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114th Congress }                                       { Rept. 114-618
                        HOUSE OF REPRESENTATIVES
 2d Session    }                                       { Part 1

======================================================================
 
                    MIDNIGHT RULE RELIEF ACT OF 2016

                                _______
                                

 June 10, 2016.--Committed to the Committee of the Whole House on the 
             State of the Union and ordered to be printed.

                                _______
                                

 Mr. Chaffetz, from the Committee on Oversight and Government Reform, 
                        submitted the following

                              R E P O R T

                             together with

                             MINORITY VIEWS

                        [To accompany H.R. 4612]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Oversight and Government Reform, to whom 
was referred the bill (H.R. 4612) to ensure economic stability, 
accountability, and efficiency of Federal Government operations 
by establishing a moratorium on midnight rules during a 
President's final days in office, and for other purposes, 
having considered the same, report favorably thereon without 
amendment and recommend that the bill do pass.

                                CONTENTS

                                                                   Page
Committee Statement and Views....................................     2
Section-by-Section...............................................     4
Explanation of Amendments........................................     5
Committee Consideration..........................................     5
Roll Call Votes..................................................     5
Correspondence...................................................     8
Application of Law to the Legislative Branch.....................    10
Statement of Oversight Findings and Recommendations of the 
  Committee......................................................    10
Statement of General Performance Goals and Objectives............    10
Duplication of Federal Programs..................................    10
Disclosure of Directed Rule Makings..............................    10
Federal Advisory Committee Act...................................    10
Unfunded Mandate Statement.......................................    10
Earmark Identification...........................................    11
Committee Estimate...............................................    11
Budget Authority and Congressional Budget Office Cost Estimate...    11
Minority Views...................................................    13

                     Committee Statement and Views


                          PURPOSE AND SUMMARY

    H.R. 4612, the Midnight Rule Relief Act of 2016, prohibits 
federal agencies from proposing or finalizing significant rules 
during a moratorium period that falls between the day after a 
presidential election and Inauguration Day in years when the 
serving president will leave office on Inauguration Day. The 
legislation is designed to ensure economic stability and the 
accountability and efficiency of federal government operations 
during an outgoing president's final days in office.

