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Major Regulatory Changes Proposed in House Bill

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By Alexander Gaffney

The House of Representatives is scheduled to vote on a piece of proposed legislation next week that would overhaul vast sections of the federal regulatory process. Importantly, the bill would also freeze all major regulatory activities—including many mandated by the recently-passed Food and Drug Administration Safety and Innovation Act—until the national unemployment rate falls below 6.0%.

Stopping all ‘Significant’ Regulatory Actions

The Regulatory Freeze for Jobs Act of 2012—dubbed the Red Tape Reduction and Small Business Job Creation Act by its authors—prevents any “significant regulatory action” from taking place, with “significant” being defined as any action having an impact of $100 million or more.

The legislation was first proposed in February 2012 by Rep. Tim Griffin (R-AK) and co-sponsored by 14 of his Republican colleagues before being referred to the House Committee on the Judiciary and the House Committee on Oversight and Government Reform.

Since being introduced in the House, the bill has exploded from just a few pages in length to more than 77 pages of legislative language containing several bills.

As with the original legislation, the bill includes a number of waivers to allow for the passage of “significant” regulations, including the ability for the President to pass it by Executive Order for “health or safety” emergency reasons. Agencies would also be allowed to eliminate existing rules under the law.

Under the law, companies or other “adversely affected” party could file suit against an agency if they pass any significant regulation in violation of the rule. Courts would then be empowered to order agencies to “take corrective action” and pay the litigant’s attorney’s fees.

Settlement Decrees to be Open to Public Comment

The bill also contains another piece of legislation previously tracked by Regulatory Focus known as the Sunshine for Regulatory Decrees and Settlements Act of 2012.

Released in June 2012, the Act would require agencies to open up any potential settlement decrees to public scrutiny in the form of a comment period. Companies could then file amicus curiae briefs with a court.

In a statement at the time of the bill’s introduction, Judiciary Chairman Lamar Smith (R-TX) said the decrees were a “heavy contributor to the burden of new regulation,” and often “force federal agencies to issue new rules.”

“Those to be regulated typically do not know about these deals until the plaintiffs’ complaints and the proposed decrees or settlements are filed in court,” added Smith. “By then, it is too late.”

Regulatory Reviews by Congress for Cost-effectiveness

A third piece of legislation bundled into the bill requires federal agencies, including the US Food and Drug Administration (FDA), to design their regulations “in the most cost-effective manner to achieve the regulatory objective” sought by the agency.

“In doing so, each agency shall consider incentives for innovation, consistency, predictability, the costs of enforcement and compliance (to the government, regulated entities, and the public), flexibility, distributive impacts, and equity,” explains the bill. Only if a “reasoned determination” exists that “the benefits of the intended regulation justify its costs” should a regulation be proposed.

The same title of the bill would also require agencies to “draft its regulations to be simple and easy to understand”—provisions similar to ones contained within a January 2012 bill introduced by Rep. Bruce Braley (D-IA).

The new language is intended to “minimize the potential for uncertainty and litigation arising from such uncertainty,” the bill explains, and would be enforced by OIRA, which could require an agency to re-write the provisions to comply with the law.

Congressional Review of Regulations

Another provision could have the potential to dramatically clog up agency resources. “At the request of the chairman or ranking minority member of a standing or select committee of the House of Representatives or the Senate, an agency shall conduct a retrospective analysis of an existing Federal regulation promulgated by an agency,” explains Sec. 209 of the bill.

The review power could potentially allow a single senator or representative to request an agency review of all regulations promulgated by the agency at nearly any time—or multiple times, even. Agencies would be required to provide an extensive analysis of each regulation, including cost, conflicts with other regulations, an analysis of technological changes since the regulation’s passage and any litigation history challenging the regulation.

Vote Schedule for 23-27 July

The Hill reports the bill will come to a vote “by next week”—23-27 July—but still must pass any amendments in the House Rules Committee, which is set to finish receiving proposals for amendments by Friday, 20 July.




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