Last week, President Donald J. Trump signed two congressional resolutions overturning rules that impact the energy extraction and mining industries. On Tuesday, February 14, President Trump signed a resolution eliminating a June 2016 SEC rule that required companies engaged in the commercial development of oil, natural gas, or minerals to disclose payments, including taxes, royalties and fees, made to foreign governments. Supporters of the rule, promulgated under the Dodd-Frank Act, claimed it was aimed to root out potential corruption, but critics feared that it would hurt U.S. businesses’ ability to compete with foreign energy and mining companies by imposing significant compliance costs.
On February 16, the President signed another resolution that overturned the Department of Interior’s “Stream Protection Rule.” The rule was intended to define the phrase “material damage to the hydrologic outside the permit area” as used in the Surface Mining Control and Reclamation Act (SMCRA) at 30 U.S.C. § 1260(b)(3). It imposed several new monitoring and permitting requirements for coal mines, and was widely criticized by the coal industry for its likely effect on jobs.
These laws mark just the second and third times that the Congressional Review Act of 1996, 5 U.S.C. § 801 et seq. (CRA), has been used successfully to overturn a federal regulation. (The first successful use occurred in 2001 when President George W. Bush signed a congressional resolution overturning an OSHA ergonomics rule.)
The CRA requires federal agencies to submit rules to Congress for review and allows Congress to vote to overturn the regulation within approximately 60 legislative days. The CRA also prohibits the issuing agency from issuing a rule that is “substantially in the same form” as the prior rule unless the rule is specifically authorized by a subsequent law. 5 U.S.C. § 801(b)(2). Given how seldom the CRA has been utilized, courts have yet to weigh in on what constitutes a rule “substantially in the same form.” But legal challenges are likely to arise – if not now, then in a subsequent administration – as the CRA is used more often.
In the coming weeks, President Trump’s administration is poised to invoke the CRA to overturn other regulations issued late in President Obama’s Administration. In fact, the Department of Interior’s “Methane and Waste Prevention Rule” was recently overturned by Congress pursuant to the CRA and awaits the president’s signature.
We will continue to provide updates as this (and other rules affecting the energy sector) are considered for review.