[Senate Report 114-342]
[From the U.S. Government Publishing Office]
Calendar No. 613
114th Congress } { Report
SENATE
2d Session } { 114-342
_______________________________________________________________________
PRINCIPLED RULEMAKING ACT OF 2015
__________
R E P O R T
of the
COMMITTEE ON HOMELAND SECURITY AND
GOVERNMENTAL AFFAIRS
UNITED STATES SENATE
together with
ADDITIONAL VIEWS
to accompany
S. 1818
TO AMEND TITLE 5, UNITED STATES CODE, TO REFORM THE RULEMAKING PROCESS
OF AGENCIES
[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]
September 6, 2016.--Ordered to be printed
______
U.S. GOVERNMENT PUBLISHING OFFICE
59-010 WASHINGTON : 2016
COMMITTEE ON HOMELAND SECURITY AND GOVERNMENTAL AFFAIRS
RON JOHNSON, Wisconsin, Chairman
JOHN McCAIN, Arizona THOMAS R. CARPER, Delaware
ROB PORTMAN, Ohio CLAIRE McCASKILL, Missouri
RAND PAUL, Kentucky JON TESTER, Montana
JAMES LANKFORD, Oklahoma TAMMY BALDWIN, Wisconsin
MICHAEL B. ENZI, Wyoming HEIDI HEITKAMP, North Dakota
KELLY AYOTTE, New Hampshire CORY A. BOOKER, New Jersey
JONI ERNST, Iowa GARY C. PETERS, Michigan
BEN SASSE, Nebraska
Christopher R. Hixon, Staff Director
Gabrielle D'Adamo Singer, Chief Counsel
Satya P. Thallam, Chief Economist
Gabrielle A. Batkin, Minority Staff Director
John P. Kilvington, Minority Deputy Staff Director
Mary Beth Schultz, Minority Chief Counsel
Katherine C. Sybenga, Minority Chief Counsel for Governmental Affairs
Laura W. Kilbride, Chief Clerk
Calendar No. 613
114th Congress } { Report
SENATE
2d Session } { 114-342
======================================================================
PRINCIPLED RULEMAKING ACT OF 2015
_______
September 6, 2016.--Ordered to be printed
_______
Mr. Johnson, from the Committee on Homeland Security and Governmental
Affairs, submitted the following
R E P O R T
together with
ADDITIONAL VIEWS
[To accompany S. 1818]
The Committee on Homeland Security and Governmental
Affairs, to which was referred the bill (S. 1818) to amend
title 5, United States Code, to reform the rulemaking process
of agencies, having considered the same, reports favorably
thereon with an amendment and recommends that the bill, as
amended, do pass.
CONTENTS
Page
I. Purpose and Summary..............................................1
II. Background and Need for the Legislation..........................2
III. Legislative History..............................................4
IV. Section-by-Section Analysis......................................5
V. Evaluation of Regulatory Impact..................................6
VI. Congressional Budget Office Cost Estimate........................7
VII. Additional Views.................................................8
VIII.Changes in Existing Law Made by the Bill, as Reported...........13
I. Purpose and Summary
S. 1818, the Principled Rulemaking Act of 2015, seeks to
improve the rulemaking process of Federal agencies, to increase
transparency, and to ensure that all regulatory agencies
complete a thorough regulatory impact analysis before issuing
regulations. S. 1818 codifies the regulatory principles and
requirements found in Executive Order 12866, section 1, and
Executive Order 13563, sections 2 through 5, which have been
endorsed by both Republican and Democratic administrations. The
requirements would apply equally to all regulatory agencies,
including independent regulatory agencies, and would be
judicially enforceable.
II. Background and the Need for Legislation
Issued in 1993 by President Bill Clinton, Executive Order
12866 has guided agency rulemaking for more than 20 years and
has been reaffirmed by both Presidents George W. Bush and
Barack Obama.\1\ Broadly, this executive order began ``a
program to reform and make more efficient the regulatory
system.''\2\ In particular, Section 1 of the executive order
establishes necessary conditions for agencies to pursue new
regulations as well as criteria by which new regulations should
be developed and analyzed.\3\ Specifically, these provisions
include (but are not limited to): identification of the problem
to which regulation is a proposed solution, including any
market failure where it may exist; examination of extant
regulations that may be contributory to the identified problem;
consideration of alternatives to regulation as a solution;
design of ``regulations in the most cost-effective manner'';
conducting benefit-cost analysis of the rule, including both
quantitative and qualitative measurements; use of best
available science and information; gathering of input from
affected State, local, and tribal entities; and clear and
understandable drafting of rules.\4\
---------------------------------------------------------------------------
\1\Exec. Order No. 12866, 58 Fed. Reg. 51,735 (Oct. 4, 1993).
Subsequently, President George W. Bush did not amend or rescind this
executive order and continued to operate under its rubric. Executive
Order 13563, issued by President Obama, reads in part: ``This order is
supplemental to and reaffirms the principles, structures, and
definitions governing contemporary regulatory review that were
established in Executive Order 12866.'' Infra., note 4.
