U.S. GOVERNMENT PUBLISHING OFFICE

WASHINGTON : 

For sale by the Superintendent of Documents, U.S. Government Publishing Office

Internet: bookstore.gpo.gov Phone: toll free (866) 512–1800; DC area (202) 512–1800

Fax: (202) 512–2104 Mail: Stop IDCC, Washington, DC 20402–0001

97–418 PDF 2016

REQUIRE EVALUATION BEFORE IMPLEMENTING EXECUTIVE WISHLISTS (REVIEW) ACT OF 2015; 

AND THE REGULATORY PREDICTABILITY FOR 

BUSINESS GROWTH ACT OF 2015 

HEARING 

BEFORE THE

SUBCOMMITTEE ON 

REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW 

OF THE

COMMITTEE ON THE JUDICIARY 

HOUSE OF REPRESENTATIVES 

ONE HUNDRED FOURTEENTH CONGRESS 

FIRST SESSION 

ON

H.R. 3438 and H.R. 2631 

NOVEMBER 3, 2015 

Serial No. 114–51 

Printed for the use of the Committee on the Judiciary 

( 

Available via the World Wide Web: http://judiciary.house.gov 
(II) 

COMMITTEE ON THE JUDICIARY 

BOB GOODLATTE, Virginia, Chairman 

F. JAMES SENSENBRENNER, JR., 

Wisconsin 

LAMAR S. SMITH, Texas 

STEVE CHABOT, Ohio 

DARRELL E. ISSA, California 

J. RANDY FORBES, Virginia 

STEVE KING, Iowa 

TRENT FRANKS, Arizona 

LOUIE GOHMERT, Texas 

JIM JORDAN, Ohio 

TED POE, Texas 

JASON CHAFFETZ, Utah 

TOM MARINO, Pennsylvania 

TREY GOWDY, South Carolina 

RAU ́ L LABRADOR, Idaho 

BLAKE FARENTHOLD, Texas 

DOUG COLLINS, Georgia 

RON DeSANTIS, Florida 

MIMI WALTERS, California 

KEN BUCK, Colorado 

JOHN RATCLIFFE, Texas 

DAVE TROTT, Michigan 

MIKE BISHOP, Michigan 

JOHN CONYERS, JR., Michigan 

JERROLD NADLER, New York 

ZOE LOFGREN, California 

SHEILA JACKSON LEE, Texas 

STEVE COHEN, Tennessee 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

PEDRO R. PIERLUISI, Puerto Rico 

JUDY CHU, California 

TED DEUTCH, Florida 

LUIS V. GUTIERREZ, Illinois 

KAREN BASS, California 

CEDRIC RICHMOND, Louisiana 

SUZAN DelBENE, Washington 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SCOTT PETERS, California 

SHELLEY HUSBAND, Chief of Staff & General Counsel 

PERRY APELBAUM, Minority Staff Director & Chief Counsel 

SUBCOMMITTEE ON REGULATORY REFORM, COMMERCIAL AND ANTITRUST LAW

TOM MARINO, Pennsylvania, Chairman 

BLAKE FARENTHOLD, Texas, Vice-Chairman 

DARRELL E. ISSA, California 

DOUG COLLINS, Georgia 

MIMI WALTERS, California 

JOHN RATCLIFFE, Texas 

DAVE TROTT, Michigan 

MIKE BISHOP, Michigan 

HENRY C. ‘‘HANK’’ JOHNSON, JR., 

Georgia 

SUZAN DelBENE, Washington 

HAKEEM JEFFRIES, New York 

DAVID N. CICILLINE, Rhode Island 

SCOTT PETERS, California 

DANIEL FLORES, Chief Counsel 
(III) 

C O N T E N T S 

NOVEMBER 3, 2015 

Page 

THE BILLS 

H.R. 3438, the ‘‘Require Evaluation before Implementing Executive Wishlists 

(REVIEW) Act of 2015’’ ........................................................................................ 3 

H.R. 2631, the ‘‘Regulatory Predictability for Business Growth Act of 2015’’ .... 6 

OPENING STATEMENTS 

The Honorable Tom Marino, a Representative in Congress from the State 

of Pennsylvania, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law .................................................................................. 1 

The Honorable Henry C. ‘‘Hank’’ Johnson, Jr., a Representative in Congress 

from the State of Georgia, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law ................................................. 8 

The Honorable Bob Goodlatte, a Representative in Congress from the State 

of Virginia, and Chairman, Committee on the Judiciary ................................. 9 

WITNESSES 

Edward Brady, President, Brady Homes Illinois, testifying on behalf of the 

National Association of Home Builders 

Oral Testimony ..................................................................................................... 12 

Prepared Statement ............................................................................................. 14 

Paul R. Noe, Esq., Vice President for Public Policy, American Forest & Paper 

Association 

Oral Testimony ..................................................................................................... 25 

Prepared Statement ............................................................................................. 27 

Jeffrey Bossert Clark, Sr., Esq., Partner, Kirkland & Ellis, LLP 

Oral Testimony ..................................................................................................... 32 

Prepared Statement ............................................................................................. 34 

William W. Buzbee, Professor of Law, Georgetown University Law Center 

Oral Testimony ..................................................................................................... 47 

Prepared Statement ............................................................................................. 49 

LETTERS, STATEMENTS, ETC., SUBMITTED FOR THE HEARING 

Prepared Statement of the Honorable John Conyers, Jr., a Representative 

in Congress from the State of Michigan, and Ranking Member, Committee 

on the Judiciary, submitted by the Honorable Henry C. ‘‘Hank’’ Johnson, 

Jr., a Representative in Congress from the State of Georgia, and Ranking 

Member, Subcommittee on Regulatory Reform, Commercial and Antitrust 

Law ........................................................................................................................ 60 

APPENDIX 

MATERIAL SUBMITTED FOR THE HEARING RECORD

Response to Questions for the Record from Edward Brady, President, Brady 

Homes Illinois, testifying on behalf of the National Association of Home 

Builders ................................................................................................................. 82 

Response to Questions for the Record from William W. Buzbee, Professor 

of Law, Georgetown University Law Center ...................................................... 84 
(IV) 

OFFICIAL HEARING RECORD 

UNPRINTED MATERIAL SUBMITTED FOR THE HEARING RECORD

Material submitted for the Hearing Record by the Honorable Hank Johnson, Jr., a 

Representative in Congress from the State of Georgia, and Ranking Member, Subcommittee on Regulatory Reform, Commercial and Antitrust Law. These submissions are available at the Subcommittee and can also be accessed at: 

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=104126. 

Material submitted for the Hearing Record by the Honorable Tom Marino, a Representative in Congress from the State of Pennsylvania, and Chairman, Subcommittee on Regulatory Reform, Commercial and Antitrust Law. These submissions are available at the Subcommittee and can also be accessed at: 

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=104126. 

Material submitted for the Hearing Record by Paul R. Noe, Esq., Vice President for 

Public Policy, American Forest & Paper Association. These submissions are available at the Subcommittee and can also be accessed at: 

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=104126. 
(1) 

REQUIRE EVALUATION BEFORE IMPLEMENTING EXECUTIVE WISHLISTS (REVIEW) 

ACT OF 2015; AND THE REGULATORY PREDICTABILITY FOR BUSINESS GROWTH ACT 

OF 2015 

TUESDAY, NOVEMBER 3, 2015 

HOUSE OF REPRESENTATIVES, 

SUBCOMMITTEE ON REGULATORY REFORM, 

COMMERCIAL AND ANTITRUST LAW

COMMITTEE ON THE JUDICIARY, 

Washington, DC. 

The Subcommittee met, pursuant to call, at 10:05 a.m., in room 

2141, Rayburn House Office Building, the Honorable Tom Marino 

(Chairman of the Subcommittee) presiding. 

Present: Representatives Marino, Goodlatte, Issa, Collins, Walters, Ratcliffe, Trott, Bishop, Johnson, DelBene, Jeffries, and Peters. 

Staff Present: (Majority) Daniel Flores, Chief Counsel; Andrea 

Lindsey, Clerk; and (Minority) Slade Bond, Counsel. 

Mr. MARINO. The Subcommittee on Regulatory Reform, Commercial and Antitrust Law will come to order. My colleagues are on 

their way. But I usually give at least 5 minutes. We’ve given 7. So 

we’ll get started. I know your schedules are as hectic as ours. 

Without objection, the Chair is authorized to declare a recess of 

the Committee at any time. 

We welcome everyone to today’s hearing on H.R. 3438, the ‘‘Require Evaluation before Implementing Executive Wishlists (REVIEW) Act of 2015,’’ and H.R. 2631, the ‘‘Regulatory Predictability 

for Business Growth Act of 2015.’’ And I now recognize myself for 

an opening statement. 

Today, this Subcommittee continues its overall regulatory reform 

agenda by examining the targeted reforms to the U.S. regulatory 

process contained in two, straightforward bills. I’m honored that we 

can take a good look at H.R. 2631, the ‘‘Regulatory Predictability 

for Business Growth Act of 2015,’’ a bill offered by my colleague, 

Congressman Steve Russell of Oklahoma. 

H.R. 2631 addresses a recent Supreme Court decision that upended the process by which agencies can change its own interpretive rules. How to address this change is an important question for 

us to consider today. 
2 

Today this Subcommittee will also examine my bill, the REVIEW 

Act. Over the last decade, our Nation has faced a costly and unprecedented regulatory onslaught. During this period, the size and 

scope of Federal regulation has ballooned to epic proportions. Longstanding Executive Branch policies have mandated additional scrutiny for ‘‘significant regulatory action,’’ i.e., those rules with an annual effect on the economy of $100 million or more. 

But regulatory uberous has flown past these commonsense concerns as agencies more frequently propose mega-rules with annual 

cost in excess of $1 billion. But as these monstrous regulations become more frequent, an average of three per year during the 

Obama administration, and six in 2014 alone, it almost seems that 

nothing can curtail these potential to damage our economy. This 

bill is one more step in this Subcommittee’s continued effort to put 

forth commonsense regulatory reform measures for the benefit of 

American workers. 

