[Federal Register Volume 61, Number 116 (Friday, June 14, 1996)]
[Rules and Regulations]
[Pages 30175-30181]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 96-14371]



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DEPARTMENT OF TRANSPORTATION

Research and Special Programs Administration

49 CFR Part 106

[Docket No. RSP-1, Amdt. No. 106-11]
RIN 2137-ACXX


Direct Final Rule Procedure; Petitions for Rulemaking

AGENCY: Research and Special Programs Administration (RSPA), DOT.

ACTION: Final rule.

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SUMMARY: To further the goals of Executive Order 12866 on Regulatory 
Planning and Review, and in response to the recommendations of the 
National Performance Review (NPR) and the former Administrative 
Conference of the United States, RSPA is implementing a new and more 
efficient procedure for adopting noncontroversial rules. This ``direct 
final rule'' procedure involves issuing a final rule providing notice 
and an opportunity to comment and stating that the rule will become 
effective on a specified date without further publication of the text 
of the rule if RSPA does not receive an adverse comment or notice of 
intent to file an adverse comment. If no adverse comment or notice of 
intent to file an adverse comment were received, RSPA would issue a 
subsequent notice in the Federal Register to confirm that fact and 
reiterate the effective date. If an adverse comment or notice of intent 
to file an adverse comment were received, RSPA would issue a subsequent 
notice in the Federal Register to confirm that fact and withdraw the 
direct final rule before it goes into effect.
    RSPA is also amending its rulemaking procedures to specify in more 
detail the required contents of a petition for rulemaking and provide 
that petitions for rulemaking and petitions for reconsideration will be 
reviewed and acted upon by the appropriate Associate Administrator or 
the Chief Counsel and that decisions of the Associate Administrator may 
be appealed to the Administrator.

EFFECTIVE DATE: July 15, 1996.

FOR FURTHER INFORMATION CONTACT: Nancy E. Machado, Office of the Chief 
Counsel, RSPA, Department of Transportation, 400 Seventh Street, SW., 
Washington, DC 20590-0001; Telephone (202) 366-4400.

SUPPLEMENTARY INFORMATION:

I. Background

    In Executive Order 12866, ``Regulatory Planning and Review'' (58 FR 
51735; October 4, 1993), the President set forth the Administration's 
regulatory philosophy and principles. The Executive Order contemplates 
an efficient and effective rulemaking process, including the 
conservation of limited government resources for carrying out its 
regulatory functions. Furthermore, ``Improving Regulatory Systems,'' an 
Accompanying Report of the National Performance Review, recognized the 
need to streamline the regulatory process and recommended the use of 
``direct final'' rulemaking

[[Page 30176]]

procedures to reduce needless double review of noncontroversial rules.
    The former Administrative Conference of the United States (ACUS) 
adopted Recommendation 95-4, ``Procedures for Noncontroversial and 
Expedited Rulemaking,'' which endorses direct final rulemaking as a 
procedure that can expedite rules in appropriate cases. (See 60 FR 
43108; August 18, 1995.) (ACUS studied the efficiency, adequacy and 
fairness of the administrative procedures used by Federal agencies in 
carrying out administrative programs, and made recommendations for 
improvements to the agencies, collectively or individually, and to the 
President, Congress, and the Judicial Conference of the United States.) 
ACUS found direct final rulemaking appropriate where a rule is expected 
to generate no significant adverse comment. ACUS defined a significant 
adverse comment as one where the commenter explains why the rule would 
be inappropriate, including challenges to the rule's underlying premise 
or approach, or would be ineffective or unacceptable without a change.
    Under ACUS Recommendation 95-4, an agency would issue a final rule 
with a statement that the rule becomes effective automatically at a 
specified time, if the agency received no significant adverse comments. 
This would eliminate a second round of intra- and inter-agency review. 
If a significant adverse comment were received, the agency would 
withdraw the rule before the effective date and issue a notice of 
proposed rulemaking. As noted in the report, ``this approach avoids the 
second round of clearances and review, which otherwise delays rules, 
wastes time, and should be superfluous * * *. Theoretically, the second 
review ought to be very quick, but clearing any document through 
numerous government offices takes time. The paper shuffling also wastes 
reviewers' time by requiring them to look at something twice when once 
would have sufficed.'' (``Improving Regulatory Systems,'' p. 42.)
    The Secretary of Transportation has directed administrations within 
the Department of Transportation (DOT) to focus on improvements that 
can be made in the way in which they propose and adopt regulations. 
This is consistent with both the letter and the spirit of the Executive 
Order and the NPR Recommendations.

