Section 8.

Sunset-Several respondents questioned why the order has an expiration date. A specific "sunset" date is in keeping with the order's emphasis of reviewing existing requirements. Based on an evaluation of the order's effectiveness, OMB will recommend to the President whether or not to extend it.

WAYNE G. GRANQUIST,

Associate Director for Management and Regulatory Policy,
Office of Management and Budget.

[Exhibit 6]

[From the Congressional Record, Aug. 4, 1977]

By Mr. Schmitt (for himself, Mr. McClure, Mr. Thurmond, Mr. Helms, Mr.. Towers, and Mr. Garn):

S. 2011. A bill to amend title 5, United States Code, to preserve and strengthen the separation of powers in Federal Government by establishing a uniform procedure for congressional review of executive branch rules which may have a harmfull impact on the public, may be contrary to law or may be inconsistent with congressional intent; to expand opportunities for public participation in Federal agency rulemaking; and for other purposes; to the Committee on the Judiciary.

REGULATORY REDUCTION AND CONGRESSIONAL CONTROL ACT OF 1977

Mr. SCHMITT. Mr. President, I am introducing today a piece of legislation which is long overdue. The bill is entitled the Regulatory Reduction and Congressional Control Act of 1977. It is designed to return to the Congress its constitutionally mandated prerogative to create law. This would be accomplished by returning to the Congress the opportunity to approve or disapprove the major rulemaking decisions of the regulatory agencies of the executive branch.

Let me review for a few moments, the reason that this legislation is required. Recent years have witnessed an eruption of regulations and regulatory bureaucracies which impact on almost every facet of the lives of the citizenry.

The American citizen, the small businessman, business in general, and Government are staggering under an increasingly heavy load of regulations. There is a general perception among the people that the regulatory bureaucracy is running out of control. There is a mandate to the Congress to do something about reestablishing control of the regulatory process and to reform existing regulations.

The size of this massive burden can be appreciated by recognizing that there are 44 independent regulatory agencies at the Federal level, plus 1,240 boards, commissions, et cetera. These organizations employ over 100,000 individuals responsible for controlling the lives of our citizens. The cost to the taxpayers to finance these bureaucracies is equally large, growing from just over $2 billion in 1974 to an estimated $3,500,000,000 in 1977.

There is little question that in recent decades Congress has increasingly given up much control over the "making of law" to the regulatory agencies. This loss of constitutional congressional authority has occurred through the passage of legislation that calls for the "promulgation" of rules and regulations that supposedly will cure some social ill. Subsequent congressional oversight over the rules and regulations so "promulgated" has been poor to nonexistent. Thus, the constitutional concept of the separation of powers between the legislative and executive branches or government have been seriously blurred and compromised.

The Senate has before it several pieces of legislation aimed at controlling the large number of regulations impacting on our citizens. One initiative sponsored by the distinguished Senator from Maine, Senator Muskie, is S. 2, a bill designed to require the "sunset" of authorizations every 5 years. This bill is cosponsored by myself and numerous other Members. In addition, the distinguished Senator from Illinois, Senator Percy, has introduced S. 600 which would provide for the reorganization of Federal regulatory agencies to prevent excessive and duplicative regulation. I am proud to be one of numerous cosponsors of this legislation also.

In addition to these efforts, it seems clear that a Regulatory Reduction and Congressional Control Act is required which would preserve and strengthen the constitutional separation of powers between the legislative and executive branches. This bill is intended to accomplish this task.

SUMMARY OF THIS LEGISLATION

Mr. President, this bill, if adopted would preserve and strengthen the separa-tion of powers between the legislative and executive branches by:

First, establishing a uniform procedure for systematic and comprehensive congressional review of proposed rules and regulations which may have serious impact on the public;

Second, expanding opportunities for public participation in the agency rulemaking process;

Third, strengthening congressional oversight over Federal regulatory agencies; Fourth, requiring agencies, when proposing new rules and regulations, to consider carefully the impact of their proposals on the economy-costs versus benefits-on Federal paperwork, and on the workload of the Federal court system; Fifth, providing more complete information to the public and the Congress about rules and regulations so that they can make informed decisions on future courses of action;

Sixth, making Federal agencies more responsive to the needs, concerns, and interests of the public:

Seventh, substantially reducing the costs of Government regulation, alleviate Federal report filing and recordkeeping requirements and eliminate regulatory excesses; and

Eighth, restoring public confidence in Government institutions.

