[Senate Report 104-311]
[From the U.S. Government Publishing Office]



                                                       Calendar No. 486
104th Congress                                                   Report
                                 SENATE

 2d Session                                                     104-311
_______________________________________________________________________


 
            DEPARTMENT OF ENERGY STANDARDIZATION ACT OF 1996

                                _______
                                

                 June 28, 1996.--Ordered to be printed

_______________________________________________________________________


  Mr. Murkowski, from the Committee on Energy and Natural Resources, 
                        submitted the following

                              R E P O R T

                         [To accompany S. 1874]

    The Committee on Energy and Natural Resources, to which was 
referred the bill (S. 1874) to amend sections of the Department 
of Energy Organization Act that are obsolete or inconsistent 
with other statutes and to repeal a related section of the 
Federal Energy Administration Act of 1974, having considered 
the same, reports favorably thereon without amendment and 
recommends that the bill do pass.

                                Purpose

    The bill amends or repeals sections 501(b) (relating to 
notice of proposed rules), 501(d) (relating to explanatory 
statements accompanying final rules), 501(e) (providing waivers 
from the requirements of subsections (b) and (d)), and 624 
(relating to advisory committees) in the Department of Energy 
Organization Act (P.L. 95-91), and section 17 (relating to 
advisory committees) in the Federal Energy Administration Act 
of 1974 (P.L. 93-275). In the two decades since the Department 
of Energy was established, the evolution of the Department's 
missions, the evolution of administrative case law, and the 
enactment of other government-wide statutes have rendered these 
provisions either obsolete, duplicative, or inconsistent with 
government-wide statutes governing rule making and advisory 
committee management.

                               Background

    The Department of Energy Organization Act (DOE Act) and the 
Federal Energy Administration Act of 1974 were enacted at a 
time in which addressing the problems of energy pricing and 
availability was considered to be ``the moral equivalent of 
war.'' Both Acts attempted to bring together, in a unified 
manner, authority and programs to regulate energy in all its 
manifestations. For example, the Senate Report accompanying the 
DOE Act states that ``creation of a Department of Energy will 
have wide-ranging benefits both for the executive branch and 
the American people. It will provide a comprehensive overview 
of and national perspective on energy matters.'' Senate Report 
No. 95-164 at 4. The proposed economic regulatory role of the 
Department of Energy (DOE) was a key focus of the legislative 
discussions on the organization of the DOE, and particularly of 
the provisions of the DOE Act that are to be amended by this 
bill:

          Merger of the economic regulatory activities of the 
        Federal Energy Administration and the Federal Power 
        Commission into the Department of Energy to carry out 
        pricing and allocation decisions in the context of 
        national energy policies, will serve to coordinate 
        these pricing policies with the development of national 
        energy policy goals. It is the purpose of the 
        committee's provisions with regard to the economic 
        regulatory activities to assure coordination with 
        national energy policy planning and implementation and 
        to assure protection of due process by retaining the 
        benefits of impartial decisionmaking. It is the further 
        purpose of the committee's provisions in this area to 
        expedite the decisions by providing that some decisions 
        be made through rulemaking rather than adjudicatory 
        procedures. Id. at 6.

    It is not surprising to find, then, that the legislative 
history of the subsections of the DOE Act to be stricken by 
this bill focus on the need for additional procedural 
requirements for DOE rule making and advisory committees in 
order to protect the public interest involved in the economic 
regulatory role that the DOE was inheriting from the Federal 
Energy Administration.

