ATTACHMENT B

SUMMARY OF FINDINGS

The following is a restatement of the major findings and conclusions of this report, listed by chapter.

NEED FOR PUBLIC PARTICIPATION (CHAPTER 1)

(1) Full public participation in the regulatory process is essential if regulatory agencies are to effectively discharge their mandate to regulate in the public interest.

(2) Increased public participation and input can provide regulators with a greater range of ideas and information, broaden the active constituency of the agency, and place greater emphasis on public interest concerns and viewpoints. A lack of such public participation, on the other hand, requires regulators to rely too heavily on input from the industry they are charged with regulating.

EXTENT AND COST OF PARTICIPATION (CHAPTER 2)

(3) At agency after agency, participation by the regulated industry predominates often overwhelmingly. Organized public interest representation accounts for a very small percentage of participation before Federal regulatory agencies. In more than half of the formal proceedings, there appears to be no such participation whatsoever, and virtually none at informal agency proceedings. In those proceedings where participation by public groups does take place, typically it is a small fraction of the participation by the regulated industry. One-tenth is not uncommon; sometimes it is even less than that. This pattern prevails in both rulemaking proceedings and adjudicatory proceedings, with an even greater imbalance occurring in adjudications than in rulemaking.

(4) The single greatest obstacle to active public participation in regulatory proceedings is the lack of financial resources by potential participants to meet the great costs of formal participation. Lack of funds has prevented public participation in many important proceedings.

(5) The regulated industry consistently outspends public participants by a wide margin in regulatory agency proceedings. In every case or agency reviewed, industry spent many times more on regulatory participation than their public interest counterparts. In some instances, industry committed as much as 50 to 100 times the resources budgeted by the public interest participants. For example, in 1976 the nation's 11 trunk airlines spent more than $2.8 million on outside counsel to represent them in regulatory proceedings before the CAB. By contrast, the Aviation Consumer Action Group, the principal representative for public interest organizations at CAB proceedings, had a total 1976 budget of $40,000, of which approximately half was spent on participation in CAB proceedings.

(6) Lack of resources has limited the amount of technical expertise that participant groups have been able to bring to bear in agency proceedings.

(7) Opportunities for citizen participation are hampered by significant administrative costs such as transcript fees and reproduction of required materials.

STANDING AND INTERVENTION RIGHTS (CHAPTER 3)

(8) The Supreme Court in recent years has taken an increasingly restrictive view of the standing requirements that make it difficult for citizens to obtain judicial review of allegedly unlawful Government action. At present, some of the Supreme Court's decisions in this area constitute a considerable barrier to citizen participation in the regulatory process.

(9) Although agencies generally have relaxed intervention requirements in recent times, there is considerable variance in the standards between agencies. In some cases, the standards have not been precisely or clearly defined; in the case of other agencies, the standards have been conservatively applied. Greater clarity and uniformity is needed to assure full public access to administrative agency proceedings.

ADMINISTRATIVE OBSTACLES TO PARTICIPATION (CHAPTER 4)

(10) Delay, which is a general problem in regulatory agency activities, is particularly burdensome to participating citizen groups. Prolonged proceedings result in straining further the usually limited resources of such groups and hinders effective and constructive participation. The prospect of expensive, protracted proceedings, has a chilling effect which frequently means that public participation is effectively precluded from the outset.

(11) Potential public participation is often foreclosed by inadequate notice of pending proceedings. Although some agencies have utilized the general and trade press, mass mailings, and agency publications, most agencies seldom make active efforts to solicit public views on important proceedings. This may be the only way for individual citizens, as opposed to citizen groups, to be alerted to proceedings which may affect them.

(12) Some agency proceedings provide inadequate time for effective public participation. These include FPC proceedings in which rate increases are granted with no opportunity for participation until after the rate increase goes into effect; FPC proceedings in which multiple and updated filings change the matters being decided by the agency; and NRC proceedings in which public participants are effectively excluded at early stages as a result of agency staff working with the regulated industry in advance of an announcement of a formal agency proceeding.

(18) Informal negotiations between the FCC and the broadcast networks as in the case of the "family viewing" hour-in lieu of official agency proceedings, resulted in circumventing the notification and public participation requirements of the Administrative Procedure Act. Such practices make effective public participation impossible.

Senator LEVIN. Thank you, very much.

Next, Anthony Roisman.

TESTIMONY OF ANTHONY Z. ROISMAN, STAFF ATTORNEY, NATIONAL RESOURCES DEFENSE COUNCIL

Mr. ROISMAN. Thank you.

My name is Anthony Roisman, I am a staff attorney with the National Resources Defense Council. We have submitted a statement which we would like to have included in the record.

I will simply summarize our position this morning.

I think one of the difficulties we have had with a number of the legislative proposals that we are looking at is that they appear to be based upon assumptions which we consider to be invalid.

