```

[House Report 113-237]
[From the U.S. Government Publishing Office]

113th Congress                                                   Report
                        HOUSE OF REPRESENTATIVES
 1st Session                                                    113-237

======================================================================

 
                 REGULATORY ACCOUNTABILITY ACT OF 2013

                                _______
                                

 September 28, 2013.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

   Mr. Goodlatte, from the Committee on the Judiciary, submitted the 
                               following

                              R E P O R T

                             together with

                            DISSENTING VIEWS

                        [To accompany H.R. 2122]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on the Judiciary, to whom was referred the 
bill (H.R. 2122) to reform the process by which Federal 
agencies analyze and formulate new regulations and guidance 
documents, having considered the same, reports favorably 
thereon without amendment and recommends that the bill do pass.

                                CONTENTS

                                                                   Page

Purpose and Summary..............................................     2
Background and Need for the Legislation..........................     2
Hearings.........................................................    13
Committee Consideration..........................................    14
Committee Votes..................................................    14
Committee Oversight Findings.....................................    18
New Budget Authority and Tax Expenditures........................    18
Congressional Budget Office Cost Estimate........................    18
Duplication of Federal Programs..................................    23
Disclosure of Directed Rule Makings..............................    23
Performance Goals and Objectives.................................    23
Advisory on Earmarks.............................................    23
Section-by-Section Analysis......................................    23
Changes in Existing Law Made by the Bill, as Reported............    27
Dissenting Views.................................................    42

                          Purpose and Summary

    H.R. 2122, the ``Regulatory Accountability Act of 2013'' 
(RAA) promotes job creation, economic growth, and the 
accountability of Federal regulatory agencies by requiring 
agencies to lower the costs of regulation while meeting 
statutory objectives; improving agencies' decision-making 
processes and enhancing regulatory transparency and 
accountability to the public; and strengthening judicial review 
of agency action. The legislation achieves these ends through 
carefully focused reforms to particular sections of the 
Administrative Procedure Act (APA).

                Background and Need for the Legislation

                         I. GENERAL BACKGROUND

    The annual cost to the economy of Federal regulations has 
recently been estimated to be in excess of $1 trillion dollars, 
and this cost is increasing each year. This burden, coupled 
with uncertainty over what additional Federal regulation may be 
imposed in the near term, have been cited as key factors 
continuing to hold back economic recovery and the creation of 
new jobs.
    The current regulatory burden is largely the fruit of 
inadequate administrative law. Most important, the APA, known 
as the ``constitution'' of agency rulemaking, imposes only a 
few light-handed constraints on the vast majority of agency 
rulemaking proceedings. Nowhere in the APA, for example, is an 
agency required to consider the costs of a proposed regulation 
and weigh them against potential benefits.
    In the 67 years since it was enacted on June 11, 1946, the 
APA has never been modernized. In the 109th Congress, the 
Subcommittee on Commercial and Administrative Law documented a 
host of potential rulemaking reforms to modernize the APA and 
other administrative law statutes.\1\ In the 112th Congress, 
the Subcommittee on Courts, Commercial and Administrative Law 
held a series of hearings to reconsider more precisely how the 
APA could be improved to create jobs and promote economic 
growth by improving agencies' decision-making processes and 
enhancing regulatory transparency and accountability.
---------------------------------------------------------------------------
    \1\House Comm. on the Judiciary, 109th Cong., Interim Report on the 
Administrative Law, Process and Procedure Project for the 21st Century 
(Comm. Print 10).
---------------------------------------------------------------------------
    On February 28, 2011, the Subcommittee held a hearing 
entitled, ``The APA at 65: Is Reform Needed to Create Jobs, 
Promote Economic Growth and Reduce Costs?''\2\ Witnesses at 
this hearing were Susan E. Dudley, director of George 
Washington University's Regulatory Studies Center and former 
administrator of the Office of Management and Budget's Office 
of Information and Regulatory Affairs (OIRA) (2007-09); Jeffrey 
A. Rosen, Esq., Kirkland & Ellis LLP and former OMB general 
counsel (2006-09); and, Professor Peter L. Strauss, Betts 
Professor of Law, Columbia Law School.
---------------------------------------------------------------------------
    \2\APA at 65: Is Reform Needed to Create Jobs, Promote Economic 
Growth, and Reduce Costs?: Hearing Before the House Committee on the 
Judiciary, Subcommittee on Courts, Commercial and Administrative Law, 
112th Cong. (Feb. 28, 2011).
---------------------------------------------------------------------------
    On March 29, 2011, the Subcommittee held a hearing 
entitled, ``Raising the Agencies' Grades: Protecting the 
Economy, Assuring Regulatory Quality and Improving Assessments 
of Regulatory Need.''\3\ At this hearing, the Subcommittee 
heard testimony from Dr. Jerry Ellig, Ph.D., director of the 
Mercatus Center's Regulatory Report Card project; Dr. Richard 
Williams, Ph.D., Director of Policy Research at the Mercatus 
Center and former OMB regulatory development and review 
official; and, Professor Robert L. Glicksman, J.B. and Maurice 
C. Shapiro Professor of Environmental Law at The George 
Washington University Law School.
---------------------------------------------------------------------------
    \3\Raising the Agencies' Grades--Protecting the Economy, Assuring 
Regulatory Quality and Improving Assessments of Regulatory Need: 
Hearing Before the House Committee on the Judiciary, Subcommittee on 
Courts, Commercial and Administrative Law, 112th Cong. (Mar. 29, 2011).
---------------------------------------------------------------------------
    On May 4, 2011, the Subcommittee held a hearing entitled, 
``Cost-Justifying Regulations: Protecting Jobs and the Economy 
by Presidential and Judicial Review of Costs and Benefits.''\4\ 
Witnesses at this hearing were John Graham, Dean of Indiana 
University's School of Public and Environmental Affairs and 
former OIRA Administrator (2001-06); Jeffrey R. Holmstead, 
Esq., Bracewell & Giuliani LLP and former EPA Assistant 
Administrator for Air and Radiation (2001-05); Dr. Harold 
Furchtgott-Roth, Ph.D., former Commissioner, Federal 
Communications Commission (1997-2001); and, Sally Katzen, 
Visiting Professor, NYU School of Law, Senior Advisor at the 
Podesta Group, and former OIRA Administrator (1993-98).
---------------------------------------------------------------------------
    \4\Cost-Justifying Regulations: Protecting Jobs and the Economy by 
Presidential and Judicial Review of Costs and Benefits: Hearing Before 
the House Committee on the Judiciary, Subcommittee on Courts, 
Commercial and Administrative Law, 112th Cong. (May 4, 2011).
---------------------------------------------------------------------------
    On May 31, 2011, the Subcommittee held a hearing entitled, 
``Formal Rulemaking and Judicial Review: Protecting Jobs and 
the Economy with Greater Regulatory Transparency and 
Accountability.''\5\ The Subcommittee heard testimony from Noel 
J. Francisco, Esq., former Associate Counsel to President 
George W. Bush (2001-2003) and Deputy Assistant Attorney 
General for the Department of Justice's Office of Legal Counsel 
(2003-2005), and current member, Government Regulation Practice 
Group, Jones Day LLP; Edward W. Warren, P.C., Environmental 
Practice Group, Kirkland & Ellis LLP; and, Professor Matthew 
Stephenson, Harvard Law School.
---------------------------------------------------------------------------
    \5\Formal Rulemaking and Judicial Review: Protecting Jobs and the 
Economy with Greater Regulatory Transparency and Accountability: 
Hearing Before the House Committee on the Judiciary, Subcommittee on 
Courts, Commercial and Administrative Law, 112th Cong. (May 31, 2011).
---------------------------------------------------------------------------
    As the fruit of these hearings, H.R. 3010, the ``Regulatory 
Accountability Act of 2011,'' was introduced on September 22, 
2011. The Committee held a legislative hearing on H.R. 3010 on 
October 25, 2011. Witnesses at the hearing included the 
Honorable C. Boyden Gray, Esq., Boyden Gray & Associates, White 
House Counsel (1989-93) and Ambassador to the European Union 
(2006-07); Arnold Baker, Chair of the National Black Chamber of 
Commerce and CEO of Baker Ready-Mix, a concrete supply company 
in New Orleans; the Honorable Christopher DeMuth, former OIRA 
Administrator (1981-1984) and President of the American 
Enterprise Institute (1986-2008); and, Professor Sidney 
Shapiro, University Distinguished Chair in Law, Wake Forest 
University School of Law.
    On February 28, 2013, the Subcommittee on Regulatory 
Reform, Commercial and Antitrust Law held an oversight hearing 
to commence consideration in the 113th Congress of issues 
relevant to the RAA and the Committee's other regulatory reform 
legislation. Testimony at the hearing concentrated on the need 
for regulatory reform in light of the Obama administration's 
continuing high levels of new, major regulation, the adverse 
impacts of new regulation on jobs, and the adverse impacts of 
new regulation on communities that suffer displaced industry 
and jobs. Numerous issues discussed at the hearing bore on the 
need for Administrative Procedure Act reform. Witnesses at the 
hearing included Douglas Holtz-Eakin, President of the American 
Action Forum and former Director of the Congressional Budget 
Office; Drew Greenblatt, CEO, Marlin Steel, Baltimore, 
Maryland; Rob James, Member, City Council, City of Avon Lake, 
Ohio; and, Professor Glicksman.
    Chairman Goodlatte reintroduced the Regulatory 
Accountability Act on May 23, 2013 by introducing H.R. 2122, 
the ``Regulatory Accountability Act of 2013.'' As mentioned 
above, on July 9, 2013, the Subcommittee held a legislative 
hearing on H.R. 2122. Testimony was received at the hearing 
from Jeffrey A. Rosen, Esq., Kirkland & Ellis (formerly general 
counsel of the Office of Management and Budget); Keith Hall, 
Mercatus Center (formerly Commissioner of the Bureau of Labor 
Statistics; Diana Thomas, Huntsman School of Business, Utah 
State University; Robert A. Sells, Titan America Mid-Atlantic 
Business Division; David Goldston, Natural Resources Defense 
Council; and, Professor Ronald Levin, Washington University 
School of Law. Mr. Rosen and Mr. Sells provided detailed 
testimony regarding the continuing need for Administrative 
Procedure Act reform and the potential benefits of the 
Regulatory Accountability Act's provisions. Mr. Hall and Prof. 
Thomas offered testimony regarding the extent to which new 
regulations promulgated under existing law create adverse jobs 
impacts and regressive effects on lower income populations. Mr. 
Goldston and Prof. Levin testified against the bill, offering 
their views that the Regulatory Accountability Act would 
unnecessarily slow down the ability of regulators to issue new 
regulations.

II. REQUIRING CONSIDERATION OF COSTS AND BENEFITS AND IMPROVING AGENCY 
                            DECISION MAKING

A. Codifying Executive Order Rulemaking Principles
    ``Whereas Congress has never amended the APA in a material 
way, the Executive Branch has frequently created its own 
requirements for how Federal agencies ought to function, and 
established a variety of principles, requirements, coordination 
mechanisms, and the like. . . .''\6\ Over the last 30-plus 
years, presidents from both parties have issued executive 
orders that require regulatory agencies to take steps in 
addition to those required by the APA. Executive Orders 12291, 
12866, 13422 and 13563 all required regulatory agencies in the 
Executive Branch to conduct regulatory impact analyses, 
including cost-benefit analysis requirements, and to coordinate 
rulemaking with the OIRA Administrator. Other requirements of 
the orders include consideration of reasonable alternatives to 
proposed rules, identification of the least burdensome 
alternative and consideration of whether it would be more 
appropriate to defer to State and local authorities than to 
issue a Federal rule.
---------------------------------------------------------------------------
    \6\APA at 65, note 2 supra, at 31 (Testimony of Jeffrey Rosen).
---------------------------------------------------------------------------
    To enforce the requirements of these executive orders, 
however, has been up to White House discretion, not the courts. 
As a result, ``agency regulatory analysis is often incomplete 
and seldom used in decisions. This pattern persists across 
Administrations, suggesting that the source of the problem is 
institutional, not political.''\7\ In the Mercatus Center's 
Regulatory Report Card project, Drs. Ellig and Williams 
``examine[d] how well the executive-branch regulatory agencies 
do what presidents have been telling them to do for more than 
three decades.''\8\ Overall, Drs. Ellig and Williams found that 
the quality of agencies' regulatory impact analysis is 
lacking,\9\ and that agencies rarely utilize the analysis in 
the decision making process.\10\ Specifically, in evaluations 
of 34 major rulemakings conducted by 17 agencies from 2008 
through 2011, the highest average score obtained by any agency 
was a meager 35 points out of 60 (earned by the Department of 
Justice). The Social Security Administration earned the worst 
performance with a score of seven points.
---------------------------------------------------------------------------
    \7\Raising the Agencies' Grades, note 3 supra, at 20 (Testimony of 
Jerry Ellig).
    \8\Id. at 21.
    \9\Id. at 23 (``One of the major areas where regulatory analysis is 
weakest is identification of the systemic problem the regulation is 
supposed to solve.'').
    \10\Id. at 21 (``All too often, agency economists have to conduct 
regulatory analysis after most major decisions about regulations have 
already been made. The analysis then becomes an advocacy document 
written to justify the agency's decisions, or a mere paperwork exercise 
to fulfill requirements imposed by the Office of Management and 
Budget.'').
---------------------------------------------------------------------------
    Dr. Williams observed that agencies only have an incentive 
to regulate; there is no incentive not to issue a new 
regulation.\11\ Drawing on his 27 years of experience as an FDA 
economist, Dr. Williams testified that ``there is no discussion 
[within agencies] of whether or not a regulation is required. 
There is also no discussion as to whether there is a failure of 
the market or some other reason for regulatory intervention; 
whether the market will solve the problem in the near future 
without intervention (baseline analysis); or if there is a need 
for federal, as opposed to some other level of government, 
intervention.''\12\ Consequently, ``the regulatory analysis 
analyzes a decision, not a problem.''\13\
---------------------------------------------------------------------------
    \11\Id. at 73-74.
    \12\Id. at 74.
    \13\Ibid.
---------------------------------------------------------------------------
    To remedy this failing, Dr. Ellig testified, ``[r]egulatory 
analysis needs to be legislatively required for all Federal 
agencies, including independent agencies.''\14\ The proposal to 
codify some or all of the Executive Orders' decision-making 
criteria also was endorsed by Mr. Rosen,\15\ Ms. Dudley,\16\ 
Prof. Strauss,\17\ Dean Graham,\18\ Mr. Holmstead,\19\ and Dr. 
Furchtgott-Roth.\20\
---------------------------------------------------------------------------
    \14\Raising the Agencies' Grades, note 3 supra, at 20.
    \15\APA at 65, note 2 supra, at 33-35.
    \16\Id. at 20-21.
    \17\Id. at 47.
    \18\Cost-Justifying Regulations, note 4 supra, at 6.
    \19\Id. at 16.
    \20\Id. at 38.
---------------------------------------------------------------------------
    Section 3(b) of the Bill addresses this issue by codifying 
the key rulemaking principles found in the Executive Orders. 
This would make the Executive Orders' criteria permanent and 
extend them to independent agencies, as numerous witnesses 
suggested. To codify these criteria also would make them 
judicially enforceable, which they currently are not\21\, but 
which multiple witnesses supported.\22\ As Dean Graham 
recommended, under section 3(b) (provisions of new subsection 
553(k) of title 5), OIRA would also have authority to issue 
more detailed guidance for agencies to follow during the 
decision-making process, including norms for cost-benefit 
analysis.\23\
---------------------------------------------------------------------------
    \21\See Exec. Order No. 12,866, Sec. 10; Exec. Order 13,563, 
Sec. 7.
    \22\Cost-Justifying Regulations, note 4 supra, at 38 (Testimony of 
Harold Furchtgott-Roth) (``The absence of judicial review of the 
regulatory process means that both the Federal agency and the outside 
parties do not take the regulatory process seriously. If Congress were 
to alter the regulatory process, it would be important to have 
mechanisms whereby courts can review Federal agency decisions.''); id. 
at 6-7 (Testimony of John Graham) (``Since presidents and agencies do 
not always adhere to the provisions in presidential executive orders, 
it is imperative that judicial review of the new statutory requirements 
be authorized.'').
    \23\Id. at 7 (``Second, I recommend that Congress require OMB to 
issue guidance on the proper conduct of BCA, and that this guidance be 
updated periodically.'').
---------------------------------------------------------------------------
B. Improving the Process for Notice-and-Comment Rulemaking
    In his testimony to the Subcommittee on May 4, 2011, Dr. 
Furchtgott-Roth explained:

        One of the most important aspects of the Notice of 
        Proposed Rulemaking process is to obtain guidance from 
        the public about how best to craft a rule. A Federal 
        agency should solicit ideas from the public first 
        rather than develop a predetermined rule before seeking 
        public comment. An agency that can articulate in detail 
        the possible costs and benefits to various segments of 
        our economy of each proposed rule and alternatives to 
        it demonstrates some thoughtful analysis behind the 
        proposed rule. And the agency can explain other forms 
        of the rule, including no new rule, that can be 
        considered.\24\
---------------------------------------------------------------------------
    \24\Id. at 37.

    Drawing on his experience at the FCC, Dr. Furchtgott-Roth 
described how that independent regulatory agency falls short in 
its decision-making processes.\25\ Specifically regarding cost-
benefit analysis, Mr. Holmstead remarked, ``I have also seen, 
however, that Federal agencies sometimes do not use [cost-
benefit analysis] to inform their regulatory decision, but 
rather to justify actions they may want to take for other 
reasons.''\26\
---------------------------------------------------------------------------
    \25\Id. at 38 (``Perhaps partly because it is not covered by the 
executive orders, the FCC does not directly weigh or even itemize the 
benefits and costs of a particular regulation. The FCC does not 
systematically consider alternative forms of regulation including no 
regulation. The FCC certainly does not focus on the alternative with 
the greatest net benefit. The only presentation of the costs and 
benefits of a regulation is an appendix for the Regulatory Flexibility 
Act. This appendix is at best an afterthought: a short, rarely read 
boilerplate passage that is outside the deliberative process. Sometimes 
it is forgotten altogether. I have seen little change in the regulatory 
analyses at the FCC since I left the Commission.'').
    \26\Id. at 15.
---------------------------------------------------------------------------
    In the Regulatory Report Card project, Drs. Ellig and 
Williams found that agencies do a poor job of both analyzing 
the problem they are trying to solve,\27\ and then applying 
whatever analysis is conducted to the drafting of a new 
regulation.\28\ This is not to say that agencies are ignorant 
of how to make good decisions. Drs. Ellig and Williams found 
that in 2008 and 2009, across Republican and Democratic 
administrations, ``a few regulatory analyses received a score 
of `5' for employing potential best practices.''\29\ This shows 
that ``[t]he knowledge required to produce better regulatory 
analysis exists, dispersed throughout agencies in the Federal 
Government. OMB Circular A-4 also summarizes a great deal of 
this knowledge. What's lacking are institutional incentives to 
produce good analysis and use it to guide decisions.''\30\
---------------------------------------------------------------------------
    \27\Raising the Agencies' Grades, note 3 supra, at 23 (Testimony of 
Jerry Ellig) (``One of the major areas where regulatory analysis is 
weakest is identification of the systemic problem the regulation is 
supposed to solve (criterion 6). This is a key weakness. . . . If the 
agency cannot identify and demonstrate the existence of a systemic 
problem that a regulation might solve, how can it assess whether the 
regulation is likely to solve the problem or identify alternative 
solutions that might be more effective?''); id. at 74 (Testimony of 
Richard Williams) (``Discussion of whether there is a problem and 
whether Federal regulation is the best way to solve that problem is 
`off the table.' That is, there is no discussion of whether or not a 
regulation is required. There is also no discussion as to whether there 
is a failure of the market or some other reason for regulatory 
intervention; whether the market will solve the problem in the near 
future without intervention (baseline analysis); or if there is a need 
for federal, as opposed to some other level of government, 
intervention.'').
    \28\Id. at 74 (Testimony of Richard Williams) (regulatory impact 
analysis ``is generally begun after the decision on how to regulate has 
been announced. That is a key part of the problem: the regulatory 
analysis analyzes a decision, not a problem.''); id. at 25 (Testimony 
of Jerry Ellig) (``But the average scores on our Use criteria are 
relatively low--less than 2.5 out of a possible 5 points on each of 
these criteria. Even under our relatively liberal definition of `use,' 
agencies claim to use the regulatory impact analysis for significant 
decisions only about 20 percent of the time at best. . . .'').
    \29\Id. at 27 (Testimony of Jerry Ellig).
    \30\Ibid.
---------------------------------------------------------------------------
    Section 3(b) of the Bill (in its new subsections 553(c)-(f) 
of title 5) addresses these recommendations in the process it 
establishes for agencies to follow in advance notices of 
proposed rulemaking, notice-and-comment rulemaking on rules 
actually proposed, final rulemaking hearings for ``major'' and 
``high-impact'' rules, as defined in Section 2, and 
promulgation criteria for final rules, in order to focus 
agencies on identifying the cause of the problem at hand, 
weighing solutions to solve that problem and adopting final 
rules. For example, in a notice of proposed rulemaking, the 
agency must summarize all information known to it through 
application of the executive-order-based rulemaking principles 
codified in Section 3(b) of the Bill, as well as information 
acquired through an advance-notice process, if one was used. 
The agency must provide ``a reasoned preliminary determination 
of the need for the rule,'' a preliminary cost-benefit analysis 
supporting the rule, an analysis of the alternatives considered 
and why they were not proposed, and ``a statement of whether 
existing regulations have created or contributed to the 
problem'' the agency is trying to solve (and, if so, whether 
rescinding or modifying those regulations could solve the 
problem). If, following an advance notice of proposed 
rulemaking, the agency chooses to proceed on a course of 
conduct other than rulemaking, then the agency must identify 
that course to the public and make public the information 
received during the advance notice process. After publishing a 
notice of proposed rulemaking, the agency must ``give 
interested persons an opportunity to participate in the rule 
making through submission of written data.'' Interested persons 
also are given the opportunity to challenge the data supporting 
the proposed rule under the Information Quality Act, which is 
discussed in more detail below.
    Section 3(b) of the Bill also requires that, when agencies 
promulgate final rules, they render final determinations on 
issues addressed with preliminary determinations in their 
notices of proposed rulemaking (new subsection 553(f) of title 
5). Further, it requires that an agency generally must issue 
the least costly alternative rule considered during the 
rulemaking that meets the relevant statutory objectives. (Id.) 
An agency may in certain instances adopt a more costly rule, 
but only to serve interests of public health, safety or welfare 
clearly within the scope of the statutory provision that 
authorizes the rule and only if the additional benefits of the 
more costly rule justify the additional costs. (Id.) An agency 
also may only adopt a rule ``on the basis of the best 
reasonably obtainable scientific, technical, economic, and 
other information'' and only after consulting with the OIRA 
Administrator. (Id.) For major rules and high-impact rules, the 
agency also must publish a plan to review the rule every 10 
years to determine whether it remains efficacious as written or 
should be modified or rescinded. (Id.) Agency review of the 
continuing efficacy of their rules is another function in which 
Drs. Ellig and Williams found agencies deficient.\31\
---------------------------------------------------------------------------
    \31\See id. at 26 (``Scores are even lower on criteria 11 and 12, 
which indicate whether the agency commits to using the results of 
regulatory analysis in the future by establishing goals and measures 
for the regulation's outcomes and tracking data to measure the 
regulation's performance. The average scores on these criteria are 
barely above 1. This indicates that, on average, agency regulatory 
analyses provide some semblance of a framework for evaluating the 
regulation's effects on the future, but agencies have made no 
commitment to do so.'').
---------------------------------------------------------------------------
C. Bringing Major Guidance within the Rulemaking Process
    In 2007, President Bush expanded the scope of Executive 
Order 12866 to bring major agency guidance documents within the 
OIRA review process.\32\ Promptly upon taking office, however, 
President Obama revoked this Executive Order, thus excluding 
major guidance documents from the OIRA review process.\33\
---------------------------------------------------------------------------
    \32\Exec. Order No. 13,422, Further Amendment to Executive Order 
12866 on Regulatory Planning and Review, 72 Fed. Reg. 2763 (Jan. 18, 
2007).
    \33\Exec. Order No. 13,497, Revocation of Certain Executive Orders 
Concerning Regulatory Planning and Review, 74 Fed. Reg. 6113 (Jan. 30, 
2009).
---------------------------------------------------------------------------
    In his testimony on May 31, 2011, Mr. Francisco described 
how current judicial review doctrines encourage agencies to use 
the rulemaking process to issue broad, ambiguous regulations, 
and then interpret those regulations through mere guidance 
documents, which do not have to be promulgated through any 
established processes.\34\ Under these circumstances, a court 
will defer to the agency's interpretation of its own ambiguous 
regulation even though the guidance document does not have the 
force of law. Both Dean Graham and Mr. Holmstead, testifying on 
May 4, 2011, recommended that agencies be required to follow 
some decision-making criteria when issuing significant guidance 
documents.\35\
---------------------------------------------------------------------------
    \34\Formal Rulemaking and Judicial Review, note 5 supra, at 179-80 
(discussing Bowles v. Seminole Rock & Sand Co., 325 U.S. 410, 414 
(1945) and Auer v. Robbins, 519 U.S. 452, 461 (1997)).
    \35\Cost-Justifying Regulations, note 4 supra, at 7 (Testimony of 
John Graham) (``Third, I recommend that Congress expand the scope of 
the statutory mandate to include significant guidance documents as well 
as legislative rules, at least in cases where the agency's action to 
issue a guidance document has the same practical effect on regulated 
parties as a regulation.''); id. at 18 (Testimony of Jeffrey Holmstead) 
(``I also recommend that the Subcommittee go beyond just rules and 
regulations to require that significant guidance documents are subject 
to analysis and interagency review.'').
---------------------------------------------------------------------------
    To curb agency abuse of guidance documents, the Bill adopts 
several measures. First, to change agency incentives, Section 
7(b) legislatively overrules the doctrine by which courts defer 
to agency interpretations of regulations when the 
interpretations are issued outside of rulemaking. In addition, 
Section 4 requires agencies to take certain steps before 
issuing ``major guidance,'' as defined in Section 2 (e.g., 
guidance with an economic impact of $100 million or more). 
Specifically, the agency must assure that the guidance is 
understandable and that the benefits justify the costs, and 
also must identify the alternatives considered and why the 
agency rejected them. The agency must confer with the OIRA 
Administrator in making these determinations. The OIRA 
Administrator, further, is authorized to establish guidelines 
for agencies to follow when issuing guidance documents. 
Finally, agencies must identify any guidance ``in a plain, 
prominent and permanent manner as guidance that is not legally 
binding'' must publish guidance when issued or upon request, 
and may not rely on guidance as legal grounds for agency 
action, such as agency enforcement action.

                III. ENHANCING REGULATORY ACCOUNTABILITY

A. Modernizing Judicial Review Doctrines
    At its February 28, 2011, and May 31, 2011, hearings, the 
Subcommittee received testimony that ``federal courts in 
general are exceedingly deferential'' to regulatory agencies in 
the Executive Branch.\36\ Messrs. Rosen\37\ and Francisco\38\ 
both testified to this effect, and they both commented on the 
apparently counter-intuitive system whereby agency decisions 
made by informal rulemaking receive a lower standard of 
judicial review, and therefore a greater degree of judicial 
deference, than agency decisions made by more rigorous formal 
rulemaking.\39\
---------------------------------------------------------------------------
    \36\APA at 65, note 2 supra, at 35 (Testimony of Jeffrey Rosen).
    \37\Ibid.
    \38\Formal Rulemaking and Judicial Review, note 5 supra, at 179 
(``Over time, however, the balance between deference and judicial 
oversight has tended strongly toward deference and away from rigorous 
judicial review. This shift toward ever-increasing deference weakens 
the primary check on agency discretion.'').
    \39\APA at 65, note 2 supra, at 39 (Testimony of Jeffrey Rosen); 
Formal Rulemaking and Judicial Review, note 5 supra, at 175 (Testimony 
of Noel Francisco).
