White House Releases Further Guidance for Its “One-In, Two-Out” Executive Order

Posted on March 8, 2017 by Katherine O'Konski

On Monday, the Office of Management and Budget (OMB) released a memorandum dated March 2, 2017, outlining guidelines and procedures for executive agency submissions to the Spring 2017 Unified Agenda of Federal Regulatory and Deregulatory Actions (Unified Agenda). According to the Memorandum, the agency submissions, which are due on March 31, 2017, must “give especially careful attention to the principles and requirements identified” in the President’s January 30, 2017, Executive Order Reducing Regulation and Controlling Regulatory Costs, also referred to as “One-In, Two-Out.”

Since the late 1970s, federal agencies have been required to prepare a list of regulatory and deregulatory activities that are in development or under review; its goals include enhancing agency planning and coordination, and making the regulatory process more accessible and open to the public. The Unified Agenda provides a compilation of these activities, covering approximately 60 federal departments, agencies, and commissions. The Unified Agenda is published twice each year. The fall edition includes each agency’s “Regulatory Plan.” The “Regulatory Plan” is a more focused portion the Unified Agenda in that it includes summaries of significant regulations,* rather than all regulations in development or under review.

OMB’s March 2, 2017, Memorandum states that in submitting information for the upcoming spring edition of the Unified Agenda, agencies must include information to comply with the One-In, Two-Out Executive Order. That Executive Order includes two major directives. First, it sets a “Regulatory Cap” for fiscal year 2017, requiring that for every new significant regulation an agency proposes for notice and comment or otherwise promulgates, the agency must identify at least two existing regulations to repeal. The Regulatory Cap requires that “the total incremental cost of all new regulations, including repealed regulations … shall be no greater than zero.” That means, as OMB clarified in earlier-issued guidance, that the savings from the two proposed “deregulatory” actions must fully offset the cost of the new regulatory action.

Second, beginning with Regulatory Plans for fiscal year 2018 (i.e. Regulatory Plan submissions for the fall 2017 Unified Agenda) and for each fiscal year thereafter, agency heads must identify for each proposed significant regulatory action two offsetting regulations and an approximation of the total costs or savings associated with each new regulation or repealed regulation. The Executive Order directs OMB to identify during the President’s budgeting process the total amount of incremental costs that each agency will be allowed in issuing new regulations and repealing regulations for the next fiscal year. OMB will approve agency proposals only if they fall within the total incremental cost allowance, and only regulations approved by OMB will be included in the Unified Agenda. The Executive Order mandates that agencies may only issue regulations that were included in the most recent version or update of the Unified Agenda.

According to the March 2, 2017, Memorandum, agency submissions for the spring 2017 Unified Agenda must now “reflect attention to the following requirements:

  • The total incremental costs of any new significant regulatory actions issued between noon on January 20, 2017 and September 30, 2017 shall, to the extent permitted by law, be fully offset as of September 30, 2017; and
  • Agencies should, for each new significant regulatory action that imposes costs and that an agency plans to issue on or before September 30, 2017, identify two existing regulatory actions the agency plans to eliminate or propose for elimination on or before September 30, 2017.”

The Memorandum accelerates some of the timelines provided for in the One-In, Two-Out Executive Order. Although the Executive Order itself applies to Regulatory Plans beginning in fiscal year 2018, the Memorandum instructs agencies to include “a preliminary estimate of the total costs or savings associated with each … planned fiscal year 2018 significant regulatory actions and offsetting deregulatory actions.” As such, we will we start seeing the impacts of the One-In, Two-Out Executive Order on agency rulemaking for 2017 and 2018 as soon as this spring.

 

* A September 30, 1993, Executive Order, Regulatory Planning and Review, established the Unified Agenda and defines a  “significant regulatory action” for inclusion in the Regulatory Plan as one that may: (a) have an annual effect on the economy of $100 million or more, or adversely affect the economy in any material way; (b) create a serious inconsistency or otherwise interfere with an action taken or planned by another agency; (c) materially alter the budgetary impact of entitlements, grants, user fees, or loan programs, or the rights and obligations of their recipients; or (d) raise novel legal or policy issues.

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Executive Order Addresses Waters of the United States Rule

Posted on March 2, 2017 by Jessica Bell

UPDATED 03.07.2017 The Notice of Intent to review and rescind the Clean Water Rule as published in the Federal Register is available here.

On February 28, 2017, President Trump signed the Presidential Executive Order on Restoring the Rule of Law, Federalism, and Economic Growth by Reviewing the “Waters of the United States” Rule.  This rule defines what bodies of water are subject to protections under the Clean Water Act as navigable waters, defined as waters of the United States (WOTUS).

The Executive Order states a policy of “ensur[ing] that the Nation’s navigable waters are kept free from pollution, while at the same time promoting economic growth, minimizing regulatory uncertainty, and showing due regard for the roles of the Congress and the States under the Constitution.”  It directs the Administrator of the EPA and the Assistant Secretary of the Army for Civil Works to review the rule for consistency with this policy, rescinding or revising it as needed, as well as to review other orders, rules, regulations, guidelines, or policies implementing or enforcing the rule.  The Executive Order also notes that action by the Attorney General in pending litigation may be warranted.  The Executive Order further suggests that “navigable waters” be defined in a future rulemaking consistent with the opinion of Justice Scalia in Rapanos v. United States, a more restrictive definition.

