Negotiated Rulemaking

Negotiated Rulemaking
Updated August 28, 2006
Curtis W. Copeland
Specialist in American National Government
Government and Finance Division

Negotiated Rulemaking
Summary
Negotiated rulemaking, which is a supplement to traditional rulemaking, is a
process in which representatives of federal agencies and affected parties work
together in a committee to reach consensus on what can ultimately become a
proposed rule. Although negotiated rulemaking is not appropriate for all regulations,
advocates believe that the approach can speed rule development, reduce litigation,
and generate more creative and effective regulatory solutions.
The Negotiated Rulemaking Act of 1990 established the basic statutory
authority for the approach while giving agencies wide latitude in its implementation,
and the Clinton Administration advocated a broader application of the approach.
Agencies are permitted to use “conveners” to determine whether negotiated
rulemaking is appropriate and to select participants, and to use “facilitators” to chair
the negotiated rulemaking committee meetings. At the end of the process, agencies
must still publish proposed and final regulations for public comment, but any
proposal agreed to by the negotiating committee is not binding on the agency or other
parties.
Although the Negotiated Rulemaking Act gives agencies substantial discretion
as to whether the approach should be employed in rulemaking, Congress has
sometimes mandated its use by rulemaking agencies and established specific
procedures and time frames to follow. Studies examining the implementation of
negotiated rulemaking have reached different conclusions regarding the approach’s
effect on rulemaking timeliness, litigation, as well as other issues. Researchers also
disagree regarding how the effectiveness of negotiated rulemaking should be
measured.
This report will be updated if significant developments occur (e.g.,
congressional action or research findings) that could affect the use of negotiated
rulemaking. For information on the traditional rulemaking process, see CRS Report
RL32240, The Federal Rulemaking Process: An Overview, by Curtis W. Copeland.

Contents
Development of Negotiated Rulemaking............................1
Congressional Action.......................................2
Executive Branch Actions...................................3
The Negotiated Rulemaking Process...............................3
Congressional Mandates to Negotiate..............................5
Evaluations of Negotiated Rulemaking.............................6
Empirical Studies..........................................7

Negotiated Rulemaking
The Administrative Procedure Act (APA) of 1946 (5 U.S.C. §551 et seq.)
generally requires federal agencies to publish their proposed rules (also called
regulations) in the Federal Register, to provide the public with an opportunity to
comment on those proposed rules, and to publish a final rule at least 30 days before
its effective date. The APA does not, however, specify how agencies are to develop
their proposed rules or who should participate in that process. Consequently, agencies
sometimes develop rules without discussing relevant issues with all affected interests,
and there may be little or no opportunity for an informal exchange of views among
affected parties or between those parties and the rulemaking agency either before or
after the proposed rule is published.
Negotiated rulemaking (sometimes referred to as regulatory negotiation or “reg-
neg”) is a supplement to the traditional APA rulemaking process in which agency
representatives and representatives of affected parties work together to develop what¹
can ultimately become the text of a proposed rule. In this approach, negotiators try
to reach consensus by evaluating their priorities and making tradeoffs, with the end
result being a draft rule that is mutually acceptable. Negotiated rulemaking has been
encouraged (although not usually required) by both congressional and executive
branch actions, and has received bipartisan support as a way to involve affected
parties in rulemaking before agencies have developed their proposals. Some
questions have been raised, however, regarding whether the approach actually speeds
rulemaking or reduces litigation.
Development of Negotiated Rulemaking
The development of negotiated rulemaking is traceable to dissatisfaction with
what some viewed as the formal, complex, and adversarial nature of traditional
rulemaking procedures. For example, in 1982, administrative law expert Philip J.
Harter — an early advocate of negotiated rulemaking — said a “malaise” had settled
over the federal rulemaking process because of the defensive and arms-length manner
in which agencies and affected parties interacted.² He suggested a different approach
in which differences were acknowledged and resolved through face-to-face
negotiations, and laid out a series of principles that could make those negotiations
successful.