                  BACKGROUND AND NEED FOR LEGISLATION

    Outgoing presidents, whether they have termed out or lost 
re-election, have a clear incentive to work to shore up their 
``legacy'' by implementing aspects of their agenda during their 
last few months in office. This incentive grows even stronger 
in the period between the election and inauguration of a new 
president. Outgoing presidents are free from the shackles of 
public opinion, making it tempting to issue rules that would 
have been too controversial to finalize before the election.
    Research has shown that since 1948 when control of the 
White House switched to the opposite party, an average of 17 
percent more rules were promulgated between Election Day and 
Inauguration Day compared to non-presidential election 
years.\1\ This trend in ``midnight rulemaking'' has been more 
dramatic in more recent years, with the highest spikes 
occurring around the 1980, 1992, and 2000 elections.\2\
---------------------------------------------------------------------------
    \1\Jerry Brito and Veronique De Rugy, For Whom the Bell Tolls: The 
Midnight Regulations Phenomenon, Mercatus Center George Mason 
University (December 2008).
    \2\Id.
---------------------------------------------------------------------------
    During the period between the election and inauguration of 
President George W. Bush, the outgoing Clinton Administration 
published 51 percent more pages of rules than it did during the 
average of the same period of the prior three years.\3\ 
According to John Podesta, former chief of staff for President 
Bill Clinton, ``starting in early 1999, [they] had people down 
in the White House basement with word processors and legal pads 
making lists of things [they] wanted to get done before [they] 
left.''\4\
---------------------------------------------------------------------------
    \3\Susan Dudley, ``Reversing Midnight Regulations,'' Regulation 
Magazine, Spring 2001.
    \4\Jerry Brito and Veronique De Rugy, For Whom the Bell Tolls: The 
Midnight Regulations Phenomenon, Mercatus Center George Mason 
University (December 2008).
---------------------------------------------------------------------------
    For example, on October 5, 2000, the Clinton Administration 
issued a proposed rule on residential clothes washers--
mandating stores sell government-approved washing machines 
considered to be ``more efficient.''\5\ Then, just three months 
later, and eight days before the end of his term, the final 
rule was published on January 12, 2001.\6\ The entire 
rulemaking process for this major rule took less time than the 
comment period alone for the Clean Power Plan, which lasted 
five and a half months alone--from June 18, 2014 to December 1, 
2014.\7\
---------------------------------------------------------------------------
    \5\Energy Conservation Program for Consumer Products: Clothes 
Washer Energy Conservation Standards, 65 Fed. Reg. 194 (proposed 
October 5, 2000).
    \6\Energy Conservation Program for Consumer Products: Clothes 
Washer Energy Conservation Standards, 66 Fed. Reg. 3314 (proposed 
January 12, 2001).
    \7\Fact Sheet: Clean Power Plan & Carbon Pollution Standards Key 
Dates, U.S. Environmental Protection Agency, https://www.epa.gov/
cleanpowerplan/fact-sheet-clean-power-plan-carbon-pollution-standards-
key-dates.
---------------------------------------------------------------------------
    The surge in midnight rules can overwhelm the Office of 
Information and Regulatory Affairs (OIRA), the entity charged 
with reviewing the quality of proposed agency rules. This can 
result in rushed and flawed oversight, further undermining the 
quality of review for proposed rules. In fact, as a result of 
midnight rulemaking, the average review time for midnight rules 
issued between 1994 and 2009 was approximately 25 days shorter 
than the review time of other rules.\8\ Economists have found 
that as the length of OIRA review time decreases, the quality 
of the economic analysis to which rules are subject also 
decreases.\9\
---------------------------------------------------------------------------
    \8\Patrick McLaughlin & Jerry Ellig, Does OIRA Review Improve the 
Quality of Regulatory Impact Analysis? Evidence from the Final Year of 
the Bush II Administration, 63 Admin L. Rev. (Special Edition) 179 
(2011).
    \9\Id.
---------------------------------------------------------------------------
    Midnight rules can also serve as a significant distraction 
for incoming presidents. Rather than being able to focus on a 
successful transition into office, midnight rules can force a 
newly-elected president to redirect energy to stopping ongoing 
rulemaking and repealing rules that were rushed through after 
his or her election. In fact, this has become such a problem 
that every president since President Ronald Reagan taking over 
from a president of the opposite party has ordered a regulatory 
moratorium.\10\ Unfortunately, while the actions of incoming 
presidents can allow for delays in implementation of final 
rules or stop rules that have yet to be published, they can do 
little to stop midnight rules in a timely fashion.
---------------------------------------------------------------------------
    \10\Jerry Brito and Veronique De Rugy, A Solution to the Midnight 
Regulation Outburst, Mercatus Center George Mason University (December 
2008).
---------------------------------------------------------------------------
    This bill would make sure presidents are prohibited from 
proposing or finalizing rules that are being rushed through the 
rulemaking process. Importantly, this bill does not create a 
moratorium that is excessive in length of time--it creates a 
moratorium just from the day after Election Day to Inauguration 
Day, about 11 weeks, and no more frequently than once every 
four years. If there are rules nearing proposal or final 
issuing, a new president will be able to take prompt action to 
ensure they move forward. The Midnight Rule Relief Act of 2016 
will ensure that the current Administration and future 
Administrations--of either party--have a system of checks and 
balances on its regulatory powers.

                          LEGISLATIVE HISTORY

    H.R. 4612, the Midnight Rule Relief Act of 2016, was 
introduced on February 25, 2016, by Congressman Tim Walberg (R-
MI) and referred to the Committee on Oversight and Government 
Reform. The bill was also referred to the Committee on the 
Judiciary. Also on February 25, 2016, Senator Joni Ernst (R-IA) 
introduced a Senate companion, S. 2582, which was referred to 
the Senate Committee on Homeland Security and Governmental 
Affairs. On March 1, 2016, the Committee on Oversight and 
Government Reform considered H.R. 4612 and ordered it to be 
favorably reported by a vote of 20 to 17.
    In the 112th Congress, H.R. 4607, the Midnight Rule Relief 
Act of 2012, was introduced on April 24, 2012, by 
Representative Reid Ribble (R-WI) and referred to the Committee 
on Oversight and Government Reform. The bill was also referred 
to the Committee on the Judiciary. On April 25, 2012, Senator 
Ron Johnson (R-WI) introduced a Senate companion bill, S. 2368. 
On April 26, 2012, the Committee on Oversight and Government 
Reform considered H.R. 4607 and ordered it to be favorably 
reported, by voice vote.
    In the 110th Congress, Representative Jerrold Nadler (D-NY) 
introduced H.R. 7296, the Midnight Rule Act, to delay the 
implementation of agency rules adopted within the final 90 days 
of the final term a president serves.

