CONGRESSWOMAN ELISE STEFANIK
On Friday, December 2, 2011, the House is scheduled to consider H.R. 3010, the Regulatory Accountability Act of 2011. The bill was introduced by Rep. Lamar Smith (R-TX) on September 22, 2011, and referred to the Committee on the Judiciary. On November 3, 2011, a mark-up was held and the bill was reported as amended by a vote of 16-6.
H.R. 3010 will be considered under a rule, H. Res. 477, that provides one hour of general debate equally divided and controlled by the chair and ranking minority member of the Committee on the Judiciary. Additionally, the rule makes in order only those amendments to H.R. 3010 printed in part B of the Rules Committee report (seven amendments, each debatable for ten minutes), and provides for one motion to recommit with or without instructions.
H.R. 3010 would define “major rule,” “high-impact rule,” “guidance,” and “major guidance” to broaden the definitions of rules that would be impacted by the bill.
The bill would update and reform the rulemaking process by setting mandatory rulemaking principles. The bill would require that, in a rule making, an agency should make all preliminary and final factual determinations based on evidence and consider, in addition to other applicable considerations, the following:
H.R. 3010 would override provisions in existing law that limit agencies from considering costs in a small number of rulemaking settings. However, the bill would not require agencies to base final rulemaking decisions in those settings on cost considerations at the expense of other statutory considerations.
In the case of a rule making for a major rule or high-impact rule or a rule that involves a novel legal or policy issue arising out of statutory mandates, the bill would require that no later than 90 days before a notice of proposed rule making is published in the Federal Register, an agency must publish advance notice of proposed rule making in the Federal Register. H.R. 3010 would require that the agency:
Before it determines to propose a rule, the bill would require the following completion of procedures, and if applicable, the agency would be required to consult with the Administrator of the Office of Information and Regulatory Affairs (OIRA). The bill would require that if the agency determines to propose a rule, the agency must publish a notice of proposed rule making (Advance Notices of Proposed Rulemaking (ANPRs), to include:
After concluding the ANPR process, the bill would allow an agency to publish a Determination of Other Agency Course, describing the alternative response the agency chose rather than to issue a new rule. H.R. 3010 would require that the agency consult with OIRA, and disclose all information provided to or considered by the agency in its decision-making process, including but not limited to any preliminary risk assessment or regulatory impact analysis. The bill would require that if the agency proceeds with the rulemaking, then the agency must give interested parties at least 60 days to submit written data, views or arguments related to the proposed rule, and 120 days to do so for any proposed major or high-impact rule.
H.R. 3010 would provide an early opportunity for quick administrative appeals of whether the key studies or other information on which agencies base their proposed rules meet standards set under the Information Quality Act (IQA).
The bill would require that following the notice of a proposed rule making, receipt of comments on the proposed rule, and any hearing held, and before adoption of any high-impact rule (a proposed rules that would impose at least $1 billion burden on the economy), the agency must hold a hearing. The agency would be required to provide a reasonable opportunity for cross-examination at the hearing and limit the hearing to the following issues:
H.R. 3010 would improve requirements at the final rulemaking stage as well. The bill would require that in adopting a final rule, an agency must do the following:
The bill would seek to prevent the abuse of “interim-final rules.” H.R. 3010 would seek to prevent agencies in cases of public urgency to issue “interim-final rules” that are effective before full rulemaking procedures are completed, but also requires prompt subsequent completion of full rulemaking procedures and allows affected entities to seek rapid judicial review of agency decisions to adopt interim-final rules (except for national security rules). The bill would allow an agency to forego the rulemaking process when the “rulemaking is undertaken only to correct a de minimis technical or clerical error in a previously issued rule or for other noncontroversial purposes.” Furthermore, if the agency receives significant adverse comment on such rules within 60 days, then it must conduct normal notice-and-comment rulemaking.
The bill would require the publication of a substantive final or interim rule no less than 30 days before its effective date.
H.R. 3010 would require OIRA to issue guidelines for agencies to follow as they assess scientific and economic issues in rulemaking, including cost-benefit analysis and assessment of risks; as they observe statute-specific rulemaking regimes in conjunction with the generally applicable procedures of the Administrative Procedure Act (APA) as amended; to assure better coordination, simplification and coordination by agencies in rulemaking; and, as they conduct hearings. The bill would require that the agency include in the rulemaking record “all documents and information prepared or considered by the agency during the proceeding” including, at the discretion of the President or the OIRA Administrator, communications from OIRA to the agency. The record must also be made available to the public online whenever feasible, but if not then by other electronic means, and otherwise.
The bill would exempt the Board of Governors of the Federal Reserve System and the Federal Open Markets Committee from performing cost-benefit analysis or holding formal hearings for monetary policy rules (such an exemption is part of the Congressional Review Act).
