[Federal Register Volume 80, Number 241 (Wednesday, December 16, 2015)]
[Notices]
[Pages 78161-78166]
From the Federal Register Online via the Government Publishing Office [www.gpo.gov]
[FR Doc No: 2015-31575]


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  Federal Register / Vol. 80, No. 241 / Wednesday, December 16, 2015 / 
Notices  

[[Page 78161]]



ADMINISTRATIVE CONFERENCE OF THE UNITED STATES


Adoption of Recommendations

AGENCY: Administrative Conference of the United States.

ACTION: Notice.

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SUMMARY: The Administrative Conference of the United States adopted 
three recommendations at its Sixty-fourth Plenary Session. The appended 
recommendations address: Technical Assistance by Federal Agencies in 
the Legislative Process; Declaratory Orders; and Designing Federal 
Permitting Programs.

FOR FURTHER INFORMATION CONTACT: For Recommendation 2015-2, Alissa 
Ardito; for Recommendation 2015-3, Amber Williams; and for 
Recommendation 2015-4, Connie Vogelmann. For all three of these actions 
the address and telephone number are: Administrative Conference of the 
United States, Suite 706 South, 1120 20th Street NW., Washington, DC 
20036; Telephone 202-480-2080.

SUPPLEMENTARY INFORMATION: The Administrative Conference Act, 5 U.S.C. 
591-596, established the Administrative Conference of the United 
States. The Conference studies the efficiency, adequacy, and fairness 
of the administrative procedures used by Federal agencies and makes 
recommendations to agencies, the President, Congress, and the Judicial 
Conference of the United States for procedural improvements (5 U.S.C. 
594(1)). For further information about the Conference and its 
activities, see www.acus.gov. At its Sixty-fourth Plenary Session, held 
December 4, 2015, the Assembly of the Conference adopted three 
recommendations.
    Recommendation 2015-2, Technical Assistance by Federal Agencies in 
the Legislative Process. This recommendation offers best practices for 
agencies when providing Congress with technical drafting assistance. It 
is intended to apply to situations in which Congress originates the 
draft legislation and asks an agency to review and provide expert 
technical feedback on the draft without necessarily taking an official 
substantive position. The recommendation urges agencies and Congress to 
engage proactively in mutually beneficial outreach and education. It 
highlights the practice of providing congressional requesters with 
redline drafts showing how proposed bills would affect existing law; 
suggests that agencies consider ways to involve appropriate agency 
experts in the process; and urges agencies to maintain a strong working 
relationship between legislative affairs and legislative counsel 
offices.
    Recommendation 2015-3, Declaratory Orders. This recommendation 
identifies contexts in which agencies should consider the use of 
declaratory orders in administrative adjudications. It also highlights 
best practices relating to the use of declaratory orders, including 
explaining the agency's procedures for issuing declaratory orders, 
ensuring adequate opportunities for public participation in the 
proceedings, responding to petitions for declaratory orders in a timely 
manner, and making declaratory orders and other dispositions of 
petitions readily available to the public.
    Recommendation 2015-4, Designing Federal Permitting Programs. This 
recommendation describes different types of permitting systems and 
provides factors for agencies to consider when designing or reviewing 
permitting programs. The recommendation discusses both ``general'' 
permits (which are granted so long as certain requirements are met) and 
``specific'' permits (which involve fact-intensive, case-by-case 
determinations), as well as intermediate or hybrid permitting programs. 
It encourages agencies that adopt permitting systems to design them so 
as to minimize burdens on the agency and regulated entities while 
maintaining required regulatory protections.
    The Appendix below sets forth the full texts of these three 
recommendations. The Conference will transmit them to affected 
agencies, Congress, and the Judicial Conference of the United States. 
The recommendations are not binding, so the entities to which they are 
addressed will make decisions on their implementation.
    The Conference based these recommendations on research reports that 
are posted at: http://www.acus.gov/64th. A video of the Plenary Session 
is available at: new.livestream.com/ACUS/64thPlenarySession, and a 
transcript of the Plenary Session will be posted when it is available.

    Dated: December 10, 2015.
Shawne C. McGibbon,
General Counsel.

APPENDIX--RECOMMENDATIONS OF THE ADMINISTRATIVE CONFERENCE OF THE 
UNITED STATES

Administrative Conference Recommendation 2015-2 Technical Assistance by 
Federal Agencies in the Legislative Process

