[Federal Register Volume 59, Number 21 (Tuesday, February 1, 1994)]
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[Page 0]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 94-2225]


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[Federal Register: February 1, 1994]


  
                                                    VOL. 59, NO. 21

                                          Tuesday, February 1, 1994
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ADMINISTRATIVE CONFERENCE OF THE UNITED STATES

 

Adoption of Recommendations and Statement Regarding 
Administrative Practice and Procedure

AGENCY: Administrative Conference of the United States.

ACTION: Notice.

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SUMMARY: The Administrative Conference of the United States (ACUS) 
adopted two recommendations its Forty-Ninth Plenary Session. The 
recommendations concerning improving the environment for agency 
rulemaking and procedures for regulation of pesticides. The Conference 
also adopted one formal statement at the Plenary Session on the right 
of persons to consult with counsel in agency investigations.

FOR FURTHER INFORMATION: Renee Barnow, 202-254-7020.

SUPPLEMENTARY INFORMATION: The Administrative Conference of the United 
States was established by the Administrative Conference Act, 5 U.S.C. 
591-596. The Conference studies the efficiency, adequacy, and fairness 
of the administrative procedures used by federal agencies in carrying 
out administrative programs, and makes recommendations for improvements 
to the agencies, collectively or individually, and to the President, 
Congress, and the Judicial Conference of the United States (5 U.S.C. 
594(1)). At its Forty-Ninth Plenary Session, held December 9-10, 1993, 
the Assembly of the Administrative Conference of the United States 
adopted two recommendations and one formal statement.
    Recommendation 93-4, Improving the Environment for Agency 
Rulemaking, concerns the federal agency rulemaking process, which has 
become both increasingly less effective and more time-consuming. To 
improve the environment for agency rulemaking, the Conference 
recommends specific steps that the President, Congress, and the courts 
should take to eliminate undue burdens on agency legislative 
rulemaking.
    With regard to presidential oversight, ACUS recommends that 
presidential oversight and review be reserved for the most important 
rules and that the agencies be given clear policy guidance in a 
directive, approved by the President, specifying what is required. In 
addition, the reviewing or oversight entity should avoid, to the extent 
possible, extensive delays in the rulemaking process. The review 
process itself should be open to public scrutiny, following guidelines 
previously developed by the Administrative Conference. With regard to 
legislatively-imposed constraints, ACUS recommends that Congress should 
review and rationalize legislatively-mandated rulemaking procedures, 
and specific proposals are offered for Congress' consideration. ACUS 
recommends that courts should be sensitive not to require greater 
justification for rules than necessary. It also advises that a 
``reasoned statement'' that explains the basis and purpose of the rule 
and addresses significant issues raised in public comments should be 
adequate for review. Finally, recognizing that rulemaking is not just a 
product of external constraints, ACUS recommends a number of steps 
agency managers can take to improve their internal processes.
    Recommendation 93-5, Procedures for Regulation of Pesticides, calls 
for the adoption of a more coordinated and strategic procedural 
framework for the Federal Insecticide, Fungicide, and Rodenticide Act 
(``FIFRA'') involving the creation of multiple and reinforcing 
incentives for regulatory compliance by registrants, for timely and 
accurate decisionmaking by EPA, and for effective public participation. 
The Conference recommends that EPA promulgate and communicate clear 
data standards and guidance on the data expected from registrants. ACUS 
also recommends that Congress authorize EPA to levy administrative 
civil money penalties upon registrants submitting data that fail to 
meet previously announced, clear standards. With regard to suspension 
and cancellation proceedings, which involve scientific data concerning 
risks and benefits, ACUS recommends use of informal procedures by which 
EPA gives registrants detailed reasons for the agency's actions and 
then provides registrants with sufficient time to file responsive 
written comments and supporting documentation. However, an opportunity 
should be provided to allow affected parties to show cause why oral 
testimony or cross-examination is justified. Among other specific 
recommendations, ACUS urges Congress to consider giving EPA the 
authority to use informal procedures to order the phase-down of 
existing pesticides when there are safer, effective products or 
practices available.
    Statement No. 16, Right to Consult with Counsel in Agency 
Investigations, addresses the procedures that govern the relationship 
between a federal agency and persons compelled to appear before the 
agency in investigations that may lead to civil or criminal 
prosecution. While addressing certain issues raised in these 
investigations, the Conference concluded that a uniform set of 
recommendations concerning agency procedures was not appropriate given 
the differences among federal agencies in the roles of investigators 
and the methods by which witnesses or parties appear before agencies.
    The full texts of the recommendations and statement are set out in 
the Appendix below. The recommendations will be transmitted to the 
affected agencies and, if so directed, to the Congress of the United 
States. The Administrative Conference has advisory powers only, and the 
decision on whether to implement the recommendations must be made by 
each body to which the various recommendations are directed.
    Recommendations and statements of the Administrative Conference are 
published in full text in the Federal Register. In past years 
Conference recommendations and statements of continuing interest were 
also published in full text in the Code of Federal Regulations (1 CFR 
parts 305 and 310). Budget constraints have required a suspension of 
this practice in 1994. However, a complete listing of past 
recommendations and statements are published in the Code of Federal 
Regulations. Copies of all past Conference recommendations and 
statements, and the research reports on which they are based, may be 
obtained from the Office of the Chairman of the Administrative 
Conference. As explained at 1 CFR 304.2, requests for single copies of 
such documents will be filed at no charge to the extent that supplies 
on hand permit.
    The transcript of the Plenary Session is available for public 
inspection at the Conference's offices at Suite 500, 2120 L Street NW., 
Washington, DC.

    Dated: January 25, 1994.
Jeffrey S. Lubbers,
Research Director.

Appendix--Recommendations of the Administrative Conference of the 
United States

    The following recommendations were adopted by the Assembly of the 
Administrative Conference on December 9 and 10, 1993, respectively:

Recommendation 93-4  Improving the Environment for Agency 
Rulemaking

    Informed observers generally agree that the rulemaking process has 
become both increasingly less effective and more time-consuming. The 
Administrative Procedure Act does not reflect many of the current 
realities of rulemaking. The APA's cumbersome ``formal rulemaking'' 
procedures are rarely used except in some adjudicative-type rate 
proceedings. Meanwhile, the APA's simple ``informal rulemaking'' 
procedures (set forth in 5 U.S.C. Sec. 553) have been overlain with an 
increasing number of constraints: Outside constraints imposed by 
Congress, the President, and the courts, and internal constraints 
arising from increasingly complex agency management of the rulemaking 
process.1 As a result, many federal agencies, faced with 
unsatisfactory rulemaking accomplishments in recent years, have turned 
to alternatives such as less formal policy statements or adjudicative 
orders to achieve regulatory compliance.2
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    \1\ See generally McGarity, Some Thoughts on ``Deossifying'' the 
Rulemaking Process, 41 Duke L. J. 1385 (1991).
    \2\See Conference Recommendation 92-2, ``Agency Policy 
Statements,'' 1 CFR 305.92-2 (1993), which distinguished 
``legislative'' rules, normally promulgated through notice-and-
comment procedures, from interpretive rules and policy statements, 
which are exempt from such procedures. The present recommendation 
addresses legislative rulemaking.
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    The Conference believes that the environment for agency legislative 
rulemaking can be improved. This recommendation sets out a coordinated 
framework of proposals aimed at promoting efficient and effective 
rulemaking by addressing constraints on the current process that derive 
from a variety of sources. We present an integrated approach for 
improving the rulemaking environment in order to relieve agencies of 
unnecessary pressures and disincentives relating to rulemaking. We also 
identify desirable revisions of section 553 relating to legislative 
rulemaking. In doing so, this recommendation both presents new 
proposals and incorporates previous Conference recommendations.