II. Proposed Rule

    In its December 18, 1995 Notice of Proposed Rulemaking (NPRM), 60 
FR 65210, RSPA proposed to adopt, in a new Sec. 106.39, direct final 
rulemaking procedures for noncontroversial rules, such as minor, 
substantive changes to regulations; incorporation by reference of the 
latest editions of technical or industry standards; and extensions of 
compliance dates. RSPA solicited comment on the advisability of using 
direct final rules for these categories of rules, as well as 
suggestions for other types of rules that could be issued as direct 
final rules.
    RSPA stated that if it believed a rulemaking in these categories 
would be unlikely to result in significant adverse comment, it would 
use its proposed direct final rulemaking procedures. Under those 
proposed procedures, a direct final rule would advise the public that 
no significant adverse comments are anticipated and, unless a 
significant adverse comment or intent to submit a significant adverse 
comment is received, in writing, within a certain period of time 
(generally 60 days), the rule would become effective on a specified 
date (generally 90 days after publication). If no significant adverse 
comment or notice of intent to file significant adverse comment were 
received, RSPA proposed to issue a subsequent document advising the 
public of that fact and that the rule would become, or did become, 
effective on the date previously specified in the direct final rule. 
RSPA stated in the NPRM that direct final rules would not be subject to 
petitions for reconsideration under 49 CFR 106.35.
    In the NPRM, RSPA also stated that if it received a significant 
adverse comment or notice of intent to file a significant adverse 
comment, it would publish a document in the Federal Register 
withdrawing the direct final rule, in whole or in part. If RSPA 
believed it could incorporate the adverse comment in a subsequent 
direct final rulemaking, without generating further significant adverse 
comment, RSPA proposed to do so. If RSPA believed that the significant 
adverse comment raised an issue serious enough to warrant a substantive 
response in a notice-and-comment process, RSPA stated that it could 
publish a notice of proposed rulemaking, following the procedures 
provided in 49 CFR Secs. 106.11-106.29, which would give an opportunity 
to comment to persons who may not have commented earlier because they 
wanted the rule to go into effect immediately. RSPA proposed that, 
where a significant adverse comment applied to part of a rule and that 
part could be severed from the remainder of the rule (for example where 
a rule deleted several unrelated regulations), RSPA would adopt as 
final those parts of the rule that were not the subject of a 
significant adverse comment.
    Furthermore, RSPA proposed to adopt ACUS's definition of 
``significant adverse comment.'' Specifically, a significant adverse 
comment would be one that explains why the rule would be inappropriate, 
including a challenge to the rule's underlying premise or approach, or 
would be ineffective or unacceptable without a change. RSPA noted that 
frivolous or insubstantial comments would not be considered adverse 
under this procedure. A comment recommending a rule change in addition 
to the rule would not be considered a significant adverse comment, 
unless the commenter stated why the rule would be ineffective without 
the additional change.
    RSPA also proposed to amend Sec. 106.3 to clarify that RSPA's Chief 
Counsel has the delegated authority to conduct rulemaking proceedings, 
Sec. 106.17 to clarify the procedures for participation by interested 
parties in the rulemaking process, and Sec. 106.31 to specify in more 
detail the required contents of a petition for rulemaking.
    RSPA further proposed to amend 49 CFR Secs. 106.31, 106.33, 106.35 
and 106.37 to provide that petitions for rulemaking and petitions for 
reconsideration be filed with the appropriate Associate Administrator 
or the Chief Counsel, who will review and issue determinations granting 
or denying the petitions in whole or part. RSPA also proposed to add a 
new Sec. 106.38 to provide that any interested party may appeal a 
decision of an Associate Administrator or the Chief Counsel to RSPA's 
Administrator.

III. Discussion of Comments

    RSPA received 25 written comments on the NPRM. The comments were 
submitted by chemical manufacturers, trade associations, transporters 
and one State agency. Commenters uniformly supported RSPA's efforts to 
streamline and clarify rulemaking procedures, cut costs and reduce 
regulatory burdens. Twenty-two of the commenters supported RSPA's 
proposal, with 14 of them suggesting changes to the proposal or 
requesting clarification. Only three commenters opposed the proposal. 
Two objected based on their belief that the proposal abrogated notice-
and-comment procedures of the Administrative Procedure Act (APA), 5 
U.S.C. 553. The third commenter asserted that RSPA failed to adequately 
justify the reasons for the proposed changes to the agency's regulatory 
procedures.
    A detailed discussion of the comments, and RSPA's response to

[[Page 30177]]

them, is provided in the following summary.

