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The Congressional Review Act: Regulations on the Chopping Block

March 20, 2017
By Sarah M. Stevenson

Since it was enacted, the Small Business Regulatory Enforcement Act of 1996, better known as the Congressional Review Act,¹ has been rarely used and certainly has not been the topic of headlines or water-cooler conversations. That has changed of late, however, and the CRA is now being used as a tool of the Republican-controlled Congress to revoke regulations passed in the final months of the Obama administration. A number of regulations finalized in the latter half of 2016, including some that affect Native American lands, have been repealed by the President’s signature or are the subject of a resolution of disapproval in one or both houses of Congress.

The CRA: The CRA requires agencies to submit final regulations and a cost-benefit analysis to Congress and the Comptroller General, and, significantly, allows Congress to adopt a joint resolution disapproving the regulations within a certain period of time. If the joint resolution is signed by the President, the regulation will be nullified. The time within which Congress may use the CRA to nullify regulations depends on whether the regulation is a “major” rule, one that likely will have an effect on the economy of $100 million or more per year, or a major increase in costs, or “significant adverse effects on competition, employment, investment, productivity, innovation, or on the ability of United States-based enterprises to compete with foreign-based enterprises in domestic and export markets.”² For major rules, submission to Congress occurs before publication, and Congress has 60 days to consider the rules. For other rules, which are not effective until 30 days after publication in the Federal Register, Congress must be provided notice of publication and may consider nullification of the rule during that 30-day period. Given the method for counting Congressional days, this means rules submitted to Congress on or after June 13, 2016, may be subject to review and nullification by Congress.

Rules Repealed under the CRA: Before 2017, the CRA had been successfully used only once by Congress under President George W. Bush to reject an Occupational Health and Safety Administration rule on ergonomic standards promulgated under President Clinton.³ A recent review of the House Rules Committee’s legislation page, however, indicates 14 rules already have been disapproved by the House.⁴ Three disapprovals have been passed by both houses and signed by the President, meaning the regulations have been repealed under the CRA: (1) the Securities and Exchange Commission’s major rule promulgated under the Dodd-Frank Act requiring resource extraction companies “to include in an annual report information relating to any payment made . . . to a foreign government or the Federal Government for the purpose of the commercial development of oil, natural gas, or minerals”;⁵ (2) the Department of the Interior’s Office of Surface Mining Reclamation and Enforcement’s “Stream Protection Rule” requiring that permits issued to coal mines require permittees to identify impacts of discharges on ground and surface water, land, and threated or endangered species, make changes to data collection and monitoring practices, and use the best available technology;⁶ and (3) the Social Security Administration’s reporting to the National Instant Criminal History Background Check System of certain individuals with mental impairments, which would result in their inability to purchase or possess firearms.⁷ Of these now former rules, only the Stream Protection Rule would have applied to Native American lands and waters, because the Surface Mining Control and Reclamation Act is administered by the Office of Surface Mining Reclamation and Enforcement when a coal mine is situated on Native American lands.

Rules Targeted for Repeal: Approximately 30 resolutions in total have been introduced in either the House or the Senate to repeal rules, and at least six target regulations that would apply on Native American lands.⁸ One rule that the House has disapproved that expressly applies to Native American lands is the Bureau of Land Management’s (BLM) rule on venting and flaring during oil and natural gas production on federal and Indian (other than the Osage Tribe) leases (the Venting and Flaring Rule), which updated regulations that had been in place for over 30 years.⁹ The Venting and Flaring Rule purported to end the waste of gas that could be captured, resulting in increased royalties to federal, state, and tribal lessors, less air pollution, and decrease impact of oil and gas production on climate change. The Venting and Flaring Rule had been drafted after consultation with tribal governments and other stakeholders. The Rule’s preamble noted that the Environmental Protection Agency (EPA) and some tribes had overlapping requirements, and specifically provided for operators to obtain a variance if state, local, or tribal requirements were equally or more effective than the BLM’s Venting and Flaring Rule. The repeal by Congress of the Venting and Flaring Rule will not affect the requirement that oil and gas producers continue to comply with other applicable laws. The House resolution disapproving this rule is now before the Senate. It is unclear whether this proposed rule will actually help public land lessors, as proposed. The Oil and Gas Industry has criticized the rule, indicating that it will delay development and cause marginally producing oil and gas wells to be prematurely shut-in. These impacts would also affect energy companies owned and operated by Native American Nations or Native American owned entities.

Two other regulations that would impact mineral leases on Native American land have been identified by the House for disapproval. The Department of the Interior Office of Natural Resources Revenue’s rule governing valuation for onshore federal oil and gas leases and federal and Indian coal leases had a goal, among others, of ensuring Native American lessees receive “maximum revenues” for coal leases, although the rule itself effected little change to the provisions specifically targeted toward governing Indian leases, and found no cost was imposed by those provisions.¹⁰ Also targeted is the BLM’s rules governing oil and gas site security and measuring, reporting, and accounting for oil and natural gas leases on Native American (except Osage Tribe) land, replacing Onshore Orders 3 and 5 and certain state-specific notices to lessees and operators.¹¹ These rules have also been highly criticized by members of the oil and gas industry because each rule would require significant amounts of new equipment and technologies to be installed on both federal and Indian leases. Industry indicates that, if imposed, these rules will disincentivize the drilling of oil and gas wells which could ultimately reduce the amount of royalties received by Native American Nations and the federal government. In contrast, advocates for these new rules state that updated requirements are needed and, in some cases, support increased restrictions being imposed on Industry. If the resolutions repealing these regulations are signed into law, Onshore Orders 3 and 5 will remain in place.

An EPA rule governing accidental releases under the Clean Air Act has been targeted for repeal. The repeal of this rule would affect approximately 260 facilities located on Native American lands that are required to submit risk management plans under the Clean Air Act.¹² Also a candidate for disapproval is EPA’s rule on cross-state air pollution standards under the 2008 ozone National Ambient Air Quality Standards, which apply to electric generating units on tribal lands, although none were to be affected by implementation of the rule.¹³ Additionally, the United States Fish and Wildlife Service’s Endangered Species Act Compensatory Mitigation Policy for endangered and threatened wildlife and plants, which may affect Native American lands, is the subject of a House resolution of disapproval.¹⁴

Take-Away: While structural restrictions within the CRA should limit the number of Obama-era regulations that can be repealed, the complex method of counting Legislative days means Congress’ review of major rules will continue in the coming months, and we expect to see more resolutions disapproving regulations presented to the President for signature. While we are not aware of any Bureau of Indian Affairs regulations being targeted under the CRA at this time, we expect other regulations that have an effect on Native American lands to be repealed prior to enactment. Not surprisingly for 2017, there is a Twitter account dedicated to monitoring Congressional resolutions introduced under the CRA.¹⁵

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