The REVIEW Act presents a simple premise that massive $1 billion regulations should face full and thorough review by the courts 

before they become effective and force compliance costs on businesses across the country. It achieves this goal through a simple 

and straightforward mechanism, a mandatory stay of any $1 billion 

rule if it is challenged in court within 60 days of its promulgation. 

Some observers might insist that the reforms in this bill are unnecessary. But just this summer, in the Supreme Court’s decision 

in Michigan v. EPA, we saw firsthand that irreparable harm can 

occur as a result of expansive, costly, and poorly-crafted regulation. 

In this case, the court found that the EPA has promulgated its 

Utility MACT rule through a faulty process and on legally infirm 

grounds because it chose not to consider costs when promulgating 

the rule. In this case, the costs of the rule were estimated by the 

EPA itself as $9.6 billion per year. In return the EPA’s best estimate of potential benefits were in the range of a mere $4 million 

to $6 million annually. 

As Justice Antonin Scalia wrote in his opinion for the court, ‘‘One 

would not say that is even rational, never mind appropriate, to impose billions of dollars in economic cost in return for a few dollars 

in health or environmental benefits.’’ Unfortunately for workers, 

homeowners, and taxpayers across the country, the Utility MACT 

rule remained in effect as litigation took years to work itself to a 

final decision at the Supreme Court. 

Over this time, electricity providers were forced to close power 

plants as they faced uncertain compliance burdens. Jobs were lost, 

and electricity costs to consumers rose as a result. Until recently, 

regulations with $1 billion annual price tags were a rare occurrence. Since 2006, however, we have seen 26 in total. 

The REVIEW Act is a step in the right direction to address this 

growing concern. It also provides a bit of certainty to the American 

people that massive $1 billion regulations must pass legal muster 

before their costs are passed on. I thank the Chairman for joining 

me on this bill, and I look forward to hearing from today’s esteemed panel. 

[The bills, H.R. 3438 and H.R. 2631, follow:] 
3 
4 
5 
6 
7 
8 

Mr. MARINO. The Chair now recognizes the Ranking Member of 

the Subcommittee on Regulatory Reform, Commercial, and Antitrust Law, Mr. Johnson of Georgia, for his opening statement. 

Mr. JOHNSON. Thank you, Mr. Chairman. 

Today’s hearing provides this Subcommittee with an important 

opportunity to consider two regulatory reform proposals that would 

affect divergent aspects of the rulemaking system. The first of 

these proposals is H.R. 2631, the ‘‘Regulatory Predictability for 

Business Growth Act of 2015,’’ which would require agencies to undertake notice and comment under section 553, the Administrative 

Procedures Act, prior to revising interpretive rules that are older 

than 1 year. 

An interpretive rule is any nonlegislative rule issued by an agency to clarify its views on a subject matter. These rules are usually 

issued in direct response to requests by regulated firms that want 

more clarity and transparency in a subject area. Because the rule 

has no binding legal effect, the parties are not bound by an agency’s expression of its current rules. 

Simply put, H.R. 2631 would impose immense procedural and 

analytical burdens on agencies seeking to provide regulatory clarity 

through interpretive rules. Not only would this requirement severely burden agencies’ existing practice of issuing timely, interpretive rules, but it would also wreak havoc on the entire rulemaking 

system. 

As Donald Elliott, a professor of law at Yale Law School, noted 

in 1992, ‘‘Imposing a notice-and-comment requirement on nonlegislative rules would literally grind the modern administrative 

process to a halt.’’ 

In an Amicus brief filed in Perez v. Mortgage Bankers, where the 

Supreme Court unanimously rejected a judicial doctrine requiring 

notice and comment for revisions to longstanding interpretive 

rules, a group of leading administrative law experts similarly argued that this requirement would be ‘‘burdensome, costly, and time 

consuming for agencies.’’ 

The second regulatory reform proposal before us today is H.R. 

3438, the ‘‘Require Evaluation before Implementing Executive 

Wishlists Act of 2015,’’ or otherwise known as the ‘‘REVIEW Act,’’ 

which would automatically stay high-impact rules that a party 

challenges within 60 days of an agency’s adoption of the rule. 

Under current law, both courts and the agency issuing a rule may 

stay the effective date of a rule. 

While agencies have broad discretion in postponing the effective 

date of a rule, a court considers several factors in deciding whether 

to stay a rule, including whether the party is likely to succeed on 

the merits. Unlike current law, the REVIEW Act would require 

that agencies automatically delay the effective date for rules exceeding $1 billion in costs, regardless of whether the party challenging the rule has any likelihood of success on the merits, is actually harmed by the rule, or whether staying the rule would be 

contrary to the public interest. 

This guarantees that virtually every regulated firm would challenge high-impact rules through frivolous litigation, creating further delays for these rules, which, in many cases, have already 

taken years to promulgate. But the bill wouldn’t just apply to these 
9 

rules; rather, it would likely apply to transfer rules, which involve 

the transfer of funds for budgetary programs as authorized by Congress, such as transfer rules involving the Medicare program or the 

Federal Pell Grant program. 

In closing, I look forward to our esteemed panel’s testimony 

today, and I yield back. 

Mr. MARINO. Thank you. 

The Chair now recognizes the Chairman of the full Judiciary 

Committee, Mr. Bob Goodlatte of Virginia, for his opening statement. 

Mr. GOODLATTE. Thank you, Mr. Chairman. 

Today’s hearing continues the Judiciary Committee’s efforts to 

deliver urgently needed reforms of Washington’s regulatory system—a system that virtually every day places new obstacles in the 

path of American jobs and economic growth. 

We consider today two bills: Subcommittee Chairman Marino’s 

REVIEW Act; and Representative Russell’s ‘‘Regulatory Predictable 

for Business Growth Act.’’ These are new bills developed in response to Supreme Court decisions issued during the Court’s 2014 

term. 

The REVIEW Act contains a simple common-sense reform responding to a problem highlighted by the court’s decision in the 

case of Michigan v. EPA. The problem is that, too often, new regulations that impose enormous costs on our society are successfully 

challenged in court, but are not stayed while litigation is pending. 

When these regulations are ultimately overturned, but compliance with them has been required while litigation is pending, there 

can be no question that large amounts of precious resources have 

been wasted—resources that could’ve been spent creating jobs, investing in development, and growing America’s economy for the 

benefit of all. 

The REVIEW Act solves this problem with a simple bright-line test that says, if a new regulation imposes $1 billion or more in annual costs, it will not go into effect until after litigation challenging 

it is resolved. Of course, if the regulation is not challenged, it may 

go into effect as normal. 

This is a balanced approach. And, it provides a healthy incentive 

for agencies to promulgate effective but lower-cost regulations that 

are more legally sound to begin with. 

The other bill we are examining, the Regulatory Predictability 

for Business Growth Act, responds to the case of Perez v. Mortgage 

Bankers Association. The bill would make sure that, notwithstanding the court’s decision finding a current gap in the provisions 

of the Administrative Procedures Act, agencies will provide notice 

to the public and an opportunity for comment before they change 

longstanding interpretive regulations. 

This is only fair. Job creators must live day-to-day with the interpretations agencies espouse, and the broader public relies on agencies’ good-faith adherence to sound and settled interpretations of 

law. Both deserve notice and a chance to comment on changes in 

interpretive rules before those changes are made. 

These are simple but powerful reforms that will help to improve 

Americans’ daily lives. I urge my colleagues to consider well and 

support these important pieces of legislation. 
10 

I look forward to hearing the testimony of our witnesses today, 

and yield back. Thank you, Mr. Chairman. 

Mr. MARINO. Thank you, Chairman. 

Mr. Conyers, the Ranking Member of the full Judiciary Committee, will be on his way shortly. And I’m going to reserve the 

time for his opening statement for when he gets here. 

And without objection, other Members’ opening statements will 

be made part of the record. 

And I will begin by swearing in our witnesses before introducing 

them. If you would please stand and raise your right hand. 

Do you swear that the testimony you’re about to give is the 

truth—before this Committee—the whole truth and nothing but 

the truth so help you God? 

Let the record reflect that all the witnesses responded in the affirmative. Please be seated. 

We have a distinguished panel with us today, and I want to 

thank the Members for being here. Seated to my left, the first gentleman, Mr. Brady is the president and founder of Brady Homes Illinois, and the second vice chairman of the National Association of 

Homebuilders. 

He is a second-generation homebuilder. Brady Homes Illinois is 

a small, single-family building and development company that 

since its founding by his father, William Brady, Sr., in 1962, has 

become one of the largest homebuilding firms in central Illinois. 

Mr. Brady has served on the NAHB board of directors for more 

than 10 years and has also held seats on several committees and 

task forces, including the NAHB Federal Government Affairs Committee and the Budget and Finance Committee. Mr. Brady has 

been a trustee and chairman of Build-PAC, NAHB’s Political Action 

Committee. 

Outside of NAHB, Mr. Brady has worked on many boards and 

commissions including serving on the board of directors, on the 

Federal Home Loan Bank of Chicago, in the Jack Kemp Foundation. And as a member of the Bloomington Planning Commission, 

and the Bipartisan Policy Center Housing Commission. Mr. Brady 

earned his bachelor’s degree in political business from Illinois Wesley University. 

Welcome, sir. 

Mr. BRADY. Thank you. 

Mr. MARINO. Mr. Noe is the vice president for public policy at the 

American Forest and Paper Association, and is also testifying today 

on behalf of the American Wood Council. At AF&PA, he works on 

a wide variety of issues, including environmental regulation, regulatory reform, renewable energy, biomass carbon neutrality, chemicals and product stewardship and sustainability. 

Before joining AF&PA, Mr. Noe had extensive experience in public policy issues, including as vice president of regulatory affairs at 

the Grocery Manufacturers Association; in private practice, and in 

public service as counsel to the administrator in the Office of Regulation and Regulatory Affairs Office of Management and Budget 

from 2001 to 2006; as well as senior counsel to the U.S. Senate 

Committee on Governmental Affairs under Chairman Fred Thompson—and we all extend our sincere condolences to the Thompson 
11 

family. He was truly a great man—Ted Stevens, and Bill Roth, 

from 1995 to 2001. 