Presidential Constraints

    We continue to support presidential coordination of agency 
policymaking as beneficial and necessary.3 We are concerned, 
however, that, unless properly focused, this additional review may 
impose unnecessary costs. All recent presidents have undertaken some 
level of review and coordination of agency rulemaking. Presidential 
review of rules, as undertaken under various executive orders applied 
by the Office of Management and Budget and other White House entities, 
has often required agencies to submit nearly all proposed and final 
rules to a review process in which the rules are screened and analyzed 
for consistency with presidential objectives. Some of these objectives 
have been incorporated into analytical requirements found in separate 
executive orders.4 This screening process can unduly slow the 
entire system of rulemaking; it can inhibit the growth of the promising 
consensus-based alternative of negotiated rulemaking;5 and it can 
create undesirable tensions between the reviewing entities and agency 
policymakers. While these analytical emphases can be rationalized 
individually, in the aggregate, they can result in redundant 
requirements, boilerplate-laden documents, circumvention, delays, and 
clutter in the Federal Register. Although specific presidential review 
policies have varied among Administrations, these recommendations set 
forth principles that the Conference believes generally should govern 
presidential review of rules.
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    \3\See Conference Recommendation 88-9, ``Presidential Review of 
Agency Rulemaking'' 1 CFR 305.88-9 (1993) (applying Presidential 
oversight to both executive branch and independent agencies).
    \4\Among the mandates reflected in these executive orders are 
requirements that agency rulemakers include cost-benefit estimates 
and analyses of the proposed and final rule's impact on federalism, 
family values, and future litigation, of whether it effects a 
``regulatory taking,'' and of other matters. The Conference of 
course takes no position on the merits of the values underlying 
these executive orders.
    \5\See Conference Recommendations 82-4 and 85-5, ``Procedures 
for Negotiating Proposed Regulations,'' 1 CFR 305.82-4, 305.85-5 
(1993);'' Negotiated Rulemaking Act of 1990, 5 U.S.C. 561-69.
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    We therefore recommend that presidential oversight and review be 
reserved for the most important rules and that the agencies be given 
clear policy guidance in a directive, approved by the President, 
specifying what is required. In addition, the reviewing or oversight 
entity should avoid, to the extent possible, extensive delays in the 
rulemaking process. The review process itself should be open to public 
scrutiny--following guidelines previously developed by the 
Administrative Conference.6 The President's policy should 
encourage planning and coordination of regulatory initiatives, and 
early dialogue between agencies and the reviewing entity. To this end, 
the concept of a unified agenda of regulations is a useful tool and 
should be preserved. We also believe that additional non-APA analytical 
requirements should be kept to a minimum. The cumulative impact of such 
requirements on the rulemaking process should be considered before 
existing requirements are continued or additional ones imposed. We also 
believe it is useful to periodically reassess the continued viability 
and relevance of the various presidential directives.7
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    \6\See Conference Recommendation 88-9, ``Presidential Review of 
Agency Rulemaking,'' 1 CFR 305.88-9 (1993) at 4.
    \7\While the most recent executive order of presidential review 
of rules generally reflects the views set forth in this 
recommendation, see Executive Order 12866, 58 Fed. Reg. 51735 
(1993), the Conference takes no position on the specifics of that 
order.
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Legislative Constraints

    Congress should similarly review and rationalize legislatively-
mandated rulemaking procedures. Specifically, we recommend that it 
refrain, as it generally has done since the 1970s, from imposing 
program-specific rulemaking requirements that go beyond the APA's basic 
notice-and-comment procedures.8 Statutory ``on-the-record'' and 
``hybrid'' rulemaking provisions that require adjudicative fact-finding 
techniques such as cross-examination, or more stringent provisions for 
judicial review (in particular, use of the ``substantial evidence'' 
test instead of the normal ``arbitrary and capricious'' test), can be 
unnecessarily burdensome or confusing and should be repealed.9 
Although additional procedures can sometimes be beneficial--see, e.g., 
Section 307 of the Clean Air Act (providing additional safeguards for 
rulemaking with significant economic and competitive effects)10--
they should be imposed only after careful review and attention by 
Congress to possible unintended consequences. Otherwise, such additions 
generally should be left to the discretion of individual 
agencies.11
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    \8\See Conference Recommendation 76-3, ``Procedures in Addition 
to Notice and the Opportunity to Comment in Informal Rulemaking,'' 1 
CFR 305.76-3 (1993).
    \9\See Conference Recommendation 80-1, ``Trade Regulation 
Rulemaking Under the Magnuson-Moss Warranty--Federal Trade 
Commission Improvement Act,'' 1 CFR 305.80-1 (1993).
    \1\042 U.S.C. 7607.
    \1\1See Conference Recommendation 76-3, ``Procedures in Addition 
to Notice and the Opportunity for Comment in Informal Rulemaking,'' 
1 CFR 305.76-3 (1993).
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    Similarly, legislatively-imposed time limits on rulemaking, while 
understandable, can be unrealistic, resulting in either hastily-imposed 
rules or missed deadlines that undermine respect for the rulemaking 
process.12 Legislative deadlines backed by statutory or regulatory 
``hammers'' (mandating, for example, that the proposed rule or some 
other policy change13 automatically take effect upon expiration of 
the deadline) are particularly undesirable and often counter-
productive;14 they are generally less desirable than the 
alternative of judicial enforcement of deadlines.15
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    \1\2See Conference Recommendation 78-3, ``Time Limits on Agency 
Action,'' 1 CFR 305.78-3 (1993).
    \1\3See, e.g., Conference Recommendation 90-8, ``Rulemaking and 
Policymaking in the Medicaid Program,'' 1 CFR 305.90-8 (1993).
    \1\4Where the ``hammer'' applied because of a failure to meet a 
deadline is that a proposed rule becomes effective, the anomalous 
result is that a policy that has withstood no public airing will be 
implemented.
    \1\5Courts should continue, where appropriate, to consider 
whether agency action in a rulemaking is ``unreasonably delayed.'' 
See 5 U.S.C. 706(1); Telecommunications Research and Action Center 
v. FCC, 750 F.2d 70, 80 (D.C. Cir. 1984).
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    Finally, legislation ancillary to the APA that creates additional 
rulemaking impediments should be reconsidered. Statutes such as the 
Regulatory Flexibility Act, which requires a special analysis of 
virtually all rules' effects on small business, may have laudable 
intentions, but their requirements are often both too broadly 
applicable and not sufficiently effective in achieving their goals. If 
such requirements are imposed, Congress should focus them more 
narrowly, by, for example, confining their application to significant 
rules or particular categories of rules.

