S. 1823 A BILL IN THE SENATE OF THE UNITED STATES

• Document Type: CREST
• Collection: General CIA Records
• Document Number (FOIA) /ESDN (CREST): CIA-RDP95B00895R000300020003-8
• Release Decision: RIPPUB
• Original Classification: K
• Document Page Count: 29
• Document Creation Date: December 21, 2016
• Document Release Date: November 17, 2008
• Sequence Number: 3
• Publication Date: August 4, 1983
• Content Type: OPEN SOURCE

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LEGISLATIVE ANALYSIS
Bill No. S. /M0~3 Report No. Companion No.
Introduced By: 2////tJ Date: 191J
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17 AU G 1983
98TH CONGRESS
1ST SESSION
5.1823
To provide for an alternative to the present adversarial rule making procedure by
establishing a process to facilitate the formation of regulatory negotiation
commissions.
IN THE SENATE OF THE UNITED STATES
AUGUST 4 (legislative day, AUGUST 1), 1983
Mr. LEVIN introduced the following bill; which was read twice and referred to the
Committee on Governmental Affairs
A BILL
To provide for an alternative to the present adversarial rule
making procedure by establishing a process to facilitate the
formation of regulatory negotiation commissions.
1 Be it enacted by the Senate and House of Representa-
2 tives of the United States of America in Congress assembled,
3 That this Act may be cited as the "Regulatory Negotiation
4 Act of 1983".
5 FINDINGS
6 SEC. 2. The Congress finds and declares that:
7 (1) Government regulation of the economy has in-
8 creased rapidly since the enactment of the Administra-
9 tive Procedure Act.
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1 (2) Although this increase in regulation has had
2 commendable purposes, it has been accompanied by a
3 formalization of the rule making process which has fre-
4 quently resulted in unjustifiably expensive, contradic-
5 tory, and often counterproductive rules.
6 (3) The adversarial nature of the rule making
7 process has often resulted in unnecessary regulations
8 which have a significant adverse effect on the econo-
9 my.
10 (4) In the current rule making process, the parties
11 often assume antagonistic positions and the best solu-
12 tions to the problems under consideration are often ig-
13 nored by the parties since the parties act in a manner
14 which maintains their bargaining positions.
15 (5) In the current rule making process, the parties
16 rarely have the opportunity to meet as a group and
17 communicate directly with each other, and the lack of
18 this opportunity effectively limits the ability of the par-
19 ties to reach agreement on a rule that fulfills the intent
20 of Congress and is acceptable to all parties.
21 (6) The adversarial nature of the rule making
22 process frequently limits the extent to which the exper-
23 tise, technical ability, and great resources of persons
24 working in a regulatory area are used to solve the
25 problem under consideration.
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1 PURPOSE
2 SEC. 3. The purpose of this Act is to establish an alter-
3 native rule making procedure which permits the establish-
4 ment of regulatory negotiation commissions that can be used
5 in appropriate circumstances to permit direct participation of
6 interested parties in a rule making, the negotiation of regula-
7 tory policy by such parties, and the development of rules that
8 represent a consensus of the members of the commission.
9 DEFINITIONS
10 SEC. 4. For purposes of this Act-
11 (1) the term "agency" has the same meaning as
12 in section 551(1) of title 5, United States Code;
13 (2) the term "person" has the same meaning as in
14 section 551(2) of such title;
15 (3) the term "party" has the same meaning as in
16 section 551(3) of such title;
17 (4) the term "rule" has the same meaning as in
18 section 551(4) of such title;
19 (5) the term "rule making" has the same meaning
20 as in section 551(5) of such title;
21 (6) the term "Conference" means the Administra-
22 tive Conference of the United States;
23 (7) the term "Chairman" means the Chairman of
24 the Administrative Conference of the United States;
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1 (8) the term "consensus" means a unanimous
2 agreement among all interests represented in the nego-
3 tiation of a proposed rule under this Act, and does not
4 mean a unanimous agreement among all individual
5 members involved in the negotiation;
6 (9) the term "interest" means a position with re-
7 spect to an issue that may be considered by a regula-
8 tory negotiation commission and that may be repre-
9 sented by one or more persons;
10 (10) the term "mediator" means an individual se-
ll lected to mediate discussions between the members of
12 a regulatory negotiation commission and to facilitate
13 communications between such members in the develop-
14 ment of a proposed rule;
15 (11) the term "member" means a person who is a
16 member of a regulatory negotiation commission; and
17 (12) the term "regulatory negotiation commis-
18 sion" means a voluntary group established by the Con-
19 ference in accordance with this Act to consider issues
20 for the purpose of reaching a consensus in the develop-
21 ment of a proposed rule.
22 REQUEST FOR REGULATORY NEGOTIATION COMMISSION
23 SEC. 5. (a) An agency or a person who is qualified to
24 represent an interest with respect to an issue may request the
25 Chairman to determine whether to recommend to the agency
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1 having jurisdiction over the development of a proposed rule
2 with respect to such issue that a regulatory negotiation com-
3 mission be established to develop such a proposed rule. The
4 request shall explain the reasons why the agency or person
5 believes that the use of a regulatory negotiation commission
6 would be an appropriate method of developing a proposed
7 rule.
8 (b) The Chairman shall consider each request made
9 under subsection (a) for the establishment of a regulatory ne-
10 gotiation commission to develop a proposed rule with respect
11 to a particular issue. If the Chairman determines that there is
12 a substantial likelihood that the agency having jurisdiction
13 over the development of such a rule will seriously consider
14 issuing a proposed rule relating to such issue, the Chairman
15 may conduct an informal investigation with respect to the
16 advisability of establishing a regulatory negotiation commis-
17 sion to develop such a proposed rule. In conducting such an
18 investigation, the Chairman may consider and make determi-
19 nations concerning-
20 (1) whether there are a limited number of inter-
21 ests which would be substantially affected by a pro-
22 posed rule relating to the issue;
23 (2) whether persons can be selected as members
24 of a regulatory negotiation commission who would rep-
25 resent the interests identified pursuant to paragraph
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1 (1), including recommendations for persons to be select-
2 ed;
3 (3) whether the persons recommended for selec-
4 tion as members of a regulatory negotiation commis-
5 sion would be willing to make a commitment to negoti-
6 ate in good faith to reach a consensus on a proposed
7 rule concerning such issue;
8 (4) whether the agency having jurisdiction over
9 the development of such a proposed rule would use the
10 regulatory negotiation commission to develop such rule;
11 (5) the scope of the issues to be considered by the
12 regulatory negotiation commission in developing such
13 rule; and
14 (6) a preliminary schedule for the completion of
15 the work of the regulatory negotiation commission.
16 (c) Within sixty days after receiving a request under
17 subsection (a) with respect to the development of a proposed
18 rule concerning an issue, the Chairman shall report to the
19 Conference and the agency having jurisdiction over the de-
20 velopment of such a proposed rule the determinations of the
21 Chairman under subsection (b) and the recommendations of
22 the Chairman as to whether a regulatory negotiation com-
23 mission should be established to develop such a proposed
24 rule.
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1 (d) The Chairman, with the advice of the agency having
2 jurisdiction over the development of a proposed rule with re-
3 spect to an issue for which a request is submitted under sub-
4 section (a), shall have complete discretion in determining the
5 subjects to be considered by any regulatory negotiation com-
6 mission established to develop such a rule. Any determination
7 by the Chairman with respect to the subjects to be considered
8 by a regulatory negotiation commission shall not be subject to
9 judicial review in any court.
10 USE OF REGULATORY NEGOTIATION COMMISSION
11 SEC. 6. (a) If, on the recommendation of the Chairman,
12 an agency decides to use a regulatory negotiation commis-
13 sion, the agency shall publish in the Federal Register a
14 notice concerning the proposed use of such commission in the
15 development of a proposed rule. Such notice shall include-
16 (1) an announcement that the agency intends to
17 use a regulatory negotiation commission in the devel-
18 opment of the proposed rule;
19 (2) a general description of the subject matter to
20 be considered by the regulatory negotiation commis-
21 sion; and
22 (3) a list of mediators compiled and approved by
23 the Conference, from which persons applying for mem-
24 bership on the commission may select a proposed medi-
25 ator.
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1 (b)(1) For a period of at least thirty days after the date
2 on which the agency publishes a notice with respect to a
3 regulatory negotiation commission under subsection (a), the
4 Chairman shall accept applications from persons who are
5 qualified to represent an interest on the commission. Each
6 such application shall specify-
7 (A) the name of the person submitting the applica-
8 tion and a description of the interest such person will
9 represent;
10 (B) the persons recommended for membership on
11 the commission and the reasons of the applicant for
12 such recommendations;
13 (C) whether a mediator will be needed by the
14 commission, and, if necessary, the name of a proposed
15 mediator;
16 (D) recommendations for the issues to be consid-
17 ered by the commission;
18 (E) recommendations for rules for the operation of
19 the commission;
20 (F) a proposed organizational plan and a proposed
21 agenda for the commission;
22 (G) a proposed schedule for completing the work
23 of the commission; and
24 (H) a written commitment that the applicant
25 will-
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1 (i) negotiate the issues under consideration
2 by the commission in good faith; and
3 (ii) produce a report on the negotiation
4 within a time period appropriate to the issues
5 under consideration.