A. ``Noncontroversial'' Rules

    In the NPRM, RSPA proposed to implement direct final rulemaking 
procedures for adopting ``noncontroversial rules, such as minor, 
substantive changes to regulations, incorporation by reference of the 
latest edition of technical or industry standards, extensions of 
compliance dates . . . .'' RSPA received numerous requests for 
clarification of what constitutes a ``noncontroversial'' rule, 
including requests that RSPA provide a list of the types of rules that 
it considers noncontroversial. RSPA also received several comments 
stating that the proposed rule gives RSPA too much discretion to 
determine what is or is not controversial.
    First, it would be impossible for RSPA to provide an all-inclusive 
list of the types of rules that would be handled under direct final 
rulemaking procedures. RSPA cannot accurately envision every type of 
rule that the agency might issue in the future. Also, RSPA cannot 
accurately predict whether those types of rules might lend themselves 
to direct final rulemaking procedures in every instance. Furthermore, 
developing such a list could lead to the inadvertent exclusion of some 
types of rules that are ideally suited to the direct final rule 
process. RSPA will not attempt to develop an all-inclusive list of the 
types of rules subject to direct final rule procedures. RSPA will, as 
proposed, review each rule on its individual merits to determine 
whether the agency believes the rule will be noncontroversial.
    Commenters are correct that, as proposed in the NPRM, the agency 
has sole discretion in determining whether a rule is or is not 
controversial. RSPA does not agree, however, that this discretion is 
overly broad or subject to abuse. The nature of the proposed direct 
final rule process ensures that RSPA will make a good faith effort to 
ascertain which rules are truly noncontroversial. As proposed in the 
NPRM, a mere notice of intent to file an adverse comment is sufficient 
to terminate the direct final rule process. This alone ensures that 
RSPA will not waste its limited resources knowingly trying to 
promulgate a controversial rule under direct final rulemaking 
procedures. To the extent that the agency miscalculates the 
contentiousness of a rule, it will have to withdraw that rule. If the 
agency again decides to move forward on the same issue, it either would 
be with another direct final rule which addresses the concern voiced in 
the adverse comment and is, itself, open to public comment, or with a 
notice of proposed rulemaking using traditional notice-and-comment 
procedures. Consequently, it is in RSPA's best interest to make every 
reasonable effort to accurately determine the contentiousness of a rule 
before deciding to use direct final rulemaking procedures.
    Several commenters also remarked that the incorporation of 
technical standards and industry standards into the Hazardous Materials 
Regulations (HMR) may be a controversial agency action. RSPA agrees 
that incorporating technical and industry standards into the HMR may be 
controversial. On the other hand, there are instances where industry 
itself has petitioned the agency to incorporate changes into the HMR, 
and the agency has done so by issuing those changes as a final rule--
which was not preceded by an NPRM--without receiving any adverse 
comments. See, e.g., RSPA Docket HM-166Z, Transportation of Hazardous 
Materials; Miscellaneous Amendments (59 FR 28487; June 2, 1994) 
(incorporating by reference the most recent editions of the American 
National Standards Institute, Inc. Standard N14.1, American 
Pyrotechnics Association Standard 87-1, Association of American 
Railroads Specification M-1102, Compressed Gas Association Pamphlet C-
7, and Institute of Makers of Explosives Standard 22). Consequently, 
RSPA will continue to incorporate technical and industry standards into 
the HMR, without prior opportunity to comment, when the agency 
reasonably believes that the rule will be noncontroversial. The direct 
final rule process is an additional tool that the agency may use to do 
so.
    Finally, several commenters expressed concern over RSPA's statement 
that minor substantive changes to the HMR may be noncontroversial and, 
thus, subject to direct final rulemaking procedures. Commenters 
questioned how a change can be minor, substantive and, at the same 
time, noncontroversial. On numerous occasions, RSPA has made minor, 
substantive changes to the HMR, without generating adverse comment. For 
example, in RSPA Docket HM-166Z, discussed above, RSPA revised 49 CFR 
173.34(e)(15)(v) to permit cylinders manufactured after December 31, 
1945, to be stamped with a five-point star. This action was taken in 
order to maintain consistency with 49 CFR 173.34(e)(15)(i), which was 
revised in RSPA Docket HM-166X (58 FR 50496; Sept. 27, 1993). As noted 
above, no adverse comments were received. Although the change to 
Sec. 173.34(e)(15)(v) was substantive, it was minor in that it followed 
logically from significant changes that were made to 
Sec. 173.34(e)(15)(i), and was necessary to maintain consistency.
    Also, in RSPA Docket 222B (61 FR 6478; Feb. 20, 1996) RSPA proposed 
to amend 49 CFR 172.402 to add an exception from the requirement for 
subsidiary hazard labeling for certain packages of Class 7 
(radioactive) materials that also meet the definition of another hazard 
class, except Class 9. Only one comment was received to RSPA's proposal 
to amend Sec. 172.402, and that comment was fully supportive of RSPA's 
proposal. These actions made or proposed to make substantive yet minor 
changes to the HMR, and drew no adverse comment. Consequently, as 
proposed, RSPA will issue these types of substantive, yet minor 
amendments to the HMR through use of direct final rulemaking 
procedures.