CONGRESSIONAL REVIEW

This legislation would mandate a review period by Congress before substantive, major agency rules or regulations could go into effect.

This legislation would require the agency head promulgating a new rule to publish in the Federal Register the text of the proposed rule and a cross-referenced index of all regulations pertaining to the same subject matter. This inforination also would be transmitted to the Congress. It also would require the agency to publish in the Federal Register an economic impact analysis of each proposed rule and any alternative approaches considered by the agency.

Mr. President, the concept of returning to the elected representatives of the people the control over governmental decisionmaking is a familiar one in recent years. Three years ago the Congress passed the Congressional Budget and Impoundment Control Act to reassert its authority over the Federal budget process. The legislation which I am introducing today would employ a similar set of procedures to reestablish congressional control in the area of regulatory rulemaking by executive branch agencies.

As I noted a few moments ago, this legislation would require that an economic impact statement be filed with major regulatory proposals to help the public and the Congress determine the value of the proposed rule to our society. A recent article by James C. Miller in the journal Regulation analyzes the record thus far on economic impact statements, and I request that it be printed in full in the Record following my remarks.

Mr. President, now that the Congress has moved to regain control of the budget through the Congressional Budget and Impoundment Control Act of 1974. I am introducing the Regulatory Reduction and Congressional Control Act of 1977 as a means of accomplishing a similar reassertion of congressional control. I ask unanimous consent that the full text of this bill1 and a section by section analysis be printed at this point in the Record.

REGULATORY REDUCTION AND CONGRESSIONAL CONTROL ACT OF 1977

SECTION-BY-SECTION ANALYSIS

SECTION 1. This is the bill's title and the findings section.

SECTION 2. This section makes several changes in Sections 551 and 553 of the Administrative Procedures Act, principally affecting the Act's definitions, public notice and comment provisions and establishing a special mechanism for emergency rules.

1 See appendix at p. 535.

Subsection (a). The definition of "rule" in Section 551 (4) of Title 5, U.S. Code is amended to provide a clearer distinction between rule making and adjudication by agencies.

Reference to "particular applicability and future effect" is deleted from the definition of "rule" in order to bring the statutory definition in line with actual application and use. Administrative functions that are primarily legislative in nature would be contrasted with functions judicial in nature, that is, regulations setting forth general policy as opposed to decisions affecting particular individuals in particular cases.

Rate making would also be removed from the general definition of "rule". Ratemaking proceedings are frequently adjudicatory in nature and should require more formal APA procedures under 5 U.S.C. §§ 554 and 556-7. It also makes clear that agency rate decisions would not be subject to congressional review and approval or veto.

This subsection adds a new concept to the APA: the "emergency rule”. An agency could promulgate and place a regulation into effect immediately, for a limited period of time, whenever an emergency exists that necessitates immediate action, that is, if the agency finds that delay in the effective date of the rule would

"(A) seriously injure an important public interest,

(B) substantially frustrate legislative policy and intent, or

(C) seriously damage a person or class of persons without serving any important public interest".

The emergency rule concept is significant for those provisions of the bill dealing with Congressional review of agency regulations. Thus, an agency could put an emergency rule immediately into effect if it could be justified under any of the alternative criteria listed in Section 2(a) (2), despite the fact that Congressional review had not occurred.

Subsection (b). The "good cause" exception in the APA would be changed to permit greater public participation in the agency rule making process.

Under present law an agency can bypass the public notice and comment procedure where it finds it to be "impracticable, unnecessary, or contrary to the public interest". 5 U.S.C. § 553 (b) (B). This amendment would reduce the instances when an agency can ignore notice and comment requirements. Henceforth these would be only when the agency "for good cause" determines that the rules are of “routine nature or matter" or would have an “insignificant impact” or that temporary "emergency rules should be promulgated".

Subsection (c). Amends Section 553 of Title 5, U.S. Code to provide that once a final rule has been adopted by an agency, it may go into effect immediately if it grants an exemption from, or relieves a restriction in a rule, or falls within one of the categories made exempt from public notice and comments in § 553 (b) (3) (see above). All other final rules adopted by an agency shall not become effective until the Congressional review and approval or disapproval procedures in Section 602 (see below) are completed.

SECTION 4: Provides for a new chapter in Title 5 of the U.S. Code to be entitled "Congressional Review of Agency Rulemaking".