\2\ Id.
\3\ Id.
\4\ Id.
---------------------------------------------------------------------------
In 2011, President Obama issued Executive Order 13563 which
was ``supplemental to and reaffirm[ed] the principles . . .
established in Executive Order 12866.''\5\ In addition to
restating many of the foundational principles for when and how
to pursue a rulemaking, the new executive order specifies the
use of additional considerations in the rulemaking process,
including Public Participation (``regulations shall be based .
. . on the open exchange of information and perspectives'');
Integration and Innovation (``[g]reater coordination across
agencies . . . reducing costs and simplifying and harmonizing
rules''); Flexible Approaches (``identify and consider
regulatory approaches that reduce burdens and maintain
flexibility and freedom of choice''); and Science (``ensure the
objectivity of any scientific and technological information and
processes used'').\6\
---------------------------------------------------------------------------
\5\Exec. Order No. 13563, 76 Fed. Reg. 3,821 (Jan. 21, 2011).
\6\ Id.
---------------------------------------------------------------------------
Despite the longstanding nature of the rulemaking
principles outlined in the aforementioned executive orders,
there are two structural limitations to relying solely on
executive orders to guide agency rulemaking.
The first is that despite a ``usual presumption of
reviewability''\7\ for executive orders, both executive orders
include (nearly identical) language specifically precluding
judicial review.\8\ This creates a situation in which agencies
cannot be challenged in court when failing to comply with
provisions of prevailing executive orders. To wit, a recent
study found that Executive Branch agencies failed to complete
all four of the selected key elements of cost-benefit analysis
for 19 percent of economically significant rules and 81 percent
of significant rules, despite an executive order requirement to
do so.\9\
---------------------------------------------------------------------------
\7\ Peter Raven-Hansen, Making Agencies Follow Orders: Judicial
Review of Agency Violations of Executive Order 12,291, 1983 Duke L.
Rev. 285, 330 (1982).
\8\In President Clinton's 1993 executive order, this language
reads, in part: the order ``does not create any right or benefit,
substantive or procedural, enforceable at law or equity by a party
against the United States. . . .'' Supra, note 1.
\9\Gov't Accountability Office, GAO-14-714, Federal Rulemaking:
Agencies Included Key Elements of Cost-Benefit Analysis, but
Explanations of Regulations' Significance Could be More Transparent 18
(2014).
---------------------------------------------------------------------------
The second limitation is that these executive orders have
been considered to have only limited application to independent
regulatory agencies. For example, President Obama's Executive
Order 13579--a companion to Executive Order 13563--notes that
``[i]ndependent regulatory agencies . . . should promote'' the
same principles and aims of the earlier order, and that they
``should comply with these provisions as well.''\10\ The
language notably avoids the more prescriptive language of
``must'' or ``shall'' in applying the order to independent
agencies. Moreover, President Clinton's Executive Order 12866
explicitly defines ``agency'' for the purpose of determining
application of its requirements as an authority ``other than
those considered to be independent regulatory agencies.''\11\
This means that despite the fact that regulations promulgated
by independent regulatory agencies carry the same weight and
force of law as those by Executive Branch agencies, they are
nonetheless not subject to the same requirements. Therefore it
should come as no surprise that independent agencies include
``the key elements of cost-benefit analysis'' (as outlined in
the current executive order) in their published analysis less
often than Executive Branch agencies.\12\ A different study
using a different sample of rulemakings indicated that no major
rule issued by an independent agency in 2012 contained a
complete cost-benefit analysis.\13\
---------------------------------------------------------------------------
\10\Exec. Order No. 13,579, 76 Fed. Reg. 41,587 (Jul. 11, 2011).
\11\Supra, note 1.
\12\Supra, note 8, Fig 2.
\13\Curtis Copeland, Economic Analysis and Independent Regulatory
Agencies, Report for the Administrative Conference of the United States
87-88 (2013).
---------------------------------------------------------------------------
In light of both these deficiencies, legislation is needed
to set a consistent standard for the regulatory process, for
both Executive and independent regulatory agencies. Codifying
the requirements found in these executive orders will ensure
both the consistent application of analytical requirements and
conditions--regardless of originating agency--as well as a
meaningful incentive for agency compliance via the possibility
of judicial review.
Support for the idea of subjecting all agencies to a
uniform regulatory analytical program, particularly benefit-
cost analysis, comes from experts from both Republican and
Democratic administrations:
Susan Dudley, former Office of Information
and Regulatory Affairs (OIRA) Administrator for
President George W. Bush, has argued that independent
regulatory agencies should be ``doing the analysis of
the kind that Presidents have required executive branch
agencies to do.''\14\
---------------------------------------------------------------------------
\14\Examining Practical Solutions to Improve the Federal Regulatory
Process: Roundtable Before the S. Comm. On Homeland Sec. & Governmental
Affairs Subcomm. On Regulatory Affairs & Fed. Mgmt., 114th Cong. (2015)
(statement of Susan Dudley).
