On May 26, as part of the President’s initiative to transform the current landscape of federal regulations into "a 21st century regulatory system," the Office of Management and Budget released for public comment 30 federal agencies’ proposed plans to modify, streamline, or eliminate a wide range of existing regulations. Set forth below is a summary of key elements of the proposed regulatory modifications. The proposed plans are expected to be finalized in late August.
21st Century Regulatory System
Among the major initiatives of the President is a plan to overhaul the federal regulatory system so that it encourages job growth, innovation, and economic competitiveness while protecting consumers and public health. Accordingly, on January 18, 2011, President Obama set in motion a process to create what he terms the "21st century regulatory system."
Executive Order 13563, entitled "Improving Regulation and Regulatory Review," [This should link to the EO], articulates certain general principles of regulation that are to guide federal agencies. These principles include an emphasis on public participation and open exchange of information in the regulatory process; coordination among regulators and simplification and harmonization of regulations, where possible; the need for regulatory flexibility; and the goal of having regulations that promote innovation. Executive Order 13563 also directs federal agencies to undertake a retrospective analysis of "rules that may be outmoded, ineffective, insufficient, or excessively burdensome" and to determine how best to "modify, streamline, expand, or repeal them." Agencies were required to submit these assessments and plans to the Office of Management and Budget’s Office of Information and Regulatory Affairs ("OIRA") by May 18.
Thirty agencies and offices submitted plans to OIRA, ranging from one page for the National Labor Relations Board to 197 pages for the Department of Transportation. The various plans generally expressed agencies’ commitment to reviewing their current regulations in light of the President’s directive, noted regulatory review initiatives already underway separate and apart from those in response to Executive Order 13563, and outlined potential regulatory modifications that the agency could consider.
Initial Congressional reaction to the release of the various plans was divided largely along partisan lines. Congressional Democrats heralded the President’s efforts, which they argued are further evidence of Democrats’ commitment to fostering economic growth and making government more effective. However, many Republicans argued that the regulatory review effort is incomplete and cannot succeed in achieving the goals outlined by the President because it fails to address three key areas of particularly heavy regulatory burdens: the new healthcare law, the Dodd-Frank financial services reforms, and various Environmental Protection Agency regulations. The House Energy and Commerce Committee’s Oversight and Investigations Subcommittee held a June 3 session to review the Administration’s plans, and additional House and Senate Committee hearings can be expected.
Department of Commerce
- The Bureau of Industry and Security (BIS) is undertaking a comprehensive overhaul of US export controls, including by establishing "Strategic Trade Authorization" that will remove most license requirements for certain countries that do not pose a national security concern.
- The Patent and Trademark Office plans to "review all of its existing regulations that were deemed ‘significant’ under" certain criteria outlined by the Office of Management and Budget.
- The International Trade Administration will review the regulatory work of the Import Administration, which oversees and enforces several various regulations regarding the import of merchandise produced in other countries.
- The National Oceanic and Atmospheric Administration could consider the potential to better integrate the National Environmental Policy Act and The Magnuson-Stevens Act.
Department of Energy
- DOE has issued a request for information seeking comment on "the use of alternative methods for determining the efficiency of commercial and industrial equipment."
- DOE has proposed updates to its National Environmental Policy Act (NEPA) regulations in an effort to better align and update certain categorical exclusions from NEPA’s coverage with current activities and technologies.
- DOE has identified several energy efficiency standards as among its "prime candidates" for review, such as those for: residential water heaters, direct heating equipment, and pool heaters; distribution transformers; electric motors; and commercial refrigeration equipment.
- Other "prime candidates" for review include National Environmental Policy Act implementing procedures; certification, compliance, and enforcement regulations for consumer products and commercial and industrial equipment; and administrative procedures for Presidential permits for international electric transmission lines.
Department of Health and Human Services
- CMS plans to increase the use of telemedicine by authorizing hospitals to accept the credentials of a provider who is credentialed at a remote hospital, provided that the remote hospital participates in Medicare and there is a written telemedicine agreement between the hospitals.
- The Food and Drug Administration (FDA) and the Centers for Medicare and Medicaid Services (CMS) are undertaking a range of activities to streamline the medical device approval process, including by testing a voluntary parallel review process for medical devices with respect to marketing (which is under the purview of the FDA) and national coverage determinations (which are under the jurisdiction of CMS).
- The FDA plans revisions to the food label regulations in an effort to improve and expand the nutrition information available to consumers.
- CMS plans to undertake a major retrospective review of the conditions of participation it imposes on hospitals to eliminate, streamline, or otherwise modify "obsolete, unnecessary, or burdensome provisions."
- CMS has begun an Alignment Initiative designed to reconcile certain conflicting Medicare and Medicaid requirements, including those concerning duel eligibility and cost-shifting between Medicare and Medicaid programs and related health care providers.