The same day, the EPA submitted a Notice of Intention to Review and Rescind or Revise the Clean Water Rule to the Federal Register for publication.  This notice announces the intention of EPA and the Army to review the rule and “provide[s] advanced notice of a forthcoming proposed rulemaking consistent with the Executive Order.”  The notice states that “[a]gencies have inherent authority to reconsider past decisions and to revise, replace or repeal a decision to the extent permitted by law and supported by a reasoned explanation.”

While there has not yet been an Executive Order issued concerning the Clean Power Plan, this Executive Order on WOTUS may provide a preview of what is to come for the CPP, including an EPA notice to start the review process as soon as the Executive Order issues.  The Stream Protection Rule, which covered waterways near coal mines often subject to pollution as a result of mining, has already been overturned using the Congressional Review Act.

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Predicting a Future Without the Clean Power Plan

Posted on February 28, 2017 by Jeff Bayne

With litigation ongoing before the D.C. Circuit and possible action from the Trump Administration, it is an understatement to call the CPP’s future uncertain.  Not surprisingly, some groups have gone from studying the effects of the CPP’s implementation to studying the effects of its repeal.  In the past few weeks, two new analyses examined the ways in which a repeal of the CPP could impact the nation’s generation mix, economy, and public health.

The U.S. Energy Information Administration released an analysis showing that in a scenario where the CPP is not implemented, coal would become the leading source of electricity generation by 2019.  It would retain that position through 2032, when it is predicted to be surpassed by natural gas.  The analysis notes that without the CPP, there would be less incentive to switch from coal to less carbon-intensive natural gas and carbon-free renewable resources.  As a result, renewable generation would not surpass coal until 2040 in this scenario.

Last week, Energy Innovation published with Forbes its analysis of the costs of repealing the CPP.  The analysis is based on Energy Innovation’s Energy Policy Simulator, a tool that lets the public model dozens of different energy policies.  It concludes that repealing the CPP would result in an increase of carbon dioxide equivalent emissions of more than 500 million metric tons in 2030 and 1,200 million metric tons in 2050.  In terms of dollars, Energy Innovation predicts that repealing the CPP would actually result in a net cost to the U.S. economy of nearly $600 billion by 2050 from increased capital, fuel, and operating and maintenance expenditures, since some more efficient technologies will be unable to overcome market barriers without the CPP in place.  It also claims that the repeal of the CPP would increase particulate pollution, causing an increase in premature deaths of 120,000 by 2050.

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NCDEQ Files Motion to Withdraw from CPP Litigation

Posted on February 23, 2017 by Anjali Patel

UPDATED 07.25.2018 On March 7, 2017, the court granted NCDEQ’s motion to withdraw as petitioner.

Earlier today, the North Carolina Department of Environmental Quality (NCDEQ), filed a motion to withdraw as a petitioner from the Clean Power Plan litigation.  The NCDEQ is one of the 25 petitioners in Docket No. 15-1363, the lead petition in West Virginia v. EPA.  The motion does not explain the basis for the withdrawal.

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State Air Pollution Control Agencies Submit Recommendations to Trump’s Administration

Posted on February 23, 2017 by Anjali Patel

Shortly after EPA Administrator Pruitt’s confirmation, the National Association of Clean Air Agencies (NACAA)—a nonpartisan association of air pollution control agencies in 40 states, the District of Columbia, four territories, and 116 metropolitan areas—submitted a set of nine policy recommendations to the Administrator entitled “Improving Our Nation’s Clean Air Program: Recommendations from the National Association of Clean Air Agencies to President Trump’s Administration.”

The recommendations include the following:

  1. Improve Technical Assistance to State and Local Agencies, especially in the areas of providing training on air pollution topics and developing new and revised emission factors.
  2. Ensure State and Local Air Agencies Have the Resources They Need to Implement Federal Requirements by, among other things, increasing federal funding for state and local air agencies and providing the agencies with flexibility over how the funds are used.
  3. Improve Regulatory Assistance to State and Local Air Agencies Through Effective Federal Measures for Mobile and Stationary Sources, including by adopting more stringent standards for nitrogen oxides from heavy-duty vehicles and engines and for greenhouse gas emissions from both light- and heavy-duty vehicles.
  4. Continue and Expand Efforts to Address the Transport of Air Pollution by updating transport standards for the East and Midwest and by assessing and developing programs to address transport in the Western United States.
  5. Ensure Effective Establishment and Implementation of the National Ambient Air Quality Standards (NAAQS) by, among other things, continuing “the science-based process for reviewing and revising the NAAQS, [and] leaving consideration of cost or feasibility of attainment to the implementation phase,” “issu[ing] timely rules and guidance related to implementation of the NAAQS,” and “work[ing] with state and local air agencies to better understand the sources and contributions of background ozone.”
  6. Address Critical Air Monitoring Challenges by investing federal resources to maintain and modernize ambient air monitoring infrastructure and continuing to evaluate new air sensor technology.
  7. Identify and Address Toxic Air Pollution Challenges by, among other things, continuing to evaluate sources of Hazardous Air Pollutants, especially minor or mobile sources or those that are not listed as a source category under Section 112(c) of the Clean Air Act, and streamlining the National Air Toxics Assessment process so that results are made available in a more timely manner.
  8. Support State and Local Efforts to Address Climate Change by continuing to “consult with state and local air pollution agencies” and to provide “the appropriate level of financial and technical resources” if “state and local air agencies are obligated to implement and enforce federal GHG-related programs.”
  9. Improve the Integration of Federal, State, and Local Data Programs and Requirements “to address concerns about minimum data requirements, data quality and data use (including public access to data that have not been quality assured).”
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