B. Significant Adverse Comments

    RSPA stated in its proposal that if, after publishing a direct 
final rule, it received no ``significant adverse comments'' or notice 
of an intent to file a significant adverse comment, the rule would 
become effective on a specified date without further publication of the 
text of the rule. RSPA defined ``significant adverse comment'' as one 
where ``the commenter explains why the rule would be inappropriate, 
including challenges to the rule's underlying premise or approach, or 
would be ineffective or unacceptable without a change.'' No commenter 
objected to the proposed definition of the term ``significant adverse 
comment,'' but several commenters objected to the word ``significant,'' 
stating that the term placed the burden of proof on industry and that 
the agency would have too much discretion to determine what is 
``significant.'' Because no commenter found the proposed definition 
objectionable, only the terminology, RSPA will adopt the definition of 
``significant adverse comment'', as proposed, but will delete the word 
``significant'' from the term ``significant adverse comment.''
    In addition, several commenters asked RSPA to clarify whether 
comments alleging increased costs, comments that agree with a proposal 
but suggest improvements, or comments requesting clarification would be 
considered sufficiently adverse to require withdrawal of a direct final 
rule. A comment alleging increased costs would generally be considered 
adverse. RSPA will not use the direct final rule process where it can 
reasonably anticipate that

[[Page 30178]]

a rule will result in increased costs. However, where the allegation of 
increased costs is, for example, clearly erroneous, the comment would 
not be considered sufficient to warrant withdrawal of the direct final 
rule.
    A comment that agrees with the proposal but suggests an improvement 
would not generally be considered adverse. RSPA stated in the NPRM that 
``a comment recommending a rule change in addition to the rule should 
not be considered a significant adverse comment, unless the commenter 
states why the rule would be ineffective without the additional 
change.'' By that statement, RSPA intended to convey that a comment 
would be considered adverse if it states that the rule would be 
intrinsically inappropriate without the suggested improvement or if it 
states that RSPA would be acting inappropriately if it were to adopt 
the rule without the suggested improvement. On the other hand, a 
comment might not be considered adverse where RSPA reasonably believes 
that incorporating the suggested improvement would be noncontroversial, 
e.g., where the commenter identifies a section of the HMR that should 
be revised in order to maintain consistency between the identified 
section and a section amended in a direct final rule, such as the 
changes made in RSPA Docket HM-166Z to 49 CFR 173.34(e)(15)(v), 
discussed above. In that instance, after the direct final rule at issue 
becomes effective, RSPA would make the technical correction in a 
subsequent miscellaneous correction rulemaking.
    Comments requesting clarification would not, in all cases, be 
considered adverse. For example, a commenter might ask the agency to 
clarify a particular proposal and at the same time give its own view of 
what it believes the agency intended. If the commenter has correctly 
understood the agency's intention, the comment is not adverse and 
should not result in the withdrawal of a direct final rule. On the 
other hand, if there is a substantive difference between the 
commenter's understanding and the agency's intention, and the commenter 
urges the agency to adopt the commenter's interpretation, the comment 
would more than likely be considered adverse.
    In the NPRM, RSPA stated that frivolous or insubstantial comments 
would not be considered adverse. Several commenters asked RSPA to 
clarify those terms. Webster's Ninth New Collegiate Dictionary (1991) 
defines ``frivolous'' as ``1: of little weight or importance 2 a: 
lacking in seriousness * * *.'' ``Insubstantial'' is defined as 
``lacking in substance or material nature.'' RSPA will only consider 
comments to be adverse where the commenter demonstrates some minimum 
level of seriousness of purpose--if RSPA would have responded to a 
comment in the course of a notice-and-comment rulemaking proceeding, it 
will consider that comment adverse under the direct final rule 
procedures. See, e.g., Center for Auto Safety v. Peck, 751 F.2d 1336, 
1355 n. 15 (D.C. Cir. 1985) (agency need not respond to remote or 
insignificant comments); Portland Cement Ass'n v. Ruckelshaus, 486 F.2d 
375, 394 (D.C. Cir. 1973) (``lack of agency response or consideration 
becomes of concern'' when comment is ``significant enough to step over 
the threshold requirement of materiality.'')
    One commenter suggested that adverse comments be published in the 
Federal Register. As proposed, RSPA will publish a document in the 
Federal Register advising the public that an adverse comment or notice 
of intent to file an adverse comment has been received and that the 
direct final rule is being withdrawn. RSPA will not publish the full 
text of an adverse comment in that document, but will identify the 
commenter and the substance of its adverse comment. The full text of 
all comments will be available to the public through RSPA's public 
docket room, Room 8419, Department of Transportation, 400 Seventh 
Street, SW., Washington, DC 20590-0001.
    Finally, several commenters expressed concern with regard to RSPA's 
statement in the NPRM that ``[i]f RSPA believed it could incorporate 
[an] adverse comment in a subsequent direct final rulemaking, without 
generating further significant adverse comment, it could do so.'' Two 
commenters stated that this would circumvent notice-and-comment 
procedures under the APA. Another stated that a ``proposed'' direct 
final rule should look the same as the ``final'' direct final rule. 
RSPA believes that the commenters misconstrued RSPA's statement to mean 
that it might incorporate an adverse comment into a direct final rule 
that would not be subject to further public comment. RSPA merely 
intended to indicate by that statement that if the agency received an 
adverse comment, it would terminate the direct final rule at issue but 
might later initiate another direct final rule proceeding which 
incorporated the adverse comment. This second direct final rule 
proceeding, like the first, would be open for public comment.