Adopted December 4, 2015

    Federal agencies play a significant role in the legislative 
process.\1\ While agencies can be the primary drafters of the 
statutes they administer, it is more common for agencies to respond 
to Congressional requests to provide technical assistance in 
statutory drafting. Despite the extent of agency involvement in 
drafting legislation, the precise nature of the interactions between 
agencies and Congress in the drafting process remains obscure.
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    \1\ See Christopher J. Walker, Federal Agencies in the 
Legislative Process: Technical Assistance in Statutory Drafting 1-4 
(November 2015), available at https://www.acus.gov/report/technical-assistance-draft-report [hereinafter Walker Report].
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    Generally speaking, federal agencies engage in two kinds of 
legislative drafting activities: substantive and technical. 
Legislative activities considered ``substantive'' are subject to the 
Office of Management and Budget (OMB) coordination and preclearance 
process governed by OMB Circular A-19, which does not explicitly 
define substantive legislative activities or technical legislative 
assistance.\2\ Substantive legislative activities include the 
submission of agencies' annual legislative programs, proposed 
legislation such as draft bills and supporting documents an agency 
may present to Congress, any endorsement of federal legislation, and 
the submission of agency views on pending bills before Congress as 
well as official agency testimony before a Congressional 
committee.\3\
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    \2\ Office of Management and Budget, Circular A-19 (revised 
Sept. 20, 1979), https://www.whitehouse.gov/omb/circulars_a019/ 
[hereinafter OMB Circular A-19].
    \3\ Id. sections (6)(a) and (7)(a).
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    Agencies also provide Congress with technical drafting 
assistance. Rather than originating with the agency or the 
Administration, in the case of technical assistance, Congress 
originates the draft

[[Page 78162]]

legislation and asks an agency to review and provide feedback on the 
draft. Circular A-19 advises agencies to keep OMB informed of their 
activities and to clarify that agency feedback does not reflect the 
views or policies of the agency or Administration.\4\ No other 
standard procedures or requirements apply when agencies respond to 
Congressional requests--from committee staff, staff of individual 
Members of Congress, or Members themselves--for technical 
assistance. In consequence, agency procedures and practices appear 
multifarious.
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    \4\ Id. section 7(i). Independent agencies routinely provide 
technical assistance, outside of the OMB Circular A-19 process, in 
line with their enabling statutes.
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    Congress frequently requests technical assistance from agencies 
on proposed legislation. Congressional requests for technical 
assistance in statutory drafting can range from review of draft 
legislation to requests for the agency to draft legislation based on 
specifications provided by the Congressional requester. Despite the 
fact that technical assistance does not require OMB preclearance, 
there is some consistency in the assistance process across agencies. 
Agencies often provide technical drafting assistance on legislation 
that directly affects those agencies and respond to Congressional 
requests regardless of factors such as the likelihood of the 
legislation being enacted, its effect on the agency, or the party 
affiliation of the requesting Member. Agency actors involved in the 
process include the agency's legislative affairs office, program and 
policy experts, and legislative counsel.\5\ In some agencies, 
regulatory counsel also participate routinely. Moreover, agency 
responses range from oral discussions of general feedback to written 
memoranda to suggested legislative language or redlined suggestions 
on the draft legislation.
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    \5\ While this recommendation uses the term ``legislative 
affairs office,'' some agencies may have different offices or 
individuals responsible for legislative affairs, and this 
recommendation encompasses such arrangements.
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    A well-run program to provide Congress with technical assistance 
on draft legislation yields important benefits to the agency. 
Responding to such Congressional requests assists the agency in 
maintaining a healthy and productive relationship with Congress, 
ensures the proposed legislation is consonant with the existing 
statutory and regulatory scheme, helps educate Congressional staff 
about the agency's statutory and regulatory framework, and keeps the 
agency informed of potential legislative action that could affect 
the agency.
    Although agencies, as a rule, strive to respond to all requests, 
they continue to face challenges in providing technical assistance. 
Congressional staff may be unfamiliar with an agency's enabling 
legislation and governing statutes. Technical assistance provided 
informally does not always involve the offices of legislative 
counsel or legislative affairs, although both offices should be kept 
informed and involved. The distinction between substantive and 
technical drafting assistance is not always self-evident, and 
Congressional requesters of technical drafting assistance often are 
actually seeking substantive feedback from the agency experts on the 
proposed legislation. The provision of technical assistance on 
appropriations legislation presents unique demands on both agency 
legislative counsel and budget offices.
    Various agencies have developed distinct practices and 
procedures to address the provision of technical assistance that the 
Conference believes should be considered best practices. For 
example, many agencies have established internal guidelines 
governing the agency procedures for providing technical assistance. 
Memorializing agency procedures ensures that the provision of 
technical assistance is consistent throughout the agency. By stating 
in written guidance that legislative counsel and legislative affairs 
offices must be involved, for instance, agencies can help diminish 
the prospect of substantive assistance being provided under the 
guise of technical assistance. Although agencies should have 
flexibility to adopt procedures that are tailored to their agency-
specific structures, norms, and internal processes, memorializing 
their legislative drafting processes, as the Departments of Homeland 
Security, Interior, and Labor have done, can ensure that all agency 
officials involved understand the processes and can help educate 
personnel new to the agency.
    Some agencies, the Department of Housing and Urban Development 
among them, utilize a practice of providing Congressional requesters 
with a Ramseyer/Cordon draft as part of the technical assistance 
response. A Ramseyer/Cordon draft is a redline of the existing law 
that shows how the proposed legislation would affect current law by 
underscoring proposed additions to existing law and bracketing the 
text of proposed deletions. Providing such drafts, when feasible, 
helps Congressional staffers unfamiliar with the agency's governing 
statutes to better comprehend the ramifications of the contemplated 
legislation.
    Maintaining separate roles for legislative affairs and 
legislative counsel offices also has proven beneficial. Legislative 
affairs staff engage Congress directly and must often make 
politically sensitive decisions when communicating with Congress. By 
contrast, legislative counsel offices, by providing expert drafting 
assistance regardless of the Administration's official policy stance 
on the legislation, maintain the non-partisan status of the agency 
in the legislative process. These offices play important yet 
distinct roles in an agency's legislative activities that help 
maintain a healthy working relationship with Congress and enhance 
the recognition of the agency's expertise in legislative drafting 
and in the relevant subject matter. This division, especially when 
both offices communicate regularly, can help agencies monitor the 
line between legislative assistance that is purely technical and 
assistance that merges into an agency's official views on pending 
legislation.
    Appropriations legislation presents agencies with potential 
coordination problems as substantive provisions or ``riders'' may 
require technical drafting assistance, but agency processes for 
reviewing appropriations legislation are channeled through agency 
budget or finance offices. It is crucial for the budget office to 
communicate with an agency's legislative counsel office to 
anticipate and later address requests for technical assistance 
related to appropriations bills. Agencies have taken a variety of 
approaches to address this issue, ranging from tasking a staffer in 
an agency legislative counsel office with tracking appropriations 
bills; to holding weekly meetings with budget, legislative affairs, 
and legislative counsel staff; to emphasizing less informally that 
the offices establish a strong working relationship.
    Educational outreach on the part of both agencies and Congress, 
by further developing expertise on both sides and by cultivating 
professional working relationships, has the potential to enhance the 
provision of technical assistance over time. In-person educational 
efforts may include briefings of Members and their staff on an 
agency's statutory and regulatory scheme as well as its programs and 
initiatives, face-to-face meetings with legislative counsel and 
Congressional staff, and training in statutory drafting for both 
Congressional staff and agency legislative counsel attorneys.
    The following recommendations derive from the best practices 
that certain agencies have developed to navigate these challenges 
and focus on both external practices that may strengthen agencies' 
relationship with Congress in the legislative process and internal 
agency practices to improve the technical drafting assistance 
process and external practices that may strengthen agencies' 
relationship with Congress in the legislative process.

