APPENDIX A "The term "rule" means any regulation or directive, statement of policy or reporting requirement initiated by an agency which in accordance with Section 601 of this Title will have a significant impact on the public, except that the term "rule" does not include A. B. A regulation, directive or statement of policy A regulation, directive or statement of policy C. Regulations, directives or statements of policy relating to: (1) acquisition by the Federal Government by (ii) disposal by contract of sale of surplus personal property of the U.S. that are promulgated in compliance with criteria and procedures establish ed by the Administrator of General Services; D. Interpretative rules, regulations or directives, or rules regulations or directives of agency organization pro cedure or practice E. Opinions, orders or approvals upon applications for licensing or certificating of facilities or service, approval of rates and charges, or issuance of securities or financial reorganization. TESTIMONY OF MARK SILBERGELD, DIRECTOR, WASHINGTON OFFICE, CONSUMERS UNION Mr. SILBERGELD. Thank you. I do not have a prepared statement but I would like, subsequent to this hearing, to submit additional material. Senator LEVIN. That will be fine. [The material follows:] CONSUMERS UNION | A NONPROFIT ORGANIZATION | PUBLISHER OF CONSUMER REPORTS Washington Office: 1714 MASSACHUSETTS AVE., N. W. WASHINGTON, D.C. 20036/202-785-1906 September 6, 1979 Honorable Carl M. Levin Committee on Governmental Affairs Room 3308 Dirksen Office Building United State Senate Washington, D.C. 20510 Dear Senator Levin: Enclosed for the record are my comments on selected regulatory reform issues. These supplement my testimony before the Committee at hearings held on May 18. PUBLIC PARTICIPATION Establishment of a Program. Consumers Union favors the provision in regulatory reform legislation for public participation programs under which individual citizens, small businesses and individual groups receive funds or are reimbursed for participation in agency proceedings. three closely-related primary benefits to be expected from such programs. There are First, the views of such persons are important to decisionmakers because those persons who would be eligible for funding are affected by federal rulemaking and other proceedings but otherwise could not afford to participate. Such programs assure that those persons can participate in proceedings, if they otherwise could not afford to do so, at a level of expertise which otherwise is not possible because of their lack of financial resources. Second, this participation is important because the interests of large regulated parties in agency proceedings typically differ substantially from those of the individual citizen, the small business and the citizen groups. It is important to provide some balance in the resources which these competing interests can bring to bear in presenting views and evidence to the federal decisionmakers. Reports of this Committee have documented extensively the imbalance of resources expended to participate in agency proceedings. Participation funds help to offset partially the imbalance. National Office: 256 WASHINGTON STREET, MOUNT VERNON, NEW YORK 10550 | 914-664-6400 The Third, the public should be assured that the government seeks to make decisions based on a balanced presentation of views and information by a variety of affected interests. fact that citizens, groups and small businesses, whose views may differ from those of large businesses, have an opportunity to make substantial presentations in agency proceedings lends an element of such assurance. Outreach. Congress should, in passing a public participation reimbursement provision, establish "outreach" programs (a) which are charged with making the availability of reimbursement known to potentially qualified applicants, (b) which assist prospective applicants for reimbursement in applying for reimbursement and (c) which call particular opportunities to apply for participation funds in specific proceedings to the attention of those persons, groups and small businesses that are likely to have a particular interest in such proceedings. Limitations. We opposed proposals to limit any particular individual, group or trade association to a certain percentage of the funds in a particular rulemaking. In fact, in a proceeding in which there is only one applicant for funds, such a restriction obviously could not be complied with, unless there were to be an exception to the restriction. The primary purpose of the funding is for the agency to make possible the meaningful participation of persons whose views and knowledge are necessary to or would contribute substantially to a decision which is more fair or of better quality because of those persons' participation. Restricting participation funding in individual rulemakings on the basis suggested would impair, rather than further, efforts to realize this goal. There are, however, some constraints on the distribution of funds, related to the general perception of participation programs as fair and equitable. One is that those small businesses, and their trade associations, which are unable to afford meaningful participation in proceedings that significantly affect them should be assured an opportunity to participate. But, consumers, individually and through their organizations, are the interests typically least able to afford participation. There is justification, therefore, for assuring that they receive a substantial majority of funds. Thus, a provision such as that contained in the Magnuson-Moss Act, providing that small business interests shall be eligible for up to 25 percent of the annual appropriation for reimbursement funds, is equitable, and its inclusion in regulatory reform legislation should be considered. Further, there should be an equitable distribution of funds geographically and among groups of various sizes. One location or geographical area should not monopolize funding. Funds should go to small as well as large organizations. However, rather than attempt to formulate a statutory requirement to this effect, it would seem sufficient that this Congressional intent be established in the Committee Report on the proposed legislation. The Applications Process. Satisfactory funding applications requirements can be found in the regulations at the Consumer Product Safety Commission, Federal Trade Commission and National Highway Traffic Safety Commission, inter alia. exact information submission requirements depend upon eligibility requirements as well as any restrictions, distribution requirements or other statutory provisions that the Congress imposes upon participation funding. The extent of agency inquiry into the use of participation funds is perhaps the single most delicate issue in establishing the program. Each agency has a responsibility to be reasonably sure that funds it proposes to grant will be used to meet the goal of providing quality representation of interests which otherwise would not be heard and which should be heard, as a matter of fairness and/or to improve the quality of agency decisionmaking. At the same time, too vigorous an agency inquiry into the use of the funds before they are expended may be viewed as an effort by the agency to control the funded party's representation in order to assure that it is in line with the agency's position (the "hired gun" charge which has been leveled at existing participation programs). Some such inquiries may in fact serve this improper purpose. Thus, some provision in the legislation or in the legislative history should establish that the agency is to make an inquiry sufficient to assure that statutory eligibility requirements and the statutory purposes for funding requirements are reasonably likely to be met if the party is funded. The legislation should provide for GAO audits and periodic Administrative Conference evaluations. In addition, regular Congressional oversight would assist in minimizing and discouraging abuses. The latter should be based on an understanding that the agencies must have some leeway in exercising discretion in funding, but are expected to avoid both the extreme of granting funds to ineligible applicants and |