C. Notice of Intent To File a Significant Adverse Comment

    In the notice, RSPA proposed that the filing of a notice of intent 
to submit an adverse comment would be sufficient to cause the agency to 
withdraw a direct final rule. One commenter cautioned against giving 
the public an open-ended opportunity to halt a direct final rule 
proceeding on the strength of a notice of intent to file an adverse 
comment. The commenter suggested that RSPA set a time-frame by which an 
entity filing a notice of intent to file an adverse comment must 
actually submit its adverse comment; failure to actually submit the 
adverse comment would allow the direct final rule proceeding to 
continue, in the absence of any other adverse comments. Another 
commenter stated that a notice of intent to file an adverse comment 
should not derail a direct final rule, and argued that a minimum 60-day 
comment period was sufficient for the filing of substantive comments. 
The same commenter also noted that comments following a notice of 
intent to file adverse comments might not actually be adverse. A third 
commenter suggested that, in lieu of allowing commenters to file a 
notice of intent to file an adverse comment, the agency allow 
commenters to request an extension of the comment period when 
necessary.
    RSPA has considered the comments on this issue and will adopt its 
original proposal. Nevertheless, RSPA will revisit this issue in a 
future rulemaking if it finds that commenters are abusing the procedure 
by failing to file adverse comments after they have notified the agency 
that they intend to do so and after the agency has withdrawn a direct 
final rule.

D. Severability

    RSPA stated in the NPRM that if an adverse comment applies to part 
of a rule and that part can be severed from the remainder of the rule 
(for example where a rule deletes several unrelated regulations), RSPA 
would adopt as final those parts of the rule that were not the subject 
of the adverse comment. Three commenters expressed the opinion that 
RSPA should only sever provisions of a direct final rule when they are 
clearly unrelated to the portion of the rule that was the subject of 
the adverse comment. RSPA agrees with the commenters that unless a 
provision of a direct final rule is clearly unrelated to a provision 
that is the subject of an adverse comment, as where a rule deletes 
several unrelated regulations, it will withdraw the entire rule.

[[Page 30179]]

E. Publication of Direct Final Rule in Federal Register

    Two commenters suggested that RSPA follow the U.S. Coast Guard's 
procedure for publishing a direct final rule in the Federal Register--
specifically, they suggest that RSPA publish the text of a direct final 
rule in the ``Rules'' section of the Federal Register and a cross-
reference in the ``Proposed Rules'' section to ensure adequate public 
notice. RSPA will not adopt the recommended procedure at this time. 
However, if RSPA finds that publication of direct final rules in the 
``Rules'' section of the Federal Register is not providing adequate 
notice to the public, the agency will revisit this issue.

F. Effective Date of Direct Final Rule

    Section 553(d) of the APA states,

    The required publication or service of a substantive rule shall 
be made not less than 30 days before its effective date, except--
    (1) a substantive rule which grants or recognizes an exemption 
or relieves a restriction;
    (2) interpretative rules and statements of policy; or
    (3) as otherwise provided by the agency for good cause found and 
published with the rule.

5 U.S.C. 553(d). Two commenters questioned whether RSPA's proposal 
would satisfy the 30-day notice requirement of Sec. 553(d). 
Specifically, if no adverse comment or notice of intent to file one 
were received, RSPA proposed to issue a subsequent document advising 
the public of that fact and that the rule will become or did become 
effective on the date previously specified in the direct final rule. 
RSPA agrees that its proposed procedure might result in less than 30 
days' notice because the document advising that a direct final rule 
will or did become effective might be published less than 30 days 
before the effective date of the direct final rule. One of the 
commenters suggested that RSPA (1) Identify in each direct final rule a 
date after the close of the comment period by which RSPA will notify 
the public when or if the rule will become effective and (2) specify an 
effective date that is at least 30 days after the public notice date. 
RSPA believes that the commenter's suggestion is a good one and, 
therefore, will adopt it as part of its direct final rule procedures.

G. Petitions for Reconsideration

    Several commenters objected to RSPA's proposal not to allow 
petitions for reconsideration of direct final rules. They argued that 
the expedited nature of the direct final rule procedure dictates that 
petition for reconsideration procedures be kept in place to protect the 
public interest. After reviewing the comments on this issue, RSPA 
agrees that a party who has filed what it believes to be adverse 
comments with the agency may petition the agency for reconsideration if 
a direct final rule becomes effective despite its comments. Because of 
the expedited nature of direct final rule procedures, however, 
petitions for reconsideration of a direct final rule will not be 
accepted from anyone who did not participate in the comment phase of 
the direct final rule proceeding. The public interest is adequately 
protected by commenters' ability to cause the withdrawal of a direct 
final rule by the filing of a notice of intent to file adverse 
comments.