---------------------------------------------------------------------------
    Consistent with academic criticism, Mr. Francisco 
specifically questioned the deference doctrines established by 
the Supreme Court in Bowles v. Seminole Rock & Sand Co., 325 
U.S. 410 (1945), Auer v. Robbins, 519 U.S. 452 (1997), and in 
Baltimore Gas & Electric Co. v. Natural Resources Defense 
Council, 462 U.S. 87 (1983).\40\ Mr. Francisco also objected to 
the notion, over which the courts of appeals are split, that a 
court should defer to an agency's interpretation of its own 
jurisdiction.\41\ Regarding the well-established, two-step 
analysis first described by the Supreme Court in Chevron, 
U.S.A., Inc. v. Natural Resources Defense Council, 467 U.S. 837 
(1984), Mr. Francisco suggested ``limit[ing] Chevron deference 
to agency decisions made in strict compliance with an agency's 
own internal administrative processes and those required by the 
APA. Absent strict adherence to administrative procedure, 
Skidmore [v. Swift & Co., 323 U.S. 134 (1944)] deference 
applies.''\42\
---------------------------------------------------------------------------
    \40\Formal Rulemaking and Judicial Review, note 5 supra, at 179-81.
    \41\Id. at 180.
    \42\Id. at 182.
---------------------------------------------------------------------------
    Section 7(b) of the Bill incorporates provisions that draw 
upon certain of these recommendations. In particular, Section 
7(b) effectively abolishes Seminole Rock/Auer deference. 
(Notably, Justice Scalia--the author of Auer--recently admitted 
that he has ``become increasingly doubtful of its 
validity.''\43\) Subsection 7(b) also withholds deference to 
agency cost-benefit determinations, other economic 
determinations, and risk assessments not made in accordance 
with guidelines for the conduct of such analyses issued by OIRA 
under the bill's new subsection 553(k) of title 5. In addition, 
under Section 7(b), courts would not defer to an agency's legal 
or factual determinations made in support of an interim-final 
rule.
---------------------------------------------------------------------------
    \43\Talk Am., Inc. v. Mich. Bell Tel. Co., 2011 U.S. LEXIS 4375, 
*30-*31 (June 9, 2011) (Scalia, J., concurring) (``When Congress enacts 
an imprecise statute that it commits to the implementation of an 
executive agency, it has no control over that implementation (except, 
of course, through further, more precise, legislation). The legislative 
and executive functions are not combined. But when an agency 
promulgates an imprecise rule, it leaves to itself the implementation 
of that rule, and thus the initial determination of the rule's meaning. 
. . . `When the legislative and executive powers are united in the same 
person, or in the same body of magistrates, there can be no liberty; 
because apprehensions may arise, lest the same monarch or senate should 
enact tyrannical laws, to execute them in a tyrannical manner.''') 
(quoting Montesquieu, The Spirit of the Laws).
---------------------------------------------------------------------------
B. Review of Interim-Final Rules
    The APA allows an agency to make what is known as an 
``interim-final rule'' ``when the agency for good cause finds 
(and incorporates the finding and a brief statement of reasons 
therefore in the rules issued) that notice and public procedure 
thereon are impracticable, unnecessary, or contrary to the 
public interest.''\44\ The interim-final rule is effective 
immediately, but ``[t]he adopting agency declares that it will 
consider . . . public comments'' after the interim-final rule 
is issued, ``will modify the rule in light of those comments, 
and will then adopt a final rule.''\45\
---------------------------------------------------------------------------
    \44\5 U.S.C. Sec. 553(b)(3)(B).
    \45\Michael Asimow, Interim-Final Rules: Making Haste Slowly, 51 
Admin. L. Rev. 703, 704 (Summer 1999).
---------------------------------------------------------------------------
    Because interim-final rules necessarily ``restrict public 
participation''\46\ and ``hinder APA procedures,''\47\ both Ms. 
Dudley and Mr. Rosen suggested that Congress examine this 
issue. Section 3(b) of the Bill (new subsection 553(g) of title 
5) allows agencies to make an interim-final rule without 
following full rulemaking procedures if it is ``impracticable 
or contrary to the public interest, including interests of 
national security. . . .'' Within 270 days after publishing an 
interim-final rule--or, in the case of an interim-final major 
or high-impact rule, within 18 months of publication--the 
agency must complete full rulemaking procedures ``and take 
final action to adopt a final rule or rescind the interim 
rule.'' Under the Bill, a party may seek immediate judicial 
review of an agency's decision to adopt an interim-final rule 
except in cases involving national security interests. Section 
6 limits judicial review to abuse of discretion by the agency.
---------------------------------------------------------------------------
    \46\APA at 65, note 2 supra, at 37 (Testimony of Jeffrey Rosen).
    \47\Id. at 21 (Testimony of Susan Dudley).
---------------------------------------------------------------------------

   IV. INCREASING REGULATORY TRANSPARENCY AND THE VETTING OF FACTUAL 
                              INFORMATION

A. LRequiring Advance Notice of Potential High-Impact and Major 
        Rulemakings
    At the Subcommittee's March 29, 2011, hearing, Drs. Ellig 
and Williams both testified that agencies often make the 
decision to regulate behind closed doors, away from the public 
eye and before commencing the legally required regulatory 
process.\48\ ``This doesn't mean that no stakeholders have 
influence over the early decisions. Generally, those that have 
petitioned for and favor regulations are heard from early in 
the process to help shape the initial decisions.''\49\ As 
Professor Strauss observed at the February 28, 2011, hearing,
---------------------------------------------------------------------------
    \48\Raising the Agencies' Grades, note 3 supra, at 21 (Testimony of 
Jerry Ellig) (``All too often, agency economists have to conduct 
regulatory analysis after most major decisions about regulations have 
already been made. The analysis then becomes an advocacy document 
written to justify the agency's decisions, or a mere paperwork exercise 
to fulfill requirements imposed by the Office of Management and 
Budget.''); id. at 74 (Testimony of Richard Williams) (``But that 
analysis is generally begun after the decision on how to regulate has 
been announced. That is a key part of the problem: the regulatory 
analysis analyzes a decision, not a problem.'').
    \49\Id. at 78 (Testimony of Richard Williams).

        Often what occurs before a notice of proposed 
        rulemaking has been published produces commitments 
        that, in the words of President George H.W. Bush's 
        General Counsel at the EPA, convert notice and comment 
        rulemaking into a form of Kabuki theater--``a highly 
        stylized process for displaying in a formal way the 
        essence of something which in real life takes place in 
        other venues.''\50\
---------------------------------------------------------------------------
    \50\APA at 65, note 2 supra, at 48-49 (quoting E. Donald Elliott, 
Re-Inventing Rulemaking, 41 Duke L.J. 1490, 1492 (June 1992)).

    Dr. Williams observed that this phenomenon is a result of 
the agency's overriding incentive to regulate whenever 
possible, and that what is needed is ``to decouple the agency's 
decision from both early analysis of and democratic input into 
a problem. That is, initially, agencies should perform 
regulatory analysis and make that analysis available for public 
comment. There should be no discussion of the agency's 
preferred solutions in this document.''\51\ Specifically, Dr. 
Williams recommended:
---------------------------------------------------------------------------
    \51\Raising the Agencies' Grades, note 3 supra, at 77.

         La clear definition of the problem that the 
        agency seeks to solve and the evidence it relied on to 
---------------------------------------------------------------------------
        define the problem;

         Lan explanation of and evidence for why a 
        Federal solution is required for this problem;

         Lthe possible ways to solve the problem; and

         La preliminary estimate of the benefits and 
        costs of each of the options listed.\52\
---------------------------------------------------------------------------
    \52\Id. at 78.

    Dr. Ellig concurred in these recommendations.\53\ Mr. Rosen 
also testified, ``[g]reater use of the Advanced Notice of 
Proposed Rule-making and similar advance processes would be a 
good thing.''\54\ Ms. Dudley recommended Congress consider this 
proposal as well.\55\ Relatedly, on May 4, 2011, Mr. Holmstead 
described how potentially collusive litigation between 
regulatory agencies and interested parties can short-circuit 
the regulatory process.\56\
---------------------------------------------------------------------------
    \53\Id. at 28.
    \54\APA at 65, note 2 supra, at 37.
    \55\Id. at 20.
    \56\Cost-Justifying Regulations, note 4 supra, at 18.
---------------------------------------------------------------------------
    For major rules and high-impact rules, as defined in 
Section 2 of the Bill, Section 3(b) (new subsection 553(c) of 
title 5) requires regulatory agencies to publish an advance 
notice of proposed rulemaking no fewer than 90 days before 
publishing a notice of proposed rulemaking, and to provide no 
fewer than 60 days in which the public may comment. Whether or 
not the agency ultimately decides to propose a new rule, the 
agency must publish its decision about what course of action, 
if any, is appropriate. If the agency decides to modify or 
rescind an existing rule, then the agency may proceed directly 
to a notice of proposed rulemaking, without undertaking to 
comply once more with the Bill's advance-notice requirement.
B. Improving the Effectiveness of the Information Quality Act
    Congress enacted the Information Quality Act as Section 515 
of the Treasury and General Government Appropriations Act for 
Fiscal Year 2001.\57\ The IQA requires the Director of the 
Office of Management and Budget to ``issue guidelines . . . 
that provide policy and procedural guidance to Federal agencies 
for ensuring and maximizing the quality, objectivity, utility, 
and integrity of information (including statistical 
information) disseminated by Federal agencies in fulfillment of 
the purposes and provisions of'' the Paperwork Reduction 
Act.\58\ Further, the IQA instructs that Federal agencies shall 
``issue guidelines ensuring and maximizing the quality, 
objectivity, utility, and integrity of information (including 
statistical information) disseminated by the agency,'' to 
``establish administrative mechanisms allowing affected persons 
to seek and obtain correction of information maintained and 
disseminated by the agency'' and to report both ``the number 
and nature of complaints received by the agency regarding the 
accuracy of information disseminated'' and ``how such 
complaints were handled.''\59\
---------------------------------------------------------------------------
    \57\See Pub. L. No. 106-554, Sec. 515.
    \58\Id. Sec. 515(a).
    \59\Id. Sec. 515(b).
---------------------------------------------------------------------------
    On February 28, 2011, Mr. Rosen testified that Congress 
should clarify that judicial review is available under the 
IQA.\60\ Ms. Dudley suggested that Congress ``consider amending 
the IQA to make agency decisions reviewable.''\61\ In the same 
vein, on May 31, 2011, Mr. Francisco suggested that one way to 
enhance the effectiveness of the IQA would be to incorporate it 
into the APA itself.\62\ Drawing upon these recommendations, 
Section 3(b) (new subsections 553(d)(4), (e)(5) and (f)(4)(F)) 
weaves IQA standards into the APA rulemaking process. Section 7 
also establishes that an IQA violation qualifies as agency 
action ``not in accordance with law,'' clearly rendering the 
IQA judicially enforceable.
---------------------------------------------------------------------------
    \60\APA at 65, note 2 supra, at 39.
    \61\Id. at 18.
    \62\Formal Rulemaking and Judicial Review, note 5 supra, at 183.
---------------------------------------------------------------------------
C. Improving the Record to Support High-Impact and Major Rules
    At the Subcommittee's February 28, 2011 hearing, Mr. Rosen 
discussed how formal rulemaking--i.e., rulemaking based on 
formal agency hearings--was specifically contemplated by the 
APA, but has become a dead letter over the past several 
decades.\63\ Mr. Rosen testified that the formal procedures 
discussed in 5 U.S.C. Sec. Sec. 556 and 557 (with evidence 
presentation and cross-examination) ``can be especially 
beneficial for issues involving complex empirical or scientific 
issues.''\64\ Mr. Rosen added, ``[t]here is no better tool than 
cross-examination to expose unsupportable factual assertions 
and assure the public that only the best science underlies 
agency action.''\65\ One option Mr. Rosen suggested is that 
``all `major rules' above a certain threshold could be subject 
to formal rulemaking. . . .''\66\ Ms. Dudley suggested that 
``legislators might consider amending the APA to . . . expand 
the use of formal rulemaking procedures.''\67\
---------------------------------------------------------------------------
    \63\Id. at 35, 38.
    \64\Id. at 35.
    \65\Id. at 38.
    \66\Ibid.
    \67\APA at 65, note 2 supra, at 17.
---------------------------------------------------------------------------
    On May 31, 2011, Mr. Francisco observed that ``[f]ormal 
rulemaking is often called `rulemaking on a record' because 
these trial-type proceedings provide much more opportunity for 
the agency to develop a formal record before issuing a final 
rule.''\68\ Mr. Francisco also explained that formal rulemaking 
is subject to a higher standard of judicial review than 
informal rulemaking, i.e., ``substantial evidence'' versus 
``arbitrary or capricious'' review.\69\ Mr. Francisco suggested 
that Congress consider legislation to put ``a renewed emphasis 
on formal rulemaking procedures.''\70\ Also on May 31, 2011, 
Mr. Warren testified at length in favor of ``mak[ing] 
carefully-tailored amendments to the Administrative Procedure 
Act (`APA') which would permit slightly more formal procedures 
for major rules currently reviewed by [OIRA] under Executive 
Orders 12866 and 13563.'' Believing ``that additional 
procedures are warranted in the interest of improving the 
agency work product,''\71\ Mr. Warren suggested that the 
additional formal procedures should be ``in addition to, not in 
lieu of,'' the procedures for informal rulemaking.\72\
---------------------------------------------------------------------------
    \68\Formal Rulemaking and Judicial Review, note 5 supra, at 177.
    \69\Id. at 178.
    \70\Ibid.
    \71\Formal Rulemaking and Judicial Review, note 5 supra, at 39.
    \72\Ibid.
---------------------------------------------------------------------------
    Consistent with these recommendations, for high-impact 
rules Section 3(b) of the bill (new subsection 553(e) of title 
5) requires agencies to engage in ``hybrid'' rulemaking that 
mixes the strengths of formal rulemaking hearings and informal 
notice-and-comment procedures. Through this procedure, agencies 
must hold targeted factual hearings according to the APA's 
formal rulemaking requirements, after following notice-and-
comment procedures and before adopting the proposed high-impact 
rule. The agency must publish public notice of the hearing not 
less than 45 days in advance. At the hearing, which will allow 
for cross-examination, only a subset of issues in the 
rulemaking is to be determined, including the key issues of the 
factual predicate for the rule (i.e., what evidence establishes 
a need for the rule); whether statutory objectives could be 
achieved at lower cost by an alternative to the proposed rule; 
whether there is a compelling need to protect public health, 
safety or welfare that justifies a more costly solution; and 
whether the information supporting the rule satisfies the 
Information Quality Act. An interested person who has 
participated in the rulemaking can bring a petition to have 
additional issues considered, which the agency must rule upon 
within 30 days and may deny if consideration of those 
additional issues through a hearing would unduly delay 
completion of the rulemaking. Participants in the rulemaking 
other than the agency may waive the hearing entirely or 
consideration of any of the above issues at the hearing, to 
assure efficiency of the process. This hybrid use of informal 
and formal rulemaking procedures builds upon successful 
precedents such the Occupational Safety and Health Act.

                                Hearings

    The Committee's Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law held one hearing on H.R. 2122 on 
July 9, 2013. Testimony was received from Jeffrey A. Rosen, 
Esq., Kirkland & Ellis (formerly general counsel of the Office 
of Management and Budget); Keith Hall, Mercatus Center 
(formerly Commissioner of the Bureau of Labor Statistics); 
Diana Thomas, Huntsman School of Business, Utah State 
University; Robert A. Sells, Titan America Mid-Atlantic 
Business Division; David Goldston, Natural Resources Defense 
Council; and, Professor Ronald Levin, Washington University 
School of Law, with additional material submitted by the U.S 
Chamber of Commerce, the Business Roundtable, the Honorable C. 
Boyden Gray, the Associated Builders and Contractors, Inc., the 
National Association of Federal Credit Unions, a coalition of 
88 trade associations, and a group of 42 administrative law 
teachers and practitioners.

                        Committee Consideration

    On July 18, 2013, the Subcommittee on Regulatory Reform, 
Commercial and Antitrust Law met in open session and ordered 
the bill H.R. 2122 favorably reported without amendment, by 
voice vote, a quorum being present. On July 24, 2013, the 
Committee met in open session and ordered the bill H.R. 2122 
favorably reported without amendment, by a rollcall vote of 13 
to 9, a quorum being present.

                            Committee Votes

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
following rollcall votes occurred during the Committee's 
consideration of H.R. 2122.
    1. The amendment offered by Mr. Conyers exempts from cost-
benefit-related requirements of H.R. 2122's new regulations for 
which existing law limits or precludes consideration of the 
regulations' costs. The amendment was defeated by a rollcall 
vote of 11-13.

                             ROLLCALL NO. 1
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................              X
Mr. Holding (NC)...............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X

Mr. Conyers, Jr. (MI), Ranking Member..........      X
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................      X
Ms. Lofgren (CA)...............................      X
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................     11      13
------------------------------------------------------------------------

    2. The amendment offered by Mr. Watt exempts from 
requirements of H.R. 2122 new regulations and guidance to 
implement the Dodd-Frank Wall Street Reform and Consumer 
Protection Act. The amendment was defeated by a rollcall vote 
of 9-11.

                             ROLLCALL NO. 2
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................
Mr. Smith (TX).................................
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................
Mr. Holding (NC)...............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X

Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................      X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................      9      11
------------------------------------------------------------------------

    3. The amendment offered by Mr. Cohen exempts from 
requirements of H.R. 2122 new regulations and guidance to 
strengthen existing prohibitions against financial companies 
owning non-financial businesses. The amendment was defeated by 
a rollcall vote of 9-13.

                             ROLLCALL NO. 3
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................              X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................
Mr. Smith (TX).................................              X
Mr. Chabot (OH)................................              X
Mr. Bachus (AL)................................              X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................              X
Mr. King (IA)..................................
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................              X
Mr. Jordan (OH)................................              X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................              X
Mr. Gowdy (SC).................................              X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................              X
Ms. Farenthold (TX)............................
Mr. Holding (NC)...............................
Mr. Collins (GA)...............................              X
Mr. DeSantis (FL)..............................              X
Mr. Smith (MO).................................              X

Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Mr. Scott (VA).................................      X
Mr. Watt (NC)..................................      X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................      X
Mr. Johnson (GA)...............................      X
Mr. Pierluisi (PR).............................      X
Ms. Chu (CA)...................................      X
Mr. Deutch (FL)................................      X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................      X
Mr. Garcia (FL)................................      X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................      9      13
------------------------------------------------------------------------

    4. The bill was reported by a rollcall vote of 13-9.

                             ROLLCALL NO. 4
------------------------------------------------------------------------
                                                  Ayes    Nays   Present
------------------------------------------------------------------------
Mr. Goodlatte (VA), Chairman...................      X
Mr. Sensenbrenner, Jr. (WI)....................
Mr. Coble (NC).................................
Mr. Smith (TX).................................      X
Mr. Chabot (OH)................................      X
Mr. Bachus (AL)................................      X
Mr. Issa (CA)..................................
Mr. Forbes (VA)................................      X
Mr. King (IA)..................................
Mr. Franks (AZ)................................
Mr. Gohmert (TX)...............................      X
Mr. Jordan (OH)................................      X
Mr. Poe (TX)...................................
Mr. Chaffetz (UT)..............................
Mr. Marino (PA)................................      X
Mr. Gowdy (SC).................................      X
Mr. Amodei (NV)................................
Mr. Labrador (ID)..............................      X
Ms. Farenthold (TX)............................
Mr. Holding (NC)...............................
Mr. Collins (GA)...............................      X
Mr. DeSantis (FL)..............................      X
Mr. Smith (MO).................................      X

Mr. Conyers, Jr. (MI), Ranking Member..........
Mr. Nadler (NY)................................
Mr. Scott (VA).................................              X
Mr. Watt (NC)..................................              X
Ms. Lofgren (CA)...............................
Ms. Jackson Lee (TX)...........................
Mr. Cohen (TN).................................              X
Mr. Johnson (GA)...............................              X
Mr. Pierluisi (PR).............................              X
Ms. Chu (CA)...................................              X
Mr. Deutch (FL)................................              X
Mr. Gutierrez (IL).............................
Ms. Bass (CA)..................................
Mr. Richmond (LA)..............................
Ms. DelBene (WA)...............................              X
Mr. Garcia (FL)................................              X
Mr. Jeffries (NY)..............................
                                                ------------------------
    Total......................................     13       9
------------------------------------------------------------------------

                      Committee Oversight Findings

    In compliance with clause 3(c)(1) of rule XIII of the Rules 
of the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

               New Budget Authority and Tax Expenditures

    Clause 3(c)(2) of rule XIII of the Rules of the House of 
Representatives is inapplicable because this legislation does 
not provide new budgetary authority or increased tax 
expenditures.

               Congressional Budget Office Cost Estimate

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, the Committee sets forth, with 
respect to the bill, H.R. 2122, the following estimate and 
comparison prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, August 1, 2013.
Hon. Bob Goodlatte, Chairman,
Committee on the Judiciary,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 2122, the 
``Regulatory Accountability Act of 2013.''
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Susanne S. 
Mehlman, who can be reached at 226-2860.
            Sincerely,
                                      Douglas W. Elmendorf,
                                                  Director.

Enclosure

cc:
        Honorable John Conyers, Jr.
        Ranking Member

            H.R. 2122--Regulatory AccountabilityAct of 2013.

      As ordered reported by the House Committee on the Judiciary 
                           on August 1, 2013.

                                SUMMARY

    H.R. 2122 would amend the Administrative Procedures Act 
(APA), which is the law that governs how Federal agencies 
propose and establish regulations. Enacting this legislation 
would codify many practices aimed at increasing regulatory 
transparency and accountability that are currently required 
under several executive orders. However, this legislation also 
would impose some new requirements on Federal agencies related 
to the rulemaking process and would extend some of the current 
requirements under the executive orders to additional Federal 
agencies. Except for changes permitting judicial review for 
compliance with the Information Quality Act (enacted as part of 
the Consolidated Appropriations Acts, 2001 [Public Law 106-
554]), the changes contained in this legislation would not 
apply to any rulemaking pending or completed on the date of 
enactment.
    CBO estimates that implementing H.R. 2122 would cost about 
$70 million over the 2014-2018 period, assuming appropriation 
of the necessary funds. Such funding would cover the 
governmentwide costs of additional personnel, contractor costs, 
and other administrative expenses associated with meeting the 
new requirements under the legislation.
    CBO also expects that enacting H.R. 2122 could delay the 
issuance of some final rules each year. As a result, CBO and 
the staff of the Joint Committee on Taxation (JCT) expect that 
enacting H.R. 2122 could have effects on both direct spending 
and revenues. Therefore, pay-as-you-go procedures apply to the 
legislation. However, given the large number of major rules 
issued each year and the extent to which rules vary in their 
nature and scope, we cannot determine the level of costs or 
savings stemming from delaying the effective date of some 
rules. In addition, while enacting the bill could affect direct 
spending and revenues if agencies not funded through annual 
appropriations incur additional costs, CBO estimates that any 
net increase in spending or change in revenues for those 
agencies would not be significant.
    CBO expects that H.R. 2122 would impose no 
intergovernmental or private-sector mandates as defined in the 
Unfunded Mandates Reform Act (UMRA).

                ESTIMATED COST TO THE FEDERAL GOVERNMENT

    The estimated budgetary impact of H.R. 2122 on 
discretionary spending is shown in the following table. The 
costs of this legislation fall within all budget functions that 
include agencies that issue regulations.

                                     By Fiscal Year, in Millions of Dollars
----------------------------------------------------------------------------------------------------------------
                                                                     2014   2015   2016   2017   2019  2014-2018
----------------------------------------------------------------------------------------------------------------

CHANGES IN SPENDING SUBJECT TO APPROPRIATION

Estimated Authorization Level                                           5     10     15     20     20        70
Estimated Outlays                                                       4      9     14     20     20        67
----------------------------------------------------------------------------------------------------------------

    Enacting H.R. 2122 also would affect direct spending and 
revenues, but CBO and JCT cannot determine the extent or sign 
of those effects.

                           BASIS OF ESTIMATE

    For this estimate, CBO assumes that the legislation will be 
enacted near the end of 2013, that the necessary amounts will 
be appropriated near the start of each fiscal year, and that 
spending will follow historical patterns for regulatory 
analysis activities.
Background
    CBO is unaware of any comprehensive information on current 
spending for regulatory activities governmentwide. However, 
according to the Congressional Research Service, Federal 
agencies issue 3,000 to 4,000 final rules each year. Most are 
promulgated by the Departments of Transportation, Homeland 
Security, and Commerce, and the Environmental Protection Agency 
(EPA). Agencies that issue the most major rules (those with an 
estimated economic impact on the economy of more than $100 
million per year) include the Department of Health and Human 
Services, the Department of Agriculture, and EPA.
    H.R. 2122 would amend the APA to codify certain practices 
currently required under several executive orders, including 
Executive Orders 12866, 13563, and 13422. (Those instructions 
require agencies in the executive branch to analyze the impacts 
of regulations (including costs and benefits), to coordinate 
with the Office of Information and Regulatory Affairs (OIRA) 
during the rulemaking, and to perform other activities and 
analyses related to the rulemaking process.) The legislation 
would add several definitions to the APA, including major rule, 
major guidance, and high-impact rule.
    A major rule would be defined as any rule, as determined by 
OIRA, likely to impose:

         LAn annual cost on the economy of $100 million 
        or more, adjusted annually for inflation;

         LA major increase in costs or prices for 
        consumers, individual industries, Federal, state, 
        local, or tribal government agencies, or geographic 
        regions;

         LSignificant adverse effects on competition, 
        employment, investment, productivity, innovation, or on 
        the ability of United States-based enterprises to 
        compete with foreign-based enterprises in domestic and 
        export markets; or

         LSignificant impacts on multiple sectors of 
        the economy.

    This definition of a major rule differs from the one 
contained in the Congressional Review Act (CRA) of 1996, which 
defines a major rule as one having an annual effect on the 
economy instead of an annual cost as defined in H.R. 2122.
    The legislation would define the term major guidance issued 
by Federal agencies using the same criteria as that used for a 
major rule. A high-impact rule would be defined as any rule 
that OIRA determines is likely to impose an annual cost on the 
economy of $1 billion or more. That threshold would be adjusted 
annually for inflation.
    Enacting H.R. 2122 also would add several new requirements 
that would broadly change the current rulemaking process. For 
all major and high-impact rules as well as rules that involve 
``novel legal or policy issues,'' agencies would be required to 
publish an advance notice of proposed rulemaking (ANPRM) in the 
Federal Register 90 days prior to publishing a Notice of 
Proposed Rulemaking (NPRM). The legislation specifies minimum 
requirements for the ANPRM, including a period of not less than 
60 days during which interested parties may submit data, views, 
or argument to the agency. A pre-proposal process occurs on a 
voluntary basis for some rules under current law, as guided by 
Executive Order 13563.
    The NPRM process, as defined in the APA, would be amended 
to codify certain requirements in place under Executive Orders 
12866 and 13563. While many agencies subject to the executive 
orders may already be implementing those practices for certain 
rules, some independent agencies outside the purview of 
executive orders may face an increase in workload with respect 
to the rulemaking process. For all agencies, H.R. 2122 would 
increase requirements for documenting cost-benefit analyses as 
well as placing other supporting documentation in the docket 
for the proposed rule. Furthermore, the legislation would 
incorporate into the rulemaking process a remedy for members of 
the public to petition for a hearing to determine if any 
information used by the agency in developing the proposed rule 
violates the Information Quality Act.
    The legislation would require agencies to hold a hearing 
for all high-impact rules. The hearing would occur after 
comments have been received on the proposed rule and after any 
hearings were held under the NPRM process but before adoption 
of the rule. The hearing could be waived if all participants-
not including the agency-agree.
Spending Subject to Appropriation
    Based on information from several Federal agencies, CBO 
estimates that more resources would be needed for Federal 
agencies to produce additional guidance documents and cost-
benefit analyses, support judicial reviews and hearings, and 
perform other administrative tasks related to the rulemaking 
process. Eventually, CBO estimates that Federal agencies would 
spend about $20 million annually to meet the requirements under 
this legislation. We expect that it would take about 3 years to 
reach that level of effort.
Direct Spending
    CBO expects that enacting H.R. 2122 would delay a number of 
major and high-impact rules from taking effect each year. 
Therefore, in assessing the budgetary effects of H.R. 2122, CBO 
considered the costs and savings that would be realized if 
anticipated major and high-impact rules were delayed. Delaying 
the issuance of some major or high-impact rules, which would 
delay when they take effect, could result in costs, while 
delaying others could result in savings. CBO expects that the 
rules with the largest effects on Federal spending would be 
those related to Federal health programs, particularly 
Medicare; thus, enacting H.R. 2122 could significantly affect 
Medicare spending relative to current law.
    CBO cannot determine the level of costs or savings in 
direct spending over the 2014-2023 period. However, we expect 
that such budgetary effects would largely be driven by delaying 
annual updates to payment schedules for providing Medicare 
services and other routine revisions to aspects of other 
government programs.