                           Section-by-Section


Section 1. Short title

    Designates the short title of the bill as the ``Midnight 
Rule Relief Act of 2016''.

Section 2. Moratorium on midnight rules

    Prohibits an agency from proposing or finalizing any 
midnight rule during the moratorium period unless the 
Administrator of the Office of Information and Regulatory 
Affairs finds that the midnight rule will not result in any of 
the following:
    (1) An annual effect on the economy of $100,000,000 or 
more;
    (2) A major increase in costs or prices for consumers, 
individual industries, Federal, State, or local government 
agencies, or geographic regions;
    (3) Significant adverse effects on competition, employment, 
investment, productivity, innovation, or on the ability of 
United States-based enterprises to compete with foreign-based 
enterprises in domestic and export markets; or
    (4) A significant economic impact on a substantial number 
of small entities.

Section 3. Special rule on statutory, regulatory, and judicial 
        deadlines

    Exempts major rules that are to be proposed or finalized 
during the moratorium period pursuant to a pre-existing 
statutory or judicial deadline.
    Requires the Administrator to publish the deadline(s) in 
the Federal Register no later than 30 days.

Section 4. Exceptions

    Provides that an agency may propose or finalize a midnight 
rule if the President determines that it is necessary for the 
health, safety, or national security, of the United States.
    This section also provides that an agency may propose or 
finalize a midnight rule if the Administrator determines that 
the midnight rule is deregulatory in nature.``

Section 5. Definitions

    Defines ``Administrator'' as the Administrator of the 
Office of Information and Regulatory Affairs within the Office 
of Management and Budget.
    Defines ``agency'' to include executive branch and 
independent agencies; however, it exempts the Federal Election 
Commission, the Federal Reserve, the Federal Deposit Insurance 
Corporation, and the United States Postal Service.
    Defines ``deadline'' as any date certain for fulfilling any 
obligation or exercising any authority established by or under 
any Federal statute or rule.
    Defines ``midnight rule'' as any agency statement of 
general applicability and future effect, issued during the 
moratorium period that is intended to have the force and effect 
of law and is designed to implement, interpret, or prescribe 
law or policy, or to describe the procedure or practice of an 
agency.
    Defines the ``moratorium period'' as the day after Election 
Day through January 20th of the following year, for years in 
which a president is not serving consecutive terms.
    Defines ``rule'' as any agency statement of general 
applicability and future effect, issued during the moratorium 
period that is intended to have the force and effect of law and 
is designed to implement, interpret, or prescribe law or 
policy, or to describe the procedure or practice of an agency.
    Defines ``small entity'' as defined in section 601 of title 
5, having the same meaning as ``small business,'' ``small 
organization,'' and ``small governmental jurisdiction.''

                       Explanation of Amendments

    During Full Committee consideration of the bill, Delegate 
Eleanor Holmes Norton (D-DC) offered an amendment to strike the 
word ``imminent'' from Sec. 4(a)(1) of the bill. The amendment 
was withdrawn.
    Ranking Member Elijah Cummings (D-MD) offered an amendment 
to create an exception to the moratorium for rules published in 
the regulatory flexibility agenda and the Unified Regulatory 
Agenda for at least a year. The amendment was not adopted by a 
roll call vote of 16 to 20.

                        Committee Consideration

    On March 1, 2016, the Committee met in open session and 
ordered reported favorably the bill, H.R. 4261, by roll call 
vote of 20 to 17, a quorum being present.

                            Roll Call Votes

[GRAPHIC(S) NOT AVAILABLE IN TIFF FORMAT]

              Application of Law to the Legislative Branch

    Section 102(b)(3) of Public Law 104-1 requires a 
description of the application of this bill to the legislative 
branch where the bill relates to the terms and conditions of 
employment or access to public services and accommodations. 
This bill ensures economic stability, accountability, and 
efficiency of Federal Government operations by establishing a 
moratorium on midnight rules during a President's final days in 
office. As such this bill does not relate to employment or 
access to public services and accommodations.

  Statement of Oversight Findings and Recommendations of the Committee

    In compliance with clause 3(c)(1) of rule XIII and clause 
(2)(b)(1) of Rule X of the rules of the House of 
Representatives, the Committee's oversight findings and 
recommendations are reflected in the descriptive portions of 
this report.