Recommendation

Congress-Agency Relationship in the Legislative Process

    1. Congressional committees and individual Members should aim to 
reach out to agencies for technical assistance early in the 
legislative drafting process.
    2. Federal agencies should endeavor to provide Congress with 
technical drafting assistance when asked. A specific Administration 
directive or policy may make the provision of technical assistance 
inappropriate in some instances. Agencies should recognize that they 
need not expend the same amount of time and resources on each 
request.
    3. To improve the quality of proposed legislation and strengthen 
their relations with Congress, agencies should be actively engaged 
in educational efforts, including in-person briefings and 
interactions, to educate Congressional staff about the agencies' 
respective statutory and regulatory frameworks and agency technical 
drafting expertise.

Agency Technical Drafting Assistance

    4. To improve intra-agency coordination and processing of 
Congressional requests for drafting assistance, agencies should 
consider memorializing their agency-specific procedures for 
responding to technical assistance requests. These procedures should 
provide that requests for technical assistance be referred to the 
agency's office with responsibility for legislative affairs.

[[Page 78163]]

    5. Similarly, agencies should consider ways to better identify 
and involve the appropriate agency experts--in particular, the 
relevant agency policy and program personnel in addition to the 
legislative drafting experts--in the technical drafting assistance 
process. These efforts may involve, for example, establishing an 
internal agency distribution list for technical drafting assistance 
requests and maintaining an internal list of appropriate agency 
policy and program contacts.
    6. When feasible and appropriate, agencies should provide the 
Congressional requester with a redline draft showing how the bill 
would modify existing law (known as a Ramseyer/Cordon draft) as part 
of the technical assistance response.
    7. Agencies should maintain the distinct roles of, and strong 
working relationships among, their legislative affairs personnel, 
policy and program experts, and legislative counsel.
    8. Agencies also should strive to ensure that the budget office 
and legislative counsel communicate so that legislative counsel will 
be able to provide appropriate advice on technical drafting of 
substantive provisions in appropriations legislation.