H.R. 3010 would curb agency abuse of purportedly non-binding “guidance” – particularly guidance with major economic impacts – to avoid statutory rulemaking requirements. Specifically, when issuing major guidance, the bill would require the agency consult with OIRA; document that the guidance is “understandable and complies with relevant statutory objectives and regulatory provisions;” summarize the underlying evidence; identify the costs and benefits of the guidance; and, describe alternatives to the guidance, their costs and benefits, and why the agency rejected them. H.R. 3010 would require that this documentation be published online or made available to the public by electronic means, or otherwise. The bill would specify that agency guidance is not legally binding, and requires agencies to disclose this on its guidance. The bill would also prohibit agencies from issuing guidance that is duplicative of, or inconsistent or incompatible with, existing statutes or regulations.
The bill would clarify that an agency’s denial of an Information Quality Act correction petition, or an agency’s failure to grant or deny a petition within 90 days, is reviewable by a court as a final action. The bill would provide for immediate judicial review of agency decisions to establish “interim-final rules” before complying with normal rulemaking requirements.
H.R. 3010 would clarify the scope and standards of judicial review available under the APA. The bill would allow courts to review agency action for violations of the Information Quality Act and would prohibit judicial deference to agency guidance and other interpretive statements rendered outside of the rulemaking process; agency determinations of cost-benefit issues, other economic assessments or risk assessments that do not comply with applicable OIRA guidelines; and, agency determinations of law and fact to support interim-final rules. The bill would allow agency denials of petitions for hearings or consideration of specific issues in hearings to be reviewed for abuse of discretion.
H.R. 3010 would not apply to rulemakings pending or completed as of the date of enactment.
According to the House Committee on the Judiciary, the costs and overreach of federal regulation—especially new regulation—hold back job creation and growth. The Administrative Procedure Act (APA), the basic but outdated charter of agency rulemaking, lies at the root of this problem. Its minimal limitations on rulemaking have hardly changed in decades as America’s economy has been revolutionized and competition from less regulated countries has soared.
The “Regulatory Accountability Act of 2011” legislates strong reforms to correct this problem. It would build on executive orders which Presidents (from both parties) have used, making their key reforms permanent, judicially enforceable and applicable to all agencies. The Act is critical to meet the rising tide of major regulations—those that cost the regulated community $100 million or more or have significant adverse impacts on competition, employment or productivity.
The Regulatory Accountability Act makes the regulatory process more transparent, agencies more accountable and regulations more cost-effective. It will not impose new rulemaking requirements on regulations already proposed or in effect and will not prevent agencies from achieving statutory objectives.
The Congressional Budget Office (CBO) estimates that enacting H.R. 3010 would cost about $70 million over the 2012-2016 period, assuming appropriation of the necessary funds. Such funding would cover the government-wide costs of additional personnel, contractor costs, and other administrative expenses associated with meeting the new requirements under the legislation. CBO also expects that enacting H.R. 3010 could delay the issuance of some final rules each year. As a result, CBO and the staff of the Joint Committee on Taxation (JCT) expect that enacting H.R. 3010 could have effects on both direct spending and revenues. Therefore, pay-as-you-go procedures apply to the legislation. However, given the large number of major rules issued each year and the extent to which rules vary in their nature and scope, CBO cannot determine the level of costs or savings stemming from delaying the effective date of some rules. In addition, while enacting the bill could affect direct spending and revenues if agencies not funded through annual appropriations incur additional costs, CBO estimates that any net increase in spending or change in revenues for those agencies would not be significant.
Amendment No. 1—Rep. Moore (D-WI): This amendment would require that an agency take into account whether a problem “disproportionately impacts certain vulnerable subpopulations (including individuals whose income is below 200 percent of the poverty line, individuals who are aged 65 and older, and veterans), and whether such an impact would be mitigated by new agency action.
Amendment No. 2—Rep. Olson (R-TX): This amendment would clarify that cumulative costs and benefits and estimated impacts on jobs shall include an estimate of the net gain or loss in domestic jobs.
Amendment No. 3—Rep. Jackson Lee (D-TX): This amendment would grant an agency the discretion to determine whether or not to provide advanced notice, no later than 90 days, of a proposed rule prior it being published in the Federal Register.
Amendment No. 4—Rep. Jackson Lee (D-TX): This amendment would strike a section of the Act that would allow any member of the public to petition for a hearing to determine whether the proposed rule fails to comply with the Information Quality Act.
Amendment No. 5—Rep. Connolly (D-VA): This amendment would prohibit any rules relating to the “safety of food, the safety of the workplace, air quality, the safety of consumer products, or water quality,” from being blocked or repealed by H.R. 3010.
Amendment No. 6—Rep. Nadler (D-NY): This amendment would exempt from H.R. 3010 any actions made by the Nuclear Regulatory Commission under the Atomic Energy Act.
Amendment No. 7—Rep. Jackson Lee (D-TX): This amendment would exempt any rules promulgated by the Department of Homeland Security from H.R. 3010.