House Passes Regulatory Reform Bill

January 13, 2016

stk318013rknOn Jan. 7, the House passed the Searching for and Cutting Regulations that are Unnecessarily Burdensome (SCRUB) Act of 2015 (H.R. 1155). The legislation was introduced by Rep. Jason Smith (R-Mo.) in February 2015. Sen. Orrin Hatch (R-Utah) introduced identical legislation (S.1890) in the Senate last July. The Senate Judiciary Committee held a hearing on the legislation in December, but has not yet scheduled a mark-up on the bill. Similar legislation has been enacted in Missouri while Rep. Smith served in the state legislature.

The SCRUB Act  would create a temporary commission to review all of the existing federal regulations and determine which ones could be repealed in order to reduce the cost of regulation. The temporary commission would consist of eight individuals selected from lists provided by leadership in both the House and Senate, with a Chair appointed by the president with all members being confirmed by the Senate. The goal of the commission will be to reduce the overall costs of regulation by 15 percent with a minimal reduction in effectiveness of the regulations.

Key provisions in legislation would:

  • Establish the Retrospective Regulatory Review Commission to conduct a review of the Code of Federal Regulations to identify rules which could be removed without significantly compromising the overall effectiveness of the regulations.
  • Priority review will be given to the following:
    • Major rules or regulations that include major rules, that have been in effect more than 15 years, that impose paperwork burdens that could be reduced substantially without significantly diminishing regulatory effectiveness, that impose disproportionately high costs on small entities, or that could be strengthened in their effectiveness while reducing regulatory costs.
  • Institutes a “cut-go procedure” under which agencies are required to cut regulations identified by the Commission prior to promulgating new regulations in order to offset the costs of the new regulation.
  • Introduce a new requirement that agencies must include in new rules a plan to review the rule within ten years of its effective date.

HR 1155 did not have any Democratic cosponsors and was passed largely along partisan lines with a vote of 245 -174. Only two Republicans, Reps. Walter Jones Jr. (R-N.C.) and Thomas Massie (R-Ky.) voted against the bill. President Barack Obama has indicated that he would veto this legislation over concerns that it would slow down the regulatory process.

Small businesses often bear a disproportional regulatory burden and therefore, regulatory reform continues to be one of the key areas identified by NSBA’s members for action. In a recent NSBA survey almost one in three small-business owners indicated that regulatory burdens create the largest obstacles to the survival and success of their small business. Small businesses need a fair regulatory playing field and NSBA supports regulatory reforms which ease the burden on small businesses, especially when the review process ensures that the overall effectiveness of regulations is not compromised. Removing unnecessary regulatory obstacles is a strong step in ensuring the growth of small businesses across the country.