Revenues
    Enacting H.R. 2122 also would affect revenues by changing 
the way the Internal Revenue Service could issue its 
nonregulatory guidance and by slowing down rulemaking 
generally. JCT expects those delays would reduce revenue 
collections in some cases and increase them in others. However, 
JCT cannot determine the level of costs or savings of those 
possible effects.

                      PAY-AS-YOU-GO CONSIDERATIONS

    The Statutory Pay-As-You-Go Act of 2010 establishes budget-
reporting and enforcement procedures for legislation affecting 
direct spending or revenues. Pay-as-you-go procedures apply to 
H.R. 2122 because enacting the legislation would affect direct 
spending and revenues. CBO and JCT cannot determine the level 
of costs or savings associated with those effects.

              INTERGOVERNMENTAL AND PRIVATE-SECTOR IMPACT

    CBO expects that H.R. 2122 would impose no 
intergovernmental or private-sector mandates as defined in 
UMRA. By potentially delaying Federal rules, the bill could 
affect public or private entities in a number of other ways, 
for example, by slowing reimbursements or delaying the 
implementation of regulatory requirements. While the costs and 
savings associated with such effects could be significant, 
because we cannot predict the nature or number of regulations 
that could be delayed, CBO has no basis for estimating the 
level of costs or savings that would result.

                         ESTIMATE PREPARED BY:

Federal Spending: Susanne S. Mehlman

Impact on State, Local, and Tribal Governments: Elizabeth Cove 
    Delisle

Impact on the Private Sector: Paige Piper/Bach

                         ESTIMATE APPROVED BY:

Theresa Gullo
Deputy Assistant Director for Budget Analysis

Holly Harvey
Deputy Assistant Director for Budget Analysis

                    Duplication of Federal Programs

    No provision of H.R. 2122 establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that H.R. 2122 specifically directs 
each Federal regulatory agency to complete one specific rule 
making within the meaning of 5 U.S.C. 551 to prescribe 
procedures for the conduct of agency hearings.

                    Performance Goals and Objectives

    The Committee states that pursuant to clause 3(c)(4) of 
rule XIII of the Rules of the House of Representatives, 
H.R.2122 is designed to promote job creation, economic growth, 
and the accountability of Federal regulatory agencies by 
reforming the Administrative Procedure Act to require agencies 
to lower the costs of regulation while meeting statutory 
objectives, to improve agencies' decision-making processes and 
enhance regulatory transparency and accountability to the 
public, and to strengthen judicial review of agency action.

                          Advisory on Earmarks

    In accordance with clause 9 of rule XXI of the Rules of the 
House of Representatives, H.R. 2122 does not contain any 
congressional earmarks, limited tax benefits, or limited tariff 
benefits as defined in clause 9(e), 9(f), or 9(g) of Rule XXI.

                      Section-by-Section Analysis

Sec. 1. Short title.
    Designates the Bill the ``Regulatory Accountability Act of 
2013.''
Sec. 2. Definitions.
    Adds to the APA definitions of the following terms: ``major 
rule,'' based on the definition given to that term in Section 
1(b) of Executive Order 12291; ``high-impact rule'' as any rule 
likely to impose an annual cost of $1 billion on the economy; 
``guidance,'' based on the definition given to that term in 
Section 3(g) of Executive Order 13422; ``major guidance,'' 
based on the definition given to the term ``significant 
guidance document'' in Section 3(h) of Executive Order 13422; 
``Information Quality Act,'' as Section 515 of Public Law 106-
554 and its implementing OMB and agency guidelines; and, the 
``Office of Information and Regulatory Affairs.''
Sec. 3. Rulemaking (references are to amended section 553 of title 5).
         LSubsec. 553(b): Rulemaking Principles. 
        Incorporates into the APA universally applicable 
        rulemaking principles rooted in the good-government 
        principles of Executive Orders 12291, 12866, 13422 and 
        13563, making them statutorily mandatory and judicially 
        enforceable. The agency must consider

           LSubsec. 553(b)(1)-(2): The legal authority 
        for the rule and other relevant statutory 
        considerations.

           LSubsec. 553(b)(3): The specific nature of 
        the problem, whether it genuinely warrants new 
        regulations, and countervailing risks that may be posed 
        by alternatives for new agency action.

           LSubsec. 3(b)(4): Whether the problem could 
        be addressed by repealing or modifying existing 
        regulations.

           LSubsec. 553(b)(5): Potential alternatives 
        to adopting a new regulation, including no Federal 
        response and a regional/State/local/tribal response.

           LSubsec. 553(b)(6): Notwithstanding any 
        other law, the potential costs and benefits--direct, 
        indirect and cumulative--associated with each 
        alternative, as well as estimated impacts on jobs, 
        economic growth, innovation and economic 
        competitiveness.

         LSubsec. 553(c): Early Public Outreach. 
        Consistent with President Obama's call in E.O. 13563 
        for earlier, more transparent outreach to the public 
        and affected entities, the Bill requires Advance 
        Notices of Proposed Rulemaking (ANPRs) 90 days before 
        an agency may propose any major or high-impact rule. 
        ANPRs must disclose information already known to the 
        agency, the legal basis for a potential rulemaking, and 
        allow the public 60 days to submit written views about 
        the information and issues discussed in the advance 
        notice.

         LSubsec. 553(d)(1): Improved Notices of 
        Proposed Rulemaking. Improved Notice of Proposed 
        Rulemaking requirements that assure major and high-
        impact proposed rules are built upon the sound, 
        transparent decision-making platform made possible by 
        the ANPR process and that other proposed rules also 
        rest on a more robust and transparent decision-making 
        platform. These requirements will crystallize for final 
        public comment the agency's preliminary determinations 
        of whether a Federal regulation is needed; whether the 
        benefits of the proposed rule meet statutory objectives 
        and justify its costs; whether alternatives exist that 
        could achieve statutory objectives at lower costs; 
        whether and why the agency has not proposed a lower-
        cost alternative; whether existing regulations or other 
        law have produced or contributed to the problem the 
        agency seeks to correct with new regulation; and, if 
        so, whether modification or repeal of those other 
        regulations or laws could resolve the problem more 
        effectively than a new rule.

           LSubsec. 553(d)(2): Determination of Other 
        Agency Course. After concluding the ANPR process, if 
        applicable, an agency may alternatively publish a 
        Determination of Other Agency Course, describing the 
        alternative response the agency chose rather than issue 
        a new rule.

           LSubsec. 553(d)(3): Public Participation in 
        Rulemaking. Requires the agency to give interested 
        parties at least 90 days to submit written data, views 
        or arguments related to the proposed rule and 120 days 
        to do so for any proposed major or high-impact rule.

           LSubsec. 553(d)(4): Efficient Early 
        Resolution of Information Quality Act Issues. Early 
        opportunities for quick administrative appeals of 
        whether the key studies or other information on which 
        agencies base their proposed rules meet vital 
        information quality standards set under the Information 
        Quality Act.

         LSubsecs. 553(e), (h): Formal Rulemaking 
        Hearings on the Most Critical Issues for High-Impact 
        Rules. Formal hearings with opportunities for cross-
        examination on the most critical factual issues for 
        proposed rules that impose a $1 billion burden on the 
        economy. These issues concern the key information on 
        ``whether the agency's asserted factual predicate for 
        the rule is supported by the evidence''; whether there 
        is a lower-cost alternative for regulation that 
        achieves statutory objectives, and why the agency did 
        not choose it; and whether the final information on 
        which the agency relies satisfies standards under the 
        Information Quality Act. The agency must publish public 
        notice of the hearing not less than 45 days in advance. 
        Upon petition, hearings or issues may be waived by 
        participants in the rulemaking other than the agency. 
        Issues also may be added to hearings on high-impact 
        rules, and hearings may be granted on major rules, upon 
        petition and at the agency's discretion.

         LSubsec. 553(f): Improved Requirements for 
        Final Rules. In adopting a final rule, the agency must:

           LSubsec. 553(f)(1): Consult with the OIRA 
        Administrator.

           LSubsec. 553(f)(2): Rely only on the best 
        reasonably obtainable scientific, technical and 
        economic information.

           LSubsec. 553(f)(3): Adopt only the least-
        cost alternative considered during rulemaking that 
        meets statutory objectives, unless the agency explains 
        why a more costly rule is justified to serve interests 
        of public health, safety or welfare clearly within the 
        scope of the statutory provision that authorizes the 
        rule and the more costly rule's additional benefits 
        justify its additional costs.

           LSubsec. 553(f)(4): Publish a notice of 
        final rulemaking giving: ``a concise, general statement 
        of the rule's basis and purpose,'' an explanation of 
        the need for the rule, the costs and benefits, and why 
        the agency did not adopt an alternative rule or amend 
        or rescind an existing rule. The agency must rest on 
        specific, final determinations on the critical issues 
        considered during formal rulemaking hearings, based on 
        data that meets the strictures of the Information 
        Quality Act.

             LSubsec. 553(f)(5)(G): Publish plans for 
        periodic review of high-impact and major rules to 
        determine whether the agency's final rule still is 
        needed, achieves statutory objectives, and produces 
        benefits that justify its costs or whether the rule 
        could be modified or rescinded.

         LSubsec. 553(g): Better Protections against 
        Abuse of Interim-Final Rules. Allows agencies in cases 
        of public urgency to issue ``interim-final rules'' that 
        are effective before full rulemaking procedures are 
        completed, but also requires prompt subsequent 
        completion of full rulemaking procedures and allows 
        affected entities to seek rapid judicial review of 
        agency decisions to adopt interim-final rules (except 
        for national security rules).

         LSubsec. 553(i): Requires publication of a 
        substantive final or interim rule no less than 30 days 
        before its effective date.

         LSubsec. 553(j): ``Each agency shall give an 
        interested person the right to petition for the 
        issuance, amendment, or repeal of a rule.''

         LSubsec. 553(k): Guidance for Agencies on 
        Cost-Benefit Analysis and other Key Issues. Authorizes 
        OIRA to issue guidelines for agencies to follow as they 
        assess economic and scientific issues in rulemaking; 
        observe statute-specific rulemaking regimes in 
        conjunction with the generally applicable procedures of 
        the APA as amended; work to assure better coordination, 
        simplification and coordination by agencies in 
        rulemaking; and conduct hearings under sections 553, 
        556 and 557 of title 5.

         LSubsec. 553(l): Requires the agency to 
        include in the rule making record ``all documents and 
        information considered by the agency during the 
        proceeding'' including, at the discretion of the 
        President or the OIRA Administrator, communications 
        from OIRA to the agency.

         LSubsec. 553(m): Exempts the Board of 
        Governors of the Federal Reserve System and the Federal 
        Open Market Committee from performing cost-benefit 
        analysis or holding formal hearings for monetary policy 
        rules.
Sec. 4. Agency Guidance.
    Curbs agency abuse of purportedly non-binding 
``guidance''--particularly guidance with major or significant 
economic impacts--to avoid statutory rulemaking requirements.
Sec. 5. Hearings.
    Adopts technical changes to existing APA requirements for 
formal, on-the-record rulemaking hearings that support hearing-
based reforms in Section 3 of the Bill.
Sec. 6. Actions Reviewable.
    Provides for immediate judicial review of agency decisions 
to establish ``interim-final rules'' before complying with 
normal rulemaking requirements. An abuse of discretion standard 
applies in such review.
Sec. 7. Scope of Review.
    Clarifies that courts may review agency action for 
violations of the Information Quality Act. Prohibits judicial 
deference to agency interpretations of regulations rendered 
outside of rulemaking; agency determinations of cost-benefit 
issues, other economic assessments or risk assessments that do 
not comply with applicable OIRA guidelines; and agency 
determinations of law and fact to support interim-final rules. 
Allows agency denials of petitions for hearings or 
consideration of specific issues in hearings to be reviewed for 
abuse of discretion.
Sec. 8. Added Definition.
    Codifies the definition of the term ``substantial 
evidence'' given by the Supreme Court in Universal Camera Corp. 
v. NLRB, 340 U.S. 474 (1951).
Sec. 9. Effective Date.
    Provides that the Bill's provisions generally do not apply 
to any rulemaking pending or completed on the date of 
enactment. Exceptions are made for the Bill's amendments to 
establish definitions in section 551 of title 5; prohibit 
judicial deference to agency interpretations of regulations 
outside of rulemaking; and guarantee judicial review of 
Information Quality Act violations.

         Changes in Existing Law Made by the Bill, as Reported

    In compliance with clause 3(e) of rule XIII of the Rules of 
the House of Representatives, changes in existing law made by 
the bill, as reported, are shown as follows (existing law 
proposed to be omitted is enclosed in black brackets, new 
matter is printed in italics, existing law in which no change 
is proposed is shown in roman):

                      TITLE 5, UNITED STATES CODE

           *       *       *       *       *       *       *
PART I--THE AGENCIES GENERALLY

           *       *       *       *       *       *       *

                  CHAPTER 5--ADMINISTRATIVE PROCEDURE

                    SUBCHAPTER I--GENERAL PROVISIONS

Sec.
500. Administrative practice; general provisions.
     * * * * * * *

                 SUBCHAPTER II--ADMINISTRATIVE PROCEDURE

     * * * * * * *
553a. Agency guidance; procedures to issue major guidance; authority to 
          issue guidelines for issuance of guidance.

           *       *       *       *       *       *       *

                SUBCHAPTER II--ADMINISTRATIVE PROCEDURE

Sec. 551. Definitions

    For the purpose of this subchapter--
            (1) * * *

           *       *       *       *       *       *       *

            (13) ``agency action'' includes the whole or a part 
        of an agency rule, order, license, sanction, relief, or 
        the equivalent or denial thereof, or failure to act; 
        [and]
            (14) ``ex parte communication'' means an oral or 
        written communication not on the public record with 
        respect to which reasonable prior notice to all parties 
        is not given, but it shall not include requests for 
        status reports on any matter or proceeding covered by 
        this subchapter[.];
            (15) ``major rule'' means any rule that the 
        Administrator of the Office of Information and 
        Regulatory Affairs determines is likely to impose--
                    (A) an annual cost on the economy of 
                $100,000,000 or more, adjusted annually for 
                inflation;
                    (B) a major increase in costs or prices for 
                consumers, individual industries, Federal, 
                State, local, or tribal government agencies, or 
                geographic regions;
                    (C) significant adverse effects on 
                competition, employment, investment, 
                productivity, innovation, or on the ability of 
                United States-based enterprises to compete with 
                foreign-based enterprises in domestic and 
                export markets; or
                    (D) significant impacts on multiple sectors 
                of the economy;
            (16) ``high-impact rule'' means any rule that the 
        Administrator of the Office of Information and 
        Regulatory Affairs determines is likely to impose an 
        annual cost on the economy of $1,000,000,000 or more, 
        adjusted annually for inflation;
            (17) ``guidance'' means an agency statement of 
        general applicability and future effect, other than a 
        regulatory action, that sets forth a policy on a 
        statutory, regulatory or technical issue or an 
        interpretation of a statutory or regulatory issue;
            (18) ``major guidance'' means guidance that the 
        Administrator of the Office of Information and 
        Regulatory Affairs finds is likely to lead to--
                    (A) an annual cost on the economy of 
                $100,000,000 or more, adjusted annually for 
                inflation;
                    (B) a major increase in costs or prices for 
                consumers, individual industries, Federal, 
                State, local or tribal government agencies, or 
                geographic regions;
                    (C) significant adverse effects on 
                competition, employment, investment, 
                productivity, innovation, or on the ability of 
                United States-based enterprises to compete with 
                foreign-based enterprises in domestic and 
                export markets; or
                    (D) significant impacts on multiple sectors 
                of the economy;
            (19) the ``Information Quality Act'' means section 
        515 of Public Law 106-554, the Treasury and General 
        Government Appropriations Act for Fiscal Year 2001, and 
        guidelines issued by the Administrator of the Office of 
        Information and Regulatory Affairs or other agencies 
        pursuant to the Act; and
            (20) the ``Office of Information and Regulatory 
        Affairs'' means the office established under section 
        3503 of chapter 35 of title 44 and any successor to 
        that office.

           *       *       *       *       *       *       *

Sec. 553. Rule making

    [(a) This section applies] (a) Applicability._This section 
applies, according to the provisions thereof, except to the 
extent that there is involved--
            (1) * * *

           *       *       *       *       *       *       *

    [(b) General notice of proposed rule making shall be 
published in the Federal Register, unless persons subject 
thereto are named and either personally served or otherwise 
have actual notice thereof in accordance with law. The notice 
shall include--
            [(1) a statement of the time, place, and nature of 
        public rule making proceedings;
            [(2) reference to the legal authority under which 
        the rule is proposed; and
            [(3) either the terms or substance of the proposed 
        rule or a description of the subjects and issues 
        involved.
Except when notice or hearing is required by statute, this 
subsection does not apply--
            [(A) to interpretative rules, general statements of 
        policy, or rules of agency organization, procedure, or 
        practice; or
            [(B) when the agency for good cause finds (and 
        incorporates the finding and a brief statement of 
        reasons therefor in the rules issued) that notice and 
        public procedure thereon are impracticable, 
        unnecessary, or contrary to the public interest.
    [(c) After notice required by this section, the agency 
shall give interested persons an opportunity to participate in 
the rule making through submission of written data, views, or 
arguments with or without opportunity for oral presentation. 
After consideration of the relevant matter presented, the 
agency shall incorporate in the rules adopted a concise general 
statement of their basis and purpose. When rules are required 
by statute to be made on the record after opportunity for an 
agency hearing, sections 556 and 557 of this title apply 
instead of this subsection.
    [(d) The required publication or service of a substantive 
rule shall be made not less than 30 days before its effective 
date, except--
            [(1) a substantive rule which grants or recognizes 
        an exemption or relieves a restriction;
            [(2) interpretative rules and statements of policy; 
        or
            [(3) as otherwise provided by the agency for good 
        cause found and published with the rule.
    [(e) Each agency shall give an interested person the right 
to petition for the issuance, amendment, or repeal of a rule.]
    (b) Rule Making Considerations.--In a rule making, an 
agency shall make all preliminary and final factual 
determinations based on evidence and consider, in addition to 
other applicable considerations, the following:
            (1) The legal authority under which a 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.
            (2) Other statutory considerations applicable to 
        whether the agency can or should propose a rule or 
        undertake other agency action.
            (3) The specific nature and significance of the 
        problem the agency may address with a rule (including 
        the degree and nature of risks the problem poses and 
        the priority of addressing those risks compared to 
        other matters or activities within the agency's 
        jurisdiction), whether the problem warrants new agency 
        action, and the countervailing risks that may be posed 
        by alternatives for new agency action.
            (4) Whether existing rules have created or 
        contributed to the problem the agency may address with 
        a rule and whether those rules could be amended or 
        rescinded to address the problem in whole or part.
            (5) Any reasonable alternatives for a new rule or 
        other response identified by the agency or interested 
        persons, including not only responses that mandate 
        particular conduct or manners of compliance, but also--
                    (A) the alternative of no Federal response;
                    (B) amending or rescinding existing rules;
                    (C) potential regional, State, local, or 
                tribal regulatory action or other responses 
                that could be taken in lieu of agency action; 
                and
                    (D) potential responses that--
                            (i) specify performance objectives 
                        rather than conduct or manners of 
                        compliance;
                            (ii) establish economic incentives 
                        to encourage desired behavior;
                            (iii) provide information upon 
                        which choices can be made by the 
                        public; or
                            (iv) incorporate other innovative 
                        alternatives rather than agency actions 
                        that specify conduct or manners of 
                        compliance.
            (6) Notwithstanding any other provision of law--
                    (A) the potential costs and benefits 
                associated with potential alternative rules and 
                other responses considered under section 
                553(b)(5), including direct, indirect, and 
                cumulative costs and benefits and estimated 
                impacts on jobs (including an estimate of the 
                net gain or loss in domestic jobs), economic 
                growth, innovation, and economic 
                competitiveness;
                    (B) means to increase the cost-
                effectiveness of any Federal response; and
                    (C) incentives for innovation, consistency, 
                predictability, lower costs of enforcement and 
                compliance (to government entities, regulated 
                entities, and the public), and flexibility.
    (c) Advance Notice of Proposed Rule Making for Major Rules, 
High-Impact Rules, and Rules Involving Novel Legal or Policy 
Issues.--In the case of a rule making for a major rule or high-
impact rule or a rule that involves a novel legal or policy 
issue arising out of statutory mandates, not later than 90 days 
before a notice of proposed rule making is published in the 
Federal Register, an agency shall publish advance notice of 
proposed rule making in the Federal Register. In publishing 
such advance notice, the agency shall--
            (1) include a written statement identifying, at a 
        minimum--
                    (A) the nature and significance of the 
                problem the agency may address with a rule, 
                including data and other evidence and 
                information on which the agency expects to rely 
                for the proposed rule;
                    (B) the legal authority under which a 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) preliminary information available to 
                the agency concerning the other considerations 
                specified in subsection (b); and
                    (D) in the case of a rule that involves a 
                novel legal or policy issue arising out of 
                statutory mandates, the nature of and potential 
                reasons to adopt the novel legal or policy 
                position upon which the agency may base a 
                proposed rule;
            (2) solicit written data, views or argument from 
        interested persons concerning the information and 
        issues addressed in the advance notice; and
            (3) provide for a period of not fewer than 60 days 
        for interested persons to submit such written data, 
        views, or argument to the agency.
    (d) Notices of Proposed Rule Making; Determinations of 
Other Agency Course.--(1) Before it determines to propose a 
rule, and following completion of procedures under subsection 
(c), if applicable, the agency shall consult with the 
Administrator of the Office of Information and Regulatory 
Affairs. If the agency thereafter determines to propose a rule, 
the agency shall publish a notice of proposed rule making, 
which shall include--
            (A) a statement of the time, place, and nature of 
        public rule making proceedings;
            (B) reference to the legal authority under which 
        the rule is proposed;
            (C) the terms of the proposed rule;
            (D) a description of information known to the 
        agency on the subject and issues of the proposed rule, 
        including but not limited to--
                    (i) a summary of information known to the 
                agency concerning the considerations specified 
                in subsection (b);
                    (ii) a summary of additional information 
                the agency provided to and obtained from 
                interested persons under subsection (c);
                    (iii) a summary of any preliminary risk 
                assessment or regulatory impact analysis 
                performed by the agency; and
                    (iv) information specifically identifying 
                all data, studies, models, and other evidence 
                or information considered or used by the agency 
                in connection with its determination to propose 
                the rule;
            (E)(i) a reasoned preliminary determination of need 
        for the rule based on the information described under 
        subparagraph (D); and
            (ii) an additional statement of whether a rule is 
        required by statute;
            (F) a reasoned preliminary determination that the 
        benefits of the proposed rule meet the relevant 
        statutory objectives and justify the costs of the 
        proposed rule (including all costs to be considered 
        under subsection (b)(6)), based on the information 
        described under subparagraph (D);
            (G) a discussion of--
                    (i) the alternatives to the proposed rule, 
                and other alternative responses, considered by 
                the agency under subsection (b);
                    (ii) the costs and benefits of those 
                alternatives (including all costs to be 
                considered under subsection (b)(6));
                    (iii) whether those alternatives meet 
                relevant statutory objectives; and
                    (iv) why the agency did not propose any of 
                those alternatives; and
            (H)(i) a statement of whether existing rules have 
        created or contributed to the problem the agency seeks 
        to address with the proposed rule; and
            (ii) if so, whether or not the agency proposes to 
        amend or rescind any such rules, and why.
All information provided to or considered by the agency, and 
steps to obtain information by the agency, in connection with 
its determination to propose the rule, including any 
preliminary risk assessment or regulatory impact analysis 
prepared by the agency and all other information prepared or 
described by the agency under subparagraph (D) and, at the 
discretion of the President or the Administrator of the Office 
of Information and Regulatory Affairs, information provided by 
that Office in consultations with the agency, shall be placed 
in the docket for the proposed rule and made accessible to the 
public by electronic means and otherwise for the public's use 
when the notice of proposed rule making is published.
    (2)(A) If the agency undertakes procedures under subsection 
(c) and determines thereafter not to propose a rule, the agency 
shall, following consultation with the Office of Information 
and Regulatory Affairs, publish a notice of determination of 
other agency course. A notice of determination of other agency 
course shall include information required by paragraph (1)(D) 
to be included in a notice of proposed rule making and a 
description of the alternative response the agency determined 
to adopt.
    (B) If in its determination of other agency course the 
agency makes a determination to amend or rescind an existing 
rule, the agency need not undertake additional proceedings 
under subsection (c) before it publishes a notice of proposed 
rule making to amend or rescind the existing rule.
All information provided to or considered by the agency, and 
steps to obtain information by the agency, in connection with 
its determination of other agency course, including but not 
limited to any preliminary risk assessment or regulatory impact 
analysis prepared by the agency and all other information that 
would be required to be prepared or described by the agency 
under paragraph (1)(D) if the agency had determined to publish 
a notice of proposed rule making and, at the discretion of the 
President or the Administrator of the Office of Information and 
Regulatory Affairs, information provided by that Office in 
consultations with the agency, shall be placed in the docket 
for the determination and made accessible to the public by 
electronic means and otherwise for the public's use when the 
notice of determination is published.
    (3) After notice of proposed rule making required by this 
section, the agency shall provide interested persons an 
opportunity to participate in the rule making through 
submission of written data, views, or arguments with or without 
opportunity for oral presentation, except that--
            (A) if a hearing is required under paragraph (4)(B) 
        or subsection (e), opportunity for oral presentation 
        shall be provided pursuant to that requirement; or
            (B) when other than under subsection (e) of this 
        section rules are required by statute or at the 
        discretion of the agency to be made on the record after 
        opportunity for an agency hearing, sections 556 and 557 
        shall apply, and paragraph (4), the requirements of 
        subsection (e) to receive comment outside of the 
        procedures of sections 556 and 557, and the petition 
        procedures of subsection (e)(6) shall not apply.
The agency shall provide not fewer than 60 days for interested 
persons to submit written data, views, or argument (or 120 days 
in the case of a proposed major or high-impact rule).
    (4)(A) Within 30 days of publication of notice of proposed 
rule making, a member of the public may petition for a hearing 
in accordance with section 556 to determine whether any 
evidence or other information upon which the agency bases the 
proposed rule fails to comply with the Information Quality Act.
    (B)(i) The agency may, upon review of the petition, 
determine without further process to exclude from the rule 
making the evidence or other information that is the subject of 
the petition and, if appropriate, withdraw the proposed rule. 
The agency shall promptly publish any such determination.
    (ii) If the agency does not resolve the petition under the 
procedures of clause (i), it shall grant any such petition that 
presents a prima facie case that evidence or other information 
upon which the agency bases the proposed rule fails to comply 
with the Information Quality Act, hold the requested hearing 
not later than 30 days after receipt of the petition, provide a 
reasonable opportunity for cross-examination at the hearing, 
and decide the issues presented by the petition not later than 
60 days after receipt of the petition. The agency may deny any 
petition that it determines does not present such a prima facie 
case.
    (C) There shall be no judicial review of the agency's 
disposition of issues considered and decided or determined 
under subparagraph (B)(ii) until judicial review of the 
agency's final action. There shall be no judicial review of an 
agency's determination to withdraw a proposed rule under 
subparagraph (B)(i) on the basis of the petition.
    (D) Failure to petition for a hearing under this paragraph 
shall not preclude judicial review of any claim based on the 
Information Quality Act under chapter 7 of this title.
    (e) Hearings for High-Impact Rules.--Following notice of a 
proposed rule making, receipt of comments on the proposed rule, 
and any hearing held under subsection (d)(4), and before 
adoption of any high-impact rule, the agency shall hold a 
hearing in accordance with sections 556 and 557, unless such 
hearing is waived by all participants in the rule making other 
than the agency. The agency shall provide a reasonable 
opportunity for cross-examination at such hearing. The hearing 
shall be limited to the following issues of fact, except that 
participants at the hearing other than the agency may waive 
determination of any such issue:
            (1) Whether the agency's asserted factual predicate 
        for the rule is supported by the evidence.
            (2) Whether there is an alternative to the proposed 
        rule that would achieve the relevant statutory 
        objectives at a lower cost (including all costs to be 
        considered under subsection (b)(6)) than the proposed 
        rule.
            (3) If there is more than one alternative to the 
        proposed rule that would achieve the relevant statutory 
        objectives at a lower cost than the proposed rule, 
        which alternative would achieve the relevant statutory 
        objectives at the lowest cost.