                          Legislative History

                              section 501

    Section 501 of the DOE Act establishes procedures for DOE 
rule making. S. 1874 repeals two of section 501's seven 
subsections and provides a conforming amendment to a third 
subsection. Section 501(b) provides requirements for notices of 
proposed rule making published by the DOE or by State and local 
government acting under delegation from the DOE. It also 
contains, in section 501(b)(3), an unusual ``exemption to an 
exemption'' that subjects DOE rule making on public property, 
grants, contracts, and loans to the Administrative Procedure 
Act (APA), notwithstanding the exemption for such matters 
contained in the APA (5 U.S.C. 553(a)(2)). Section 510(d) 
establishes requirements for explanatory statements that 
accompany final rules promulgated by the DOE. Section 501(e) 
provides the Secretary of Energy with authority to waive the 
requirement of subsections (b), (c), (d).
    The report of the Committee on Government Operations of the 
House of Representatives, in explaining section 501 of the DOE 
Act, stated that ``This section makes the provisions of the 
Administrative Procedures [sic] Act applicable to the issuance 
of rules, regulations or orders issued by the Department of 
Energy. In addition, this section transfers some but not all 
protections presently incorporated in the Federal Energy 
Administration legislation which is to be transferred to the 
Department under this act.'' House Report 95-346, Part I, at 
25-26. With respect to sections 501(b)(1), 501(b)(2), 501(d), 
and 501(e) of the DOE Act, the Committee adopted language 
closely modeled on section 7(i)(1)(B) of the Federal Energy 
Administration Act of 1974 and section 523 of the Energy Policy 
and Conservation Act of 1975. However, the language of section 
501(b)(3) was not in the version of the bill reported by the 
Committee.
    During debate on the DOE Act in the House, a comprehensive 
substitute amendment (of over 1700) words) rewriting most of 
sections 501 and 502 was offered and accepted, in which the 
language that eventually became section 501(b)(3) first 
appeared. The statement accompanying this amendment stressed 
the need to ``keep in place all of those procedural rights and 
safeguards'' contained in three regulatory acts: the Federal 
Energy Administration Act of 1974, the Energy Policy and 
Conservation Act of 1975, and the Emergency Petroleum 
Allocation Act of 1973. Congressional Record, June 2, 1977, at 
17321.
    A rationale for including the provision in section 
501(b)(3) of the DOE Act does not appear in the floor 
discussion, nor does the provision of section 501(b)(3) appear 
in any of the three laws on which the floor amendment was 
based. The Federal Energy Administration Act of 1974, in 
section 7(i)(1)(A), makes 5 U.S.C. 553 applicable to rule 
making without any qualification or change. Identical 
legislative language is contained in section 523 of the Energy 
Policy and Conservation Act of 1975. The Emergency Petroleum 
Allocation Act of 1973 makes rule making subject to the 
Economic Stabilization Act of 1970, which in section 207(a) 
invokes the requirements of 5 U.S.C. without qualification or 
change.
    The Senate Report on the DOE Act also spoke to the need for 
``additional, more specific procedural requirements than found 
in the Administrative Procedure Act'' in adopting the 
provisions that eventually became sections 501(b)(1), 
501(b)(2), 501(d), and 501(e) of the DOE Act. There was no 
provision equivalent to the present section 501(b)(3) of the 
DOE Act in the Senate bill. In fact, the Senate Report 
specifically noted that it was the intention of the Senate that 
``Certain interpretative, procedural, or other types of rules 
exempted from notice and comment requirements of the 
Administrative Procedure Act by 5 U.S.C. 553 will also be 
exempted from the requirements of this section.'' Senate Report 
at 43.
    A consideration of the implications of the above 
legislative history for the present bill, then, must separate 
the issues dealt with in section 501(b) (1) and (2) and section 
501 (d) and (e) from the issue presented by section 501(b)(3).

           Current Status of Law with Respect to Section 501

    While the provisions of sections 501(b)(1), 501(b)(2), 
501(d), and 501(e) were considered, in 1977, to represent 
additional and more specific procedural requirements than those 
of the APA, the evolving jurisprudence on the requirements of 
the APA and the requirements for reasoned decision making in 
agencies have substantially changed this situation.

Section 501(b) (1) and (2)

    With respect to section 501(b) (1) and (2), the Senate 
Committee report described the rationale for these sections in 
the following manner:

          The subsection states that notice of any proposed 
        rule or regulation required by law to be published in 
        the Federal Register shall be accompanied, to the 
        degree necessary, by a statement describing the 
        research, analysis, and other information supporting 
        the need for, and probable effect of, any proposed rule 
        or regulation. Currently, the research and analysis on 
        which a proposed rule is based may be neither 
        publicized nor made available to the public when the 
        rule is proposed. The lack of this information places 
        members of the public at an extreme disadvantage in 
        attempting to evaluate and comment on a proposed rule, 
        in part because they cannot assess the validity of the 
        underlying information, and hence, the proposed rule 
        itself.
          The subsection further specifies that in addition to 
        publication in the Federal Register, other means of 
        publicity should be utilized to notify interested 
        parties of the nature and probable effect of any 
        proposed rule or regulation. A minimum of 30 days must 
        be provided for public comment on the proposal. The 
        period may only be less than 30 days where necessary to 
        avoid serious harm or injury to the public health, 
        safety, or welfare.
          Section 501(b) further requires that public notice of 
        all rules or regulations which are promulgated by 
        officers of a State or local government shall be 
        published in at least two newspapers of statewide 
        circulation. If such publication is not practicable, 
        notice of any proposed rule or regulation shall be 
        given by other means which will assure wide public 
        notice.'' Senate Report at 44.