Judicial Constraints

    Other constraints on rulemaking that warrant similar 
reconsideration have been imposed through judicial review. The APA, in 
section 706, provides that agency rules may be set aside if they are 
``arbitrary or capricious,'' represent an ``abuse of discretion,'' or 
are ``otherwise not in accordance with law.'' The evolving scope of 
judicial review of agency rules, along with the timing of much such 
review at the preenforcement stage, has contributed to what is 
sometimes an overly intrusive inquiry. This, in turn, has led agencies 
to take defensive measures against such review. While some tension is 
an inevitable adjunct of the process of judicial review, we believe 
that steps can be taken to lessen some of the burdens without loss of 
effective outside scrutiny of agency rules.
    The tendency of some courts to require extra-APA procedures in 
rulemaking was arrested by the Supreme Court's Vermont Yankee decision 
in 1978.16 Nevertheless, while the prevailing judicial 
interpretation of the arbitrary-and-capricious standard of review 
(which became known as the ``hard look doctrine'') has promoted 
reasoned decisionmaking, courts have not infrequently remanded rules on 
the basis of an agency's failure to respond adequately to comments, 
consider relevant factors, or explain fully the bases for its rule. 
Courts should be sensitive not to require greater justification for 
rules than necessary; a reasoned statement that explains the basis and 
purpose of the rule and addresses significant issues raised in public 
comments should be adequate.
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    \1\6Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 
(1978).
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    Preenforcement review, expanded by the Supreme Court in the 1967 
Abbott Laboratories cases,17 endorsed by the Conference in various 
recommendations,18 and codified in numerous rulemaking programs, 
has the virtue of settling legal issues early and definitively. When 
overused, however, preenforcement review can have the negative effect 
of inducing precautionary challenges to most rules and the raising of 
as many objections to a rule as possible, including somewhat 
speculative challenges pertaining to the rule's potential application.
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    \1\7Abbott Laboratories v. Gardner, 387 U.S. 136 (1967); Toilet 
Goods Ass'n v. Gardner, 387 U.S. 158 (1967).
    \1\8See Conference Recommendation 74-4, ``Preenforcement 
Judicial Review of Rules of General Applicability,'' 1 CFR 305.74-4 
(1993); Conference Recommendation 91-5, ``Facilitating the Use of 
Rulemaking by the National Labor Relations Board,'' 1 CFR 305.91-5 
(1993).
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    Under the Abbott Laboratories standard, challenges to a rule are 
permitted where issues are appropriate for judicial review and where 
the impact on a challenger is direct and immediate. The Conference 
believes that the Abbott Laboratories standard strikes a sensible 
balance, and that preenforcement challenges generally are appropriate 
where the administrative record provides a sufficient basis for the 
court to resolve the issues before it. Thus, a preenforcement challenge 
to a rule based on the procedures used in the rulemaking should 
normally be permitted. Preenforcement review that involves a facial 
challenge to a rule's substantive validity (whether because of a 
conflict with a statute or the Constitution, or because of the 
inadequacy of the facts or reasoning on which it is based) should also 
generally be heard.19 In contrast, challenges to a rule because it 
might be applied in a particular way should normally be deferred until 
the rule has actually been applied.
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    \1\9A challenge based on the facial invalidity of the rule, in 
this context, would normally be directed at a requirement or course 
of action to which the agency has clearly committed itself.
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    Although prompt resolution of legal issues is to be encouraged, 
Congress should be cautious in coupling mandated time-limited 
preenforcement review with preclusion of review at the enforcement 
stage. Such time-limited review should be provided for only in the 
situations and conditions specified in Recommendation 82-7.20 
Where Congress does set time limits for preenforcement review, it 
should, in the interests of consistency, generally specify that 
preenforcement review should occur within 90 days of a rule's issuance. 
Current statutory specifications vary. There does not seem to be any 
reason for variation that outweighs the benefits of uniformity in this 
context.
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    \2\0Recommendation 82-7, ``Judicial Review of Rules in 
Enforcement Proceedings,'' 1 CFR 305.82-7 (1993), sets out criteria 
for when judicial review should be limited at the enforcement stage, 
and what kinds of issues should remain reviewable at that stage.
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    Congress should also amend any existing statutes that mandate use 
of the ``substantial evidence'' test for reviewing legislative rules, 
by replacing it with the ``arbitrary and capricious'' test. The 
occasional introduction of the substantial evidence test in the 
rulemaking context has created unnecessary confusion; some courts apply 
it in a manner identical to that of the ``arbitrary and capricious'' 
test; others believe that it sets a higher standard. The Conference 
believes that the arbitrary and capricious test provides sufficient 
review in the informal rulemaking context.
    The intensity of judicial review directly affects the rulemaking 
process. For example, the scope of review of agency statutory 
interpretations is governed by the deferential Chevron test, which 
requires affirmance if the agency's interpretation of an ambiguous 
statute is permissible.21 On the other hand, when reviewing the 
reasonableness of an agency's policy and factual justifications for its 
rules, courts apply the stricter ``hard look'' doctrine.22 
Deferential review of the legal issue of statutory interpretation, 
coupled with the rigorous review of a rule's factual and policy 
underpinnings that the ``hard look'' doctrine specifies, has been 
criticized as anomalous. The Conference believes, however, that the 
review standards can be harmonized by looking beyond the labels. That 
is, under both of these doctrines, courts are required to determine 
independently the limits of the agency's statutory authority and 
whether the factors the agency took into account in formulating the 
rule were permissible. Following that determination, courts properly 
defer to an agency's permissible reading of its statute and to its 
choice of inferences from the facts in making policy decisions. Courts 
would help make their review more consistent and predictable if they 
articulated more clearly this two-step approach. Both the Chevron and 
``hard look'' doctrines would then be understood as including a 
searching review of the range of an agency's legally permissible 
choices (statutory, policy, and factual), combined with, in each 
instance, deference to the agency's reasonable selection among such 
choices, once the alternatives are determined to be within the 
permissible range.
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    \2\1Chevron USA Inc. v. NRDC, 467 U.S. 837 (1984).
    \2\2Motor Vehicle Manufacturers Ass'n v. State Farm Mutual 
Automobile Insurance Co., 463 U.S. 29 (1983) (State Farm).
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    Finally, in order to prevent additional litigation, courts should 
be encouraged to address certain issues that arise in many if not most 
reviews of rules. Reviewing courts should, for example, specify, to the 
extent feasible, which portions of the rule, if any, are to be set 
aside, vacated, stayed or otherwise affected by the decision in the 
case. They should seek to ensure that portions of a rule unaffected by 
a finding of illegality remain in effect, unless the rule expressly or 
impliedly indicates that the rule is inseverable. A reviewing court 
should also consider the extent to which its mandate will apply 
retroactively. In considering the effect to be given to its decision, 
the court should weigh the impact of the decision on parties not before 
the court, and recognize their interest in being heard or adequately 
represented prior to any ruling that adversely affects them.