Mr. Noe earned his bachelor’s degree, Phi Beta Kappa, from Williams College and is a graduate of the Georgetown University Law 

Center, where he was an Olin Fellow in law and economics. Welcome, sir. 

Our next witness is Mr. Clark. He is a partner at the law firm 

of Kirkland & Ellis, LLP, and specializes in complex trial and appellate litigation. Mr. Clark has been with the firm since 1996, 

with the exception of 2001 to 2005, when he was appointed to serve 

as deputy assistant attorney general in the environment and natural resources division of the Justice Department. 

During his appointment, Mr. Clark supervised the division’s appellate section—it contained 50 lawyers and staff members—and 

Indian resources section with another 25 lawyers and staff. He has 

argued and won the noted Massachusetts v. EPA case in the D.C. 

circuit and is rated, and I quote, ‘‘AV preeminent,’’ 5.0 out of 5 by 

Martindale-Hubbell, the highest level of professional excellence. 

Prior to joining Kirkland & Ellis, Mr. Clark was a law clerk for 

Judge Danny J. Boggs, of the United States Court of Appeals for 

the Sixth Circuit. He has written and appeared extensively in public on topics in energy efficiency, clean air and water law, administrative law, and constitutional law. 

Mr. Clark is an elected member of the governing counsel of the 

ABA administrative law section and is currently serving as co-chair 

of the ABA section of administrative law and regulatory practices 

committee on environmental and natural resources regulation. 

Mr. Clark graduated with an AB in economics and Russian/Soviet history, cum laude from Harvard University, an MA in urban 

affairs and public policy, summa cum laude from the University of 

Delaware, and J.D. Magna cum laude from Georgetown University 

Law Center. Welcome, sir. 

Our next witness, Professor Buzbee is a professor of law at 

Georgetown University Law Center. Prior to joining Georgetown, 

Professor Buzbee worked at Emory Law School where he was a 

professor of law, directed Emory’s environmental and natural resources law program, founded and oversaw its Turner environmental law clinic, and co-directed Emory’s Center on Federalism 

and Intersystemic Governance. That’s a tough one to say, but impressive. He is also a founding member, scholar of the Center for 

Progressive Reform, a Washington, D.C.-based regulatory think 

tank. 

Before becoming professor, he was a law clerk for Judge Jose A. 

Cabranes at the United States Court of Appeals for the Second Circuit; and attorney fellow at the Natural Resources Defense Council; 

and also performed environmental law, land use, and litigation 

work for the New York City law firm Patterson, Belknap, Webb & 

Tyler. 

Professor Buzbee has published scholarly works, many of which 

have appeared in journals, books, news outlets, and blogs. He has 

assisted with appellate and Supreme Court environmental federalism and regulatory litigation and provided expert testimony before congressional Committees on environmental and regulatory 

matters. 
12 

Professor Buzbee graduated magna cum laude with his BA from 

Amherst College, and his J.D. From Columbia Law School. Welcome, sir. 

Each of the witnesses’ written statements will be entered into 

the record into its entirety. I ask that each witness summarize his 

or her testimony in 5 minutes or less, and to help you stay within 

the time, there is a timing light in front of you. The light will 

switch from green to yellow indicating that you have 1 minute to 

conclude your testimony. When the light turns red, it indicates that 

your 5 minutes have expired. 

And what I also do is, you’re so intent, as I am, on wanting to 

communicate and read and talk to us that no one pays attention 

to the lights. Even I am guilty of that. So I will diplomatically and 

politely raise the gavel, just twirl it around a little bit to get your 

attention, and if you are just so that intent on looking I’ll just give 

a nice little tap and ask you to please wrap up. If you would kindly 

do that. 

Okay, we will begin with Mr. Brady and his opening statement. 

TESTIMONY OF EDWARD BRADY, PRESIDENT, BRADY HOMES 

ILLINOIS, TESTIFYING ON BEHALF OF THE NATIONAL ASSOCIATION OF HOME BUILDERS 

Mr. BRADY. Well, thank you Chairman Marino, Ranking Member 

Johnson, and Members of the Subcommittee. I’m pleased to appear 

before you today on behalf of the National Association of Homebuilders to discuss H.R. 3438 and H.R. 2631, both of which would 

help repair our broken Federal regulatory rulemaking system. 

As the Chairman said, my name is Ed Brady, and I am a small 

homebuilder from Bloomington, IL. Perhaps it was a simpler time 

when my father founded our family homebuilding business in 1962, 

but the complexities of regulation facing our industry today makes 

it difficult for a small business to survive. 

Regulations imposed by government, at all levels, account for 25 

percent of the final price of a new single-family home. Certainly we 

need to protect the environment, we need to protect worker safety, 

but we also need to return some sensibility and sanity to the process. Unfortunately, Federal agencies under both Republican and 

Democratic administrations have increasingly sought to skirt the 

rules set up by the Administrative Procedures Act and diminish 

public participation in rulemaking. 

The bills we will discuss today represent significant progress toward restoring the public participation. Congress intended and provided judicial protections when a rule is challenged in court. NAHB 

is particularly concerned about the reliance by Federal agencies on 

guidance rather than going through the formal rulemaking process. 

That is why we strongly support H.R. 2631, which would ensure 

that the public has input on significant changes to existing, longstanding interpretive rules. 

For an example of why this bill is needed, let’s look for a moment 

at the ongoing struggle with the EPA and the Army Corps to define 

the scope of waters protected under the Clean Water Act. Prior to 

the regulation that was finalized earlier this year, the most recent 

Clean Water Act regulation addressing the scope of jurisdiction was 

finalized in 1986. 
13 

For 29 years, the EPA and the Corps relied on several interpretive rules, despite two Supreme Court rulings that significantly 

limited the scope of the Clean Water Act. Those interpretive rules 

had the same effect and force as a regulation, but never went 

through the formal rulemaking process. Most troubling is that 

there is little judicial oversight over the use of guidance. 

Before we could challenge that, this guidance acted as improper 

rulemaking, we would first have to seek a ruling over the very 

issue of whether the guidance is ‘‘final agency action,’’ subject to 

the court scrutiny. The outcome of this would be very uncertain. 

And while we would prefer that the rulemaking process to work as 

Congress intended with public input, a cost-benefit analysis, and 

an examination of alternative options so the agency gets it right 

the very first time, sometimes we need to turn to the courts for relief. 

The second bill before you today, H.R. 3438, provides for a stay 

of enforcement for high-cost regulations pending judicial review. 

This is a commonsense approach that would spare small businesses 

the significant and irretrievable cost of compliance in the event a 

pending rule is overturned. 

While courts issue preliminary injunctions when a rule faces 

legal review, these injunctions are unusual and extremely difficult 

for businesses to obtain. Courts require businesses to show that the 

regulation would impose irreparable harm, but generally do not include the monetary costs associated with compliance as meeting 

that standard, even though small businesses have no realistic 

means of seeking repair from the compliance cost for the rule later 

thrown out by the courts. 

For example, the U.S. Department of Labor has recently proposed new overtime regulations, which would make 116,000 construction workers eligible for overtime, according to our analysis. 

Yet these costs would not likely be considered by the courts as imposing irreparable harm. And even if challenged in court, the rule 

might still be allowed to go into effect. But if the rule goes into effect, it would immediately alter how small homebuilders do business. 

It is simply unfair for businesses to impose the compliance cost 

of a new regulation while it’s under judicial review. The regulatory 

process is failing us and we need to repair it. These bills are a good 

start, and I urge this Subcommittee to support them. Thank you 

again for the opportunity to testify today, and I’d be happy to answer any questions. 

Mr. MARINO. Thank you, Mr. Brady. 

[The prepared statement of Mr. Brady follows:] 
14 
15 
16 
17 
18 
19 
20 
21 
22 
23 
24 
25 

Mr. MARINO. Mr. Noe. 

TESTIMONY OF PAUL R. NOE, ESQ., VICE PRESIDENT FOR 

PUBLIC POLICY, AMERICAN FOREST & PAPER ASSOCIATION 

Mr. NOE. Thank you. Chairman Marino, Ranking Member Johnson, and Members of the Subcommittee, my name is Paul Noe, and 

I want to thank you for the opportunity to be here today on behalf 

of the American Forest and Paper Association, the American Wood 

Council, and their members on two bills to make important reforms 

to the Federal rulemaking process. 

We applaud these bills because we believe they are important 

steps to increase regulatory transparency and fairness, harmonize 

regulatory requirements, avoid wasting limited resources, and increase regulatory certainty. H.R. 2631 would require public notice 

and comment when agencies issue an interpretive rule that conflicts with, or is inconsistent with a, previous longstanding interpretive guidance. 

This is consistent with the principles of due process, transparency, and accountability that are the foundation of the APA. 

After the Supreme Court’s Mortgage Bankers decision, it is clear 

that an agency can reverse the binding policy reflected in a longstanding, definitive interpretive rule by simply issuing a contrary 

interpretive rule. In other words, an agency can change its binding 

policy from ‘‘X’’ to ‘‘not X’’ without having provided the public notice 

and an opportunity for comment. 

As a practical matter, by regulating through interpretive guidance rather than legislative rules, an agency often can avoid not 

only public review but OMB review, court review, and congressional oversight. That is not good government. As the D.C. circuit 

put it, the phenomenon we see in this case is familiar. 

Congress passes a broadly-worded statute. The agency follows 

with regulations containing broad language, open-ended phrases, 

ambiguous standards, and the like. Then as years pass, the agency 

issues circulars or guidance or memoranda explaining, interpreting, 

defining, and often expanding the commands and the regulations. 

Law is made without notice and comment, without public participation, without publication in the Federal Register, or the code of 

Federal regulations. 

Many authorities have gone beyond H.R. 2631 to recommend preadoption notice and comment for all significant guidance, including 

the administrative conference of the United States, the U.S. Food 

and Drug Administration, and the American Bar Association. H.R. 