Department of Housing and Urban Development
- The Federal Housing Administration (FHA) is finalizing a rule that will remove certain barriers to the refinancing of existing, FHA-insured mortgage debt by owners of multifamily cooperative housing projects.
- FHA has proposed a suspension of time restrictions on the resale of FHA-insured property.
- FHA has proposed the creation of alternative financial statement reporting requirements for FHA-approved lenders and mortgagees supervised by a Federal banking agency and possessing consolidated assets of less than $500 million.
- The Office of Public and Indian Housing has planned a wide range of reviews covering topics such as public housing modernization programs, the application process for participation in mixed-finance public housing development, and housing choice vouchers.
- The Office of Community Planning and Development proposed a rule that would implement performance standards and require more timely housing production under the HOME investment partnership programs. Department of the Interior
- DOI is proposing rules that would implement a geographic market-based approach to the valuation of oil and gas for purposes of calculating federal royalty payments.
- DOI expressed its interest in reviewing certain aspects of the Endangered Species Act, including simplifying the requirements for written descriptions of critical habit boundaries by allowing internet-based and map-based descriptions; streamlining approval processes for conservation agreements; clarifying the definition of "destruction or adverse modification of critical habitat"; and providing States with a greater role in the listing process.
- The Bureau of Ocean Energy Management, Regulation and Enforcement is examining reforms that would improve, over the long term, regulations that are meant to respond to "high impact, low probability events," such as the Deepwater Horizon oil spill of 2010.
- The Bureau of Indian Affairs proposed changes to current leasing regulations and permit review processes concerning the three types of non-agricultural leases of Indian land: business leasing, residential leasing, and wind and solar resource leasing.
- The Bureau of Land Management proposed removal of what it called "obsolete" land classification regulations and the integration of classification into the existing planning process.
Department of Labor
- The Occupational Safety and Health Administration (OSHA) generally plans to update "safety and health standards" that it deems to be inefficient, redundant, or outdated.
- OSHA also is considering its approach to assessing safety in the oil and gas sector.
- The Employee Benefits Security Administration (EBSA) will propose amendments to its regulations of abandoned plans and a related class exemption.
- EBSA has also proposed certain modifications to the prohibited transaction exemption procedures.
Department of the Treasury
- The Internal Revenue Service (IRS) proposed various regulations clarifying the proper place to file claims for refunds or credits, modifying provisions regarding accuracy-related penalties; and updating certain provisions, including those related to home office deductions and eligibility for the home construction contract exemption.
- Treasury and the IRS are examining specific retirement plan regulations in an effort to identify better ways to promote "retirement security by facilitating the offering of benefit distribution options in the form of retirement income."
- The Office of Financial Stability is finalizing an interim TARP conflicts of interest rule.
- The Office of Foreign Assets Control (OFAC) will update the various economic sanctions regulations programs to remove outdated material, such as sanctions regulations concerning the Former Yugoslavia.
- The Financial Crimes Enforcement Network (FinCEN) is seeking to finalize several interim anti-money laundering rules with respect to mutual funds as well as dealers in precious metals, stones and jewels. FinCen will also consider modifications to the definition of "money services business".
Department of Transportation
- DOT established Departmental procedures for National Environmental Policy Act compliance.
- The Federal Aviation Administration (FAA) plans to examine a potential "systems approach" to aircraft certification.
- DOT expressed a willingness to consider potentially requiring that all ancillary fees for air travel be displayed at all points of sale.
- The Federal Highway Administration (FHWA) is considering providing state and local governments with "greater flexibility to allocate financial resources in meeting compliance dates in the Manual on Uniform Traffic Control Devices (MUTCD)."
- FHWA is also considering providing State and local governments with more authority to prioritize various traffic control device upgrades based on local conditions and the actual useful service life of such devices.
Environmental Protection Agency
- EPA has designated 31 regulatory reviews as "priority" and divided this group into 16 early action and 15 longer term action reviews.
The early action areas include:
- Working with the US Department of Transportation and the state of California to create more uniform vehicle registration requirements
- Modifying the new vehicle fuel economy label (expected in June 2011)
- Undertaking a combined rulemaking with DOT (expected in September 2011) on greenhouse gas and Corporate Average Fuel Economy (CAFE) standards for model year 2017-2025 light-duty vehicles
- Reviewing the National Pollutant Discharge Elimination System (NPDES) to eliminate outdated and redundant provisions
- Reducing the cost of regulations by improving pre-issuance cost estimates with new data after regulated entities begin compliance
- Longer-term action areas include various water quality regulations, the development of an "E-Manifest" in lieu of paper forms for waste management facility reporting obligations, and certain pesticide regulations.