    However, since the enactment of the DOE Act, the issues 
that the Congress was attempting to address in section 
501(b)(1) have been addressed more fully by a line of court 
cases growing out of the D.C. Circuit's decision in Portland 
Cement Assn. v. Ruckelshaus, 486 F.2d 375 (D.C. Cir. 1973). The 
court in this case stated the basis for its action in terms of 
a broad principle of general applicability: ``It is not 
consonant with the purpose of a rule-making proceeding to 
promulgate rules on the basis of inadequate data, or on data 
that, [to a] critical degree, is known only to the agency.'' 
Id. at 393.
    Portland Cement has been followed and expanded on in many 
cases in numerous circuits since the enactment of the DOE Act. 
For example, rules have been overturned because underlying 
studies were not exposed to public scrutiny. Aqua Slide `N' 
Dive Corp. v. Consumer Product Safety Commission, 569 F.2d 831, 
842 (5th Cir. 1978). ``An agency commits serious procedural 
error when it fails to reveal portions of the technical basis 
for a proposed rule in time for meaningful commentary.'' 
Connecticut Light and Power Co. v. NRC, 673 F.2d 525, 531 (D.C. 
Cir. 1982), cert. denied, 459 U.S. 835 (1982). A supplemental 
notice containing new data and analysis was held inadequate 
when it was received one day before the rule was promulgated in 
Solite Corp. v. EPA, 952 F.2d 473, 499-500 (D.C. Cir. 1991). At 
the same time, the post-Portland Cement jurisprudence has 
introduced some nuances missing from the statutory language in 
the DOE Act. In Air Pollution Control Dist. v. EPA, 739 F.2d 
1071 (6th Cir. 1984) the court held that data submitted after 
close of the comment period may be considered when members of 
the public were aware of it and the petitioner had responded to 
it. An agency may change calculations in response to comments 
without providing opportunity to challenge the changes. Air 
Transport Assn. v. CAB, 732 F.2d 219 (D.C. Cir. 1984). The test 
as to whether Portland Cement requires publication of a study 
on which a rule is based is whether the new study provides 
critical new understanding. Community Nutrition Institute v. 
Block, 749 F.2d 50, 58 (D.C. Cir. 1984). Given that the problem 
stated by the drafters of the DOE Act, that ``currently, the 
research and analysis on which a proposed rule is based may be 
neither publicized nor made available to the public when the 
rule is proposed,'' has been addressed with considerable 
sophistication in the post-Portland Cement case law, this 
statutory requirement may be removed from the DOE Act without 
affecting the rights of the public to know ``the technical 
basis for a proposed rule in time to allow for meaningful 
commentary.'' 673 F.2d at 531.
    With respect to the requirements on State and local 
government promulgation of DOE rules under section 501(b)(2), 
it should be noted that there have been no such rules in the 
entire history of the DOE, and that no current DOE statutory 
authority provides for such delegated rule making. States have 
their own laws governing administrative rule making, and many 
are of more recent vintage, and are more detailed in their 
requirements, than the Administrative Procedure Act. There 
would appear to be no rationale for maintaining a superfluous 
Federal supplementation of State law.

Section 501(d)

    The need for section 501(d) was also predicated on the 
belief, at the time of the enactment of the DOE Act, that the 
corresponding provision in the Administrative Procedure Act, 
section 553(c) was too weak. The Senate Committee explained 
this rational as follows: ``Following the notice and comment 
period, including any oral presentations required by section 
501(b) [moved in the final bill to 501(c)], the Secretary or 
the Board may promulgate the rule if it is accompanied by an 
explanation responding to the major comments, criticisms, and 
alternative proposals offered in the comments. The committee 
believes that such a requirement will help assure full 
consideration of all comments submitted by interested persons, 
and help the public understand the full basis and nature of the 
ultimate decision reached by the Board or the Secretary.'' 
Senate Report at 45. Case law interpreting section 553(c), 
though, has reached an identical state of development since 
1977. As described in Professors Kenneth C. Davis and Richard 
J. Pierce, Jr. in ``3 Administrative Law Treatise'' at 310-311:

          Over the decades since Congress enacted Sec. 553(c), 
        the courts gradually have attached greater significance 
        to the language Congress used to describe the statement 
        of basis and purpose in the Committee reports 
        [accompanying the enactment of the Administrative 
        Procedure Act]. * * * No court today would uphold a 
        major agency rule that incorporates only a ``concise 
        general statement of basis and purpose.'' To have any 
        reasonable prospect of obtaining judicial affirmance of 
        a rule, and agency must set forth the basis and purpose 
        of the rule in a detailed statement, often several 
        hundred pages long, in which the agency refers to the 
        evidentiary basis for all factual predicates, explains 
        its method of reasoning from factual predicates and 
        expected effects of the rule, related the factual 
        predicates and expected effects of the rule to each of 
        the statutory goals or purposes the agency is required 
        to further or to consider, responds to all major 
        criticisms contained in the comments on its proposed 
        rule, and explains why it has rejected at least some of 
        the most plausible alternatives to the rule that it has 
        adopted. See, e.g., American Gas Assn. v. FERC, 888 
        F.2d 136 (D.C. Cir. 1989); Mobil Oil Co. v. DOE, 610 
        F.2d 796 (TECA 1979), cert. denied, 446 U.S. 937 
        (1980); National Tire Dealers & Retreaders v. Brinegar, 
        491 F.2d 31 (D.C. Cir. 1974). Failure to fulfill one of 
        these judicially prescribed requirements of a ``concise 
        general statement of basis and purpose'' has become the 
        most frequent basis for judicial reversal of agency 
        rules.