            (4) Whether, if the agency proposes to adopt a rule 
        that is more costly than the least costly alternative 
        that would achieve the relevant statutory objectives 
        (including all costs to be considered under subsection 
        (b)(6)), the additional benefits of the more costly 
        rule exceed the additional costs of the more costly 
        rule.
            (5) Whether the evidence and other information upon 
        which the agency bases the proposed rule meets the 
        requirements of the Information Quality Act.
            (6) Upon petition by an interested person who has 
        participated in the rule making, other issues relevant 
        to the rule making, unless the agency determines that 
        consideration of the issues at the hearing would not 
        advance consideration of the rule or would, in light of 
        the nature of the need for agency action, unreasonably 
        delay completion of the rule making. An agency shall 
        grant or deny a petition under this paragraph within 30 
        days of its receipt of the petition.
No later than 45 days before any hearing held under this 
subsection or sections 556 and 557, the agency shall publish in 
the Federal Register a notice specifying the proposed rule to 
be considered at such hearing, the issues to be considered at 
the hearing, and the time and place for such hearing, except 
that such notice may be issued not later than 15 days before a 
hearing held under subsection (d)(4)(B).
    (f) Final Rules.--(1) The agency shall adopt a rule only 
following consultation with the Administrator of the Office of 
Information and Regulatory Affairs to facilitate compliance 
with applicable rule making requirements.
    (2) The agency shall adopt a rule only on the basis of the 
best reasonably obtainable scientific, technical, economic, and 
other evidence and information concerning the need for, 
consequences of, and alternatives to the rule.
    (3)(A) Except as provided in subparagraph (B), the agency 
shall adopt the least costly rule considered during the rule 
making (including all costs to be considered under subsection 
(b)(6)) that meets relevant statutory objectives.
    (B) The agency may adopt a rule that is more costly than 
the least costly alternative that would achieve the relevant 
statutory objectives only if the additional benefits of the 
more costly rule justify its additional costs and only if the 
agency explains its reason for doing so based on interests of 
public health, safety or welfare that are clearly within the 
scope of the statutory provision authorizing the rule.
    (4) When it adopts a final rule, the agency shall publish a 
notice of final rule making. The notice shall include--
            (A) a concise, general statement of the rule's 
        basis and purpose;
            (B) the agency's reasoned final determination of 
        need for a rule to address the problem the agency seeks 
        to address with the rule, including a statement of 
        whether a rule is required by statute and a summary of 
        any final risk assessment or regulatory impact analysis 
        prepared by the agency;
            (C) the agency's reasoned final determination that 
        the benefits of the rule meet the relevant statutory 
        objectives and justify the rule's costs (including all 
        costs to be considered under subsection (b)(6));
            (D) the agency's reasoned final determination not 
        to adopt any of the alternatives to the proposed rule 
        considered by the agency during the rule making, 
        including--
                    (i) the agency's reasoned final 
                determination that no alternative considered 
                achieved the relevant statutory objectives with 
                lower costs (including all costs to be 
                considered under subsection (b)(6)) than the 
                rule; or
                    (ii) the agency's reasoned determination 
                that its adoption of a more costly rule 
                complies with subsection (f)(3)(B);
            (E) the agency's reasoned final determination--
                    (i) that existing rules have not created or 
                contributed to the problem the agency seeks to 
                address with the rule; or
                    (ii) that existing rules have created or 
                contributed to the problem the agency seeks to 
                address with the rule, and, if so--
                            (I) why amendment or rescission of 
                        such existing rules is not alone 
                        sufficient to respond to the problem; 
                        and
                            (II) whether and how the agency 
                        intends to amend or rescind the 
                        existing rule separate from adoption of 
                        the rule;
            (F) the agency's reasoned final determination that 
        the evidence and other information upon which the 
        agency bases the rule complies with the Information 
        Quality Act; and
            (G)(i) for any major rule or high-impact rule, the 
        agency's plan for review of the rule no less than every 
        ten years to determine whether, based upon evidence, 
        there remains a need for the rule, whether the rule is 
        in fact achieving statutory objectives, whether the 
        rule's benefits continue to justify its costs, and 
        whether the rule can be modified or rescinded to reduce 
        costs while continuing to achieve statutory objectives; 
        and
            (ii) review of a rule under a plan required by 
        clause (i) of this subparagraph shall take into account 
        the factors and criteria set forth in subsections (b) 
        through (f) of section 553 of this title.
All information considered by the agency in connection with its 
adoption of the rule, and, at the discretion of the President 
or the Administrator of the Office of Information and 
Regulatory Affairs, information provided by that Office in 
consultations with the agency, shall be placed in the docket 
for the rule and made accessible to the public for the public's 
use no later than when the rule is adopted.
    (g) Exceptions From Notice and Hearing Requirements.--(1) 
Except when notice or hearing is required by statute, the 
following do not apply to interpretive rules, general 
statements of policy, or rules of agency organization, 
procedure, or practice:
            (A) Subsections (c) through (e).
            (B) Paragraphs (1) through (3) of subsection (f).
            (C) Subparagraphs (B) through (H) of subsection 
        (f)(4).
    (2)(A) When the agency for good cause, based upon evidence, 
finds (and incorporates the finding and a brief statement of 
reasons therefor in the rules issued) that compliance with 
subsection (c), (d), or (e) or requirements to render final 
determinations under subsection (f) of this section before the 
issuance of an interim rule is impracticable or contrary to the 
public interest, including interests of national security, such 
subsections or requirements to render final determinations 
shall not apply to the agency's adoption of an interim rule.
    (B) If, following compliance with subparagraph (A) of this 
paragraph, the agency adopts an interim rule, it shall commence 
proceedings that comply fully with subsections (d) through (f) 
of this section immediately upon publication of the interim 
rule, shall treat the publication of the interim rule as 
publication of a notice of proposed rule making and shall not 
be required to issue supplemental notice other than to complete 
full compliance with subsection (d). No less than 270 days from 
publication of the interim rule (or 18 months in the case of a 
major rule or high-impact rule), the agency shall complete rule 
making under subsections (d) through (f) of this subsection and 
take final action to adopt a final rule or rescind the interim 
rule. If the agency fails to take timely final action, the 
interim rule will cease to have the effect of law.
    (C) Other than in cases involving interests of national 
security, upon the agency's publication of an interim rule 
without compliance with subsections (c), (d), or (e) or 
requirements to render final determinations under subsection 
(f) of this section, an interested party may seek immediate 
judicial review under chapter 7 of this title of the agency's 
determination to adopt such interim rule. The record on such 
review shall include all documents and information considered 
by the agency and any additional information presented by a 
party that the court determines necessary to consider to assure 
justice.
    (3) When the agency for good cause finds (and incorporates 
the finding and a brief statement of reasons therefor in the 
rules issued) that notice and public procedure thereon are 
unnecessary, including because agency rule making is undertaken 
only to correct a de minimis technical or clerical error in a 
previously issued rule or for other noncontroversial purposes, 
the agency may publish a rule without compliance with 
subsections (c), (d), (e), or (f)(1)-(3) and (f)(4)(B)-(F). If 
the agency receives significant adverse comment within 60 days 
after publication of the rule, it shall treat the notice of the 
rule as a notice of proposed rule making and complete rule 
making in compliance with subsections (d) and (f).
    (h) Additional Requirements for Hearings.--When a hearing 
is required under subsection (e) or is otherwise required by 
statute or at the agency's discretion before adoption of a 
rule, the agency shall comply with the requirements of sections 
556 and 557 in addition to the requirements of subsection (f) 
in adopting the rule and in providing notice of the rule's 
adoption.
    (i) Date of Publication of Rule.--The required publication 
or service of a substantive final or interim rule shall be made 
not less than 30 days before the effective date of the rule, 
except--
            (1) a substantive rule which grants or recognizes 
        an exemption or relieves a restriction;
            (2) interpretive rules and statements of policy; or
            (3) as otherwise provided by the agency for good 
        cause found and published with the rule.
    (j) Right To Petition.--Each agency shall give an 
interested person the right to petition for the issuance, 
amendment, or repeal of a rule.
    (k) Rule Making Guidelines.--(1)(A) The Administrator of 
the Office of Information and Regulatory Affairs shall 
establish guidelines for the assessment, including quantitative 
and qualitative assessment, of the costs and benefits of 
proposed and final rules and other economic issues or issues 
related to risk that are relevant to rule making under this 
title. The rigor of cost-benefit analysis required by such 
guidelines shall be commensurate, in the Administrator's 
determination, with the economic impact of the rule.
    (B) To ensure that agencies use the best available 
techniques to quantify and evaluate anticipated present and 
future benefits, costs, other economic issues, and risks as 
accurately as possible, the Administrator of the Office of 
Information and Regulatory Affairs shall regularly update 
guidelines established under paragraph (1)(A) of this 
subsection.
    (2) The Administrator of the Office of Information and 
Regulatory Affairs shall also issue guidelines to promote 
coordination, simplification and harmonization of agency rules 
during the rule making process and otherwise. Such guidelines 
shall assure that each agency avoids regulations that are 
inconsistent or incompatible with, or duplicative of, its other 
regulations and those of other Federal agencies and drafts its 
regulations to be simple and easy to understand, with the goal 
of minimizing the potential for uncertainty and litigation 
arising from such uncertainty.
    (3) To ensure consistency in Federal rule making, the 
Administrator of the Office of Information and Regulatory 
Affairs shall--
            (A) issue guidelines and otherwise take action to 
        ensure that rule makings conducted in whole or in part 
        under procedures specified in provisions of law other 
        than those of subchapter II of this title conform to 
        the fullest extent allowed by law with the procedures 
        set forth in section 553 of this title; and
            (B) issue guidelines for the conduct of hearings 
        under subsections 553(d)(4) and 553(e) of this section, 
        including to assure a reasonable opportunity for cross-
        examination. Each agency shall adopt regulations for 
        the conduct of hearings consistent with the guidelines 
        issued under this subparagraph.
    (4) The Administrator of the Office of Information and 
Regulatory Affairs shall issue guidelines pursuant to the 
Information Quality Act to apply in rule making proceedings 
under sections 553, 556, and 557 of this title. In all cases, 
such guidelines, and the Administrator's specific 
determinations regarding agency compliance with such 
guidelines, shall be entitled to judicial deference.
    (l) Inclusion in the Record of Certain Documents and 
Information.--The agency shall include in the record for a rule 
making, and shall make available by electronic means and 
otherwise, all documents and information prepared or considered 
by the agency during the proceeding, including, at the 
discretion of the President or the Administrator of the Office 
of Information and Regulatory Affairs, documents and 
information communicated by that Office during consultation 
with the Agency.
    (m) Monetary Policy Exemption.--Nothing in subsection 
(b)(6), subparagraphs (F) and (G) of subsection (d)(1), 
subsection (e), subsection (f)(3), and subparagraphs (C) and 
(D) of subsection (f)(5) shall apply to rule makings that 
concern monetary policy proposed or implemented by the Board of 
Governors of the Federal Reserve System or the Federal Open 
Market Committee.

Sec. 553a. Agency guidance; procedures to issue major guidance; 
                    authority to issue guidelines for issuance of 
                    guidance

    (a) Before issuing any major guidance, or guidance that 
involves a novel legal or policy issue arising out of statutory 
mandates, an agency shall--
            (1) make and document a reasoned determination 
        that--
                    (A) assures that such guidance is 
                understandable and complies with relevant 
                statutory objectives and regulatory provisions 
                (including any statutory deadlines for agency 
                action);
                    (B) summarizes the evidence and data on 
                which the agency will base the guidance;
                    (C) identifies the costs and benefits 
                (including all costs to be considered during a 
                rule making under section 553(b) of this title) 
                of conduct conforming to such guidance and 
                assures that such benefits justify such costs; 
                and
                    (D) describes alternatives to such guidance 
                and their costs and benefits (including all 
                costs to be considered during a rule making 
                under section 553(b) of this title) and 
                explains why the agency rejected those 
                alternatives; and
            (2) confer with the Administrator of the Office of 
        Information and Regulatory Affairs on the issuance of 
        such guidance to assure that the guidance is 
        reasonable, understandable, consistent with relevant 
        statutory and regulatory provisions and requirements or 
        practices of other agencies, does not produce costs 
        that are unjustified by the guidance's benefits, and is 
        otherwise appropriate.
Upon issuing major guidance, or guidance that involves a novel 
legal or policy issue arising out of statutory mandates, the 
agency shall publish the documentation required by subparagraph 
(1) by electronic means and otherwise.
    (b) Agency guidance--
            (1) is not legally binding and may not be relied 
        upon by an agency as legal grounds for agency action;
            (2) shall state in a plain, prominent and permanent 
        manner that it is not legally binding; and
            (3) shall, at the time it is issued or upon 
        request, be made available by the issuing agency to 
        interested persons and the public by electronic means 
        and otherwise.
Agencies shall avoid the issuance of guidance that is 
inconsistent or incompatible with, or duplicative of, the 
agency's governing statutes or regulations, with the goal of 
minimizing the potential for uncertainty and litigation arising 
from such uncertainty.
    (c) The Administrator of the Office of Information and 
Regulatory Affairs shall have authority to issue guidelines for 
use by the agencies in the issuance of major guidance and other 
guidance. Such guidelines shall assure that each agency avoids 
issuing guidance documents that are inconsistent or 
incompatible with, or duplicative of, the law, its other 
regulations, or the regulations of other Federal agencies and 
drafts its guidance documents to be simple and easy to 
understand, with the goal of minimizing the potential for 
uncertainty and litigation arising from such uncertainty.

           *       *       *       *       *       *       *

Sec. 556. Hearings; presiding employees; powers and duties; burden of 
                    proof; evidence; record as basis of decision

    (a) * * *

           *       *       *       *       *       *       *

    [(e) The transcript of testimony and exhibits, together 
with all papers and requests filed in the proceeding, 
constitutes the exclusive record for decision in accordance 
with section 557 of this title and, on payment of lawfully 
prescribed costs, shall be made available to the parties. When 
an agency decision rests on official notice of a material fact 
not appearing in the evidence in the record, a party is 
entitled, on timely request, to an opportunity to show the 
contrary.]
    (e)(1) The transcript of testimony and exhibits, together 
with all papers and requests filed in the proceeding, 
constitutes the exclusive record for decision in accordance 
with section 557 and shall be made available to the parties and 
the public by electronic means and, upon payment of lawfully 
prescribed costs, otherwise. When an agency decision rests on 
official notice of a material fact not appearing in the 
evidence in the record, a party is entitled, on timely request, 
to an opportunity to show the contrary.
    (2) Notwithstanding paragraph (1) of this subsection, in a 
proceeding held under this section pursuant to section 
553(d)(4) or 553(e), the record for decision shall also include 
any information that is part of the record of proceedings under 
section 553.
    (f) When an agency conducts rule making under this section 
and section 557 directly after concluding proceedings upon an 
advance notice of proposed rule making under section 553(c), 
the matters to be considered and determinations to be made 
shall include, among other relevant matters and determinations, 
the matters and determinations described in subsections (b) and 
(f) of section 553.
    (g) Upon receipt of a petition for a hearing under this 
section, the agency shall grant the petition in the case of any 
major rule, unless the agency reasonably determines that a 
hearing would not advance consideration of the rule or would, 
in light of the need for agency action, unreasonably delay 
completion of the rule making. The agency shall publish its 
decision to grant or deny the petition when it renders the 
decision, including an explanation of the grounds for decision. 
The information contained in the petition shall in all cases be 
included in the administrative record. This subsection shall 
not apply to rule makings that concern monetary policy proposed 
or implemented by the Board of Governors of the Federal Reserve 
System or the Federal Open Market Committee.

           *       *       *       *       *       *       *

CHAPTER 7--JUDICIAL REVIEW

           *       *       *       *       *       *       *

Sec. 701. Application; definitions

    (a) * * *
    (b) For the purpose of this chapter--
            (1) ``agency'' means each authority of the 
        Government of the United States, whether or not it is 
        within or subject to review by another agency, but does 
        not include--
                    (A) * * *

           *       *       *       *       *       *       *

                    (H) functions conferred by sections 1738, 
                1739, 1743, and 1744 of title 12; subchapter II 
                of chapter 471 of title 49; or sections 1884, 
                1891-1902, and former section 1641(b)(2), of 
                title 50, appendix; [and]
            (2) ``person'', ``rule'', ``order'', ``license'', 
        ``sanction'', ``relief'', and ``agency action'' have 
        the meanings given them by section 551 of this 
        title[.]; and
            (3) ``substantial evidence'' means such relevant 
        evidence as a reasonable mind might accept as adequate 
        to support a conclusion in light of the record 
        considered as a whole, taking into account whatever in 
        the record fairly detracts from the weight of the 
        evidence relied upon by the agency to support its 
        decision.

           *       *       *       *       *       *       *

Sec. 704. Actions reviewable

    [Agency action made] (a) Agency action made reviewable by 
statute and final agency action for which there is no other 
adequate remedy in a court are subject to judicial review. A 
preliminary, procedural, or intermediate agency action or 
ruling not directly reviewable is subject to review on the 
review of the final agency action. Except as otherwise 
expressly required by statute, agency action otherwise final is 
final for the purposes of this section whether or not there has 
been presented or determined an application for a declaratory 
order, for any form of reconsideration, or, unless the agency 
otherwise requires by rule and provides that the action 
meanwhile is inoperative, for an appeal to superior agency 
authority. Denial by an agency of a correction request or, 
where administrative appeal is provided for, denial of an 
appeal, under an administrative mechanism described in 
subsection (b)(2)(B) of the Information Quality Act, or the 
failure of an agency within 90 days to grant or deny such 
request or appeal, shall be final action for purposes of this 
section.
    (b) Other than in cases involving interests of national 
security, notwithstanding subsection (a) of this section, upon 
the agency's publication of an interim rule without compliance 
with section 553(c), (d), or (e) or requirements to render 
final determinations under subsection (f) of section 553, an 
interested party may seek immediate judicial review under this 
chapter of the agency's determination to adopt such rule on an 
interim basis. Review shall be limited to whether the agency 
abused its discretion to adopt the interim rule without 
compliance with section 553(c), (d), or (e) or without 
rendering final determinations under subsection (f) of section 
553.

           *       *       *       *       *       *       *

Sec. 706. Scope of review

    [To the extent necessary] (a) To the extent necessary to 
decision and when presented, the reviewing court shall decide 
all relevant questions of law, interpret constitutional and 
statutory provisions, and determine the meaning or 
applicability of the terms of an agency action. The reviewing 
court shall--
            (1) * * *
            (2) hold unlawful and set aside agency action, 
        findings, and conclusions found to be--
                    (A) arbitrary, capricious, an abuse of 
                discretion, or otherwise not in accordance with 
                law (including the Information Quality Act);

           *       *       *       *       *       *       *

    (b) The court shall not defer to the agency's--
            (1) interpretation of an agency rule if the agency 
        did not comply with the procedures of section 553 or 
        sections 556-557 of chapter 5 of this title to issue 
        the interpretation;
            (2) determination of the costs and benefits or 
        other economic or risk assessment of the action, if the 
        agency failed to conform to guidelines on such 
        determinations and assessments established by the 
        Administrator of the Office of Information and 
        Regulatory Affairs under section 553(k);
            (3) determinations made in the adoption of an 
        interim rule; or
            (4) guidance.
    (c) The court shall review agency denials of petitions 
under section 553(e)(6) or any other petition for a hearing 
under sections 556 and 557 for abuse of agency discretion.

           *       *       *       *       *       *       *

                            Dissenting Views

                              INTRODUCTION

    H.R. 2122, the ``Regulatory Accountability Act of 2013,'' 
substantially amends the Administrative Procedure Act (APA)\1\ 
to impose new procedural and analytical requirements on the 
Federal rulemaking process. It does this by adding more than 60 
additional procedural and analytical requirements to the 
process that agencies use to promulgate regulations under the 
APA, many of which have long been rejected as being ill-
conceived. Most critically, H.R. 2122 would override laws that 
prohibit agencies from considering costs when public health and 
safety are at stake such as the Clean Air Act,\2\ the Clean 
Water Act,\3\ the Occupational Safety and Health Act,\4\ and 
the Federal Mine Safety and Health Act.\5\ As a result, 
agencies will be forced to weigh the financial and economic 
costs of critical public health and safety measures against the 
number of illnesses and lost lives that will result in the 
absence of such a regulation.
---------------------------------------------------------------------------
    \1\5 U.S.C. Sec. Sec. 551-59, 701-06, 1305, 3105, 3344, 5372, 7521 
(2013).
    \2\Pub. L. No. 91-604, 84 Stat. 1676 (1970), as amended. The cost 
prohibition is codified at 42 U.S.C. Sec. 7142(d)(2) (2013).
    \3\Pub. L. No. 95-217, 86 Stat. 816 (1977), as amended. The 
limitation on cost consideration is codified at 33 U.S.C. Sec. 1311(b) 
(2013).
    \4\Pub. L. No. 91-596, 84 Stat. 1590, 84 Stat. 1590 (1970), as 
amended. The limitation on cost consideration is codified at 29 U.S.C. 
Sec. 655(b)(5) (2013).
    \5\Pub. L. No. 95-164, 91 Stat. 1290 (1977), as amended. The 
limitation on cost consideration is contained in section 101(a)(6)(A) 
of the Act.
---------------------------------------------------------------------------
    In addition to imposing burdensome and unnecessary 
analytical and procedural requirements, H.R. 2122 will greatly 
increase the ability of anti-regulatory interests to obstruct 
agency rulemaking. Specifically, the bill will give anti-
regulatory interests multiple opportunities to intervene in the 
rulemaking process by broadening the scope of judicial review 
and requiring a less deferential standard of review. H.R. 2122 
will also give industry additional opportunities to engage in 
dilatory tactics by requiring the use of the trial-type 
procedures of formal rulemaking for so-called ``high-impact'' 
rules. In addition, H.R. 2122 facilitates greater political 
interference by giving the White House Office of Information 
and Regulatory Affairs (OIRA) more control over 
congressionally-mandated rulemaking, providing industry with an 
additional chokepoint for the issuance of rules. As a result of 
these changes, H.R. 2122 would drastically undermine the 
Federal rulemaking process by hobbling the ability of agencies 
to effectively regulate consumer health and product safety, 
environmental protection, workplace safety, and financial 
services industry misconduct, among other matters.
    In response to a virtually identical bill considered in the 
last Congress,\6\ the Obama administration issued a strong veto 
threat.\7\ It warned that the bill ``would seriously undermine 
the ability of agencies to execute their statutory duties'' and 
would also ``impede the ability of agencies to provide the 
public with basic protections,'' among other concerns.\8\ In 
addition, 42 administrative law academics,\9\ the 
Administrative Law and Regulatory Practice Section of the 
American Bar Association,\10\ and the Coalition for Sensible 
Safeguards (which includes more than 70 member 
organizations)\11\ have expressed strong opposition to this 
bill. For example, the Coalition stated that the bill 
represented ``the biggest threat to environmental standards, 
workplace safety rules, public health, and financial reform 
regulations to appear in decades.''\12\
---------------------------------------------------------------------------
    \6\H.R. 3010, 112th Cong. (2011).
    \7\Executive Office of the President, Office of Management and 
Budget, Statement of Administration Policy for H.R. 3010--Regulatory 
Accountability Act of 2011 (Nov. 29, 2011).
    \8\Id.
    \9\Letter from 42 administrative law academics to Lamar Smith, 
House Judiciary Committee Chair, and John Conyers, Jr., House Judiciary 
Committee Ranking Member (Oct. 24, 2011) (on file with the H. Committee 
on the Judiciary Democratic staff).
    \10\American Bar Ass'n--Section of Administrative Law and 
Regulatory Practice, Comments on H.R. 3010, the Regulatory 
Accountability Act (Oct. 24, 2011) (on file with the H. Committee on 
the Judiciary Democratic staff).
    \11\Coalition for Sensible Safeguards, The Regulatory 
Accountability Act of 2011: Legislation Would Override and Threaten 
Decades of Public Protections, at 1 (undated) (on file with the H. 
Committee on the Judiciary Democratic staff). Current members of the 
Coalition include: AFL-CIO; Alliance for Justice; American Association 
of University Professors; American Federation of State, County and 
Municipal Employees; American Federation of Teachers Americans for 
Financial Reform; American Lung Association; American Rivers; American 
Values Campaign; American Sustainable Business Council; BlueGreen 
Alliance; Campaign for Contract Agriculture Reform; Center for 
Effective Government; Center for Digital Democracy; Center for Food 
Safety; Center for Foodborne Illness Research & Prevention; Center for 
Independent Living; Center for Science in the Public Interest; Citizens 
for Sludge-Free Land; Clean Air Watch; Clean Water Network; Consortium 
for Citizens with Disabilities; Consumer Federation of America; 
Consumers Union; CounterCorp; Cumberland Countians for Peace & Justice; 
Demos; Economic Policy Institute; Edmonds Institute; Environment 
America; Farmworker Justice; Free Press; Friends of the Earth; Green 
for All; Health Care for America Now; In the Public Interest; 
International Brotherhood of Teamsters; International Center for 
Technology Assessment; International Union, United Automobile, 
Aerospace & Agricultural Implement Workers of America (UAW); League of 
Conservation Voters; Los Angeles Alliance for a New Economy; Main 
Street Alliance; National Association of Consumer Advocates; National 
Center for Healthy Housing; National Consumers League; National Council 
for Occupational Safety and Health; National Employment Law Project; 
National Lawyers Guild, Louisville Chapter; National Women's Health 
Network; National Women's Law Center; Natural Resources Defense 
Council; Network for Environmental & Economic Responsibility of United 
Church of Christ; New Jersey Work Environment Council; New York 
Committee for Occupational Safety and Health; Oregon PeaceWorks; People 
for the American Way; Protect All Children's Environment; Public 
Citizen; Reproductive Health Technologies Project; Safe Tables Our 
Priority; Sierra Club; Service Employees International Union; Southern 
Illinois Committee for Occupational Safety and Health; The Arc of the 
United States; The Partnership for Working Families; Trust for 
America's Health; U.S. Chamber Watch; U.S. PIRG; Union of Concerned 
Scientists; Union Plus; United Food and Commercial Workers Union; 
United Steelworkers; Waterkeeper Alliance; and Worksafe. Coalition for 
Sensible Safeguards--Our Members, available at http://
sensiblesafeguards.org/our-members (last visited June 21, 2013).
    \12\Coalition for Sensible Safeguards, The Regulatory 
Accountability Act of 2011: Legislation Would Override and Threaten 
Decades of Public Protections, at 1 (undated) (on file with the H. 
Committee on the Judiciary Democratic staff).
---------------------------------------------------------------------------
    In sum, our principal concerns with H.R. 2122 are that the 
bill: (1) is based on the false premise that it will ``promote 
job creation and economic growth;''\13\ (2) unnecessarily 
expands cost-benefit analysis requirements and overrides 
existing statutes such as the Clean Air Act and the 
Occupational Safety and Health Act that prohibit consideration 
of cost when public health and safety are at stake; (3) will 
effectively prevent critical public health and safety rules 
from being promulgated by expanding the use of formal 
rulemaking; (4) will unduly hamper agency rulemaking, lead to 
endless litigation, and allow courts to substitute their policy 
judgments for those of agencies without enhancing due process; 
(5) will provide numerous opportunities for regulated entities 
to challenge proposed rulemakings and encourage dilatory 
tactics by opponents of regulation; and (6) may undermine the 
independence of regulatory agencies by extending cost-benefit 
analysis requirements to such agencies.
---------------------------------------------------------------------------
    \13\H. Rep. No. 112-294, at 10 (2011).
---------------------------------------------------------------------------
    For these reasons, and others discussed below, we 
respectfully dissent and urge our colleagues to reject this 
seriously flawed legislation.

                       DESCRIPTION AND BACKGROUND

                              DESCRIPTION

    A brief summary of H.R. 2122's principal provisions is 
presented here and a more detailed section-by-section 
explanation of the bill appears at the end of our dissenting 
views.
    H.R. 2122 amends the APA in numerous ways to impose new 
procedural and analytical requirements on the Federal 
rulemaking process. For instance, the bill requires agencies to 
consider ``potential'' costs of proposed rules even when 
existing law explicitly directs such agencies not to consider 
the costs of such rules. Another provision requires agencies to 
follow formal rulemaking procedures for proposed ``high 
impact''rules, defined in the bill as those rules that have a 
$1 billion or more cost on the economy. The bill also greatly 
expands the ability of courts to second-guess agency decisions 
by expanding the scope of judicial review and imposing a less 
deferential standard of review. In addition, the bill contains 
various provisions intended to give OIRA even greater control 
over congressionally-mandated rulemakings. Finally, the bill 
allows the President and OIRA to withhold documents and 
information communicated by OIRA during consultation with the 
agency, which would further undermine transparency of the 
rulemaking process.