Subsection 601: The same definitions set forth in Section 551 with the exceptions that "agency" includes the Congress; federal courts; are applicable and extended to include those agency functions now excluded from coverage of the Administrative Procedure Act in 5 U.S.C. § 551 (1) (H). In other words, regulations concerning mortgage insurance, termination of war contracts, disposal of surplus government property and veterans hearings will also be subject to Congressional review. Provides that, for the purposes of the review procedures set forth in this bill, purely internal agency rules and regulations and rules granting or recognizing an exception or relieving a restriction and rules which, in the view of the agency, require no public notice or comment (in other words, agency regulations which have "insignificant public impact"), will not be subject to Congressional approval or disapproval. Defines the term "promulgation" to include publication in the Federal Register of each proposed new rule. together with the economic, paperwork, and judicial impact analyses for each rule, as required under Section 602. The G.S.A. is responsible for ensuring prompt publication, with appropriate explanations, of such information for each rule. (See also Subsection 610).

Subsection 602 (a): Requires each federal agency, at the time it promulgates a new rule, to transmit a copy of the complete text of the rule to both Houses of

Congress, to gether with (i) a comprehensive index of all existing rules on the same matter, cross-referenced by subject; (ii) an economic impact analysis of each proposed rule and any alternatives that may have been seriously considered by the agency; (iii) a paperwork impact analysis of each proposed rule and alternatives; and (iv) a judicial impact analysis of each proposed rule and alternatives, requirements, as well as internal measures being taken by the agency to eliminate duplication. In the case where an agency cannot access the impact as required, the agency would be required to file a statement with the House and Senate which lists the qualitative costs and benefits. In addition, when qualitative evidence is not available, the agency shall forward to the Congress the supporting documentation necessary for Congressional considerations of each rule. The information provided by the agency should be at its best estimate, based on its experience and other external data. The agency should not attempt to barden businesses, consumers or other parties with "fishing expeditions," unnecessary paperwork, surveys or the like in order to obtain the required information. All of its direct inquiries are subject to the limits prescribed by the Federal Reports Act, including the requirement that it obtain data available from existing government sources.

Subsection 602(a)(2): sets out the information that the agency must provide in an economic impact analysis. This includes an estimate of costs vs. benefits of the regulation to consumers, businesses, markets and levels of government, and its effects on productivity, competition, supplies of important manufactured products or services, employment, energy supply and demand, and the environment. Where the agency is unable to make an estimate, it must explain the nature and extent of costs and benefits that it cannot quantify. This identical information is currently required of Executive Branch agencies and contained in inflationary impact statements which accompany new regulations proposed by those agencies. As part of the Ford Administration's regulatory reform programs, the President, on November 27, 1974, issued Executive Order No. 11821, which specified the criteria that agencies should consider when weighing the costs and benefits of proposed regulations. In January, 1975, the Office of Management and Budget issued a circular implementing this executive order, which resulted in the widespread use of inflationary impact statements. This program has been supported by most of the departments and agencies responsible for its implementation, and has been extended by President Carter. (See discussion by James C. Miller in Regulation issue of the AEI Journal on Government and Society, July/Aug. 1977). The Congress already requires an estimate of costs and regulatory impact of proposed legislation to be included in committee reports on bills. Subsection 602 (a) (3): sets out the information that the agency must provide in a paperwork impact analysis. This includes an estimate of the nature, amount, frequency, costs and man-hours that would be required under the new regulation for fulfilling information, report filing and recordkeeping, as well as the steps that are, will or should be taken by the agency to eliminate duplication in paperwork requirements. The Congress currently requires a paperwork impact statement in committee bill reports and has been established the Federal Paperwork Commission to find ways to reduce the Government paperwork burden.

Subsection 602(a) (4): sets out the information that the agency must provide in a judicial impact analysis to measure probable effects of the rule on the operation, work load and efficiency of the Federal courts. This requirement is in line with the recommendations of Chief Justice Warren Burger that the Federal Government carefully consider the impact of its actions on the court system and the administration of justice in the United States.