Administrative Conference Recommendation 2015-3

Declaratory Orders

Adopted December 4, 2015

    Providing clarity and certainty is an enduring challenge of 
administrative governance, particularly in the regulatory context. 
Sometimes statutes and regulations fail to provide sufficient 
clarity with regard to their applicability to a particular project 
or transaction. In such instances, businesses and individuals may be 
unable or unwilling to act, and the consequences for the economy, 
society, and technological progress can be significant and harmful. 
The predominant way agencies address this problem is by providing 
guidance to regulated parties.\1\ Although the many forms of agency 
guidance--such as interpretive rules and policy statements--do much 
to dispel regulatory uncertainty, they cannot eliminate it entirely. 
This is because they are generally informal and not legally binding 
on the agency that issues them. Regulated parties may usually be 
able to rely upon them, but if an agency changes its position after 
a transaction is completed, the consequences for the affected party 
can be severe. As the potential costs of misplaced reliance rise, 
even a small chance that an agency will not adhere to a position 
offered in guidance can become intolerable.
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    \1\ The Administrative Conference has adopted a number of 
recommendations on agency guidance. See Recommendation 2014-3, 
Guidance in the Rulemaking Process, 79 FR 35992 (June 25, 2014), 
available at https://www.acus.gov/recommendation/guidance-rulemaking-process; Recommendation 92-2, Agency Policy Statements, 
57 FR 30103 (July 8, 1992), available at https://www.acus.gov/recommendation/agency-policy-statements; Recommendation 76-5, 
Interpretive Rules of General Applicability and Statements of 
General Policy, 41 FR 56769 (Dec. 30, 1976), available at https://www.acus.gov/recommendation/interpretive-rules-general-applicability-and-statements-general-policy; Recommendation 75-9, 
Internal Revenue Service Procedures: Taxpayer Services and 
Complaints, 41 FR 3986 (Jan. 27, 1976), available at https://www.acus.gov/recommendation/ internal-revenue-service-procedures-
taxpayer-services-and-complaints; Recommendation 71-3, Articulation 
of Agency Policies, 38 FR 19788 (July 23, 1973), available at 
https://www.acus.gov/recommendation/articulation-agency-policies.
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    When it enacted the Administrative Procedure Act (APA) in 1946, 
Congress included a provision designed to address this difficult 
problem. In 5 U.S.C. 554(e), it provided that an ``agency, with like 
effect as in the case of other orders, and in its sound discretion, 
may issue a declaratory order to terminate a controversy or remove 
uncertainty.'' \2\ The declaratory order is a type of adjudication 
that serves an important advice-giving function. It may be issued in 
response to a petition filed with the agency \3\ (as is usually the 
case) or on the agency's own motion. It is well tailored to provide 
a level of certainty that may not be achievable using more informal 
kinds of guidance. This is because it is non-coercive and yet 
legally binds the agency and the named party, but only on the facts 
assumed in the order. The agency remains free to change its position 
with adequate explanation in a subsequent proceeding. It is a device 
that affords substantial administrative discretion--the agency may 
decline a request to institute a declaratory proceeding or to issue 
a declaratory order. An agency's decision, be it a denial of a 
petition or the issuance of a declaratory order, is judicially 
reviewable. But the scope of review is limited, and the position an 
agency takes in a declaratory order is typically afforded 
deference,\4\ both on judicial review and when relevant to matters 
at issue in subsequent or parallel litigation.
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    \2\ 5 U.S.C. 554(e) (2012); see generally Administrative 
Procedure in Government Agencies, Final Report of the Attorney 
General's Committee on Administrative Procedure, S. Doc. No. 77-8, 
at 30-34 (1941) (urging Congress to include the declaratory order 
provision in the APA).
    \3\ An agency so authorized may assess a filing fee to help 
defray the cost of issuing declaratory orders in response to 
petitions.
    \4\ The level of deference may depend on the formality of the 
procedure used, see United States v. Mead Corp., 553 U.S. 218 
(2001), though ``[c]ourts have afforded Chevron deference to 
declaratory orders issued through both formal and informal 
adjudication.'' Emily S. Bremer, Declaratory Orders 25 (Oct. 30, 
2015) available at https://www.acus.gov/report/declaratory-orders-final-report [hereinafter Bremer] (citing City of Arlington v. FCC, 
133 S. Ct. 1863 (2013) (giving Chevron deference to a declaratory 
ruling issued by the FCC through informal adjudication)).
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    An agency may properly use a declaratory order for a wide 
variety of purposes, including to: (1) Interpret the agency's 
governing statute or own regulations; (2) define terms of art; (3) 
clarify whether a matter falls within federal regulatory authority; 
or (4) address questions of preemption.\5\ One occasion for doing so 
is in response to a court's request for a ruling when the court has 
found that the agency has primary jurisdiction over a matter being 
litigated. By presenting the agency's views through a document of 
easily ascertainable legal effect, declaratory orders may reduce or 
eliminate litigation.\6\ By using declaratory orders to address 
narrow questions raised by specific and uncontested facts, an agency 
can precisely define the legal issues it addresses and reserve 
related issues for future resolution, thereby facilitating an 
incremental approach to the provision of guidance. The resulting 
body of agency precedent will not only be useful to regulated and 
other interested parties, but may also prove invaluable to the 
agency when it later decides to conduct a rulemaking or other 
proceeding for formulating policy on a broader scale. Other uses may 
be possible as well. For example, an agency that conducts mass 
adjudication could use the declaratory order to promote uniformity 
by choosing to give practical and detailed guidance while also 
making decisional law binding on the parties to the proceeding 
regarding the proper application of the law to commonly encountered 
factual circumstances.
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    \5\ See generally Ill. Terminal R.R. v. ICC, 671 F.2d 1214 (8th 
Cir. 1992); N.Y. State Comm'n on Cable Television v. FCC, 669 F.2d 
58 (2d Cir. 1982); N.C. Utils. Comm'n, 537 F.2d 787 (4th Cir. 1976); 
Ashland Oil & Ref. Co. v. FPC, 421 F.2d 17 (6th Cir. 1970).
    \6\ Cf. Mitchell Rogovin & Donald L. Korb, The Four R's 
Revisited: Regulations, Rulings, Reliance, and Retroativity in the 
21st Century: A View from Within, 46 Duq. L. Rev. 323,331 (2008).
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    There are several benefits to an agency when it uses declaratory 
orders. First, declaratory orders promote voluntary compliance, 
which saves agency resources that would otherwise be spent on 
enforcement. Second, declaratory orders promote uniformity and 
fairness in treatment among the agency's regulated parties. Third, 
declaratory orders facilitate communication between the agency and 
its regulated parties, which can help highlight issues before they 
become problems. Finally, declaratory orders help the agency stay 
current by allowing regulated parties to communicate how they are 
doing business so that agency officials can understand and address 
emerging issues.
    Despite the apparent usefulness of the declaratory order as a 
tool of administrative governance, agencies have demonstrated a 
persistent reluctance to use it. Several developments may encourage 
agencies to overcome this traditional reluctance to use declaratory 
orders. First, it is now reasonably clear that agencies may issue 
declaratory orders in informal adjudication.\7\ This development 
expands the availability of the device and also reduces the cost and 
procedural burden of using declaratory orders.\8\ Second, courts 
today are often

