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Federal Regulations Advisor Insight and Commentary on U.S. Government Regulatory Affairs

Monday Morning Regulatory Review – 1/28/13

Posted in Agency Authority, Executive - OMB Review, Judicial Review & Remedies

A short week after the Inaugural Holiday (reaffirming that the Republic works) may have slowed publication of rules slightly, but the courts were in full swing.  In addition to finding that the recess appointments to the National Labor Relations Board (NLRB) were unconstitutional and void, which drew the lion’s share of attention, the United States Court of Appeals for the District of Columbia vacated portions of two Environmental Protection Agency (EPA) rules.  The two key rules of the week were the Department of Justice’s firearm instant background check proposals and the Department of Health and Human Services (HHS) individual health information security final rule.

Clean Air Act – Fuel Predictions:  The D.C. Circuit set aside the Environmental Protection Agency (EPA) predictive regulations on the quantity of available advanced alternative fuels (“cellulosic biofuels” for the initiated) in American Petroleum Institute v. EPA.  The court found that EPA’s 2012 projection of cellulosic biofuel production exceeded its statutory authority.  Production has never met the projections, and that is one of the problems of predictive regulations.  The court otherwise rejected API’s argument that the entire regulatory scheme must fall.

Particulate Matter:  In another complex case, the D.C. Circuit also vacated the Significant Impact Levels (“SILs”) provisions of EPA’s particulate matter rule at EPA’s request in Sierra Club v. EPA.  The court, however, also granted the Sierra Club’s petition for review that argued that EPA had no authority to establish a Significant Monitoring Concentration (“SMC”) for particulate matter, another screening tool the EPA uses to determine whether a new source may be exempted from certain requirements under the Clean Air Act.  EPA, honestly conceded that it needed to revise some of the SIL provisions, received a little more than it requested.

Firearms Background Checks:  In the first regulatory action in President Obama’s gun control initiative, DOJ published long awaited (a year in review and published after POTUS’ announcment) proposed changes to the National Instant Criminal Background Check System (NICS).  A key change, pre-announced in the gun control program, would authorize criminal justice agencies to access the NICS Index to permit background checks for the purpose of disposing of firearms in the possession of those agencies (i.e. returning them).

Health Privacy:  As promised previously, HHS published its long awaited revisions of the Health Insurance Portability and Accountability Act (HIPAA) update in light of the Health Information Technology for Economic and Clinical Health Act (HITECH).  The final rule makes economically significant changes to the privacy and security protection requirements for individuals’ health information.  While the changes affect 700,000 health care providers (mostly small entities), the rule increases penalties to up to $50,000 per violation and $1.5 million yearly aggregate for the same violations.

Civil Monetary Penalties and Fees:  One notable trend may also be appearing:  this week a number of agencies – from the Copyright Office to the Corps of Engineers published arithmetic civil monetary penalty or fee increase proposed or final rules.  Although nothing has been apparent to this author, Office of Management and Budget (OMB) demands for agency contingency plans in the event of funding lapses and sequestration may have spurred the effort.