2631 has a more modest scope by proposing pre-adoption notice 

and comment for interpretive rules, not policy statements, that conflict with or are inconsistent with prior interpretive guidance that 

have been in effect for a year or more. This bill is a good step toward addressing the problem of regulation by guidance. 

The other bill, H.R. 3438 would, pending judicial review, postpone the effective date of high-impact rules that may impose an annual cost on the economy of not less than $1 billion. This bill would 

promote certainty, efficiency, and legal integrity in the regulatory 

process. 

All too often regulations requiring major capital investments are 

struck down in court, and this is an increasing trend, I believe. 
26 

H.R. 3438 would avoid wasting resources, stranding assets, and ensure that rules are legally sound before billions of dollars in investment are made. 

One example of how this rule effects the U.S. forest products industry is EPA’s Boiler MACT rules. In 2007, about $200 million in 

compliance investments were stranded in the paper and wood products industry when a court struck down the 2004 Boiler MACT 

rules just 3 months before the compliance deadline. 

When the rules were reissued in 2013, the new standards had 

changed significantly, and previous investments proved to be the 

wrong approaches to achieve compliance. Wasting limited capital 

undermines the competitiveness of U.S. businesses and impedes 

growth in job creation. One suggestion I would submit for the Subcommittee to consider is to broaden the definition of high-impact 

rules to ensure that highly consequential rules, such as the Boiler 

MACT rules, are covered. 

In conclusion, H.R. 2631 and H.R. 3438 take important steps to 

promote transparency, certainty, efficiency, and fairness in the regulatory process. We support these efforts, and we would be happy 

to work with the Committee as it advances these proposals through 

the legislative process. 

Mr. Chairman, I request permission to include in the record documents referenced in my testimony. I thank you. 

Mr. MARINO. Without objection. And I apologize, sir, I believe 

your name is pronounced Noe? 

Mr. NOE. Yes, sir. 

Mr. MARINO. I apologize for that. 

Mr. NOE. Thank you. 

[The prepared statement of Mr. Noe follows:] 
27 
28 
29 
30 
31 
32 

Mr. MARINO. Mr. Clark. 

TESTIMONY OF JEFFREY BOSSERT CLARK, SR., ESQ., 

PARTNER, KIRKLAND & ELLIS, LLP 

Mr. CLARK. Good morning, Chairman Marino, and Ranking 

Member Johnson, and honorable Members of the Subcommittee. 

I’m very pleased to be here today. And in addition to coming to 

help however I can with my testimony, I wanted to note that my 

wife and oldest daughter are in the room. I thought it would be a 

good civics lesson, especially with it being voting day in my home 

State of Virginia. 

And also, Ranking Member Johnson, my wife lived for a long 

time, including when we were married 20 years ago in your district, in Stone Mountain, Georgia. And she came there after she 

immigrated from Korea. 

So with that little introduction out of the way, I can draw a 

straight line, I think, between my law school experiences in front 

of Judge Silverman, as I noted in my written testimony, to my career here at DOJ, and to sitting here with you today. And, you 

know, if I were a half generation younger, I’m sure I would’ve had 

Professor Buzbee as one of my professors, so I’m honored to sit 

alongside of him. 

Administrative law really is constitutional law. It’s suffused with 

the separation of powers, with due process concerns, and with 

guaranteeing Democratic accountability. And I think both of the 

bills that you have before you today are excellent bills that would 

help to accomplish promoting those constitutional ends. 

The first bill, H.R. 2631, really is the product, I think, of you trying to solve a negative synergy between a number of administrative 

law doctrines and current provisions in the APA that the Paralyzed 

Veterans case enforced, and those rules are 553(b), which is what 

got enforced in Mortgage Bankers, Seminole Rock deference and its 

potential for abuse, and Chevron. 

The combination of those rules really let agencies turn on a dime 

and defeat reliance interests by individuals in businesses like the 

NAHB and their members. And by imposing this new requirement 

that resurrects the Paralyzed Veterans doctrine, you would help to 

counteract all of those negative synergies. 

In addition, I think there is several other advantages, which I lay 

out in my written testimony. I think it advances your power to, as 

Congress, write the laws. The argument that we often hear from 

the professoriate that agency processes will be ossified, I think, has 

really become a tired canard at this point. You get to define the 

Nation’s policies and legislation, not really the Executive Branch or 

the professoriate. 

Second, I think that these bills, the first bill especially, the one 

that reverses Paralyzed Veterans, helps to enhance the separation 

of powers, because it gives time for mistakes to be corrected. It 

doesn’t allow agencies to turn on a dime. It allows agencies that 

are acting closer in time to the law that they passed—that was 

passed that, you know, is being interpreted, and so that harmonizes agency action more with congressional will. 

And third, by giving that time period and making sure that 

there’s notice and comment, you establish that there’s an adversary 
33 

process, an adversary process that can inform judicial review and, 

thereby, also enhance the separation of powers through the process 

of judicial oversight. Of course, the fact that you have notice and 

comment enhances due process and accountability, and it helps to 

protect reliance interests. 

In addition, it protects both public property and private property, 

not just private property, because many agencies regulate the actions of other Executive Branch agencies. 

And third—I’m sorry, and lastly, it’s not a perfect solution to the 

abuses of Seminole Rock deference, but it’s kind of a very good second best. It’s a very good first start to try to reverse those abuses. 

And, you know, I note that Professor Buzbee had indicated that, 

you know, perhaps you might be open to seeing, you know, that 

bigger step of reversing Seminole Rock deference. But in the short 

term, I think this is a good first step toward that. 

Turning to the second bill, the REVIEW Act of 2015, you know, 

I started my testimony with the apocrypha from Senator Dirksen 

of, you know, $1 billion here, $1 billion there, and pretty soon 

you’re talking, you know, real money. I think that providing an 

automatic legislative stay that will be in place to allow the courts 

to test the legality of rules, you know, before they actually go into 

effect when they cross such a monumental threshold is a very good 

step in the right direction. 

And I’ll tell you in my experience as a practitioner that getting 

stays from the court process are very tough. I tell my clients that 

there’s almost a macro that spits out that just says in a few paragraphs, stay denied. There’s not a lot of judicial consideration of 

those stays, and so providing for an automatic stay in the very limited circumstance where you have a $1 billion rule is a very good 

step in the right direction. 

Thank you. 

Mr. MARINO. Thank you, Mr. Clark. 

[The prepared statement of Mr. Clark follows:] 
34 
35 
36 
37 
38 
39 
40 
41 
42 
43 
44 
45 
46 
47 

Mr. MARINO. Professor Buzbee. 

TESTIMONY OF WILLIAM W. BUZBEE, PROFESSOR OF LAW, 

GEORGETOWN UNIVERSITY LAW CENTER 

Mr. BUZBEE. Chairman Marino, Ranking Member Johnson, and 

Members of the Subcommittee, thank you for the opportunity to 

discuss my views of bills under consideration. 

And is this working okay? 

Mr. CLARK. Yes. 

Mr. BUZBEE. Okay. H.R. 2631, as indicated by the opening statements, would require agencies to engage in notice-and-comment 

rulemaking before they could revise longstanding rules, interpretive rules, and, I think clearly, as everyone has indicated, this relates to the Supreme Court’s Perez decision. 

And I think, furthermore, these statements of the witnesses, indicate clearly, this is motivated by concerns with excessive regulatory power. But a few things are neglected: First, most interpretive rules are issued at the behest of businesses seeking consistency and clarity in the law. And I think that this proposal is a bad 

idea, especially for businesses, and I also think it would predictably 

backfire by creating incentives for behavior that nobody here would 

like. 

Okay. First, there’s an important problem with this bill, which 

is the very definition of interpretive rules. Interpretive rules are 

not defined in the APA, and there are a wide array of rule-like documents that agencies issue that could be called interpretive rules 

but also might not be. If a bill like this is to proceed, we really 

need to have a clear definition of interpretive rules and what do 

not count as interpretive rules. 

Second, interpretive rules address a pervasive problem and legal 

challenge. There’s a lot of work for lawyers because statutes and 

regulations leave difficult questions, and businesses seek clarity 

and they seek certainty. So they ask questions, and ask agencies 

to commit and to give some kind of guidance, and agencies often 

will do so. 

However, if you require all longstanding interpretive rules to go 

through notice and comment, this will not lead to a wave of noticeand-comment proceedings; instead, interpretive rules would become 

rigidified, they would not be changed. Interpretive rules also would 

cease to be issued, or agencies would be much more likely to shift 

into more ad hoc modes of policy making or policy making through 

adjudications. This is not desirable. 

Second—— 

Mr. JOHNSON. Pull that microphone a little closer to you. 

Mr. BUZBEE. Okay. Sure. Thank you. 

In addition, the Perez case, which everyone mentioned, actually 

made a bill like this less necessary. Although the Supreme Court 

struck down the Paralyzed Veterans doctrine, it included strong 

language about the limited legal power of interpretive rules, taking 

a string of mostly lower court law, and making very clear that 

these kind of interpretive rules are not law. They don’t have the 

sort of powerful effect. 

Similarly, Supreme Court doctrine in recent years has made 

clear that interpretive rules do not receive the same kind of def-
48 

erence from the courts. Basically there is not need for this bill, and 

it would have bad effects that would really have the opposite effects I think people desire here. 

Let me turn to H.R. 3438, the ‘‘REVIEW Act of 2015.’’ I think 

this is a simple bill and I applaud its elegance, but I think it could 

have devastating effects on the law and also could cause massive 

economic, environmental, and health harms, as well as create legal 

uncertainty. 

So first, virtually all high-stakes bills are challenged by someone. 

This bill would stay any bill—any regulation simply upon the filing 

of such a challenge. The net effect would be to put regulations in 

abeyance, usually for years on end, regardless of the merits or seriousness of the challenge. 

Second, most bills with high-stakes regulations have their own 

mandatory lead time or a period where people kind of phase in a 

regulation. An important issue of clarity is how would the tolling 

or the staying of lacking the effect of a regulation apply to bills and 

regulations with lead time. 