¹ For a more complete discussion of negotiated rulemaking and relevant agency documents,
see David M. Pritzker and Deborah S. Dalton, eds., Negotiated Rulemaking Sourcebook
(Washington: Administrative Conference of the United States, 1995).
² Philip J. Harter, “Negotiating Regulations: A Cure for Malaise,” Georgetown Law Journal

71 (1982), pp. 1-118.

Also in 1982, the Administrative Conference of the United States (ACUS)
recommended that agencies consider using negotiated rulemaking as a way to
develop proposed rules, published criteria for determining when negotiated
rulemaking was likely to be successful, and suggested specific procedures to be
followed when implementing the approach.³ For example, ACUS said agencies
should use “conveners” to determine whether negotiated rulemaking is appropriate
and to identify affected interests. ACUS also recommended that Congress pass
legislation explicitly authorizing agencies to use negotiated rulemaking, but giving
them substantial flexibility to adapt negotiation methods.
In 1983, the Federal Aviation Administration became the first federal agency to
try negotiated rulemaking (regarding flight and rest time requirements for domestic
airline pilots), followed by the Environmental Protection Agency (EPA) and the
Occupational Health and Safety Administration. In 1985, ACUS recommended
refinements to the procedures based on these agencies’ experience with the
approach.⁴ For example, ACUS said that agencies sponsoring the effort should take
part in the negotiations, and pointed out that negotiated rulemaking could be used at
several stages of the rulemaking process.
Congressional Action. The Negotiated Rulemaking Act of 1990 (5 U.S.C.
§§561-570), as amended and permanently authorized in 1996 by the Administrative
Dispute Resolution Act of 1996 (110 Stat. 2870, 3873), essentially enacted the
ACUS recommendations, establishing basic statutory authority and requirements for
the use of the approach while giving agencies wide latitude in its implementation.
The act supplements (but does not supplant) APA rulemaking procedures, and
establishes a framework by which agencies are encouraged (but not required) to use
negotiated rulemaking to develop proposed rules. The act established public notice
requirements and procedures by which affected parties can petition for inclusion in
the process, and clarified that agencies must generally comply with the Federal
Advisory Committee Act in establishing and administering the negotiating⁵
committee. The negotiated rulemaking committee, composed of representatives of
the agency and from the various non-federal interests that would be affected by the
proposed regulation, addresses areas of concern in the hope that it can reach
agreement on the contents of a proposed regulation. The agency can, if it agrees,
then issue the agreement as a proposed rule, and eventually as a final rule, under
existing APA procedures. The expectation is that any rule drafted through negotiated
rulemaking would be easier to implement and less likely to be the subject of
subsequent litigation.⁶

³ Administrative Conference of the United States, Recommendation 82-4, 1 CFR 305.82.4.
The Administrative Conference was established in 1968 to provide advice regarding
procedural improvements in federal programs, and was eliminated by Congress in 1995.
⁴ Administrative Conference of the United States, Recommendation 85-5, 1 CFR 305.85-5.
⁵ The Federal Advisory Committee Act (codified at 5 U.S.C. App. 2) regulates the formation
and operation of advisory committees used by federal agencies that are not entirely
composed of full-time federal employees.
⁶ Another process for early stakeholder involvement in rulemaking was established by the
(continued...)

Executive Branch Actions. In September 1993, the Clinton
Administration’s National Performance Review (NPR) recommended (among other⁷
things) that federal agencies increase their use of negotiated rulemaking. That same
month, President Clinton issued Executive Order 12866, which, in part, directed
federal agencies to “explore and, where appropriate, use consensual mechanisms for
developing regulations, including negotiated rulemaking.”⁸ President Clinton also
issued a separate memorandum in September 1993 directing each agency to identify
at least one rulemaking for which the agency would use negotiated rulemaking during⁹

1994, or to explain why the use of the approach was not feasible.

