In Washington

U.S. Supreme Court hears oral argument in case about presidential control of independent agencies

• What’s the story? The U.S. Supreme Court will decide inCollins v. Mnuchin whether restrictions Congress placed on the ability of the president to remove the director of the Federal Housing Finance Agency (FHFA) amount to an unconstitutional violation of separation of powers principles. The court heard oral argument in the case on December 9. 
• Opponents of the FHFA’s structure argue that Congress interfered with the power of the executive branch to control the agency by creating a structure in which the agency’s single director has protections against removal by the president. Independent agencies are generally headed by multi-member commissions with removal protections, rather than a single director.
• Supporters of the FHFA’s design argue that the U.S. Constitution, in their view, allows Congress to insulate some agencies from direct presidential control.
• The U.S. Supreme Court in June decided a similar case,Seila Law v. Consumer Financial Protection Bureau, ruling 5-4 that the removal protections given to the single director of the Consumer Financial Protection Bureau were unconstitutional.
• Want to go deeper?
  • Collins v. Mnuchin
  • Seila Law v. Consumer Financial Protection Bureau

New bill would require GAO to send Congress a report on major midnight regulations

• What’s the story?Representative Gerald Connolly (D-Va.) on December 14 introduced the Midnight Regulations Review Act in the U.S. House of Representatives. The bill would require the Government Accountability Office (GAO) to send Congress a report on major regulations made by outgoing presidents just before the transition to a new administration.
• The bill requires the GAO to send the report to Congress within the first five weeks of a new presidential administration. The report must identify any new major rules that Congress could block using the Congressional Review Act (CRA). 
• The bill defines major rules as those that would have an annual economic effect of $100,000,000 or more, would cause major cost increases for consumers, industries, or government agencies, or would have significant adverse effects on competition, employment, investment, productivity, innovation, or trade.
• Under the CRA, Congress has a chance to review and reject any new regulatory rules created by federal administrative agencies. Since the law’s creation in 1996, Congress has used it to repeal 17 out of the over 90,767 rules published in theFederal Register during that time. Congress blocked 16 of those rules at the beginning of the Trump administration as it reviewed rules made by agencies at the end of the Obama administration.
• Connolly’s bill had four Democratic Party cosponsors as of December 18: Carolyn Maloney (N.Y.), Raja Krishamoorthi (Ill.), Jackie Speier (Calif.), and Eleanor Holmes Norton (D.C.)
• Want to go deeper?
  • Midnight rulemaking
  • Congressional Review Act

U.S. Supreme Court will hear challenge to HHS approval of Medicaid work requirements

• What’s the story? The U.S. Supreme Court on December 4 agreed to hear a case regarding agency approval of work requirements for state Medicaid beneficiaries. InAzar v. Gresham, the court will decide whether the Medicaid statute empowers the secretary of the U.S. Department of Health and Human Services (HHS) to approve state plans for work requirements to encourage Medicaid beneficiaries to find alternative healthcare coverage.
• The U.S. District Court for the District of Columbia blocked HHS from approving state plans in Arkansas and New Hampshire in 2019. 
• The U.S. Court of Appeals for the District of Columbia Circuit affirmed the decision of the district court. The court held that HHS focused on alternative goals that go beyond what the agency may consider when deciding whether to grant a waiver from Medicaid requirements. The court ruled that HHS failed the Administrative Procedure Act’s arbitrary-or-capricious test, which requires courts to invalidate agency actions that are arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law.
• HHS in 2018 began approving state requests for waivers from Medicaid requirements. The waivers allow states to test plans that require certain Medicaid beneficiaries to work or pursue job-training to remain enrolled in the program. States argued that such plans would help beneficiaries find employer-sponsored or individual health insurance plans and free up Medicaid resources for those who cannot afford healthcare coverage on their own.
• Want to go deeper?
  • Azar v. Gresham
  • Arbitrary-or-capricious test
  • Read more in the March 2020edition ofChecks and Balances

In the States

Kentucky legislation aims to limit governor’s emergency powers

• What’s the story? The Republican-majority Kentucky General Assembly on January 7 passed four bills aimed at limiting the emergency powers of the state governor. The Kentucky legislation exemplifies a broader national trend in which state legislatures have moved to place limits on executive power in response to the coronavirus pandemic. 
• House Bill 1 would allow any businesses, schools, or associations to remain open as long as their operating plans meet or exceed guidance issued by the federal Centers for Disease Control and Prevention (CDC). The bill aims to override restrictions placed on businesses and other groups by Kentucky Governor Andy Beshear (D) in response to the coronavirus pandemic.
• House Bill 5 would limit the authority of the governor to temporarily reorganize administrative agencies and transfer personnel without legislative approval.
• Senate Bill 1 would require that executive orders issued by the governor that restrict in-person meetings as well as school, business, or church functions sunset after 30 days unless the legislature approves an extension. The bill also allows the state legislature to terminate declarations of emergency at any time.
• The final bill, Senate Bill 2, would make it more difficult for the governor to direct state administrative agencies to make emergency regulations without justifying the emergency nature of the situation. The bill defines an emergency situation and requires agencies to demonstrate such emergencies with documentary evidence to receive approval for new regulations from the Administrative Regulation Review Subcommittee.
• At least 18 state legislatures, according to the National Conference of State Legislatures, have moved to place limits on executive authority as of January 15.
• Want to go deeper?
  • Andy Beshear
  • Kentucky General Assembly