Amendment of the APA

    As we approach the fiftieth anniversary of the APA, some of its 
rulemaking provisions need to be updated. Section 553(c), which does 
not now state a length of time for the comment period, should be 
amended to specify that a comment period of ``no fewer than least 30 
days'' be provided (although a good cause exception for shorter periods 
should be incorporated). This would relieve agencies of the need to 
justify comment periods that were 30 days or longer. The thirty-day 
period is intended as a minimum, not a maximum; agencies would still be 
encouraged to allow longer comment periods and to leave the record open 
for the receipt of late comments.23 Section 553 should also 
specify that a second round of notice and comment is not required where 
the final rule is the ``logical outgrowth'' of the proposed rule, thus 
codifying generally accepted doctrine.24 A provision requiring 
maintenance of a public rulemaking file should be incorporated into 
section 553, so that those who seek access to the file are not forced 
to rely on the Freedom of Information Act to obtain it.25 (The 
content of such a file is discussed further below in connection with 
internal agency management initiatives.)
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    \2\3See Conference Statement #7, ``Views of the Administrative 
Conference on Proposals Pending in Congress to Amend the Informal 
Rulemaking Provisions of the Administrative Procedure Act,'' 1 CFR 
310.7 (para. 2).
    \2\4See South Terminal Corp. v. EPA, 504 F.2d 646, 659 (1st Cir. 
1974), in which the 1st Circuit originated the ``logical outgrowth'' 
test. It was subsequently embraced by other circuits, particularly 
the D.C. Circuit. See Shell Oil Co. v. EPA, 950 F.2d 741 (D.C. Cir. 
1991); International Union, United Auto, Aerospace and Agr. 
Implement Workers of America v. OSHA, 938 F.2d 1310 (D.C. Cir. 
1991); American Medical Association, 887 F.2d 760 (7th Cir. 1989); 
NRDC v. USEPA, 824 F.2d 1258 (1st Cir. 1987); United Steelworkers v. 
Schuykill Metal Corp., 828 F.2d 314 (5th Cir. 1987); National Black 
Media Coalition v. FCC, 791 F.2d 1016 (2nd Cir. 1986); Chocolate 
Mfrs. Ass'n v. Block, 755 F.2d 1098 (4th Cir. 1985).
    \2\5Statement #7, supra n. 23, at 4.
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    In addition, the requirement in section 553(c) of a statement of 
basis and purpose for the rule should be revised to require a 
``reasoned statement''26 (deleting the ``conciseness'' provision), 
which includes a response to significant issues raised in the public 
comments.27 These changes are designed to codify the salutary 
aspects of the caselaw on rulemaking, discourage insubstantial 
arguments and objections on review, and stem the tendency to require 
additional, more burdensome justifications.
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    \2\6State Farm, supra n. 22, 463 U.S. at 57 (quoting Greater 
Boston Television Corp. v, FCC, 444 F.2d 841, 852 (D.C. Cir. 1970)).
    \2\7Conference Statement #7, supra n. 23, at 5.
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    Another long-overdue change in the Act is elimination of section 
553(a)(2)'s exemption from notice-and-comment procedures for matters 
relating to ``public property, loans, grants, benefits, or contracts.'' 
As the Conference recognized as early as 1969, this ``proprietary 
exemption'' is an anachronism.28 The exemption for ``military or 
foreign affairs function[s]'' in section 553(a)(1) should be narrowed 
so that all but secret aspects of those functions are open to public 
comment.29
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    \2\8See Conference Recommendation 69-8, ``Elimination of Certain 
Exemptions From the APA Rulemaking Requirements,'' 1 CFR 305.69-8 
(1993).
    \2\9See Conference Recommendation 73-5, ``Elimination of the 
`Military or Foreign Affairs Function' Exemption from APA Rulemaking 
Requirements,'' 1 CFR 305.73-5 (1993).
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Internal Agency Management Initiatives

    Rulemaking is not just a product of external constraints. The 
agency's own processes for developing rules and reviewing them 
internally affect the rulemaking environment. Thus, agency management 
initiatives can have a significant impact on the effectiveness and 
efficiency of rulemaking. The Conference recommends a number of steps 
agency managers can take to improve their internal processes.
    Senior agency staff should develop management strategies to set 
priorities and track agency rulemaking initiatives.30 Agencies 
should seek to involve the presidential oversight entity in the 
rulemaking process as early as feasible, in order to reach agreement on 
the significance of rules in the developmental stage, to provide 
greater coordination, and to speed final oversight review. Agencies 
should also review their existing systems for developing and reviewing 
regulations, to determine where problems and bottlenecks are occurring. 
They should seek to achieve more rapid internal clearances of proposed 
and final rules, and to develop reasoned analyses31 and responses 
to significant issues raised in public comments. They should also take 
steps to manage the rulemaking file (and associated requests for access 
to it).32 The file should, to the extent feasible, contain notices 
of the rulemaking, all written33 comments submitted to the agency, 
and copies or an index of all written factual material, studies, or 
reports substantially relied on or seriously considered by the agency 
in formulating its proposed and final rule (except insofar as 
disclosure is prohibited by law). Materials substantially relied on or 
seriously considered need not encompass every study, report, or other 
document that the agency may have in its files or has otherwise used, 
but they should include those that exerted a significant impact on the 
agency's thinking, even if they represent an approach that the agency 
ultimately did not accept.
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    \3\0See Conference Recommendation 87-1, ``Priority Setting and 
Management of Rulemaking by the Occupational Safety and Health 
Administration,'' 1 CFR 305.87-1 (1993).
    \3\1See Conference Recommendation 85-2, ``Agency Procedures for 
Performing Regulatory Analysis of Rules, 1 CFR 305.85-2 (1993); 
Conference Recommendation 88-7, ``Valuation of Human Life in 
Regulatory Decisionmaking,'' 1 CFR 305.88-7 (1993).
    \3\2Computerized access should be made available, preferably in 
a uniform system government-wide. See Conference Recommendation 88-
10, ``Federal Agency Use of Computers in Acquiring and Releasing 
Information,'' 1 CFR 305.88-5 (1993).
    \3\3''Written'' includes documents in electronic form.
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    Agencies should also consider innovative methods for developing and 
getting public input on rules. Agencies should use advisory or 
negotiated rulemaking committees where appropriate to improve the 
quality and acceptability of rules.34 They should also consider 
the use of ``direct final'' rulemaking where appropriate to eliminate 
double review of noncontroversial rules. Direct final rulemaking 
involves issuing a rule for notice and comment, with an accompanying 
explanation that if the agency receives no notice during the comment 
period that any person intends to file an adverse comment, the rule 
will become effective 30 days (or some longer period) after the comment 
period closes.
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    \3\4Any government-wide policy concerning the use of advisory 
committees should be consistent with their use as part of the 
process of negotiated rulemaking.
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Recommendation

    To improve the environment for agency legislative rulemaking, the 
President, Congress, and the courts should take steps to eliminate 
undue burdens on agency legislative rulemaking; Congress should update 
the Administrative Procedure Act's rulemaking provisions; and agencies 
should review their internal rulemaking environment and, where 
appropriate, implement internal management initiatives aimed at 
improving the effectiveness and efficiency of their efforts.

I. Presidential Oversight\35\ of Rulemaking
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    \35\The recommendations contained in this section apply to 
oversight of both executive and independent agencies. The Conference 
has previously recommended that presidential review of rulemaking 
apply to the independent agencies to the same extent it applies to 
the rulemaking of the Executive Branch departments and agencies. See 
Conference Recommendation 88-9, ``Presidential Review of Agency 
Rulemaking,'' 1 CFR 305.88-9 (1993).
    The term ``presidential oversight entity,'' as used herein, is 
that part of the Executive Office of the President delegated 
responsibility for review and oversight of agency rulemaking.
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    A. The President's program for coordination and review of agency 
rules should be set forth in a directive that is reviewed periodically. 
The program should be sensitive to the burdens being imposed on the 
rulemaking process, and implementation of the program should ensure 
that it does not unduly delay or constrain rulemaking. The President 
should consider the cumulative impact of existing analytical 
requirements on the rulemaking process before continuing these 
requirements or imposing new ones.36
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    \3\6In recommending review of analytical requirements beyond 
those contained in the APA, we express no position on the 
substantive policies being mandated.
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    B. The President's directive, as well as the explanations provided 
and the procedures followed by the presidential oversight entity, 
should, insofar as practicable:
    1. Promote dialogue and coordination between the oversight entity 
and rulemaking agencies in the early identification and selection of 
rules warranting application of the review process;
    2. Set forth the relevant analytical requirements that the 
oversight entity should apply to agency rulemaking, and provide 
interpretive guidance to assist agencies in complying with these 
requirements;
    3. Ensure appropriate expedition and openness in the process, in 
accordance with Conference Recommendation 88-9;
    4. Support a process for planning regulatory initiatives and 
tracking rule development; and
    5. Encourage and support agency efforts to use consensual processes 
such as negotiated rulemaking.