In May 1998, President Clinton issued another memorandum to the heads of
executive branch departments and agencies intended to promote greater use of¹⁰
negotiated rulemaking. Specifically, he designated the Regulatory Working Group
(which had been established by Executive Order 12866 and was composed of the
heads of agencies with significant domestic regulatory responsibilities) as an
interagency committee to “facilitate and encourage agency use of negotiated
rulemaking.”
The Negotiated Rulemaking Process
The Negotiated Rulemaking Act permits agencies to establish a negotiated
rulemaking committee if the head of the agency determines that doing so is “in the
public interest.” In making that determination, the act says the head of the agency
must consider whether (1) a rule is needed, (2) there are a limited number of
identifiable interests that will be significantly affected by the rule, (3) there is a
“reasonable likelihood” that a balanced committee can be convened that will
adequately represent those identifiable interests and is willing to negotiate in good
faith to reach consensus on a proposed rule, (4) there is a “reasonable likelihood” that
the committee will reach a consensus on the proposed rule within a fixed period of
time, (5) the negotiated rulemaking process will not delay the issuance of the
proposed or final rule, (6) the agency has adequate resources that it is willing to

⁶ (...continued)
Small Business Regulatory Enforcement Fairness Act of 1996 (P.L. 104-121, codified at 5
U.S.C. §609). The act required the Environmental Protection Agency and the Occupational
Safety and Health Administration to convene a small business advocacy review panel before
publishing any proposed rule that they determine may have a significant economic impact
on a substantial number of small entities. Although the panels are required to be composed
of federal employees, the panel must collect the advice and recommendations of
representatives of affected small entities.
⁷ Vice President Al Gore, From Red Tape to Results: Creating a Government That Works
Better and Costs Less (Sept. 1993), recommendation REG03.
⁸ Executive Order 12866, “Regulatory Planning and Review,” 58 Federal Register 51735,
Oct. 4, 1993. The order was issued on Sept. 30, 1993.
⁹ U.S. President (Clinton), “Negotiated Rulemaking,” Sept. 30, 1993.
¹⁰ U.S. President (Clinton), “Designation of Interagency Committees to Facilitate and
Encourage Agency Use of Alternate Means of Dispute Resolution and Negotiated
Rulemaking,” May 1, 1998.

commit to the committee, and (7) the agency will use the committee’s consensus as
the basis of the proposed rule “to the maximum extent possible consistent with the
legal obligations of the agency.” The act also specifically permits the use of
conveners to help the agency identify affected parties and to determine whether a
committee should be established.
If the agency decides to establish a negotiated rulemaking committee, the act
requires the agency to publish a notice in the Federal Register (and, as appropriate,
relevant trade or other specialized publications) containing (among other things) a
description of the subject and scope of the rule, a list of affected interests, a list of
those proposed to represent those interests and the agency, and a solicitation for
comments.¹¹ The comment period must be for at least 30 calendar days.
Membership on the committee is limited to 25 members (including at least one from
the sponsoring agency), unless the agency head determines that more members are
needed. The agency can select (subject to the approval of the committee by
consensus) an impartial “facilitator” to chair meetings and oversee the administration
of the committee. The facilitator does not have to be a federal employee, but
agencies are required to determine whether a person under consideration to be a
convener or a facilitator has any financial or other conflict of interest.
Any agreement on a negotiated rule must be unanimous, unless the negotiated
rulemaking committee agrees to other conditions. If the committee reaches
consensus, it must submit a report to the sponsoring agency containing the proposed
rule and any other information it deems appropriate. However, any proposal agreed
to by the committee is not binding on the agency or other parties; the agency may
decide not to issue a proposed rule at all or not as designed by the committee, and
interest groups represented on the committee may oppose the rule that they helped
craft .¹²
The committee terminates no later than promulgation of the final rule. An
agency may pay reasonable travel and per diem expenses, and reasonable
compensation to negotiating committee members under certain conditions. Agency
procedural actions related to establishing, assisting, or terminating the committee are
not subject to judicial review, but any judicial review available regarding the rule
resulting from negotiated rulemaking is unaffected.

¹¹ If the agency subsequently decides not to establish a negotiated rulemaking committee,
the agency is required to publish another notice in the Federal Register explaining why it
decided not to go forward. A copy of the notice must be sent to each person who applied
for or nominated another person for membership on the committee.
¹² See USA Group Loan Services, Inc. v. Riley, 82 F.3d 708 (7^th Cir. 1996).

