July 8, 2019

What Difference Could Federal Regulatory Reform Measures Make?

In a recent policy memo, the Washington, D.C.-based public relations firm the CGCN Group provided an overview of regulatory reform measures that have been introduced during the 115thCongress and what they will mean for U.S. businesses’ regulatory compliance and the impact it could have on regulatory reforms in the future.

CGCN experts note that, due to a variety of political, institutional, and legal concerns, landmark regulatory reform legislation has encountered significant obstacles. Because of this, the regulatory reform bills most likely to pass are those that make only incremental changes, either to the regulatory process and/or to statutes already on the books. While certain incremental changes may appear trivial, CGCN notes, they can spur more significant regulatory changes down the road.

Among the regulatory reform measures the U.S. House of Representatives is considering this session are:

  • H.R. 1654, “Federal Register Modernization Act,” which was passed by the House by a vote of 426-1 on March 12, 2019. The bill was referred to Senate Homeland Security and Governmental Affairs Committee (HSGAC), and could move quickly through the Senate.H.R. 1654 would revise the requirements for publication by agencies of materials in the Federal Registerby eliminating the hard copy requirement and move publication to an online format. It also would require that the action be published for public inspection (the last step before formal publication) the moment an action is sent to the Federal Register. These reforms matter because theywould decrease the timeframe from when an agency finishes an action and “publication.”  For some rules, the period between finalization and publication can be weeks, if not months. Thus, with H.R. 1654, rules will be finalized earlier so they will become effective sooner. That means the bill could help expedite permitting of infrastructure projects.

Among the measures being considered by the Senate are:

  • S. 1339,“Prove It Act of 2019,” a bipartisan bill cosponsored by Sens. Joni Ernst (R-Iowa) and Krysten Sinema (D-Ariz.). The Senate Homeland Security and Government Affairs Committee (HSGAC) has held hearings on the bill. The Prove It Act provides the Small Business Administration’s Office of Advocacy (SBA Advocacy) more power to disagree with regulatory actions that would impact small businesses. The bill could result in agencies developing regulatory flexibility analyses more often to avoid sparking public disagreements with SBA. It also could allow small businesses (and those who represent them) the chance to participate earlier in the process.
  • S. 1420, “The Setting Management Analysis Requirements in Text Act of 2019,” or “SMART Act,” another bipartisan bill that is cosponsored by Sens. Krysten Sinema (D-Ariz.) and James Lankford (R-Okla.). The SMART Act covers all major regulations and puts teeth into retrospective review. This legislation matters because, during the retrospective review, the agency is required to analyze how the actual benefits and costs of the rule varied from those anticipated at the time the rule was issued and to determine whether: (1) the rule has been rendered unnecessary; (2) the rule needs to be improved to accomplish the regulatory objective; and (3) other alternatives or a modification of the rule could achieve the regulatory objective at a lower compliance burden or increased net benefits. The bill also includes a judicial review provision that requires an agency to establish a retrospective review plan before finalization or the rule will not become effective.
  • S. 1419,“Early Participation in Regulations Act of 2019,” also sponsored by Sens. Lankford and Sinema. Like the SMART Act, S. 1419 provides additional requirements for major rules. While the SMART Act focuses on the period afterdevelopment of a major rule, S. 1419 focuses on providing the public additional interaction before the development of the rule, requiring that agencies publish an advanced notice of proposed rulemaking (ANPRM) at least 90 days before publication of a proposed rule for all major rules. The ANPRM must include: (1) the problem to be addressed; (2) the data and information to be relied upon by the agency; (3) regulatory alternatives; (4) legal authority; and (5) the objective of the rule. The agency must solicit information from the public and provide at least 60 days for public comment. This legislation would result in major rules taking longer to develop but could result in better informed and more balanced proposed and final rules.
  • S. 380,“Guidance Out of Darkness Act,” or “GOOD Act,” which the Senate could soon consider. The GOOD Act requires agencies to post all guidance documents, including items such as memos, ‘‘Dear Colleague’’ letters, bulletins, directives, or “anything that can be considered a policy statement or interpretation,” on a central website and “publish a hyperlink on the internet website of the agency that provides access to the guidance documents.”  It also requires that all existing guidance be made available on agency websites within 180 days. The GOOD Act should be helpful in rooting out what some experts call “regulatory dark matter,” a term that generally refers to policymaking through guidance. As one regulatory expert stated, “[r]equiring vastly more disclosure, ensuring that federal agencies post all guidance documents online is a sensible and essential step to beginning to hold federal agencies accountable for their actions.”
  • S. 395,“Providing Accountability Through Transparency Act of 2019,” which also could soon be considered by the Senate. This bill requires that agencies post a 100-word summary on the internet of a proposed rule, establishing a procedural requirement but would not likely provide any legal recourse for stakeholders harmed by the regulatory action.