Third, rules of broad impact are typically addressing huge risks 

to the population or the environment. So what are viewed as costs 

here also are accompanied by costs imposed on people or things 

that are protected. If a regulation is stayed, those harms will continue during the pendency of any legal challenges. 

Cost-benefit analysis, many people debate it, but one basic fundamental rule of cost-benefit analysis is you have to consider cost and 

benefits of regulation. This bill only looks at the cost side of the 

ledger. Justice Scalia—a friend of several members of the panel 

here—recently said in Michigan v. EPA case that, reasonable regulation requires paying attention to the advantages and disadvantages of agency decisions. 

Lastly, H.R. 3438 could be seen as an indirect effort to derail 

bills that could not be attacked directly. If there is a direct democratically-accountable challenge to a statute or regulation based on 

the merits, then people will know what is at stake. To simply stay 

a regulation upon a challenge would have an indirect effect and 

would not enhance democratic accountability. 

Thank you very much. 

Mr. MARINO. Thank you. 

[The prepared statement of Mr. Buzbee follows:] 
49 
50 
51 
52 
53 
54 
55 
56 
57 

Mr. MARINO. We will now begin our 5 minutes each of questioning, and I will recognize myself to start the process. 

Mr. Clark, you suggested that judicial stays are hard to come by, 

even of high-cost rules, and that they may be getting even harder 

to come by. Could you provide me with more details about how 

hard it is and the trend that has been set? 

Mr. CLARK. Sure, Your Honor. Sure. I’m sorry, Chairman 

Marino. I have an argument tomorrow in the Fifth Circuit so I’m 

in ‘‘Your Honor’’ mode. My apologies. 

Mr. MARINO. Understood. 

Mr. CLARK. But I would say, yes, in my experience, it’s very difficult to get stays. You know, the most regularized jurisprudence 

in that area is from the D.C. circuit. And there really is an almost 

form order that they issue that’s just a few paragraphs long. So it’s 

not like, even if you’re talking about a rule of Earth-shattering 

costs, you know, benefit implications or the ability to devastate an 

entire industry that you’re going to get an opinion from the D.C. 

circuit about whether a stay will be granted or not. 

Essentially, all of the balancing of the four equitable factors 

takes place behind closed doors, and you just get a result of really 

stay yes or stay no. Or if there is a stay, some kind of definition 

of, you know, what exactly is being stayed if it’s not the entire rule. 

And I think that one of the benefits of the bill that you have in 

front of you to do the automatic stay is that you’re showing value 

judgment, which I think is entirely appropriate for Congress to 

make, that if you’re talking about a rule that has enormous costs 

of $1 billion or more that those should essentially be not, you 

know—they wouldn’t begin to be implemented until after the judicial review process is closed. I think that’s entirely appropriate and 

would be an improvement over the current system. 

Mr. MARINO. Thank you. 

Mr. Noe, your statement talks about rules for which it would be 

important to have protections like those in the REVIEW Act that 

doesn’t rise quite to the revenue act of a $1 billion threshold. What 

kind of refinements or alternative tests could be added to the terms 

already in the bill to make sure that we are covering all the rules 

that really need this kind of automatic stay protection? 

Mr. NOE. Well, one suggestion that I would make, Mr. Chairman, 

is to focus not on the annual cost but the total capital cost. As I 

understand the bill, a large part of the driver here is to avoid some 

capital in complying with a rule that is then determined to be unlawful. 

And if you key it to total capital costs of not less than $1 billion, 

you would have captured the Boiler MACT rules I referred to. They 

had a capital cost of over $1.7 billion. But annualized over a 20- 

year period, as EPA does, they were estimated to be $860 million 

annually. So it would not have passed that test. 

One other suggestion I would make is to clarify that the cost includes both direct and indirect costs, because agencies sometimes 

say, well, it’s not this, you know, national ambient air quality 

standard that caused the cost; it’s implementation of it. And so direct and indirect cost, I think, would be helpful to capture that as 

well. But I’d be happy to work with your counsel on some specific 

language. 
58 

Mr. MARINO. Thank you. 

Mr. Brady, you alluded in your statement from your experience 

what regulation has done to the construction business. Could you 

elaborate on what you’ve experienced because of the regulation? 

Mr. BRADY. A couple things. Thank you, Mr. Chairman. The regulation and changes in regulation are uncertainties in small business. Many of you probably have experience in small business, and 

any uncertainties is very difficult for a small business to perpetuate itself, whether there’s jobs on the line or the regulation adds 

additional costs in the middle of a project or something like that 

is catastrophic to the small business. 

As an example, most recently, the DOL suggested the overtime, 

the new overtime rule. I have superintendents, and as I said in my 

statement, over 100,000 superintendents in our industry would be 

affected by that. And so I have to go back in my office and say, is 

it better for me to hire and keep that person on payroll or go into 

a subcontract position or a contract position? 

My superintendents have flexibility. They’re salaried. They have 

flexibility on the workday. Many times they work during the weekends to get projects done, but they have flexibility to go take their 

kids to school or pick their kids up from the doctor or whatever the 

case may be. And, in fact, I think that employee would be hindered 

by that type of regulation, and certainly my business would be hindered. 

Mr. MARINO. Thank you, sir. My time has expired, and I now recognize the gentleman from Georgia, the Ranking Member, Mr. 

Johnson. 

Mr. JOHNSON. Thank you. And thank you all, gentlemen, for 

being here today. And welcome, wife and daughter. 

H.R. 3438 defines a high-impact rule as any rule that the administrator of the Office of Information and Regulatory Affairs determines may impose an annual cost on the economy of more than $1 

billion. This determination requires only a cost assessment and not 

an assessment of the money saved or the benefits of a rule; is that 

not correct, Mr. Clark? 

Mr. CLARK. That’s correct. 

Mr. JOHNSON. And so is it your opinion that agencies should only 

consider the cost and ignore the benefits when assessing the value 

of new regulations, Mr. Clark? 

Mr. CLARK. No, Representative Johnson. I think that agencies 

should do an analysis of both costs and benefits, although the issue 

of whether they do that or not depends in part first on whether the 

organic statute permits them to do that or not. But typically if the 

organic statute is silent on that issue, then they would need to do 

an analysis of both cost and benefits. Here—— 

Mr. JOHNSON. Well, H.R. 3438 would abandon any obligation to 

look at benefits and just simply impose the responsibility of determining whether or not the costs exceeds $1 billion. And if it does, 

then the law would require upon filing of a lawsuit within the 60- 

day period after adoption that the rule be stayed. 

Mr. CLARK. So in response to that, I think I’d like to make two 

points: First is, it’s not accurate that it would remove a consideration of benefits. That would remain part of the judicial review 

process. 
59 

Mr. JOHNSON. Well, not a part of the administrative process in 

issuing a stay automatically upon filing of a lawsuit. 

Mr. CLARK. Right. As a matter of the stay, it would focus only 

on costs. I would submit to you that I think that’s an appropriate 

thing for Congress to do, one because—— 

Mr. JOHNSON. Let me ask you this: Let me ask you this, if that 

law, if H.R. 3438 had been in effect at the time the National Highway Traffic Safety Administration issued the rule requiring air 

bags in automobiles, then there would have been an automatic stay 

applied to the adoption of that rule once the auto manufacturers 

filed a lawsuit. Correct? 

Mr. CLARK. I don’t know exactly what the cost impact of that 

would have been and—— 

Mr. JOHNSON. Assuming that it would’ve had a $1 billion cost. 

Mr. CLARK. For the sake of argument, grant that that was true, 

what I was about to say based on your prior question was that one 

of the other constitutional values I think, that this automatic stay 

serves are the kinds of values that go to the vesting clause, the fact 

that you are the law makers and not the agency. 

Mr. JOHNSON. Well, certainly. Certainly. 

Mr. CLARK. So all that this does is reinforce essentially kind of 

nondelegation values. 

Mr. JOHNSON. Well, what this does is puts adoption of a rule into 

the purview of whatever the opposing party of the rule decides, 

whether or not to file a lawsuit or not. I mean, it would just automatically stay adoption of the rule. 

Now, Professor Buzbee, what is your assessment of what we have 

just heard from Mr. Clark? 

Mr. BUZBEE. Well, I agree with your view that, a regulation 

needs to be assessed for both the cost and the benefits, and having 

an asymmetrical examination only if costs with an automatic stay 

basically doesn’t follow the basic sound views about cost-benefit 

analysis—— 

Mr. JOHNSON. And that’s exactly what H.R. 3438 does, does it 

not? 

Mr. BUZBEE. Yes, it does. 

Mr. JOHNSON. And with respect to H.R. 2631, isn’t it a fact, Professor Buzbee, that parties are not bound by interpretation of agency rule. There’s no binding legal effect on parties; isn’t that correct? 

Mr. BUZBEE. That is correct. 

Mr. JOHNSON. With that, I’ll yield back. 

Mr. MARINO. Thank you. 

The Chair recognizes the gentleman from California, Congressman Issa. 

Mr. ISSA. Thank you. 

Mr. JOHNSON. Mr. Chairman, if I might—— 

Mr. MARINO. Just a moment. 

Mr. JOHNSON. Mr. Chairman, if I might, I do have some statements for the record: One is Ranking Member Conyers’ statement, 

his opening statement. 

[The prepared statement of Mr. Conyers follows:] 
60 
61 
62 
63 
64 
65 
66 
67 
68 

*Note: The material submitted by Mr. Johnson is not printed in this hearing record but is 

on file with the Subcommittee, and can be accessed at: 

http://docs.house.gov/Committee/Calendar/ByEvent.aspx?EventID=104126. 

Mr. JOHNSON. Also, a statement from William Funk, Louis and 

Clark Law School; also a statement from the NAACP calling on 

EPA to set a strong final ozone standard highlighting disparities 

and health impacts from air pollution. And also a letter from 40 

health labor faith-based environmental justice and frontline community organizations calling on the EPA to set a strong final ozone 

standard; also a letter from 16 public health and medical organizations opposing any attempts to block, weaken, or delay Clean Air 

Act protections; and last but not least, an article in The Hill entitled ‘‘Arguing About the Cost of Regulation But Ignoring the Benefits,’’ by Stewart Shapiro. I would ask that these be placed into the 

record by unanimous consent.* 

Mr. MARINO. Without objection. 

