Earlier in May, we wrote about the latest chapter in the Bismarck Renaissance Zone fight. Since then, a lot has been uncovered about the lack of over-sight and intentional loopholes created by the legislature to allow some state agencies to run wild.
N.D.C.C. 28-32 is the Administrative Agency Practices Act. This portion of state law governs state agencies as far as how they are to operate beyond explicit legislatively enacted laws.
N.D.C.C. 28-32-2 says
"The authority of an administrative agency to adopt administrative rules is authority delegated by the legislative assembly. As part of that delegation, the legislative assembly reserves to itself the authority to determine when and if rules of administrative agencies are effective. Every administrative agency may adopt, amend, or repeal reasonable rules in conformity with this chapter and any statute administered or enforced by the agency."
The key sentence is the 2nd sentence: the legislative assembly reserves to itself the authority to determine when and if rules of administrative agencies are effective.
Previously in the definitions section (N.D.C.C. 28-32-01.2a-2y), the legislature carves out specific agencies and departments where agencies can operate without going through the typical administrative rule making process as defined in the the chapter.
Many of the exemptions cover agencies that are led by elected official, or government entities that are quasi-independent based on their status in the state constitution.
One line-item exempted entity that sticks out is Item. E - The department of commerce with respect to the division of economic development and finance.
That's right, the division of the State Commerce Department that has now acted in contradiction to its own memo to the Burleigh County Commission is explicitly exempted from the general rule-making process that most state agencies must abide by in the name of transparency and due process.
This means that the Department of Commerce can ignore its own procedural guidelines which are still posted on their website because the legislature says they don't have to abide by any process to make rules in the first place. So any rules make by the Department of Commerce's Division of Economic Development and Finance can be changed at a whim, by explicit state law.
Doesn't that seem like a pretty terrible way to manage the way tax incentives and corporate welfare handouts are given away?
It should to all taxpayers, and to lawmakers who like to say we do things differently in North Dakota as compared to the Federal Government.
In the case of Economic Development oversight, North Dakota does it just about as bad as possible.
These sorts of intentional loopholes should be an embarrassment for the state. The public should know that the agencies in charge of giving away selective tax breaks to special people and businesses have a sound policy making process. It's very clear there is no process at all, and that is how the legislature wanted it.