II. Congressional Structuring of Rulemaking

    A. Section 553 of title 5, United States Code, which established 
the framework for legislative rulemaking, has operated most efficiently 
when not encumbered by additional procedural requirements. Congress 
generally should refrain from creating program-specific rulemaking 
procedures or analytical requirements beyond those required by the APA. 
When Congress determines that additional procedures beyond those 
required by section 553 are justified by the nature of a particular 
program, such procedures should be focused on identified problems and, 
where possible, adopted incrementally or after experimentation.37 
In addition, Congress should repeal formal (``on-the-record'') or other 
adjudicative fact-finding procedures in rulemaking in any existing 
statutes mandating such procedures.38
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    \3\7See, for example, the development of more specific, but not 
necessarily more burdensome, procedures for EPA rulemaking that has 
significant economic and competitive effects. See 42 U.S.C. 
Sec. 7607 (Sec. 307 of the Clean Air Act). See also Conference 
Recommendation 76-3, ``Procedures in Addition to Notice and the 
Opportunity for Comment in Informal Rulemaking,'' 1 CFR 305.76-3 
(1993), which encourages agency experimentation with use of oral 
procedures beyond simple notice and comment in some circumstances.
    \3\8Conference has recommended against the mandated use of 
cross-examination and other ``adjudicative'' procedures for agency 
fact-finding in rulemaking. See, e.g., Conference Recommendation 79-
1, ``Hybrid Rulemaking Procedures of the Federal Trade Commission,'' 
1 CFR 305.79-1 (1993). The Conference recognizes, however, that more 
formal procedures may be appropriate for ratemaking based on party-
related facts. See United States v. Florida East Coast RR, 410 U.S. 
224 (1973). Congress may also wish to consider whether less formal 
hybrid processes may be useful in contexts currently requiring 
formal rulemaking.
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    B. In general, Congress should not legislate time limits on 
rulemaking, but should instead rely on judicial enforcement of prompt 
agency action under Sec. 706(1) of the APA.39 However, if Congress 
determines that a deadline is appropriate, it also should ensure that 
the agency has sufficient resources to support the required rulemaking 
effort without distorting the agency's other regulatory functions. If 
Congress further determines that a default rule is necessary where an 
agency does not meet a deadline, it should specify the terms of that 
rule and, in particular, should not impose ``regulatory hammers'' that 
would cause the agency's proposed rules to take effect automatically.
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    \3\9This is not a comment on the legitimacy of congressional 
directives in this regard, but on their impracticality. On the other 
hand, agency self-imposed deadlines are encouraged, see V(D), below. 
For more detailed advice on time limits, see paragraph 5 of 
Conference Recommendation 78-3, ``Time Limits on Agency Action,'' 1 
CFR 305.78-3 (1993).
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    C. Congress should reconsider the need for continuing statutory 
analytical requirements that necessitate broadly applicable analyses or 
action to address narrowly-focused issues.40 If Congress 
nonetheless determines that such analytical requirements are necessary, 
Congress should structure its requirements more narrowly (e.g., by 
confining their application to the most significant rules or to rules 
likely to be affected by the stated concern).
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    \4\0See, e.g., the Regulatory Flexibility Act of 1980. The 
Conference takes no position on the substantive issues the Act seeks 
to address. Insofar as possible, however, such concerns are more 
appropriately included in the President's oversight guidelines. See 
I(B)(2) above.
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III. Timing and Scope of Judicial Review

    Congress and the courts generally should be sensitive to the impact 
of judicial review on agency rulemaking and should seek to simplify, 
clarify, and harmonize provisions for judicial review of rules.
A. Congress and the Courts
    In determining whether preenforcement challenges to rules are 
appropriate, courts have traditionally evaluated ``both the fitness of 
the issues for judicial decision and the hardship to the parties of 
withholding its consideration.''41 Adherence to this standard 
benefits both agencies and those affected by agency rules. Congress 
generally should authorize and courts should allow preenforcement 
challenges where the administrative record is a sufficient basis for 
resolving the issues. Thus, preenforcement challenges to a rule based 
on the procedures used in the rulemaking or on the asserted substantive 
invalidity of the rule, however it would be applied, should normally be 
permitted. Claims of substantive invalidity would include facial 
challenges based on statutory or constitutional grounds, or asserting 
the inadequacy of the facts or reasoning underlying the rule. 
Challenges to a rule on the basis that the rule might be applied in a 
particular way should normally be deferred until the application seems 
likely or has occurred.
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    \4\1Abbott Laboratories v. Gardner, supra n. 17, 387 U.S. at 
149.
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B. Congress
    1. Congress should be cautious in mandating time-limited 
preenforcement review coupled with preclusion of review at the 
enforcement stage, and should rely on time limits only in the 
situations and conditions specified in Recommendation 82-7.42 
Congressional time limits on preenforcement review should be understood 
to bar later challenges in the enforcement context only to the extent 
specified by Congress. Where Congress mandates a time limit on 
preenforcement review, it generally should specify that such review be 
requested within 90 days of the issuance of the rule.43 It should 
also provide that preenforcement review cases be directly reviewable in 
the courts of appeals, and that a stay or partial stay of the rule's 
effectiveness ordinarily be issued only on the demonstration of 
likelihood of success on the merits and the prospect of significant 
private harm if the rule is permitted to take effect.
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    \4\2See Conference Recommendation 82-7, ``Judicial Review of 
Rules in Enforcement Proceedings,'' 1 CFR 305.82-7 (1993).
    \4\3Congress should likewise reevaluate existing statutes for 
conformity with this approach.
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    2. The standards set out in Sec. 706(2)(A) of the APA's judicial 
review provisions should apply in all cases involving review of rules. 
Specifically, Congress should not provide for the use of the 
``substantial evidence'' test for agency rules. It should conform 
existing statutes to this standard by deleting the use of the 
``substantial evidence'' test for review of agency rules.
C. Courts
    1. In articulating the doctrines used in the judicial review of 
rulemaking, reviewing courts should more clearly harmonize the 
deferential Chevron doctrine, applied in reviewing agency 
interpretation of its statutory authority, with the ``hard look'' 
doctrine, used in examining an agency's justification for its rule. 
Courts, in applying these doctrines, should recognize that both the 
Chevron and ``hard look'' tests call for a searching review of the 
range of factors or permissible choices that may be considered by the 
agency, and require deference to agency application of those factors 
once they are shown to be legally appropriate.
    2. When reviewing an agency's explanation for its rule, courts 
should consider the context of the entire proceeding and concern 
themselves principally with whether the agency's overall explanation 
and analysis is reasonable, including its response to the significant 
issues raised in public comments.
    3. In reviewing challenges to agency rules, courts should, to the 
extent feasible and after taking into account the effect of the 
decision on affected persons not before the court, consider: (a) 
Whether any portion of a rule unaffected by a finding of illegality 
should remain in full force and effect; (b) which portions of the 
challenged rule, if any, are to be set aside, vacated, stayed, or 
otherwise affected by the court's decision in a case; and (c) the 
extent to which the court's mandate should apply retroactively.
    4. Courts should continue, where appropriate, to consider whether 
agency action in a rulemaking is ``unreasonably delayed.''44
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    \4\4See n. 15, 39, supra.
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IV. Amendments to the APA's Legislative Rulemaking Provisions

