18. Negotiated Rulemaking Act

• Pages: 941-980

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941

Negotiated

Rulemaking

Act

Citations:

5 U.S.C. §§561-570 (2000); enacted November 29, 1990, by Pub. L.

No. 101-648, 104 Stat. 4969, renumbered August 26, 1992 by Pub. L. No.

102-354, 106 Stat. 944; amended by Pub. L. No. 104-320, §10, Oct. 19,

1996, 110 Stat. 3870.

Lead Agency:

The Act originally named the Administrative Conference of the United

States 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 inter-

agency 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.1 However, it is not clear

that the Regulatory Working Group as a functioning entity survived the change

in administrations, despite its retention on paper and specific amendment in

Executive Order 13,258, 67 Fed. Reg. 9385 (2002). Thus, there does not

appear to be a lead agency for this Act.

Overview:

The Negotiated Rulemaking Act of 1990 establishes a statutory frame-

work for agencies to formulate proposed regulations by using negotiated

rulemaking. The Act supplements the rulemaking provisions of the Adminis-

1See Memorandum on the Designation of Interagency Committees to Fa-

cilitate and Encourage Agency Use of Alternate Means of Dispute Resolution

and Negotiated Rulemaking, May 1, 1998, 1998 WL 214697.

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trative Procedure Act by clarifying the authority of federal agencies to con-

duct negotiated rulemaking. It largely codifies the practice of those agencies

that had previously used the procedure. While not requiring use of the tech-

nique, the Act provides each agency discretion with regard to using negoti-

ated 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 a 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 a 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 negotia-

tion sessions generally take place prior to issuance of the notice and the op-

portunity 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 the Administrative Conference of the United States 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 nego-

tiated rulemaking would be appropriate for addressing particular regulatory

problems. The Conference 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 (Rec-

ommendation 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 recommen-

dations. 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 negoti-

ated rulemaking process. Although the Act plainly permits an agency to pub-

lish as its own the consensus proposal adopted by the negotiating committee,

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NEGOTIATED RULEMAKING ACT

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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 pro-

cess. Section 564 requires public notice of planned negotiated rulemaking

proceedings both in the Federal Register and in appropriate trade and special-

ized publications. Persons or interest groups believing that they are not ad-

equately 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 Com-

mittee 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 deter-

mines 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 com-

mittee in its deliberations.

Section 567 permits an agency to keep a negotiating committee in exist-

ence 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.2 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 consult

the agency or committee identified by the President to facilitate and encour-

age 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.”

2See also Administrative Conference Recommendation 86-8, Acquiring

the Services of “Neutrals” for Alternative Means of Dispute Resolution, 51 Fed.

Reg. 46,990; Ruttinger, Acquiring the Services of Neutrals for Alternative Means

of Dispute Resolution and Negotiated Rulemaking, 1986 ACUS 863.