Subsection 602(a)(5); provides that the agency provide such other information as it deems appropriate for Congressional review of each proposed rule. Subsection 603 (a): This subsection adds a new concept to the A.P.A. by establishing the "concurrent resolution of approval" for certain rules and regulations as part of the Congressional review process. Sets forth the criteria for determining when and if both Houses of Congress must take affirmative action, i.e., adopt a concurrent resolution approving a proposed rule or regulation (except an emergency rule), in order for the rule or regulation to be put into effect. The standards to be used by the House and Senate Committee reviewing the rule relate to the impact of the rule on civil or criminal penalties, agency actions (inspection), public health, safety and welfare, or the economy. The economic criteria in (4), (5) and (6) are similar to those used in connection with the Ford Administration's regulatory reform program affecting "major" rules proposed by Executive Branch agencies (see discussion under Subsection 602 (a) (2) (above). The infor36-175-783

mation provided by the proposing agency in its economic impact analysis will assist the Congress in its determination of whether the criteria in (4), (5), (6), (7), or (8) are met and joint approval is required. If the proposed rule has a "major" impact on the economy, or any economic sector, industry or level of government, or will likely cause serious harm to the public, or will result in greater costs than benefits, as shown by the agency, then both Houses must act favorably on the rule for it to become effective. However, the concurrent resolution must be adopted within 60 legislative days after the date the rule has been promulgated by the proposing agency.

Subsection 603(b): Provides that if both Houses have affirmative action within the 60-day period on the "major" rule meeting the Subsection 603 (a) criteria, then it shall take effect if either House or Senate or both fail to adopt the resolution, the rule cannot go into effect.

Subsection 604(a): This subsection adds a new concept to the A.P.A. by establishing the "resolution of disapproval" for certain rules and regulations as part of the Congressional review process. Sets forth the criteria for determining when and if either House can take action to prevent a rule (except an emergency rule) from becoming effective within 60 legislative days after its promulgation date. i.e., adopt a resolution disapproving the proposed rule or regulation. A resolution of disapproval could be adopted in either House if it determines that the rule contains provisions which (i) violate existing law; (ii) conflict with court desisions; (iii) exceed the legislative mandate; (iv) are inconsistent, redundant or overlapping with other rules; (v) would seriously injure an important public interest; or (vi) are inconsistent with Congressional intent.

Subsection 604(b): Provides that if either House has failed to adopt a resolution of disapproval the proposed rule will go into effect automatically within 60 legislative days after the date the rule has been promulgated unless a later date is required by law or specified in the rule.

Subsection 604 (c): Prohibits an agency from promulgating a new rule or an emergency rule identical to the one disapproved already unless permitted by statute. A new rule dealing with the same subject matter as a disapproved rule is subject to the procedures for any proposed rule, unless it has been less than twelve months since the disapproval, in which case the procedures apply only to changes in the disapproved rule.

Subsection 605: Provides that disapproval of a proposed rule does not relieve an agency from adopting a rule; however, any statutory time limit will apply to a renewed rule only from the date on which the resolution is adopted.

Subsection 606: Provides that the time periods for the Congressional review procedures shall be computed in “legislative days." States that “legislative days" does not count calendar days on which either House is not in session.

Subsection 607(a): Recognizes that the provisions for consideration of resolutions of approval or disapproval are an exercise of the rulemaking power of the Senate and the House and, as such, are adopted with a full recognition of the constitutional right of either House to change its own rules at any time as it may determine.

Subsection 607 (b): Provides that resolution of approval or disapproval shall be referred to the standing committee in each House which has oversight and legislative jurisdiction over the agency proposing the particular rule and cannot be referred to any other committee. Provides that it will be in order to make a motion to discharge a committee from further consideration of the resolution within 45 legislative days after the date of refusal if the committee has not yet takon action. The discharge motion must be supported by at least 20 Senators or 87 Representatives. It is highly privileged, is not debatable and amendments or motions to reconsider are not in order. This accelerated discharge procedure, natterned after the Budget Control and Impoundment Act, 31 U.S.C. § 1017(b), is to prevent a committee from sitting on a proposed rule, so that it will automatically go into effect or lapse at the end of the 60-legislative-day period. Debate on the resolution of approval or disapproval is limited to not more than two hours, to be divided equally between proponents and opponents.

Subsection 608: States that the failure of Congress to act or approve a resolution of approval or disapproval should not be regarded legally as an expression of approval of the proposed regulation.

Subsection 609: Provides that every rule (including an emergency rule) adopted pursuant to the new Congressional procedures in Chapter 6 will "sunset" automatically at the end of five years from the effective date. Before that termination date, the proposing agency can recommend to the Congress whether the rule