---------------------------------------------------------------------------
Dr. Michael Greenstone, former Chief
Economist for President Obama's Council of Economic
Advisors, has argued that ``there is no reason that a
regulation, no matter where it appears from, should not
be subject to a cost-benefit analysis.''\15\
---------------------------------------------------------------------------
\15\Examining Practical Solutions to Improve the Federal Regulatory
Process: Roundtable Before the S. Comm. On Homeland Sec. & Governmental
Affairs Subcomm. On Regulatory Affairs &Fed. Mgmt., 114th Cong. (2015)
(statement of Michael Greenstone).
---------------------------------------------------------------------------
Sally Katzen, former OIRA Administrator for
President Clinton, has argued that Congress should act
to extend the requirements found in Executive Order
12866 to independent regulatory agencies because those
agencies ``are not typically engaging in the analysis
that has come to be expected as a form of governmental
best practice[s] for regulatory agencies.''\16\
---------------------------------------------------------------------------
\16\Sally Katzen, Expand Centralized Regulatory Review to
Independent Agencies, Penn. Program on Regulation Blog (Aug. 9, 2011),
http://www.regblog.org/2011/08/09/expand-centralized-regulatory-review-
to-independent-agencies/.
---------------------------------------------------------------------------
President Obama's Jobs Council has also
recommended this action as it ``would prompt
[independent regulatory agencies] to perform better
analyses and to issue better and smarter
regulations.''\17\
---------------------------------------------------------------------------
\17\The President's Council on Jobs & Competitiveness, Roadmap to
Renewal 45 (2012), available at http://files.jobs-council.com/files/
2012/01/JobsCouncil_2011YearEndReportWeb.pdf.
---------------------------------------------------------------------------
The requirements in this legislation would not place any
new burden on the agency rulemaking process that has not
already been required or encouraged by multiple presidents
through executive order.
III. Legislative History
Senator James Lankford (R-OK) introduced S. 1818 on July
21, 2015. The bill was referred to the Committee on Homeland
Security and Governmental Affairs. Senators Heidi Heitkamp (D-
ND), Kelly Ayotte (R-NH), and Joni Ernst (R-IA) are cosponsors
of the bill. The Committee considered S. 1818 at a business
meeting on October 7, 2015.
During the business meeting, Senator Lankford offered a
substitute amendment with clarifying language. The substitute
amendment was adopted without objection by unanimous consent
with Senators Johnson, Portman, Lankford, Enzi, Ernst, Sasse,
Carper, McCaskill, Baldwin, Heitkamp, Booker, and Peters
present.
Senator Carper offered two amendments during the business
meeting. The first was to strike the provision that would
require agencies to tailor each rule to impose the least
possible burden on society when maximizing benefits. This
amendment failed on a voice vote. Senators present were
Johnson, Portman, Lankford, Enzi, Ernst, Sasse, Carper,
McCaskill, Baldwin, Heitkamp, Booker, and Peters. The second
amendment removed the judicial review component of the bill.
This amendment failed on a roll call vote of 6 yeas to 10 nays.
Senators voting in the affirmative were Senators Carper,
McCaskill, Baldwin, Booker and Peters, and Senator Tester by
proxy. Senators voting in the negative were Senators Johnson,
Portman, Lankford, Enzi, Ernst, Sasse, and Heitkamp, and
Senators McCain, Paul, and Ayotte by proxy.
The Committee ordered S. 1818, as amended, reported
favorably on October 7, 2015, by a roll call vote of 7 yeas to
5 nays. Senators voting in the affirmative were Senators
Johnson, Portman, Lankford, Enzi, Ernst, Sasse, and Heitkamp.
For the record only, Senators McCain, Paul, and Ayotte voted
yea by proxy. Senators voting in the negative were Senators
Carper, McCaskill, Baldwin, Booker, and Peters. For the record
only, Senator Tester voted nay by proxy.
IV. Section-by-Section Analysis of the Bill, as Reported
Section 1. Short title
This section provides the bill's short title, the
``Principled Rulemaking Act of 2015.''
Section 2. Definitions
This section provides several definitions, including for
the following terms: ``agency,'' ``rule,'' ``rule making,'' and
``regulatory action.''
Section 3. Rule making considerations
This section amends Section 553 of title 5, United States
Code, by adding additional rulemaking principles.
New subsection (f)(1) ensures that all regulations
promulgated by agencies are directly related to law by
requiring that agencies only promulgate rules that are (A)
``required by law;'' (B) ``necessary to interpret law;'' or (C)
``as permitted by law, made necessary by public need, to
protect or improve the health and safety of the public, the
environment, or the wellbeing of the people of the United
States.''