Congressional Mandates to Negotiate
Although the Negotiated Rulemaking Act gives agencies substantial discretion
as to whether the approach should be employed in rulemaking, Congress has
sometimes mandated its use by rulemaking agencies and established specific
procedures and time frames to follow. For example:
^!Section 7212 of the Intelligence Reform and Terrorism Prevention
Act of 2004 (P.L. 108-458) required the Secretary of Transportation
to use negotiated rulemaking in developing regulations establishing
minimum standards for drivers licenses or personal identification
cards.
^!Section 222 of the “Consolidated Appropriations Act, 2004” (P.L.
108-199) required the Secretary of Housing and Urban Development
to “conduct negotiated rulemaking with representatives from
interested parties for purposes of any changes to the formula
governing the Public Housing Operating Fund.”
^!Section 1901(b)(3)(A) of the No Child Left Behind Act (P.L. 107-
110) required the Secretary of Education to “establish a negotiated
rulemaking process on, at a minimum, standards and assessments.”
The section went on the stipulate that those involved in the process
should be selected from among those that provided advice and
recommendations on how the title should be carried out, and said
that the process should follow the process outlined in the Negotiated
Rulemaking Act (except that it should not be subject to the Federal
Advisory Committee Act).
^!Section 1125(a)(5) of the No Child Left Behind Act required the
Secretary of Education to establish a negotiated rulemaking
committee to prepare, for schools funded by the Bureau of Indian
Affairs, a catalog of the condition of school facilities, a school
replacement and new construction report, and a renovation repairs
report. The act specified the contents of each report and required
that it be submitted to particular congressional committees within 24
months.
^!Section 106(b)(2) of the Native American Housing Assistance and
Self-Determination Act of 1996 (P.L. 104-330) required that all
regulations under the act must be issued according to negotiated
rulemaking procedures, and required that the negotiating committee
be composed only of representatives of the federal government and
“geographically diverse small, medium, and large Indian tribes.”
Section 6 of the Native American Housing Assistance and Self-
Determination Reauthorization Act of 2002 (P.L. 107-292) required
negotiated rulemaking for any rules issued pursuant to amendments
to the original act.

^!Section 490D(b)(3) of the Higher Education Amendments of 1998
(P.L. 105-244) required that negotiated rulemaking must be used for
all subsequent regulations pertaining to the act’s title on student
assistance “unless the Secretary determines that applying such a
requirement with respect to given regulations is impracticable,
unnecessary, or contrary to the public interest.” The Secretary is
required to publish such a determination in the Federal Register at
the same time as the proposed rule.
Several bills that have been introduced in the 110^th Congress would, if enacted,
also require the use of negotiated rulemaking. For example, the Indian Health Care
Improvement Act Amendments of 2007 and 2008 (H.R. 1328 and S. 1200) would
(among other things) revise the Indian Catastrophic Health Emergency Fund (CHEF)
requirements and require the Secretary of HHS to use negotiated rulemaking for the
promulgation of CHEF regulations.
Evaluations of Negotiated Rulemaking
According to ACUS and other advocates of the approach, negotiated rulemaking
can have a number of beneficial effects, including the following:
^!reduced time, money and effort expended on developing and
enforcing rules,
^!earlier implementation of associated rules,
^!better agency understanding of regulated parties’ concerns,
^!greater understanding by regulated parties of their responsibilities
and higher compliance rates,
^!more creative and effective regulatory solutions,
^!less litigation associated with the rule, and
^!more cooperative relationships between the agency and other parties.
ACUS and others have also identified a number of disadvantages of negotiated
rulemaking.
^!ACUS noted that the approach can be more resource-intensive than
traditional rulemaking, at least in the short term, and does not work
when the number of affected interests is too large (e.g., more than 25
negotiators).
^!One author said that the approach has been used only rarely
(reportedly for less than one-tenth of 1% of all rules), and he said
only a few of those rules were considered “major” or “significant.”¹³
The author noted that the Negotiated Rulemaking Act instructs