6 (2) In order to ensure that all interests, including inter-
7 ests represented by public interest groups, have an adequate
8 opportunity to participate in a regulatory negotiation com-
9 mission, the Chairman may suggest that a person submitting
10 an application under paragraph (1) request a grant under sec-
11 tion 9 of this Act to pay the expenses that will be incurred by
12 such person as a result of participation on the regulatory ne-
13 gotiation commission.
14 (c) During the period in which the Chairman is accept-
15 ing applications under subsection (b)(1), an agency which
16 published a notice under subsection (a) with respect to a reg-
17 ulatory negotiation commission shall submit to the Chairman
18 a written statement specifying-
19 (1) the name and position of a senior official of the
20 agency who will represent the agency on the commis-
21 sion;
22 (2) whether a mediator will be.necessary for the
23 commission, and, if necessary, the name of a proposed
24 mediator;
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1 (3) the persons recommended for membership on
2 the commission and the reasons of the agency for such
3 recommendations;
4 (4) recommendations for the issues to be consid-
5 ered by the commission;
6 (5) recommendations for rules for the operation of
7 the commission;
8 (6) a proposed organizational plan and a proposed
9 agenda for the commission;
10 (7) a proposed schedule for completing the work
11 of the commission; and
12 (8) a written commitment that the agency will-
13 (A) negotiate the issues under consideration
14 by the commission in good faith; and
15 (B) produce a report on the negotiation
16 within a time period appropriate to the issues
17 under consideration.
18 (d) After the period for applications for membership on a
19 regulatory negotiation commission under subsection (b) has
20 expired, the Chairman shall consider all of the applications
21 submitted under such subsection and the statement submitted
22 by the agency under subsection (c). If, after considering such
23 applications and statement, the Chairman determines that all
24 necessary interests will be represented on the regulatory ne-
25 gotiation commission for which the applications are made and
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1 that persons representing such interests will have an oppor-
2 tunity to contribute to the negotiation of a proposed rule, the
3 Chairman shall announce the establishment of such a com-
4 mission in accordance with subsection (e).
5 (e) The Chairman shall announce the establishment of a
6 regulatory negotiation commission for the development of a
7 proposed rule through publication in the Federal Register
8 and through notices in appropriate journals, newsletters, and
9 other media. Such announcement shall include-
10 (1) a description of the issue to be considered by
11 the commission;
12 (2) a tentative list of the subjects to be considered
13 by the commission in negotiating with respect to the
14 issue described pursuant to in paragraph (1);
15 (3) the name and position of the senior official of
16 the agency having jurisdiction over the development of
17 such a rule who is proposed to represent the agency on
18 the commission;
19 (4) the name of each person proposed for selection
20 as a member of the commission, and a specification of
21 the interest to be represented by each such member;
22 (5) the name of a proposed mediator for the com-
23 mission, if any;
24 (6) a proposed schedule for the completion of the
25 work of the commission; and
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1 (7) a request that members of the public comment
2 on the proposed commission, including comments on-.-
3 (A) whether each appropriate interest will be
4 represented on the commission;
5 (B) the persons selected to represent each
6 such interest;
7 (C) the official proposed to represent the
8 agency; and
9 (D) the issues to be considered by the com-
10 mission.
11 (f) For a period of at least thirty days after the date on
12 which the notice required under subsection (e) is published in
13 the Federal Register, the Chairman shall accept comments
14 from the public with respect to the matters specified in such
15 notice. The Chairman, with the advice of the agency having
16 jurisdiction over the proposed rule to be developed by the
17 commission, shall consider all relevant matter and comments
18 submitted, and may modify the proposal for the use of a regu-
19 latory negotiation commission specified in such notice with
20 the agreement of the agency and the members proposed by
21 the Chairman in such notice to represent the major interests
22 on the commission.
23 (g) The agency shall publish in the Federal Register a
24 final notice concerning the establishment of a regulatory ne-
25 gotiation commission to develop a proposed rule. The notice
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1 shall specify the matters described in paragraphs (1) through
2 (6) of subsection (e) with respect to the regulatory negotiation
3 commission that will be established.
4 PROCEDURES FOR REGULATORY NEGOTIATION
5 COMMISSIONS
6 SEC. 7. (a) Each regulatory negotiation commission es-
7 tablished pursuant to this Act shall consider the subjects
8 specified by the Chairman for consideration by the commis-
9 sion and shall attempt to reach a consensus concerning a
10 proposed rule with respect to such issues.
11 (b) The official representing the agency on a regulatory
12 negotiation commission shall participate in the deliberations
13 and activities of the commission as a voting member who is
14 equal to all other members of the commission.
15 (c)(1) Any mediator selected by the Chairman for a reg-
16 ulatory negotiation commission shall-
17 (A) chair the meetings of the commission;
18 (B) assist the members of the commission in con-
19. ducting discussions;
20 (C) keep the Congress informed of the activities of
21 the commission; and
22 (D) assist in the deliberations of the commission.
23 A mediator shall not vote on any matter before the commis-
24 sion or participate in any agreement made by the commis-
25 sion.
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1 (2) If the Chairman has not selected a mediator for a
2 regulatory negotiation commission, the commission shall elect
3 a chairperson from among its members to carry out the func-
4 tions of a mediator described in paragraph (1). A chairperson
5 elected under this paragraph shall be entitled to vote on any
6 matter before the commission and participate in any agree-
7 ment made by the commission.
8 (d) Whenever possible, not more than fifteen members of
9 a regulatory negotiation commission shall participate in the
10 deliberations of the commission at any one time. The total
11 number of members of a regulatory negotiation commission
12 may exceed fifteen.
13 (e) A regulatory negotiation commission may change its
14 membership, rules, or agenda if a majority of the interests
15 represented on the commission agree to such change and if
16 the commission submits such change to the Chairman for
17 review. If the Chairman determines that any such change
18 will substantially impair the ability of the commission to
19 carry out the purposes of this Act, the Chairman may-
20 (1) suggest additional changes in the membership,
21 rules, or agenda of the commission in order to assure
22 consistency with the purposes of this Act; or
23 (2) require that the commission, and any members
24 thereof, repay the Government the amount of any
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1 grant provided under this Act which has not been obli-
2 gated or expended.
3 The Chairman may not require a commission to make repay-
4 ment under paragraph (2) of this subsection unless the Chair-
5 man determines that efforts by the commission to assure con-
6 sistency with the purposes of this Act have failed.
7 (f) At the conclusion of negotiations, each regulatory ne-
8 gotiation commission shall prepare and transmit to the Chair-
9 man, the head of the agency participating in the commission,
10 each committee of the Senate and House of Representatives
11 having legislative jurisdiction over the subjects considered by
12 the commission, and the Director of the Office of Manage-
13 ment and Budget a report with respect to the negotiations
14 conducted by the commission. If the commission reached a
15 consensus and developed a proposed rule, the report shall
16 contain the proposed rule developed by the commission and a
17 concise general statement of the basis and purpose of that
18 rule. If the commission did not develop a consensus and a
19 proposed rule, the report shall specify the areas in which the
20 commission reached a consensus, the areas of disagreement
21 among the commission, and such recommendations and back-
22 ground material the commission may consider appropriate.
23 (g) Any meeting of a regulatory negotiation commission
24 shall be open to the public, unless a majority of the members
25 of the commission determine by vote that a closed meeting is
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1 necessary to achieve the purposes of the commission. Each
2 open meeting shall be announced at least fifteen days prior to
3 the date of the meeting in the Federal Register if possible,
4 and a record shall be prepared of each such meeting.
5 (h)(1) A regulatory negotiation commission which devel-
6 oped a proposed rule shall be terminated-
7 (A) on the date on which the agency that partici-
8 pated in the commission publishes a notice of proposed
9 rule making under section 8(a) for such proposed rule;
10 or
11 (B) in any case in which the agency chooses not
12 to publish a notice of proposed rule making for such
13 proposed rule, on a date determined by the Chairman
14 which occurs-
15 (i) after the commission has had an opportu-
16 nity to comment on the agency action with re-
17 spect to such proposed rule; and
18 (ii) after the commission has transmitted the
19 report required under subsection (f) to the commit-
20 tees of the Senate and the House of Representa-
21 tives referred to in such subsection.
