Three House Reform Measures Receive Attention This Week

On Thursday, the House passed HR 527, the Regulatory Flexibility Improvements Act.  Introduced in February by Lamar Smith (R-TX), the bill amends the existing Regulatory Flexibility Act to ensure that a more detailed analysis is conducted of potential regulatory impacts (both direct and indirect economic effects) on small entities.  It calls for each Federal regulatory agency to develop and publish a plan for periodic review of all rules deemed to have significant economic impact on a substantial number of small entities.  The measure also expands elements of initial and final regulatory flexibility analyses to include estimates and descriptions of the cumulative economic impact of a proposed rule on a small entity and calls for a post-publication judicial review of an agency final rule for compliance with the underlying Act.

Although the measure has been treated favorably by the House, the Administration has already vowed to veto any such measure.  This, in effect, kills the bill since the Senate has been reluctant to pursue similar legislation and, with a looming veto threat, is more likely to turn its attention elsewhere.

Two additional House bills, each aimed at one or more aspects of regulatory reform, are being vetted by the Rules Committee for House Floor consideration.  Floor action is expected by the end of this week or next on each of these bills:

• HR 10, the Regulations From the Executive in Need of Scrutiny (REINS) Act of 2011was introduced by Geoff Davis (R-KY) just after 112^th Congress convened in January 2012.  A Senate companion bill, S 299, has been introduced by Senator Rand Paul (R-KY).  Hearings have been held but no further Senate action has been taken.

  The proposed House measure requires congressional approval of all major rules before they take effect (currently, major rules take effect unless Congress passes and the President signs a joint resolution disapproving them).  The REINS Act defines “major rule” as any rule, including an interim final rule, that has resulted in or is likely to result in:  1) an annual effect on the economy of $100 million or more; 2) a major increase in costs or prices; or 3) significant adverse effects on competition, employment, investment, productivity, innovation, or U.S. competitiveness.

  The bill goes on to require that if approval of a major rule does not take place by the end of 70 session/ legislative days after the proposing agency submits its report to Congress, the rule shall be deemed not to be approved and shall not take effect.  However, it also permits a major rule to take effect for 90 calendar days without such approval if the President determines such rule is necessary because of an imminent threat to health or safety or other emergency, for the enforcement of criminal laws, for national security, or to implement an international trade agreement.

• HR 3010, the Regulatory Accountability Act of 2011, was also introduced by Lamar Smith (R-TX) in September.  This bill takes a different approach for regulatory reform than in HR 527 (above).  It amends the Administrative Procedure Act to revise and expand the requirements for Federal agency rulemaking by requiring agencies to base all preliminary and final determinations on evidence and to consider the legal authority under which the rule may be proposed, the specific nature and significance of the problem the agency may address with the rule, any reasonable alternatives for the rule, and the potential costs and benefits associated with such alternatives.  It calls for advanced notice of proposed rulemaking for any major (>$100M) or high impact (>$1B) rule.  The measure also expands the scope of judicial review of agency rulemaking by allowing immediate review of rulemaking not in compliance with notice requirements and establishing a substantial evidence standard for affirming agency rulemaking decisions.

  This bill also has a Senate companion, S 1606, introduced by Rob Portman (R-OH) which has been referred to the Senate Committee on Homeland Security and Government Affairs.  To date, it has not been the subject of hearings or other actions.