By Carol L. O’Riordan
On January 5, 2017, the U.S. House of Representatives passed, pretty much along party lines, the Regulations from the Executive in Need of Scrutiny (REINS) Act. This bill, if enacted into law, would dramatically change the way that federal regulation of industry operates. The vote was 237 to 187, with all Republicans voting for it, joined by only two Democrats.
The bill would require congressional approval of any rule promulgated by a federal regulatory agency that would impose compliance costs of more than $100 million a year. If Congress failed to approve a rule in 70 days after its promulgation, it would be null and void.
This drastic change would apply to pretty much everything that federal regulators put forward: cleanup regulations from the Environmental Protection Agency, financial regulations from the Comptroller of the Currency, work overtime rules by the U.S. Department of Labor, and so on. That means that anyone who has a business that is likely to be affected by a major rule needs to know about the REINS Act.
Conservatives generally support the REINS Act as a way of obtaining control over what they believe to be a trend toward overzealous regulation. Liberals are opposed to the bill.
The U.S. Senate has not yet voted on the REINS Act. In the past, it has rejected this idea, and the Republicans’ narrow 52-48 margin in the Senate means that there is a good chance that the Democratic minority will filibuster it or otherwise bottle it up there. But there’s certainly a good chance that it will pass the Senate.
President Trump has expressed support for the act. During the campaign, he said, “I will sign the REINS Act should it reach my desk as President and more importantly I will work hard to get it passed. The monstrosity that is the Federal Government with its pages and pages of rules and regulations has been a disaster for the American economy and job growth. The REINS Act is one major step toward getting our government under control.”
If the bill passes both houses and is signed by the President, the regulatory system will undergo a massive change. Once the REINS Act is in effect, any business that may be affected by a proposed regulation – in other words, nearly any business at all — will need to track regulatory changes not just through the appropriate agency, from original draft to promulgation, but also through the 70-day legislative process.
Whatever one thinks of the merits of the bill, businesses will find themselves in a swirl of uncertainty unlike anything they are going through today. Companies in highly regulated industries, such as financial services, telecommunications, and government procurement, need to be particularly aware of possible rules changes and the ups and downs of congressional participation.
We are ready and able to guide our clients through the vicissitudes of the REINS Act, should it become law, and through other types of regulatory uncertainty.