New procedural hurdles and litigation rights could slow protective regulations

What it does

This bill amends the Unfunded Mandates Reform Act to require federal agencies to conduct detailed cost-benefit analyses before issuing major rules (those with $100M+ annual economic impact), consult extensively with state, local, tribal, and private-sector stakeholders before proposing rules, and select regulatory alternatives that maximize net benefits unless the Office of Information and Regulatory Affairs approves an exception. It also expands judicial review so citizens and businesses can sue to challenge whether agencies followed these procedural requirements, and applies these same requirements to independent regulatory agencies like the Federal Reserve (except for monetary policy).

Why we flagged it

The bill's core mechanism is not deregulation per se, but a procedural framework that elevates cost-benefit analysis, private-sector input, and judicial review as gatekeepers on agency rulemaking. It does not repeal existing rules or prohibit agencies from acting, but it raises the procedural bar and litigation risk in ways that systematically favor regulated industries.

What the text implies

• The 'maximize net benefits' standard in Section 205 requires agencies to select the alternative with the highest net benefit, but only within the scope of the authorizing statute. This may force agencies to ignore broader public harms (e.g., climate, health externalities) if the statute does not explicitly authorize their consideration, effectively narrowing regulatory scope.
• Expanded judicial review (Section 401) allows any 'aggrieved person' to sue over procedural compliance with Sections 202, 202(1), or 205. This creates a new litigation vector for regulated industries to challenge rules on technical grounds (inadequate cost-benefit analysis, insufficient consultation) even if the rule itself is lawful and protective.
• The requirement to consult 'impacted parties within the private sector (including small businesses)' before notice of proposed rulemaking (Section 204) gives industry early veto-like input before public comment periods, potentially allowing regulated entities to shape alternatives before the public sees them.
• The 90-day pre-notice-of-proposed-rulemaking publication requirement (Section 209) extends the rulemaking timeline and creates a new opportunity for industry mobilization and litigation threats before formal rulemaking begins.
• Applying the bill's requirements to independent regulatory agencies (Section 7) may constrain the Federal Reserve, SEC, CFTC, and FCC in ways that weaken their ability to respond to financial, securities, or communications crises without extensive cost-benefit justification.

Section numbers refer to the bill text the analysis read — linked under Primary records below.

Who it affects

The bill creates new transparency and procedural safeguards—requiring agencies to quantify costs, consider alternatives, and consult stakeholders—which can improve public participation and expose hidden regulatory burdens. However, the 'maximize net benefits' mandate and expanded private-sector consultation may systematically bias rulemaking toward industry preferences, and the new judicial-review pathway creates litigation risk that could delay or block protective rules (environmental, health,

Who stands to gain

• regulated industries across all sectors (energy, finance, pharmaceuticals, telecommunications, manuf
• business litigation firms (expanded judicial review creates new fee-generating claims)
• consulting firms specializing in regulatory impact analysis and cost-benefit modeling

Named in the bill

Office of Information and Regulatory Affairs (OIRA), Federal agencies (all executive-branch rulemakers), Independent regulatory agencies (Federal Reserve, SEC, CFTC, FCC, CPSC, etc.), State, local, and Tribal governments, Private sector (businesses, small businesses), Congress (Committees on Homeland Security and Governmental Affairs, Oversight and Government Reform), Federal courts (expanded jurisdiction)

Where it stands

4 cosponsors: 2 Democrats, 2 Republicans.

• Jan 21, 2025 — Introduced · Congress.gov: “Introduced in House”
• Jan 21, 2025 — Referred to House Committee on the Judiciary and House Committee on the Budget · Congress.gov: “Referred to the Committee on Oversight and Government Reform, and in addition to the Committees on Rules, the…”
• May 21, 2025 — Markup held in committee · Congress.gov: “Committee Consideration and Mark-up Session Held”
• May 21, 2025 — Reported out of committee · Congress.gov: “Ordered to be Reported by the Yeas and Nays: 23 - 19”

Dates and quoted wording are Congress.gov's action record; the timeline shows status changes, not every procedural step.