The Small Business Regulatory Enforcement Fairness Act of 1996, P.L. 104-121, March 29, 1996, provides that before a federal agency rule may take effect, the agency must submit to each house of the Congress and to the Comptroller General a report containing:
- a copy of the rule;
- a concise general statement relating to the rule, including whether it is a major rule; and
- the proposed effective date of the rule.
5 U.S.C. § 801(a)(1)(A). If the rule is a “major rule”, as defined, then the Comptroller General is required to prepare a report for the applicable Congressional committees. For example, the Comptroller General issued this report on the Securities and Exchange Commission’s rule governing disclosure of payments by resource extraction issuers.
Under the Act, Congress and the President can void a rule adopted by a federal agency. For this to happen, both the houses must pass a resolution disapproving the rule and either the President signs the resolution or both houses override a veto. If this happens, the agency may not republish the rule in the same form without Congressional approval. I understand that this has happened only once during President George W. Bush’s administration when he signed PL 107-5 which disapproved of ergonomic rules adopted by the Department of Labor.
The disapproval procedure established by the SBREFA illustrates the threefold nature of administrative agencies. They are located in the executive branch, but they also exercise quasi-legislative powers in the form of rule making and quasi-judicial powers in the form of administrative adjudications.