    Perhaps the most important contributor to the evolution of 
jurisprudence relating to the statement of basis and purpose 
has been the evolving judicial interpretation of the 
requirement in the APA for courts ``to hold unlawful and set 
aside agency action'' that is ``arbitrary, capricious, and 
abuse of discretion of otherwise not in accordance with law.'' 
5 U.S.C. 706(2)(A). In Motor Vehicle Manufacturers Assn. v. 
State Farm Mutual Automobile Insurance Co., 463 U.S. 29 (1983), 
the Supreme Court provided a generalized standard concerning 
the content of a statement of basis and purpose required to 
support or avoid a conclusion that a rule is ``arbitrary'' or 
``capricious'':

          Normally, an agency rule would be arbitrary and 
        capricious if the agency has relied on factors which 
        Congress has not intended for it to consider, entirely 
        failed to consider an important aspect of the problem, 
        offered an explanation for its decision that runs 
        counter to the evidence before the agency, or is so 
        implausible that it could not be ascribed to a 
        difference in view or the product of agency expertise. 
        463 U.S. at 43.

    Seen in the light of this evolution of case law on section 
553, most of which occurred after the passage of the DOE Act in 
1977, the need for a separate section 501(d) is not readily 
apparent. The disadvantage of retaining this subsection can be 
seen by the presence of a waiver for the requirements of 
subsection (d) in section 501(e) of the DOE Act. Given that 
courts, in developing their standards for reasoned decision 
making, have not seen fit to conclude that agencies need 
waivers from such standards, one could argue that the DOE Act 
now provides less protection on this score than the case law 
interpreting section 553. At best, then, section 501(d) is 
surplusage, and it could be argued that retaining this 
subsection risks allowing an obsolete provision to remain the 
U.S. Code that may be out of step with the future evolution of 
the APA through legislation or case law on rule making.

Section 501(b)(3)

    As stated above, the rationale for the provision of section 
501(b)(3) is much more difficult to understand in light of the 
legislative history of the DOE Act. It appears without any 
specific explanation and the general explanation provided for 
the amendment in which it initially appeared does not apply to 
it. The conference report on the DOE Act similarly provides no 
explanation of the need for or intention of this provision. In 
1984, Congress provided, by enacting a new section 22 of the 
Office of Federal Procurement Policy Act (41 U.S.C. 418b), that 
procurement policies, regulations, procedures, and forms must 
be published in the Federal Register for at least 30 days of 
public comment prior to their adoption. Thus, there are now two 
separate laws requiring rule making procedures that apply to 
DOE procurement-related rules, while other Federal agencies 
have only one. Given this, the anomalous provision in the DOE 
Act is no longer required.

                              Section 624

    The Senate bill authorized the Secretary to establish 
advisory committees to assist in the performance of his 
functions, and made these advisory committees subject to 
section 17 of the Federal Energy Administration Act of 1974. 
The House bill limited the applicability of section 17 to the 
regulatory activities of the Department. As we stated during 
the floor debate on the House bill, ``there are other 
operational needs to close advisory committee meetings such as 
when trade secrets or other private business, confidential 
information, or other privileged information of a personal or 
private nature will have to be discussed,'' and the DOE was 
intended to be ``an operational as well as regulatory agency.'' 
Congressional Record, June 3, 1977, p. 17406. In the conference 
report, it was decided to keep the Senate provision, with the 
addition of exemption number 4 in the Government in the 
Sunshine Act (5 U.S.C. 552b(c)(4); relating to trade secrets 
and confidential business information) as an additional ground 
to close advisory committee meetings.

