What You Need to Know About Federal Regulatory Reform

President Trump and the newly-elected Congress have made regulatory reform a main focus of their policy agenda. With Republicans controlling both the White House and Capitol Hill for the first time in over a decade, significant actions were taken within the first several weeks of coming into power that regulated industries should be aware of.

Implementation of a Regulatory Freeze – The Trump Administration froze all federal rulemaking by issuing a policy memorandum to the Executive Branch departments and agencies. The memorandum declared that no regulations should be submitted “until a department or agency head appointed or designated by the President … reviews and approves the regulation.” The memorandum also required the Executive Branch agencies to either withdraw or postpone all agency regulations submitted to the Office of the Federal Register. The only exceptions to the regulatory freeze are for “emergency situations or other urgent circumstances relating to health, safety, financial, or national security matters” or “regulations subject to statutory or judicial deadlines.”

Reducing Regulations for Domestic Manufacturing – President Trump directed the Executive Branch departments and agencies to support the expansion of manufacturing in the United States through “expedited reviews of and approvals for proposals to construct or expand manufacturing facilities and through reductions in regulatory burdens affecting domestic manufacturing.” A key component of the Presidential Memorandum is the Permit Streamlining Action Plan to be developed and reported to the President within 60 days.

“Two for One” Executive Order on Regulations – On January 30, 2017, President Trump issued an Executive Order requiring that an Executive Branch department or agency “identify at least two existing regulations to be repealed” for every one new publicly proposed regulation. The Executive Order also requires that any regulation issued in Fiscal Year 2017 be budget neutral, and that regulations issued in Fiscal Year 2018 and beyond provide the “total costs or savings associated with each new regulation or repealed regulation.”

Use of the “Congressional Review Act” – The Congressional Review Act (“CRA”) allows Congress to review a regulation and pass a “Joint Resolution of Disapproval” within 60 legislative days of the regulation being submitted to Congress. If the President signs the resolution, the regulation will not take effect. Republicans in Congress can use the CRA to repeal regulations enacted by the Obama Administration in the last few months of his term. Congress passed its first “Joint Resolution of Disapproval” on February 2, 2017, attempting to repeal the stream protection rules related to coal mining operations. Other regulations potentially targeted for repeal address firearm purchasing, methane emissions, labor law violations, and disclosure rules for oil and gas companies.

Repeal of the Chevron and Auer Doctrine – The House of Representatives passed the Regulatory Accountability Act of 2017 which repeals the judicial-created Chevron and Auer doctrines. The Chevron doctrine, which comes from the Supreme Court case Chevron USA Inc. v. Natural Resources Defense Council Inc., provides federal agencies deference when interpreting statutes for the purpose of drafting and promulgating rules. The Auer doctrine, from the Supreme Court case Auer v. Robbins, gives deference to a federal agency’s interpretation of its own rules. It is unclear whether there are enough votes in the U.S. Senate to pass the Regulatory Accountability Act.

The Gibbons Government Affairs Department regularly counsels clients in the area of state and federal regulations and agency actions. We continually monitor new developments in the regulatory arena. Please contact us if you have a regulatory issue with a state or federal agency, or need assistance determining the impact of a regulation on your business.

DAVID J. PASCRELL, CO-CHAIR OF THE GIBBONS GOVERNMENT AFFAIRS DEPARTMENT, AND MICHAEL D. DELORETO, AN ASSOCIATE IN THE GIBBONS GOVERNMENT AFFAIRS DEPARTMENT, AUTHORED THIS POST.

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