House Report 115-2 - PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 5) TO REFORM THE PROCESS BY WHICH FEDERAL AGENCIES ANALYZE AND FORMULATE NEW REGULATIONS AND GUIDANCE DOCUMENTS, TO CLARIFY THE NATURE OF JUDICIAL REVIEW OF AGENCY INTERPRETATIONS, TO ENSURE COMPLETE ANALYSIS OF POTENTIAL IMPACTS ON SMALL ENTITIES OF RULES, AND FOR OTHER PURPOSES, AND PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 79) TO CLARIFY THE DEFINITION OF GENERAL SOLICITATION UNDER FEDERAL SECURITIES LAW

[House Report 115-2]
[From the U.S. Government Publishing Office]

115th Congress } { Report
HOUSE OF REPRESENTATIVES
1st Session } { 115-2

======================================================================

PROVIDING FOR CONSIDERATION OF THE BILL (H.R. 5) TO REFORM THE PROCESS
BY WHICH FEDERAL AGENCIES ANALYZE AND FORMULATE NEW REGULATIONS AND
GUIDANCE DOCUMENTS, TO CLARIFY THE NATURE OF JUDICIAL REVIEW OF AGENCY
INTERPRETATIONS, TO ENSURE COMPLETE ANALYSIS OF POTENTIAL IMPACTS ON
SMALL ENTITIES OF RULES, AND FOR OTHER PURPOSES, AND PROVIDING FOR
CONSIDERATION OF THE BILL (H.R. 79) TO CLARIFY THE DEFINITION OF
GENERAL SOLICITATION UNDER FEDERAL SECURITIES LAW

_______

January 9, 2017.--Referred to the House Calendar and ordered to be
printed

_______

Mr. Collins of Georgia, from the Committee on Rules,
submitted the following

R E P O R T

[To accompany H. Res. 33]

The Committee on Rules, having had under consideration
House Resolution 33, by a nonrecord vote, report the same to
the House with the recommendation that the resolution be
adopted.

SUMMARY OF PROVISIONS OF THE RESOLUTION

The resolution provides for consideration of H.R. 5, the
Regulatory Accountability Act of 2017, under a structured rule.
The rule provides one hour of general debate equally divided
and controlled by the Majority Leader and the Minority Leader
or their respective designees. The resolution waives all points
of order against consideration of the bill. The resolution
provides that the bill shall be considered as read. The
resolution waives all points of order against provisions in the
bill. The resolution makes in order only those amendments
printed in part A of this report. Each such amendment may be
offered only in the order printed in this report, may be
offered only by a Member designated in this report, shall be
considered as read, shall be debatable for the time specified
in this report equally divided and controlled by the proponent
and an opponent, shall not be subject to amendment, and shall
not be subject to a demand for division of the question in the
House or in the Committee of the Whole. The resolution waives
all points of order against the amendments printed in part A of
this report. The rule provides one motion to recommit with or
without instructions.
Section 2 of the resolution provides for consideration of
H.R. 79, the HALOS Act, under a structured rule. The resolution
provides one hour of general debate equally divided and
controlled by the chair and ranking minority member of the
Committee on Financial Services or their respective designees.
The resolution waives all points of order against consideration
of the bill. The resolution provides that the bill shall be
considered as read. The resolution waives all points of order
against provisions in the bill. The resolution makes in order
only those amendments printed in part B of this report. Each
such amendment may be offered only in the order printed in this
report, may be offered only by a Member designated in this
report, shall be considered as read, shall be debatable for the
time specified in this report equally divided and controlled by
the proponent and an opponent, shall not be subject to
amendment, and shall not be subject to a demand for division of
the question in the House or in the Committee of the Whole. The
resolution waives all points of order against the amendments
printed in part B of this report. The resolution provides one
motion to recommit with or without instructions.

EXPLANATION OF WAIVERS

Although the resolution waives all points of order against
consideration of H.R. 5, the Committee is not aware of any
points of order. The waiver is prophylactic in nature.
Although the resolution waives all points of order against
provisions in H.R. 5, the Committee is not aware of any points
of order. The waiver is prophylactic in nature.
Although the resolution waives all points of order against
the amendments to H.R. 5 printed in part A of this report, the
Committee is not aware of any points of order. The waiver is
prophylactic in nature.
Although the resolution waives all points of order against
consideration of H.R. 79, the Committee is not aware of any
points of order. The waiver is prophylactic in nature.
Although the resolution waives all points of order against
provisions in H.R. 79, the Committee is not aware of any points
of order. The waiver is prophylactic in nature.
Although the resolution waives all points of order against
the amendments to H.R. 79 printed in part B of this report, the
Committee is not aware of any points of order. The waiver is
prophylactic in nature.