New subsection (f)(2) stipulates the various analyses and
considerations that an agency shall complete before
promulgating a rule. The first five provisions detail what an
agency must do before deciding on a rule. These include:
identification of the problem; consideration of the legal
authority under which the agency intends to act; examination of
existing rules that may be contributing to the identified
problem; identification of alternatives to regulation; and
consideration of ``the degree and nature of the risks''
associated with ``substances or activities within the
jurisdiction of the agency.''
The last nine provisions are requirements for agencies to
complete ``after determining that a rule is the best available
method of achieving the regulatory objective.'' These include:
assessment of costs and benefits of the proposed rule; reliance
on the best available scientific and technical information that
is publicly available; identification of alternative forms of
regulations such as establishment of performance standards
rather than prescription of specific behaviors; consultation
with and assessment of effect on State, local, or tribal
governments; avoiding duplication; tailoring of the rule to
maximize benefits and be least burdensome; and drafting of the
rule in the clearest and simplest way.
New subsection (f)(3) lists the exceptions to the new
rulemaking requirements found in (f)(2). Following the language
found in 5 U.S.C. 553(b)(3)(A), it specifically exempts
``interpretive rules, general statements of policy, or rules of
agency organization, procedures, or practice,'' sometimes
referred to as ``guidance.'' Exceptions can also be made by the
OIRA Administrator or by the rule's underlying statute.
New subsection (f)(4) sets forth the framework for judicial
review of agency compliance with the requirements of this
subsection. The review must be ``in connection with review of
final agency action'' and therefore a challenge cannot be made
during the rulemaking process. The agency's consideration of
the provisions in subsection (f)(2) will be part of the
rulemaking record and may be considered by a court to the
extent relevant to determining if the rule is ``arbitrary,
capricious, or an abuse of discretion.'' If the court finds the
agency did not comply with the requirements herein, it may set
aside the rule.
Section 4. Public participation
Subsection (a) ensures that, consistent with the
requirements of 5 U.S.C. Sec. 553, agencies issue rules with a
process that involves public participation.
This subsection also requires agencies to allow comments
through the internet on any proposed rule for at least a 60-day
period, provide online access to the rulemaking docket for both
proposed and final rules, and allow the public the ability to
comment on pertinent parts of the proposed rule.
Subsection (b) requires agencies, ``when feasible and
appropriate,'' to reach out to parties that are likely to be
affected by the rule. This includes those who may benefit as
well as those who may be subject to new regulations. The
requirement that those who are ``likely to benefit and those
who are potentially to be subject to the rule'' requires that
comments from all affected parties should be sought.
Section 5. Integration and innovation
This section requires that agencies develop regulatory
approaches that are harmonized and coordinated among agencies
and designed to promote innovation among the regulated parties.
Section 6. Science
When agencies issue a rule under 5 U.S.C. Sec. 553, each
agency must ensure that the scientific and technological
information, processes, and models that are used in support of
any regulatory action is the best available. The information
must be peer-reviewed so that other experts in the field have
the opportunity to verify the findings and those findings must
be reproducible to ensure accuracy. Finally, the information
must be made available for public access.
V. Evaluation of Regulatory Impact
Pursuant to the requirements of paragraph 11(b) of rule
XXVI of the Standing Rules of the Senate, the Committee has
considered the regulatory impact of this bill and determined
that the bill will have no regulatory impact within the meaning
of the rules. The Committee agrees with the Congressional
Budget Office's statement that the bill contains no
intergovernmental or private-sector mandates as defined in the
Unfunded Mandates Reform Act (UMRA) and would impose no costs
on state, local, or tribal governments.
VI. Congressional Budget Office Cost Estimate
August 29, 2016.
Hon. Ron Johnson,
Chairman, Committee on Homeland Security and Governmental
Affairs,
U.S. Senate, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for S. 1818, the Principled
Rulemaking Act of 2015.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Matthew
Pickford.
Sincerely,
Keith Hall,
Enclosure.
S. 1818--Principled Rulemaking Act of 2015
CBO estimates that implementing S. 1818 would have no
significant cost over the next five years. The bill could
affect direct spending by agencies not funded though annual
appropriations; therefore, pay-as-you-go procedures apply. CBO
estimates, however, that any net increase in spending by those
agencies would be negligible. Enacting S. 1818 would not affect
revenues.
CBO estimates that enacting S. 1818 would not increase net
direct spending or on-budget deficits in any of the four
consecutive 10-year periods beginning in 2027.
S. 1818 would amend federal law to codify portions of
Executive Order 12866 and Executive Order 13563. Those orders
direct regulatory agencies to only issue regulations that are
necessary, provide the maximum benefit to the public, and allow
public involvement in the rulemaking process. Because the
legislation would put into statute current policies and
practices, CBO estimates that implementing S. 1818 would have
no significant cost over the next five years.
S. 1818 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act and
would not affect the budgets of state, local, or trial
governments.