[[Page 78164]]

willing to review guidance documents and to question an agency's 
characterization of its action as non-binding. Agencies may be able 
to enhance their chances of prevailing in court by using declaratory 
orders--a binding, but targeted form of instruction--in lieu of non-
binding, legislative guidance. Agencies may also be able to use 
declaratory orders to provide requisite notice to regulated parties 
of the agency's intention to enforce in the future a rule or 
principle that has previously been communicated only via non-binding 
guidance. Finally, new programs and new challenges facing old 
programs may create opportunities to beneficially expand the use of 
declaratory orders.
    The Administrative Conference recognizes the declaratory order 
as a useful device to be used in appropriate circumstances. To that 
end, this recommendation provides guidance and best practices to 
agencies as they consider implementing or improving their use of 
declaratory orders.

Recommendation

    1. Agencies should consider issuing declaratory orders as 
authorized by 5 U.S.C. 554(e), either sua sponte or by petition. A 
declaratory order can provide a legally binding decision to the 
parties to the proceeding, without imposing a penalty, sanction, or 
other liability, in order to terminate an actual or emerging 
controversy or to remove uncertainty in the application of existing 
legal requirements. With respect to entities other than the parties 
to the proceeding, it can provide non-binding guidance.
    2. Any filing fees for issuing declaratory orders should be 
reasonable within the fee structure of the agency and contain 
appropriate exemptions and waivers.

Potential Uses of Declaratory Orders

    3. An agency should consider issuing declaratory orders in 
several ways, including, but not limited, to:
    (a) Communicating the agency's considered views regarding the 
meaning of its governing statute, regulations, or other legal 
documents (such as permits, licenses, certificates, or other 
authorizations the agency has issued);
    (b) Explaining how existing legal requirements apply to proposed 
or contemplated transactions or other activities;
    (c) Defining terms of art that are used within the agency's 
regulatory scheme;
    (d) Clarifying whether a matter falls within the agency's 
regulatory authority;
    (e) Clarifying a division of jurisdiction between or among 
federal agencies that operate in a shared regulatory space; and
    (f) Addressing questions of preemption.
    4. Agencies should look for opportunities to experiment with 
innovative uses of declaratory orders to improve regulatory 
programs.

Determining Minimal Procedural Requirements for Declaratory Orders

    5. Each agency that uses declaratory orders should have written 
and publicly available procedures explaining how the agency 
initiates, conducts, and terminates declaratory proceedings. An 
agency should also communicate in a written and publicly available 
way its preferred uses of declaratory orders.
    6. When designing the procedures for its declaratory 
proceedings, an agency should begin by determining whether or not 
the matter is one that must be adjudicated according to the formal 
adjudication provisions of the APA. If the matter is not required by 
statute to be conducted under the APA's formal adjudication 
provisions, an agency has substantial procedural discretion, but at 
a minimum should provide a basic form of notice and opportunity for 
comment, although it need not be equivalent to the notice-and-
comment process used in rulemaking.
    7. Agency procedures should provide guidance regarding the 
information that petitioners should include in a petition for 
declaratory order.