         Statement of General Performance Goals and Objectives

    In accordance with clause 3(c)(4) of rule XIII of the Rules 
of the House of Representatives, the Committee's performance 
goals and objectives of the bill are to ensure economic 
stability, accountability, and efficiency of Federal Government 
operations by establishing a moratorium on midnight rules 
during a President's final days in office.

                    Duplication of Federal Programs

    No provision of this bill establishes or reauthorizes a 
program of the Federal Government known to be duplicative of 
another Federal program, a program that was included in any 
report from the Government Accountability Office to Congress 
pursuant to section 21 of Public Law 111-139, or a program 
related to a program identified in the most recent Catalog of 
Federal Domestic Assistance.

                  Disclosure of Directed Rule Makings

    The Committee estimates that enacting this bill does not 
direct the completion of any specific rule makings within the 
meaning of 5 U.S.C. 551.

                     Federal Advisory Committee Act

    The Committee finds that the legislation does not establish 
or authorize the establishment of an advisory committee within 
the definition of 5 U.S.C. App., Section 5(b).

                       Unfunded Mandate Statement

    Section 423 of the Congressional Budget and Impoundment 
Control Act (as amended by Section 101(a)(2) of the Unfunded 
Mandates Reform Act, P.L. 104-4) requires a statement as to 
whether the provisions of the reported include unfunded 
mandates. In compliance with this requirement the Committee has 
received a letter from the Congressional Budget Office included 
herein.

                         Earmark Identification

    This bill does not include any congressional earmarks, 
limited tax benefits, or limited tariff benefits as defined in 
clause 9 of Rule XXI.

                           Committee Estimate

    Clause 3(d)(1) of rule XIII of the Rules of the House of 
Representatives requires an estimate and a comparison by the 
Committee of the costs that would be incurred in carrying out 
this bill. However, clause 3(d)(2)(B) of that Rule provides 
that this requirement does not apply when the Committee has 
included in its report a timely submitted cost estimate of the 
bill prepared by the Director of the Congressional Budget 
Office under section 402 of the Congressional Budget Act of 
1974.

     Budget Authority and Congressional Budget Office Cost Estimate

    With respect to the requirements of clause 3(c)(2) of rule 
XIII of the Rules of the House of Representatives and section 
308(a) of the Congressional Budget Act of 1974 and with respect 
to requirements of clause (3)(c)(3) of rule XIII of the Rules 
of the House of Representatives and section 402 of the 
Congressional Budget Act of 1974, the Committee has received 
the following cost estimate for this bill from the Director of 
Congressional Budget Office:

                                     U.S. Congress,
                               Congressional Budget Office,
                                    Washington, DC, March 15, 2016.
Hon. Jason Chaffetz,
Chairman, Committee on Oversight and Government Reform,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 4612, the Midnight 
Rule Relief Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Matthew 
Pickford.
            Sincerely,
                                         Robert A. Sunshine
                                        (For Keith Hall, Director).
    Enclosure.

H.R. 4612--Midnight Rule Relief Act of 2016

    H.R. 4612 would prohibit federal agencies from promulgating 
significant regulatory actions from Election Day through 
Inauguration Day unless an incumbent President is reelected. 
The bill defines significant regulatory actions as those having 
an annual impact of more than $100 million on the economy, 
causing major increases in costs or prices, having adverse 
effects on U.S. companies competing in global markets, or 
having a significant economic impact on small entities. The 
legislation, however, would provide a number of exemptions to 
the prohibition.
    Considering the short time frame proposed for prohibiting 
regulatory actions and the broad exemption authority that would 
be provided, CBO estimates that implementing H.R. 4612 would 
not have a significant effect on the budget. Pay-as-you-go 
procedures do not apply because enacting the bill would not 
affect direct spending or revenues.
    CBO estimates that enacting H.R. 4612 would not increase 
direct spending or on-budget deficits in any of the four 
consecutive 10-year periods beginning in 2027.
    H.R. 4612 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Matthew 
Pickford. This estimate was approved by H. Sam Papenfuss, 
Deputy Assistant Director for Budget Analysis.