22 (2) A regulatory negotiation commission which did not
23 develop a proposed rule shall terminate fifteen days after the
24 date on which the commission transmits the report required
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1 by subsection (f) to the committees of the Senate and the
2 House of Representatives referred to in such subsection.
3 AGENCY ACTION
4 SEC. 8. (a) An agency shall publish in the Federal Reg-
5 ister a notice of proposed rule making in accordance with
6 section 553 of title 5, United States Code, for any proposed
7 rule developed by a regulatory negotiation commission unless
8 the agency determines that there is good cause for not pub-
9 lishing such notice. The agency may propose amendments to
10 or modifications to the proposed rule developed by the regu-
11 latory negotiation commission and shall publish such amend-
12 ments or modifications in the Federal Register with the
13 notice of proposed rule making. The agency may publish with
14 such notice such additional explanatory material as the
15 agency considers appropriate.
16 (b) The agency shall make available the report transmit-
17 ted under section 7(f) by the regulatory negotiation commis-
18 sion concerning the proposed rule developed by such commis-
19 sion.
20 (c) The agency shall allow a period of at least thirty
21 days for the public to review and comment on-
22 (1) the notice of proposed rule making published
23 under subsection (a);
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1 (2) any amendments or modifications proposed by
2 the agency under such subsection to the proposed rule
3 developed by a regulatory negotiation commission; and
4 (3) any other material published under such sub-
5 section.
6 (d) The agency shall provide a regulatory negotiation
7 commission which developed a proposed rule an opportunity
8 to review and comment upon any material received by the
9 agency pursuant to the notice of proposed rule making for
10 such rule published under subsection (a) and an opportunity
11 to participate in any additional proceedings the agency con-
12 ducts with respect to such proposed rule.
13 GRANTS FOR REGULATORY NEGOTIATION COMMISSIONS
14 SEC. 9. (a) In order to carry out the purposes of this
15 Act, the Conference, through the Chairman, shall make
16 grants to-
17 (1) regulatory negotiation commissions for the
18 payment of administrative expenses of such commis-
19 sions; and
20 (2) members of a regulatory negotiation commis-
21 sion who are unable to afford to pay the costs of par-
22 ticipation in the commission.
23 (b) The Chairman shall announce through publication in
24 the Federal Register and through notice in appropriate jour-
25 nals, newsletters, and other media, the availability of grants
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1 under this Act, and shall take such other actions as may be
2 necessary to provide notice to the public concerning the
3 availability of such grants.
4 EXEMPTIONS FROM CERTAIN PROVISIONS OF LAW
5 SEC. 10. (a) The Federal Advisory Committee Act shall
6 not apply to any regulatory negotiation commission estab-
7 lished pursuant to this Act.
8 (b) Notwithstanding any other provision of law, no writ-
9 ten or oral communication-
10 (1) between the members or staff of a regulatory
11 negotiation commission and the staff of an agency;
12 (2) the members of a regulatory negotiation com-
13 mission or their staff; or
14 (3) between any person and a regulatory negotia-
15 tion commission and its staff;
16 shall be regarded as an improper ex parte communication
17 subject to any sanction imposed by statute, regulation, or ju-
18 dicial precedent.
19 (c) Information or records submitted to a regulatory ne-
20 gotiation commission shall not be regarded as agency records
21 for purposes of section 552(a)(3) of title 5, United States
22 Code.
23 (d) The members of a regulatory negotiation commission
24 and any mediator of such commission shall not be regarded as
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1 employees or agents of the United States solely because of
2 their participation in the commission.
3 STAFF FACILITIES AND RESEARCH
4 SEC. 11. (a)(1) The Chairman of the Administrative
5 Conference of the United States is authorized to-
6 (A) employ an individual to carry out the duties of
7 the Chairman under section 5(b); and
8 (B) subject to paragraphs (2), (3), and (4), enter
9 into contracts with individuals to serve as mediators for
10 regulatory negotiation commissions.
11 (2) The Chairman may not enter into any contract under
12 paragraph (1)(B) with an individual if such individual-
13 (A) may represent any interest with respect to the
14 issue to be considered by a regulatory negotiation com-
15 mission in developing a proposed rule; and
16 (B) is a member of, or is associated with, any or-
17 ganization which may represent such an interest.
18 (3) The Chairman may compensate any individual em-
19 ployed under paragraph (1)(B) at a daily rate equal to the
20 maximum daily rate of pay for level 15 of the General Sched-
21 ule under section 5332 of title 5, United States Code.
22 (4) The authority of the Chairman to enter into con-
23 tracts under this subsection shall be to such extent or in such
24 amounts as are provided in appropriation Acts.
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1 (b) A regulatory negotiation commission is authorized to
2 utilize the services and facilities of Federal agencies and
3 public and private agencies and instrumentalities with the
4 consent of such agencies and instrumentalities and with or
5 without reimbursement to such agencies, and to accept vol-
6 untary and uncompensated services without regard to the
7 provisions of section 1342 of title 31, United States Code.
8 (c) Members of a regulatory negotiation commission may
9 agree to share the research and scientific and technical data
10 available to such members.
11 AUTHORIZATION OF APPROPRIATIONS
12 SEC. 12. To carry out this Act, there are authorized to
13 be appropriated to the Conference not in excess of
14 $1,000,000 for each of the fiscal years 1985, 1986, and
15 1987.
0
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August 4, 1983 CONGRESSIONAL RECORD - SENATE
graphs (9) and (10) of section 103A (1) shall
apply.
"(3) MORTGAGE MAY NOT EXCEED VALUE OF
RESIDENCE.-The principal amount of any
qualified first or second mortgage on any
residence, when added to the aggregate out-
standing principal amount of all previous
such mortgages on such residence, shall not,
on the date such mortgage is issued, exceed
the fair market value of such residence on
such date.
"(4) CONSTRUCTION LOANS NOT PERMITTED.-
The term 'qualified first or second mort-
gage' shall not include any construction
loan.
"(5) ORIGINAL ISSUE DISCOUNT.-Except to
the extent provided in regulations pre-
scribed by the Secretary, the term 'qualified
first or second mortgage' does not include
any mortgage originated with an original
issue discount.
"(C) QUALIFIED PARTICIPATION.-The term
'qualified participation' means any partici-
pation in any mortgage or pool of mortgages
but only if-
"(1) such mortgages would be qualified
first or second mortgages if held directly by
the TIM, and
"(2) the mortgages of such mortgages
remain the primary obligors.
"(d) QUALIFIED REPURCHASE OBLIGA-
TIONs.-The term 'qualified repurchase obli-
gation' means any qualified first or second
mortgage which is subject to a repurchase
agreement under which-
"(1) any amount payable to the TIM does
not exceed the payments due on the mort-
gage subject to the agreement.
"(2) such TIM purchases such mortgage
for not more than the fair market value of
such mortgage, and
"(3) the amount paid for repurchase is
fixed at the time the agreement is entered
into. -
"(e) QUALIFIED INCOME INVESTMENTS.-
"(1) IN GENERAL.-The term 'qualified
income investment' means any security,
letter of credit, certificate of deposit, surety
bond, or other similar instrument or device
which-
"(A) is acquired during the 18-month
period beginning on the date the TIM is in-
corporated or formed, and
"(B) is acquired-
"(1) to provide cash to meet fixed obliga-
tions of such TIM which cannot be met
from investments in other qualified obliga-
tions, or
"(ii) to provide income to the TIM to
? offset income which is lost by reason of the
prepayment or liquidation (other than by
sale by such TIM) of any qualified obliga-
tion before maturity.
"(2) TERMINATION AS QUALIFIED OBLIGA-
TION.-Any qualified income investment
shall not be treated as a qualified obligation
after the earlier of-
"(A) the date which is 7 years after a TIM
is incorporated or formed, or
"(B) in the case of such a TIM with a
fixed term, the date on which the first one-
third of such term has expired.".
(b) CONFORMING AMENDMENT.-The table
of parts for subchapter M of chapter 1 of
such Code is amended by adding at the end
therof the following new part:
"PART IV-TRUSTS FOR INVESTMENTS IN
MORTGAGES.".
SE(' 2. TAX ON PROHIBITED TRANSACTIONS OF
TIMS.
(a) IMPOSITION OF TAX.-Chapter 44 of the
Internal Revenue Code of 1954 (relating to
excise tax on real estate investment trusts)
is amended by adding at the end thereof the
following new section:
"SEC. 4982. EXCISE TAX ON PROHIBITED TRANSAC.
TIONS OF TIMS.
"(a) IMPOSITION OF TAx.-There is hereby
imposed on each prohibited transaction of a
TIM a tax in an amount equal to the gain or
loss allocable to such transaction.