Giving Notice and Collecting Information

    8. Each agency should provide a way for petitioners and other 
interested parties to learn when the agency has received a petition 
for declaratory order or intends to issue a declaratory order on its 
own motion. The agency should tailor this communication according to 
the nature of the proceeding and the needs of potential commenters.
    9. Each agency should provide a way for interested parties to 
participate in declaratory order proceedings.
    (a) If the matter is one of broad interest or general policy, 
the agency should allow broad public participation.
    (b) If the declaratory proceeding involves a narrow question of 
how existing regulations would apply to an individual party's 
proposed actions, the agency may choose to manage the submission of 
comments via an intervention process.

Timeliness and Availability of Declaratory Orders

    10. Agencies that receive a petition for declaratory order 
should respond to that petition within a reasonable period of time. 
If an agency declines to act on the petition, it should give prompt 
notice of its decision, accompanied by a brief explanation of its 
reasons.
    11. Agencies should make their declaratory orders and other 
dispositions on petitions available to the public in a centralized 
and easy-to-find location on their Web sites.

Administrative Conference Recommendation 2015-4

Designing Federal Permitting Programs
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    \7\ See Am. Airlines, Inc. v. DOT, 202 F.3d 788, 796-97 (5th 
Cir. 2000); Wilson v. A.H. Belo Corp., 87 F.3d 393, 397 (9th Cir. 
1996); Texas v. United States, 866 F.2d 1546, 1555-56 (5th Cir. 
1989); Bremer, supra note 4 at 12-13, 32-33, 36-37. For example, 
courts have affirmed the sufficiency of basic notice-and-comment 
procedures when agencies issue a declaratory order in informal 
adjudication. See City of Arlington v. FCC, 668 F.3d 229, 243-45 
(5th Cir. 2012), aff'd 133 S. Ct. 1863 (2013).
    \8\ Even if the matter is one subject by statute to formal 
adjudication under the APA, an agency may be able to streamline the 
process of issuing a declaratory order. Cf. Administrative 
Conference of the United States, Recommendation 70-3, Summary 
Decision in Agency Adjudication, 38 FR 19785 (July 23, 1973). See 
generally Weinberger v. Hynson, Westcott & Dunning, 412 U.S. 625 
(1973).
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Adopted December 4, 2015

    Regulatory permits are ubiquitous in modern society, and each 
year dozens of federal agencies administering their regulatory 
permit authority issue tens of thousands of permits covering a broad 
and diverse range of actions.\1\ The APA includes the term 
``permit'' in its definition of ``license.'' In addition to agency 
permits, the APA defines licenses to include ``the whole or part of 
an agency . . . certificate, approval, registration, charter, 
membership, statutory exemption or other form of permission.'' \2\ 
Otherwise, the APA provides little elaboration on the definition of 
a permit.\3\ For purposes of this recommendation, a regulatory 
permit is defined as any administrative agency's statutorily 
authorized, discretionary, judicially reviewable granting of 
permission to do something that would otherwise be statutorily 
prohibited. This recommendation treats any agency action that meets 
this definition as a permit, regardless of how it is styled by the 
agency (e.g., ``license,'' ``conditional exemption'').
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    \1\ Eric Biber & J.B. Ruhl, Designing Regulatory Permits 2 
(2015), https://www.acus.gov/report/licensing-and-permitting-final-report. For a more complete discussion of different types of permits 
and permitting systems, see Eric Biber & J.B. Ruhl, The Permit Power 
Revisited: The Theory and Practice of Regulatory Permits in the 
Administrative State, 64 Duke L.J. 133 (2014).
    \2\ 5 U.S.C. 551(8).
    \3\ See Biber & Ruhl, supra note 1, at 3-4 (discussing lack of 
APA definition).
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    Permits exist on a continuum of agency regulation, falling 
between exemptions (in which an activity is not regulated at all) 
and prohibitions. Broadly speaking, there are two contrasting 
approaches to permitting.\4\ In specific permitting, upon receiving 
an application, an agency engages in extensive fact gathering and 
deliberation particular to the individual circumstances of the 
applicant's proposed action, after which the agency issues a 
detailed permit tailored to the applicant's situation. In their 
strictest form, specific permits can demand so much of the permit 
applicant in terms of cost, information, and time that they closely 
resemble prohibitions. However, some specific permits can be 
lenient, with relatively few conditions placed on regulated 
entities.
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    \4\ Id. at 2-6.
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    In general permitting, an agency issues a permit that defines 
and approves a category of activity on its own initiative, and 
allows entities engaging in that activity to readily take advantage 
of the permit. Agency review of specific facts in any particular 
case is generally limited unless the agency finds good cause to 
condition or withdraw the general approval. In their most flexible 
form, general permits can resemble exemptions in form and effect, 
with few requirements on regulated entities and relatively little 
agency oversight. On the other hand, general permits may place 
requirements on regulated entities that aid agency oversight and 
enforcement. Some permits toward the more general end of the 
spectrum require the regulated entity to provide notice to the 
regulator and others do not.
    Between general and specific permits lie many possible 
intermediate forms of permitting that can exhibit traits of both 
general and specific permitting.\5\ These

