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ACA Supports New Regulatory Legislation

Monday, July 1, 2013

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Coating makers are urging Congress to lighten up on new regulations and hunker down against a regulatory pressure tactic known as “sue and settle.”

The American Coatings Association and other organizations are helping push two federal pieces of legislation: the Regulatory Accountability Act of 2013, which would provide more transparency in the way federal agencies develop regulations, and the Sunshine for Regulatory Decrees and Settlements Act of 2013, which aims to end regulation advancement through "sue and settle" litigation with federal agencies.

Regulatory Accountability Act

ACA and several other organizations joined the U.S. Chamber of Commerce in signing letters to members of the U.S. House and Senate Judiciary Committees, urging the passage of the Regulatory Accountability Act of 2013.

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ACA and other organizations are pushing for two new regulations. One would require better accountability for federal agencies' rulemaking activities to cut out unnecessary regulations and the other seeks to end the practice of advancing regulations by "sue and settle" litigation.

The Act (H.R. 2122 and companion bill S. 1029) was introduced on May 23 and would modernize the 66-year-old Administrative Procedure Act to improve the way federal agencies promulgate regulations for better accountability and the integrity of rulemaking activity.

"If we are to grow our economy and get more Americans back to work, Washington must get out of the way," said Rep. Bob Goodlatte (R-VA), bill sponsor and House Judiciary Committee Chairman.

"The Regulatory Accountability Act solves the problem of overreaching and unnecessary regulation by providing greater transparency, cost-benefit analysis of new rules, and a more thorough process for high-impact rules," said Goodlatte.

In 2011, the Regulatory Accountability Act passed in the House of Representatives but stalled in the Senate.

Fixing Regulatory Burdens

The Regulatory Accountability Act requires federal agencies to choose the lowest-cost rulemaking alternative that would:

• Meet statutory objectives;
• Improve agency fact-gathering, fact-finding, and identification of regulatory alternatives;
• Require advance notice of proposed major rulemakings to increase public input before costly agency positions are proposed; and
• Fortify judicial review of new agency regulations.

The Act also presented a new defintion for a "major rule," which would include any rule expected to cost the economy $100 million, impose "a major increase in costs or prices" for consumers or industries, or bring "significant adverse effects" for competition, employment, investment, productivity, or U.S. companies' ability to compete with foreign players.

In the letters to members of the House and Senate Judiciary Committees, dated June 5, ACA wrote: "Our regulatory process has not been updated in more than six decades, and as a result we are seeing a rising number of massive, costly rules that breed uncertainty, drive up costs, and stifle hiring and investment.

"Small and large businesses alike consistently cite growing regulatory burdens and the uncertainty that occurs when badly written regulations must be corrected through years of litigation as the most significant obstacles to new hiring."

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"If we are to grow our economy and get more Americans back to work, Washington must get out of the way," said Rep. Bob Goodlatte (R-VA), Regulatory Accountability Act sponsor and House Judiciary Committee Chairman.

ACA wrote that the bill would not prevent federal agencies from issuing regulations, but instead it would ensure that federal regulators base their decisions on solid information, make the process more transparent, and hold agencies more accountable to the public.

Ending 'Sue and Settle'

In April, Sen. Chuck Grassley (R-IA) and Rep. Doug Collins (R-GA) introduced the Sunshine for Regulatory Decrees and Settlements Act of 2013 (H.R. 1493, S. 714), which aims to end the practice of federal agencies advancing regulations through "sue and settle" litigation.

On June 5, the U.S. House Committee on the Judiciary's Subcommittee on Regulatory Reform, Commercial, and Antitrust Law held a hearing on the "sue-and-settle" legal tactic.

The same bill was introduced in the House and Senate during the last Congress and passed the full House as part of a larger bill—the Red Tape Reduction and Small Business Job Creation Act—but the Senate did not take up the measure.

ACA was joined by 53 other organizations in a letter to the bills' sponsors supporting the legislation and noting that under the legislation "agencies would continue to be free to enter into settlement agreements and consent decrees that result in regulations; however, the public and regulated parties would no longer be excluded from participating in our regulatory system because of this 'sue and settle' tactic."

Environmental Protection Agency

Regulations issued after "sue and settle" litigation has resulted in several actions in recent years, including revised hazardous air pollutant standards for cement kilns.

ACA explained "sue and settle" in its letters to the House and the Senate, saying: "Organizations sue federal agencies to compel agencies to take specific actions, such as issuing new regulations. Behind closed doors, these organization and agencies then enter into consent decrees and settlement agreements compelling the agency to issue rules.

"The public and those regulated entities most affected by these rules are often not aware of these lawsuits and, even when they are, have an extremely difficult time when trying to intervene in the cases. Their only recourse is after the settlement has been agreed to by the agency—in essence, after the damage has been done."

Actions in Recent Years

The Sunshine for Regulatory Decrees and Settlements Act would require agencies to provide timely notice of lawsuits and give regulated entities a sufficient opportunity to intervene in cases.

According to ACA, there have been many "sue and settle" actions in recent years, including:

• The New Source Performance Standards for greenhouse gas emissions from utilities and refineries;
• Numeric nutrient criteria for the state of Florida;
• Revisions to the definition of solid waste;
• Revised hazardous air pollutant standards for cement kilns;
• Clean Water Act guidance for mountaintop removal; and
• Multi-industry section 112 air toxic rules.

"Sue and settle litigation damages the transparency, public participation, and judicial review protections Congress has guaranteed for all of our citizens in the rulemaking process," said Sen. Grassley, ranking member on the Senate Judiciary Committee.