The U.S. Senate has confirmed President Trump’s appointment of Mark Christie to the Federal Energy Regulatory Commission. That leaves a vacancy on the Virginia State Corporation Commission (SCC), where Christie was the chair of the three-person panel. Governor Ralph Northam said at a Wednesday press conference that he will temporarily fill the vacancy with Angela Navarro, former deputy secretary of Natural Resources under Northam and his predecessor Terry McAuliffe.
Christie isn’t expected to leave until January. The Democrat-controlled General Assembly will elect a permanent replacement; however, the Senate failed to reach an agreement on a previous appointment to the board earlier this year, according to a Northam press release. As a result, Northam appointed Jehmal Hudson in June.
The SCC is a powerful section of Virginia bureaucracy whose authority includes regulatory roles over businesses and utilities. Even with his broad emergency powers, Governor Ralph Northam still had to ask the SCC to extend a utilities shutoff moratorium in 2020. The panel temporarily agreed, but warned that long-term extensions were unsustainable, and eventually refused the Governor’s request for more extensions. Northam finally got his way, but only after the General Assembly changed the law around utilities moratoriums.
Creation of the SCC
“The creation of the Virginia State Corporation Commission in the early years of the 20th century was a decisive shift in the organization of state government. Regulatory decision making moved from the legislature to a permanent body which could hire specialists and conduct inquiries,” states a 2003 SCC review of the history of the agency.
The SCC was created by Virginia’s new Constitution in 1902, after A. Caperton Braxton argued at the constitutional convention that a new regulatory body was needed to protect consumers from Virginia’s powerful railroads charging exorbitant rates. Braxton’s committee at the convention planned to give the SCC legislative, administrative and judicial powers necessary to allow slow-moving Virginia government to keep up with railroad leadership.
“Historian Virginius Dabney maintains that the establishment of the State Corporation Commission represented an entirely new departure in the machinery of government and conferred on the Commission a wider jurisdiction than enjoyed by any similar state agency in the country, before or since,” states the SCC history.
Expansion of the SCC
“Although it was created initially to regulate the rates and services of railroads and telephone and telegraph companies, as well as to grant charters to corporations in the Commonwealth and to administer the laws to which they are subject, between 1906 and 1971 there were more than 50 legislative enactments imposing new duties and responsibilities upon the Commission,” states a 1973 article in the William and Mary Law Review.
According to the article, the SCC’s staff grew from four to 369 by 1973; today the SCC has 675 full-time employees, according to its website.
The SCC’s independence from other branches of government was protected in the 1971 revision of the Virginia Constitution. According to the Constitution, the General Assembly elects SCC members to six-year terms; the elections are staggered and held on even-numbered years.
At least one member of the SCC must be qualified to be a judge, and members can be impeached by the General Assembly, like judges. According to the Constitution, temporary terms created by the governor end 30 days after the start of the next regular session of the General Assembly.
Whoever replaces Christie will be up for election in 2022, when Christie’s term ends. Christie has been re-elected three times, according to Ballotpedia.
Northern Virginia business attorney Bradley McConnell told The Virginia Star that from a business standpoint, the SCC functions like agencies found in other states across the country — a sort of legal clearinghouse where businesses file as corporations instead of mere partnerships between the owners.
McConnell said, “Once you have filed, you exist as an entity separate from the people who own it. In order to exist, you have to make those filings.”
Non-Virginia businesses often also have to file with the SCC to do business in the state, according to McConell. However, the SCC’s roles are broad.
For a time, aviation authority, motor vehicle authority, and state fire marshal authority were housed in the SCC, though those roles are currently filled by other agencies, according to the SCC history.
“[The SCC’s roles] include regulation of public utilities, insurance, state-chartered financial institutions, securities, retail franchising, and railroads. It is also the state’s central filing office for corporations, limited partnerships, limited liability companies and Uniform Commercial Code liens,” the SCC’s website states.
Checks and Balances
“It remains an independent department of state government that promotes and protects the public interest. It continues to be vested with legislative, administrative, and judicial authority. No other state in the country consolidates so many regulatory functions into one organization,” the SCC history states.
Lawyer and candidate for Attorney General Chuck Smith (R) told The Star that although the SCC is independent of the other branches of government in Virginia, it’s still subject to the checks and balances of American democracy.
“The government has supervisory authority over them to some extent. They are an independent commission and of course they make their own decisions,” Smith said.
“The overriding principles of the [U.S.] Constitution all remain the same,” Smith said. “To the extent that they affect individuals or affect people’s property or affect people’s rights, the Constitution has a lot to say in that and the Virginia Constitution has a lot to say in that.”
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