H. Administrative Procedure Act

    Two commenters argued that direct final rule procedures abrogate 
the protections afforded to the public under the APA. One commenter 
stated that ``procedural due process protections afforded in the [APA] 
should not be truncated by unilateral agency action. Prior notice-and-
comment rulemaking is an essential element of regulatory justice and 
provides legitimacy for agency actions.'' The other commenter stated 
that RSPA's proposal would ``curtail the procedural protections of the 
[APA] and simultaneously restrict review of actions taken under the new 
procedure.''
    In recommending that agencies adopt direct final rule procedures, 
ACUS recognized and discussed the issue of compliance with APA notice-
and-comment requirements. In Recommendation 95-4, ACUS stated,

    Under current law, direct final rulemaking is supported by two 
rationales. First, it is justified by the Administrative Procedure 
Act's ``good cause'' exemption from notice-and-comment procedures 
where they are found to be ``unnecessary.'' The agency's 
solicitation of public comment does not undercut this argument, but 
rather is used to validate the agency's initial determination. 
Alternatively, direct final rulemaking also complies with the basic 
notice-and-comment requirements in section 553 of the APA. The 
agency provides notice and opportunity to comment on the rule 
through its Federal Register notice; the publication requirements 
are met, although the information has been published earlier in the 
process than normal; and the requisite advance notice of the 
effective date required by the APA is provided.

60 FR 43111
    The direct final rule procedures that RSPA is adopting are 
justified by the APA's ``good cause'' exemption from notice-and-comment 
procedures. Nevertheless, the procedures adopted by RSPA also give the 
public the opportunity to submit comments--where no adverse comments 
are received, the agency's determination that the rule would be 
noncontroversial is validated. Consequently, the interests of the 
public in the rulemaking process are adequately protected under RSPA's 
direct final rule procedures.

I. Petitions for Rulemaking

    In proposed Sec. 106.31(c), RSPA stated that where the potential 
impact of an action proposed in a petition for rulemaking is 
substantial, and information and data related to that impact are 
available to the petitioner, the agency may request the petitioner to 
provide information and data to assist in rulemaking analyses required 
under Executive Orders 12866 and 12612, the Regulatory Flexibility Act, 
the Paperwork Reduction Act and the National Environmental Policy Act. 
RSPA stated that it may request a petitioner to provide specific 
information regarding costs and benefits, direct effects, regulatory 
burdens, recordkeeping and reporting requirements, and environmental 
impacts of its proposed action, where such information is ``available 
to the petitioner.'' By ``available,'' RSPA means that the information 
is in petitioner's possession or obtainable by the petitioner. RSPA's 
proposal is consistent with ACUS Recommendation 86-6, Petitions for 
Rulemaking, which suggests how agencies may improve the handling of 
petitions for the issuance of rules. See 51 FR 46985; Dec. 30, 1986. 
Several commenters supported RSPA's proposal while several others 
objected to RSPA's proposal as a shifting of governmental functions to 
industry.
    The APA requires Federal agencies to give interested persons the 
right to petition for the issuance, amendment or repeal of a rule and 
requires that Federal agencies give prompt notice of a denial of a 
petition, including a brief statement of the grounds for the denial. 5 
U.S.C. 555(e). RSPA encourages the filing of well-supported petitions 
for rulemaking with the agency, and will consider all petitions that 
meet the criteria set forth in proposed Sec. 106.31. RSPA's proposed 
requirements are intended to provide the agency with information that 
is essential to the agency's review of petitions for rulemaking that 
have a substantial impact on the public.
    The APA does not require agencies to accept all petitions for 
rulemaking. Consequently, the agency will not consider a petition for 
rulemaking that is frivolous, that is unsupported, or that fails to 
adequately set forth information that the agency deems critical to a 
thorough evaluation of the petition. In

[[Page 30180]]

filing a petition for rulemaking, the burden is on the petitioner to 
provide supporting information and arguments as to why the agency 
should commit itself to the rulemaking proceeding being advocated by 
the petitioner.

J. Appeal to Administrator

    RSPA received only one comment with respect to its proposal to add 
a new Sec. 106.38 to provide that any interested party may appeal a 
decision of an Associate Administrator under Sec. 106.33 or Sec. 106.37 
(concerning petitions for rulemaking and petitions for reconsideration, 
respectively) to the Administrator. The commenter supported RSPA's 
proposal but noted a lack of detail as to the required contents of a 
written appeal document. This final rule adopts Sec. 106.38 as proposed 
and adds the right to appeal a decision of the Chief Counsel to the 
Administrator. At the appeal stage, all relevant documents that were 
considered by an Associate Administrator or the Chief Counsel in 
reaching his decision will be provided by the Associate Administrator 
or Chief Counsel to the Administrator for review; the party appealing 
the decision need not provide that information to the agency again. An 
appeal to the Administrator should identify the decision that is being 
appealed, state with particularity the aspects of the decision being 
appealed, and include any new information or arguments that the 
Administrator is being asked to consider.

