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Regulatory Restructuring Initiatives Keep Coming

March 7, 2017

Continuing a Trump Administration series of Executive Orders, Presidential Memoranda, and Office of Management and Budget ("OMB") guidance documents that direct federal agencies to fundamentally change their rulemaking processes, three new developments provide further detail on how this new regulatory regime will be implemented. 

On February 24, 2017, President Trump signed an Executive Order ("EO") titled "Enforcing the Regulatory Reform Agenda." The new EO creates structures and mechanisms to make sure agencies carry out the requirements of EO 13771 of January 30, 2017, which directed agencies to revoke two rules for every new one promulgated and offset the costs of new rules with savings from those that are rescinded. (See Clark Hill's alert on "Next Steps on the Executive Order on Reducing Regulation: OMB's Guidance Provides Some Clarity.") Under the February 24th EO, each agency must designate a Regulatory Reform Officer charged with enforcing the new requirements and establish a Regulatory Reform Task Force that is responsible for identifying regulations that should be repealed, replaced, or modified. The Task Force is directed to focus on regulations that eliminate jobs, are outdated or ineffective, impose costs that exceed benefits, create regulatory inconsistencies or interfere with regulatory reform objectives or policies, rely on data that are not publicly available or reproducible, or derive from EOs or Presidential directives that have been overridden or modified. While some of these themes are familiar, the emphasis on rules that rely on data, information, or methods that are insufficiently transparent to meet the standard for reproducibility introduces a new ground for challenging existing rules, and echoes principles contained in "Secret Science Reform" legislation that has been proposed in previous Congressional sessions. The February 24th EO imposes tight deadlines: agencies have 60 days to designate Regulatory Reform Officers and 90 days for the first report from each Regulatory Reform Task Force. 

Another regulatory implementation initiative was launched by the Commerce Department March 7, 2017 as a Request for Information ("RFI"). The RFI fulfills responsibilities assigned to the Commerce Department by the President's Memorandum on Streamlining Permitting and Reducing Regulatory Burdens for Domestic Manufacturing. (See Clark Hill's alert on "New Administration Orders Federal Agency Action to Reduce Regulatory Burden on Manufacturing.") With a short deadline requiring comments by March 31, 2017, the RFI seeks information from regulated manufacturing entities on (1) burdens they experience from federal permitting, along with proposed changes, and (2) the four most onerous regulations they face, and recommendations for reducing unnecessary federal regulation. The Commerce Department must produce a report within 60 days of the end of the comment period that sets forth a plan to expedite federal permitting and reduce regulatory burdens on domestic manufacturing. 

In a Memorandum issued March 6, 2017, OMB provided guidelines and procedures for federal agencies to use in preparing their regulatory plans to be published in the newly renamed Spring 2017 Unified Agenda of Federal Regulatory and Deregulatory Actions ("Unified Agenda"), which was previously known as the Unified Agenda of Federal Regulatory Actions. Under the terms of EO 13771, no new rule may be issued unless it is included in the Unified Agenda. Further, under the February 2, 2017 OMB guidance implementing EO 13771, all agency submissions to the Unified Agenda must set forth the total incremental costs of any significant new rule and explain how those costs will be fully offset as of September 30, 2017 by satisfaction of the requirement to eliminate at least two existing rules for every new rule that is promulgated. As an aid to future planning, the March 6 Memorandum also asks agencies to provide a preliminary estimate of the total costs or savings associated with each new rule that is expected to be issued in Fiscal Year 2018 (beginning October 1, 2017). Agencies are required to send their submissions to OMB by March 31, 2017.     

The continued flow of implementing directives makes clear that the Trump Administration's deregulatory campaign is serious and supported by increasingly fortified machinery to make sure intended results are achieved. Opponents have already challenged EO 13771 in federal district court, and even if that effort fails, additional lawsuits will follow any rule revocations, raising administrative law process claims. Without a doubt, the new era of regulatory deconstruction offers many opportunities and challenges to all affected parties. 

Regulated businesses should be assessing existing rules and permitting requirements that are unduly burdensome – or meet other criteria called out by the February 24, 2017 EO – and putting together recommendations for change, along with supporting documentation that can withstand legal challenge. The short comment deadlines for these proposals require efficient and focused effort in order to be successful. Clark Hill attorneys are experienced in working with clients to develop effective legal strategies and advocacy approaches to address regulatory and deregulatory initiatives.

For more information, please contact Karen C. Bennett at | (202) 572-8676; Jane C. Luxton at | (202) 572-8674; Kenneth von Schaumburg at | (202) 772-0904; William J. Walsh at | (202) 772-0924; or another member of Clark Hill's Environment, Energy & Natural Resources practice group.

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