Now Mr. Issa. 

Mr. ISSA. Thank you. That was well worthwhile. 

And following on Ranking Member Johnson’s line of questioning, 

I think it was a good line of questioning, but I’d like to take it in 

a slightly different way. And I’ll go down with a question for everyone. 

Mr. Buzbee, do you think that there’s anything wrong today with the current situation in which a $1 billion or greater cost to the 

private sector can be passed on by an agency years, even decades, 

after the passage of a law by Congress and, in fact, you must effectively do it or be in peril until or unless you prevail in court, perhaps for 5 years later? Just a yes or no. Do you think that that 

status quo today is okay? 

Mr. BUZBEE. Well, I think that the supposition that there isn’t 

an opportunity for a stay before the courts is not correct. The 

courts will—— 

Mr. ISSA. No. Well, you have to go to the court and get a stay. 

Mr. BUZBEE. That’s correct. 

Mr. ISSA. Very few agencies think that their new rules are frivolous enough for them to grant the stay. So by definition, you have 

to go to the court which means you have a period of time and a 

high standard. Just yes or no, do you think that’s a good standard 

today? 

Mr. BUZBEE. Well, I think many agencies actually add lead 

time—— 

Mr. ISSA. Professor, I want to know if you think the current 

standard, not what benevolent government bureaucrats do, you 

know. I’m not from the side of the aisle that believes in benevolent 

government bureaucrats. So excluding all the good things that 

sometimes happen, do you think the current balance of what can 

happen is okay? Yes or no, please. 

Mr. BUZBEE. I believe the administrative law doctrine is quite 

sound in this area. 

Mr. ISSA. Thank you. 

Mr. Clark, I would go down and just say, how would you answer 

that yes-or-no question? 

Mr. CLARK. I think, Representative Issa, that that’s an intolerable status quo. 
69 

And if I could just supplement a little bit to the answer I wanted 

to give to Representative Johnson—— 

Mr. ISSA. You can in a second. Let me just get down this and 

then I’ll get back to you. 

Mr. NOE. Congressman, I think the status quo is very problematic as well. 

Mr. ISSA. Mr. Brady, you are living under these laws. I assume 

your answer is you don’t think the status quo is particularly good. 

Mr. BRADY. Status quo is not good for small business. 

Mr. ISSA. Okay. So 75 percent of the audience here today says 

that they want to rebalance this. 

Now, the act moves the burden, if in a sense, the other direction, 

doesn’t it, in the case of multibillion. And agencies, including ones 

that my former Committee next door looked at, often underestimate. So a multibillion dollar one effecting dust for farmers and so, 

can sometimes be guessed at a very low level and thus circumvent 

the $1 billion responsibilities. 

Mr. Clark, you’re familiar with some of those cases where they 

guess low? 

Mr. CLARK. Yes. Or the cost-benefit analysis, in my view, sometimes is often deliberately skewed. 

Mr. ISSA. So as we look at this legislation, I’m going to ask you 

a series of—one question. I’m going to get back to Mr. Clark, give 

you that opportunity to follow up. 

But as we look at the rebalancing, isn’t the obligation of this 

Committee, recognizing we’re only dealing with regulations that 

come out that essentially are adding to a law that is more than a 

year old, a new regulation in which they did not do it in the original passage of law—I think it’s important, that limitation. We’re 

not dealing with the act of Congress and then the rulemaking 

afterwards. We’re dealing with second guessing and new thoughts 

on legislation that could be decades old. Should we consider for a smaller than $1 billion still having an 

expedited ability to get to the court for that decision, and if so, 

should we consider that the court instead of having the burden be 

irreparable harm have a simple balance of cost and benefit? 

And I ask that for a reason, because if it’s $100 million and on 

balance it costs more than it saves, it may not be irreparable harm. 

But as was said by the Chairman in the opening statement, currently, just having it cost you a lot of money and doing very little 

benefit doesn’t happen to be a standard that the court would consider. So as much as I like the billion, I like the shifting. 

My question to you, and I’ll start with Mr. Clark is, should we 

consider a balance that puts the court in an expeditious fashion in 

a position to evaluate sooner and on an expeditious basis, even if 

it’s below $1 billion? Mr. Clark. 

Mr. CLARK. I think expedition would be helpful. Although I 

would say that since a lot of these rules go to the D.C. circuit, it’s 

not as if their caseload is particularly high. And then I’d also say 

that—— 

Mr. ISSA. I don’t believe it—they’re still working on fast and furious from 2010. 

Mr. CLARK. True enough. 

Mr. ISSA. Mr. Noe. 
70 

Mr. NOE. I like the idea, Congressman, and I’m happy to welcome Professor Buzbee to the regulatory reform movement. It 

sounds like he likes cost-benefit analysis, and I would encourage 

Congress to require that by statute. 

Mr. ISSA. As do I. 

Mr. Brady, you have to live under these laws, regulations that 

agencies come up with years after laws are passed. How do you feel 

about them? 

Mr. BRADY. Well, you’re exactly right. And the one case that I 

quoted earlier is the Department of Labor on the overtime. They 

scored it at a $200 million impact cost. That was a direct administrative cost. They didn’t take into effect the cost that an employer 

pays the employee, which is well over $1 billion. So yes, we would 

support—this is a great first step, but we would support looking at 

that cost-benefit analysis even under $1 billion. 

Mr. ISSA. Mr. Chairman, I think Mr. Buzbee wanted to weigh in, 

and I don’t want to cut him off unfairly. But Thank you, Mr. Chairman. 

Mr. MARINO. Go ahead, Mr. Buzbee. 

Mr. BUZBEE. No, thank you. 

Mr. MARINO. No? All right. 

The Chair now recognizes the gentleman from New York, Congressman Jeffries. 

Mr. JEFFRIES. Thank you, Mr. Chairman. And I want to thank 

the witnesses for their presence here today, their testimony. 

Let me just start with Mr. Buzbee. Am I correct that most interpretive rules are promulgated most often at the request of the industry? 

Mr. BUZBEE. Yes, that is correct. 

Mr. JEFFRIES. And these requests are generally made to address 

regulatory uncertainties; is that correct? 

Mr. BUZBEE. That’s correct, it’s both to address regulatory uncertainty and then, agencies also usually desire to have consistency 

and implementation and enforcement and, hence, both business 

and agency see benefits to clarity in their interpretive rules. 

Mr. JEFFRIES. So what would the risk be, if any, if we were to 

move forward and subject revisions to the interpretive rules related 

to notice-and-comment rulemaking? 

Mr. BUZBEE. I think the most predictable effect is the backfiring 

I talked about. If you add process, impose new process on agencies, 

you know, examination of past, similar proposals so that agencies 

will avoid that additional process, so instead of having lots more 

notice and common rulemaking, you probably have fewer of these 

clarifying interpretive rules and more policymaking through adjudications and more ad hoc conversations. 

Mr. JEFFRIES. And what, if any, benefits are there as it relates 

to interpretive rules for both agencies, but more significantly to industries that they regulate? 

Mr. BUZBEE. In my experience, both as a professor and then also 

when I was advising the industry, is there’s great difficulty getting, 

figuring out the answer to particular questions, so typically agencies seek—sorry. Businesses seek more guidance, not less, and they 

really would like to have agencies say what they wanted. 
71 

I was at a proceeding years ago, and a home builder said, I don’t 

care what the rules are. I want to know what the rules are, and 

if I can know what the rules are, then I can comply. And interpretive rules tend to bring that sort of clarity, and that’s the idea behind them. 

Mr. JEFFRIES. Now, Mr. Brady, you mentioned that, I think, uncertainty is catastrophic to a small business; is that correct? 

Mr. BRADY. Yes. 

Mr. JEFFRIES. And would you say that there’s uncertainty as it 

relates to the period of time in early 2013 as to whether we were 

going to fall over the fiscal cliff or not? Is that uncertainty that 

was—— 

Mr. BRADY. There was a lot of uncertainty. 

Mr. JEFFRIES. And would you say there was uncertainty as relates to the impact of the sequestration cuts that have been imposed upon this country as a result of a deal that was struck several years ago that creates a climate that could be adverse to small 

businesses in America? 

Mr. BRADY. In regards to the sequester? 

Mr. JEFFRIES. Yes. 

Mr. BRADY. Potentially, yes. 

Mr. JEFFRIES. When the government shut down in October of 2013, which I believe it was 16 days, it cost the economy about $24 

billion in lost economic productivity, was there uncertainty as to 

the chaos that was imposed upon us as a result of this addiction 

with the Affordable Care Act repeal? Was that uncertainty problematic in terms of the government shutdown? 

Mr. BRADY. Yes. 

Mr. JEFFRIES. And we’ve been engaged in this process of serial 

flirtation with defaulting on our debt, which would be the first time 

that we would default in our Nation’s history were that to happen, 

even though we’re charged constitutionally with protecting the full, 

faith, and credit of America. Does the serial flirtation with not raising the debt ceiling and defaulting on our debt, aside from the catastrophic economic consequences that would be caused, does that 

create a level of uncertainty that is problematic for small businesses across America? 

Mr. BRADY. We are a little over my pay grade on the debt limit, 

but I must—— 

Mr. JEFFRIES. I think that’s the easiest question of all. 

Mr. BRADY. But I must answer the interpretive—there’s uncertainty in interpretive rules. And for 29 years we worked under interpretive rules. Those interpretations can change from Administration to Administration, and that’s the uncertainty with an interpretive rule that hasn’t gone through the rulemaking process, 

there’s uncertainty. 

Mr. JEFFRIES. Now Professor Buzbee, you mentioned that H.R. 

3438 would cause legal uncertainty. Can you just elaborate on that 

dynamic and why that would be problematic for the industries that 

are seeking relief from regulation? 