    Congress should update the APA and eliminate outmoded provisions. 
It should codify court decisions that have increased the effectiveness 
of public participation in the rulemaking process. In particular, 
Congress should consider amending section 553 of the APA to:
    A. Eliminate the exemption (Sec. 553(a)(2)) for rules relating to 
public property, loans, grants, benefits or contracts, and delete the 
exemption (Sec. 553(a)(1)) of military and foreign affairs matters, 
except for secret matters;45
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    \4\5See Conference Recommendation 69-8, ``Elimination of Certain 
Exemptions From the APA Rulemaking Requirements,'' 1 CFR 305.69-8 
(1993), and Conference Recommendation 73-5, ``Elimination of the 
`Military or Foreign Affairs Function' Exemption from APA Rulemaking 
Requirements,'' 1 CFR 305.73-5 (1993). The latter recommendation 
urged eliminating the APA's categorical exemption for matters 
pertaining to the military or foreign affairs function. It does 
recognize, however, that a modified exemption may be appropriate for 
matters ``specifically required by executive order to be kept secret 
in the interest of national defense or foreign policy.''
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    B. Specify a comment period of ``no fewer than 30 days'' 
(Sec. 553(c)),46 provided that a good cause provision allowing 
shorter comment periods or no comment period is incorporated, and 
codify the doctrine holding that a second round of notice and comment 
is not required if the final rule is a ``logical outgrowth'' of the 
noticed proposed rule;
---------------------------------------------------------------------------

    \4\6The 30-day period is intended as a minimum, not a maximum. 
Agencies are encouraged to use longer periods for public comment.
---------------------------------------------------------------------------

    C. Require establishment of a public rulemaking file beginning no 
later than the date on which an agency publishes an advance notice of 
proposed rulemaking or notice of proposed rulemaking, whichever is 
earlier.
    D. Restate the ``concise'' statement of basis and purpose 
requirement (Sec. 553(c)) by codifying existing doctrine that a rule 
must be supported by a ``reasoned statement,'' and that such statement 
respond to the significant issues raised in public comments.
    To the extent permitted by law, agencies should adopt these 
proposed policies pending Congressional action.

V. Agency Management Initiatives

    In order to improve their internal rulemaking environments, 
agencies should develop management techniques to ensure efficient and 
effective administration of rulemaking. Such techniques should include:
    A. Systematically setting priorities at the highest agency levels 
and tracking rulemaking initiatives, including identifying clearly who 
has the authority to ensure that agency schedules and policies are 
followed;
    B. Coordinating with the presidential oversight entity on the 
identification of rules warranting review as early in the process as is 
feasible, and establishing internal review procedures at the highest 
levels to ensure compliance with presidential analytical requirements;
    C. Reviewing the agency's existing system for developing and 
reviewing regulations, to determine where problems and bottlenecks are 
occurring, and to improve and streamline the process;
    D. Achieving timely internal clearances of proposed and final 
rules, using, where feasible, publicly announced schedules for 
particular rulemaking proceedings;
    E. Managing rulemaking files, so that maximum disclosure to the 
public is achieved during the comment period and so that a usable and 
reliable file is available for purposes of judicial review. The 
rulemaking file should, insofar as feasible, include (1) all notices 
pertaining to the rulemaking, (2) copies or an index of all 
written47 factual material, studies, and reports substantially 
relied on or seriously considered by agency personnel in formulating 
the proposed or final rule (except insofar as disclosure is prohibited 
by law), (3) all written comments submitted to the agency, and (4) any 
other material required by statute, executive order, or agency rule to 
be made public in connection with the rulemaking.48
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    \4\7``Written'' includes documents in electronic form.
    \4\8See Conference Statement #7, 1 CFR 310.7 (1993), ``Views of 
the Administrative Conference on Proposals Pending in Congress to 
Amend the Informal Rulemaking Provisions of the Administrative 
Procedure Act.''
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    F. Making use, where appropriate, of negotiated rulemaking and 
advisory committees;
    G. Considering innovative methods for reducing the time required to 
develop final rules without eliminating the opportunity for 
consideration and comment;
    H. Taking steps to ensure that proposed rules are acted on in a 
reasonably timely manner or withdrawn; and
    I. Evaluating and reconsidering existing rules and initiating 
amendments and repeals where appropriate.

Recommendation 93-5  Procedures for Regulation of Pesticides.

    The Environmental Protection Agency cannot accomplish its 
substantive mission in regulating pesticides without change and 
improvement in the Agency's regulatory procedures. The Conference 
recommends the adoption of a more coordinated and strategic procedural 
framework for the Federal Insecticide, Fungicide, and Rodenticide Act 
(``FIFRA''). EPA needs procedures that create multiple and reinforcing 
incentives for regulatory compliance by registrants, for timely and 
accurate decisionmaking by EPA, and for effective public participation.