"(b) PROHIBITED TRANSACTION DEFINED.-
For purposes of this section, the term 'pro-
hibited transaction' means the disposition
by a TIM of
"(1) any qualified obligation held by such
TIM for less than 3 years, or
"(2) any qualified obligation which is-
"(A) held by the TIM for 3 years or more,
and
"(B) described in section 1221(1).
"(C) EXCEPTION FROM PROHIBITED TRANSAC-
TIONS.-
"(1) IN GENERAL.-A disposition shall not
be treated as a prohibited transaction if- '
"(A) such disposition is in connection with
the prepayment, retirement, or renegota-
tion of a qualified obligation,
"(B) such disposition is of-
"(I) any defective qualified obligation,
"(ii) foreclosure property, or
"(iii) qualified short-term investment, or
"(C) such disposition is in connection with
the involuntary liquidation or dissolution of
a TIM.
"(2) CERTAIN TRANSACTIONS NOT TREATED AS
PROHIBITED TRANSACTIONS.-Paragraph (2) of
subsection (b) shall not apply to any quali-
fied obligation described in such paragraph
for any taxable year if-
"(A) not more than 20 percent of the ag-
gregate face amount of all such qualified ob-
ligations are disposed of during such taxable
year,
"(B) not more than 50 percent of the ag-
gregate face amount of all such qualified ob-
ligations are disposed of during taxable
year, but not more than 5 obligations are
disposed of during such taxable year, or
"(C) the disposition is-
"(I) pursuant to a bulk sale as part of a
plan of complete liquidation, and
"(ii) by a TIM which has been a TIM for a
least 3 taxable years before such disposition.
"(d) QUALIFIED SHORT-TERM INVEST-
MENTS.-
"(1) IN GENERAL.-For purposes of this sec-
tion, the term 'qualified short-term invest-
ment' means any qualified obligation
which-
"(A) is designated by a TIM as a qualified
short-term investment on the date such ob-
ligation is acquired,
"(B) is held by a TIM for less than 180
days (or if longer than 180 days, is held to
maturity), and
"(C) the proceeds of which are-
"(I) used to acquire other qualified obliga-
tions, or
"(ii) distributed by the TIM to its share-
holders.
"(2) SPECIAL RULE FOR REINVESTMENT
DURING PHASE-IN PERIOD.-Notwithstanding
paragraph (1), during the 18-month period
beginning on the date a TIM is incorporated
or formed, proceeds from the disposition of
a qualified short-term investment may be
invested in other qualified short-term in-
vestments.
"(e) DEFINITION.-For purposes of this sec-
tion-
"(1) TIM; QUALIFIED OBLIGATIONS.-The
term 'TIM' and 'qualified obligation' have
the same meanings as when used in part IV
of subchapter M of chapter 1.
"(2) FORECLOSURE PROPERTY.-The term
'foreclosure property' has the same meaning
given such term by section 856 (e) without
regard to whether such property is held by
a real estate investment trust.".
"(b) CONFORMING AMENDMENTS.-The table
of sections for chapter 44 of the Internal
Revenue Code of 1954 is amended-
S 11787
(1) by inserting "AND TIMS" after
"TRUSTS" in the heading thereof, and
(2) by adding at the end thereof the fol-
lowing new item:
"SEC. 4982. Excise tax on prohibited transac-
tions of TIMS.".
bill to provide for an alter-
n tive V the present adversarial rule-
mdk4rl- procedure by establishing a
process to facilitate the formation of
regulatory negotiation commissions; to
the Committee on Governmental Af-
fairs.
REGULATORY NEGOTIATION ACT OF 1983
Mr. LEVIN. Mr. President, I am
pleased to introduce today a bill that
provides for an alternative to the
present adversarial rulemaking proce-
dure by facilitating the use of a proc-
ess called regulatory negotiation.
The current approach to regulatory
policymaking has evolved ' into a very
adversarial and litigious process. Af-
fected businesses, interest groups, and
regulatory agencies all tend to adopt
antagonistic postures during the pro-
mulgation and implementation of Fed-
eral regulations. Thus, it is not sur-
prising that the policies and regula-
tions that result are often considered
inappropriate and ineffective by both
business and interest groups and that
litigation and conflict have become an
integral and inevitable part of the
process. The resulting regulatory
policy crisis has become so severe that
innovative alternatives are needed to
encourage a more cooperative and pro-
ductive process, where as many
common positions as possible can be
reached and incorporated into regula-
tions.
One of the most exciting and prom-
ising new approaches to the regulatory
policy procedure is a process called
regulatory negotiation. Regulatory ne-
gotiation operates on the premise that
industry, government, and interested
groups can sit down together and, with
the aid of a mediator, attempt to fash-
ion a consensus in areas of mutual
concern. The basic notion is that if re-
sponsible people commit themselves to
find points of agreement in a coopera-
tive atmosphere, regulations can be
designed which better meet true policy
needs, and needless conflict and delay
can be avoided.
The need for such an approach is ap-
parent. Regulations often create anxi-
ety among the parties who have an in-
terest in their promulgation and im-
plementation. Business often sees reg-
ulations as limiting its freedom to
function as it desires. Other interested
groups believe that the public welfare
is sacrificed in the regulatory process
and that interest groups are not repre-
sented and not heard. Legislators, who
thought the problem was solved when
they adopted legislation are faced with
a continuing battle throughout the
rulemaking and enforcement process.
If a party has little or no role in the
formulation of a rule, it has little or
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S 11788 CONGRESSIONAL RECORD - SENATE
no vested interest in following that
rule.
Attempts to use regulatory negotia-
tion as an alternative have been suc-
cessful in several areas, most recently
in the area of environmental issues.
The most recent environmental ne-
gotiation involved the Environmental
Protection Agency (EPA), the steel in-
dustry and the Natural Resources De-
fense Council (NRDC).
In May 1982, the EPA proposed in
"final" form a rather controversial
regulation on the control of water pol-
lution in the steel industry. The law
set July 1984, as the deadline for com-
panies to limit their water pollution to
levels at or below those attainable
with the "best available technology,
economically achieveable." Of ap-
proximately 700 specifications out-
lined in the regulation, the industry
challenged about 30 of them as being
based on faulty information. In addii-
ton, the NRDC challenged the EPA's
use of a "bubble" concept that would
have allowed companies to make cost-
saving tradeoffs among effluent
sources so long as the aggregate pollu-
tion result was no worse. Inevitably
the matter landed in the courts.
However, in October 1982, the par-
ties began a negotiation process in an
effort to avoid the delays and conflicts
of litigation. On the one hand, indus-
try was concerned about ending the
uncertainty attendant to the incom-
plete regulatory process and on the
other hand, the NRDC and the envi-
ronmentalists were concerned with ex-
pediting matters because the steel in-
dustry regulations were to be the fore-
runners to many industrywide regula-
tions.
In a settlement reached in late Feb-
ruary of this year, the steel industry
won concessions on the technical num-
bers, the NRDC and the environmen-
talists won a modification of the
"bubble" provision, and costly and
time-consuming litigation was avoided.
The most well-known regulatory ne-
gotiation success story is probably
that of the national coal policy project
(NCPP). The NCPP was an outgrowth
of the recognition that it was impor-
tant for the United States to shift
from oil and natural gas to coal. In
order to accomplish this, there had to
be a reconciliation of environmental
and industrial interests.
In July 1976, business representa-
tives and environmentalists endorsed
the regulatory negotiation concept
and agreed to pursue important coal
related environmental and energy
policy issues using this approach.
The participants in the negotiations
used the following principles known as
the "rules of reason" to resolve differ-
ences and develop workable solutions:
First. Data should not be withheld
from the other side.
Second. Delaying tactics should not
be used.
Third. Tactics should not be used to
mislead.
Fourth. Motives should not be im-
pugned lightly.
Fifth. Dogmatism should be avoided.
Sixth. Extremism should be coun-
tered forcefully but not in kind.
Seventh. Integrity should be given
first priority.
The Georgetown University Center
for Strategic and International Stud-
ies (CSIS) served as the neutral meet-
ing place for the project participants.
It also raised funds and provided ad-
ministrative support for the project.
The project itself was financed by
grants and contributions from founda-
tions, Government agencies, and in-
dustry.
Five task forces were established to
cover the following coal policy issues:
mining, transportation, air pollution,
fuel utilization and conservation, and
energy pricing. The governing body
for the project was called the plenary
group and was made up of task force
cochairmen and vice cochairmen. The
duties of the plenary group were to
define the nature and scope of the
project, provide guidance, review and
finally approve task force recommen-
dations, and resolve task force dis-
putes. Of the 200 task force recom-
mendations 90 percent we unanimous-
ly achieved.