[[Page 78165]]

permits, referred to in this recommendation interchangeably as 
``intermediate'' or ``hybrid'' permits, may call for intermediate 
levels of agency review or intermediate requirements to be met by 
regulated parties, or may contain a mix of features from both 
general and specific permitting. Intermediate permits provide 
agencies with significant flexibility, allowing them to tailor 
permitting to the regulated activity.
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    \5\ Id. at 8-10 (discussing possible hybrid permitting and 
providing an example). For instance, some of the nationwide permits 
utilized by the Army Corps of Engineers to regulate the fill of 
wetlands pursuant to Section 404 of the Clean Water Act require 
permittees to provide notice to the agency before proceeding with 
development activities. The notice may require substantial amounts 
of information (including detailed mitigation plans), and the 
permittee may not be able to proceed with development until directly 
authorized by the agency. These nationwide permits have elements of 
both a general permit (they apply to a category of activities, do 
not require the full range of applicant information that individual 
permits under Section 404, require and do not require the agency to 
do the full amount of environmental review associated with 
individual permits) and a specific permit (they still require 
substantial information to be submitted by the applicant and may 
require prior approval by the agency before permitted activities can 
be initiated).
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    This recommendation focuses on the distinction between general 
and specific permits, and considers intermediate permits as well. It 
does not specify situations in which exemptions are appropriate or 
evaluate the extent to which general permits may be preferable to 
exemptions. Marketable permits, in which permits are bought and 
traded by regulated entities, may also prove beneficial to agencies, 
the regulated community, and the public in many circumstances.\6\
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    \6\ Permit marketability lies outside the continuum of general 
permits to specific permits.
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    General and specific permitting differ in both the system used 
to issue the permit and in the way permits are issued under the 
system.\7\ In specific permitting, the agency issues a rule 
outlining the process and standards for obtaining permits, after 
which regulated entities apply for permits and the agency reviews 
the submissions, often with public input and judicial review. In 
general permitting, the agency often promulgates a rule outlining 
the precise conditions under which regulated entities may take 
advantage of the permit. This approach imposes significant burdens 
on the agency upfront; however, once in place, the process of 
permitting is relatively streamlined and sometimes provides fewer 
opportunities for public input and judicial review. Although some 
agencies have traditionally relied primarily on specific permits, 
general permits may offer agencies advantages in efficiency or 
resource use.
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    \7\ Id. at 6-7.
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    Most statutes delegate considerable discretion to agencies to 
decide at what point on the spectrum from general to specific to 
implement a permitting system.\8\ Whether an agency adopts a general 
or specific permitting system, or an intermediate system, can have 
significant impacts on the agency, the regulated entities, and third 
parties affected by the permitting action. If Congress decides to 
specify which type of permitting system an agency should adopt, 
Congress may want to consider the guidance provided in this 
recommendation.
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    \8\ For example, the Migratory Bird Treaty Act provides almost 
no guidance as to the use of general versus specific permits. See 16 
U.S.C. 703 and 704. Section 404 of the Clean Water Act lays out 
specific factors that must be met in order to use general permits. 
See 33 U.S.C. 1344(e)(1) and (2). Both of these programs are 
described in case studies accompanying the report.
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    In recent years, there has been increasing public concern over 
the extent to which inefficiencies in the permitting process delay 
necessary infrastructure reform.\9\ As an initial step, in 2012, 
Executive Order 13604 established a steering committee to 
``facilitate improvements in Federal permitting and review processes 
for infrastructure projects.'' \10\ The order also established an 
online permit-tracking tool, the Federal Infrastructure Projects 
Dashboard. The Steering Committee and Dashboard serve to enhance 
interagency coordination and provide permit tracking to improve 
agency timeliness.\11\ Congress has also been considering modifying 
the permitting process in various ways.\12\ In seeking to reform 
existing permitting systems or establish a new permitting system, 
Congress and agencies should also be aware of the comparative 
advantages of general and specific permits and design or modify such 
systems accordingly.
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    \9\ See, e.g., Philip K. Howard, Common Good, Two Years Not Ten 
Years: Redesigning Infrastructure Approvals (2015), http://commongood.3cdn.net/c613b4cfda258a5fcb_e8m6b5t3x.pdf.
    \10\ Performance of Federal Permitting and Review of 
Infrastructure Projects, 77 FR 18885, 18888 (Mar. 28, 2012) (to be 
codified at 3 CFR part 100).
    \11\ Id. at 18,887-8. The reforms promoted by E.O. 13604 are 
largely in accord with the Administrative Conference's 
Recommendation 1984-1, Public Regulation of Siting of Industrial 
Development Projects, 49 FR 29938 (July 25, 1984). Specifically, 
Recommendation 1984-1 encouraged interagency coordination of 
permitting, the establishment of permitting deadlines, and timely 
processing of permit applications.
    \12\ See, e.g., H.R. 348, 114th Cong. (2015); H.R. 351, 114th 
Cong. (2015); H.R. 89, 114th Cong. (2015); S. 33, 114th Cong. 
(2015); H.R. 161, 114th Cong. (2015). These bills are cited merely 
as indications of Congressional interest in the permitting process, 
and the Conference has not reviewed and does not endorse any of 
their provisions.
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    Although each permitting system is different, and an agency must 
tailor its procedures to meet both its statutory mandate and the 
needs of the particular program at issue, agencies face a number of 
common considerations when designing or reviewing a permitting 
system. There are many circumstances in which general permits may 
save agencies time or resources over specific permits without 
compromising the goals and standards of the regulatory program, and 
this recommendation provides guidance on when an agency might 
benefit most from using a general permitting system. This 
recommendation identifies a number of elements that should be 
considered in determining whether an agency should adopt a general 
permitting system, a specific permitting system, or an intermediate 
or hybrid system somewhere between the two.