If, as is the mission of this committee, the goal is to reform the regulatory process, then it would be a sad mistake for the legislation to become some sort of a cover for what is really a substantive reform in the agencies. Thus we are particularly disturbed by any effort to write into a piece of legislation what appears to be a mandate to agencies that are not now required to look at the economic implications of what they do, but do look at the economic implications of what they do.

If Congress feels that is a reform that is needed, it is a substantive reform which should appear not in the form of an amendment to the Administrative Procedures Act, but rather an amendment to the substantive act of the individual agency to be affected.

That, of course, would put that legislation under the jurisdiction of the committee whose members are most closely concerned with the substantive issues which those agencies have to raise.

To mix up what is really an effort by certain segments of the business community to free themselves from what they consider to be economically disadvantageous regulation with real reform in the regulatory process is in our belief a serious mistake.

We urge the committee not to seriously consider and to pursue that effort. There are, however, important regulatory reforms, some of which are addressed in pending legislation, some of which has been addressed in draft legislation being circulated by Senator Kennedy and being looked at by the Senate Judiciary Committee which we think are important and we hope the committee will direct its attention to those proposals.

First and foremost and at the very top of the list for us has always been the problem of disparity of resources between people who have no economic interest but an important policy interest in the outcome of regulation and those people who have a direct economic interest in the outcome.

It shows up starkly in cases with which I am familiar, the licensing of nuclear powerplants. In individual licensing proceedings utilities and proponents of the building of the plant have at risk literally billions of dollars. They can well afford and usually do spend millions of dollars to make their case and we favor them doing that, if they have that much evidence that they need to pull together to make their case, and they want to spend that amount of money. That is their business. But those people who think the plant should not be built, people who have issued warnings in the past about problems they thought might occur and that recent

events have suggested may in fact have been accurate, they go in with at most thousands, maybe occasionally tens of thousands of dollars; important safety issues which are not being raised in licensing proceedings for nuclear plants would be raised if the citizens who are concerned about the safety of the plant had the resources to hire the experts.

This is repeated throughout the regulatory process in this Government. And it is a growing source of concern among the American public that they are faced with the fact that regulation which affects them directly is being undertaken without them being able to effectively voice their own position on those issues.

Second, the courts have developed a series of rules that govern what represents an agency decision in rulemaking. It is called a rational basis test. The Congress could usefully clarify what is required by simply listing the kinds of factors which ought to be addressed by an agency in reaching its conclusions and making sure that at the end, this statement of consideration of the rule which includes the rational basis is clearly articulated so that the court knows precisely what it should be reviewing and everyone is clear on what the agency will be using as the justification for the action that it is taking.

This does not require nor would it be useful to require the production of some new document, whether it is called regulatory analysis or something else. There is already a document, the agency rule and statement of considerations for it. There has been some uncertainty among agencies as to what should be included in that rule and Congress could usefully codify the principles laid down by the courts so agencies are clearly aware of their obligations.

Finally, there is an important need to reconfirm the value of the adjudicatory hearing process. The suggestion that the current adjudicatory hearing process be downgraded to a so-called hybrid hearing process is in our judgment an invitation to even increase the current overlawyerazation of the process.

I speak from the vantage point of being a lawyer. Nothing would allow lawyers more leeway to hold up licensing hearings for nuclear plants or to hold up important safety regulations in agencies than the opportunity to argue through the hybrid hearing process that is proposed in both the administration bill and the bill that has been introduced by the chairman of this committee.

That type of hybrid hearing process has in the past proved disastrous when it has been used and the Supreme Court in the case Vermont Yankee Nuclear Power v. Natural Resource Defense Council specifically indicated that fuzzing up the lines drawn in the Administrative Procedures Act is an invitation to chaos.

We urge the committee to seriously reconsider the wisdom of taking clear demarcations that now exist in the Administrative Procedures Act and creating a hybrid hearing which in our judgment will produce nothing but a chaotic situation in the licensing process.

Thank you.

Senator LEVIN. Thank you, very much, Mr. Roisman. [The prepared statement of Mr. Roisman follows:]

50-941 O- 80-80

TESTIMONY OF ANTHONY Z. ROISMAN

OF THE NATURAL RESOURCES DEFENSE COUNCIL

BEFORE THE SENATE GOVERNMENTAL AFFAIRS COMMITTEE

ON

REGULATORY REFORM LEGISLATION

May 18, 1979

Introduction

Regulatory reform has a lot in common with apple pie.

It

It is popular, it is unamerican to oppose it, and it may often prove indigestible if not properly prepared. would appear that 1979 is becoming the year for regulatory reform, but the precise product depends very much on the recipe. To much of the business community, regulatory reform is a euphemism for less regulation. To those of us in the public interest community, the regulatory reform concern is an opportunity to make the legitimate regulatory process more effective, i.e., to better regulate the profitmotivated segment of the society to assure that health, safety, civil rights and liberties, environmental, and other non-economic public values are incorporated into the profitmaking activities of business.

Such assurances must, to a large extent, be obtained from outside the profit-making sector because the economic and other impacts from which protections are needed do not show up on the corporate balance sheet but instead on the