Says rule’s broad impact on American consumers, jobs, and investors warrants review by Americans’ elected representatives
WASHINGTON—United States Senator Bill Hagerty (R-TN), a member of the Senate Banking Committee, sent a letter to Securities & Exchange Commission (SEC) Chair Gary Gensler to confirm that the SEC’s proposed rule requiring American businesses to calculate and disclose their greenhouse gas emissions, as well as the emissions generated by their suppliers and partners, will be submitted to Congress, as required under the Congressional Review Act (CRA).
“If adopted, these rules would substantially increase compliance costs for publicly traded companies, which would have the effect of raising prices for American consumers, reducing American jobs, and lowering returns for American investors […] Plainly, this climate disclosure rule imposing significant new requirements on American businesses and new costs on the American people is a rule for CRA purposes,” Hagerty wrote, adding that it must be submitted to Congress “[s]o that Americans’ elected representatives may timely review this rule as required under federal law.”
Following yesterday’s release of these proposed rules, Hagerty stated that Democrats are attempting to use the SEC to impose sweeping climate and energy policy regulations that far exceed the SEC’s authority because they don’t have the votes in the Senate to pass their Green New Deal agenda, warning that this rule would significantly disrupt our energy markets
Hagerty added that these new regulations also create revolving-door concerns, observing: “though consumers and investors will be saddled with higher prices, job losses, and lower returns as a result of increased compliance costs, the large accounting and law firms see a money-making bonanza ahead. The same high-ranking SEC officials that authored these rules will inevitably be hired by these firms on the back end to reap the vast compliance fees required by the regulations they just wrote.” As a result, last week, Hagerty sent a letter to SEC Chair Gensler urging him to reform the agency’s rules and regulations to address conflicts of interest and prevent individuals from taking advantage of the revolving door between public service and private profit.
The CRA provides for Congress to oversee the federal regulatory process for implementing legislation by allowing it to review and potentially revoke, through a resolution of disapproval, rules that substantively affect the American people. Under the CRA, rules must be submitted to Congress under the CRA before they can take effect, at which point they can be brought for a vote under expedited procedures. When an agency fails to submit to Congress a policy that constitutes a rule under the CRA, a member of Congress may request that the Government Accountability Office (GAO) issue an opinion regarding whether the rule should have been submitted to Congress. If GAO finds that the policy should have been submitted to Congress because it constitutes a rule, then such rule can be brought before Congress for a vote under the same expedited procedures.
Hagerty is requesting that Chair Gensler reply by April 4.
A copy of the letter can be found here or below.
Dear Chair Gensler:
Today, the Securities and Exchange Commission (SEC) issued a draft rule requiring American businesses to calculate and disclose their greenhouse gas emissions, as well as the emissions generated by their suppliers and partners. This proposal will significantly impact the American economy and cuts across numerous policymaking areas and economic sectors. If adopted, these rules would substantially increase compliance costs for publicly traded companies, which would have the effect of raising prices for American consumers, reducing American jobs, and lowering returns for American investors.
Given this broad impact, Congress should be setting American policy in this area, and therefore, it is imperative that this rule receive congressional review. I write to confirm that you will comply with the requirements of the Congressional Review Act (CRA) in issuing this rule.
Under the CRA, an agency action that falls within the definition of a “rule” must be submitted to Congress for review before it can take effect. 5 U.S.C. § 801(a)(1)(A). “The definition of a rule under the CRA is very broad.” Government Accountability Office B-323772, at 3 (Sept. 4, 2012), available at https://www.gao.gov/assets/b-323772.pdf. In pertinent part, the CRA defines a rule as: “the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.” 5 U.S.C. § 551(4). This is not limited to directives requiring notice, public comment, or similar Administrative Procedure Act procedures.
Plainly, this climate disclosure rule imposing significant new requirements on American businesses and new costs on the American people is a rule for CRA purposes. So that Americans’ elected representatives may timely review this rule as required under federal law, please confirm by Monday, April 4, that you will submit it to Congress before it purports to take effect.
Thank you, and I look forward to your prompt reply.