Recommendation

Congressional Delegation of Permitting Power

    1. When Congress delegates permitting power to an agency, it 
should consider whether to specify which type(s) of permitting 
system(s) on the spectrum from general to specific permitting 
systems an agency may adopt.
    2. If Congress decides to limit an agency's permitting power to 
a certain type of permit, it should consider the factors discussed 
in recommendations 3-4 when determining the preferred type of 
permitting system to mandate. If Congress decides to give agencies 
discretion on which system to adopt, Congress should consider 
requiring that agencies make specific findings about the factors 
discussed in recommendations 3-4 in order to ensure agencies use 
general or specific permitting authority appropriately.

Agency Establishment of Permitting Systems

    3. When an agency designs a permitting system, the agency should 
be cognizant of the resources, both present and future, that are 
required to develop and operate the system. In particular, the 
agency should consider that a general permitting system may require 
significant resources during the design phase (especially if system 
design triggers additional procedural or environmental review 
requirements), but relatively fewer resources once the system is in 
place. A specific permitting system may require fewer resources 
upfront but significant resources in its application. The agency 
should balance resource constraints with competing priorities and 
opportunity costs.
    4. An agency should consider the following additional factors 
when deciding what type of permitting system, if any, to adopt.
    (a) The following conditions weigh in favor of designing a 
permitting system toward the general end of the spectrum:
    i. The effects of the regulated activity are small in magnitude, 
both in individual instances and from the cumulative impact of the 
activity;
    ii. The variability of effects expected across instances of the 
regulated activity is low;
    iii. The agency is able to expend the upfront resources to 
design a general permitting system and can subsequently benefit from 
the reduced administration costs a general permitting system 
requires to enforce;
    iv. The agency wishes to encourage the regulated activity or 
desires to keep barriers to entry low;
    v. The agency does not need to collect detailed information 
about the regulated activity or regulated parties;
    vi. The agency does not need to tailor permits to context-
specific instances of the activity;
    vii. The agency does not need to monitor the regulated activity 
closely and does not believe that the information that might be 
provided by specific permits is needed to facilitate enforcement; or
    viii. The agency does not need to exercise significant 
enforcement discretion to readily enforce the permitting system.
    (b) The following conditions weigh in favor of designing a 
permitting system toward the specific end of the spectrum:
    i. The effects of the regulated activity are large in magnitude, 
either in individual instances or from the cumulative impact of the 
activity;

[[Page 78166]]

    ii. The variability of effects expected across instances of the 
regulated activity is high;
    iii. The agency is unable to expend the upfront resources 
necessary to design a general permitting system or the agency can 
absorb the higher administration costs necessary to enforce a 
specific permitting system;
    iv. The agency believes that specific controls on particular 
regulated activities are desirable to reduce, control, or mitigate 
the negative effects of the regulated activity, or is less concerned 
about relatively high barriers to entry;
    v. The agency needs detailed information about the regulated 
activity or regulated parties;
    vi. The agency needs to tailor permits to context-specific 
instances of the activity;
    vii. The agency needs to monitor the regulated activity closely, 
and concludes the information provided in specific permits will 
facilitate enforcement; or
    viii. The agency needs to have discretion in enforcing the 
permitting system against individual entities.
    (c) An agency should weigh all the factors and consider 
implementing a hybrid permitting system that has features of both 
general and specific permits if the factors described above do not 
weigh strongly in favor of either general or specific permits or cut 
against each other.

Agency Review of Existing Permitting Structures

    5. Subject to budgetary constraints and other priorities, 
agencies are encouraged to conduct periodic reviews of their 
existing permitting structures, consistent with the Administrative 
Conference's Recommendation 2014-5, Retrospective Review of Agency 
Rules.
    6. In reviewing existing permitting structures, agencies should 
consider the factors in recommendations 3-4 and, where appropriate 
and consistent with statutory mandates, consider reforming existing 
permitting systems to align more closely with the goals the agency 
seeks to accomplish.
    7. Subject to budgetary and legal constraints, including the 
Paperwork Reduction Act and other statutory restrictions on data 
collection and dissemination, agencies should consider incorporating 
data-collection into new and existing permitting systems to aid 
analysis and review.

[FR Doc. 2015-31575 Filed 12-15-15; 8:45 am]
BILLING CODE 6110-01-P