           Current Status of Law with Respect to Section 624

    In the years since the enactment of the DOE Act, the 
regulatory mission of the Department has waned dramatically, 
while the operational mission of the Department in research and 
development (not prominent in the originally reported bills to 
create the Department) has grown substantially. There has also 
been further development in the implementation of the Federal 
Advisory Committee Act (FACA). Responsibility for 
implementation of FACA was transferred to the General Services 
Administration (GSA) in October 1977, after the enactment of 
the DOE Act, and the GSA subsequently published government-wide 
regulations (codified at 41 CFR 101-6.1001 et seq.) that 
provide essentially the same advisory committee protections 
contained in the Federal Energy Administration Act of 1974 
(e.g., requiring balanced membership on committees, access to 
minutes of advisory committee meetings and to studies 
considered by such committees). The unique restriction 
remaining as a result of section 624(b) of the DOE Act has thus 
become more pronounced as a bar to the use, for example, of 
advisory committees in peer review of grant and contract 
applications, without compensating benefits not found in the 
Federal Advisory Committee Act and its implementing 
regulations. In 1991, the General Accounting Office agreed with 
DOE that DOE's ``authorizing legislation generally prohibits 
closing advisory committee meetings on research and 
development, unless the closing is due to national security 
reasons or the protection of privileged information. However, 
this legislation does not allow the closing of panel meetings 
to protect personal information. Consequently, [if DOE] 
charters its peer review panels under FACA it would not be able 
to close the meeting to prevent the disclosure of personal 
information.'' ``Peer Review: Compliance with the Privacy Act 
and the Federal Advisory Committee Act,'' GAO/GGD-91-48 (1991) 
at 13. The GAO recommended that ``The Secretary of Energy 
should seek an amendment to its authorizing legislation that 
would allow Energy to charter its peer review panels but still 
protect the privacy of the grant applicants and peer 
reviewers.'' Id. at 14.
    Given that the original impetus for the application of 
section 17 of the Federal Energy Administration Act was DOE's 
anticipated regulatory role; and given that the Federal 
Advisory Committee Act and its implementing regulations provide 
for the same procedural protections in section 17 while 
providing agencies with more latitude to protect privileged 
information and personal information, there is little rationale 
for maintaining the overlapping and excessively restrictive 
requirements of section 17.

      Legislative History of S. 1874 and Committee Recommendation

    Senator J. Bennett Johnston introduced S. 1874 on June 13, 
1996 and the bill was referred to the Committee on Energy and 
Natural Resources. The Department of Energy rendered technical 
assistance with the drafting of the bill. Secretary of Energy 
Hazel O'Leary, on behalf of the Administration, wrote to 
Senator Johnston on June 10, 1996 stating that the 
Administration ``strongly supports'' the amendments made by the 
bill.
    The Senate Committee on Energy and Natural Resources, in 
open business session on June 19, 1996, by unanimous vote of a 
quorum present recommends that the Senate pass S. 1874 without 
amendment.

                      Section-by-Section Analysis

    Section 1 of the bill provides the short title, the 
Department of Energy Standardization Act of 1996.
    Section 2 of the bill consists of two subsections. The 
first subsection strikes redundant and conflicting sections of 
the Department of Energy Organization Act related to the 
promulgation of Department of Energy regulations. After 
enactment of this subsection, DOE rule making with respect to 
public property, contracts, loans, and grants will be conducted 
under the same legislative authorities as such rule making is 
conducted generally, i.e., under the Office of Federal 
Procurement Policy Act (41 U.S.C. 418b). Requirements for other 
proposed and final DOE rules will be governed by the applicable 
provisions of the Administrative Procedure Act (5 U.S.C. 553 
(c) and (d)). The second subsection strikes redundant and 
conflicting sections of the Department of Energy Organization 
Act and the Federal Energy Administration Act of 1974 relating 
to advisory committee management. After enactment of this 
subsection, DOE advisory committees will be governed completely 
by the Federal Advisory Committee Act (5 U.S.C. Appendix).

    Cost and Budgetary Considerations and Federal Mandate Evaluation

    The following estimate of costs of this measure and Federal 
mandate evaluation has been provided by the Congressional 
Budget Office.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, June 27, 1996.
Hon. Frank H. Murkowski,
Chairman, Committee on Energy and Natural Resources, U.S. Senate, 
        Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
reviewed S. 1874, the Department of Energy Standardization Act 
of 1996, as ordered reported by the Senate Committee on Energy 
and Natural Resources on June 19, 1996. Assuming that 
appropriations are adjusted to be consistent with the bill, we 
estimate that enacting S. 1874 would result in discretionary 
savings of about $500,000 a year because of changes in 
statutory guidelines for various administrative activities of 
the Department of Energy (DOE). Enacting S. 1874 would not 
affect direct spending or receipts. Therefore, pay-as-you-go 
procedures would not apply to the bill.
    S. 1874 would eliminate certain statutory requirements 
applicable to DOE's procurement actions and advisory 
committees. DOE currently must comply with two sets of 
standards: those that apply government-wide and some that apply 
only to the department. For example, before DOE procurement 
rules can be finalized, the department has to issue a proposed 
rule and provide for public notice and comment. In contrast, 
other agencies are authorized to issue procurement rules 
without going through that proposal and review process. 
Likewise, all meetings of DOE's advisory committees must be 
open to the public unless they involve documented national 
security interests or research and development. Based on 
information provided by DOE, CBO estimates that repealing these 
agency-specific requirements would reduce the workload 
associated with procurement actions, saving the department 
about $500,000 a year beginning in fiscal year 1997. CBO 
estimates that other provisions of the bill would have no 
significant budgetary impact.
    S. 1874 contains no intergovernmental or private-sector 
mandates as defined in Public Law 104-4 and would impose no 
costs on state, local, or tribal governments. This bill would 
delete a provision of existing law that requires state and 
local governments to publish proposed rules in newspapers when 
those governments promulgate rules pursuant to a delegation by 
DOE. Department officials have indicated that they have 
delegated no rulemaking authority to state or local governments 
and do not expect to do so. Therefore, we believe that no state 
or local governments would be affected by repeal of this 
provision.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contacts are Kathleen 
Gramp (for federal costs) and Marjorie Miller (for the state 
and local impact).
            Sincerely,
                                         June E. O'Neill, Director.