The NCPP report found that the
project was very successful in dispel-
ling stereotypes:
Quite apart from the substance of the rec-
ommendations, the project has been valua-
ble in disspelling stereotypes. Those envi-
ronmentalists who had previously regarded
the position of industry on environment and
energy issues as being monolithic and
intransigent were rather quickly disabused
of that notion. This was largely because of
the differing perspectives of the industry
members. For example, producers of fuel,
regulated utilities and industrial users of
large quantities of energy each tended to
have different interests and views on ques-
tions of energy pricing.
In similar fashion, those industrialists
who expected the environmentalists to be
opposed to economic growth and to the in-
troduction of new technology, and in favor
of governmental rather than marketplace
decisions on the allocation of resources,
were pleasantly surprised to find that their
suppositions were incorrect. The environ-
mentalists opposed a pattern of growth that
produced wasteful use of natural resources
and an environmental impact which they
felt was unacceptable; they did not oppose
economic growth in itself. They welcomed
new technology that would serve to increase
efficiency and reduce adverse environmental
impacts and demands on natural resources.
They preferred marketplace decisions to
economic regulation by government when
markets are workably competitive; when
this was not the case, or when Important
(external) environmental and social impacts
were not properly valued in the market, the
environmentalists were eager to explore
methods of influencing the market (as with
emission charges) so that the desired goals
would be achieved while retaining the ad-
vantages of keeping detailed decisions in the
private sector.
The report stated further that:
We are not proposing that the process of
discussion and negotiation in which we have
participated should replace the adversary
August 4, 1983
process. Indeed many of the policy recom-
mendations on which we have agreed would
have to be implemented through the tradi-
tional adversary system; that is, they re-
quire action by legislative and judicial
bodies . . . there are others that simply do
not lend themselves to negotiated agree-
ments.
We believe, however, that exclusive reli-
ance on adversial processes is likely to pro-
duce decisions that are less desirable (from
the point of view of either of the parties)
than those in which a common position
serving both interests could have been
agreed to in a non-adversial context.
The NCPP recommendations have
received agency support from the
Office of Surface Mining (OSM) and
the Federal Energy Regulatory Com-
mission (FERC). OSM adopted word-
for-word project recommendations re-
garding bonding concerns and oper-
ations. FERC adopted the coal genera-
tion and small power recommenda-
tions.
Two bill were also introduced in May
1980: H.R. 7464 and H.R. 7465, which
adopted the recommendations that
called for the use of incentives to de-
velop pollution control technology and
the development of plant siting proce-
dures.
In addition to the two projects that I
have just mentioned, regulatory nego-
tiation has been tried in the environ-
mental area of toxic substances. The
Conservation Foundation was involved
in this approach during the implemen-
tation of the Toxic Substances Control
Act (TOSCA).
Specifically, approximately 13 busi-
ness persons and environmentalists
met to discuss the training of toxicol-
ogists, the testing of new chemicals
and the prioritizing of what chemicals
should be tested and the nature and
scope of agency followup on the
chemical after it reaches the market.
With respect to the testing of new
chemicals, the Conservation Founda-
tion's committee made four recom-
mendations:
First. That a conceptual framework
for a testing program be developed to
test chemicals using a tier system.
Second. That all relevant aspects of
the potential impact on human and
animal health be tested, starting with
inexpensive tests and ending with
more complex tests.
Third. That the tests within the tier
be required on a selective and neces-
sary basis.
Fourth. That tier 0, the first tier,
should be viewed as a minimal test-
therefore, all substances should be
tested under the first two tiers at a
minimum.
The EPA is now developing guide-
lines-regulations-to effectuate the
first recommendations.
In the area of labor relations, regula-
tory negotiations have also emerged.
For example, the joint labor manage-
ment-committee for the retail food in-
dustry utilized the process to reach an
agreement on an OSHA regulation for
protective equipment for employees in
the meat department of supermarkets.
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August 4, 1983 CONGRESSIONAL RECORD - SENATE
This concensus took several months of
hard work but once labor and manage-
ment agreed, the two groups were able
to reach an agreement with OSHA.
On July 29 and 30, 1980, the Sub-
committee on Oversight of Govern-
ment Management, of which I was the
chairman, and the Select Committee
on Small Business, of which I was a
member, held a hearing on the regula-
tory negotiation approach. We re-
ceived testimony from representatives
of both the private and public sectors
who have had specific experiences in
regulatory negotiations, including the
NCPP, the Conservation Foundation,
and the EPA. These witnesses support-
ed regulatory negotiation as a valuable
aid to achieving more flexible and
workable regulatory policy and sug-
gested ways to strengthen the process.
The bill reflects many of these sug-
gestions, as well as the suggestions of
other experts in the private sector
who have been involved in the regula-
tory negotiation process in several dif-
ferent areas. The bill also reflects
some of the recommendations of De-
partment of Transportation that is
currently Involved in regulatory nego-
tiations between the FAA, the airlines,
and pilot association on the subject of
pilot flight time and scheduling.
Essentially the bill creates a process
for establishing regulatory negotiation
commissions. These commissions are
composed of balanced interests in the
area being reviewed. These commis-
sions are to develop a proposed rule
representing a consensus of the com-
missions' participants.
The bill gives the Administrative
Conference of the United States
(ACUS) and its Chairperson the re-
sponsibility of administering the pro-
gram. A $1 million fund is authorized
to fund the program for each of the 3
years be i n 1985.
commission would be a viable means of
developing a proposed rule, the Chair
man will announce in the Federal Reg-
ister, along with the agency involved,
the intention to establish a regulatory
negotiation commission. The Chair-
man will then accept applications for
participation on the commission from
interested parties.-The Chairman may
also suggest that an interested party
seek a grant from the Conference if it
is determined that the party is eligible
for participation but unable to afford
the expense of such participation.
Grants would be available to not only
assist participants, but also to cover
commission. S. 1823
~` Be U. enacted by the Senate and House of
Representatives of the United States of
m America in Congress assembled, That this
Act may be cited as the "Regulatory Negoti-
ation Act of 1983".
SEC.
The bill outlines the status and
function of the parties during the
process, and makes the agency an
equal voting member. The commission
would also have the responsibility of
reporting to the agency, ONB, and the
Congress on the results of the negotia-
tion.
Upon receipt of the commission's
report, the agency must comment on
the report and is permitted to amend
and modify the proposed rule, if it
feels that amendments or modifica-
tions are necessary. However, it must
give the commission and the public an
opportunity to review and comment on
the proposed rule and any amend-
ments or modifications.
The NCPP and the environmental
negotiations demonstrate the vital
progress that can result from regula-
tory negotiation. Yet, despite the
promise that this approach holds, its
use has been limited. The failures, to
use regulatory negotiation more fre-
quently stems in part from our tradi-
tional reliance on the adversarial pro-
ceedings and in part from the possible
costs involved in the process.
Expanding the use of regulatory ne-
gotiation will require some encourage-
ment from the regulators. Private par-
ties need to know that there is a proc-
ess and funds available to meet the
cost of negotiation and facilitate the
establishment of a workable negotia-
tion mechanism. This will enable
many parties in the private sector to
participate in the process who would
otherwise be left out and demon-
strates that the Government will take
the results seriously and insures that
the negotiation will be fairly and im-
partially structured so that all points
of view can be effectively represented.
The program envisioned in this bill
will give the concept of regulatory ne-
gotiation impetus and the initial fund-
ing it needs and deserves. Moreover, in
the next few years, several major regu-
latory policy decisions will be made in
several areas. Certainly the time for a
less adversarial and more productive
approach to regulatory policymaking
can be no more urgent than it is now.
I view this bill as a unique opportu-
nity to foster more effective and ap-
propriate regulations and to reduce
.conflict and delay in the regulatory
process. I hope that you share this
view and that you will join me in sup-
porting it.
Mr. President, I ask unanimous con-
sent that the text of the bill be print-
ed in the RECORD.
There being no objection, the bill
was ordered to be printed in the
S 11789
FINDINGS
2. The Congress finds and declares
that:
(1) Government regulation of the econo-
my has increased rapidly since the enact-
ment of the Administrative Procedure Act.
(2) Although this increase in regulation
has had commendable purposes, it has been
accompanied by a formalization of the rule-
making process which has frequently result-
ed in unjustifiably expensive, contradictory,
and often counterproductive rules.
(3) The adversarial nature of the rule-
making process has often resulted in unnec-
essary regulations which have a significant
adverse effect on the economy. -
(4) In the current rulemaking process, the
parties often assume antagonistic positions
and the best solutions to the problems
under consideration are often ignored by
the parties since the parties act in a manner
which maintains their bargaining positions.
(5) In the current rule making process, the
parties rarely have the opportunity to meet
as a group and communicate directly with
each other, and the lack of this opportunity
effectively limits the ability of the parties to
reach agreement on a rule that fulfills the
intent of Congress and is acceptable to all
parties.
