Negotiated Rulemaking Act

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Citations:

5 U.S.C. §§ 561–570 (2012); enacted Nov. 29, 1990, by Pub. L. No. 101-648, 104 Stat. 4969, renumbered Aug. 26, 1992, by Pub. L. No. 102354, 106 Stat. 944; amended by Pub. L. No. 104-320, § 11, Oct. 19, 1996, 110 Stat. 3870.

Lead Agency:

The Act originally named the Administrative Conference of the United States (ACUS) as the lead agency for coordinating negotiated rulemaking, but the Conference was defunded by Congress in 1995, so in 1996 Section 569 of the Act was amended to require the President to designate an agency or interagency committee to facilitate and encourage agency use of negotiated rulemaking. The President then named the Regulatory Working Group, which had been established under Section 4(d) of Executive Order 12,866, 58 Fed. Reg. 51,735 (Sept. 30, 1993), as the lead agency. See Memorandum on the Designation of Interagency Committees to Facilitate and Encourage Agency Use of Alternate Means of Dispute Resolution and Negotiated Rulemaking, May 1, 1998, 1 Pub. Papers of the Presidents 749, 1998 WL 214697. However, it is not clear that the Regulatory Working Group has taken on any responsibilities in this area, despite its retention on paper and specific amendment in Executive Order 13,258, 67 Fed. Reg. 9385 (2002). The reestablishment of ACUS in 2010 has thus far not resulted in its redesignation as the agency responsible for facilitating and encouraging the use of negotiated rulemaking. Thus, there does not appear to be any real lead agency for this Act. For more information on ACUS, see www.acus.gov.

Overview:

The Negotiated Rulemaking Act of 1990 establishes a statutory framework for agencies to formulate proposed regulations by using negotiated rulemaking. The Act supplements the rulemaking provisions of the Administrative Procedure Act by clarifying the authority of federal agencies to conduct negotiated rulemaking. It largely codifies the practice of those agencies that had previously used the procedure. While not requiring use of the technique, the Act provides each agency discretion with regard to using negotiated rulemaking.

Negotiated rulemaking (sometimes known as “regulatory negotiation” or “reg-neg”) emerged in the 1980s as an alternative to traditional procedures for drafting proposed regulations. The essence of the idea was that in certain situations it is possible to bring together representatives of an agency and the various affected interest groups to negotiate the text of a proposed rule. The negotiators would try to reach consensus through a process of evaluating their own priorities and making tradeoffs to achieve an acceptable outcome on the issues of greatest importance to them. If they do achieve consensus, then the resulting rule is likely to be easier to implement, and the likelihood of subsequent litigation is diminished. Even absent consensus on a draft rule, the process may be valuable as a means of better informing the regulatory agency of the issues and the concerns of the affected interests.

Negotiated rulemaking should be viewed as a supplement to the rulemaking provisions of the Administrative Procedure Act. This means that the negotiation sessions generally take place prior to issuance of the notice and the opportunity for the public to comment on a proposed rule that are required by the APA (5 U.S.C. § 553). In some instances, negotiations may be appropriate at a later stage of the proceeding and have sometimes been used effectively in drafting the text of a final rule based on comments received.

In 1982 ACUS set forth criteria for identifying rulemaking situations for which reg-neg is likely to be successful (Recommendation 82-4, 47 Fed. Reg. 30,708 (July 15, 1982)). These criteria were intended to guide agencies in determining whether negotiated rulemaking would be appropriate for addressing particular regulatory problems. ACUS also suggested specific procedures for agencies to follow in applying this approach. Additional refinements, based on a study of initial agency experiences with reg-neg, were recommended in 1985 (Recommendation 85-5, 50 Fed. Reg. 52,895 (Dec. 27, 1985)).

Much of the Negotiated Rulemaking Act is permissive, incorporating many of the criteria and procedures suggested in the Conference recommendations. The drafters intended that the Act not impair any rights otherwise retained by agencies or parties, and section 561 expressly provides that the Act is not intended to limit innovation or experimentation with the negotiated rulemaking process. Although the Act plainly permits an agency to publish as its own the consensus proposal adopted by the negotiating committee, nothing in the Act requires the agency to publish either a proposed or final rule merely because a negotiating committee proposed it.

Following the recommendations of the Conference, section 563 of the Act lists several criteria for agencies to consider in determining whether to use negotiated rulemaking in any particular instance. It permits, but does not require, the use of outside impartial persons (referred to as “conveners”) to assist the agency in identifying potential participants in the negotiation process. Section 564 requires public notice of planned negotiated rulemaking proceedings both in the Federal Register and in appropriate trade and specialized publications. Persons or interests believing that they are not adequately represented on the negotiating committee must be given an opportunity to apply for membership, though the agency retains discretion as to whether to grant such requests.

Section 565 outlines the process for establishing negotiating committees and makes clear that they are also to comply with the Federal Advisory Committee Act. At least one member of the committee must be a representative of the agency. If, after considering the public responses to the published notice of intent to establish a negotiating committee under the Act, the agency determines not to do so, then the agency must publish a notice of that fact and the reasons for its decision.

Section 566 addresses the procedures of the negotiating committee and provides for selection of a neutral “facilitator” or mediator to assist the committee in its deliberations.

Section 567 permits an agency to keep a negotiating committee in existence until promulgation of the final rule, but also allows earlier termination if the agency or the committee so chooses.

Section 568 addresses options for acquiring the services of conveners and facilitators. Agencies are authorized to pay expenses of certain committee members in accordance with the Federal Advisory Committee Act. Section 569 refers agencies considering negotiated rulemaking to the agency or committee identified by the President to facilitate and encourage negotiated rulemaking. It also permits an agency to accept and utilize gifts in support of negotiated rulemaking, if the gift would not “create a conflict of interest.” To avoid creating new sources of potential litigation, section 570 provides that agency actions relating to the establishment, assistance, or termination of a negotiated rulemaking committee are not subject to judicial review. However, the Act does not affect the otherwise available judicial review of the rules promulgated through the negotiation process. Under section 5 of the Negotiated Rulemaking Act of 1990, as originally enacted by Public Law 101-648, the provisions of the Act were to be repealed six years after the date of enactment (Nov. 26, 1996). Section 11(a) of the Administrative Dispute Resolution Act of 1996 (Pub. L. No. 104-320) repealed section 5 and permanently reauthorized the Act.