K. Miscellaneous

    One commenter asked RSPA to distinguish between the interim final 
rule procedures the agency has used in the past and the agency's 
proposed direct final rule procedures. Essentially, when an agency uses 
interim final rulemaking, it adopts a rule without prior public input, 
makes it immediately effective, and then invites post-promulgation 
comments directed towards the issue of whether the rule should be 
changed sometime in the future. The receipt of comments adverse to the 
interim final rule will not necessarily cause the agency to withdraw 
the interim final rule, but may lead to future amendments if the agency 
is persuaded that amendments are necessary. On the other hand, when an 
agency proposes a rule using direct final rule procedures, a single 
adverse comment or notice of intent to file an adverse comment will 
cause the agency to withdraw the rule, whether or not the agency is 
persuaded that amendments to the rule are necessary.

IV. Rulemaking Analysis and Notices

Executive Order 12866 and DOT Regulatory Policies and Procedures

    This final rule is not considered a significant regulatory action 
under section 3(f) of Executive Order 12866 and, therefore, was not 
reviewed by the Office of Management and Budget. The rule is not 
significant according to the Regulatory Policies and Procedures of the 
Department of Transportation (44 FR 11034). The changes adopted in this 
rule do not result in any additional costs but result in modest cost 
savings to the public and to the agency. Because of the minimal 
economic impact of this rule, preparation of a regulatory evaluation is 
not warranted.

Executive Order 12612

    This final rule has been analyzed in accordance with the principles 
and criteria in Executive Order 12612 (``Federalism'') and does not 
have sufficient Federalism impacts to warrant the preparation of a 
federalism assessment.

Regulatory Flexibility Act

    I certify that this final rule will not have a significant economic 
impact on a substantial number of small entities. This rule does not 
impose any new requirements; thus, there are no direct or indirect 
adverse economic impacts for small units of government, businesses or 
other organizations.

Paperwork Reduction Act

    There are no new information collection requirements in this final 
rule.

Regulation Identifier Number

    A regulation identifier number (RIN) is assigned to each regulatory 
action listed in the Unified Agenda of Federal Regulations. The 
Regulatory Information Service Center publishes the Unified Agenda in 
April and October of each year. The RIN number contained in the heading 
of this document can be used to cross-reference this action with the 
Unified Agenda.

List of Subjects in 49 CFR Part 106

    Administrative practice and procedure, Hazardous materials 
transportation, Oil, Pipeline safety.

    In consideration of the foregoing, 49 CFR Part 106 is amended as 
follows:

PART 106--RULEMAKING PROCEDURES

    1. The authority citation for part 106 continues to read as 
follows:

    Authority: 33 U.S.C. 1321; 49 U.S.C. 5101-5127, 40113, 60101-
60125; 49 CFR 1.53.

    2. In Sec. 106.3, a new paragraph (d) is added to read as follows:


Sec. 106.3  Delegations.

* * * * *
    (d) Chief Counsel.
    3. In Sec. 106.17, paragraph (a) is revised to read as follows:


Sec. 106.17  Participation by interested persons.

    (a) Any interested person may participate in rulemaking proceedings 
by submitting comments in writing containing information, views or 
arguments in accordance with instructions for participation in the 
rulemaking document.
* * * * *
    4. Section 106.31 is revised to read as follows:


Sec. 106.31  Petitions for rulemaking.

    (a) Any interested person may petition the Associate Administrator 
to establish, amend, or repeal a substantive regulation, or may 
petition the Chief Counsel to establish, amend, or repeal a procedural 
regulation in parts 106 or 107.
    (b) Each petition filed under this section must--
    (1) Summarize the proposed action and explain its purpose;
    (2) State the text of the proposed rule or amendment, or specify 
the rule proposed to be repealed;
    (3) Explain the petitioner's interest in the proposed action and 
the interest of any party the petitioner represents; and
    (4) Provide information and arguments that support the proposed 
action, including relevant technical, scientific or other data as 
available to the petitioner, and any specific known cases that 
illustrate the need for the proposed action.
    (c) If the potential impact of the proposed action is substantial, 
and information and data related to that impact are available to the 
petitioner, the Associate Administrator or the Chief Counsel may 
request the petitioner to provide--
    (1) The costs and benefits to society and identifiable groups 
within society, quantifiable and otherwise;
    (2) The direct effects (including preemption effects) of the 
proposed action on States, on the relationship between the Federal 
Government and the States, and on the distribution of power and 
responsibilities among the various levels of government;
    (3) The regulatory burden on small businesses, small organizations 
and small governmental jurisdictions;
    (4) The recordkeeping and reporting requirements and to whom they 
would apply; and

[[Page 30181]]

    (5) Impacts on the quality of the natural and social environments.
    (d) The Associate Administrator or Chief Counsel may return a 
petition that does not comply with the requirements of this section, 
accompanied by a written statement indicating the deficiencies in the 
petition.