The CBO staff contact for this estimate is Matthew
Pickford. The estimate was approved by Theresa Gullo, Assistant
Director for Budget Analysis.
VII. ADDITIONAL VIEWS
While there has been strong bipartisan support for the
principles in the Executive Orders that guide agency
rulemakings through multiple administrations since at least the
1980s, codifying these principles raises a number of
significant concerns and could significantly slow down the
already slow regulatory process. First, this bill would make
these principles legal requirements, subjecting each step of
the process to judicial review, taking away agency flexibility,
and overriding provisions of certain health, safety, and
environmental laws that exempt regulations authorized by those
laws from some of these requirements. In addition, this bill
would extend these requirements to the independent agencies
that often have their own statutory requirements.
S.1818 would lead to endless litigation and regulatory delay
There are a number of statutes that already provide the
basic procedures that agencies must follow when promulgating
regulations. Chief among them is the Administrative Procedures
Act (APA), which among other things, requires all agencies to
publish notice of proposed rulemaking, provide an opportunity
for public comment, publish a final rule that includes a
statement of basis and purpose, and wait at least 30 days after
any rule's publication to make that rule effective.\1\ In
addition, agencies are required to comply, when applicable,
with the requirements of the Regulatory Flexibility Act
(RFA),\2\ the Paperwork Reduction Act (PRA),\3\ and the
Congressional Review Act (CRA).\4\ Each of these laws provides
judicial review of agency compliance.
---------------------------------------------------------------------------
\1\5 U.S.C. Sec. 553.
\2\5 U.S.C Sec. 601 et seq.
\3\44 U.S.C. Sec. Sec. 3501-3521.
\4\5 U.S.C.Sec. Sec. 801-808.
---------------------------------------------------------------------------
Since the 1980s, Presidents of both parties have
supplemented these statutory requirements with executive orders
that include additional procedures that agencies are directed
to use, to the extent permitted by law, when promulgating
regulations.\5\ S. 1818 would take the principles found in
these widely supported executive orders and codify them--making
these principles legally required and agency compliance with
all of these principles judicially reviewable. This goes well
beyond the intent of these executive orders. All of these
executive orders, including E.O. 12291 issued by President
Reagan, specifically precluded judicial review of agency
compliance with the principles laid out in the executive
orders.\6\ As each executive order has done since, the
executive order issued by President Reagan made this very
clear, stating that the executive order was ``intended only to
improve the internal management of the Federal government, and
is not intended to create any right or benefit, substantive or
procedural, enforceable at law by a party against the United
States, its agencies, its officers or any person.''\7\
---------------------------------------------------------------------------
\5\See E.O. 12291, 46 Fed. Reg. 13193 (Feb. 19, 1981); E.O. 12866,
58 Fed. Reg. 51,735 (Oct. 4, 1993); E.O. 13563, 76 Fed. Reg. 3,821
(Jan. 21, 2011)
\6\See E.O. 12291, Sec. 9; E.O. 12866, Sec. 10; E.O. 13563, Sec.
7(d).
\7\See E.O. 12291, Sec. 9.
---------------------------------------------------------------------------
The additional judicial scrutiny this bill would allow is
problematic for a number of reasons and would have significant
consequences, including additional regulatory delays. Courts
would be asked to determine whether an agency was in compliance
with requirements that are not always clearly defined and very
difficult to review. As Sally Katzen, a former Administrator of
the Office of Information and Regulatory Affairs, said in her
testimony before the Committee in March 2015, ``casting [the
executive orders] in statute only compounds the problems''
because of a lack of agency resources and because these
requirements would be hard to review, ``. . . like quantifying
costs, what does that mean and how would somebody say that is
sufficient?''\8\ This would invite endless litigation and
delays since those who oppose these regulations would be able
to challenge each of these requirements in court. And courts,
who are not experts on the issues, would have the nearly
impossible task of trying to decide in each case whether or not
the agency's work was sufficient.
---------------------------------------------------------------------------
\8\Testimony of Sally Katzen, hearing before the Senate Committee
on Homeland Security and Governmental Affairs, ``Toward a 21st-Century
Regulatory System,'' February 25, 2015.
---------------------------------------------------------------------------
For example, one provision of the bill would require
agencies to ensure scientific or technical data used in
formulating and analyzing the rule was objective, but the
provision provides no definition of ``objective'' and does not
describe how compliance with this requirement could be
demonstrated by the agency.\9\ Does this mean a scientific
study is not objective if it is disputed by other studies? Does
this mean experts at the agency cannot make any judgements
about the validity of the evidence available or make any policy
judgements based on their expertise and experience? In his
testimony before the Committee, Sidney Shapiro, a law professor
at Wake Forest University and a leading expert in
administrative procedure and regulatory policy, raised these
concerns with this provision saying, ``[g]eneralist judges
would be empowered to second-guess the scientific judgments of
agency experts on complex matters of science, medicine, and
technology on the basis of the problematic concept of
`objectivity'.''\10\ Howard Shelanski, the current
Administrator of the Office of Information and Regulatory
Affairs (OIRA) at the Office of Management and Budget,
testified last year that he does not believe codification of
the principles in the Executive Orders are necessary, saying
``[w]e at OIRA think that we have the tools that we need under
the Executive Orders to achieve what we need to achieve.''\11\
And that ``the Executive Orders are on very solid ground having
stayed firm and really only been reaffirmed across
Administrations of both parties.''\12\
---------------------------------------------------------------------------
\9\Principled Rulemaking Act of 2015, S. 1818, Sec. 6, 114th Cong.
