Congressional Review Act Timeline Threatens Key Elements of Biden Administration Regulatory Agenda

As the 2024 elections approach, federal agencies are working to finalize rules and regulations ahead of the Congressional Review Act (CRA)¹ “lookback” window, which opens as early as today if Congress adjusts its schedule to allow more in-district work for members. In fact, as the George Washington University reports, federal agencies published 66 significant final rules in April, higher than any month since the Reagan administration.

Following elections, where there is a change in administration and the resulting Congress is controlled by the same party in the White House, the CRA provides the new president an expedited procedure to review — and potentially block — rules and regulations completed by the previous administration, so long as the rules were finalized within a certain “lookback” window.

Not only can the CRA be used to block recently completed rules and regulations or undo the rule or regulation at issue, it also can prevent federal agencies from issuing a “substantially similar” rule or regulation in the future. As a result, use of the CRA has the potential to change the immediate trajectory of a rule or regulation, as well as raise a lasting regulatory barrier. What is considered a substantially similar rule or regulation is not defined and, in order to overcome such ambiguity in the future, Congress would generally be forced to authorize a substantially similar rule or regulation by specifically authorizing such a rule or regulation in a law that is enacted after the date of the joint resolution disapproving the original rule.²

Since its creation, the CRA has been used to overturn a total of 20 rules or regulations: one in the 107th Congress (2001-2002) under President George W. Bush, 16 in the 115th Congress (2017-2018) under President Donald Trump, and three in the 117th Congress under President Joe Biden (2021-2022). On the campaign trail in 2024, Donald Trump frequently calls for revocation of various Biden-administration rules, some of which may be susceptible to use of the CRA, as we discuss below. (Members of Congress also call for use of the tool when disapproving of agency actions and occasionally challenge presidents of their own party, such as Senator Tester’s disapproval resolution with respect to rules relating to beef imports from Paraguay.³)

Enacted in 1996 as part of the Small Business Regulatory Enforcement Fairness Act⁴ to ensure an adequate period of congressional review of rules enacted late in a presidential term, the CRA “lookback” provision provides an additional window for a new Congress to review recently enacted rules or regulations. The CRA requires certain finalized agency rules and regulations to be submitted to Congress for a period of congressional review — 60 session days in the Senate and 60 legislative days in the House — after the rule or regulation is submitted to Congress.⁵ “Session” and “legislative” days do not necessarily correspond with calendar days and they can vary in length, subject to the decision of the House or the Senate. If Congress adjourns sine die before the congressional review clock runs out, the congressional review timeframe resets in the next session of Congress, beginning on the 15th session day in the Senate and the 15th legislative day in the House.⁶

The CRA includes a broad definition of “rule” contained in the Administrative Procedure Act⁷, with three exceptions.⁸ Actions excluded from the CRA are: (1) rules of particular applicability; (2) rules relating to agency management or personnel; and (3) rules of agency organization, procedure, or practice that do not substantially affect the rights and obligations of non-agency parties.⁹ Otherwise, the CRA applies to final rules and regulations, including major, non-major, and interim final rules and regulations. The definition of a “rule” is sufficiently broad that it can also include agency actions not subject to traditional notice and comment rulemaking, such as certain guidance documents and policy memoranda.¹⁰ The CRA does not apply to presidential actions or agency orders.

Blocking a rule or regulation requires a three-step process. Both the House and Senate must vote to approve a joint resolution of disapproval and the president must then sign the joint resolution into law.¹¹ A joint resolution of disapproval may originate in either chamber. Any rule or regulation subject to an enacted joint resolution of disapproval “may not be reissued in substantially the same form, and a new rule that is substantially the same … may not be issued, unless the reissued or new rule is specifically authorized by a law enacted after the date of the joint resolution.”¹² The CRA does not define the scope of “substantially the same” or provide guidance as to what body might make such a determination. To date, agencies have reissued rules and regulations following disapproval under the CRA twice, modifying the reissued regulation by reviewing the legislative history of the disapproval resolution and modifying those objectionable aspects in the reissued rule or regulation.

When does the “lookback” window open? There is no fixed date outside of the statutory calculation. The final date will depend on how many days Congress is in session between now and the end of the calendar year. Given the lack of certainty on the length of a Senate session day and a House legislative day, which can vary from less than a single calendar day to several calendar days or even weeks, we can only provide an estimate of when the window may open. With these caveats in mind, we currently project the CRA “lookback” window will open around August 2, 2024. Rules and regulations that are finalized after the “lookback” window opens could be subject to review under the CRA in the next Congress. This date could move to earlier or later in the year, depending on adjustments to Congress’ schedule.