(6) The adversarial nature of the rule
making process frequently limits the extent
to which the expertise, technical ability,
and great resources of persons working in a
regulatory area are used to solve the prob-
lem under consideration.
PURPOSE
SEC. 3. The purpose of this Act is to estab-
lish an alternative rule making procedure
which permits the establishment of regula-
tory negotiation commissions that can be
used in appropriate circumstances to permit
direct participation of interested parties in a
rule making, the negotiation of regulatory
policy by such parties, and the development
of rules that represent a consensus of the
members of the commission.
DEFINITIONS
SEC. 4. For purposes of this Act-
(1) the term "agency" has the same mean-
ing as in section 551 (1) of title 5, United
States Code;
(2) the term "person" has the same mean-
ing as in section 551 (2) of such title;
(3) the term "party" has the same mean-
ing as in section 551 (3) of such title;
(4) the term "rule" has the same meaning
as in section 551 (4) of such title;
(5) the term "rule making" has the same
meaning as in section 551 (5) of such title:
(6) the term "Conference" means the Ad-
ministrative Conference of the United
States;
(7) the term "Chairman" means the
Chairman of the Administrative Conference
of the United States;
(8) the term "consensus" means a unani-
mous agreement among all interests repre-
sented in the negotiation of a proposed rule
under this Act, and does not mean a unani-
mous agreement among all individual mem-
bers involved in the negotiation;
(9) the term "interest" means a position
with respect to an issue that may be consid-
ered by a regulatory negotiation commission
and that may be represented by one or more
persons;
(10) the term "mediator" means the indi-
vidual selected to mediate discussions be-
tween the members of a regulatory negotia-
tion commission and to facilitate communi-
cations between such members in the devel-
opment of a proposed rule;
(11) the term "member" means a person
who is a member of a regulatory negotiation
commission; and
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S 11790 CONGRESSIONAL RECORD - SENATE
(12) the term "regulatory negotiaton com-
mission" means a voluntary group estab-
lished by the Conference in accordance with
this Act to consider issues for the purpose
of reaching a consensus in the development
of a proposed rule.
REQUEST FOR REGULATORY NEGOTIATION
COMMISSION
SEC. 5. (a) An agency or a person who is
qualified to represent an interest with re-
spect to an issue may request the Chairman
to determine whether to recommend to the
agency having jurisdiction over the develop-
ment of a proposed rule with respect to
such issue that a regulatory negotiation
commission be established to develop such a
proposed rule. The request shall explain the
reasons why the agency or person believes
that the use of a regulatory negotiation
commission would be an appropriate
method of developing a proposed rule.
(b) The Chairman shall consider each re-
quest made under subsection (a) for the es-
tablishment of a regulatory negotiation
commission to develop a proposed rule with
respect to a particular issue. If the Chair-
man determines that there is a substantial
likelihood that the agency having jurisdic-
tion over the development of such a rule
will seriously consider issuing a proposed
rule relating to such issue, the Chairman
may conduct an informal investigation with
respect to the advisability of establishing a
regulatory negotiation commission to devel-
op such a proposed rule. In conducting such
an investigation, the Chairman may consid-
er and make determinations concerning-
(1) whether there are a limited number of
interests which would be substantially af-
fected by a proposed rule relating to the
issue;
(2) whether persons can be selected as
members of a regulatory commission who
would represent the interests identified pur-
suant to paragraph (1), including recom-
mendations for persons to be selected;
(3) whether the persons recommended for
selection as members of a regulatory negoti-
ation commission would be willing to make a
commitment to negotiate in good faith to
reach a consensus on a proposed rule con-
cerning such issue;
(4) whether the agency having jurisdiction
over the development of such a proposed
rule would use the regulatory negotiation
commission to develop such rule;
(5) the scope of the issues to be considered
by the regulatory negotiation commission in
developing such rule; and
(6) a preliminary schedule for the comple-
tion of the work of the regulatory negotia-
tion commission.
(c) Within sixty days after receiving a re-
quest under subsection (a) with respect to
the development of a proposed rule concern-
ing an issue, the Chairman shall report to
the Conference and the agency having juris-
diction over the development of such a pro-
posed rule the determinations of the Chair-
man under subsection (b) and the recom-
mendations of the Chairman as to whether
a regulatory negotiation commission should
be established to develop such a proposed
rule.
(d) The Chairman, with the advice of the
agency having jurisdiction over the develop-
ment of a proposed rule with respect to an
issue for which a request is submitted under
subsection (a), shall have complete discre-
tion in determining the subjects to be con-
sidered by any regulatory negotiation com-
mission established to develop such a rule.
Any determination by the Chairman with
respect to the subjects to be considered by a
regulatory negotiation commission shall not
be subject to judicial review in any court.
USE OF REGULATORY NEGOTIATION COMMISSION
SEC. 6. (a) If, on the recommendation of
the Chairman, an agency decides to use a
regulatory negotiation commission, the
agency shall publish in the Federal Register
a notice concerning the proposed use of
such commission in the development of a
proposed rule. Such notice shall include-
(1) an announcement that the agency in-
tends to use a regulatory negotiation com-
mission in the development of the proposed
rule;
(2) a general description of the subject
matter to be considered by the regulatory
negotiation commission; and
(3) a list of mediators compiled and ap-
proved by the Conference, from which per-
sons applying for membership on the com-
mission may select a proposed mediator.
(b)(1) For a period of at least thirty days
after the date on which the agency pub-
lishes a notice with respect to a regulatory
negotiation commission under subsection
(a), the Chairman shall accept applications
from persons who are qualified to represent
an interest on the commission. Each such
application shall specify-
(A) the name of the person submitting the
application and a description of the interest
such person will represent;
(B7 the persons recommended for mem-
bership on the commission and the reasons
of the applicant for such recommendations;
(C) whether a mediator will be needed by
the commission, and, if necessary, the name
of a proposed mediator;
(D) recommendations for the issues to be
considered by the commission;
(E) recommendations for rules for the op-
eration of the commission;
(F) a proposed organizational plan and a
proposed agenda for the commission;
(G) a proposed schedule for completing
the work of the commission; and
(H) a written commitment that the appli-
cant will-
(i) negotiate the issues under considera-
tion by the commission in good faith; and
(ii) produce a report on the negotiation
within a time period appropriate to the
issues under consideration.
(2) In order to ensure that all interests, in-
cluding interests represented by public in-
terest groups, have an adequate opportunity
to participate in a regulatory negotiation
commission, the Chairman may suggest that
a person submitting an application under
paragraph (1) request a grant under section
9 of this Act to pay the expenses that will
be incurred by such person as a result of
participation on the regulatory negotiation
commission.
(c) during the period in which the Chair-
man is accepting applications under subsec-
tion (b)(1), an agency which published a
notice under subsection (a) with respect to a
regulatory negotiation commission shall
submit to the Chairman a written sta~ement
specifying-
(1) the name and position of a senior offi-
cial of the agency who will represent the
agency or the commission;
(2) whether a mediator will be necessary
for the commission, and, if necessary, the
name of a proposed mediator:
(3) the persons recommended for member-
ship on the commission and the reasons of
the agency for such recommendations;
(4) recommendations for the issues to be
considered by the commission;
(5) recommendations for rules for the op-
eration of the commission;
(6) a proposed organizational plan and a
proposed agenda for the commission;
(7) a proposed schedule for completing the
work of the commission; and
(8) a written commitment that the agency
will-
August 4, 1983
(A) negotiate the issue under considera-
tion by the commission in good faith; and
(B) produce a report on the negotiation
within a time period appropriate to the
issues under consideration.
(d) After the period for applications for
membership on a regulatory negotiation
commission under subsection (b) has ex-
pired, the Chairman shall consider all of the
applications submitted under such subsec-
tion and the statement submitted by the
agency under subsection (c). If, after consid-
ering such applications and statement, the
Chairman determines that all necessary in-
terests will be represented on the regulatory
negotiation commission for which the appli-
cations are made and that person represent-
ing such interests will have an opportunity
to contribute to the negotiation of a pro-
posed rule, the Chairman shall announce
the establishment of such a commission in
accordance with subsection (e).
(e) The Chairman shall announce the es-
tablishment of a regulatory negotiation
commission for the development of a pro-
posed rule through publication in the Fed-
eral Register and through notices in appro-
priate journals, newsletters, and other
media. Such announcement shall include-
(1) a description of the issue to be consid-
ered by the commission;
(2) a tentative list of the subjects to be
considered by the commission in negotiating
with respect to the issue described pursuant
to in paragraph (1);
(3) the name and position of the senior of-
ficial of the agency having jurisdiction over
the development of such a rule who is pro-
posed to represent the agency on the com-
mission;
(4) the name of each person proposed for
selection as a member of the commission,
and a specification of the interest to be rep-
resented by each such member;
(5) the name of a proposed mediator for
the commission, if any;
(6) a proposed schedule for the comple-
tion of the work of the commission; and
(7) a request that members of the public
comment on the proposed commission, in-
cluding comments on-
(A) whether each appropriate interest will
be represented on the commission;
(B) the persons selected to represent each
such interest;
(C) the official proposed to represent the
agency; and
(D) the issues to be considered by the
commission.