\10\Written testimony of Sidney A. Shapiro, hearing before the
Senate Committee on Homeland Security and Governmental Affairs, ``A
Review of Regulatory Reform Proposals,'' September 16, 2015.
\11\Testimony of Howard Shelanski, hearing before the Senate
Committee on Homeland Security and Governmental Affairs Subcommittee on
Regulatory Affairs and Federal Management, ``Reviewing the Office of
Information and Regulatory Affairs' Role in the Regulatory Process,''
July 16, 2015.
\12\Testimony of Howard Shelanski, hearing before the Senate
Committee on Homeland Security and Governmental Affairs Subcommittee on
Regulatory Affairs and Federal Management, ``Reviewing the Office of
Information and Regulatory Affairs' Role in the Regulatory Process,''
July 16, 2015.
---------------------------------------------------------------------------
We are also concerned with another requirement in the bill
which would require agencies to tailor each rule so it would
impose the least possible burden on society.\13\ This
requirement is very similar to the requirement in the Toxic
Substances Control Act (TSCA) that made it nearly impossible to
use that law to protect people and the environment from harmful
chemicals.\14\ This provision was so problematic that it was
recently repealed.\15\ While a very similar provision requiring
tailoring a rule is included in E.O. 12866, the language of the
executive order and nature of the executive orders generally
provides agencies with some flexibility. This type of
requirement becomes much more problematic when put into statute
like it was in the Toxic Substances Control Act. Despite clear
evidence of the consequences of such a provision and the fact
that the Senate was at that very same time voting to remove a
similar provision from TSCA, the majority of my colleagues
rejected an amendment Senator Carper offered to this bill, S.
1818, that would have struck this particularly problematic
provision.
---------------------------------------------------------------------------
\13\Principled Rulemaking Act of 2015, S. 1818, Sec. 3, 114th
Cong., new 5 U.S.C. 553(f)(1)(M)(i).
\14\15 U.S.C. Sec. 2605 (a) (amended in 2016).
\15\The Frank R. Lautenberg Chemical Safety for the 21st Century
Act, P.L. 114-182, Sec. 6, striking ``to protect adequately against
such risk using the least burdensome requirements'' from 15 U.S.C.
Sec. 2605(a).
---------------------------------------------------------------------------
S.1818 would override existing provisions of certain health, safety,
and environmental laws that exempt regulations authorized by
those laws from some of requirements of executive orders on
rule makings
In addition to precluding judicial review, each of the
executive orders this bill would codify, including E.O. 12291
issued by President Reagan, specifically stated that the
requirements in the executive orders would not override
statutes that aimed to exclude certain regulations from
requirements in the executive orders by specifically stating
that these requirements of the executive orders applied only to
the extent permitted by law.\16\ This bill, however, seems to
require agencies to follow these same requirements for all
regulations, regardless of the original intent of the
authorizing statutes. A number of health, safety and
environmental statutes specifically bar agencies from certain
considerations or specifically provide the decision-making
criteria that the agency should use in rulemakings, criteria
that could differ from those spelled out in the orders. For
example, courts have found that provisions of the Clean Air Act
specifically bar the use of cost-benefit analysis for
regulations authorized by the Act.\17\ And the American Bar
Association has criticized similar ``supermandates''' saying
that ``[much], perhaps most, of the safety and health
legislation now on the books would seemingly be displaced.\18\
---------------------------------------------------------------------------
\16\See E.O. 12291, Sec. 2; E.O. 12866, Sec. 1(b); E.O. 13563, Sec.
1(b).
\17\Whitman v. Am. Trucking Ass'ns., Inc., 531 U.S. 457, 471
(2001).
\18\Amer. Bar Assoc. Section of Admin. L. and Reg. Practice,
Comments on H.R. 3010, The Regulatory Accountability Act of 2011 12-13
(2011), citing Sidney A. Shapiro & Robert L. Glicksman, Risk Regulation
at Risk: restoring a Pragmatic Approach 32 (2003) (which surveyed 22
health, safety, and environmental laws and found that only two contain
a substantive cost-benefit mandate).
