The Congressional Review Act: Congress Dusts Off an Old Oversight Weapon

One of the great powers that Congress has to undo changes made by a prior administration is the Congressional Review Act (CRA), which was enacted in 1996. As of March 17, 2017, this Congress has used the CRA to overturn more agency rulemakings than any Congress before it. Many more regulations are on the potential chopping block; a lot of them address environmental, energy, and natural resources issues. With this whirlwind of activity under the CRA, it is vital for the regulated community to stay informed of congressional action in this realm.

The Basics

The CRA requires agencies to submit many of the rules they promulgate to Congress in order for the rule to take effect. Congress has 60 days to review the rule from the date of submission to determine whether to issue a “joint resolution” disapproving the rule. A joint resolution requires a majority vote in both houses of Congress and signature by the President, or a two-thirds super-majority in both houses if vetoed by the President.

Rules promulgated near the end of a legislative session are given a longer review period that runs into the next legislative session – and this allows a new President and Congress to review rules promulgated by the prior administration. Rules that are submitted to Congress within the last 60 days of a legislative session are to be treated as if they were submitted on the 15th day of the following session. This is precisely how the current Congress is reviewing rules that the Obama administration passed.

The CRA also provides expedited legislative procedures to encourage passage of joint resolutions for overturning agency rules, including limiting debate and preventing it from dying in committee. In addition, once Congress disapproves a rule with the CRA, no rule that is “substantially the same” may be re-issued unless specifically authorized by subsequent legislation.

CRA Disapprovals in the 115th Congress

Prior to this year, the CRA was rarely used to disapprove rules. In the twenty years between 1996 and 2016, approximately 72,000 final rules were submitted to Congress for review under the CRA. Only one was disapproved: an ergonomics rule promulgated by the Occupational Safety and Health Administration.

By March 17, 2017, the current Congress had proposed approximately 50 joint resolutions for disapproval under the CRA. To date, three of these rules have been overturned: the Securities and Exchange Commission’s (SEC’s) “Disclosure of Payments by Resource Extraction Issuers” rule, 81 Fed. Reg. 49359 (July 27, 2016), the Interior Department’s (DOI’s) “Stream Protection Rule,” 81 Fed. Reg. 93066 (Dec. 20, 2016), and the Social Security Administration’s “Implementation of the NICS Improvement Amendments Act of 2007,” 81 Fed. Reg. 91702 (Dec. 19, 2016). Click here for a table that lists environmental, energy, or natural resources-related rules that are targeted in proposed or enacted joint resolutions under the CRA disapproval process.

How Far Back Can the CRA Go?

A key question for evaluating the potential impact of the CRA is how far the process can go retrospectively. The answer to this question is not clear; commentators and stakeholders have proposed at least two answers.

The first proposed answer is June 13, 2016, as suggested by the Congressional Research Service (CRS). This answer is based on the plain language of the CRA, which allows a new Congress to review rules that were submitted in the last 60 congressional days of the preceding Congress. Counting down the legislative days on the congressional calendars for the last months of the 114th Congress, the CRS concluded that June 13, 2016, would be the earliest date for which a rule published or submitted might be subject to the CRA.

A second proposed answer is 1996, the year when the CRA was enacted. The argument is that, under the CRA, rules must be published or sent to Congress before they can take effect. Therefore, if a rule is never published or reported but qualifies as a “rule,” such a rule should never have become effective. For purposes of the CRA, proponents argued, the new administration can locate and submit such rules to Congress, thereby triggering the disapproval window and eliminating them.

If the second answer is correct, then the CRA can be much more powerful and, arguably, the current administration can play a substantive role in the review initiation process. The Trump administration could theoretically direct all agencies under his purview to submit rules that had not been already presented to Congress, granting Congress the opportunity to finally review them. However, it is not clear whether the Trump administration will take this route, or if there is sufficient congressional will and political capital to start overturning rules that became effective long ago and for which regulated entities have expended resources to comply.

Increasing Congressional Oversight Power

Congress is also contemplating other mechanisms to enhance its power to overturn administrative rules. Where the current CRA only allows for joint resolutions to disapprove rules one at a time, the Midnight Rules Relief Act of 2017 would amend the CRA to allow multiple rules to be targeted if they were passed in the final year of a President’s term. Much like the CRA itself, this mechanism would be most effective after Presidential transitions when Congress is looking to overturn rules promulgated by a previous administration. Another proposed bill, the Regulations from the Executive in Need of Scrutiny Act of 2017, would revolutionize administrative law as we know it. This bill would amend the CRA to require, among other things, that major rules receive a joint resolution of approval from Congress, and require agencies to repeal or amend old rules to offset the costs of a new rule before it may take effect. Both of these bills have passed in the House.

Next Steps

Keeping track of congressional action under the CRA will be an important task for regulated entities in the months to come. Questions will remain about how or whether investments in compliance readiness should be made when the fate of an applicable rule is less than certain. The regulated community should be prepared for a shift in the regulatory landscape from what appeared on the horizon at the end of the Obama administration.