```

[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.
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    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).
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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.
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    \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.
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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]
```