---------------------------------------------------------------------------
S. 1818 would extend all of these requirements to independent agencies
that are not currently subject to the executive orders
S. 1818 would extend the requirements in the rule making
executive orders to the independent agencies that are not
currently subject to the executive orders. While we appreciate
the need to ensure thoughtful analysis during the regulatory
process of the impacts a proposed rule could have, we have
serious concerns with the impact this bill would have on
independent regulatory agencies. Independent regulatory
agencies already conduct regulatory analysis and have their own
analytical requirements for rulemaking, some of which are
required by statute. Furthermore, requiring independent
regulatory agencies to submit their regulatory analysis to the
Office of Information and Regulatory Affairs (OIRA) would cause
additional regulatory delays and undermine the independence of
the independent agencies.
In addition to the many statutes that already guide all
agency rulemaking, many of the statutes that authorize the
independent agencies include statutory requirements for
regulatory analysis, which, while different from the executive
order analysis, can be quite rigorous. If there is a certain
agency that is not meeting its statutory requirements or whose
authorizing statute should be updated to include additional
analytical requirements, that is something the authorizing
committee of that agency should consider undertaking--it does
not mean we should impose these same requirements on all
independent regulatory agencies.
Imposing the same analytical requirements as other
executive branch agencies on all of the independent regulatory
agencies, regardless of the other statutory requirements
already imposed on them, would not improve the efficiency and
effectiveness of the regulatory process at these agencies.
Instead, it would just further slow down the already slow
regulatory process and ensure delays in the promulgation of
regulations and the implementation of laws that Congress
passes.
Including independent agencies in these requirements would
also undermine the independence of these agencies and cause
delays of important regulations, including many meant to
protect health and safety and promote consumer protection.
Independent regulatory agencies were established by Congress to
fulfill their missions, including their rulemaking authority,
independent of the direct control of any administration,
regardless of party.\19\ Members of both parties have at times
expressed frustration with a president's ability to influence
rulemakings at independent regulatory agencies, even without
the requirement for OIRA review of these regulations that this
bill would allow.
---------------------------------------------------------------------------
\19\See e.g., Testimony of Sidney A. Shapiro, hearing before the
Senate Committee on Homeland Security and Governmental Affairs, ``A
Review of Regulatory Reform Proposals,'' September 16, 2015. (saying,
``Congress explicitly designed independent regulatory agencies to be
institutionally insulated from excessive political interference from
the president.''); Paul R. Verkuil, The Purposes and Limits of
Independent Agencies, 1988 Duke L.J. 257, 259-60 (1988) (saying, ``The
requirement that the President appoint some commissioners of the party
out of power or who are politically `independent' is designed to
isolate those decisionmakers from politics.'').
---------------------------------------------------------------------------
For example, the majority staff of this committee released
a report in February 2016 alleging that the President
improperly interfered in the Federal Communications
Commissions' open internet rulemaking.\20\ As their report
concluded, ``Politics should never trump policy, especially not
when an agency, like the FCC, was created for the expressed
purpose of being independent and above the political
fray.''\21\ This bill would not just allow a President to have
even more political influence on these independent agencies'
rulemakings, but would provide the President with explicit
approval from Congress to do so. It is important that we do not
politicize the regulatory process at these independent
regulatory agencies by giving this President or any future
President the ability to interfere in these rulemakings.
---------------------------------------------------------------------------
\20\Staff Report of the Majority Office of the Senate Committee on
Homeland Security and Governmental Affairs, Regulating the Internet:
How the White House Bowled over FCC Independence, February 29, 2016.
\21\Id. at 29.
---------------------------------------------------------------------------
Conclusion
We believe that whatever we do here in Congress and on this
Committee to reform the regulatory process should encourage
reducing burdens and increasing transparency while achieving
the greatest public benefit. It should be our goal to have the
most efficient, effective, and transparent regulatory process
we can have, and to ensure that process results in common-sense
regulations. We do not believe this bill would improve the
regulatory process, and in fact would make the process far less
efficient. Therefore, we oppose this measure.
VIII. Changes in Existing Law Made by the Bill, as Reported
In compliance with paragraph 12 of rule XXVI of the
Standing Rules of the Senate, changes in existing law made by
S. 1818 as reported are shown as follows (existing law proposed
to be omitted is enclosed in brackets, new matter is printed in
italic, and existing law in which no change is proposed is
shown in roman):
UNITED STATES CODE
* * * * * * *
TITLE 5--GOVERNMENT ORGANIZATION AND EMPLOYEES
* * * * * * *
PART I--THE AGENCIES GENERALLY
* * * * * * *
CHAPTER 5--ADMINISTRATIVE PROCEDURE
* * * * * * *
SUBCHAPTER II--ADMINISTRATIVE PROCEDURE
* * * * * * *
SEC. 553. RULE MAKING
(a) * * *
* * * * * * *
(f) Rule Making Considerations.--
(1) In general.--An agency shall only promulgate a
rule under this section that is--
(A) required by law;
(B) necessary to interpret a law; or
(C) as permitted by law, made necessary by
public need, to protect or improve the health
and safety of the public, the environment, or
the wellbeing of the people of the United
States.
