Thursday, February 28, 2013

Senator Warner Introduces Bi-Partisan Legislation Requiring SEC and Other Independent Federal Agenies to Conduct Cost Benefit Analysis of Regulations

Senator Mark Warner (D-VA), a key member of the Banking Committee, and Senator Jerry Moran (R-KN) have introduced legislation requiring the SEC and other independent federal agenies to conduct a cost-benefit analysis of significant regulations. which the Startup Act 3.0, S. 310, defines, in the alternative, a regulation with a $100 million impact on the economy or a regulation that materially adversely impacts a sector of the economy, jobs or competition, or a regulation that creates a serious inconsistency or otherwise interferes with an action by another agency. Under the bill, the SEC and other independent regulators would have to conduct a cost-benefit analysis that includes an assessment of the benefits perceived from the propopsed regulation and an assessment of the costs of the proposed regulation, including the costs to the federal government to administer the regulation and the cost of companies to comply with it. There must also be an assessment of the cost and benefits of any reasonably  feasible alternatives to the proposed regulation and why the proposed regulation is preferable to these alternatives.

The legislation also requires the SEC Chair and other agency heads to conduct a review of proposed significant rulemaking and submit the results of that review to the appropriate congressional oversight committees which, in the SEC's case would be the Senate Banking Committee and the House Financial Services Committee. The review must also be posted on a public website. The review must examine, among other things, the problem the proposed regulation is intended to address and the impact of the regulation on the ability of new businesses to form and expand. The review must also identify and conflicting or duplicative regulations.

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