COMMITTEE VOTES

The results of each record vote on an amendment or motion
to report, together with the names of those voting for and
against, are printed below:

Rules Committee record vote No. 7

Motion by Ms. Slaughter to report open rules for H.R. 5 and
H.R. 79 Defeated: 3-8

----------------------------------------------------------------------------------------------------------------
Majority Members Vote Minority Members Vote
----------------------------------------------------------------------------------------------------------------
Mr. Cole........................................ Nay Ms. Slaughter..................... Yea
Mr. Woodall..................................... Nay Mr. McGovern...................... Yea
Mr. Burgess..................................... Nay Mr. Hastings of Florida........... Yea
Mr. Collins..................................... ............ Mr. Polis......................... ............
Mr. Byrne....................................... Nay
Mr. Newhouse.................................... Nay
Mr. Buck........................................ Nay
Ms. Cheney...................................... Nay
Mr. Sessions, Chairman.......................... Nay
----------------------------------------------------------------------------------------------------------------

SUMMARY OF THE AMENDMENTS TO H.R. 5 IN PART A MADE IN ORDER

1. Goodlatte (VA): Revises section 2 of title II of the
bill to restrain unwarranted interpretation of ambiguous
statutes to find implied delegations of legislative rulemaking
authority, and of ambiguous statutes and regulations to
expansively extend agency authority. (10 minutes)
2. Chaffetz (UT): Establishes a timeline by which the
Office of Information and Regulatory Affairs must issue
guidelines under title I of the bill. (10 minutes)
3. Chabot (OH): Requires an agency to include an economic
assessment or a summary of it when an agency certifies that a
proposed rule will not have a ``significant economic impact on
a substantial number of small entities'' under the Regulatory
Flexibility Act. This will ensure an agency's decision to
certify a rule and not conduct a full regulatory flexibility
analysis is supported by data. (10 minutes)
4. Velazquez (NY): Strikes Title III of the bill and
replaces it with alternative language that reforms the
Regulatory Flexibility Act to reduce the burden of regulations
on small businesses. (10 minutes)
5. Peterson (MN), Goodlatte (VA), Chaffetz (UT): Prohibits
agencies from impartially communicating with the public in
order to generate support or opposition to a proposed rule. (10
minutes)
6. Graves, Garret (LA), Cuellar (TX), Babin (TX): Provides
agency accountability of major rules by requiring retrospective
review and report. (10 minutes)
7. Young, David (IA): Allows for sufficient time (at least
90 days) for affected entities to take steps to comply with
issued guidance (10 minutes)
8. Castor (FL): Ensures that any rule intended to protect
public health and welfare is exempted from the requirements of
this act. (10 minutes)
9. Cicilline (RI): Provides for the prevention of the
transmission of foodborne illness or to meet preventive-control
requirements for food safety (10 minutes)
10. Johnson, Hank (GA): Exempts rules that significantly
improve the employment, retention, and wages of workforce
participants, especially those with significant barriers to
employment, such as persons with disabilities or limited
English proficiency. (10 minutes)
11. Ruiz (CA): Exempts rules pertaining to the safety of
children's products or toys. (10 minutes)
12. Scott, Bobby (VA): Exempts from this bill a rule which
pertains to workplace health and safety and that is necessary
to prevent or reduce the incidence of traumatic injury, cancer
or irreversible lung disease at mining facilities which are
subject to the Federal Mine Safety and Health Act of 1977 (30
USC 801, et seq) or workplaces which are subject to the
Occupational Safety and Health Act (29 USC 651 et seq). (10
minutes)
13. Tonko (NY): Ensures that any rules made under the
``Frank R. Lautenberg Chemical Safety for the 21st Century
Act,'' are exempted from this act. (10 minutes)
14. Grijalva (AZ): Strikes language that would require the
Forest Service and the Bureau of Land Management to perform
regulatory flexibility analyses for forest and land management
plans. (10 minutes)
15. Nadler (NY): Requires analyses conducted under Title
III of the bill to include direct and indirect benefits as well
as direct and indirect costs. (10 minutes)
16. Posey (FL): Requires federal agencies to report on
influential scientific information and associated peer reviews
disseminated or to be disseminated in a rulemaking proceeding.
(10 minutes)