                      Regulatory Impact Evaluation

    In compliance with paragraph 11(b) of rule XVI of the 
Standing Rules of the Senate, the Committee makes the following 
evaluation of the regulatory impact which would be incurred in 
carrying out S. 1874.
    The bill is not a regulatory measure in the sense of 
imposing Government established standards or significant 
economic responsibilities on private individuals or businesses. 
the bill provides for simplification and standardization of DOE 
rule making procedures with respect to public property, loans, 
grants, or contracts. Because DOE rules relating to these 
subjects will now be subject to the government-wide exemption 
in the Administrative Procedure Act (5 U.S.C. 553(a)(2)), DOE 
will no longer have to engage in rule making under the 
Administrative Procedure Act for rules on such topics in 
addition to rule making under the procedures provided for in 
the Office of Federal Procurement Policy Act (41 U.S.C. 418b). 
The bill also provides for simplification and standardization 
of DOE advisory committee procedures. The only impact would be 
to streamline the internal DOE administrative process relating 
to advisory committee management. DOE will probably need to 
revise its internal guidelines to implement these changes.
    No personal information would be collected in administering 
the program. Enactment of this bill will strengthen DOE's 
ability to protect personal information exempt from public 
disclosure under the Administrative Procedure Act, so the bill 
would improve the protection of personal privacy.
    Enactment of S. 1874 will reduce the paperwork associated 
with DOE advisory committee management and rule making.

                        Executive Communications

    The pertinent legislative report and communication received 
by the Committee from the Department of Energy setting forth 
Executive agency recommendation relating to S.1874 is set forth 
below:

                                   The Secretary of Energy,
                                     Washington, DC, June 10, 1996.
Hon. J. Bennett Johnston,
Ranking Democrat, Committee on Energy and Natural Resources, U.S. 
        Senate, Washington, DC.
    Dear Senator Johnston: This responds to your request for 
Department of Energy views on proposed amendments to the 
Department of Energy Organization Act (DOE Organization Act). 
These amendments would repeal subsections 624(b) and 501 (b) 
and (d) of the Act. The Department strongly supports these 
amendments.
    The first amendment would repeal section 624(b) of the DOE 
Organization Act (DOE Act) and section 17 of the Federal Energy 
Administration Act. The amendment would place DOE advisory 
committees on the same legal and procedural basis as all 
committees covered by the Federal Advisory Committee Act. Under 
current law DOE advisory committees are required to meet in 
public session, while other agencies may close meetings to 
protect information exempt from disclosure under the 
Administrative Procedure Act. DOE's more stringent requirement 
was justified at the time of its enactment by the economic 
regulatory role of the Department's predecessor, the Federal 
Energy Administration.
    The second amendment would repeal subsections 501 (b) and 
(d) of the DOE Organization Act. Subsections 501 (b) and (d) 
elaborate on requirements in the Administrative Procedure Act 
interpreted by the Supreme Court to require agencies to provide 
the basis or purpose of the rule in their rulemaking (Motor 
Vehicle Manufacturers Association v. State Farm, 463 U.S. 29, 
423 (1983)). With repeal of subsections 501 (b) and (d), the 
Department would be governed by the same standard procedural 
requirements as other agencies in conducting notice-and-comment 
rulemakings. The Department supports this change.
    The Office of Management and Budget advises that there is 
no objection from the standpoint of the President's program to 
submission of this report for the Committee's consideration.
    If you have further questions, please contact me, or have a 
member of your staff contact Douglas W. Smith, Deputy General 
Counsel for Energy Policy.
            Sincerely,
                                                  Hazel R. O'Leary.