Mr. BUZBEE. Well, one important aspect is by not defining what 

counts as cost. If this became law, there’s a lot of different ways 

you can define cost. Some people call for cost-effective regulation. 

Virtually everyone says that if you’re going to be cost-benefit anal-
72 

ysis, you don’t just look at direct effects, you look at all of societal 

costs and benefits. Mr. Noe, years ago worked on the idea that you 

should look at all societal costs and benefits and then look at the 

net of them to figure out if regulation is a good idea. This bill, by 

saying you stay any regulation by just looking at costs might stay 

a regulation that might be incredibly important and leave people 

very vulnerable. 

Mr. JEFFRIES. Thank you, Mr. Chairman. I yield back. 

Mr. MARINO. Thank you. The Chair now recognizes the gentleman from Michigan, Congressman Bishop. 

Mr. BISHOP. Thank you, Mr. Chairman. And thank you to the 

panel for being here today, and I appreciate your testimony. 

I’d like to begin, if I could, with Mr. Clark. Critics of the REVIEW Act say that it will stop urgent rules in their tracks. Professor Buzbee indicated that that added process might discourage 

rulemakers also. But in your written testimony, I thought you provided the perfect answer for that, that statement, when you indicated that if a legislative rule—if a rule was that important, that 

Congress should take initiative and pass the statute as provided in 

our constitutional duty. I just want you, if you wouldn’t mind, to 

expound upon that. And doesn’t your answer highlight how upside 

down our modern concept of how to legislate and how the process 

works? And it seems to me that—of course, I’m new here, so I’m 

learning as I go, but as I sit through these hearings, I note that 

the power of Congress has slowly been handed over to unaccountable bodies, and we in Congress have very little authority to step 

in. 

And I listened to the questioning earlier from my colleague 

across the aisle, who suggested that all these other uncertainties, 

when he’s talking to Mr. Brady out there, that were caused by Congress. Certainly, there are uncertainties, but at the same time Congress is accountable. Ultimately, we have to face the people that 

brought us—that sent us here. Agencies don’t have that same accountability. 

So I would like you to talk a little bit about that answer. And 

if you wouldn’t mind, just expound upon your thought on the current state of our system. 

Mr. CLARK. Yes. Thank you, Representative Bishop. I agree with 

all of those remarks. And I think it’s precisely true. If you’re talking about a monumental regulation that would impose more than 

a billion dollars of costs, to essentially, you know, say if that truly 

is seen as something that’s urgent, you must have whatever the 

health and safety benefits or other benefits of the rule are, that the 

easy answer to any objection like that is for Congress to pass that 

law, that is clearly more legitimate under our constitutional system 

than to have it be done by a delegated power. 

And this allows me I think, to provide the rest of the answer to 

Representative Johnson, which is, it’s not unfair to have an asymmetric consideration of costs here, because all you are doing as 

Representative Issa recognized, is flipping the burden of proof. And 

I think you’re flipping the burden of proof to be more in the constitutional direction. If a rule imposed more than a billion dollars 

in costs, make the regulators—don’t presume that they are correct 

in their cost benefit analysis. Make them prove that the benefits 
73 

exceed the costs through the judicial process, and don’t let a rule 

like that go into effect until the judiciary has agreed, as an independent check on that delegated power with the agency imposing 

a rule of that magnitude. 

Mr. BISHOP. Thank you very much. 

I think, if I could, also to turn to Mr. Brady. And I want to thank 

you for being here. And thank you for representing small business, 

because I know that small business is really the most impacted by 

this increased regulation and this regulatory environment. 

In your testimony, you stated that for 29 years the EPA used 

various interpretive rules in lieu of going through the rulemaking 

process for the Clean Water Act. And we hear, in our districts, all 

about that process, especially with regard to the Clean Water Act. 

And I’m wondering if, after all this, did that period offer any clarity 

or certainty in your industry? 

Mr. BRADY. The interpretive rules? 

Mr. BISHOP. Yes. 

Mr. BRADY. Well, it produces clarity at the moment. What it also 

produces uncertainty as to where it’s moving. I mean, the Supreme 

Court issued two rulings on interpretive rules, on the Clean Water 

Act, and yet, those interpretive rules were not substantially 

changed according to the Supreme Court’s rules. And there was no 

public hearing, no requirement to create or give input from the 

public as the EPA is supposed to do. And so those regulations, interpretive, do not necessarily create the clarity long term that a 

business needs. 

I will also say that one shoe doesn’t fit all. And as somebody suggested earlier, interpretive rules are based on industry asking 

questions for clarity, and that may be clarity to a large business, 

but not a small business. 

Mr. BISHOP. Thank you, sir. And I yield back. 

Mr. MARINO. Thank you. The Chair now recognizes the gentleman from California, Congressman Peters. 

Mr. PETERS. Thank you, Mr. Chairman. My colleagues know that 

I practiced law in this field before I got into government, and so 

I’m pretty sympathetic with some of the stuff that you are talking 

about. 

And, Mr. Brady, I want to ask you a question, couple of questions, just to make sure I understand what the objection is. 

You gave an example about overtime rules that might take effect 

for a business who’s maybe already into a project, and so I understand the problem is the law or the courts. And you couldn’t recover those. Obviously, if you were forced to pay these wages because a new rule came into effect, you were to pursue, overturn the 

rule, you would still be out the money. Would that not be irreparable harm under the law, and you are just not getting an injunction from the court? 

Mr. BRADY. I think that it would be irreparable harm, but that 

is a very tough thing to prove and a very tough thing for a small 

business to get a stay based on that. 

Mr. PETERS. Right. But I’m thinking that maybe the objection is 

more that the courts are not doing their jobs under the current 

standard by recognizing, this is irreparable harm; this is money I 

can’t get back, might be a lot of money. In this micro level, forget 
74 

about the billion dollars, it’s irreparable harm to that business. 

And I would say that I would agree with that, but the problem is 

maybe the courts aren’t observing that. 

Mr. BRADY. Well, from the law perspective, I don’t mean to speak 

from an expert position, but, again, you’re right, the courts have 

not been willing to issue those stays—— 

Mr. PETERS. Okay. 

Mr. BRADY [continuing]. When we argue irreparable harm. 

Mr. PETERS. Okay. The other thing is you talked about the idea 

of a law coming into effect while a project was going on. Has there 

ever been an attempt to grandfather projects that are, say, permitted or under construction so that they are not subject to new 

regulations, and is that something that you think would be constructive? 

Mr. BRADY. It could be constructive, but this law, the overtime 

law, is indexed every year per the law. So that means that we have 

to change those—we don’t know what that index is until January 

1st. 

Mr. PETERS. Well, in this particular case, there would be—that 

wouldn’t be applicable. But I guess the question you raised in my 

mind was whether, you know, you’re doing a project and all of a 

sudden the law changes, maybe the project would be protected from 

that through the duration of the permitting? 

Mr. BRADY. On a long-term project, that may be able to be—— 

Mr. PETERS. That’s not the issue. 

Mr. BRADY. But from a short-term perspective, there’s still that 

uncertainty as to what you are dealing with. And whether or not 

that person is an employee still, versus a contract person. 

Mr. PETERS. Right. 

Mr. Noe, I wanted you to give you a chance to respond to Professor Buzbee. So with respect to these letters that you get from 

an agency, it was often my experience that you desperately wanted 

the agency to tell you what they meant by this, how they were 

going to treat it so you can count on it. And I understand the frustration you state of, you know, you have been relying on a particular interpretation for many years, all of a sudden the agency 

changes it, and that’s got to stink. I get that. 

But on the other side, how do you deal with the fact that you 

might further bureaucratize this process by telling them that if you 

do give us an answer to this question, we might sue you? And the 

thing we talk a lot about here is empowering people to make decisions. And it seems to me—so I would just like you to sort of respond to the professor about how that would be—— 

Mr. NOE. Yes. Thank you for that question, Congressman. And 

I would say that of the witnesses here who work in the business 

community, we all support these bills. And the reason is, yes, we 

want clarity; yes, we do ask agencies for interpretations, but we 

also want due process. And I think that’s what the bill would provide. 

We also find it very hard to operate in a regulatory system where 

there’s actually now an incentive and agencies are going in this direction to hollow out their legislative rules. A lot of the controversial issues are not in those rules. They pass through a one view review. You don’t have an objection here, because once they’re object 
75 

to and along comes an interpretive rule, without due process, without notice and comment, and then they can do a 180 and say one 

day our policy was X, and the next day it’s not X. 

I can give you a specific example where you can imagine an 

agency issuing a broadly-worded legislative rule with a preamble 

that says, what we mean is X. They could come out, under mortgage bankers, later with a letter or something that says not X. 

Mr. PETERS. I actually think we—I agree on the phenomenon, 

and I actually have a lot of examples that I get steamed about 

where the government gets away from what Congress intended, the 

government actually is fighting with its own citizens of its own 

businesses. It drives me crazy. 

I just want to—I have 14 seconds left, so I won’t be able to talk 

about it now. But I would love to talk to you more about how to 

preserve the flexibility, to answer a small business’s question about 

what the heck am I supposed to do, because that’s often how it 

comes up, without doing this thing that you describe, which is to 

really—to be unfair, to be inconsistent with the law, which is something that deserves a remedy. I just don’t think we’ve landed the 

plane on that yet and I would like to talk about it more. 

Mr. Chairman my time has expired. 

Mr. MARINO. The Chair now recognizes the gentleman from 

Georgia, Congressman Collins. 

Mr. COLLINS. Thank you, Mr. Chairman. 

Again, this is—and I go out to both Mr. Bishop and also Mr. Peters in his question. I think this is a problem that most people are 

just struggling. Mr. Brady, that’s why in a panel like this I appreciate you being here and actually having the, you know, what I call 

the boots on the ground. You have to live with this all the time. 

I’ve had in my office just recently—it’s not just a matter of also 

the interpretive language, it’s also the matter of getting the actual 

agencies, if they are going to do a rule to actually do the rule. And 

I’ve got businesses right now that are having to make multi-million 

dollar decisions based on the salt or lack of salt in processed foods 

that are going to school lunch programs. They are having to make 

the decision now, because actually, business understands that you 

actually have to plant your crop before you get a harvest. Government doesn’t understand that. 

