H.J. Res. 88, a joint resolution providing for congressional disapproval under chapter 8 of title 5, United States Code, of a rule submitted by the Department of Labor relating to the definition of the term “Fiduciary”
As ordered reported by the House Committee on Education and the Workforce on April 21, 2016
H.J. Res. 88 would disapprove the final rule submitted by the Department of Labor (DOL) and published in the Federal Register on April 8, 2016, relating to investment advice within pension and retirement plans; those regulations are sometimes referred to as the “fiduciary rule.” H.J. Res. 88 would invoke a legislative process established by the Congressional Review Act (Public Law 104-121) to disapprove the new rule. If H.J. Res. 88 is enacted, the rule would have no force or effect.
CBO expects that, if this legislation were enacted, DOL would likely not propose a new rule related to the definition of fiduciary because the Congressional Review Act prohibits agencies from issuing any new rule in substantially the same form as a disapproved rule, unless specifically authorized by subsequent legislation.
Under the Employee Retirement Income Security Act of 1974 (ERISA) and the Internal Revenue Code, a person who is paid to provide investment advice is considered a fiduciary and is obligated to work in the best sole interest of their clients. The rule published on April 8 broadens the definition of investment advice within pension and retirement plans and therefore applies the fiduciary standard to more advisors.
CBO and the staff of the Joint Committee on Taxation (JCT) estimate that the bill would have a negligible effect on revenues over the 2016-2026 period. Enacting the bill would not affect direct spending. Because enacting H.J. Res. 88 would affect revenues, pay-as-you-go procedures apply.
CBO and JCT estimate that enacting H.J. Res. 88 would not increase net direct spending or on-budget deficits in any of the four consecutive 10-year periods beginning in 2027.