(f) For a period of at least thirty days
after the date on which the notice required
under subsection (e) is published in the Fed
eral Register, the Chairman shall accept
comments from the public with respect to
the matters specified in such notice. The
Chairman, with the advice of the agency
having jurisdiction over the proposed rule
to be developed by the commission, shall
consider all relevant matter and comments
submitted, and may notify the proposal for
the use of a regulatory negotiation commis-
sion specified in such notice with the agree-
ment of the agency and the members pro-
posed by the Chairman in such notice to
represent the major interests on the com-
mission.
(g) The agency shall publish in the Feder-
al Register a final notice concerning the es-
tablishment of a regulatory negotiation
commission to develop a proposed rule. The
notice shall specify the matters described in
paragraphs (1) through (6) of subsection (e)
with respect to the regulatory negotiation
commission that will be established.
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August 4, 1983 CONGRESSIONAL RECORD - SENATE
S 11791
PROCEDURES FOR REGULATORY NEGOTIATION rule, the report shall specify the areas in GRANTS FOR REGULATORY NEGOTIATION
COMMISSIONS which the commission reached a consensus, coseMrssroNS
SEC. I. (a) Each regulatory negotiation the areas of disagreement among the com- SEC. 9. (a) In order to carry out the pur-
commission established pursuant to this Act mission, and such recommendations and poses of this Act, the Conference, through
shall consider the subjects specified by the background material the commission may the Chairman, shall make grants to-
Chairman for consideration by the commis- consider appropriate. (1) regulatory negotiation commissions for
lion and shall attempt to reach a consensus (g) Any meeting of a regulatory negotfa- the payment of administrative expenses of
concerning a proposed rule with respect to Lion commission shall be open to the public, such commissions; and
such issues. unless a majority of members of the (b) The official representing the commission determine be vote that a closed (2) members of a regulatory negotiation
agency commission who are unable to afford to pay
on a regulatory negotiation ation commission meeting is necessary to achieve the pus- the costs of participation in the commission.
shall participate in the deliberations and ac- poses of the commission Each open meeting (b) The Chairman shall announce
tivities of the commission as a voting shall be announced at least fifteen days through publication in the Federal Register
member who is eaual to all other .nemhe.e orior to the date of the meetino in the we,L_
~..a..
(c)(1) Any mediator selected by the Chair- be prepared of each such meeting.
man for a regulatory negotiation commis- (h)(1) A regulatory negotiation commis-
sion shall- Sion which developed a proposed rule shall
(A) chair the meetings of the commission; be terminated-
(B) assist the members of the commission (A) on the date on which the agency that
in conducting discussions; participated in the commission publishes a
(C) keep the Congress informed of the ac- notice of proposed rulemaking under section
tivities of the commission; and ? 8(a) for such proposed rule; or
(D) assist in the deliberations of the com- (B) in any case In which the agency
mission. chooses not to publish. a notice of proposed
a mediator shall not vote on any matter rule making for such proposed rule, an a
before the commission or participate in any date determined by the Chairman which
agreement made by the commission, occurs-
(2) If the Chairman has not selected a me- (I) after the commission has had an oppor-
diator for a regulatory negotiation commis- tunity to comment on the agency action
lion, the commission shall elect a chairper- with respect to such proposed role; and
son from among its members to carry out (ii) after the commission has transmitted
the functions of a mediator described in the report required under subsection (f) to
paragraph (1). A chairperson elected under the committees of the Senate and the
this paragraph shall be entitled to vote on House of Representatives referred to In
any matter before the commission and par- such subsection.
ticipate in any agreement made by the com- (2) A regulatory 'negotiation commission
mission. which did not develop a proposed rule shall
(d) Whenever possible, not more than fif- terminate fifteen days after the date an
teen members of a regulatory negotiation which the commission transmits the report
commission shall participate in the delibera- required by subsection (f) to the committees
tions of the commission at any one time. of the Senate and the House of Represent--
The total number of members of a regular tives referred to in such subsection.
tory negotiation commission may exceed fif-
teen. AGRNCY ACTION
(e) A regulatory negotiation commission SEC. 8. (a) An agency shall publish in the
may change its membership, rules, or Federal Register a notice of proposed rule
agenda if a majority of the interests repre- making in accordance with section 553 of
sented on the commission agree to such title 5, United States Code, for any proposed
change and if the commission submits such rule developed by a regulatory negotiation
change to the Chairman for review. If the commission unless the agency determines
newsletters, and other media, the availabil-
ity of grants under this Act, and shall take
such other actions as may be necessary to
provide notice to the public concerning the
availability of such grants.
EXEMPTIONS FROI4'CERTAIN PROVISIONS OF
LAW
SEC. 10. (a) The Federal Advisory Commit-
tee Act shall not apply to any regulatory ne-
gotiation commission established pursuant
to this Act.
(b) Notwithstanding any other provision
of law, no written or oral communication-
(1) between the members or staff of a reg?
ulatory negotiation commission and the
staff of an agency;
(2) the members of a regulatory negotia-
tion commission or their staff; or
(3) between. any person and a regulatory
negotiation commission and its staff;
shall be regarded as an improper ex parte
communication subject to any sanction im-
posed by statute, regulation, or judicial
precedent.
(c) Information or records submitted to a
regulatory negotiation commission shall not
be regarded as agency records for purposes
of section 552(aX3) of title 5, United States
Code.
(d) The members of a regulatory negotia-
tion commission and any mediator of such
commission shall not be regarded as employ.
ees or agents of the United States solely be-
cause of their participation In the commis-
sion.
Chairman determines that any such change that there is good cause for not publishing STAFF FACILITIES AND RRSEWRCII
will substantially impair the ability of the such notice The agency may propose SEC. 11. (a)(1) The Chairman of the Ad-
commission to carry out the purposes of this amendments to or modilicatims to the pro- ministratfve Conference of the United
Act, the Chalrtmn may- posed rule developed by the regulatory ne- States is authorized to-
(1) suggest additional changes in the gotiation Commission and shall publish such (A) employ an Individual to carry out the
membership, rules, or agenda of the com- amendments or modifications in the Federal duties of the chairman under section 5(b);
mission in order to assure consistency with Register with the notice of proposed rule and
the purposes of this Act; or making. The agency may publish with such (B) subject to paragraphs (2), (3), and (4),
(2) require that the commission, and any notice such additional explanatory material enter into contracts with individuals to
members thereof, repay the Government as the agency considers appropriate. serve as mediators for regulatory negotia-
the amount of any grant provided under (b) The agency shall make available the tion commissions,
this Act which has not been obligated or ex- report transmitted under section 7(f) by the (2) The Chairman may not enter into any
pended. regulatory negotiation commission concern- contract under paragraph (1XB) with an in-
The Chairman may not require a commis dog the proposed rule developed by such dividua) if such Individual-
sion to make repayment under paragraph commission. (A) may represent any interest with re-
(2) of this subsection unless the.Chairman (c) The agency shall allow a period of at spect to the issue to be considered by a regu-
determines that efforts by the commission least thirty days for the public to review latory negotiation commission in developing
to assure consistency with the purposes of and comment on- a proposed rule; and
this Act have failed (1) the notice of proposed rule making (B) is a member of, or is associated with,
(f) At the conclusion of negotiations, each Published under subsection (a) any organization which may represent such
regulatory negotiation commission shall (2) any amendments or modifications pro- an interest.
prepare and transmit to the Chairman, the posed by the agency under such subsection (3) The Chairman may compensate any
head of the agency participating in the com- to the proposed rule developed by a regula- individual employed under paragraph (1)(B)
mission, each committee of the Senate and tory negotiation commission; and at a daily rate equal to the maximum daily
House of Representatives having legislative (3) any other material published under rate of pay for level 15 of the General
jurisdiction over the subjects considered by such subsection. Schedule under section 5332 of title 5,
the commission, and the Director of the (d) The agency shall provide a regulatory United States Code.