SUMMARY OF THE AMENDMENTS TO H.R. 79 IN PART B MADE IN ORDER

1. Velazquez (NY): Requires the event sponsor to provide
attendees with a written disclosure outlining the nature of the
event and the risks of investing in the securities for sale. It
would also clarify that attendance at an event does not in
itself establish a pre-existing relationship for purposes of
Rule 506(b). (10 minutes)
2. Waters (CA): Limits the types of fees ``demo day''
sponsors can collect and requires an issuer to be a real
business. (10 minutes)

PART A--TEXT OF AMENDMENTS TO H.R. 5 MADE IN ORDER

1. An Amendment To Be Offered by Representative Goodlatte of Virginia
or His Designee, Debatable for 10 Minutes

Page 39, line 3, insert after ``made by agencies.'' the
following: ``If the reviewing court determines that a statutory
or regulatory provision relevant to its decision contains a gap
or ambiguity, the court shall not interpret that gap or
ambiguity as an implicit delegation to the agency of
legislative rule making authority and shall not rely on such
gap or ambiguity as a justification either for interpreting
agency authority expansively or for deferring to the agency's
interpretation on the question of law.''.
----------

2. An Amendment To Be Offered by Representative Chaffetz of Utah or His
Designee, Debatable for 10 Minutes

Page 38, insert after line 10 the following:

SEC. 110. PROMPT ISSUANCE OF OIRA GUIDELINES.

The Administrator of the Office of Information and Regulatory
Affairs of the Office of Management and Budget shall establish
any guideline required to be established by this title or the
amendments made by this title by not later than 270 days after
the date of enactment of this title.
----------

3. An Amendment To Be Offered by Representative Chabot of Ohio or His
Designee, Debatable for 10 Minutes

In section 304(d)(1) of the bill, strike ``and'' at the end.
In section 304(d)(2) of the bill, strike the period and
insert ``; and''.
In section 304(d), insert after paragraph (2) the following:
(3) by inserting ``The detailed statement shall
include an economic assessment or a summary thereof
that is sufficiently detailed to support the agency's
certification.'' before ``The agency shall provide such
certification''.
----------

4. An Amendment To Be Offered by Representative Velazquez of New York
or Her Designee, Debatable for 10 Minutes

Strike line 13 on page 39 and all that follows through line
26 on page 69, and insert the following (and conform the table
of contents accordingly):

TITLE III--SMALL BUSINESS REGULATORY IMPROVEMENT ACT

SEC. 301. SHORT TITLE.

This title may be cited as the ``Small Business Regulatory
Improvement Act of 2017''.

SEC. 302. CLARIFICATION AND EXPANSION OF RULES COVERED BY THE
REGULATORY FLEXIBILITY ACT.

Section 601 of title 5, United States Code, is amended by
adding at the end the following new paragraph:
``(9) Economic impact.--The term `economic impact'
means, with respect to a proposed or final rule--
``(A) any direct economic effect on small
entities of such rule; and
``(B) any indirect economic effect on small
entities which is reasonably foreseeable and
results from such rule (without regard to
whether small entities will be directly
regulated by the rule).''.

SEC. 303. REQUIREMENTS PROVIDING FOR MORE DETAILED ANALYSES.

(a) Initial Regulatory Flexibility Analysis.--Subsection (b)
of section 603 of title 5, United States Code, is amended to
read as follows:
``(b) Each initial regulatory flexibility analysis required
under this section shall contain a detailed statement
describing--
``(1) the reasons why the action by the agency is
being considered;
``(2) the objectives of, and legal basis for, the
proposed rule;
``(3) the type of small entities to which the
proposed rule will apply;
``(4) the number of small entities to which the
proposed rule will apply or why such estimate is not
available;
``(5) the projected reporting, recordkeeping, and
other compliance requirements of the proposed rule,
including an estimate of the classes of small entities
which will be subject to the requirement, the costs,
and the type of professional skills necessary to comply
with the rule; and
``(6) all relevant Federal rules which may duplicate,
overlap, or conflict with the proposed rule, or the
reasons why such a description could not be
provided.''.
(b) Final Regulatory Flexibility Analysis.--
(1) Paragraph (4) of such section is amended by
striking ``an explanation'' and inserting ``a detailed
explanation''.
(2) Paragraph (5) of such section is amended to read
as follows:
``(4) a description of the projected reporting,
recordkeeping, and other compliance requirements of the
rule, including an estimate of the classes of small
entities which will be subject to the requirement, the
costs, and the type of professional skills necessary to
comply with the rule; and''.
(c) Certification of No Impact.--Subsection (b) of section
605 of title 5, United States Code, is amended by inserting
``detailed'' before ``statement'' both places such term
appears.