Florida Administrative Commission appoints new chief administrative law judge

• What’s the story? The Florida Administrative Commission on December 15 appointed Pete Antonacci to serve as chief administrative law judge (ALJ) of the Florida Division of Administrative Hearings (DOAH).
• As chief administrative law judge, Antonacci will manage 31 administrative law judges within the DOAH as they adjudicate challenges to state agency rules. 
• The Florida Administrative Commission is composed of Governor Ron DeSantis (R) and his cabinet.
• State ALJ operations vary by state. While some states mirror the federal ALJ structure by allowing state agencies to maintain a roster of state ALJs, 28 states, including Florida, operate a central panel of ALJs who are assigned to agencies as needed. 
• Want to go deeper?
  • State administrative law judge

Colorado Supreme Court mandates deference to state agency disciplinary actions 

• What’s the story? Theen bancColorado Supreme Court on December 21ruled inDOC v. Stiles that the Colorado State Personnel Board (Board) must defer to disciplinary decisions made by state agencies. The court’s decision aimed to shed light on the standard the board must apply when reviewing the disciplinary decisions of other state agencies. 
• When the board considers appeals of decisions to discipline agency employees, the court held that they must apply the “arbitrary, capricious, or contrary to rule or law” standard instead of reviewing the facts of the case on ade novo basis. 
• The court remanded the case back to the state administrative law judge (ALJ) acting on behalf of the board who had overruled the state agency disciplinary action at issue in the case. 
• Want to go deeper?
  • Deference
  • Colorado Supreme Court

The Trump administration’s 2-for-1 regulatory policy in review

The Office of Information and Regulatory Affairs (OIRA) issued a 2020 update on the Trump administration's 2-for-1 regulatory policy as part of the Fall 2020 edition of the Unified Agenda of Federal Regulatory and Deregulatory Actions. The 2-for-1 policy applies to economically significant rules—those with an anticipated economic impact of $100 million or more. The update featured the following highlights:

• Agencies eliminated $198.6 billion in overall regulatory costs across the federal government in fiscal year 2020.
• Agencies eliminated 5.5 regulations for every new significant regulation added.
• Agencies issued 538 deregulatory actions overall.

From 2017 to 2019, agencies eliminated a cumulative $50.9 billion in regulatory costs.

The Trump administration as of January 15, 2021 had yet to publish a formal update on the 2-for-1 regulatory policy. Ananalysis by the Competitive Enterprise Institute, however, concluded that the administration issued 101 completed deregulatory actions and 31 completed regulatory actions in fiscal year 2020 for a 3-to-1 ratio. OIRA reported a 1.7-to-1 ratio in 2019, a 4-to-1 ratio in 2018, and a 22-to-1 ratio in 2017.

President Donald Trump (R) enacted the 2-for-1 regulatory policy via Executive Order 13771 in January 2017. The order instituted annual regulatory budgets for federal agencies and required agencies to eliminate two old regulations for each new regulation issued. The future of the 2-for-1 regulatory policy under the incoming Biden administration remains unclear.

• Want to go deeper? 
  • Click here to read OIRA’s update in the Fall 2020 edition of the Unified Agenda of Federal Regulatory and Deregulatory Actions.
  • Executive Order 13771

Regulatory Tally: 2020 in Review

Federal Register

• The Trump administration added a total of 87,352 pages to theFederal Register in 2020—a 20% increase from the 2019 total of 72,564 pages, 28% increase from the 2018 total of 68,082 pages, and a 41% increase from the 2017 total of 61,950 pages.
• The 2020Federal Register page total is the Trump administration’s highest annual page total. It also ranks as the second-highest annual page total behind the Obama administration’s 95,894 page total in 2016 .
• The Trump administration added an average of 1,648 pages to theFederal Register each week in 2020. Over the course of the Obama administration, theFederal Register increased by an average of 1,658 pages per week.
• The 2020Federal Register included the following 28,309 documents: 22,499 notices, 327 presidential documents, 2,158 proposed rules, and 3,350 final rules.
• Not all rules issued by the Trump administration are regulatory actions. Some rules are deregulatory actions pursuant to President Trump’s (R) Executive Order 13771, which requires federal agencies to eliminate two old significant regulations for each new significant regulation issued.
• Want to go deeper? 
• Click here to find more information about weekly additions to the Federal Register in 2019, 2018, and 2017 
• Click here to find yearly information about additions to the Federal Register from 1936 to 2016 

Office of Information and Regulatory Affairs (OIRA)

OIRA’s 2020 regulatory review activity included the following actions:

• Review of 676 significant regulatory actions. Between 2009-2016, the Obama administration reviewed an average of 545 significant regulatory actions each year.
• The Trump administration reviewed 475 significant rules in 2019, 355 significant rules in 2018, and 237 significant rules in 2017.
• Seventy-one rules approved without change; 35 rules withdrawn; one emergency rule classification; four rules subject to statutory or judicial deadlines; recommended changes to 564 proposed rules.
• As of January 4, 2021, OIRA’s website listed 118 regulatory actions under review.
• Want to go deeper? 
  • Every month, Ballotpedia compiles information about regulatory reviews conducted by OIRA. To view this project, visit:Completed OIRA review of federal administrative agency rules