                               BACKGROUND

    The current rulemaking process provides ample opportunity 
for public participation and comment. In addition, all three 
branches of government have the ability to review rulemakings. 
Overall, the system works well and, if anything, could be 
streamlined to address the often lengthy process by which 
regulations are promulgated.

                   I. THE CURRENT RULEMAKING PROCESS

    The APA, enacted in 1946, establishes the minimum 
rulemaking\14\ and formal adjudication requirements for all 
administrative agencies. The APA also sets forth standards for 
judicial review of final agency actions. While the APA sets 
minimum standards, many agency actions may involve procedures 
that depart from or go beyond APA requirements. As one academic 
noted, ``[T]he American administrative system, by evolution and 
design, is characterized by a considerable degree of 
informality, agency discretion and procedural 
flexibility.''\15\ The APA's baseline procedural requirements 
are designed to maintain a balance between this flexibility and 
the requirements of due process. The APA effectively functions 
as an ``administrative Constitution.'' Indeed, Committee 
Chairman Bob Goodlatte (R-VA) cited the APA's ``critical 
protections . . . against errors and excesses in agency 
rulemakings.''\16\
---------------------------------------------------------------------------
    \14\The APA defines ``rulemaking'' as the ``agency process for 
formulating, amending or repealing a rule.'' 5 U.S.C. Sec. 551(5) 
(2013). A ``rule,'' in turn, is defined as ``an agency statement of 
general or particular applicability and future effect designed to 
implement, interpret, or prescribe law or policy or describing the 
organization, procedure, or practice requirements of an agency.'' 5 
U.S.C. Sec. 551(4) (2013).
    \15\Gary J. Edles, Lessons from the Administrative Conference of 
the United States, 2 Eur. Pub. L. 571, 572 (1996).
    \16\Unofficial Transcript of Markup of H.R. 1947, the ``Federal 
Agriculture Reform and Risk Management Act,'' by the H. Committee on 
the Judiciary, 113th Cong. 6 (June 5, 2013).
---------------------------------------------------------------------------
    The principal way by which agencies promulgate rules is the 
informal notice-and-comment rulemaking process.\17\ Although 
called ``informal'' rulemaking, the process is, in fact, 
heavily proceduralized. Agencies are required to provide the 
public with adequate notice of a proposed rule and a meaningful 
opportunity to comment on the rule's content,\18\ including 
giving the public the opportunity to submit written ``data, 
views, or arguments.''\19\ There is no minimum time period 
during which an agency must accept comments, but courts 
reviewing an agency's compliance with this requirement 
typically consider whether the opportunity to comment was 
``adequate.'' Furthermore, the agency must consider the 
public's comments and incorporate into the adopted rule a 
``concise general statement'' of the ``basis and purpose'' of 
the final rule.\20\ The statement should be sufficient to allow 
the public to obtain a general idea of the purpose of and basic 
justification for the rule. The final rule and the general 
statement must be published in the Federal Register not less 
than 30 days before the rule's effective date.\21\
---------------------------------------------------------------------------
    \17\The APA exempts from all of its informal rulemaking 
requirements rules concerning: (1) ``a military or foreign affairs 
function of the United States;'' (2) ``a matter relating to agency 
management or personnel;'' or (3) a matter relating to ``public 
property, loans, grants, benefits, or contracts.'' 5 U.S.C. Sec. 553(a) 
(2013).
    \18\5 U.S.C. Sec. Sec. 553(b), (c) (2013). Under the APA's good 
cause exception, an agency may be exempted from the notice-and-comment 
requirements when such ``notice and public procedure thereon are 
impracticable, unnecessary, or contrary to the public interest.'' 5 
U.S.C. Sec. 553(b)(B) (2013). At least one court has noted that ``good 
cause requires some showing of exigency beyond generic complexity of 
data collection and time constraints.'' Natural Resources Defense 
Council, Inc. v. Evans, 316 F.3d 904, 906 (9th Cir. 2003).
    \19\5 U.S.C. Sec. 553(c) (2013).
    \20\Id.
    \21\5 U.S.C. Sec. 553(d) (2013).
---------------------------------------------------------------------------
    In addition to informal rulemaking, agencies follow the 
APA's formal rulemaking procedures ``when rules are required by 
statute to be made on the record after opportunity for an 
agency hearing.''\22\ These procedures require the agency to 
carry the burden of proof in support of its rule through a 
trial-like process.\23\ Any interested party has the 
opportunity to present evidence and conduct cross-examination, 
with an administrative law judge or other agency official 
presiding.\24\ The presiding officer can administer oaths, 
issue subpoenas, exclude irrelevant evidence, and make other 
rulings concerning the conduct of the proceeding.\25\ The rule 
must be supported by substantial evidence.\26\ In contrast to 
an informal rulemaking, a court can review a rule subject to 
formal rulemaking to determine whether the ``evidence'' 
supporting the rule was ``substantial.''\27\ Since the 1970's, 
however, formal rulemaking procedures have generally fallen 
into disuse not only because they are unnecessarily cumbersome 
and time-consuming, but also because they offer little 
advantage over informal rulemaking procedures.\28\
---------------------------------------------------------------------------
    \22\5 U.S.C. Sec. 553(c) (2013). The Supreme Court, in an opinion 
authored by then-Justice William Rehnquist, interpreted this language 
to mean that unless Congress specifically states in a statute governing 
the substance of the rulemaking that agency ``hearings'' regarding 
proposed rules are to be ``on the record,'' an agency is not required 
to use formal rulemaking procedures. United States v. Florida East 
Coast Railway Co., 410 U.S. 224, 237-238 (1973).
    \23\5 U.S.C. Sec. 556(d) (2013).
    \24\5 U.S.C. Sec. Sec. 556(c), (d) (2013).
    \25\5 U.S.C. Sec. 556(d) (2013).
    \26\Id.
    \27\See 5 U.S.C. Sec. 706(2) (2013) (outlining various bases for 
judicial review).
    \28\Stephen G. Breyer et al., Administrative Law and Regulatory 
Policy, at 582 (4th ed. 1999).
---------------------------------------------------------------------------
    In addition to the APA's rulemaking procedures, Federal 
agencies sometimes use rulemaking processes that are not 
specified by the APA. For example, Congress may direct an 
agency to follow specified rulemaking procedures that go beyond 
the APA's informal procedures.\29\ These procedures often 
include elements of both the APA's formal and informal 
rulemaking requirements and are sometimes referred to as 
``hybrid'' rulemaking procedures. Such processes attempt to 
strike a balance between the flexibility of notice-and-comment 
rulemaking and greater public participation that a more formal 
rulemaking process may allow.
---------------------------------------------------------------------------
    \29\See, e.g., 15 U.S.C. Sec. 57a (2013) (imposing heightened 
notice and congressional reporting requirements on the Federal Trade 
Commission).
---------------------------------------------------------------------------

        II. JUDICIAL, PRESIDENTIAL, AND CONGRESSIONAL CHECKS ON 
                           AGENCY RULEMAKING

A. Judicial Review
    The APA provides for judicial review of final agency action 
when there is no other adequate judicial remedy available.\30\ 
The APA requires a reviewing court to compel agency action when 
it is unlawfully withheld or unreasonably delayed and to set 
aside as unlawful agency action, findings, and conclusions when 
they are found to be:
---------------------------------------------------------------------------
    \30\5 U.S.C. Sec. Sec. 702, 704 (2013).

        (A) arbitrary, capricious, an abuse of discretion, or 
---------------------------------------------------------------------------
        otherwise not in accordance with law;

        (B) contrary to constitutional right, power, privilege, 
        or immunity;

        (C) in excess of statutory jurisdiction, authority, or 
        limitations, or short of statutory right;

        (D) without observance of procedure required by law;

        (E) unsupported by substantial evidence in [a formal 
        rulemaking] or otherwise reviewed on the record of an 
        agency hearing provided by statute; or

        (F) unwarranted by the facts to the extent that the 
        facts are subject to trial de novo by the reviewing 
        court.\31\
---------------------------------------------------------------------------
    \31\5 U.S.C. Sec. 706(2) (2013).

The two exceptions to this presumption of judicial review under 
the APA are when ``statutes preclude judicial review'' and when 
``agency action is committed to agency discretion by law.''\32\ 
A court, however, always has the authority to review the 
constitutionality of agency action, including those actions 
that are otherwise unreviewable.\33\
---------------------------------------------------------------------------
    \32\5 U.S.C. Sec. 701 (2013).
    \33\See Webster v. Doe, 486 U.S. 592 (1988); Oestereich v. 
Selective Service System, 393 U.S. 233 (1968).
---------------------------------------------------------------------------
    In Chevron U.S.A., Inc. v. Natural Resources Defense 
Council, the Supreme Court held that a reviewing court can 
invalidate an agency rule or formal adjudication only when it 
violates a constitutional provision or when the agency's rule 
exceeds its statutory authority to issue the rule as clearly 
expressed by Congress.\34\ Where the statute is ambiguous, 
courts must defer to an agency's permissible interpretation of 
the statute.\35\ The court cannot strike down a rule based on 
substantive policy grounds, out of deference to an agency's 
substantive expertise in the matter being regulated.\36\ 
Subsequent to the Chevron decision, the Supreme Court has 
limited the Chevron doctrine to legislative rules\37\ (i.e., 
those having the effect of law), and the extent of judicial 
deference can be unclear in a given case.
---------------------------------------------------------------------------
    \34\Chevron U.S.A., Inc. v. Natural Resources Defense Council, 
Inc., 467 U.S. 837 (1984).
    \35\Id.
    \36\Id.
    \37\United States v. Mead Corp., 533 U.S. 218 (2001).
---------------------------------------------------------------------------
    Courts will also invalidate a rule that is arbitrary or 
capricious. Normally, this type of scrutiny applies to informal 
rulemaking.\38\ Although originally an extremely deferential 
standard, the Supreme Court, in a series of decisions since the 
1970's, has left unclear precisely what level of deference is 
required, suggesting that the ``arbitrary or capricious'' 
standard may not be as deferential towards agency action as it 
is in other contexts.\39\ The Court has suggested that, even 
under the arbitrary or capricious standard, a reviewing court 
must conduct a ``searching and careful'' review of agency 
action.\40\ This type of heightened review under the arbitrary 
or capricious standard has been referred to as the ``hard 
look'' doctrine, under which a court examines ``carefully the 
administrative record and the agency's explanation, to 
determine whether the agency applied the correct analytical 
methodology, applied the right criteria, considered the 
relevant factors, chose from among the available range of 
regulatory options, relied upon appropriate policies, and 
pointed to adequate support in the record for material 
empirical conclusions.''\41\
---------------------------------------------------------------------------
    \38\Staff of Subcomm. on Comm. and Admin. Law of the H. Comm. on 
the Judiciary, 109th Cong., Interim Report on the Administrative Law, 
Process and Procedure Project for the 21st Century 112 (Comm. Print 
2006) [hereinafter ``Interim Report''], available at http://
judiciary.house.gov/Media/PDFS/Printers/109th/31505.pdf.
    \39\Motor Vehicle Mfr. Ass'n v. State Farm Mut. Auto. Ins. Co., 463 
U.S. 29 (1983); Citizens to Preserve Overton Park, Inc. v. Volpe, 401 
U.S. 402 (1971).
    \40\Citizens to Preserve Overton Park, Inc. v. Volpe, 401 U.S. 402 
(1971); Interim Report at 113.
    \41\Interim Report at 113 (quoting Thomas O. McGarity, Some 
Thoughts on Deossifying the Rulemaking Process, 41 Duke L.J. 1385, 1410 
(1992)).
---------------------------------------------------------------------------
B. Presidential Review
    There are various mechanisms through which the President 
can exert control over Federal agency rulemaking. For example, 
centralized review of agencies' regulations within the 
Executive Office of the President has been part of the 
rulemaking process since the early 1970's. OIRA reviews 
significant proposed and final rules before they are published 
in the Federal Register.\42\ As a result of such reviews, draft 
rules may be revised before publication, withdrawn before a 
review is completed, or returned to the agencies ``because, in 
OIRA's analysis, certain aspects of the rule need to be 
reconsidered.''\43\
---------------------------------------------------------------------------
    \42\Paperwork Reduction Act of 1980 Sec. 3503, 44 U.S.C. ch. 35 
(2007).
    \43\Interim Report at 39.
---------------------------------------------------------------------------
    Presidents have also imposed various rulemaking 
requirements on Federal agencies through executive orders (EO). 
For example, President Bill Clinton issued EO 12866 in 1993, 
which requires, inter alia, agencies to prepare cost-benefit 
analyses for their ``economically significant'' rules and 
imposes expanded transparency requirements.\44\ President 
Barack Obama issued EO 13563 in January 2011, which emphasizes 
the need to increase public participation in the rulemaking 
process, to the ``extent feasible and consistent with 
law.''\45\ EO 13563 also requires agencies to: (1) identify, 
``as appropriate, means to achieve regulatory goals designed to 
promote innovation;'' (2) reduce costs and simplify and 
harmonize rules through inter-agency coordination; (3) identify 
and consider regulatory approaches that reduce burdens and 
maintain flexibility and freedom of choice for the public; and 
(4) conduct periodic reviews of existing significant 
regulations that ``may be outmoded, ineffective, insufficient, 
or excessively burdensome, and to modify, streamline, expand, 
or repeal them in accordance with what has been learned.''\46\ 
Later that same year, President Obama issued EO 13579, which 
encouraged independent regulatory agencies\47\ to follow the 
principles of EO 13563, including complying with its 
retrospective review requirement.\48\ Then-OIRA Administrator 
Cass Sunstein, however, made clear that EO 13579 was not 
binding on independent agencies.\49\
---------------------------------------------------------------------------
    \44\Exec. Ord. No. 12,866, 58 Fed. Reg. 51,735 (Oct. 4, 1993). In 
its statement of regulatory philosophy, EO 12866 states that agencies 
should assess all costs and benefits of available regulatory 
alternatives, including, significantly, both quantitative and 
qualitative measures. It also provides that agencies should select 
regulatory approaches that maximize net benefits (unless a statute 
requires another approach). Pursuant to the order, agencies, where 
permissible and applicable, should adhere to a set of principles when 
developing rules, including: (1) consideration of the degree and nature 
of risk posed when setting regulatory priorities, (2) adoption of 
regulations only upon a ``reasoned determination that the benefits of 
the intended regulation justify its costs,'' and (3) tailoring 
regulations to impose the least burden on society needed to achieve the 
regulatory objectives. Among the EO's stated objectives are ``to 
reaffirm the primacy of Federal agencies in the regulatory decision-
making process; to restore the integrity and legitimacy of regulatory 
review and oversight; and to make the process more accessible and open 
to the public.'' The ``primacy'' of the agencies provision signaled a 
significant change in regulatory philosophy, vesting greater control of 
the rulemaking process with regulatory agencies and taking away 
authority from OIRA. Also, the requirement that the benefits of a 
regulation ``justify'' its costs was a noticeably lower threshold than 
the requirement in EO 12291, i.e., that the benefits must ``outweigh'' 
the costs. Id.
    \45\Exec. Ord. No. 13,563, 76 Fed. Reg. 3,821 (Jan. 18, 2011). For 
example, EO 13563 directs agencies to give the public a meaningful 
opportunity to comment on proposed rules through the Internet, to 
provide a minimum 60-day comment period, and to provide online access 
to the rulemaking docket (including scientific and technical findings 
and public comments) in an easily searchable and downloadable format. 
Agencies are also directed to seek the views of those likely to be 
affected, including those who are likely to benefit and those likely to 
be subject to a proposed rule, prior to issuing a notice of proposed 
rulemaking.
    \46\Id.
    \47\Independent regulatory agencies, as opposed to executive branch 
agencies, are considered ``independent''because the President has 
limited authority to remove their leaders, who can only be removed for 
cause, rather than simply serving at the President's pleasure. Such 
agencies are usually styled ``commissions'' or ``boards'' (e.g., 
National Labor Relations Board, Securities and Exchange Commission). 
Stephen G. Breyer, et al., Administrative Law and Regulatory Policy, at 
100 (4th ed. 1999).
    \48\Exec. Ord. No. 13,579, 76 Fed. Reg. 41587 (July 11, 2011).
    \49\Memorandum from Cass R. Sunstein to the Heads of Independent 
Regulatory Agencies, (July 22, 2011) (``It is understood that this 
guidance is issued with full respect for the independence of the 
agencies to which it is addressed, and hence nothing said here is meant 
to be binding.''), available at http://www.whitehouse.gov/omb/
international_regulatory_cooperation
#eo13579.
---------------------------------------------------------------------------
C. Congressional Review
    There are various ways in which Congress can check agency 
rulemaking behavior: limiting or restricting delegations of 
authority, defunding rulemaking activities through the 
appropriations process, and conducting oversight activity. In 
addition, Congress can exert its powers under the Congressional 
Review Act (CRA).\50\ The CRA authorizes Congress to disapprove 
an agency rule to which it objects by enacting a joint 
resolution of disapproval.\51\ Such a joint resolution must be 
introduced within at least 60 days of the rule's submission to 
Congress.\52\ For a joint resolution of disapproval to take 
effect, it must pass both Houses of Congress and be signed by 
the President, thereby meeting the Constitution's Bicameralism 
and Presentment Clauses' requirements.\53\ If a joint 
resolution is enacted into law, the disapproved rule is deemed 
not to have been in effect at any time.\54\ Additionally, the 
CRA prohibits an agency from reissuing a rule that is 
substantially the same as a disapproved rule.\55\
---------------------------------------------------------------------------
    \50\5 U.S.C. Sec. Sec. 801-08 (2013).
    \51\See 5 U.S.C. Sec. 802 (2013) (outlining congressional 
disapproval procedure).
    \52\5 U.S.C. Sec. 802(a) (2013). The CRA prescribes special 
expedited procedures for Senate consideration of a joint resolution of 
disapproval, though it does not provide for similar procedures in the 
House of Representatives. 5 U.S.C. Sec. 802(c) (2013).
    \53\U.S. Const. Art. I, Sec. 7, cl. 2, 3.
    \54\5 U.S.C. Sec. 801(f) (2013).
    \55\5 U.S.C. Sec. 801(b)(2) (2013).
---------------------------------------------------------------------------

                        CONCERNS WITH H.R. 2122

I. H.R. 2122 IS BASED ON THE FALSE PREMISE THAT REGULATIONS INHIBIT JOB 
                  CREATION AND STIFLE ECONOMIC GROWTH

    H.R. 2122's proponents rely on unsupported assertions that 
regulations inhibit job creation and stifle economic growth by 
imposing burdensome costs on business and creating regulatory 
uncertainty.\56\ While these arguments can sound appealing on 
the surface, no facts actually support them.
---------------------------------------------------------------------------
    \56\Former Judiciary Committee Chairman Lamar Smith (R-TX), for 
example, asserted last Congress:

        The American people urgently need jobs that only economic 
      growth can give. Standing in the way of growth and job 
---------------------------------------------------------------------------
      creation is a wall of Federal regulation.

                                          *    *    *
        New regulatory burdens and uncertainty about the economy 
      have helped to keep trillions of dollars of private sector 
      capital on the sidelines. Companies cannot safely invest if 
      they cannot tell whether tomorrow's regulations will make 
      their investments unprofitable. 

The Regulatory Accountability Act of 2011: Hearing on H.R. 3010 Before 
the Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on 
the Judiciary, 112th Cong. (2011) [hereinafter H.R. 3010 Hearing] 
(remarks of Rep. Lamar Smith (R-TX), Chair, H. Comm. on the Judiciary).
A. Regulations Have No Discernible Impact on Job Creation
    Over the course of 22 hearings held by the Committee since 
the beginning of the 112th Congress, proponents of deregulatory 
measures like H.R. 2122 have repeatedly argued that regulations 
stifle job creation by creating business uncertainty.\57\ 
Noticeably absent, however, is any evidence documenting these 
arguments. Indeed, Bruce Bartlett, a senior policy analyst in 
the Reagan and George H.W. Bush administrations, observes that 
no ``hard evidence is offered for'' the claim that President 
Obama ``has unleashed a tidal wave of new regulations, which 
has created uncertainty among businesses and prevents them from 
investing and hiring.''\58\ Rather, Mr. Bartlett notes, this 
argument is ``simply asserted as self-evident and repeated 
endlessly throughout the conservative echo chamber.''\59\ Mr. 
Bartlett concluded his analysis with this observation, ``In my 
opinion, regulatory uncertainty is a canard invented by 
Republicans that allows them to use current economic problems 
to pursue an agenda supported by the business community year in 
and year out. In other words, it is a simple case of political 
opportunism, not a serious effort to deal with high 
unemployment.''\60\
---------------------------------------------------------------------------
    \57\See, e.g., Regulatory Accountability Act of 2013: Hearing on 
H.R. 2122 Before the Subcomm. on Regulatory Reform, Commercial and 
Antitrust Law of the H. Comm. on the Judiciary, 113th Cong. (2013); 
Regulatory Flexibility Improvements Act of 2013: Hearing on H.R. 2542 
Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law 
of the H. Comm. on the Judiciary, 113th Cong. (2013); Sunshine for 
Regulatory Decrees and Settlements Act of 2013: Hearing on H.R. 1493 
Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law 
of the H. Comm. on the Judiciary, 113th Cong. (2013); REINS Act: 
Promoting Jobs, Growth and American Competitiveness: Hearing on H.R. 
367 Before the Subcomm. on Regulatory Reform, Commercial and Antitrust 
Law of the H. Comm. on the Judiciary, 113th Cong. (2013); The Obama 
Administration's Regulatory War on Jobs, the Economy, and America's 
Global Competitiveness: Hearing Before the Subcomm. on Regulatory 
Reform, Commercial and Antitrust Law of the H. Comm. on the Judiciary, 
113th Cong. (2013); Responsibly and Professionally Invigorating 
Development Act of 2013: Hearing on H.R. 2641 Before the Subcomm. on 
Regulatory Reform, Commercial and Antitrust Law of the H. Comm. on the 
Judiciary, 113th Cong. (2013); Regulation Nation: The Obama 
Administration's Regulatory Expansion vs. Jobs and Economic Recovery: 
Hearing Before the H. Comm. on the Judiciary, 112th Congress (2012); 
The Obama Administration's Abuse of Power: Hearing Before the H. Comm. 
on the Judiciary, 112th Cong. (2012); Clearing the Way for Jobs and 
Growth: Retrospective Review to Reduce Red Tape and Regulations: 
Hearing Before the Subcomm. on Courts, Commercial and Admin. Law. of 
the H. Comm. on the Judiciary, 112th Cong. (2012); The Responsibly and 
Professionally Invigorating Development Act of 2012: Hearing on H.R. 
4377 Before the Subcomm. on Courts, Commercial and Admin. L. of the H. 
Comm. on the Judiciary, 112th Cong. (2012); The Office of Information 
and Regulatory Affairs: Federal Regulations and Regulatory Reform Under 
the Obama Administration: Hearing Before the Subcomm. on Courts, 
Commercial and Admin. L. of the H. Comm. on the Judiciary, 112th Cong. 
(2012) [hereinafter OIRA Hearing]; The Regulatory Freeze for Jobs Act 
of 2012: Hearing on H.R. 4078 Before the Subcomm. on Courts, Commercial 
and Admin. L. of the H. Comm. on the Judiciary, 112th Cong. (2012); The 
Consent Decree Fairness Act and the Sunshine for Regulatory Decrees and 
Settlements Act: Hearing on H.R. 3041 and H.R. 3862 Before the Subcomm. 
on Courts, Commercial and Admin. L. of the H. Comm. on the Judiciary, 
112th Cong. (2012) [hereinafter Consent Decrees Hearing]; The 
Regulatory Accountability Act of 2011: Hearing on H.R. 3010 Before the 
H. Comm. on the Judiciary, 112th Cong. (2011) [hereinafter H.R. 3010 
Hearing]; The Role of Social Security Administrative Law Judges: 
Hearing Before the Subcomm. on Courts, Commercial and Admin. L. of the 
H. Comm. on the Judiciary, 112th Cong. (2011); Formal Rulemaking and 
Judicial Review: Protecting Jobs and the Economy with Greater 
Regulatory Transparency and Accountability: Hearing Before the Subcomm. 
on Courts, Commercial and Admin. L. of the H. Comm. on the Judiciary, 
112th Cong. (2011) [hereinafter Formal Rulemaking Hearing]; Cost-
Justifying Regulations: Protecting Jobs and the Economy by Presidential 
and Judicial Review of Costs and Benefits: Hearing Before the Subcomm. 
on Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 
112th Cong. (2011); Raising the Agencies' Grades--Protecting the 
Economy, Assuring Regulatory Quality and Improving Assessments of 
Regulatory Need: Hearing Before the Subcomm. on Courts, Commercial and 
Admin. Law of the H. Comm. on the Judiciary, 112th Cong. (2011); The 
Regulations From the Executive in Need of Scrutiny Act of 2011: Hearing 
on H.R. 10 Before the Subcomm. on Courts, Commercial and Admin. Law of 
the H. Comm. on the Judiciary, 112th Cong. (2011); [hereinafter REINS 
Act Legislative Hearing]; The APA at 65--Is Reform Needed to Create 
Jobs, Promote Economic Growth, and Reduce Costs?: Hearing Before the 
Subcomm. on Courts, Commercial and Admin. Law of the H. Comm. on the 
Judiciary, 112th Cong. (2011) [hereinafter the APA at 65 Hearing]; 
Regulatory Flexibility Improvements Act of 2011--Unleashing Small 
Businesses to Create Jobs: Hearing on H.R. 527 Before the Subcomm. on 
Courts, Commercial and Admin. L. of the H. Comm. on the Judiciary, 
112th Cong. (2011); The REINS Act--Promoting Jobs and Expanding Freedom 
by Reducing Needless Regulations: Hearing Before the Subcomm. on 
Courts, Commercial and Admin. Law of the H. Comm. on the Judiciary, 
112th Cong. (2011).
    \58\Bruce Bartlett, Op-Ed., Misrepresentations, Regulations and 
Jobs, N.Y. TIMES Economix Blog, Oct. 4, 2011, available at http://
economix.blogs.nytimes.com/2011/10/04/regulation-and-unemployment/
?scp=4&sq=bartlett&st=cse.
    \59\Id.
    \60\Id.
---------------------------------------------------------------------------
    The Majority's own witness at the legislative hearing on a 
nearly identical legislation considered in the 112th Congress 
clearly debunked the myth that regulations stymie job creation. 
Christopher DeMuth, who appeared on behalf of the American 
Enterprise Institute, a conservative think tank, stated in his 
prepared testimony that the ``focus on jobs . . . can lead to 
confusion in regulatory debates'' and that ``the employment 
effects of regulation, while important, are 
indeterminate.''\61\ At this same hearing, Minority witness 
Professor Sidney Shapiro explained that ``[a]ll of the 
available evidence contradicts the claim that regulatory 
uncertainty is deterring business investment.''\62\
---------------------------------------------------------------------------
    \61\H.R. 3010 Hearing (prepared statement of Christopher DeMuth, 
American Enterprise Institute)
    \62\Id. (prepared statement of Prof. Sidney Shapiro, Wake Forest 
School of Law).
---------------------------------------------------------------------------
    If anything, regulations may promote job growth and put 
Americans back to work. For instance, the BlueGreen Alliance, 
notes:

        Studies on the direct impact of regulations on job 
        growth have found that most regulations result in 
        modest job growth or have no effect, and economic 
        growth has consistently surged forward in concert with 
        these health and safety protections. The Clean Air Act 
        is a shining example, given that the economy has grown 
        204% and private sector job creation has expanded 86% 
        since its passage in 1970.\63\
---------------------------------------------------------------------------
    \63\Letter to House Judiciary Committee Chair Lamar Smith and House 
Judiciary Committee Ranking Member John Conyers, Jr. from David A. 
Forster, Executive Director, BlueGreen Alliance, at 2 (Nov. 2, 2011) 
(on file with the H. Committee on the Judiciary, Democratic Staff).

Also in reference to the Clean Air Act, the White House Office 
of Management and Budget (``OMB'') observed that 40 years of 
success with this measure ``have demonstrated that strong 
environmental protections and strong economic growth go hand in 
hand.''\64\ Similarly, the Natural Resources Defense Council 
and the United Auto Workers cite the fact that increased fuel 
economy standards have already led to the creation of more than 
155,000 U.S. jobs.\65\
---------------------------------------------------------------------------
    \64\Executive Office of the President--Office of Management and 
Budget, Statement of Administration Policy on H.R. 2401, Transparency 
in Regulatory Analysis of Impacts on the Nation Act of 2011 (Sept. 21, 
2011).