Office of Management and Budget a report negotiation commission which developed a (4) The authority of the Chairman to
with respect to the negotiations conducted proposed rule an opportunity to review and enter into contracts under this subsection
by the commission. If the commission comment upon any material received by the shall be to ,such extent or in such amounts
reached a consensus and developed a pro- agency pursuant to the notice of proposed as are provided in appropriation Acts.
posed rule, the report shall contain the pro- rule making for such rule published under (b) A regulatory negotiation commission is
posed rule developed by the commission and subsection (a) and an opportunity to partied- authorized to utilize the services and facili-
a concise general statement of the basis and pate in any additional proceedings the ties of Federal agencies and public and pri-
purpose of that rule. If the comnmsion did agency conducts with respect to such pro- vate agencies and instrumentalities with the
not develop a consensus and a proposed posed rule. consent of such agencies and instrumental-
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S 11792
CONGRESSIONAL RECORD - SENATE August 4, 1983
ities and with or without reimbursement to
such agencies, and to accept voluntary and
uncompensated services without regard to
the provisions of section 1342 of title 31,
United States Code.
(c) Members of a regulatory negotiation
commission may agree to share the research
and scientific and technical data available to
such members.
AUTHORIZATION OF APPROPRIATIONS
SEC. 12. To carry out this Act, there are
authorized to be appropriated to the Con-
ference not in excess of $1,000,000 for each
of the fiscal years 1985, 1986, and 1987.
GRASSLEY (for himself
B
Mr
y
.
and Mr. Symms):
S. 1824. A bill to amend the Internal
Revenue Code of 1954 to remove the
limitation on estate tax exclusions
under section 2039; to the Committee
on Finance.
REMOVAL OF LIMITATION ON ESTATE TAX
EXCLUSIONS UNDER SECTION 2039
Mr. GRASSLEY. Mr. President, I
rise to introduce a bill designed to
remedy a problem caused by the Tax
Equity and Fiscal Responsibility Act
of 1982.
Under the Economic Recovery Tax
Act of 1981, taxpayers were permitted
to roll over pension accumulations
into individual retirement accounts or
annuities without estate tax liability
upon their death. In TEFRA, we limit-
ed the estate tax exclusion on these
accumulations to $100,000. Unfortu-
nately, many taxpayers made this ir-
revocable election before TEFRA was
passed. If the $100,000 estate tax ex-
clusion had existed when they made
the election, they would have made a
different decision about the best use
for these funds. While I have no quar-
rel with the conferees' decision to re-
quire pension beneficiaries to use
these earnings for retirement savings,
I feel retroactive application of this
rule will cause undue hardship.
Consequently, I am proposing that
Congress retain the full estate tax ex-
clusion for those taxpayers who rolled
over pension contributions into tax
sheltered annuities or individual re-
tirement accounts in reliance upon
ERTA. Taxpayers acting after the
conferees decision to limit the contri-
butions to $100,000 of estate tax exclu-
sion will be bound by current law. My
intent is only to remedy the hardship
caused by taxpayers making an irrevo-
cable rollover decision before TEFRA
was enacted.
By Mr. GRASSLEY (for himself
and Mr. SYMMS):
S. 1825. A bill to amend to the Inter-
nal Revenue Code of 1954 to revise the
addition tax for failure to pay estimat-
ed income tax; to the Committee on
Finance.
ESTIMATED TAX SIMPLIFICATION ACT OF 1983
Mr. GRASSLEY. Mr. President, I
rise to introduce this measure with
Senator SYMMs to address many of the
problems surrounding the estimated
tax penalty.
The estimated tax provision has long
been a source of concern to taxpayers.
As currently written, the estimated S. 1826
tax penalty automatically applies if a Be it enacted by the Senate and House of
taxpayers fails to make a quarterly Representatives of the United States of
filing. The Commissioner has no au- America in Congress assembled, That a. Sec-
thority to waive this penalty, hence tion 170(e)(3) of the Internal Revenue Code
many innocent taxpayers are snared by of 1954 is amended to read as follows:
this each year even if they had (3) SPECIAL RULE FOR CERTAIN CONTRIBU-
penalty y TIONS OF INVENTORY AND OTHER PROPERTY.-
no prior knowledge that the penalty '?(A) QUALIFIED CONTRIBUTIONS, IN GENER-
or the obligation of file existed. Tax- AL.-For purposes of this paragraph, a quali-
payers commonly subjected to the
penalty are workers who have had
wage withholding their entire employ-
ment careers. Upon retirement, they
often have a legal obligation to file
quarterly statements but have no
knowledge of this requirement. Many
of these taxpayers consider their legal
tax obligation to be an annual filing of
a tax return. Suddenly, they find they
have triggered a tax penalty for failure
to file a return they never knew exist-
ed. Lifelong taxpayers who pride
themselves. on good compliance re-
cords are penalized for their lack of
knowledge. Since the estimated tax
penalty is a no fault penalty, even in
the most sympathetic cases the Com-
missioner lacks the authority to waive
the penalty.
Other taxpayers subject to this pen-
alty are individuals who are unem-
ployed or disabled and are unaware of
their obligation to file quarterly. The
penalty rate is equal to the statutory
interest rate. The Treasury argues
that taxpayers had the use of dollars
rightfully owed the United States and
should be responsible to pay interest
on this loan. Unlike other creditors,
taxpayers who have triggered the esti-
mated tax penalty often have no
knowledge that their bill is overdue.
To penalize these taxpayers is not
just.
My bill gives the Commissioner the
discretion to waive the penalty for rea-
sonable cause. The sponsors of this bill
intend to define reasonable cause in
the legislative history as those situa-
tions which I have chronicled above.
Also, my bill changes the penalty to
an interest charge which is deductible
by the taxpayer in the year paid or ac-
crued. It retains the same safe harbors
that exist in current law and redrafts
the section to read more clearly.
It is my hope that this type of
needed tax reform can be enacted
swiftly. Arbitrary laws breed disre-
spect for our revenue collection system
and enourage noncompliance. These
modifications should improve taxpay-
er attitudes about their financial obli-
gations to their Government.
By Mr. DANFORTH:
S. 1826. A bill entitled the "Hunger
Relief Incentives Tax Act of 1983"; to
the Committee on Finance.
HUNGER RELIEF INCENTIVES TAX ACT OF 1983
Mr. DANFORTH. Mr. President, I
ask unanimous consent that the text
of this bill, as well as the explanation
of the bill, be printed in full in the
RECORD.
There being no objection, the mate-
rial was ordered to be printed in the
RECORD, as follows:
fied contribution shall mean a charitable
contribution of property described in para-
graph (1) and (2) of section 1221, by a corpo-
ration (other than a corporation which is an
electing small business corporation within
the meaning of section 1371(b)) to an organ-
iazation which is described in section
170(c)(1) or to an organization which is de-
scribed in section 170(c)(2) and is exempt
under section 501(a) (other than a private
foundation, as defined in section 509(a),
which is not an operating foundation, as de-
fined in section 492(j)(3)), but only if-
"(I) the use of the property by the donee
is related to its governmental purpose or
function or to the purpose or function con-
stituting the basis for its exemption under
section 501 and the property is to be used by
the donee solely for the care of the ill, the
needy, or infants;
"(ii) the property is not transferred by the
donee in exchange for money, other proper-
ty, or service;
"(iii) the taxpayer receives from the donee
a written statement representing that its
use and disposition of the property will be
in accordance with the provisions of clauses
(i) and (ii): and
"(iv) in the case where the property is sub-
ject to regulation under the Federal Food,
Drug, and Cosmetic Act, as amended, such
property must fully satisfy the applicable
requirements of such Act and regulations
promulgated thereunder on the date of
transfer and for one hundred and eighty
days prior thereto.
"(B) SPECIAL RULE FOR CONTRIBUTIONS OF
FOOD.-
"(I) IN GENERAL.-In the case of a charita-
ble contribution of food, a contribution
which otherwise meets the definition of a
qualified contribution under subparagraph
(A) shall not be disqualified solely because
the taxpayer is not a corporation described
in subparagraph (A), if such taxpayer is ac-
tively engaged in the trade or business of
production or wholesale or retail marketing
of food.
"(ii) DEFINITION OF FOOD.-For purposes of
this subparagraph, the term "food" shall
mean any agricultural product which is in-
tended for, and at the date of contribution
is suitable for, human consumption, and
which is not subject to the federal excise
tax on alcohol and tobacco under Chapters
51 and 52 of the Internal Revenue Code.
"(iii) GLEANING.-For purposes of this sub-
paragraph, a charitable contribution of food
shall include contributions of food which a
donee organization described in subpara-
graph (A) has removed from the taxpayer's
fields, if the contribution otherwise meets
the definition of a qualified contribution
under subparagraph (A).
"(iv) Notwithstanding any other provision
a contribution of food may qualify under
this paragraph in spite of the donee-organi
zation charging a fee to the ill or needy indi
viduals or infants who receive the property
from such organization if the fee is small o,
nominal in relation to the value of the
transferred property and is not determines
by its value, and the fee is designed to reim
burse the donee-organization for its admin
istrative, warehousing, or similar costs.
"(C) SPECIAL RULE FOR CONTRIBUTIONS OF
CERTAIN TRANSPORTATION SERVICES.-For pul'
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