Senate Committee Takes on Regulatory Reform

The Senate Committee on Homeland Security and Government Affairs May 17 advanced a number of bills that could have significant impacts on the future of energy regulation in the future.

Four of the bills— the Regulatory Accountability Act (RAA), the Regulations from the Executive in Need of Scrutiny (REINS) Act, the Midnight Rules Relief Act, and the Small Business Regulatory Flexibility Improvements Act—passed largely on party-line votes. One regulation focused bill, the Early Participation in Regulations Act, enjoyed broad bipartisan support.

Regulatory Accountability Act

The Senate version of the Regulatory Accountability Act would require agencies to develop the least expensive version of a regulation and mandated additional economic analyses while drafting rules. “This is a big deal because it’s the first update the administrative procedures act in about 70 years and it’s needed,” bill sponsor Sen. Rob Portman (R-Ohio) said during the markup. “It also makes regulations more cost effective. It says ‘hey look, if you’re going to have a congressional objective, let’s achieve it but let’s achieve it in the cost-effective way.’ All of us know regulations are necessary, but we need to do it in a smarter way.”

The bill has been cheered by industry. In early February, a group of more than 600 groups sent a letter to Senate Majority Leader Mitch McConnell (R-Ky.) and Democratic Leader Sen. Chuck Schumer (D-N.Y.) urging passage of the bill. “The RAA stands for good governance and getting rules right by bringing transparency, accountability, and integrity to the rulemaking process at federal agencies,” the letter said.

Signatories of the February 6 letter include the American Fuel and Petrochemical Manufacturers, the American Public Power Association, the Association of Energy Service Companies, the Consumer Energy Alliance, the Energy Equipment and Infrastructure Alliance, the National Association of Electrical Distributors, the National Rural Electric Cooperative Association, the U.S. Chamber of Commerce, and the U.S. Oil and Gas Association.

Environmental groups, however, are less than thrilled with the content of the bill, which they say in a May 16 letter to senators will “make it virtually impossible for federal agencies to put into place commonsense protections that benefit the environment, safety, public health, and economic stability.”

According to the letter, the RAA “would emphasize costs to industry over benefits to Americans and set up a system that is designed to shortchange the public. And it would invite political interference by giving White House political officials greater control over the regulatory system while limiting transparency about their activities.”

The Regulations from the Executive in Need of Scrutiny (REINS) Act

Under the REINS Act, any regulation that would impose compliance costs of more than $100 million a year would have to be approved by Congress. If the rule did not get congressional approval via a joint resolution within 70 days, it would be null and void. Such approval is not currently required.

The bill does allow for some extenuating circumstances. “A major rule may take effect for 90 days without such approval if the President determines it 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,” according to the bill summary.

“I think this was the intent of our founding fathers that …  significant legislation be passed by Congress, and not by just the executive branch,” Sen. Rand Paul (R-Ky.) said during the markup.

The Midnight Rules Relief Act

“Midnight regulations,” are rules published between the fall election and January inauguration of a new administration. While November to January is referred to as the “midnight” period during any election cycle, it is particularly important during a presidential election year.

In such a year, the outgoing administration may publish regulations during this time, rush them through finalization, and enact them just before the new administration takes power. The regulations can be reversed by the incoming administration, but this requires an extensive rule-making process.

The Midnight Rules Relief Act modifies the Congressional Review Act (CRA) to allow Congress to disapprove en bloc of any number “midnight regulations” passed in the final months of any outgoing administration.

Congress may already use the CRA to target midnight regulations but must do so one by one. Under the Midnight Rules Act, a group of rules could be voted on at once. “Even though it may sound, we obviously used the congressional review act against President Obama’s midnight regulations, this is a bipartisan action, you can do the same thing when a Republican administration is out of power and from my standpoint it’s pretty fair treatment,” Committee Chairman Ron Johnson (R-Wis.) said during the markup.

Ranking member Sen. Clair McCaskill (D-Mo.) argued that the bill would breed partisanship. “I think saying that they have to all be voted on at one time is asking people to vote party-line, and I don’t think that’s what we should be doing right now,” she said.

The Small Business Regulatory Flexibility Improvements Act

The Small Business Regulatory Flexibility Improvements Act is intended to ensure that small businesses are considered when regulations are drafts that would affect them. However, McCaskill argued, the bill needs to be reworked before gaining the support of the Democrats because it would classify nearly all regulations as having a significant impact on small businesses.

Early Participation in Regulations Act

The Early Participation in Regulations Act got the support of all but three committee Democrats and all committee Republicans. The bill would require agencies to publish notice of proposed rulemakings for major rules in the Federal Register no less than 90 days before the publication of official notices. This will allow interested parties more time to review the issues at hand before commenting on the rulemaking.

—Abby L. Harvey is a POWER reporter.