Sec. 106.33  [Amended]

    5. Section 106.33 is amended by replacing the word 
``Administrator'' with the words ``Associate Administrator or the Chief 
Counsel'' wherever it appears.
    6. Section 106.33, paragraph (d) is revised to read as follows:


Sec. 106.33  Processing of Petition.

* * * * *
    (d) Notification. The Associate Administrator or the Chief Counsel 
will notify a petitioner, in writing, of his decision to grant or deny 
a petition for rulemaking.
    7. In Sec. 106.35, the first sentence of paragraph (a) is revised 
to read as follows:


Sec. 106.35  Petitions for reconsideration.

    (a) Except as provided in Sec. 106.39(d), any interested person may 
petition the Associate Administrator for reconsideration of any 
regulation issued under this part, or may petition the Chief Counsel 
for reconsideration of any procedural regulation issued under this part 
and contained in this part or in Part 107 of this Chapter. * * *
* * * * *


Sec. 106.35  [Amended]

    8. In addition, in Sec. 106.35, paragraphs (b), (c), and (d), the 
word ``Administrator'' is amended to read ``Associate Administrator or 
the Chief Counsel'' wherever it appears.


Sec. 106.37  [Amended]

    9. In Sec. 106.37, the word ``Administrator'' is amended to read 
``Associate Administrator or the Chief Counsel'' wherever it appears.
    10. Part 106 is amended by adding a new Sec. 106.38 to read as 
follows:


Sec. 106.38  Appeals.

    (a) Any interested person may appeal a decision of the Associate 
Administrator or the Chief Counsel, issued under Sec. 106.33 or 
Sec. 106.37, to the Administrator.
    (b) An appeal must be received within 20 days of service of written 
notice to petitioner of the Associate Administrator's or the Chief 
Counsel's decision, or within 20 days from the date of publication of 
the decision in the Federal Register, and should set forth the 
contested aspects of the decision as well as any new arguments or 
information.
    (c) It is requested, but not required, that three copies of the 
appeal be submitted to the Administrator.
    (d) Unless the Administrator otherwise provides, the filing of an 
appeal under this section does not stay the effectiveness of any rule.
    11. Part 106 is amended by adding a new Sec. 106.39 to read as 
follows:


Sec. 106.39  Direct final rulemaking.

    (a) Where practicable, the Administrator will use direct final 
rulemaking to issue the following types of rules:
    (1) Minor, substantive changes to regulations;
    (2) Incorporation by reference of the latest edition of technical 
or industry standards;
    (3) Extensions of compliance dates; and
    (4) Other noncontroversial rules where the Administrator determines 
that use of direct final rulemaking is in the public interest, and that 
a regulation is unlikely to result in adverse comment.
    (b) The direct final rule will state an effective date. The direct 
final rule will also state that unless an adverse comment or notice of 
intent to file an adverse comment is received within the specified 
comment period, generally 60 days after publication of the direct final 
rule in the Federal Register, the Administrator will issue a 
confirmation document, generally within 15 days after the close of the 
comment period, advising the public that the direct final rule will 
either become effective on the date stated in the direct final rule or 
at least 30 days after the publication date of the confirmation 
document, whichever is later.
    (c) For purposes of this section, an adverse comment is one which 
explains why the rule would be inappropriate, including a challenge to 
the rule's underlying premise or approach, or would be ineffective or 
unacceptable without a change. Comments that are frivolous or 
insubstantial will not be considered adverse under this procedure. A 
comment recommending a rule change in addition to the rule will not be 
considered an adverse comment, unless the commenter states why the rule 
would be ineffective without the additional change.
    (d) Only parties who filed comments to a direct final rule issued 
under this section may petition under Sec. 106.35 for reconsideration 
of that direct final rule.
    (e) If an adverse comment or notice of intent to file an adverse 
comment is received, a timely document will be published in the Federal 
Register advising the public and withdrawing the direct final rule in 
whole or in part. The Administrator may then incorporate the adverse 
comment into a subsequent direct final rule or may publish a notice of 
proposed rulemaking. A notice of proposed rulemaking will provide an 
opportunity for public comment, generally a minimum of 60 days, and 
will be processed in accordance with Secs. 106.11-106.29.

    Issued in Washington, D.C. on May 31, 1996, under the authority 
delegated in 49 CFR part 1.53 and RSPA Order 1100.2A (May 19, 1992).
Kelley S. Coyner,
Deputy Administrator.
[FR Doc. 96-14371 Filed 6-13-96; 8:45 am]
BILLING CODE 4910-60-P