SEC. 304. PERIODIC REVIEW OF RULES.

Section 610 of title 5, United States Code, is amended to
read as follows:

``Sec. 610. Periodic review of rules

``(a) Not later than 180 days after the effective date of
this section, each agency shall publish in the Federal Register
and place on its website a plan for the periodic review of
rules issued by the agency which the head of the agency
determines have a significant economic impact on a substantial
number of small entities. Such determination shall be made
without regard to whether the agency performed an analysis
under section 604. The purpose of the review shall be to
determine whether such rules should be continued without
change, or should be amended or rescinded, consistent with the
stated objectives of applicable statutes, to minimize
significant economic impacts on a substantial number of small
entities. Such plan may be amended by the agency at any time by
publishing the revision in the Federal Register and
subsequently placing the amended plan on the agency's website.
``(b) The plan shall provide for the review of all such
agency rules existing on the effective date of this section
within 10 years of the date of publication of the plan in the
Federal Register and for review of rules adopted after the
effective date of this section within 10 years after the
publication of the final rule in the Federal Register. If the
head of the agency determines that completion of the review of
existing rules is not feasible by the established date, the
head of the agency shall so certify in a statement published in
the Federal Register and may extend the review for not longer
than 2 years after publication of notice of extension in the
Federal Register. Such certification and notice shall be sent
to the Chief Counsel for Advocacy and the Congress.
``(c) Each agency shall annually submit a report regarding
the results of its review pursuant to such plan to the Congress
and, in the case of agencies other than independent regulatory
agencies (as defined in section 3502(5) of title 44, United
States Code) to the Administrator of the Office of Information
and Regulatory Affairs of the Office of Management and Budget.
Such report shall include the identification of any rule with
respect to which the head of the agency made a determination
described in paragraph (5) or (6) of subsection (d) and a
detailed explanation of the reasons for such determination.
``(d) In reviewing rules under such plan, the agency shall
consider the following factors:
``(1) The continued need for the rule.
``(2) The nature of complaints received by the agency
from small entities concerning the rule.
``(3) Comments by the Regulatory Enforcement
Ombudsman and the Chief Counsel for Advocacy.
``(4) The complexity of the rule.
``(5) The extent to which the rule overlaps,
duplicates, or conflicts with other Federal rules and,
unless the head of the agency determines it to be
infeasible, State and local rules.
``(6) The length of time since the rule has been
evaluated or the degree to which technology, economic
conditions, or other factors have changed in the area
affected by the rule.
``(e) The agency shall publish in the Federal Register and on
its website a list of rules to be reviewed pursuant to such
plan. Such publication shall include a brief description of the
rule, the reason why the agency determined that it has a
significant economic impact on a substantial number of small
entities (without regard to whether it had prepared a final
regulatory flexibility analysis for the rule), and request
comments from the public, the Chief Counsel for Advocacy, and
the Regulatory Enforcement Ombudsman concerning the enforcement
of the rule.''.

SEC. 305. CHANGES TO THE REGULATORY FLEXIBILITY ACT TO COMPORT WITH
EXECUTIVE ORDER 13272.