With the “lookback” window potentially opening soon, there are several rules the Biden administration is working to finalize that may fall within the final “lookback” window. The relatively early nature in which the “lookback” window is projected to open has influenced the Biden administration’s behavior as it relates to fulfilling their ambitious regulatory agenda and undertaking new policy proposals. Below we discuss some of the notable rules that may fall within the “lookback” window.

Health Care

• Medicaid Drug Rebate Program (MDRP). On May 26, 2023, the Centers for Medicare & Medicaid Services (CMS) issued a rule proposing to implement provisions of the Medicaid Services Investment and Accountability Act of 2019 relating to drug misclassifications. The rule also proposes several reforms to the MDRP, including requiring “stacking” of certain price concessions when calculating Best Price, modifying the definition of a “covered outpatient drug,” and establishing a “price verification survey” for certain covered outpatient drugs. The proposed rule’s comment period closed on July 25, 2023, and according to the Unified Agenda, is slated to be finalized by June 2024. The Office of Management and Budget began reviewing the final rule on March 22, 2024. On May 15, 2024, CMS announced that it will “not finaliz[e] the proposal regarding stacking at this time. Instead, [CMS is] going to pursue the collection of additional information from manufacturers related to best price stacking methodologies to better understand and inform future rulemaking.”

• Birth Control. The Trump administration finalized two rules in January 2019: one rule expanded “moral belief” exemptions and the other rule expanded “religious belief” exemptions for certain entities and individuals whose health plans are subject to the contraceptive coverage mandate under the Patient Protection and Affordable Care Act. The rule regarding moral beliefs exempts employers, except those who are publicly traded, and the rule regarding religious beliefs exempts certain nonprofits and for-profit employers with such objections. The Biden administration is seeking to dull the impact of this policy with their rule, which would eliminate the exemption where the denial of contraceptives is based on “non-religious moral beliefs,” as well as provide contraceptives at no cost where an employer utilizes the religious objection to deny coverage. The proposed rule comment period ended on April 3, 2023 and the Unified Agenda states that the final rule will be issued by August 2024, which likely would be after the projected “lookback” period begins.
• Diversity Action Plans. In April 2022, the U.S. Food and Drug Administration (FDA) issued draft guidance on “Diversity Plans to Improve Enrollment of Participants from Underrepresented Racial and Ethnic Populations in Clinical Trials.” Months later, on December 29, 2022, President Biden enacted the Food and Drug Omnibus Reform Act (FDORA), which requires sponsors of certain pivotal studies to submit a diversity action plan to FDA. FDORA also required FDA to issue draft guidance (or revise existing guidance) on diversity action plans within one year of the law’s enactment, and to finalize such guidance within nine months after the closing of the comment period. (For a deeper dive on FDORA, see our December 2022 Advisory.) FDA has come under heat for not releasing the diversity action plan guidance before the statutory deadline, including in a recent letter from Democratic leaders of the House Energy & Commerce Committee. The Office of Management and Budget began reviewing the diversity action plan guidance on April 10, 2024, and it is possible that it could be issued during the CRA “lookback” window. The changing priorities of a new administration could substantially affect the focus and content of the guidance, though given it is a statutory commitment, it seems unlikely that FDA would be prohibited from issuing a final guidance on this topic.

Inflation Reduction Act Rules 

Pursuant to Sections 13204 (“credit for the production of clean hydrogen”), 13701 (“clean electricity production credit”), 13702 (“clean electricity investment credit”), 13704 (“clean fuel production credit”), among others

Among its many provisions, the Inflation Reduction Act¹³ included a substantial array of tax measures to shift energy consumption toward renewable sources. Following enactment, the Treasury Department (Treasury) embarked on an ambitious effort to finalize regulations in what they described as a “phased” process. During 2023, under “phase one” of their efforts, Treasury finalized guidance on the clean vehicle credit, the energy communities bonus, the domestic content bonus, direct pay and transferability, and the prevailing wage and apprenticeship standards required to receive full credits. Treasury next turned to “phase two,” which included guidance that facilitates investment in the U.S. manufacturing base, such as Section 45X and Section 48C, as well as strengthening domestic energy security, particularly with respect to critical minerals and battery components. Some elements of “phase two,” but not all, have been finalized. For instance, final guidance with respect to the production of clean hydrogen has not yet been released. Implementation of the clean hydrogen credit has deeply divided the energy community, leaving Treasury with difficult regulatory decisions to complete. Final publication of the rules governing the clean hydrogen credit is possible prior to the CRA’s “lookback” date.

Among the guidance efforts under “phase three,” Treasury also seeks to finalize rules relating to the “tech-neutral” tax credits. These credits, the Clean Electricity Production and Investment credits and the Clean Fuel Production credit, are designed to replace the production and investment tax credits that have been the key incentives underpinning clean energy development for decades. Treasury describes the guidance process for these credits as “one of the most consequential pillars” in the law’s implementation. Proposed rules, however, have not been released for these rules. Allowing for notice and comment, it is highly likely that these rules will fall within the CRA’s “lookback” date and are thus at risk of a CRA resolution.