                        Changes in Existing Law

    In compliance with paragraph 12 of rule XXVI of the 
Standing Rules of the Senate, changes in existing law made by 
bill S. 1874, as ordered reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italic, existing law in 
which no change is proposed is shown in roman):

                      TITLE 15, UNITED STATES CODE

          * * * * * * *

               CHAPTER 16B--FEDERAL ENERGY ADMINISTRATION

          * * * * * * *

              Subchapter I--Federal Energy Administration

          * * * * * * *

[Sec. 776. Advisory committees

    [(a) Representation of points of view and functions, 
government, and regulatory utility commissions. Whenever the 
Administrator shall establish or utilize any board, task force, 
commission, committee, or similar group, not composed entirely 
of full-time Government employees, to advise with respect to, 
or to formulate or carry out, any agreement or plan of action 
affecting any industry or segment thereof, the Administrator 
shall endeavor to insure that each such group is reasonably 
representative of the various points of view and functions of 
the industry and users affected, including those of 
residential, commercial, and industrial consumers, and shall 
include, where appropriate, representation from both State and 
local governments, and from representatives of State regulatory 
utility commissions, selected after consultation with the 
respective national associations.
    [(b) Public meetings; participation of interested persons; 
closed meetings; determination, national security, reasons. 
Each meeting of such board, task force, commission, committee, 
or similar group, shall be open to the public, and interested 
persons shall be permitted to attend, appear before, and file 
statements with, such group, except that the Administrator may 
determine that such meeting shall be closed in the interest of 
national security. Such determination shall be in writing, 
shall contain a detailed explanation of reasons in 
justification of the determination, and shall be made available 
to the public.
    [(c) Public inspection and copying of documents. All 
records, reports, transcripts, memoranda, and other documents, 
which were prepared for or by such group, shall be available 
for public inspection and copying at a single location in the 
offices of the Administration.
    [(d) Federal Advisory Committee Act applicable. Advisory 
committees established or utilized pursuant to this Act shall 
be governed in full by the provisions of the Federal Advisory 
Committee Act (Public Law 92-463, 86 Stat. 770), except as 
inconsistent with this section.]
          * * * * * * *

                      TITLE 42, UNITED STATES CODE

          * * * * * * *

                    CHAPTER 84--DEPARTMENT OF ENERGY

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      Subchapter V--Administrative Procedures and Judicial Review

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Sec. 7191. Procedures for issuance of rules, regulations, or orders