(a) Initial Regulatory Flexibility Analysis.--Section 603 of
title 5, United States Code, is amended by adding at the end
the following:
``(e) An agency shall notify the Chief Counsel for Advocacy
of the Small Business Administration of any draft rules that
may have a significant economic impact on a substantial number
of small entities either--
``(1) when the agency submits a draft rule to the
Office of Information and Regulatory Affairs at the
Office of Management and Budget, if submission is
required; or
``(2) if no submission to the Office of Information
and Regulatory Affairs is so required, at a reasonable
time prior to publication of the rule by the agency.''.
(b) Inclusion in Final Regulatory Flexibility Analysis of
Response to Comments on Certification of Proposed Rule.--
Paragraph (2) of section 604(a) of title 5, United States Code,
is amended by inserting after ``initial regulatory flexibility
analysis'' the following: ``(or certification of the proposed
rule under section 605(b))''.
----------

5. An Amendment To Be Offered by Representative Peterson of Minnesota
or His Designee, Debatable for 10 Minutes

Page 18, insert after line 8 the following:
``(5) After notice or advance notice of a proposed rule
making, the agency making the rule, and any person acting in an
official capacity on behalf of the agency, may not communicate,
and a person who receives Federal funds from the agency may not
use those funds to communicate, through written, oral,
electronic, or other means to the public about the proposed
rule in a manner that--
``(A) directly advocates, in support of or against
the proposed rule, for the submission of information to
form part of the record of review for the proposed
rule;
``(B) appeals to the public, or solicits a third-
party, to undertake advocacy in support of or against
the proposed rule; or
``(C) is directly or indirectly for publicity or
propaganda purposes within the United States not
heretofore authorized by the Congress.
Such prohibition shall not apply to communication that requests
comments or provides information regarding the rule in an
impartial manner.''.
----------

6. An Amendment To Be Offered by Representative Graves of Louisiana or
His Designee, Debatable for 10 Minutes

Page 23, line 24, strike ``and''.
Page 24, insert after line 5 the following:
``(iii) in the case of a major rule, a report
on the benefits and costs of the final rule on
entities whose conduct is regulated by the rule
in the Federal Register, to be revised every 5
years thereafter while the rule remains in
effect, and including, at a minimum--
``(I) an assessment of the impacts,
including any costs, of the major rule
on regulated entities;
``(II) a determination about how the
actual benefits and costs of the major
rule have varied from those anticipated
at the time the major rule was issued;
``(III) an assessment of the
effectiveness and benefits of the major
rule in producing the regulatory
objectives of the major rule; and
``(IV) a review by the Administrator
of the Office of Information and
Regulatory Affairs of the Office of
Management and Budget when required
under executive order; and''.
Page 30, line 16, insert after ``the Federal Open Market
Committee.'' the following:
``(n) Regulation-specific Frameworks.--
``(1) Report to congress.--The agency shall provide a
report to Congress not later than 90 days after the
agency makes any determination under subsection
(f)(4)(I)(iii)(II) that the cost to regulated entities
has exceeded the anticipated cost at the time the final
rule was issued. The agency, at a minimum, shall assess
in the report--
``(A) whether the major rule is accomplishing
its regulatory objective; and
``(B) whether the major rule has been
rendered unnecessary, taking into
consideration--
``(i) changes in the subject area
affected by the major rule;
``(ii) whether the major rule
overlaps, duplicates, or conflicts with
other rules or, to the extent feasible,
State and local government regulations;
and
``(iii) other alternatives to the
major rule or modification of the major
rule that might achieve better results
while imposing a smaller burden on
society or at a lower cost, taking into
consideration any cost already
incurred.
``(2) Reopening of public docket.--Upon delivery of
the report required in paragraph (1) the agency shall--
``(A) reopen the public docket for 60 days to
receive additional comments; and
``(B) consider modifications or alternatives
that reduce costs and increase benefits to
regulated entities or individuals.
``(3) Rule of construction.--Nothing in this
subsection may be construed to affect any other
provision of law that requires an agency to conduct
retrospective reviews of rules issued by the agency.''.
----------

7. An Amendment To Be Offered by Representative Young of Iowa or His
Designee, Debatable for 10 Minutes

Page 33, line 10, strike ``agencies and'' and insert
``agencies,''.
Page 33, line 11, insert after ``easy to understand,'' the
following: ``and issues guidance in a manner sufficient to
provide at least 90 days for affected entities to take steps to
comply with such guidance,''.
----------

8. An Amendment To Be Offered by Representative Castor of Florida or
Her Designee, Debatable for 10 Minutes

Page 36, strike line 10 and all that follows through page 37,
line 9.
Page 38, strike line 11 and all that follows through page 39,
line 12.
Add, at the end of the bill, the following (and conform the
table of contents accordingly):

TITLE VII--EXCEPTION FOR CERTAIN RULES