    \65\Natural Resources Defense Council et al., Supplying Ingenuity: 
U.S. Suppliers of Clean, Fuel-Efficient Vehicle Technologies (2011), 
available at http://www.nrdc.org/transportation/autosuppliers/files/
SupplierMappingReport.pdf.
---------------------------------------------------------------------------
    The facts also indicate that regulatory uncertainty is not 
the problem. A July 2011 Wall Street Journal survey of business 
economists, found that the ``main reason U.S. companies are 
reluctant to step up hiring is scant demand, rather than 
uncertainty over government policies.''\66\ Similarly, a 2011 
National Federation of Independent Business survey of its 
members likewise suggests that ``poor sales''--not regulation--
is the biggest problem.\67\ The Main Street Alliance, an 
alliance of small businesses, similarly observed that a lack of 
demand, and not regulation, is the problem\68\ In sum, there is 
no credible evidence that regulations depress job creation.\69\
---------------------------------------------------------------------------
    \66\Phil Izzo, Dearth of Demand Seen Behind Weak Hiring, Wall St. 
J., July 18, 2011, available at http://online.wsj.com/article/
SB10001424052702303661904576452181063763332.html.]
    \67\Press Release, Nat'l Federation of Independent Businesses, 
Small Business Confidence Takes Huge Hit: Optimism Index Now in Decline 
for Six Months Running (Sept. 13, 2011) (``Of those reporting negative 
sales trends, 45 percent blamed faltering sales, 5 percent higher labor 
costs, 15 percent higher materials costs, 3 percent insurance costs, 8 
percent lower selling prices and 10 percent higher taxes and regulatory 
costs.''), available at http://www.nfib.com/press-media/press-media-
item?cmsid=58190.
    \68\Letter to House Judiciary Committee Chair Lamar Smith and House 
Judiciary Committee Ranking Member John Conyers, Jr. from Jim Houser, 
Co-Chair, The Main Street Alliance, et al., at 1-2 (Nov. 2, 2011) (on 
file with the H. Committee on the Judiciary, Democratic Staff).
    \69\See also Jia Lynn Yang, Does Government Regulation Really Kill 
Jobs? Economists 
Say Overall Effect Minimal, Wash. Post, Nov. 13, 2011, available at 
http://www.washingtonpost.com/business/economy/does-government-
regulation-really-kill-jobs-
economists-say-overall-effect-minimal/2011/10/19/
gIQALRF5INXstory.html?hpid=z1 (``In 2010, 0.3 percent of the people who 
lost their jobs in layoffs were let go because of `government 
regulations/intervention.' By comparison, 25 percent were laid off 
because of a drop in business demand. . . . Economists who have studied 
the matter say that there is little evidence that regulations cause 
massive job loss in the economy, and that rolling them back would not 
lead to a boom in job creation.'').
---------------------------------------------------------------------------
    If anything, H.R. 2122 will cause greater business 
uncertainty by substantially lengthening and adding to the 
complexity of the rulemaking process, which will result in less 
predictability\70\ and leave ``stakeholders (including 
businesses large and small) less able to plan effectively for 
the future.''\71\ Just two examples of how it does this is that 
the bill: (1) adds more than ``60 new procedural and analytical 
requirements to the agency rulemaking process;'' and (2) 
expands the APA's informal rulemaking requirements by 
approximately tenfold.\72\
---------------------------------------------------------------------------
    \70\H.R. 3010 Hearing (statement of Prof. Sidney Shapiro, Wake 
Forest Law School) (``It currently takes 4 to 8 years for an agency to 
promulgate and enforce most significant rules, and the proposed 
procedures would likely add another two to 3 years to the process. 
Under H.R. 3010, the longest rulemakings could take more than 12 
years--spanning potentially four different presidential 
administrations--to complete. In the meantime, thousands of people 
would die and tens of thousands more would be injured or become ill 
because of the lack of regulation.'').
    \71\Letter from 42 administrative law academics to House Judiciary 
Committee Chair Lamar Smith and House Judiciary Committee Ranking 
Member John Conyers, Jr., at 2 (Oct. 24, 2011) (on file with the H. 
Committee on the Judiciary, Democratic Staff).
    \72\Id.
---------------------------------------------------------------------------
    Those who claim that regulations stifle economic growth 
fail to remember that the lack of adequate regulation of the 
financial services industry led to the 2008 financial crisis 
and the ensuing Great Recession, the lingering effects of which 
many Americans still suffer from today. The Dodd-Frank Wall 
Street Reform Act\73\ was designed, in part, to ensure that 
America's largest financial institutions could no longer 
jeopardize our Nation's economy through reckless conduct, to 
protect consumers through the establishment of a Consumer 
Financial Protection Bureau, and to stop any future need for 
congressional bailouts. Although it is essential that rules 
implementing the Act's provisions be promulgated, industry 
lobbyists have been working overtime to stop them from going 
into effect. As Representative Melvin L. Watt (D-NC), who sits 
on both the Judiciary and Financial Services Committees, 
explained:
---------------------------------------------------------------------------
    \73\Pub. L. No. 111-203 (2010).

          We are having a hard enough time getting the 
        regulators to timely proceed with completing the rules, 
        because a lot of the areas in which they are rulemaking 
        are so very complicated and have so many nuances and 
        implications. The last thing we want to do is slow down 
        that process.
          And I hear all the time when I go home with my 
        business community that they are looking for certainty. 
        ``Just tell us what the rules are so that we can start 
        playing by them.'' And to the extent that we delay that 
        certainty, we delay their ability to rely on what the 
        rules of the road will be going forward.\74\
---------------------------------------------------------------------------
    \74\Unofficial Tr. of Markup of H.R. 2122, the Regulatory 
Accountability Act of 2013, by the H. Comm. on the Judiciary, 113th 
Cong. at 135 (July 24, 2013), available at http://judiciary.house.gov/
hearings/Markups%202013/mark_07242013/
07.24.13%20Markup%20Transcript.pdf.

    Accordingly, to ensure that the promulgation of these 
critical regulations would not be adversely impacted by H.R. 
2122, Representative Watt offered an amendment that would have 
exempted from the bill any regulations issued to implement the 
Dodd-Frank Wall Street Reform Act. His amendment, however, 
failed by a party-line vote of 9 to 11.
B. The Benefits of Regulations More Than Outweigh Their Costs
    Proponents of H.R. 2122 overstate the purported costs of 
regulation while completely ignoring its benefits. At nearly 
every hearing on various anti-regulatory bills and oversight 
issues during the current and prior Congress, Majority Members 
and witnesses have cited the same widely debunked study by 
economists Mark and Nicole Crain, which claims that Federal 
regulation imposes an annual cost of $1.75 trillion on 
business.\75\
---------------------------------------------------------------------------
    \75\Nicole V. Crain & W. Mark Crain, The Impact of Regulatory Costs 
on Small Firms, Rep. No. SBAHQ-08-M-0466 (Sept. 2010), available at 
http://archive.sba.gov/advo/research/
    rs371tot.pdf.
---------------------------------------------------------------------------
    The Crain study, however, has been extensively criticized 
for exaggerating the economic costs of Federal rulemaking. For 
example, the Center for Progressive Reform (CPR) notes that the 
study myopically fails to account for any benefits of 
regulation.\76\ In fact, as CPR observed, OMB estimated in 2008 
that major rules imposed $46 billion to $54 billion in costs, 
but also produced $122 billion to $656 billion in benefits.\77\
---------------------------------------------------------------------------
    \76\Sidney Shapiro, et al., Setting the Record Straight: The Crain 
and Crain Report on Regulatory Costs, Center for Progressive Reform 
White Paper #1103 (Feb. 2011).
    \77\Id.
---------------------------------------------------------------------------
    Moreover, the study's methodology is seriously flawed with 
respect to how it calculated economic costs. The study, which 
relied on international public opinion polling by the World 
Bank on how friendly a particular country was to business 
interests, ignored actual data on costs imposed by Federal 
regulation in the United States.\78\ CRS conducted an extensive 
examination of the Crain study and criticized much of its 
methodology.\79\ In fact, the authors of the study told CRS 
that it was ``not meant to be a decision-making tool for 
lawmakers or Federal regulatory agencies to use in choosing the 
`right' level of regulation. In no place in any of the reports 
do we imply that our reports should be used for this purpose. 
(How could we recommend this use when we make no attempt to 
estimate the benefits?)''\80\ CRS concluded that ``a valid, 
reasoned policy decision can only be made after considering 
information on both costs and benefits'' of regulation.\81\ The 
Economic Policy Institute also issued a critique of the Crain 
study outlining additional concerns with the study's 
methodology and data.\82\
---------------------------------------------------------------------------
    \78\Id.
    \79\Curtis W. Copeland, Analysis of an Estimate of the Total Costs 
of Federal Regulations, Congressional Research Service Report for 
Congress, R41763 (Apr. 6, 2011).
    \80\Id. at 26 (quoting an e-mail from Nicole and W. Mark Crain to 
te author of the CRS report).
    \81\Id.
    \82\John Irons & Andrew Green, Flaws Call for Rejecting Crain and 
Crain Model: Cited $1.75 Trillion Cost of Regulations Is Not Worth 
Repeating, Economic Policy Institute, July 19, 2011, available at 
http://w3.epi-data.org/temp2011/IssueBrief308.pdf.
---------------------------------------------------------------------------
    Although the proponents of H.R. 2122 emphasize the 
purported costs of regulations, regulations, in truth, 
routinely result in net benefits to society. OMB's 2012 annual 
report to Congress estimates that the annual benefits of 
Federal regulations for which agencies estimated and monetized 
both benefits and costs from October 1, 2001 through September 
30, 2011 aggregate between $141 billion to $691 billion, while 
the estimated annual costs aggregate between $42.4 billion and 
$66.3 billion.\83\ In sum, there is simply no credible evidence 
that the cost of regulations exceed their benefits.
---------------------------------------------------------------------------
    \83\Office of Management and Budget, 2012 Report to Congress on the 
Benefits and Costs of Federal Regulations and Unfunded Mandates on 
State, Local, and Tribal Entities at 3, avail-
able at http://www.whitehouse.gov/sites/default/files/omb/inforeg/
2012_cb/2012_cost_benefit_
report.pdf.
---------------------------------------------------------------------------

 II. H.R. 2122 PRIORITIZES PERCEIVED COST OVER CRITICAL PUBLIC HEALTH, 
                  SAFETY AND ENVIRONMENTAL PROTECTIONS

    H.R. 2122 will undermine the government's ability to 
protect us from a wide range of harms, in complete disregard of 
the devastating impact that inadequate regulation has had on 
the health and economic well-being of Americans. For example, 
our Nation continues to struggle in the aftermath of the 2008 
financial crisis and to deal with the ongoing costs of 
regulatory failure and underenforcement of current regulations. 
As Americans for Financial Reform observed, the crisis has cost 
the United States economy an estimated ``trillions of dollars 
and millions of jobs, and led to millions of families losing 
their homes.''\84\ Likewise, the BP oil spill and Massey coal 
mine explosion provide further examples of the dangers of 
regulatory failure.
---------------------------------------------------------------------------
    \84\Letter to House Judiciary Committee Chair Lamar Smith and House 
Judiciary Committee Ranking Member John Conyers, Jr. from Americans for 
Financial Reform, at 2 (DATE) (on file with the H. Committee on the 
Judiciary, Democratic Staff).
---------------------------------------------------------------------------
    Notwithstanding these and other examples, H.R. 2122's 
supporters appear to suffer some form of collective amnesia 
about the dangers of regulatory failure. H.R. 2122 prioritizes 
minimizing business costs over protecting the health and safety 
of Americans in at least two ways. First, it imposes a 
``supermandate'' that overrides numerous statutes prohibiting 
or limiting the authority of agencies to consider cost in 
promulgating public health and safety rules. Second, it goes 
well beyond the existing cost-benefit analysis requirements 
contained in EOs 12866 and 13563 to mandate expanded analytical 
requirements with much less agency discretion, threatening 
paralysis by analysis. Indeed, as David Goldston, the Director 
of Government Affairs at the Natural Resources Defense Council, 
observed at the legislative hearing on H.R. 2122, this bill 
``is a kind of anthology of bad ideas that have already proven 
to interfere with efforts to protect the public.''\85\
---------------------------------------------------------------------------
    \85\The Regulatory Accountability Act of 2013: Hearing on H.R. 2122 
Before the Subcomm. on Regulatory Reform, Commercial and Antitrust Law 
of the H. Comm. on the Judiciary, 113th Cong. (2013) (prepared 
statement of David Goldston, the Director of Government Affairs at the 
Natural Resources Defense Council).
---------------------------------------------------------------------------
A. LH.R. 2122 Overrides Statutory Prohibitions or Limitations on 
        Considering Costs in the Rulemaking Process
    Regulations are critical to protecting all Americans from a 
vast array of harms, including dirty air and water, dangerous 
toys, reckless financial behavior, and unsafe workplaces. This 
is not an abstract notion. With respect to workplace safety, 
for instance, there were 4,383 fatal occupational injuries last 
year, according to the Bureau of Labor Statistics.\86\ And, an 
analysis by the National Institute for Occupational Safety and 
Health, the American Cancer Society, and Emory University's 
School of Public Health estimates that after factoring in 
disease and injury data ``there are a total of 55,200 US deaths 
annually resulting from occupational disease or injury (range 
32,200-78,200).''\87\
---------------------------------------------------------------------------
    \86\Press Release, U.S. Dep't of Labor Bureau of Labor Statistics, 
National Census of Fatal Occupational Census of Fatal Occupational 
Injuries in 2012 (Preliminary Results), Aug. 13, 2013, available at 
http://www.bls.gov/news.release/pdf/cfoi.pdf.
    \87\Kyle Steenland et al., Dying for Work: The Magnitude of US 
Mortality from Selected Cases of Death Associated with Occupation, 43 
Am. J. Industrial Medicine 461 (2003).
---------------------------------------------------------------------------
    This is why we believe that one of the most pernicious 
aspects of H.R. 2122 is its requirement that agencies consider 
regulatory costs and benefits of proposed and final rules 
regardless of the dictates of other laws, thereby establishing 
a ``supermandate.'' As a result, it overrides provisions in 
numerous other statutes that prohibit or limit agency 
consideration of costs when promulgating rules. These statutes 
include the Clean Air Act,\88\ the Clean Water Act,\89\ the 
Occupational Safety and Health Act,\90\ and the Federal Mine 
Safety and Health Act.\91\
---------------------------------------------------------------------------
    \88\Pub. L. No. 91-604, 84 Stat. 1676 (1970), as amended. The cost 
prohibition is codified at 42 U.S.C. Sec. 7142(d)(2) (2013).
    \89\Pub. L. No. 95-217, 86 Stat. 816 (1977), as amended. The 
limitation on cost consideration is codified at 33 U.S.C. Sec. 1311(b) 
(2013).
    \90\Pub. L. No. 91-596, 84 Stat. 1590, 84 Stat. 1590 (1970), as 
amended. The limitation on cost consideration is codified at 29 U.S.C. 
Sec. 655(b)(5) (2013).
    \91\Pub. L. No. 95-164, 91 Stat. 1290 (1977), as amended. The 
limitation on cost consideration is contained in section 101(a)(6)(A) 
of the Act.
---------------------------------------------------------------------------
    Various environmental groups warn that this is a ``cynical 
attempt'' to overturn these measures and the carefully crafted 
legislative bargains that they represent.\92\ One such 
organization, American Rivers, notes that ``[m]any of our 
nation's fundamental laws protecting our health, like the Clean 
Air Act and the Clean Water Act, would likely not have come 
into effect when their costs, the costs of keeping our air and 
water clean, were greater compared to less protective 
regulations.''\93\ As the ABA's Administrative Law Section 
observes:
---------------------------------------------------------------------------
    \92\Letter to House Members from American Rivers, Clean Water 
Action, Defenders of Wildlife, Earthjustice, Environment America, 
League of Conservation Voters & the Natural Resources Defense Council 
(Nov. 2, 2011) (on file with the H. Committee on the Judiciary, 
Democratic Staff).
    \93\Letter to House Judiciary Committee Chair Lamar Smith and House 
Judiciary Committee Ranking Member John Conyers, Jr. from Jim Bradley, 
Director of Government Relations, American Rivers (Nov. 2, 2011) (on 
file with the H. Committee on the Judiciary, Democratic Staff).

        In addition to burdening the rulemaking process with 
        analytical requirements that appear to be out of 
        proportion to their likely payoffs, the bill's 
        ``rulemaking considerations'' are troubling because of 
        the way in which they would, in some cases, alter the 
        substantive law. The APA would thus become, in several 
        respects, an ``Administrative Substance Act.''\94\
---------------------------------------------------------------------------
    \94\American Bar Ass'n--Section of Administrative Law and 
Regulatory Practice, Comments on H.R. 3010, the Regulatory 
Accountability Act, at 12-13 (Oct. 24, 2011) (on file with the H. 
Committee on the Judiciary, Democratic Staff) (noting that `[m]uch, 
perhaps most, of the safety and health legislation now on the books 
would seemingly be replaced').]

    In addition, the bill imposes other supermandates that 
compromise public health, workplace safety, and environmental 
protections. For example, new section 553(d) requires agencies 
to ``adopt the least costly rule considered during the rule 
making . . . that meets relevant statutory objectives'' and 
permits agencies to chose a more expensive option only if the 
additional benefits ``justify its additional costs.'' As the 
AFL-CIO observed, this provision ``would make protecting 
workers and the public secondary to limiting costs and impacts 
on business and corporations.''\95\
---------------------------------------------------------------------------
    \95\Letter to House Judiciary Committee Chair Lamar Smith and House 
Judiciary Committee Ranking Member John Conyers, Jr. from William 
Samuel, Director, the American Federation of Labor and Congress of 
Industrial Organizations, at 1 (Nov. 1, 2011) (on file with the H. 
Committee on the Judiciary, Democratic Staff).
---------------------------------------------------------------------------
    To rectify the pernicious effects of the bill's 
supermandates, Ranking Member John Conyers, Jr. (D-MI) offered 
an amendment striking these provisions and clarifying that the 
bill's cost-benefit analysis requirements apply only to the 
extent permitted by existing law. He explained:

        My colleagues, this measure is an endangerment to the 
        health and safety and wellbeing of all Americans, 
        anywhere they may be. And it will force agency 
        officials, were it to become law, to ignore 
        congressional directives in these statutes to not 
        consider cost in issuing regulations enforcing the 
        critical, lifesaving protections required by these 
        laws. Now, apparently the supporters of the bill 
        believe that money should trump safety, a proposition 
        that I adamantly oppose.\96\
---------------------------------------------------------------------------
    \96\Unofficial Tr. of Markup of H.R. 2122, the Regulatory 
Accountability Act of 2013, by the H. Comm. on the Judiciary, 113th 
Cong. at 124 (July 24, 2013), available at http://judiciary.house.gov/
hearings/Markups%202013/mark_07242013/
07.24.13%20Markup%20Transcript.pdf.

    Ranking Member Conyers' amendment would have ensured that 
prior congressional intent--as expressed in such laws as the 
Clean Air Act--would be preserved and thereby prevent agencies 
from weighing costs against saving lives. His amendment, 
however, failed by a vote of 11 to 13.
B. LH.R. 2122 Compels Agencies To Prioritize Cost and Analysis Over 
        Protecting Health and Safety By Imposing Onerous and 
        Unnecessary Cost-Benefit Analysis Requirements, Resulting in 
        Paralysis by Analysis
    Although H.R. 2122's proponents claim that the bill simply 
codifies the cost-benefit requirements of the various executive 
orders that Presidents have issued over more than 30 years 
concerning cost-benefit analysis of agency rules, the bill 
actually does much more than that. For example, H.R. 2122 would 
force agencies to adopt the least costly rule absent a 
compelling need to protect public health and safety. Under EO 
12866, in contrast, agencies must simply determine that the 
benefits of a proposed rule--including non-quantifiable 
benefits--justify the costs of the rule and that benefits are 
maximized. As U.S. PIRG observes:

        The new bill would in effect slow down the regulatory 
        process by adding unending cost-benefit analyses, 
        followed by court challenges. New analyses mandated by 
        the legislation would require estimates of future 
        direct and indirect costs that are impossible to 
        forecast with any reliability. These new hurdles and 
        the increased influence given to big business and 
        corporate special interests would cause significant 
        problems for Federal agencies such as the CDC and the 
        FDA and would undermine their ability to fulfill their 
        missions.\97\
---------------------------------------------------------------------------
    \97\Letter to House Judiciary Committee Chair Lamar Smith and House 
Judiciary Committee Ranking Member John Conyers, Jr. from Nasima 
Hossain, U.S. PIRG Public Health Advocate, at 2 (Nov. 2, 2011) (on file 
with the H. Committee on the Judiciary, Democratic Staff)

    In addition, the bill mandates all agencies to conduct a 
cost-benefit analysis for virtually every rule, and not just 
economically significant ones. This expanded scope would apply 
to more than 3,000 rules annually, including minor ones. For 
example, if the U.S. Coast Guard wanted to issue a rule 
establishing a safety zone for a fireworks display (something 
the Coast Guard does frequently), the bill would require the 
agency to do a cost-benefit analysis, and to show that the 
benefits ``justify'' the costs.
    The bill's cost-benefit analysis mandate itself will result 
in a tremendous expenditure of taxpayer dollars to pay for 
agencies' greatly expanded analysis responsibilities. Even one 
of the Majority's witnesses at the legislative hearing on a 
nearly identical version of the bill considered in the last 
Congress acknowledged as much. He said cost-benefit analysis 
``summons the apparatus of cost (and benefit) estimation--which 
is itself costly.''\98\
---------------------------------------------------------------------------
    \98\H.R. 3010 Hearing (prepared statement of Christopher DeMuth, 
American Enterprise Institute).
---------------------------------------------------------------------------
    More than 50 administrative law academics also highlighted 
their concern about the additional costs that the bill's 
burdensome requirements will impose on agencies, which is 
particularly problematic in this time of severe budgetary 
pressures.\99\
---------------------------------------------------------------------------
    \99\Letter from 42 administrative law academics to House Judiciary 
Committee Chair Lamar Smith and House Judiciary Committee Ranking 
Member John Conyers, Jr., at 1 (Oct. 24, 2011).
---------------------------------------------------------------------------
    In addition to expanding cost-benefit analysis requirements 
to include all rules and not just economically significant ones 
per the existing executive orders, H.R. 2122 also adds numerous 
analytical requirements to the APA's already substantial 
analytical requirements, threatening ``paralysis by analysis.'' 
Moreover, H.R. 2122 expands the cost-benefit analysis 
requirement to include ``major guidance'' documents, i.e., 
documents that are not ``rules'' under current law. The bill 
also would require agencies to identify the costs and benefits 
of alternatives to rules that are ultimately proposed.
    There is an additional concern with not only statutorily 
requiring cost-benefit analysis, but with specifying the 
factors to be considered in that analysis. While both 
Democratic and Republican administrations have agreed on the 
basic principle that agencies should engage in cost-benefit 
analysis of proposed and final rules, former OIRA Administrator 
Sally Katzen opposes codification of cost-benefit analysis 
requirements because it would impede an Administration's 
flexibility to respond to current conditions.\100\
---------------------------------------------------------------------------
    \100\Cost-Benefit Hearing (statement of Sally Katzen, former OIRA 
Administrator).
---------------------------------------------------------------------------
C. LH.R. 2122 Will Prevent Needed Public Health and Safety Rules from 
        Being Promulgated Because of its Formal Rulemaking Requirement 
        for High-Impact Rules
    H.R. 2122's expanded use of formal rulemaking procedures 
will effectively halt agency rulemaking for so-called ``high-
impact'' rules (defined in the bill as those with a $1 billion 
cost to the economy). The bill lacks any exception for proposed 
regulations protecting public health and the environment.
    Proponents of formal rulemaking assert that it allows an 
opportunity for parties to cross-examine the agency, which is 
the best way to vet the agency's factual assertions and assure 
the public that only the best science underlies agency 
action.\101\ Such an assertion, however, is itself unsupported 
by evidence. H.R. 2122's proponents offer no study or other 
data indicating that cross-examination and other facets of the 
formal rulemaking process are the most effective tools for 
making scientific and policy judgements. Indeed, Professor 
Matthew Stephenson of Harvard Law School challenged this 
assertion in testimony before the Subcommittee on Regulatory 
Reform, Commercial and Antitrust Law.\102\ Additionally, 
Professor Stephenson noted that informal notice-and-comment 
rulemaking is already heavily proceduralized (as outlined 
above), making formal rulemaking procedures unnecessary. And, 
such an expansion of formal rulemaking would do nothing to 
improve the quality of agency decisions. Mandating formal 
rulemaking, as Ronald M. Levin, the William R. Orthwein 
Distinguished Professor of Law at Washington University in St. 
Louis, observed, ``is a serious mistake.''\103\
---------------------------------------------------------------------------
    \101\APA at 65 Hearing (statement of Jeffrey A. Rosen); Formal 
Rulemaking Hearing (statements of Noel J. Francisco and Edward W. 
Warren).
    \102\Formal Rulemaking Hearing (statement of Matthew C. 
Stephenson).
    \103\The Regulatory Accountability Act of 2013: Hearing on H.R. 
2122 Before the Subcomm. on Regulatory Reform, Commercial and Antitrust 
Law of the H. Comm. on the Judiciary, 113th Cong. (2013) (prepared 
statement of Ronald M. Levin, the William R. Orthwein Distinguished 
Professor of Law at Washington University in St. Louis).
---------------------------------------------------------------------------
    While adopting formal rulemaking procedures would not 
improve the quality of agency rules, the costs and delays 
associated with formal rulemaking would effectively bring 
agency rulemaking to a halt.\104\ Formal rulemakings could take 
up to a decade and produce thousands of pages of documents, 
without any positive effect on the quality of the final 
decisions.\105\ Additionally, by impeding agency rulemaking 
through more formal procedural requirements, Congress may: (1) 
impede desirable rule changes; (2) lead agencies to use other, 
less desirable forms of agency regulation such as ad hoc 
adjudication; (3) force agencies to write cruder, blunter 
rules, leaving the interpretation to courts; and (4) impede its 
own oversight of rulemaking by making it harder for agencies to 
change course in response to the views of the political 
branches, giving agencies a way to ``run out the clock'' on a 
President or a congressional majority, and shifting power 
within agencies away from political appointees to career 
staff.\106\ As Professor Sidney Shapiro observed, ``Almost no 
serious administrative law expert regards formal rulemaking as 
reasonable, and it has been all but relegated to the dustbin of 
history.''\107\ More than 40 other administrative law academics 
concur.\108\
---------------------------------------------------------------------------
    \104\Formal Rulemaking Hearing (statement of Matthew C. 
Stephenson).
    \105\Stephen G. Breyer et al., Administrative Law and Regulatory 
Policy, at 582 (4th ed. 1999) (noting Food and Drug Administration 
formal rulemaking on peanut butter that took 10 years to conclude).
    \106\Formal Rulemaking Hearing (statement of Matthew C. 
Stephenson).
    \107\Hearing on H.R. 3010 (prepared statement of Prof. Sidney 
Shapiro, Wake Forest School of Law).]
    \108\Letter from 42 administrative law academics to House Judiciary 
Committee Chair Lamar Smith and House Judiciary Committee Ranking 
Member John Conyers, Jr., at 2 (Oct. 24, 2011) (noting that formal 
rulemaking `runs directly contrary to the consensus of the 
administrative law community that the APA formal rulemaking procedure 
is unworkable and obsolete') (on file with H. Committee on the 
Judiciary, Democratic Staff).]
---------------------------------------------------------------------------
    By delaying the rulemaking process, this legislation 
presents serious public health and workplace safety concerns. 
As the AFL-CIO explained:

        These formal rulemaking procedures will make it more 
        difficult for workers and members of the public to 
        participate, and give greater access and influence to 
        business groups that have the resources to hire lawyers 
        and lobbyists to participte in this complex process. 
        For agencies that already provide for public hearings, 
        such as OSHA and MSHA, the bill would substitute formal 
        rulemaking for the development of all new rules, 
        overriding the effective public participation processes 
        conducted by these agencies.\109\
---------------------------------------------------------------------------
    \109\Letter to House Judiciary Committee Chair Lamar Smith and 
House Judiciary Committee Ranking Member John Conyers, Jr. from William 
Samuel, Director, the American Federation of Labor and Congress of 
Industrial Organizations, at 2 (Nov. 1, 2011) (on file with H. 