    (a) Applicability of subchapter II of chapter 5 of Title 5.
          (1) Subject to the other requirements of this title, 
        the provisions of subchapter II of chapter 5 of title 
        5, United States Code, shall apply in accordance with 
        its terms to any rule or regulation, or any order 
        having the applicability and effect of a rule (as 
        defined in section 551(4) of title 5, United States 
        Code), issued pursuant to authority vested by law in, 
        or transferred or delegated to, the Secretary, or 
        required by this Act or any other Act to be carried out 
        by any other officer, employee, or component of the 
        Department, other than the Commission, including any 
        such rule, regulation, or order of a State, or local 
        government agency or officer thereof, issued pursuant 
        to authority delegated by the Secretary in accordance 
        with this title. If any provision of any Act, the 
        functions of which are transferred, vested, or 
        delegated pursuant to this Act, provides administrative 
        procedure requirements in addition to the requirements 
        provided in this title, such additional requirements 
        shall also apply to actions under that provision.
          (2) Notwithstanding paragraph (1), this title shall 
        apply to the Commission to the same extent this title 
        applies to the Secretary in the exercise of any of the 
        Commission's functions under section 402(c)(1) or which 
        the Secretary has assigned under section 402(e).
    [(b) Publication of proposed rules, regulations, or orders 
in the Federal Register; statement; minimum comment period; 
additional notice requirement; availability of exception.
          [(1) In addition to the requirements of subsection 
        (a) of this section, notice of any proposed rule, 
        regulation, or order described in subsection (a) shall 
        be given by publication of such proposed rule, 
        regulation, or order in the Federal Register. Such 
        publication shall be accompanied by a statement of the 
        research, analysis, and other available information in 
        support of, the need for, and the probable effect of, 
        any such proposed rule, regulation, or order. Other 
        effective means of publicity shall be utilized as may 
        be reasonably calculated to notify concerned or 
        affected persons of the nature and probable effect of 
        any such proposed rule, regulation, or order. In each 
        case, a minimum of thirty days following such 
        publication shall be provided for an opportunity to 
        comment prior to promulgation of any such rule, 
        regulation, or order.
          [(2) Public notice of all rules, regulations, or 
        orders described in subsection (a) which are 
        promulgated by officers of a State or local government 
        or agency pursuant to a delegation under this Act shall 
        be provided by publication of such proposed rules, 
        regulations, or orders in at least two newspapers of 
        statewide circulation. If such publication is not 
        practicable, notice of any such rule, regulation, or 
        order shall be given by such other means as the officer 
        promulgating such rule, regulation, or order determines 
        will reasonably assure wide public notice.
          [(3) For the purposes of this title, the exception 
        from the requirements of section 553 of title 5, United 
        States Code, provided by subsection (a)(2) of such 
        section with respect to public property, loans, grants, 
        or contracts shall not be available.]
    (c) Substantial issue of fact or law or likelihood of 
substantial impact on Nation's economy, etc.; oral 
presentation.
          (1) If the Secretary determines, on his own 
        initiative or in response to any showing made pursuant 
        to paragraph (2) (with respect to a proposed rule, 
        regulation, or order described in subsection (a)) that 
        no substantial issue of fact or law exists and that 
        such rule, regulation, or order is unlikely to have a 
        substantial impact on the Nation's economy or large 
        numbers of individuals or businesses, such proposed 
        rule, regulation, or order may be promulgated in 
        accordance with section 553 of title 5, United States 
        Code. If the Secretary determines that a substantial 
        issue of fact or law exists or that such rule, 
        regulation, or order is likely to have a substantial 
        impact on the Nation's economy or large numbers of 
        individuals or businesses, an opportunity for oral 
        presentation of views, data, and arguments shall be 
        provided.
          (2) Any person, who would be adversely affected by 
        the implementation of any proposed rule, regulation, or 
        order who desires an opportunity for oral presentation 
        of views, data, and arguments, may submit material 
        supporting the existence of such substantial issues or 
        such impact.
          (3) A transcript shall be kept of any oral 
        presentation with respect to a rule, regulation, or 
        order described in subsection (a).
    [(d) Promulgation of rule if accompanied by explanation. 
Following the notice and comment period, including any oral 
presentation required by this subsection, the Secretary may 
promulgate a rule if the rule is accompanied by an explanation 
responding to the major comments, criticisms, and alternatives 
offered during the comment period.]
    (e) Waiver of requirements. The requirements of 
[subsections (b), (c) and (d)] subsection (c) of this section 
may be waived where strict compliance is found by the Secretary 
to be likely to cause serious harm or injury to the public 
health, safety, or welfare, and such finding is set out in 
detail in such rule, regulation, or order. In the event the 
requirements of this section are waived, the requirements shall 
be satisfied within a reasonable period of time subsequent to 
the promulgation of such rule, regulation, or order.
    (f) Effects confined to single unit of local government, 
geographic area within State, or State; hearing or oral 
presentation.
          (1) With respect to any rule, regulation, or order 
        described in subsection (a), the effects of which, 
        except for indirect effects of an inconsequential 
        nature, are confined to--
                  (A) a single unit of local government or the 
                residents thereof;
                  (B) a single geographic area within a State 
                or the residents thereof; or
                  (C) a single State or the residents thereof;
        the Secretary shall, in any case where appropriate, 
        afford an opportunity for a hearing or the oral 
        presentation of views, and provide procedures for the 
        holding of such hearing or oral presentation within the 
        boundaries of the unit of local government, geographic 
        area, or State described in paragraphs (A) through (C) 
        of this paragraph as the case may be.
          (2) For the purposes of this subsection--
                  (A) the term ``unit of local government'' 
                means a county, municipality, town, township, 
                village, or other unit of general government 
                below the State level; and
                  (B) the term ``geographic area within a 
                State'' means a special purpose district or 
                other region recognized for governmental 
                purposes within such State which is not a unit 
                of local government.
          (3) Nothing in this subsection shall be construed as 
        requiring a hearing or an oral presentation of views 
        where none is required by this section or other 
        provision of law.
    (g) Prescription of procedures for State and local 
government agencies. Where authorized by any law vested, 
transferred, or delegated pursuant to this Act, the Secretary 
may, by rule, prescribe procedures for State or local 
government agencies authorized by the Secretary to carry out 
such functions as may be permitted under applicable law. Such 
procedures shall apply to such agencies in lieu of this 
section, and shall require that prior to taking any action, 
such agencies shall take steps reasonably calculated to provide 
notice to persons who may be affected by the action, and shall 
afford an opportunity for presentation of views (including oral 
presentation of views where practicable) within a reasonable 
time before taking the action.
          * * * * * * *

                Subchapter VI--Administrative Provisions

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Sec. 7234. Advisory committees

    [(a)] The Secretary is authorized to established in 
accordance with the Federal Advisory Committee Act such 
advisory committees as he may deem appropriate to assist in the 
performance of his functions. Members of such advisory 
committees, other than full-time employees of the Federal 
Government, while attending meetings of such committees or 
while otherwise serving at the request of the Secretary while 
serving away from their homes or regular places of business, 
may be allowed travel expenses, including per diem in lieu of 
subsistence, as authorized by section 5703 of title 5, United 
States Code for individuals in the Government serving without 
pay.
    [(b) Section 17 of the Federal Energy Administration Act of 
1974 shall be applicable to advisory committees chartered by 
the Secretary, or transferred to the Secretary or the 
Department under 
this Act, except that where an advisory committee advises the 
Secretary on matters pertaining to research and development, 
the Secretary may determine that such meeting shall be closed 
because it involves research and development matters and comes 
within the exemption of section 552b(c)(4) of title 5, United 
States Code.]