                             MINORITY VIEWS

    The Minority opposes H.R. 4612, the Midnight Rule Relief 
Act of 2016. This bill would significantly interfere with the 
ability of federal agencies to implement regulations that are 
critical to protecting the health and safety of the American 
people.
    The value of a rulemaking should not be judged solely by 
when it becomes final. Agencies have a responsibility to 
continue to protect our health, safety, environment, and 
economy no matter how long a president has left in his or her 
term.
    H.R. 4612 would bar virtually all regulations from being 
finalized during the end of a president's term, regardless of 
when the rule was proposed or how long the regulation has been 
in the regulatory process. This legislation would also block 
agencies from proposing rules during the moratorium period. 
Rules that would repeal existing rules, on the other hand, 
would be exempt from the moratorium.
    This legislation is based on the false conclusion that 
regulations finalized near the end of a president's term are 
rushed through the regulatory process and do not comply with 
mandatory rulemaking procedures. According to a report issued 
by the Administrative Conference of the United States, most 
end-of-term regulations have been found to be routine matters 
or were issued in response to deadlines that are out of the 
agency's control.\1\ This nonpartisan research is the most 
recent comprehensive review of late-term rulemakings.
---------------------------------------------------------------------------
    \1\Administrative Conference of the United States, Recommendation 
2012-2, Midnight Rules (June 14, 2012) (online at www.acus.gov/sites/
default/files/Final-Recommendation-2012-2-Midnight-Rules.pdf).
---------------------------------------------------------------------------
    There is no indication that this Administration will short-
circuit the rulemaking process. The Administrator of the Office 
of Information and Regulatory Affairs (OIRA) issued a memo on 
December 17, 2015, that encouraged agencies to submit rules for 
OIRA review before the end of the year. The memo stated:

        Agencies should strive to complete their highest 
        priority rulemakings by the end of 2016 to avoid an end 
        of the year scramble that has the potential to lower 
        the quality of regulations that OIRA receives for 
        review and to use the resources available for 
        interagency review.\2\
---------------------------------------------------------------------------
    \2\Memo from Administrator Howard Shelanski, Office of Information 
and Regulatory Affairs, Office of Management and Budget, to Deputy 
Secretaries, Regulatory Review at the End of the Administration (Dec. 
17, 2015) (online at www.whitehouse.gov/sites/default/files/omb/assets/
agencyinformation_circulars_memoranda_2015_pdf/
regulatory_review_at_the_end_of_the_ administration.pdf).

    The Coalition for Sensible Safeguards, which includes more 
than 150 consumer, public health, environmental, labor, and 
scientific organizations, sent a letter to the Committee 
---------------------------------------------------------------------------
opposing H.R. 4612. The letter stated:

        This bill would jeopardize public protections affecting 
        public health and safety and the environment that often 
        are years, if not decades, in the making. Worse, it 
        would exempt attempts in the final days of an 
        administration, through rulemaking to ``undo'' or 
        weaken existing regulations.\3\
---------------------------------------------------------------------------
    \3\Letter from Robert Weissman, President, Coalition for Sensible 
Safeguards, to Chairman Jason Chaffetz and Ranking Member Elijah E. 
Cummings, House Committee on Oversight and Government Reform (Mar. 1, 
2016).

    The American Association for Justice also sent a letter to 
the Committee opposing H.R. 4612. That letter stated:
    This misguided bill would jeopardize crucial public 
protections by blocking regulations based on timing alone. It 
presumes the regulations which are proposed or finalized during 
the so-called ``midnight'' rulemaking period are rushed and 
inadequately vetted.\4\
---------------------------------------------------------------------------
    \4\Letter from Linda Lipsen, Chief Executive Officer, American 
Association for Justice, to Ranking Member Elijah E. Cummings, House 
Committee on Oversight and Government Reform (Feb. 29, 2016).
---------------------------------------------------------------------------
    Yet many of the regulations which this moratorium would 
apply to have been in the regulatory process for years. These 
regulations were delegated by Congress to agencies in order to 
protect children from toxic toys, families from tainted food, 
and consumers from financial exploitation.\4\
    I offered an amendment that would have exempted from the 
moratorium imposed by H.R. 4612 any rule that is published in 
the regulatory flexibility agenda of the agency and that has 
been included in the Unified Regulatory Agenda for at least one 
year. If the majority were really concerned about ensuring that 
regulations are not rushed through the process, they would have 
accepted this amendment, but they did not.
    For all of these reasons, Committee Democrats oppose H.R. 
4612.

                                        Elijah E. Cummings,
                                                    Ranking Member.

                                  [all]