Committee on the Judiciary, Democratic Staff).

    As David Goldston, the Director of Government Affairs at 
the Natural Resources Defense Council, aptly noted, the short 
title of the bill should actually be the ```Regulatory Atrophy 
Act' because its primary effect would be to prevent the 
government from exercising its responsibility and duty to 
protect the public.''\110\ He continued, ``The title is also 
misleading because it implies that the current system lacks 
checks and balances when, in reality, Congress and the courts 
already have ample authority to hold agencies to account, and 
the entire system gives industry and others numerous 
opportunities, formal and informal, to influence the 
development of regulations.''\111\
---------------------------------------------------------------------------
    \110\The Regulatory Accountability Act of 2013: Hearing on H.R. 
2122 Before the Subcomm. on Regulatory Reform, Commercial and Antitrust 
Law of the H. Comm. on the Judiciary, 113th Cong. (2013) (prepared 
statement of David Goldston, the Director of Government Affairs at the 
Natural Resources Defense Council).
    \111\Id.
---------------------------------------------------------------------------

    III. H.R. 2122 FURTHER TILTS THE REGULATORY PROCESS IN FAVOR OF 
  BUSINESS INTERESTS AND THOSE WHO WANT TO INTERFERE WITH REGULATIONS

    H.R. 2122 will enable regulated entities to exert even more 
influence over Federal rulemaking than they already do. For 
instance, the bill's formal rulemaking provisions and expanded 
and less deferential standard of judicial review give 
additional opportunities for anti-regulatory interests to 
engage in dilatory tactics that can substantially slow down an 
already slow rulemkaing process.
A. LH.R. 2122's Expanded Use of Formal Rulemaking Will Give an Unfair 
        Advantage to Well-Funded Special Interests to Influence 
        Rulemaking
    As noted in the prior section, formal rulemaking is a 
grueling, time-consuming and litigation-intensive process. By 
mandating formal rulemaking, the bill will force agencies to 
expend extensive agency resources to litigate the validity of 
their proposed rulemakings against deep-pocketed regulated 
industries and well-funded anti-regulatory interests.
    In effect, the bill would exacerbate the problems that 
already exist under current law by which ``corporate and 
business lobbying of agencies far exceeds that by groups 
representing the public.''\112\ We accordingly share the 
concerns of the Union of Concerned Scientists, which notes, for 
example, that these provisions jeopardize ``the respect and 
deference to the role of science in rulemaking'' that exists 
under current law.\113\ Rather than facilitating ``thoughtful 
consideration based on facts,'' the bill would open ``the 
floodgates to challenges that are not fact-based and that seek 
only to delay the rulemaking process, and to make it easier for 
special interests to contest rules in the courts.''\114\
---------------------------------------------------------------------------
    \112\H.R. 3010 Hearing (prepared statement of Prof. Sidney Shapiro, 
Wake Forest School of Law).
    \113\Letter to to House Judiciary Committee Chair Lamar Smith and 
House Judiciary Committee Ranking Member John Conyers, Jr. from 
Francesca T. Grifo, Senior Scientist and Director--Scientific Integrity 
Program, Union of Concerned Scientists (Nov. 3, 2011) (on file with the 
H. Committee on the Judiciary, Democratic Staff).
    \114\Id.
---------------------------------------------------------------------------
    Subcommittee Ranking Member Steve Cohen (D-TN) sought to 
minimize the impact of H.R. 2122 on rules that prohibit or 
strengthen existing prohibitions on financial businesses owning 
non-financial businesses. He was reacting to then-recent press 
reports about financial service entities that own non-financial 
business which, in turn, engage in speculative activities that 
may raise prices for commodities, such as aluminum and 
oil.\115\ As a result of such activities, consumers and other 
businesses pay more for products, such as the price of soda 
sold in aluminum cans. His amendment, however, failed by a 
party-line vote of 9 to 13.
---------------------------------------------------------------------------
    \115\See, e.g., David Kocieniewski, A Shuffle of Aluminum, But to 
Banks, Pure Gold, N.Y. Times, July 21, 2013, at A1.
---------------------------------------------------------------------------
B. LH.R. 2122's Judicial Review Standard Risks Undermining Agency 
        Rulemaking and Reducing Political Accountability for Policy 
        Decisions Without Enhancing Due Process
    H.R. 2122 would subject to judicial review agency 
compliance with numerous APA requirements as well as the bill's 
cost-benefit analysis requirements. By greatly expanding 
opportunities for judicial review, the legislation would 
present many more instances when a court could overrule agency 
action.
    Even assuming that courts had the resources to review these 
types of agency decisions, expanded and less deferential 
judicial review would be troublesome. It would make rulemaking 
more costly and time-consuming for agencies by forcing them to 
adopt more detailed factual records and explanations, 
effectively imposing more procedural requirements on agency 
rulemaking. Also, agencies may be dissuaded from pursuing 
regulations in the first place. Additionally, criticism of the 
existing ``hard look'' arbitrary or capricious review standard 
for informal rulemaking may apply to a much greater degree to 
H.R. 2122's more formal move to expand the scope of judicial 
review.
    In particular, H.R. 2122 would require that a court give 
less deference to agency decisions under many circumstances, 
and such a less deferential judicial review standard runs the 
risk that judges effectively will be making policy by allowing 
personal policy preferences to intrude in their review of an 
agency rule, whether consciously or not. Public Citizen, a 
nonprofit consumer advocacy organization representing consumer 
interests, observes:

        [B]y needless expanding the scope of judicial review, 
        the legislation marks an unprecedented and dangerous 
        move away from traditional judicial deference to a 
        system where courts are encouraged to overturn highly 
        technical, resource-intensive agency decisions and 
        substitute their own policy preferences instead. This 
        new and inappropriate role for the courts is a recipe 
        for more activist judges, increased litigation, endless 
        delays, and more rather than less uncertainty for 
        regulated parties and the public.\116\
---------------------------------------------------------------------------
    \116\Letter to to House Judiciary Committee Chair Lamar Smith and 
House Judiciary Committee Ranking Member John Conyers, Jr. from David 
Arkush, Director, & Amit Narang, Regulatory Policy Advocate, Public 
Citizen's Congress Watch, at 2 (on file with the H. Committee on the 
Judiciary, Democratic Staff).]

    Much of H.R. 2122's judicial review standard appears to be 
old wine in new bottles. A similar legislative initiative was 
promoted during the 1980's by anti-regulatory interests in 
Congress. The view then, as now, among proponents of enhanced 
judicial review was that the existing standard of judicial 
review favored agency decisions too much whenever injured 
members of the public sought to reverse those decisions on 
appeal.\117\ The enhanced judicial review standard proposed in 
that legislation would have required courts to independently 
decide all relevant questions of law, review agency 
determinations of jurisdiction and authority to determine 
whether they were based on statutory language or other evidence 
of legislative intent, not accord any presumption in favor of 
agency determinations of questions of law other than its 
jurisdiction and authority, and apply what was in effect a 
``substantial evidence'' test for informal rulemaking.\118\
---------------------------------------------------------------------------
    \117\See Morton Rosenberg, The Future of Public Participation in 
Informal Agency Rulemaking Under Pending Regulatory Reform Proposals, 
Congressional Research Service Report for Congress, at 44 (Dec. 7, 
1982).
    \118\Id. at 45.
---------------------------------------------------------------------------
    CRS concluded that the effect of this enhanced judicial 
review proposal would be ``to abolish the judicially developed 
doctrine of deference, which was developed by the courts as an 
aid to reviewing agency decisions and which recognizes agency 
expertise and involvement in the legislative process.''\119\ 
CRS also noted that enhanced judicial review threatened to skew 
the agency factfinding process in favor of those with the 
resources to shape the agency record by making it more lengthy 
and costly.\120\ Also, parties opposed to a rule could further 
add costs and delay to the rulemaking process by appealing 
agency determinations.\121\ Finally, enhanced judicial review 
increases the risk of judicial activism, whereby judges would 
make policy from the bench by substituting their policy views 
for those of the agency.\122\ Unfortunately, the same 
criticisms that applied to expanded judicial review considered 
and rejected more than a generation ago apply equally to H.R. 
2122's judicial review provision.
---------------------------------------------------------------------------
    \119\Id.
    \120\Id. at 46-47.
    \121\Id. at 47-48.
    \122\Id. at 48-51.
---------------------------------------------------------------------------
C. LH.R. 2122's Expansion of Opportunities to Challenge Agency 
        Compliance With the Information Quality Act Gives More 
        Opportunities for Business Interests To Undermine Rulemaking
    New APA section 553(d)(4), as proposed by H.R. 2122, would 
permit any ``member of the public''--that is, anyone, including 
an entity that has no legitimate interest in the rule at 
issue--to petition for a trial-type hearing for the purpose of 
determining whether a proposed rule complies with of the 
Information Quality Act (``IQA'').\123\ In support of such 
petition, section 553(d)(4) only requires the proponent to 
present a ``prima facie case that evidence or other information 
upon which the agency bases the proposed rule fails to comply'' 
with the IQA. Moreover, the bill makes agency compliance with 
the IQA subject to judicial review, including the decision 
whether to hold an agency hearing.
---------------------------------------------------------------------------
    \123\Pub. L. No. 106-554, Sec. 515 (2000).
---------------------------------------------------------------------------
    The IQA, also known as the Data Quality Act, was a 
Republican initiative buried in a voluminous appropriations 
bill. No hearings or legislative process preceded its 
enactment. The Act requires OMB to issue data quality 
guidelines to Federal agencies. Under these guidelines, all 
agencies subject to the Paperwork Reduction Act--a law that 
requires OMB to develop and oversee the implementation of 
policies, principles, standards, and guidelines applicable to 
the dissemination of public information by Federal agencies--
are required to establish and follow data quality guidelines 
that: (1) ensure and maximize the quality, objectivity, utility 
and integrity of information, including statistical information 
prior to dissemination; and (2) allow affected individuals and/
or organizations to seek and obtain correction of information 
maintained and disseminated by the agency that does not comply 
with OMB or agency guidelines. In addition, an agency must 
report to OMB regarding the number and nature of complaints 
received by the agency regarding agency compliance with OMB 
guidelines. More controversially, the IQA also requires Federal 
agencies to have a process by which outside parties can ``seek 
and obtain correction of information maintained and 
disseminated by the agency that does not comply with'' the 
IQA's requirements for information quality. Proponents of the 
IQA include the U.S. Chamber of Commerce and the Center for 
Regulatory Effectiveness, an industry-backed anti-regulatory 
``watch dog''group. Critics of the law, which include the 
Center for Progressive Reform, the Center for Effective 
Government (f/k/a OMB Watch), and Public Citizen, observe that 
the IQA is a mechanism for ``regulating the regulators.''\124\
---------------------------------------------------------------------------
    \124\Project on Scientific Knowledge and Public Policy, Information 
Quality Act, available at DefendingScience.org
---------------------------------------------------------------------------
    The expanded opportunities to challenge agency compliance 
with the IQA is very problematic for several reasons. In 
addition to offering yet another way to slow down rulemaking 
both by challenging agencies' data and by challenging their 
compliance with the IQA, the IQA itself provides opportunities 
for regulated entities to challenge agencies' scientific 
findings to the extent that those findings are contrary to the 
economic interests of industry.
    In sum, H.R. 2122 would permit anyone to request an IQA 
hearing, even if that person suffers no injury, i.e., lacks any 
legal standing. In addition, the bill fails to clarify what 
constitutes a ``prima facie'' case of agency non-compliance 
with the IQA, which will force agencies to err on the side of 
caution and hold IQA hearings, especially in light of the 
bill's provision making a decision not to hold a hearing 
subject to judicial review. Finally, judicial review would add 
an entirely new level of litigation to the rulemaking process.
D. H.R. 2122 Encourages a Regulatory Race to the Bottom
    Section 2 of H.R. 2122 defines a major rule, in pertinent 
part, as a rule that has ``significant adverse effects on . . . 
the ability of United States-based enterprises to compete with 
foreign-based enterprises in domestic and export markets.'' The 
practical effect of this definition is that it will require 
agencies and the courts to consider the business and regulatory 
environments of other nations.
    For example, a proposed rule that imposes heightened clean 
air requirements on American steel manufacturers would 
necessarily require consideration of whether this regulation--
which could potentially result in higher compliance costs--
could make American steel products less competitive in a 
country, such as China, that has a much less stringent 
regulatory regime. While the economic analysis under this 
requirement may be simple, its dangerous ramifications for 
public health cannot be underestimated. Chinese officials have 
only recently begun to acknowledge the health hazard risks 
presented by extensive air pollution that affects its cities, 
including its capital.\125\
---------------------------------------------------------------------------
    \125\See, e.g., Andrew Jacobs, With Anger Over Dirty Air Rising, 
Beijing Tries Tours on Monitoring Center, N.Y. Times, Nov. 9, 2011 
(`Environmental officials who have resisted releasing sensitive data 
about air pollution here in the capital announced that they would take 
action to address increasing complaints that the government's 
monitoring system fails to report on the most dangerous airborne 
particles emitted by the growing ranks of cars and trucks.'), available 
at http://www.nytimes.com/2011/11/10/world/asia/with-anger-over-dirty-
air-rising-beijing-tries-tours-on-monitoring-center.html?ref=world.
---------------------------------------------------------------------------
    The end result of H.R. 2122 is that the public health of 
Americans and the safety of the environment will be compromised 
so that American manufacturers can better compete with their 
foreign counterparts. This is a shortsighted regulatory ``race 
to the bottom'' that prioritizes profits over saving lives.

 IV. H.R. 2122 USURPS CONGRESSIONAL INTENT BY SUBSTANTIALLY EXPANDING 
THE EXECUTIVE BRANCH'S CONTROL OVER RULEMAKING AND UNDERCUTTING CURRENT 
                       TRANSPARENCY REQUIREMENTS

    H.R. 2122 substantially expands OIRA's control over all 
agency rulemaking and undercuts current transparency 
requirements under EO 12866. Although we do not impugn in any 
way the current Administration's integrity or current OIRA 
leadership, this extraordinary and unaccountable power over 
congressionally-mandated rulemaking in the hands of the wrong 
Administration will allow the Executive Branch to interfere and 
possibly derail such congressional directives.
A. H.R. 2122 Empowers OIRA To Exert a Choke Hold Over Rulemaking
    As noted above, OIRA reviews significant proposed and final 
rules from Federal agencies before they are published in the 
Federal Register. As a result of OIRA's review, draft rules may 
be revised before publication, withdrawn before a review is 
completed, or returned to the agencies ``because, in OIRA's 
analysis, certain aspects of the rule need to be 
reconsidered.''\126\ Currently, EO 12866 and EO 13563 govern 
the use of cost-benefit analysis by executive agencies in 
issuing rules, as well as OIRA review of such rules.
---------------------------------------------------------------------------
    \126\Interim Report on the Administrative Law, Process and 
Procedure Project for the 21st Century, Subcomm. on Commercial and 
Administrative Law of the H. Comm. on the Judiciary, 109th Cong. 39 
(2006) available at http://judiciary.house.gov/Media/PDFS/Printers/
109th/31505.pdf [hereinafter `Interim Report'].
---------------------------------------------------------------------------
    H.R. 2122's excessive concentration of OIRA control over 
rulemaking is troubling. During the Bush administration, 
``OIRA's increasingly aggressive role in controlling agency 
action'' may have been ``the biggest administrative law story 
of the new century.''\127\ By way of background, President 
George W. Bush issued EO 13422, which substantively amended EO 
12866, on January 18, 2007.\128\ The directive gave ``the White 
House much greater control over the rules and policy statements 
that the government develops to protect public health, safety, 
the environment, civil rights and privacy.''\129\ Critics of 
the new executive order questioned whether it was an attempt to 
establish standards for rulemaking that were inconsistent with 
statutory requirements.\130\ For example, a New York Times 
commentator noted that EO 13422 ``will make it even easier for 
political appointees to overrule the professionals, tailoring 
government regulations to suit the interests of companies that 
support the G.O.P.''\131\
---------------------------------------------------------------------------
    \127\Lisa Heinzerling, Statutory Interpretation in the Era of OIRA, 
33 Ford. Urb. L. Rev. 1097, 1117 (2006).
    \128\Exec. Ord. No. 13,422, 72 Fed. Reg. 2,763 (Jan. 23, 2007).
    \129\Robert Pear, Bush Directive Increases Sway on Regulation, N.Y. 
Times, Jan. 30, 2007, at A1.
    \130\See, e.g., Press Release, Public Citizen, New Executive Order 
Is Latest White House Power Grab (Jan. 18, 2007), at http://
www.citizen.org/pressroom/release.cfm?ID=2361; Garrett Epps, The Power 
of King George, Salon.com (Feb. 1, 2007) (describing EO 13422 as a 
``power 
grab'' by the Bush administration), at http://www.salon.com/opinion/
feature/2007/02/01/
presidential_power/.
    \131\Paul Krugman, Op-Ed., The Green-Zoning of America, N.Y. Times, 
Feb. 5, 2007, at A25.
---------------------------------------------------------------------------
    EO 13422 revised EO 12866 in a number of ways. In 
particular, EO 13422 imposed greater specificity and market 
analysis requirements on agencies; heightened scrutiny of 
significant guidance documents that agencies issued from time 
to time to provide non-binding information regarding their 
regulations; increased emphasis on cost-benefit analysis by 
agencies, including requiring agencies to include reasonable 
estimates of the aggregate costs and benefits of all of the 
agencies regulations for each calendar year; and allowed for a 
greater role for political appointees in agency rulemaking.
    These heightened requirements were in line with the Bush 
administration's view that OIRA should be a ``gatekeeper for 
new rulemakings.''\132\ The OIRA Administrator during the Bush 
administration explained that one of his office's functions is 
``to protect people from poorly designed rules,'' and that OIRA 
review is a way to ``combat the tunnel vision that plagues the 
thinking of single-mission regulators.''\133\
---------------------------------------------------------------------------
    \132\Curtis W. Copeland, ``Changes to the OMB Regulatory Review 
Process by Executive Order 13422,'' CRS Report for Congress, RL 33862, 
at 56 (2007) (quoting Office of Management and Budget, Stimulating 
Smarter Regulation: 2002 Report to Congress on the Costs and Benefits 
of Federal Regulations and Unfunded Mandates on State, Local, and 
Tribal Entities, Dec. 2002).
    \133\John Graham, Administrator, OIRA, Remarks to the Board of 
Trustees, The Keystone Center, at Washington, DC (June 18, 2002), 
available at http://www.whitehouse.gov/omb/inforeg/
keystone_speech061802.html.
---------------------------------------------------------------------------
    This ``return to the gatekeeper perspective of OIRA's role 
[had] implications for an array of OIRA's functions.''\134\ 
Under the Bush administration, ``OIRA's increasingly aggressive 
role in controlling agency action'' may have been ``the biggest 
administrative law story of the new century.''\135\ 
Manifestations of OIRA's heightened role in the rulemaking 
process, as identified by the Government Accountability Office 
(GAO)\136\ and CRS,\137\ included the following:
---------------------------------------------------------------------------
    \134\Interim Report at 56.
    \135\Lisa Heinzerling, ``Statutory Interpretation in the Era of 
OIRA,'' 33 Ford. Urb. L. Rev. 1097, 1117 (2006).
    \136\U.S. General Accounting Office, Rulemaking: OMB's Role in 
Reviews of Agencies' Draft Rules and the Transparency of Those Reviews, 
GAO-03-929, Sept. 22, 2003.
    \137\The Rulemaking Process and the Unitary Executive Theory: 
Hearing Before the Subcomm. on Commercial and Administrative Law of the 
H. Comm. on the Judiciary, 110th Cong. (2008) (prepared statement of 
Curtis W. Copeland, Specialist in American National Government, 
Congressional Research Service) (footnotes omitted). Additional 
instances of this heightened role include the following:

     Gthe increased use of ``informal'' OIRA reviews in which 
agencies share preliminary drafts of rules and analyses before final 
decisionmaking at the agencies--a period when OIRA says it can have its 
greatest impact on the rules, but when OIRA says that some of the 
---------------------------------------------------------------------------
transparency requirements in Executive Order 12866 do not apply;

     Gextensions of OIRA review for certain rules for months or 
years beyond the 90-day time limit delineated in the executive order;

     Gusing a general statutory requirement that OIRA provide 
Congress with ``recommendations for reform'' to request the public to 
identify rules that it believes should be eliminated or reformed;

     Ga leadership role for OIRA in the development of 
electronic rulemaking, which has led to the development of a 
centralized rulemaking docket, but which some observers believe can 
lead to increased presidential influence over the agencies;

     Gthe development of an OMB bulletin on peer review that, 
in its original form, some believed could have led to a centralized 
system within OMB that could be vulnerable to political manipulation or 
control;

     Gthe development of a proposed bulletin standardizing 
agency risk assessment procedures that the National Academy of Sciences 
concluded was ``fundamentally flawed,'' and that OIRA later withdrew; 
and

     Gthe development of a ``good guidance practices'' bulletin 
that standardizes certain agency guidance practices.
Id.

         Lthe development of a detailed economic 
        analysis circular and what agency officials described 
        as a perceptible ``stepping up the bar'' in the amount 
        of support required from agencies for their rules, with 
        OIRA reportedly more often looking for regulatory 
        benefits to be quantified and a cost-benefit analysis 
        for every regulatory option that the agency considered, 
        not just the option selected;

         Lthe issuance of 21 letters returning rules to 
        the agencies between July 2001 and March 2002--three 
        times the number of return letters issued during the 
        last 6 years of the Clinton administration;\138\
---------------------------------------------------------------------------
    \138\However, OIRA returned only two rules in 2003, one rule in 
2004, one rule in 2005, no rules in 2006, and one rule in 2007. OIRA 
officials indicated that the pace of return letters declined after 2002 
because agencies had gotten the message about the seriousness of OIRA 
reviews.

         Lthe issuance of 13 ``prompt letters'' between 
        September 2001 and December 2003 suggesting that 
        agencies develop regulations in a particular area or 
        encouraging ongoing efforts. However, OIRA issued two 
        prompt letters in 2004, none in 2005, one in 2006, and 
---------------------------------------------------------------------------
        none in 2007[.]

According to CRS, these and other initiatives ``represent[ed] 
the strongest assertion of presidential power in the area of 
rulemaking in at least 20 years.''\139\ Not surprisingly, 
President Obama, as one of his first official acts after 
assuming office, revoked EO 13422 on January 30, 2009.\140\
---------------------------------------------------------------------------
    \139\The Rulemaking Process and the Unitary Executive Theory: 
Hearing Before the Subcomm. on Commercial and Administrative Law of the 
H. Comm. on the Judiciary, 110th Cong. (2008) (prepared statement of 
Curtis W. Copeland, Specialist in American National Government, 
Congressional Research Service).
    \140\Exec. Ord. No. 13,497, 74 Fed. Reg. 6,113 (Jan. 30, 2009).
---------------------------------------------------------------------------
    H.R. 2122, in part, reflects the Bush administration view 
that OIRA should act as a rulemaking ``gatekeeper'' by 
expanding cost-benefit analysis requirements and OIRA review 
authority in some of the ways outlined in EO 13422. In short, 
greater presidential control over rulemaking, in the wrong 
Administration's hands, could undermine important health, 
safety, consumer protection, financial and other regulations. 
The Democratic staff of the House Judiciary Committee prepared 
a detailed analysis of the Bush administration's control of the 
rulemaking process and concluded that such control was ``to the 
detriment of the public interest and has served to circumvent 
legislative intent.''\141\
---------------------------------------------------------------------------
    \141\H. Comm. on the Judiciary Majority Staff, Reining in the 
Imperial Presidency--Lessons and Recommendations Relating to the 
Presidency of George W. Bush, 111th Cong., at 186 (Mar. 2009).
---------------------------------------------------------------------------
    Notwithstanding the serious concerns presented regarding 
greater presidential control over rulemaking, section 3 of H.R. 
2122 would require all agencies--including independent 
regulatory agencies--to consult with OIRA before they could 
publish a proposed or final rule. This requirement represents 
an unprecedented delegation of power to OIRA and the President 
as it will effectively allow OIRA to control all rulemaking 
activity. Moreover, this provision would undermine the 
independence of independent regulatory agencies that Congress 
created to be independent of the President.\142\
---------------------------------------------------------------------------
    \142\Certain agencies are considered ``independent'' because the 
President has limited authority to remove their leaders (usually, heads 
of such agencies can only be removed for cause, rather than at the 
President's pleasure). Stephen G. Breyer, et al., Administrative Law 
and Regulatory Policy, at 100 (4th ed. 1999).
---------------------------------------------------------------------------
    This requirement is particularly curious in light of the 
fact that many of the proponents of H.R. 2122 are also, 
somewhat hypocritically, proponents of H.R. 367, the 
``Regulations from the Executive in Need of Scrutiny Act of 
2013'' or the ``REINS Act,''\143\ which requires, among other 
things, that Congress approve all major rules before they can 
go into effect. Therefore, proponents of H.R. 367 are seeking 
to have Congress regain control from the Executive Branch over 
the rulemaking process, while in H.R. 2122, they seek to give 
the Executive Branch even more power over the rulemaking 
process.
---------------------------------------------------------------------------
    \143\H.R. 367, 113th Cong. (2013).
---------------------------------------------------------------------------
    Rather than learning from prior mistakes, the proponents of 
H.R. 2122, in effect, seek to revitalize and codify the Bush 
administration's view that OIRA should act as a rulemaking 
``gatekeeper'' by mandating OIRA review authority in some of 
the same ways specified in the Bush administration's overruled 
EO 13422. As a result, H.R. 2122 ensures greater presidential 
control over rulemaking, which, in the wrong Administration's 
hands, could undermine important health, safety, consumer 
protection, financial and other regulations.
B. H.R. 2122 Undercuts Current Transparency Requirements
    Another problematic provision of H.R. 2122 gives the 
President and OIRA the discretion as to what information must 
be made available to the public in connection with certain 
rulemaking processes. As a result, the bill would reduce--not 
strengthen--current requirements for OIRA transparency. For 
example, EO 12866 currently requires OIRA to ``make available 
to the public all documents exchanged between OIRA and the 
agency during the review by OIRA.'' The bill, however, would 
allow the President and the OIRA Administrator to decide--at 
their sole discretion--what information that OIRA provides to 
the agency will be disclosed to the public. Also, the bill 
would allow the President or the OIRA Administrator to choose 
what documents and information communicated by OIRA should be 
in the public rulemaking record.
C. LIn Extending Cost-Benefit Analysis Requirements to Independent 
        Regulatory Agencies, H.R. 2122 Usurps the Congressionally 
        Mandated Independence of Such Agencies
    One area where there may a limited degree of consensus is 
with respect to the question of whether modest cost-benefit 
analysis requirements should apply to independent regulatory 
agencies. Such limited consensus, however, does not extend to 
OIRA review of independent regulatory agencies. For instance, 
EO 12866 (and EO 13563, by reference) specifically excludes 
agencies that are ``considered to be independent regulatory 
agencies'' from its requirements, including the requirement to 
consider the costs and benefits of regulation.\144\ Certain 
agencies are considered ``independent'' because the President 
has limited authority to remove their leaders (usually, heads 
of such agencies can only be removed for cause, rather than at 
the President's pleasure).\145\ Such agencies are usually 
styled ``commissions'' or ``boards'' (e.g., the Securities and 
Exchange Commission, the Federal Trade Commission, the National 
Labor Relations Board.) Some of these independent agencies 
voluntarily choose to comply with the requirements of EO 12866 
and EO 13563, but none are compelled to do so. While not all 
observers support the extensive reliance on cost-benefit 
analysis in agency rulemaking, to the extent that agencies 
already engage in such analysis, it would seem logical to 
extend those same requirements to other agencies.
---------------------------------------------------------------------------
    \144\Exec. Ord. No. 12,866, 58 Fed. Reg. 51,735 (Oct. 4, 1993).
    \145\Stephen G. Breyer et al., Administrative Law and Regulatory 
Policy, at 100 (4th ed. 1999).
---------------------------------------------------------------------------
    H.R. 2122, however, does not protect the independence of 
such agencies. Rather, it would require them to comply with 
mandatory guidelines issued by OMB and OIRA, thereby bringing 
them under the President's control. Such a move would 
contravene Congress's intent in making them ``independent'' in 
the first place.

