On Wednesday, the House Judiciary Subcommittee on Commercial and Administrative Law will hold a hearing entitled, “Midnight Rulemaking: Shedding Some Light.” The significance for online poker players is that one of the first items to be discussed is HR 34, the Midnight Rule Act, which could potentially undo the regulations of the Unlawful Internet Gambling Enforcement Act (UIGEA).
The bill, which is sponsored by Democratic Congressman from New York Jerrold Nadler, was introduced on January 6th and referred to the House Committee on the Judiciary. Two panels will headline Wednesday’s proceedings, which kick off at 11:00am Eastern Time from room 2141 of the Rayburn House Office Building. The first consists solely of Nadler, who represents the Eighth District of the State of New York. The second panel includes the following industry experts:
Gary Bass: Executive Director, OMB Watch
Robert F. Kennedy, Jr.: Chairman, Waterkeeper Alliance
Lynn Rhinehart: Associate General Counsel, AFL-CIO
Veronique de Rugy, Ph.D.: Senior Research Fellow, Mercatus Center at George Mason University
Michael Abramowicz: George Washington University Law School
Curtis Copeland, Ph.D.: Specialist in American National Government – Government and Finance Division, Congressional Research Service
The hearing will discuss a possible legislative fix for midnight rulemaking, which is the term given to last-minute regulations passed by an outgoing administration. In the case of the UIGEA, the regulations were officially enacted on January 19th, 2009 as part of midnight rulemaking by the outgoing Bush Administration. The very next day, President Barack Obama was sworn in. The UIGEA regulations call for banks and other financial institutions to comply by December. Their ultimate effect on the industry remains anyone’s guess. Nadler’s bill will not be marked up or voted on during Wednesday’s hearing.
HR 34, which currently does not have any co-sponsors according to the Library of Congress website, states that the bill is designed “to delay the implementation of agency rules adopted within the final 90 days of the final term a President serves.” A new agency head who is appointed by the incoming administration may express their disagreement with a midnight rule “by publishing a statement of disapproval in the Federal Register and sending a notice of disapproval to the congressional committees of jurisdiction.” The bill does not state what procedures must then be followed in order to undo a midnight rule.
Regulations that are deemed to be critical to national security, related to criminal statutes, “pursuant to any statute implementing an international trade agreement,” or dealing with emergencies are not subject to the Midnight Rule Act. The bill is retroactive to October 22, 2008, which means that the UIGEA regulations may be reviewed if the bill is passed. A spokesperson for Congressman Nadler’s office told Poker News Daily, “We have reason to believe that some form of this bill will make it through. We’re hopeful that it will be this specific bill.”
Last September, HR 5767, the second version of the Payments System Protection Act, passed through the House Financial Services Committee by a 30-19 vote. The bill, which was introduced by Committee Chairman Barney Frank (D-MA), would have clarified what is legal and illegal under the UIGEA. Despite its endorsement by the Committee, it was not acted upon due to the monumental financial crisis, which broke out shortly thereafter. Despite the economic woes, the UIGEA regulations were ushered through the White House Office of Management and Budget (OMB) as a midnight rule.
If HR 34 were passed, there is no guarantee that the UIGEA regulations would be among the rules to be overturned.
