A note on jurisdiction. When trying to track the Senate’s regulatory reform efforts, you have to know where to look. Whereas most APA-focused legislation in the House is referred to the Judiciary Committee, in the Senate that place is the Homeland Security and Governmental Affairs Committee (HSGAC). There’s a long and (to some of us) interesting story behind that committee’s origins and unique jurisdiction, but the bottom line is HSGAC is the gatekeeper for most cross-cutting regulatory process changes. For agency or industry-specific reforms, like those directed at Dodd-Frank or the EPA, look to the Committees on Banking or Environmental and Public Works, respectively. For those changes directly targeted at the role of the courts, look to (where else) the Judiciary Committee. A final caveat, unlike the House, the Senate does not do simultaneous referrals. This means legislation is referred to a single committee based on its preponderance of content – the issue of judicial review may be addressed in a larger bill which is nonetheless referred to HSGAC rather than Judiciary.

In my last post, I briefly described the context and conditions which led successfully to passage of a regulatory reform proposal: theFederal Permitting Improvement Act of 2015, which was signed into law by the President as part of a larger transportation bill. That was an example of what I called the “good” of the “good, bad, and the ugly” of efforts in this area in the 114^th Congress.

Now for the bad.

The permitting bill is a regulatory proposal, in the sense that it lowers the administrative barriers to some for some form of activity from occurring. But it applies to only a specific type of economic projects, and ultimately to small subset thereof. It neither reforms the rules by which regulations are promulgated (e.g., the Administrative Procedure Act, Paperwork Reduction Act, Congressional Review Act, etc.; what we might call “meta-regulation”) nor does it limit or substantially alter the effective impact of regulations on broader set of enterprises or activity. In other words, for those of use interested in reform, while the permitting bill was a net positive, it does not squarely fit into regulatory reform (notice the emphasis) as we tend to think of it.

For something more along those lines consider S. 86 – the Small Business Paperwork Relief Act of 2015. Introduced by Sen. Vitter, S. 86 would amend the Paperwork Reduction Act and essentially gave small businesses an automatic stay on penalties for first time paperwork violations. It’s legislation that exists within a philosophy that businesses do not actively seek to violate rules, but often do so accidentally in the course of normal operations and attempting to comply. To discourage bad actors, the bill ultimately left the decision of whether to impose a fine or not to the agency itself, required the violation be corrected, and excepted specific cases such as bad faith, material benefit, and public safety issues.

This was not groundbreaking stuff and was really based on allowable discretion that already existed at many agencies. One issue is that we lacked good information on whether, how often, and in what cases agencies used this discretion, and wanted to create a uniform standard and presumption in favor of small businesses. Moreover, we had heard testimony and met with individuals who had received sizable fines for things like an errant signature on a form—cases that did not substantively interfere with agency information gathering.

We were using this bill as a fairly small, uncontroversial test case and bridge to further and more wide-ranging regulatory reform legislation – a down payment on a bigger project.

Unfortunately, if this was the down payment, we didn’t even get preapproved for the loan. Before we could markup the bill, members of the minority indicated a deep skepticism of this approach and questioned whether this would create a wholesale incentive to evade paperwork violations. In an almost exact mirror image of the view of the bill’s supporters, their underlying philosophy presumed businesses are wont to violate rules but for penalties and other sanctions. Nonetheless the bill’s sponsors attempted to alleviate concerns by clarifying certain aspects, like the lack of review for agency decisions and the like.

Opposition went further than internal discussions – we soon received letters from outside groups stating their opposition. Ultimately, in the interest of avoiding a partisan vote and barrage of amendments (especially so early in a new Congress), the bill was pulled and never considered.

It did serve as a useful chemical test of the conditions of the regulatory reform waters. Efforts would have to continue in a different way and different direction.

Next up: the ugly.