(2) Considerations.--Before promulgating a rule under
this section, an agency shall--
(A) identify and assess the significance of
the problem that the agency intends to address
with the rule;
(B) consider the legal authority under which
the rule may be proposed, including whether a
rule making is required by statute, and if so,
whether by a specific date, or whether the
agency has discretion to commence a rule
making;
(C) where practicable, examine whether
existing rules or other laws, including the
cumulative effect of existing rules or other
laws--
(i) have created or contributed to
the problem identified under
subparagraph (A); and
(ii) should be modified to achieve
the intended regulatory objective more
effectively;
(D) as permitted by statute, identify and
assess available alternatives to direct
regulation, including by providing--
(i) economic incentives to encourage
the desired behavior, such as user fees
or marketable permits; or
(ii) information to the public in a
form that is clear and intelligible;
(E) consider, to the extent reasonable, the
degree and nature of the risks posed by various
substances or activities within the
jurisdiction of the agency;
(F) after determining that a rule is the best
available method of achieving the regulatory
objective--
(i) assess the costs and benefits of
the intended rule and, recognizing that
some costs and benefits (including
quantifiable and qualitative measures)
are difficult to quantify, design the
rule to maximize net benefits while
justifying the costs, unless a statute
requires another regulatory approach;
and
(ii) as permitted by statute--
(I) consider, when developing
the rule--
(aa) incentives for
innovation,
consistency,
predictability,
flexibility,
distributive impacts,
and equity on the
regulated entities and
the public; and
(bb) the cost of
enforcement and
compliance to the
Federal Government,
regulated entities, and
the public; and
(II) select approaches that
reduce burdens and maintain
flexibility and freedom of
choice for regulated entities
and the public;
(G) base decisions on the best reasonably
obtainable and publically accessible
scientific, technical, economic, and other
information concerning the need for, and
consequences of, the intended rule;
(H) identify and assess alternative forms of
regulation and, to the extent feasible, specify
performance objectives, and not the behavior or
manner of compliance that regulated entities
are required to adopt;
(I) seek views of appropriate State, local,
and tribal officials before imposing regulatory
requirements that may significantly or uniquely
affect those governmental entities;
(J) assess the effects of rules on State,
local, and tribal governments and the private
sector, including specifically the availability
of resources to carry out those mandates, and
seek to minimize those burdens that uniquely or
significantly affect those governmental
entities, consistent with achieving the
regulatory objective of the agency;
(K) as appropriate, seek to harmonize agency
action with related State, local, and tribal
regulatory and other governmental functions;
(L) avoid the promulgation of a rule that is
inconsistent, incompatible, or duplicative with
other rules of the agency or those of other
agencies;
(M) tailor the rule--
(i) to maximize benefits while
imposing the least possible burden on
society, including individuals,
businesses of differing sizes, and
other entities, including small
communities and governmental entities;
and
(ii) in a manner that is consistent
with obtaining the regulatory
objective, taking into account, and to
the greatest extent practicable, the
costs of cumulative rules; and
(N) in order to minimize the potential for
uncertainty and litigation arising from such
uncertainty--
(i) draft the rule in a manner that
is simple and easy to understand; and
(ii) include information to assist
with compliance with the rule, such as
warnings, appropriate default rules,
and disclosure requirements.
(3) Exceptions.--This subsection shall not apply--
(A) to interpretative rules, general
statements of policy, or rules of agency
organization, procedures, or practice;
(B) if the Administrator of the Office of
Information and Regulatory Affairs waives the
requirements of this subsection for good cause;
or
(C) if the statute on which a proposed rule
is based specifically exempts a rule from any
of the procedures under this subsection.
(4) Judicial review.--
(A) In general.--Compliance by an agency with
the provisions of this subsection shall be
subject to judicial review only--
(i) in connection with review of
final agency action; and
(ii) in accordance with this
paragraph.
(B) Determinations by administrator.--Any
determination, action, or inaction of the
Administrator of the Office of Information and
Regulatory Affairs under this subsection shall
not be subject to judicial review.
(C) Review with final rule.--Compliance by an
agency with the provisions of this subsection
shall only be subject to judicial review in
connection with review of the final rule to
which an analysis, assessment, or other
consideration under paragraph (2) applies.
(D) Rule making record.--Each consideration
by an agency under paragraph (2) shall be--
(i) included as part of the rule
making record for the rule; and
(ii) to the extent relevant,
considered by a court only in
determining whether, under the statute
granting the rule making authority to
the agency, the final rule is--
(I) arbitrary, capricious, or
an abuse of discretion; or
(II) unsupported by
substantial evidence where the
standard is otherwise provided
by law.
(E) Set aside.--If an agency fails to comply
with the requirements under paragraph (2), a
court may, giving due account to prejudicial
error, hold unlawful and set aside the agency
action.
[all]