Government, if you work in the little cubicles down, which God 

love them, they are great folks, they need to be smaller in size, but 

they work down here for the good of folks, that’s not the way it 

happens. They just can go on because they are never held accountable to any standard. They are accountable to a piece of paper 

that’s brought out at the end of the day. 

Mr. Buzbee, you said something that is really interesting to me. 

How in the world—and again, you have to understand, if you’ve 

heard me on the floor, and you’ve heard me here, I am not at all 

concerned about imposing a little bit of work on an agency. That 

is not a problem. Okay. My problem is when you said to impose 

due process or a substance, actually would be a problem, because 

then they would begin to skirt. I want you to explain a little bit 

more what you were saying there? 

Mr. BUZBEE. Sure. 

Mr. COLLINS. Because that right there is just terrible. 
76 

Mr. BUZBEE. Sure. I would be happy to. Supreme Court doctrine 

going back, actually, 1940’s and 1950’s which make clear, agencies 

can make policies in several different modes and Administrative 

Procedure Act has also long recognized that. And so when you add 

a regulatory burden on one of the options here, interpretive rules, 

agencies will look at the other options they have. And one of the 

options agencies have is to do things in a more ad hoc basis, or possibly, other the other forms of non-notice and comment rules. And 

so what may end up happening is more ad hoc and less known law, 

and that’s been long established that agencies have that choice. 

The law doesn’t force them to do notice-and-comment rulemaking, even if people think that would be a good idea in some 

areas. Some statutes do. Some statutes say regulations in a particular area have to go through notice-and-comment rulemaking, 

and often with deadlines, and then agencies do them. But a lot— 

usually interpretive rules are two or three layers down below a 

high-stakes promulgated regulation. 

I just have one example that there was mention of the waters of 

the United States rule in Rapanos. The Supreme Court came with 

an extremely confusing decision. The Army Corps of Engineers and 

EPA immediately, or within a few months, tried to come out with 

a guidance document interpreting that ruling so people would understand how they understood an extraordinarily confusing decision. And not everyone would have necessarily agree with all aspects of it, but it brought greater clarity to the law. 

Mr. COLLINS. But I think what we’re looking at here, and, Mr. 

Brady, actually brought that—you know, even though you had a 

Supreme Court ruling that did sort of lay it out and, frankly, there 

were many people who understood what the Supreme Court was 

doing. I mean, we can lawyer everything, I lawyer everything to 

death, and you can as well. That’s why there’s a lot of problems in 

this. 

The problem is interpretive rules have the full—they formally 

through court cases, lack the full force and effect of the law.’’ But, 

you know, from a builder perspective, how many times have you 

had a building inspector come to your home or your building and 

give you an interpretive ruling on how high a fence was to be or 

how much—who is the law at that point? 

Mr. BRADY. Well, they are usually the law, because they won’t 

give me the sticker unless I interpret it the same way that they 

do. 

Mr. COLLINS. Exactly. This is the problem we’re getting at. And 

I’m not even sure anybody would like to take this on, is when we’re 

looking at these, there could be issues—and, Mr. Clark, I think you 

had brought up an issue of actually doing it below a billion. Real 

quickly, is there a place where you would draw the line, on—Mr. 

Noe, either one—that would broaden the applicability of the REVIEW Act to below $1 billion. Is there a line below $1 billion? Like 

a number, do you have a number in mind? Mr. Clark. Mr. Noe. 

Mr. NOE. I would recommend—you know, I respect if the Committee wants to have it only apply to the very small handful of 

rules it applies to now, but I would hope a least it’s clear that it’s 

total capital cost, whatever the number is. I think, frankly, there 

are a number of rules, though, that could effect small business or 
77 

other entities that when it hit that threshold. So it’s for you to consider whether you’d want to lower that further. 

Mr. COLLINS. Do all have a number in mind? Mr. Clark, do you? 

Mr. CLARK. Yes, I would say that, you know, just as a quick, you know, thing. Suppose you considered it to be half, you know, $500 

billion on a threshold that’s ties to small business where that—you 

know, an impact of that magnitude could be catastrophic for small 

businesses so that you have sort of one speed for large businesses 

and one speed for small businesses. 

Mr. COLLINS. Well, I think the biggest thing here, and I tried to 

get something from all of you here, as I’m closing up here is, simply 

is these rules, these interpretive rules, whether it’s before the billion cap, non-billion cap, we’re dealing with issues of real-world significance on. There is a cost-benefit analysis. There is something 

that to say that you do need this billion dollars and decide if we 

are going to have a suit or not, because otherwise, you can stop 

things. And for the interpretive reason, this says we need to take 

a look back. And I don’t see anything wrong with an agency of any 

kind doing a comment open period so that we can get some of this 

clarified. 

This is a good reason for this hearing, and, Mr. Chairman, I yield 

back. 

Mr. MARINO. The Chair now recognizes the gentleman from 

Texas, Congressman Ratcliffe. 

Mr. RATCLIFFE. Thank you, Chairman Marino. 

Gentlemen, thank you all for being here today. The industries 

that you represent are essential to manufacturing in this country 

both with respect to job creation and economic growth, and they’re 

certainly vital to the families in the fourth congressional district of 

Texas, which I’m honored to represent. So from my perspective, 

this hearing couldn’t be more timely or more critical. 

And, frankly, in hearings like this, I’m at a loss when I hear my 

colleagues on the other side of the aisle express concern about reforms that would force regulatory agencies to be more deliberative 

and more thoughtful, as if that’s troubling or a bad thing. And I 

couldn’t agree with you more, Mr. Clark, when you said that this 

is really a separation of powers issue. And I would certainly hope 

that folks on both sides of the aisle would agree that we’d be better 

off in this country if we were solving the problems that need solving in our communities, not by regulations legislated by unelected 

bureaucrats at unaccountable agencies, but instead by statutes legislated by an accountable Congress. 

So let me turn to you, Mr. Noe, because the impact of your members, those in the paper and the wood products manufacturing industry, is a big economic driver in the fourth congressional district 

of Texas. I want to make sure that those businesses and the families that they represent aren’t crushed by regulations that require 

not just millions, but in some cases billions of dollars in compliance 

costs. In your testimony, you talked about sustainability efforts 

that the paper and wood products manufacturing industry has had 

to take in recent years, and you talked about costly regulations 

from the Federal Government, and additional $10 million in new 

capital obligations that you expect will come in the coming years, 

and that that is a regulatory burden that you called unsustainable. 
78 

With that in mind, do you think that the REVIEW Act that we’re 

considering, H.R. 3438, would actually incentivize agencies to work 

with stakeholders in the paper and wood manufacturing industry 

before issuing regulations thereby resulting in more legally sound 

rules and, in fact, significantly reducing regulation that we have in 

this country? 

Mr. NOE. I absolutely do, Congressman, and I think you make 

a good point. I think what’s being lost in the discussion about you 

should consider benefits as well as costs, is that we’re talking about 

regulations that are later declared to be unlawful. Okay. And that 

creates tremendous waste of limited resources, which effects ability 

to hire, capital expansion. In other countries, to your point, my understanding, and I’m not an expert in foreign regulation, but 

there’s much more of an accommodation, the regulators working 

with the industry on capital planning for highly costly rules. We 

have a very adversarial legal system where that doesn’t happen as 

much as it should. And when it does happen, the stakes can be 

avoided. 

The airbags rule that Ranking Member Johnson referred to, for 

example, you know, NHTSA actually originally made a mistake in 

those rules. And it considered the risks from high-force airbags, 

and there were a number of fatalities because of that. I’m not saying—I don’t know enough of that to say the REVIEW Act could 

have to avoid that, but I know it would avoid mistakes that are 

made. And so we’re talking about a bill that could lead to sustainable regulation, increase the legal soundness of it and really avoid 

mistakes, and that’s where you’re going to get real benefits. 

If I could, I just want to show you from a distance. This is a picture of the clean air regulations, just one program of one agency 

that our industry faces in the next 10 years. This is what people 

face when they run companies in this country, and it’s a scary picture 

Mr. RATCLIFFE. Thank you, Mr. Noe. 

Mr. Brady, your industry, the home builders that is important in 

my district and every district I would hope in this country. I want 

to give you an opportunity to expound on Mr. Noe’s comments and 

answer the same question. 

Mr. BRADY. Well, when I suggest 25 percent of the costs of a 

home is regulatory, it can tell you the burden that the regulatory 

environment puts on the cost of a product, which is an affordable 

housing issue, being able to produce a product in an affordable 

price. It affects the amount of people that I can put on the payroll, 

the amount of houses that I build and employ people to build those. 

The regulatory burden—and as I said in my statement, we need 

to protect workers; we need to protect the environment, but the 

regulatory burden on our industry alone, is cutting affordability; 

it’s cutting job creation. We have 240 members of our association 

6, 7 years ago. We have 140,000 now, because many of those businesses, they are not around any more, in part because of the regulatory burden they have to live by. 

Mr. RATCLIFFE. Well, I thank the gentleman. I wish I had more 

time to expound and highlight on these issues today. But I see my 

time has expired, so with that, I yield back Mr. Chairman. 
79 

Mr. MARINO. Thank you. Seeing no other Members present, this 

concludes today’s hearing. I want to thank the witnesses for being 

here. It’s very enlightening. 

Without objection, all Members will have 5 legislative days to 

submit additional written questions for the witnesses or additional 

materials for the record. This hearing is adjourned. 

[Whereupon, at 11:31 a.m., the Subcommittee was adjourned.] 

(81) 

A P P E N D I X 

MATERIAL SUBMITTED FOR THE HEARING RECORD
82 

Response to Questions for the Record from Edward Brady, President, 

Brady Homes Illinois, testifying on behalf of the National Association of 

Home Builders 
83 

f 
84 

Response to Questions for the Record from William W. Buzbee, 

Professor of Law, Georgetown University Law Center 
85 
86 
87 

Æ