Environmental

Agencies have been hard at work to beat the CRA “lookback” window and hopefully better cement the Biden-Harris administration’s environmental legacy. In the first two weeks of May, the Environmental Protection Agency (EPA) alone had 19 final rules published in the Federal Register, notably including:

• New Source Performance Standards for Greenhouse Gas Emissions From New, Modified, and Reconstructed Fossil Fuel-Fired Electric Generating Units; Emission Guidelines for Greenhouse Gas Emissions From Existing Fossil Fuel-Fired Electric Generating Units; and Repeal of the Affordable Clean Energy Rule (published May 9, 2024): EPA finalized the long-awaited rule to regulate greenhouse gas emissions from fossil fuel power plants. In EPA's third attempt to use its authority under section 111(d) of the Clean Air Act, EPA imposes requirements on existing coal-fired and new natural gas-fired power plants, but punts regulation of existing natural gas units to a future rulemaking.
• Designation of Perfluorooctanoic Acid (PFOA) and Perfluorooctanesulfonic Acid (PFOS) as CERCLA Hazardous Substances (published May 8, 2024): As explained in our April 2024 Advisory, EPA added two per- and polyfluoroalkyl substance legacy chemicals, including their salts and structures, to the list of hazardous substances under the Comprehensive Environmental Response, Compensation, and Liability Act (CERCLA). This rule will expose a wide range of industries and governmental entities to potential Superfund cleanup liability for releases of PFOA and PFOS.
• Hazardous and Solid Waste Management System: Disposal of Coal Combustion Residuals From Electric Utilities; Legacy CCR Surface Impoundments (published May 8, 2024): In compliance with a court-ordered deadline to take action consistent with the D.C. Circuit’s decision in Utility Solid Waste Activities Group, et al. v. EPA, EPA finalized a rule establishing national minimum criteria for legacy coal combustion residuals (CCR) surface impoundments under the Resource Conservation and Recovery Act, as amended. EPA also established minimum requirements for a vast category of CCR management units.
• Procedures for Chemical Risk Evaluation Under the Toxic Substances Control Act (TSCA) (published May 3, 2024): EPA finalized amendments to the procedural framework rule for conducting risk evaluations of chemicals under TSCA that could result in increased limitations on uses, as well as additional expense and delay.

EPA was not the only agency with the CRA in mind, as other Biden-Harris administration priority rulemakings related to permitting also likely beat the clock, including:

• National Environmental Policy Act Implementing (NEPA) Regulations Revisions Phase 2 (published May 1, 2024): The Council on Environmental Quality completed its overhaul of NEPA regulations that will apply to the federal government, including to a wide-range of energy and other infrastructure-related actions. While the Biden-Harris administration has touted the rule as an efficiency effort, many argue the more substantive changes — including those related to mitigation, significance determinations, and environmental justice — will cause delays in reviews and expose projects to greater litigation risk.
• Coordination of Federal Authorizations for Electric Transmission Facilities (published May 1, 2024): The Department of Energy finalized the establishment of the Coordinated Interagency Transmission Authorizations and Permits program and revamped the Integrated Interagency Pre-Application Process, with the intent of enabling timely coordination of federal authorizations for proposed interstate electric transmission facilities and expediting the lengthy environmental review and permitting process for desperately needed new transmission infrastructure.
• Renewable Energy Modernization Rule (published May 15, 2024): The Department of the Interior (DOI), Bureau of Ocean Energy Management (BOEM), and Bureau of Safety and Environmental Enforcement (BSEE) completed their revision to the regulations for renewable energy development on the U.S. Outer Continental Shelf. BOEM and BSEE intend for the rule to encourage development of offshore wind projects by reducing administrative burdens, cost, and uncertainty and increasing flexibility.

So what’s left on the environmental front? There are still a number of rulemakings related to the Biden-Harris administration’s infrastructure permitting agenda to complete in the months ahead. For example, the Federal Energy Regulatory Commission issued revisions to regulations for exercising backstop siting authority for transmission lines blocked or otherwise impeded by state siting authorities on May 13, 2024, but the final rule has yet to be published in the Federal Register. The Fish and Wildlife Service (FWS) has yet to finalize the proposed updates to the regulations for permitting rights-of-way to align them with those of other DOI agencies. In addition, while FWS finalized the general permit program for incidental (i.e., accidental) take of eagles from wind energy and powerlines back in February 2024, the analogous program for migratory birds has yet to be issued in proposed or final form.

© Arnold & Porter Kaye Scholer LLP 2024 All Rights Reserved. This Advisory is intended to be a general summary of the law and does not constitute legal advice. You should consult with counsel to determine applicable legal requirements in a specific fact situation.