The Reregistration Process

    The reregistration of existing pesticides under contemporary risk 
assessment standards, and the removal of unacceptable pesticides from 
the marketplace, are examples where procedures can hinder the agency's 
prospects for success in its substantive mission. Reregistration of 
existing pesticides, which Congress originally directed to be completed 
by 1976, became sufficiently delayed so that Congress in 1988 amended 
FIFRA specifically to force the completion of reregistration by 1998. 
Yet subsequent delays in the reregistration process may cause EPA to 
miss this congressional deadline. To some extent, the delay may reflect 
the underlying difficulty and resource-intensiveness of the risk 
assessment enterprise with which EPA has been charged. There are some 
50,000 pesticide products that are separately formulated from 642 
identified active ingredients. Although EPA has tried to expedite its 
task by focusing reregistration on some 402 ``cases'' (composed of 
single or related active ingredients), each case can require evaluation 
of 100-150 separate studies, every one of which may pose further 
questions of scientific protocol and interpretation. It may be that 
EPA's Office of Pesticide Programs needs more personnel to match its 
regulatory task.
    Whatever the case for additional resources (a question not 
addressed by the Conference), there is a more basic need for timely and 
adequate data from registrants--all else in the reregistration process 
depends on this. Yet the reregistration process does not now provide 
sufficient procedural incentives to encourage submission of timely and 
adequate data. In general, because registrants continue to market their 
products during reregistration, they have little to lose by regulatory 
decisions that are reached later rather than sooner. Although the 1988 
FIFRA Amendments require registrants to identify data gaps, and commit 
to fill them, the 1988 Amendments do not provide the agency with 
sufficient tools to police tardy or inadequate data submissions.
    As to tardiness, the 1988 Amendments authorized the agency to 
suspend registrations of those registrants that fail to submit data. 
But EPA must first provide nonsubmitters with 30-days' notice in 
response to which registrants can demand a limited hearing (which must 
be held within 75 days); the 1988 Amendments further provide that 
registrants suspended for not submitting data can have their 
registrations ``reinstated'' upon submission of the data. Some 
registrants, ironically, have used these suspension procedures as a 
means of obtaining penalty-free and self-awarded extensions of time. In 
the 7 months between August 1991 and February 1992, for example, EPA 
found it necessary to issue 70 Notices of Intent to Suspend for 
nonsubmittal of data, yet in the majority of these instances (53) the 
registrants merely submitted their data prior to exhausting their 
procedural rights and were no worse off for having missed their 
deadlines. To create an additional disincentive for untimely data 
submissions it is necessary to make lateness costly to the registrant. 
To this end, the Conference recommends that Congress authorize EPA to 
impose civil money penalties for untimely data.
    As to the adequacy of data, EPA may now have the theoretical (but 
untested in court) capacity to suspend or cancel the registration of 
those pesticides for which inadequate data have been submitted. 
However, the more common response to inadequate data is a ``data call-
in,'' through which the agency demands that studies be redone--a source 
of additional delay that the agency has identified as significant. Even 
with respect to its highest priority pesticides, EPA has in the recent 
past found 50 percent of studies to be either inadequate, 
``upgradable'' or otherwise requiring supplementation. Although the 
cost of redoing studies should provide some incentive for registrants 
to ensure that their studies meet EPA's quality criteria, it does not 
seem to provide a sufficient incentive. In fairness to some 
registrants, there is evidence that EPA itself may be partially to 
blame for the high rates of data rejection. In 1992, an internal agency 
review found that misinterpretation of data requirements and poor 
guidance from EPA case managers were in part responsible for the 
inadequacy of data submissions. The Conference therefore recommends 
that EPA promulgate and communicate clear data standards and guidance 
on the data expected from registrants. To help prevent the submission 
of inadequate data even after sufficiently clear agency guidance has 
been given, the Conference recommends that Congress authorize EPA to 
levy administrative civil money penalties upon registrants submitting 
data that fail to meet previously announced standards. This will not 
only create incentives for registrants to take the extra steps 
necessary to ensure the adequacy of their submittals, but it will also 
create incentives for the agency to make clear its expectations.
    Whatever the additional tactical advantages that the agency may 
gain by improving its own ability to enforce data timeliness and 
adequacy, the sheer number of studies and the innumerable decisions 
requiring agency discretion suggest that more global incentives are 
needed to ensure that registrants themselves have a stake in timely and 
adequate data. The danger is that the reregistration process now has 
become, even with the best of intentions, an analytical treadmill 
powered by the rhythms of data call-ins, subsequent requests for data 
waivers and time extensions, submission of data that do not always meet 
EPA's standards for adequacy, and further data call-ins that restart 
the sequence. The Conference believes that the unique demands of the 
reregistration process justify congressional consideration of a 
``hammer'' provision that would legislatively impose an automatic 
suspension of all ``List A'' pesticides (those high-priority pesticides 
to which there is greatest human exposure) for which there are still 
significant data gaps within the registrant's control, and of which the 
registrant is aware--subject to a provision for a registrant to 
petition for reinstatement. Such a provision would not only provide an 
overarching incentive for registrants to favor the completion rather 
than postponement of their data obligations, but it would also better 
align the reregistration process with FIFRA's central procedural 
presumption--that, in the face of uncertainty, applicants (especially 
those seeking to reregister pesticides with extensive human exposure) 
should bear the burden of proof in establishing that their pesticides 
do not pose unreasonable risks.

Suspension and Cancellation Hearings

    Apart from improvements in the reregistration process, the 
Conference urges Congress to substitute a relatively informal 
decisionmaking process for the formal adjudicatory hearings that 
registrants can now demand in cancellation and suspension matters. In 
the past, formal hearings under FIFRA have averaged 1,000 days to 
complete. These hearings can directly impose on EPA significant 
resource costs and can also indirectly discourage the agency from 
aggressive prehearing negotiations with registrants (lest the 
registrant ``take EPA to hearing''). It is not surprising that EPA has 
long sought alternatives to cancellation hearings. For years, it sought 
to identify problem pesticides for heightened regulatory attention in a 
``Special Review'' process. There is little need for procedural 
formality in these types of decisions. At issue in most cancellation 
and suspension proceedings are scientific data concerning risks and 
benefits, disputes over which can generally be well-ventilated when EPA 
gives registrants detailed reasons for the agency's actions and then 
provides registrants with sufficient time to file responsive written 
comments and supporting documentation. For those cases where oral 
testimony or cross-examination is justified, the benefits of more 
formal procedures can be preserved by providing registrants an 
opportunity to show cause why such procedures are warranted. 
Accordingly, the Conference recommends that Congress pattern 
cancellation and suspension proceedings on a basic notice-and-comment 
model, with more formal procedures available only if a party will be 
demonstrably prejudiced by the informal procedure.

Labeling and Phase-down Procedures

    Although the reregistration process and adjudicatory hearings are 
the most visible aspects of pesticide regulation in need of procedural 
improvement, they are not the only places where procedural reform is 
important. Since the late 1980's, EPA has in fact sought to reduce the 
risks of pesticides through private negotiations with registrants over 
label changes that impose restrictions on use. Such regulatory action 
has the potential to attain interim risk-reduction quickly when 
warranted by available data, without going through the cumbersome 
Special Review and cancellation procedures, even when complete 
reregistration may still be years away. But there are also 
disadvantages to relying so heavily on private negotiations with 
registrants--chief among them the lack of participation among the 
various interested publics in crafting label changes. In the early 
1980's, similar concern about privately negotiated Special Review and 
pre-Special-Review decisions seriously undermined the agency's 
credibility and slowed regulatory progress. In 1985, EPA adopted 
procedures to open the door for information from, and participation by, 
the public in those processes.1 The Conference recommends that EPA 
adopt analogous procedures to regularize and open the agency's 
negotiated label program. In addition, because label changes are 
effective in reducing risk only if they are actually implemented in the 
field, the Conference recommends procedures to facilitate feedback from 
registrants, pesticide users, and all other interested persons on the 
effectiveness or ineffectiveness of the interim risk-reduction measures 
EPA has adopted. Moreover, the Conference recommends that EPA's Office 
Of Pesticide Programs (OPP) establish regular channels of communication 
with EPA's Office of Enforcement and Compliance Assurance to inform 
that office of all label changes and of any material information 
received by OPP on noncompliance with such changes.
---------------------------------------------------------------------------

    \1\40 CFR Part 154, Subpart B.
---------------------------------------------------------------------------

    The Conference also urges Congress to consider providing EPA with a 
new procedural device designed to accommodate a safer pesticides 
policy: The ability by informal procedures to order the phase-down of 
existing pesticides when there are available for use safer, effective 
pest management products or practices.2 Empowering the agency to 
develop an informal phase-down mechanism would have several procedural 
advantages. First, ordering the phase down of an existing pesticide on 
relative risk grounds will cause less stigmatization of an existing 
product than would a cancellation proceeding based on the traditional, 
more absolutist ``unreasonable risk'' judgment. Second, phase-down 
procedures provide for an incremental style of decisionmaking in which 
EPA's reasoned judgments about comparative risk can be tested and 
reevaluated without making irreversible decisions about existing 
pesticides in cancellation proceedings. Finally, phase-down procedures 
based on relative risk can reinforce and integrate EPA's pesticide 
programs under FIFRA with other federal environmental programs.
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    \2\Without taking any position on the substantive questions 
involved in determining the relative safety and effectiveness of 
pest control measures, the Conference notes EPA's interest in both 
the present and prior presidential administrations in developing 
such a substantive capability.
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Recommendation

I. Adequacy and Timeliness of Data

    A. EPA should adopt, whenever possible, rules setting clear 
standards for pesticide reregistration data and should communicate 
those standards to registrants.
    B. Congress should authorize EPA to impose administrative civil 
money penalties on registrants for the failure to submit data by any 
applicable deadline, or for submitting data (even if timely) that do 
not comply with the data standards adopted by EPA.3
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    \3\Imposition of penalties should be through formal 
adjudication. See Conference Recommendation 93-1 ``Use of APA Formal 
Procedures in Civil Money Penalty Proceedings,'' 58 FR 45409 (Aug. 
30, 1993).
---------------------------------------------------------------------------

    C. Congress should consider imposing an automatic suspension of 
``List A'' (high priority) pesticides for which there still remain, by 
a date to be set by Congress, previously identified and significant 
gaps in data within the registrant's control, and of which the 
registrant is on notice. Once suspended, pesticides could be reinstated 
through a petition process.

