Direct Final Rule Procedure; Petitions for Rulemaking

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

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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

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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

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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.

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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

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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