                H.R. 2122 SECTION-BY-SECTION EXPLANATION

    A description of the bill's principal substantive 
provisions follows. Section 2 of H.R. 2122 amends section 551 
of title 5 of the U.S. Code, which defines various terms 
applicable to the Administrative Procedure Act (APA) to add new 
definitions. For the definition of ``major rule,'' section 2 
sets forth four alternative definitions, each of which is 
potentially vague and subject to interpretation because each 
definition applies where a rule is ``likely to impose'' some 
effect. A major rule, under new section 551(15), is any rule 
determined by OIRA that is ``likely to impose'':

        (1) an annual cost on the economy of $100 million or 
        more, adjusted annually for inflation;

        (2) a major increase in costs or prices for consumers, 
        individual industries, Federal, state, local or tribal 
        government agencies, or geographic regions (it is 
        unclear what a ``major increase'' means in this 
        context);

        (3) significant adverse effects on competition, 
        employment, investment, productivity, innovation, or on 
        the ability of U.S.-based enterprises to compete with 
        foreign-based enterprises in domestic and expert 
        markets (this has the potential to undo a broad range 
        of safety regulations); or

        (4) significant costs on multiple sectors of the 
        economy (again, ``significant costs'' is a vague term).

    Section 2 also defines a ``high-impact rule'' as any rule 
that OIRA determines is likely to impose an annual cost on the 
economy of $1 billion or more, adjusted for inflation
    In addition, section 2 defines ``guidance'' as an agency 
statement of general applicability and future effect, other 
than a regulatory action, that sets forth a policy on a 
statutory, regulatory or technical issue or an interpretation 
of a statutory or regulatory issue. Section 2 also defines 
``major guidance'' as guidance that OIRA finds is ``likely to 
lead to'' any of the four impacts set forth for the definition 
of a major rule. Further, section 2 includes definitions for 
the Information Quality Act (IQA) (new section 551(19)) and 
OIRA (new section 551(20)).
    Subsection 3 amends section 553, which sets forth the 
requirements for informal notice-and-comment rulemaking under 
the APA, to add an extensive series of new requirements. First, 
new subsection (b) requires an agency to make all preliminary 
and final determinations based on evidence. It is not clear 
what type of evidentiary standard would apply. Second, the 
agency must, in addition to other applicable considerations, 
consider the following:

        (1) The legal authority under which the rule may be 
        proposed, such as whether it is required by statute 
        and, if so, whether it is due by a specific date and 
        whether the agency has discretion to commence a 
        rulemaking (new section 553(b)(1)).

        (2) Other statutory considerations applicable to 
        whether the agency can or should propose a rule or 
        undertake other agency action (new section 553(b)(2)). 
        It is unclear what ``other agency action'' would 
        encompass.

        (3) The specific nature and significance of the problem 
        the agency may address with a rule, including the 
        degree and nature of risks the problem poses and the 
        priority of addressing those risks compared to other 
        matters or activities within the agency's jurisdiction, 
        and whether the problem warrants new agency action and 
        any countervailing risks posed by such new action (new 
        section 553(b)(3)). Again, these criteria are very 
        vague.

        (4) Whether existing rules have created or contributed 
        to the problem the agency may address with a rule and 
        whether such rules could be amended or rescinded to 
        address the problem in whole or in part (new section 
        553(b)(4)).

        (5) Any reasonable alternatives in lieu of a new rule 
        or other response identified by the agency or 
        ``interested persons,'' including not only responses 
        that mandate particular conduct or manners of 
        compliance, but also the alternative of no Federal 
        response; amending or rescinding existing rules; 
        potential regional, state, local or tribal regulatory 
        action or other responses that could be taken in lieu 
        of agency action; and potential responses that specify 
        performance objectives rather than conduct or manners 
        of compliance, establish economic incentives to 
        encourage desired behavior, provide information upon 
        which choices can be made by the public, or incorporate 
        other innovative alternatives rather than agency 
        actions that specify conduct or manners of compliance 
        (new section 553(b)(5)). Essentially, this directs the 
        agency to consider alternatives to promulgating a new 
        rule. Note that ``interested persons'' can include 
        literally anyone.

    Third, new section 553(b)(6) acts as a ``supermandate'' by 
overriding all existing law to require the agency to consider: 
(1) the ``potential'' costs and benefits associated with 
``potential'' alternatives and other responses set forth above, 
including direct, indirect, and cumulative costs and benefits 
and estimated impacts on jobs (including an estimate of the net 
gain or loss in domestic jobs), economic growth, innovation, 
and economic competitiveness (new section 553(b)(6)(A)); (2) 
means to increase the cost-effectiveness of any Federal 
response (new section 553(b)(6)(B)); and (3) incentives for 
innovation, consistency, predictability, lower costs of 
enforcement and compliance--for governmental and regulated 
entities, and the public--and flexibility (new section 
553(b)(6)(C)).
    Fourth, new section 553(c)(1) requires advance notice of 
proposed rulemaking for major and high-impact rules as well as 
rules involving novel legal or policy issues. The bill, 
however, does not define what would constitute a ``novel legal 
or policy'' issue. Not later than 90 days before a notice of 
proposed rulemaking (NPRM) is published in the Federal Register 
(the current starting point for notice-and-comment rulemaking), 
an agency must published advance notice of such rulemaking 
(ANPRM) in the Federal Register. The ANPRM must include a 
written statement, ``at a minimum,'' identifying all of the 
following:

        (1) the nature and significance of the problem the 
        agency may address with a rule, including data and 
        other evidence and information on which the agency 
        expects to rely for the proposed rule (new section 
        553(c)(1)(A)(i));

        (2) the legal authority under which a rule may be 
        proposed, such as whether it is required by statute 
        and, if so, whether it is due by a specific date and 
        whether the agency has discretion to commence a 
        rulemaking (new section 553(c)(1)(A)(ii);

        (3) preliminary information available to the agency 
        concerning the other considerations specified in new 
        section 553(b) (new section 553(c)(1)(A)(iii); and

        (4) with respect to a rule that involves a novel legal 
        or policy issue arising out of statutory mandates, the 
        nature of and potential reasons to adopt the novel 
        legal or policy position upon which the agency may base 
        a proposed rule.

In addition, the notice must solicit data, views or argument 
from interested persons concerning the information and issues 
addressed in the ANPRM and provide for a period of not less 
than 60 days for such persons to submit such feedback to the 
agency (new section 553(c)(1)(B)-(C)).
    Fifth, new section 553(d) requires the agency, after 
complying with new section 553(c) (if applicable) and in 
consultation with OIRA, to publish a NPRM containing the 
following:

        (1) a statement of the time, place, and nature of 
        public rulemaking proceedings (new section 
        553(d)(1)(A));

        (2) reference to the legal authority under which the 
        rule is proposed (new section 553(d)(1)(B));

        (3) the terms of the proposed rule (new section 
        553(d)(1)(C));

        (4) a description of the information known to the 
        agency on the subject and issues of the proposed rule, 
        including--``but not limited to''--a summary of 
        information known to the agency concerning the items 
        specified in section 553(b); a summary of additional 
        information the agency provided to and obtained from 
        interested persons under subsection 553(c); a summary 
        of any preliminary risk assessment or regulatory impact 
        analysis performed by the agency; and information 
        specifically identifying all data, studies, models, and 
        other evidence or information considered or used by the 
        agency in connection with its determination to propose 
        the rule (new section 553(d)(1)(D));

        (5) a reasoned preliminary determination of need for 
        the rule based on information described in the 
        preceding paragraph; and whether the rule is required 
        by statute (new section 553(d)(1)(E));

        (6) a reasoned preliminary determination that the 
        benefits of the proposed rule meet the relevant 
        statutory objectives and justify the costs of the rule, 
        including all costs described in section 553(b)(6);

        (7) a discussion of alternatives to the proposed rule 
        and other alternative responses considered by the 
        agency under new section 553(b);

        (8) a discussion of the costs and benefits of those 
        alternatives (including all costs to be considered 
        under section 553(b)(6);

        (9) a discussion of whether those alternatives meet 
        relevant statutory objectives;

        (10) a discussion of why the agency did not propose any 
        of those alternatives (new section 553(d)(1)(G)); and

        (11) a statement of whether existing rules have created 
        or contributed to the problem that the agency seeks to 
        address with the rule, and, if so, whether or not the 
        agency proposes to amend or rescind any of these rules 
        (new section 553(d)(1)(H)).

Note that the requirements set forth in items (4) through (11) 
are in addition to the current NPRM requirements.
    Sixth, all information considered by the agency and ``steps 
to obtain information by the agency'' in connection with its 
determination to propose the rule must be placed in the docket 
for the proposed rule and made available to the public (new 
section 553(d)(1)).
    Seventh, if the agency undertakes procedures under new 
section 553(c) and then determines not to propose a rule, the 
agency must then publish a notice of determination of other 
agency course of action. This notice must include the 
information required by new section 553(d)(1)(D) and a 
description of the alternative response the agency determined 
to adopt. If in its determination of other agency course the 
agency determines to amend or rescind an existing rule, the 
agency is not required to undertake additional proceedings 
under new section 553(c) before it publishes a NPRM to amend or 
rescind the existing rule (new section 553(d)(2))(B)).
    Eighth, all information considered by the agency and 
``steps to obtain information by the agency'' in connection 
with its determination of other agency course must be placed in 
the docket for the proposed rule and made available to the 
public (new section 553(d)(2)).
    Ninth, after issuing the NPRM, the agency must provide 
interested persons an opportunity to participate in the 
rulemaking through submissions of written data, views, or 
arguments with or without opportunity for oral presentation. 
The agency must provide not less than 60 days for the 
submission of such material and 120 days if the rule is major 
or high impact. An opportunity for oral presentation must be 
provided if a hearing is required under section 553(d)(4)(B) or 
553(e) (new section 553(d)(3)(A)). With regard to rules 
required by statute or required to be made on the record after 
opportunity for agency hearing, sections 556 and 557 must apply 
and the following provisions do not apply: section 553(d)(4), 
553(e) (pertaining to receiving comment outside of the 
procedures of sections 556 and 557), and 553(e)(6) (pertaining 
to the petition procedures) (new section 553(d)(3)(B)).
    Tenth, within 30 days of publication of a NPRM, a member of 
the public may petition for a hearing in accordance with 
section 556 to determine any evidence or other information upon 
which the agency bases the proposed rule fails to comply with 
the IQA (new section 553(d)(4)(A). This means that anyone, even 
someone who would not qualify as an interested person, could 
demand this relief (new section 553(d)(4)(A)). Upon review of 
the petition, the agency may exclude from the rulemaking the 
evidence or information that is the subject of the petition. 
The agency may also withdraw the proposed rule. In addition, 
the agency must promptly publish any such determination (new 
section 553(d)(4)(B)(i)).
    Eleventh, if the petition is not resolved per the above, 
then the agency must grant any such petition that presents a 
prima facie case that evidence or other information upon which 
the agency bases the proposed rule fails to comply with the IQA 
and hold the requested hearing not later than 30 days after 
receipt of the petition, provide a reasonable opportunity for 
cross-examination at the hearing, and decide the issues 
presented by the petition no later than 60 days after receipt 
of the petition. The agency may deny a petition that does not 
present a prima facie case. (new section 553(d)(4)(B)(ii)).
    Twelfth, judicial review is not available with respect to 
the agency's disposition of issues considered under new section 
553(d)(4)(B)(ii) until there is judicial review of the agency's 
final action. In addition, the provision prohibits judicial 
review of an agency's determination to withdraw a proposed rule 
under new section 553(d)(4)(B)(i) (new section 553(d)(3)(C). 
Nevertheless, the failure to petition for a hearing under new 
section 553(d)(4) does not preclude judicial review of any 
claim based on the IQA under chapter 7 (new section 
553(d)(3)(D).
    Thirteenth, the agency, with respect to high-impact rules, 
must hold a hearing in accordance with sections 556 and 557, 
following a NPRM, receipt of comments on the proposed rule, and 
any hearing held under section 553(d)(4), unless such hearing 
is waived by all participants in the rulemaking other than the 
agency (new section 553(e)). The agency must provide a 
reasonable opportunity for cross-examination at the hearing. 
The hearing is limited to the following issues of fact, except 
that participants at the hearing other than the agency may 
waive determination of any such issue: (1) whether the agency's 
asserted factual predicate for the rule is supported by the 
evidence; (2) whether there is an alternative to the proposed 
rule that would achieve the relevant statutory objectives at a 
lower cost (including all costs considered under section 
553(b)(6)); (3) if there is more than one alternative, which 
would achieve the relevant statutory objectives at the lowest 
cost; (4) whether, if the agency proposes to adopt a rule that 
is more costly than the least costly alternative, the 
additional benefits of the more costly rule exceed the 
additional costs of the more costly rule [how does one define 
cost here?]; (5) whether the evidence and other information 
upon which the agency bases the proposed rule meets the 
requirements of the IQA; and (6) upon petition by an interested 
person who has participated in the rulemaking other issues 
relevant to the rulemaking, unless the agency determines that 
consideration of the rule would not advance consideration of 
the rule or would, in light of the need for agency action, 
unreasonably delay completion of the rulemaking. The agency 
must grant or deny this petition within 30 days of receipt.
    Fourteenth, not later than 45 days before any hearing held 
under new section 553(e) or sections 556 and 557, the agency 
must publish in the Federal Register a notice specifying the 
proposed rule to be considered at such hearing, the issues to 
be considered at the hearing, time/place, except that such 
notice may be issued not later than 15 days before a hearing 
under section 553(d)(4)(B).
    Fifteenth, an agency may only adopt a rule following 
consultation with OIRA to facilitate compliance with applicable 
rulemaking requirements (new section 553(f)(1)).
    Sixteenth, an agency may adopt a rule only on the basis of 
best reasonably obtainable scientific, technical, economic, and 
other evidence and information concerning the need for, 
consequences of, and alternatives to the rule (new section 
553(f)(2)).
    Seventeenth, except as provided in new section 
553(f)(3)(B), the agency must adopt the least costly rule 
considered during the rulemaking, including all costs pursuant 
to section 553(b)(6) (new section 553(f)(3)(A)). The agency may 
adopt a more costly rule only if its additional benefits 
justify its additional costs and only if the agency explains 
its reason for doing so based on interests of public health, 
safety or welfare that are clearly within the scope of the 
statutory provision authorizing the rule (new section 
553(f)(3)(B)).
    Eighteenth, when the agency adopts a final rule, it must 
publish a NFRM that includes: (1) a concise, general statement 
of the rule's basis and purpose (new section 553(f)(4)(A)); (2) 
the agency's reasoned final determination of need for a rule, 
including whether it is required by statute (new section 
553(f)(4)(B)); (3) the agency's reasoned final determination 
that the rule's benefits meet the relevant statutory objectives 
and justify the rule's costs (new section 553(f)(4)(C)); (4) 
the agency's reasoned final determination not to adopt any of 
the alternatives to the rule (new section 553(f)(4)(D)); (5) 
the agency's reasoned final determination that existing rules 
have not created or contributed to the problem that the agency 
seeks to address with the rule or that existing rules have 
created or contributed to the problem, and if so, why amendment 
or rescission of such existing rules is not alone sufficient to 
respond to the problem and whether and how the agency intends 
to amend or rescind the existing rule separate from adoption of 
the rule (new section 553(f)(4)(E)); (6) the agency's reasoned 
final determination that the evidence and other information 
upon which the agency bases the rule complies with IQA (new 
section 553(f)(4)(F)); and (7) for any major or high-impact 
rule, the agency's plan for review of the rule no less than 
every 10 years to determine whether, based on evidence, there 
remains a need for the rule, whether the rule is in fact 
achieving statutory objectives, whether the rule's benefits 
continue to justify its costs, and whether the rule can be 
modified or rescinded to reduce costs while continuing to 
achieve statutory objectives (new section 553(f)(4)(G)). As 
required elsewhere, all information considered by the agency 
must be placed in the docket for the rule.
    Unless notice or hearing is otherwise required by statute, 
the requirements of new section 553(c) through (e) do not apply 
to interpretive rules, general statements of policy, or rules 
of agency organization, procedure or practice (new section 
553(g)(1)). When the agency for good cause, based on evidence, 
finds (and incorporates the finding and a brief statement of 
reasons therefore in the rules issued) that compliance with 
subsection (c), (d) or (e) or requirements to render final 
determinations under subjection (f) before the issuance of an 
interim rule is impracticable or contrary to the public 
interest (including national security), such provisions/
requirements do no apply to the agency's adoption of an interim 
rule new section 553(g)(2)(A)). If an agency, in compliance 
with subsection (A), adopts an interim rule, it must commence 
proceedings that comply fully with subsections (c) through (f) 
immediately upon publication of the interim rule and must 
complete compliance within 270 days from publication of the 
interim rule or 18 months for a major or high-impact rule and 
take final action to adopt a final rule or rescind the interim 
rule. If the agency fails to take timely final action, the 
interim rule will cease to have the effect of law (new section 
553(g)(2)(B)).
    Other than in cases involving national security, the 
agency's publication of an interim rule not in compliance with 
subsection (c) through (e) or requirements to render final 
determinations under subsection (f), an interested party may 
seek immediate judiciary review under chapter 7 of the agency's 
determination to adopt such interim rule. The record on review 
must include all documents and information considered by the 
agency and any additional information presented by a party that 
the court determines necessary to consider to assure justice 
(new section 553(g)(2)(C)). Note it pertains to an interested 
party, not a person. This could allow parties to overwhelm 
courts with submissions that would force them to sort through 
and determine whether they would assure justice (``justice'' 
being a vague term in this context).
    Nineteenth, when a hearing is required under subsection (e) 
or is otherwise required by statute or at the agency's 
discretion before the adoption of a rule, the agency must 
comply with the formal rulemaking requirements of sections 556 
and 557 in addition to subsection (f) in adopting the rule and 
in providing notice of the rule's adoption (new section 
553(h)).
    Twentieth, the required publication or service of a 
substantive final or interim rule must be made within 30 days 
before the rule's effective date, unless: (1) a substantive 
rule grants or recognizes an exemption or relieves a 
restriction; (2) interpretive rules and statements of policy; 
or (3) as otherwise provided by the agency for good cause found 
and published with the rule (new section 553(i)).
    Twenty-first, each agency must give an interested person 
the right to petition for the issuance, amendment, or repeal of 
a rule (new section 553(j)). This appears to be extremely 
broad.
    Twenty-second, OIRA has authority to establish guidelines 
for the assessment, including quantitative and qualitative, of 
the costs and benefits of potential, proposed, and final rules, 
other economic issues, or issues related to risk that are 
relevant to rulemaking under section 553 and other sections of 
this title (new section 553(k)(1)(A)). It is unclear what 
``other economic issues'' would include.
    Twenty-third, to ensure that agencies use the best 
available techniques to quantify and evaluate anticipated 
present and future benefits, costs, other economic issues, and 
risks as accurately as possible, OIRA must regularly update 
these guidelines (new section 553(k)(2)(B)).
    Twenty-fourth, OIRA also has the authority to issue 
guidelines to promote coordination, simplification, and 
harmonization of agency rules. Such guidelines must assure that 
each agency avoids regulations that are inconsistent or 
incompatible with or duplicative of its other regulations and 
those of other Federal agencies. These guidelines should ensure 
that agencies draft their regulations to be simple and easy to 
understand with the goal of minimizing the potential for 
uncertainty and litigation (new section 553(k)(2)).
    Twenty-fifth, OIRA, to ensure consistency in rulemaking, 
must issue guidelines and otherwise ensure that rulemakings 
conducted under procedures specified in provisions of law other 
than those of subchapter II of title 5 conform to the fullest 
extent allow by law with the procedures set forth in section 
553 (new section 553(k)(3)(A)).
    Twenty-sixth, OIRA must issue guidelines for the conduct of 
hearings under subsections 553(d)(4) and (e), including 
provisions that assure a reasonable opportunity for cross-
examination. Each agency must adopt regulations for conducting 
hearings consistent with these guidelines (new section 
553(k)(3)(B)).
    Twenty-seventh, OIRA must issue guidelines pursuant to the 
IQA to apply in rulemaking proceedings under sections 553, 556, 
and 557. Such guidelines and OIRA's specific determinations 
regarding agency compliance with such guidelilnes shall be 
entitled to judicial deference (new section 553(k)(4)).
    Twenty-eighth, the agency must include in the rulemaking 
record all documents and information considered by the agency 
during the proceeding, including at the discretion of the 
President or OIRA documents and information communicated by 
OIRA during consultation with the agency (new section 553(l)).
    New section 553(m) recognizes an exception for certain 
provisions with respect to monetary policy rulemakings by the 
Federal Reserve or Federal Open Market Committee.
    Section 4 of the bill imposes an extensive series of new 
obligations on an agency before it can issue major guidance (as 
opposed to a rule). First, before an agency may issue any major 
guidance, it must make a reasonable determination and document 
it assuring that such guidance is understandable and complies 
with relevant statutory objectives and regulatory provisions 
(new section 553a(a)(1)(A)).
    Second, the agency must identify the costs and benefits 
(including all costs considered during the rulemaking under 
section 553(b)) of conduct conforming to such guidance and 
assures that such benefits justify such costs (new section 
553a(a)(1)(B)).
    Third, the agency must describe alternatives to such 
guidance and their costs and benefits (including all costs to 
be considered during the rulemaking under section 553(b)) and 
explain why the agency rejected those alternatives (new section 
553a(a)(1)(C)). This would force an agency to potentially do 
countless cost-benefit analyses.
    Fourth, the agency must confer with OIRA to assure that the 
guidance is reasonable, understandable, consistent with 
relevant statutory and regulatory provisions, and requirements 
or practices of other agencies, does not produce costs that are 
unjustified by the guidance's benefits, and otherwise 
appropriate (new section 553a(a)(2)).
    Fifth, the agency guidance must state in a plain, prominent 
and permanent manner that it is not legally binding (new 
section 553a(b)(2)).
    Sixth, the guidance must be made available by the issuing 
agency to interested persons and the public at the time it is 
issued (new section 553a(b)(3)).
    Seventh, OIRA has authority to issue guidelines for use by 
agencies in the issuance of major guidance and other guidance 
that must assure each agency avoids issuing guidance documents 
that are inconsistent or incompatible with or duplicative of 
its other regulations and those of other agencies. The agency 
must draft its guidance documents to be simple and easy to 
understand in order to minimize the potential for uncertainty 
and litigation.
    Section 5 of the bill sets forth a comprehensive regime of 
new requirements for hearings.
    New section 556(e)(1) appears to be identical to current 
section 556(e). It provides that the transcript of testimony 
and exhibits, together with all papers and requests filed in 
the proceeding, constitute the exclusive record for decision in 
accordance with section 557, on payment of lawfully prescribed 
costs, shall be made available to the parties. When an agency 
decision rests on official notice of a material fact not 
appearing in the evidence in the record, a party is entitled, 
on timely request, to an opportunity to show the contrary.
    New section 556(e)(2) overrides paragraph (1) with respect 
to a proceeding held under section 556 pursuant to section 
553(d)(4) or 553(e), the record for decision must include any 
information that is part of the record of proceedings under 
section 553. When an agency conducts rulemaking under sections 
556 and 557 directly after concluding proceedings on an ANPR 
under section 553(c), the matters to be considered and 
determinations to be made must include, among other relevant 
matters and determinations, the matters and determinations 
described in subsections (b) and (f).
    Upon receipt of a petition for a hearing under this 
section, an agency pursuant to new subsection 556(g) must grant 
the petition in the case of any major rule, unless the agency 
reasonably determines that a hearing would not advance 
consideration of the rule or would, in light of the need for 
agency action, unreasonably delay completion of the rulemaking. 
The agency must publish its decision to grant or deny the 
petition when it renders the decision, including an explanation 
of the grounds for such decision. The information contained in 
the petition must be included in the administrative record. 
Subsection (g), however, does not apply to monetary policy 
rulemakings proposed or implemented by the Federal Reserve or 
Federal Open Market Committee.
    Section 6 of the bill amends section 704 of the APA, which 
specifies what agency actions are reviewable by a court. 
Section 6 adds a new provision to section 704 that broadens the 
types of actions reviewable. Except for cases involving 
national security, an interested party may seek immediate 
judicial review of the agency's determination to adopt an 
interim rule on an interim basis upon the agency's publication 
of such rule without compliance with section 553(c), (d), or 
(e) or requirements to render final determinations under 
section 553(f). Review is limited to whether the agency abused 
its discretion to adopt the interim rule without compliance 
with section 553(c), (d), or (e) or without rendering final 
determinations under section 553(f).
    Section 7 of the bill amends section 706 of the APA, which 
sets forth the scope of judicial review. Current section 
706(a)(2)(A) provides that a court, in appropriate 
circumstances, must ``hold unlawful and set aside action, 
findings, and conclusions found to be arbitrary, capricious, an 
abuse of discretion, or otherwise not in accordance with law.'' 
Section 7(2) would require such action if the agency action, 
findings or conclusions violated the Information Quality Act. 
Section 7(3) adds a new provision that prohibits a court from 
deferring to the agency's interpretation of an agency rule if 
the agency's (1) interpretation of an agency rule did not 
comply with the procedures of sections 553, 556 and 557; (2) 
determination of the costs and benefits or economic or risk 
assessment of the action failed to conform to guidelines on 
such determinations and assessments established by OIRA 
pursuant to section 553(k); or (3) determinations under 
interlocutory review pursuant to sections 553(g)(2)(C) and 
704(b). In addition, section 7 requires a court to review 
agency denials of petitions under section 553(e)(6) (pertaining 
to petitions by interested persons raising other issues) or any 
other petition for a hearing under sections 556 and 557 for 
abuse of agency discretion.
    Section 8 of the bill amends the definitions pertinent to 
judicial review of agency actions to add a definition of 
``substantial evidence.'' It defines this term to mean such 
relevant evidence as a reasonable mind might accept as adequate 
to support a conclusion in light of the record considered as a 
whole, taking into account whatever in the record fairly 
detracts from the weight of the evidence relied on by the 
agency to support its decision.
    Section 9 of the bill provides that its amendments to 
sections 553, 556, 704, 701, and 706(b) and (c) do not apply to 
any rulemakings pending or completed on the date of enactment.

                               CONCLUSION

    The cumulative weight of the changes to the APA made by 
H.R. 2122 threatens to bring rulemaking to a halt. Most 
academic administrative law experts believe that the bill's 
revisions to current law, taken as a whole, will pour ``sand in 
the gears'' of the rulemaking process. Although Congress 
legislatively directs agencies to issue rules to protect the 
American public from a wide spectrum of harms, H.R. 2122 would 
effectively contravene such directives by making it almost 
impossible for agencies to promulgate rules.
    H.R. 2122 garners our strong opposition for numerous 
reasons. First, it is based on the false and unsupported 
assertions that regulations stifle economic growth and job 
creation. Such claims ignore the overwhelming evidence that 
regulations result in net benefits to society, including 
spurring economic activity. Second, H.R. 2122's numerous and 
ill-conceived changes to the APA would have the cumulative 
effect of halting agency rulemaking in its tracks and 
undermining agencies' ability to protect the American people 
from a wide range of harms. They also would permit the 
Executive Branch to circumvent Congress's intent in delegating 
rulemaking authority to agencies through various statutes. 
Third, H.R. 2122 prioritizes cost considerations over public 
health, workplace safety, environmental protection, and other 
values by overriding substantive law and imposing an unworkable 
cost-benefit analysis regime on agencies. Fourth, the bill 
dangerously concentrates unaccountable political power over 
rulemaking in OIRA's hands. Fifth, H.R. 2122 tilts the 
rulemaking playing field in favor of business interests by 
resurrecting the long-discredited and time-consuming formal 
rulemaking process, providing for expanded and less deferential 
judicial review, increasing opportunities to challenge agency 
compliance with the IQA, and encouraging the United States to 
engage in a regulatory ``race to the bottom'' with countries 
that lack protective regulatory regimes.
    The Congressional Budget Office estimates that agencies 
will need to expend $20 million annually to (cover the 
governmentwide costs of additional personnel, contractor costs, 
and other administrative expenses associated with meeting the 
new requirements under the legislation.\146\
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    \146\Congressional Budget Office, Cost Estimate for H.R. 2122, the 
Regulatory Accountability Act of 2013, at 1, 4 (Aug. 1, 2013), 
available at http://www.cbo.gov/sites/default/files/cbofiles/
attachments/hr2122.pdf.
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    For these reasons, we respectfully dissent and urge our 
colleagues to oppose H.R. 2122.

                                   John Conyers, Jr.
                                   Jerrold Nadler.
                                   Robert C. ``Bobby'' Scott.
                                   Melvin L. Watt.
                                   Zoe Lofgren.
                                   Sheila Jackson Lee.
                                   Steve Cohen.
                                   Henry C. ``Hank'' Johnson, Jr.

                                 
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