SJR 173/HJR 187

Joint Subcommittee to Study the Regulatory Responsibilities, Policies and Activities of the State Corporation Commission

October 4, 2000, Richmond

The joint subcommittee held its third meeting to determine the process it will use to secure an independent consultant and to develop a list of considerations and study objectives for inclusion in a study work plan.

Independent Consultant

Staff presented information to the joint subcommittee regarding options for the process to be used in securing an independent consultant, funding for the consultant, and the scope of the issues to be examined. The joint subcommittee decided that it would look to the state's public institutions of higher education to provide the consultant services. The joint subcommittee also decided that, in order to have the consultant in place by December 2000, it would attempt to obtain funding from the Legislative Reversion Account through the Joint Rules Committee.

The joint subcommittee also decided that the issues for consideration that had been developed from both public and subcommittee member comment provide the basis of the consultant's scope of issues for examination. The joint subcommittee directed staff to develop a request for proposals based on these guidelines and to perform the initial review of submitted proposals. After reviewing the proposals, staff will provide a recommendation regarding the finalist(s) who best satisfies the needs of the joint subcommittee. The finalist(s) then would present the proposal at the December 2000 meeting of the joint subcommittee.

Study Objectives

The joint subcommittee adopted the following issues for consideration as encompassing the scope of the study objectives:

I. General Considerations

A. Appropriate Regulation of New and Future Industries

1. Is the overall direction of the SCC in terms of its policy and rule-making authority well suited to the new market dynamics of the business activities it regulates?

2. Is the SCC's current direction and approach toward the new economic conditions affecting the business activities it regulates appropriate? If not, what new direction and approaches are required?

3. How can the SCC be changed to ensure that in the future government will continue to achieve the proper balance between public protection and encouraging and rewarding entrepreneurial initiative, competitive innovation and economic development?

B. Developing Regulatory Policy

1. What is the appropriate role of the SCC in the development of regulatory policy for the Commonwealth?

2. How effectively has the SCC participated in the development of regulatory policy for the Commonwealth?

C. Compliance with General Assembly Policy and Intent

1. Is the SCC, in exercising the authority delegated to it by the General Assembly, achieving the results that the General Assembly intended?

2. Is the SCC staff effective and faithful in carrying out the legislative intent of the General Assembly in those cases where policy has been set by legislation?

D. Separation of Functions

1. Are the interests of the Commonwealth best served by having policy determinations and rule-making authority for the various business activities regulated by the SCC housed in one agency?

2. Should policy making decisions and rule making be conducted by other state agencies or the General Assembly?

3. In light of technological advances and more universal access to information, does there remain a need to have a single regulatory agency in order to achieve the goals of regulatory consistency, expertise and specific institutional knowledge, and to prevent undue influence on the regulatory process?

4. Should the same SCC staff lobby and then regulate? Does this relationship represent a conflict?

5. Should the adjudicatory and management roles of the SCC be separated?

E. Relationship among SCC, General Assembly, and Executive Branch

Should more collaboration be established among the SCC, the executive branch and the General Assembly to promote common goals and create more job opportunities while protecting consumers?

F. Funding and Financial Oversight

1. What is the proper level of funding for the SCC in light of its responsibilities in the changing regulatory environment?

2. What are the financial operations of the SCC and how does the General Assembly oversee those operations?

G. Miscellaneous

1. Should the process for selecting judges be changed?

2. Should the SCC be authorized to waive its immunity from suit in federal court in order to permit it to address issues brought for its consideration pursuant to the federal Telecommunications Act of 1996? (Federal courts have concluded that state commissions like the SCC are deemed to have waived their immunity from suit in federal court if they arbitrate unsettled issues between new entry telephone companies and incumbent telephone companies, because either party may then appeal to federal court. Accordingly, the SCC recently concluded that it could no longer arbitrate such issues because it was not empowered to waive such immunity.)

II. Internal Operational Considerations

A. Mission and Structure

1. Does the SCC's mission accurately describe its activities?

2. Does the SCC's organizational structure advance its ability to achieve the stated mission?

3. Could the SCC be restructured to better accomplish its mission?

B. Operations

1. Is there excessive fragmentation of the SCC staff such that responsibilities are unclear and/or duplicative, contributing to cumbersome and protracted regulatory proceedings?

2. How are the functions (executive/legislative/judicial) carried out by the SCC different from those carried out by other executive or legislative branch agencies?

3. Do the SCC's Rules of Practice provide for adequate due process?

4. Do the commissioners provide adequate oversight over the activities of the SCC's divisions, including addressing complaints regarding the actions of SCC employees?

5. What are the different proceedings held or conducted by the SCC and how can they be streamlined?

6. Should the SCC's processes and structure be modified to better accommodate a collaborative model for making rules?

Work Plan

The joint subcommittee adopted a work plan for completion of the study objectives. There was discussion among the members regarding whether the next meeting of the joint subcommittee should include an opportunity for public comment. Several members noted that the consultant hired by the joint subcommittee would be required to obtain comment from the regulated community, consumer groups, and other interested parties. Accordingly, it was determined that it would be more appropriate to provide for a public hearing or public comment period after the consultant has been engaged, in the second year of the study. There was also agreement that the work plan should remain flexible to ensure maximum participation and input from all interested parties.

Next Meeting

The joint subcommittee scheduled its next meeting for December 5, 2000, at 1:00 p.m. Several subcommittee members indicated an interest in the SCC's revision of its procedural rules. SCC representatives indicated that an executive summary of the proposed changes would be provided prior to the subcommittee's next meeting. An update on the status of the report from the SCC's consultant was also requested for the next meeting.

The Honorable Thomas K. Norment, Jr., Chairman
Legislative Services Contacts: Amigo Wade and David Rosenberg