II. Informal Procedures

    A. Congress should eliminate the provisions in FIFRA allowing for 
formal adjudicatory hearings in proposed suspension or cancellation 
actions and should provide instead an informal procedure, including 
notice in the Federal Register, that informs registrants and others of 
the specific grounds on which EPA bases its proposed action and that 
provides a reasonable opportunity to file written comments and data. 
Only if a party will be demonstrably prejudiced by the written notice-
and-comment process should the agency be required to grant the right to 
introduce oral testimony or to subpoena and cross-examine witnesses.
    B. Congress should consider providing EPA the authority to order a 
phase down in the use of any registered pesticide through an informal 
notice-and-comment procedure in which EPA considers such factors as the 
relative risks and benefits of the pesticide at issue when compared 
with alternative pest management products and practices.

III. Public Participation

    A. EPA should regularize and open for broader public participation 
its informal procedures for achieving interim risk reduction through 
pesticide label changes. EPA should inform the public, through a 
Federal Register notice, when it commences private label negotiations 
with registrants. EPA should simultaneously open a public ``negotiation 
docket'' into which interested persons may submit comments they believe 
might be relevant, for consideration by EPA and the registrants during 
their negotiations. If, after negotiations with registrants, EPA 
proposes a label change, it should publish a notice of the proposed 
change in the Federal Register and provide the public an opportunity to 
file written comments. The notice should include a concise, general 
statement of the proposed label's basis and purpose, including a 
summary of the material aspects of the agency's negotiations with 
registrants.
    B. After requiring a label change, EPA should establish and 
publicize the availability of a ``compliance docket,'' for any input 
about the effectiveness or ineffectiveness of interim risk-reduction 
measures. In addition, EPA's Office of Pesticide Programs (OPP) should 
communicate to EPA's Office of Enforcement and Compliance Assurance the 
adoption by OPP of label changes and any material information received 
by OPP in its compliance docket.

STATEMENT OF THE ADMINISTRATIVE CONFERENCE OF THE UNITED STATES

    The following formal statement was adopted by the Assembly of the 
Administrative Conference on December 9, 1993:

Statement No. 16  Right to Consult With Counsel in Agency 
Investigations

    In recent years, Congress has attached sanctions to an increasingly 
wide range of regulatory violations, causing federal administrative 
agencies to become involved more routinely in investigations that lead 
to civil or criminal prosecution. The Administrative Conference has 
completed a study that explores the procedures that govern the 
relationship between the agency and a person compelled to appear before 
the agency in such investigations.
    The Administrative Procedure Act at section 555(b) provides that 
``[a] person compelled to appear in person before an agency or 
representative thereof is entitled to be accompanied, represented, and 
advised by counsel or, if permitted by the agency, by other qualified 
representative. A party is entitled to appear in person or by or with 
counsel or other duly qualified representative in an agency 
proceeding.'' This brief reference to counsel in the APA leaves a 
number of questions open. The Act, for example, does not specify the 
types of actions attorneys may take in representing their clients 
during agency investigative proceedings. It also does not indicate 
precisely which persons coming in contact with an agency may invoke the 
right to counsel.1
---------------------------------------------------------------------------

    \1\The 1941 Attorney General's Report on Administrative 
Procedure in Government Agencies is strangely taciturn on the 
subject of legal representation. Sen. Doc. No. 8, 77th Cong., 1st 
Sess. (1941). The report throughout refers to the presentations and 
contentions of ``parties,'' without any indication whether parties 
would or would not have the benefit of legal counsel. Statements in 
both House and Senate committee reports regarding this provision of 
the APA state simply that it is ``designed to confirm and make 
effective'' the ``statutory and mandatory right'' of interested 
persons to appear personally or with counsel before the agency. Sen. 
Doc. No. 248, 79th Cong., 2d Sess. 205, 263 (1946).
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    Because the roles of investigators in federal agencies, and the 
methods by which witnesses or parties appear before agencies vary 
considerably, the Administrative Conference does not believe it can 
develop a uniform set of recommendations concerning these procedures. 
However, the Conference believes it would be valuable to provide a 
statement on some of the issues raised in such investigations 
concerning the role of counsel so that those government officials 
involved can be made aware of the issues and seek additional guidance 
where warranted.

I. Agency Exclusion of Counsel

    Although courts construing the APA's right-to-counsel provision 
have held that the right includes the power to retain counsel of one's 
own choosing, some federal agencies have, by rule or order, reserved 
the power to exclude counsel who represents a person compelled to 
appear before an agency representative during an investigation. They 
have done so out of a concern that the particular attorney may impair 
the effectiveness of the investigation, especially where the attorney 
represents either multiple witnesses, or a witness and his or her 
employer.
    Agencies should consider whether, in most situations, a person 
compelled to appear in agency investigative proceedings ought to have 
the discretion to choose his or her own counsel, even where counsel 
represents multiple witnesses or parties in the matter. As courts have 
held, an agency must have ``concrete evidence'' that an investigation 
will be impaired before it may exclude counsel.2 Thus, the mere 
fact of multiple representation, an employment relationship between the 
witness and some other party involved in the investigation, or past 
dealings between the agency and a particular attorney should not be 
considered, in and of themselves, a sufficient basis for excluding the 
counsel of a witness.
---------------------------------------------------------------------------

    \2\See SEC v. Csapo, 533 F.2d 7 (D.C. Cir. 1976); Professional 
Reactor Operator Society v. NRC, 939 F.2d 1047 (D.C. Cir. 1991).
---------------------------------------------------------------------------

    Regardless of an agency's decision on the above matter, it has the 
power to exclude counsel for disruptive or obstructionist behavior 
during the proceedings, and to take action in situations where the 
attorney is suspected of personal involvement in the potential 
violations or matters under investigation.

II. Consultation With Auxiliary Experts

    Because of the highly technical nature of many regulatory fields, 
attorneys who advise witnesses or parties in some agency investigations 
must consult with accountants, engineers, economists, or other experts 
in order to provide effective legal assistance. The prevailing practice 
among federal agencies is to allow such consultation with auxiliary 
personnel, either by allowing the expert to attend the proceedings or 
by allowing the attorney a reasonable opportunity during the proceeding 
to consult with the expert about the substance of the investigation. 
Agencies that do not currently provide this opportunity should consider 
whether to allow counsel representing a person compelled to appear 
before the agency reasonable access to auxiliary experts, regardless of 
whether the investigation involves civil or criminal sanctions.

III. Informing Persons of Their Right to Counsel

    Agencies should be sensitive to the right to counsel that persons 
compelled to appear before it are granted under the APA and other 
statutes, and should consider when it is appropriate to advise such an 
individual of this right. Where necessary, agencies should consider 
providing training on this subject to field investigators. In the 
interest of maintaining an effective working relationship between 
federal regulatory agencies and regulated parties, agencies should 
consider whether it is appropriate to conduct a compelled investigative 
proceeding in the absence of legal counsel when it is apparent that a 
person is unaware of his or her right to counsel.

[FR Doc. 94-2225 Filed 1-31-94; 8:45 am]
BILLING CODE 6110-01-W