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This Davis Polk blog discusses an abundance of legislative initiatives designed to enhance Congressional control over the agency rulemaking process. In early January, the House passed two separate statutes that would make it easier for Congress to intervene in the regulatory process. Naturally, the proposed statutes have the kind of colorful & politically charged names that we’ve come to expect from our lawmakers.

First, there’s the “Midnight Rules Relief Act of 2017,” which would enable Congress to pass omnibus disapproval resolutions that cover multiple regulations submitted during the final year of a President’s term. Next comes the “Regulations from the Executive in Need of Scrutiny (REINS) Act of 2017,” which provides that “major rules” – those identified as likely to cause annual economic effects of at least $100 million — could only take effect if Congress adopted a joint resolution approving of the rule.

A third bill, the “Require Evaluation Before Implementing Executive Wishlists (REVIEW) Act of 2017,” has also been introduced. Under this statute, agencies would have to postpone the effective date of “high-impact” rules—those determined to impose annual economic costs of $1 billion or more—until after the final disposition of all actions seeking judicial review of the rule.

The blog’s skeptical that any of this legislation will pass absent a decision by the Senate to eliminate the filibuster, but this excerpt suggests that these statutes reflect the mood of Congressional Republicans:

Congressional Republicans are both eager to unwind the Obama Administration’s regulatory agenda and cognizant of the difficulties of doing so through notice-and-comment rulemaking. Moreover, these bills signal the desire of many in Congress to play a greater role in the regulatory process and a view that, according to the Purpose section of the REINS Act, “Congress has excessively delegated its constitutional charge while failing to conduct appropriate oversight and retain accountability for the content of the laws it passes.”

While reforms as sweeping as those proposed in some of these statutes are not expected, we should expect further efforts by Congress to increase its control over agency rulemaking.

But Wait! There’s More!

Remember when I said we should expect further Congressional action on rulemaking?  This blog from Cydney Posner says that they’re already back at it.  After passing the REINS Act & the Midnight Rules Relief Act, the House of Representatives came back the following week with another round of legislation:

On Wednesday, the House Republicans (with five Democratic votes) passed H.R. 5, the “Regulatory Accountability Act,” a bill that would change the way federal agencies issue regulations and guidance. This bill would require agencies to, as part of their rulemaking processes, expand the factual determinations required, provide advance notice with regard to certain important rule proposals and follow specified procedures for issuing important guidance, among other processes. Included as part of the same bill is the “Separation of Powers Restoration Act,” which provides for de novo judicial review of agency actions.

Another bill has been introduced in the House that has the SEC’s rulemaking process squarely in the cross-hairs. The “SEC Regulatory Accountability Act” would enhance the requirements for cost-benefit analyses of proposed SEC rules & provide for post-adoption impact assessment and periodic review of existing regulations.

In what is likely to be her final speech as SEC Chair, Mary Jo White today pushed back against legislative initiatives to remake the rulemaking process.  In particular, she said that the SEC Regulatory Accountability Act would provide “no benefit to investors beyond the exhaustive economic analysis we already undertake” and that the Act’s requirements would prevent the SEC from “responding timely to market developments or risks that could lead to a market crisis.”

Tomorrow’s Webcast: “Pat McGurn’s Forecast for 2017 Proxy Season”

Tune in tomorrow for the webcast – “Pat McGurn’s Forecast for 2017 Proxy Season” – when Davis Polk’s Ning Chiu and Gunster’s Bob Lamm join Pat McGurn of ISS to recap what transpired during the 2016 proxy season and what to expect for 2017. Please print these “Course Materials” in advance…

– John Jenkins