¹³ Cary Coglianese, “Is Consensus an Appropriate Basis for Regulatory Policy?,” in Eric
Orts and Kurt Deketelaere, eds., Environmental Contracts: Comparative Approaches to
Regulatory Innovation in the United States and Europe (Kluwer Law International, 2001),
pp. 93-113.

agencies to select rules based on their likelihood of consensus, not
their importance.
^!Another author said that negotiated rulemaking has been used
sparingly “for the good reason that it represents a corporatist
abdication of public authority to private interests,” and that even
when used it only results in a proposed rule that is subject to the
same procedural requirements as rules developed conventionally.¹⁴
^!Another commenter asserted that negotiated rulemaking does not
work when developing regulations based on broad statutes, and may
“inadvertently perpetuate the problem (of statutory vagueness) by
facilitating efforts to shift blame for controversial public policies
from legislators to bureaucrats.”¹⁵
^!Yet another study concluded that “the principles, theory, and
practice of negotiated rulemaking subtly subvert the basic,
underlying concepts of American administrative law — an agency’s
pursuit of the public interest through law and reasoned
decisionmaking. In its place, negotiated rulemaking would establish
privately bargained interests as the source of putative public law.”¹⁶
Nevertheless, a number of observers continue to view negotiated rulemaking
favorably, with one regulatory expert describing it as offering the public “the most
direct and influential role in rulemaking of any reform of the process ever devised.”¹⁷
Empirical Studies. Studies of how negotiated rulemaking works in practice
have reached substantially different conclusions about its effects and prospects.
^!In 1990, eight agencies that had convened negotiation committees
reportedly told ACUS that even though full consensus was not
always possible, the information developed through the process¹⁸
contributed substantially to the rule that was produced.

¹⁴ William F. West, “Formal Procedures, Informal Processes, Accountability, and
Responsiveness in Bureaucratic Policy Making: An Institutional Policy Analysis,” Public
Administration Review 64 (Jan/Feb 2004), pp. 66-80.
¹⁵ Juliet A. Williams, “The Delegation Dilemma: Negotiated Rulemaking in Perspective,”
Policy Studies Review 17 (spring 2000), pp. 125-146.
¹⁶ William Funk, “Bargaining Toward the New Millennium: Regulatory Negotiation and the
Subversion of the Public Interest,” Duke Law Journal 46 (1997), pp. 1351-1388.
¹⁷ Cornelius M. Kerwin, Rulemaking: How Government Agencies Write Law and Make
Policy, 2^nd ed. (Washington: CQ Press, 1999), p. 179.
¹⁸ David Pritzer and Deborah Dalton, eds., “Agency Experience with Negotiated
Rulemaking,” in Negotiated Rulemaking Sourcebook (Washington: Administrative
Conference of the United States, 1990), pp. 327-344.

^!A 1992 study of four EPA negotiated rulemaking efforts indicated
that the approach reduced the time needed to develop rules
(particularly during the period between proposed and final
rulemaking).¹⁹ However, another study five years later examining
more EPA negotiations reached the opposite conclusion, finding that
conventional rules and negotiated rules took about the same amount
of time and that negotiated rules were more likely to be challenged
in court.²⁰ Similarly, a 1999 study also concluded that negotiated
rulemaking had “no discernible effect” on the amount of time
between proposed and final rulemaking.²¹
^!Another study indicated that negotiated rulemaking can improve
participants’ perception of the final rule and of the overall
rulemaking process.²² Participants in negotiated rulemaking were
reportedly more pleased with the quality of the information the
process generated than those who filed comments on conventional
rules, and more likely to view their participation as having an effect
on the final rule. The study also indicated, however, that negotiated
rulemaking imposes substantial costs on participants, who are
required to attend multiple meetings and interact with other
stakeholders for long periods of time.
Substantial disagreements exist regarding how the effectiveness of negotiated
rulemaking should be measured (e.g., timeliness and the amount of litigation).²³
Most researchers agree, however, that the approach is not appropriate for all rules,
and that more research is needed to determine its effects on rules, the rulemaking
process, and participants in that process.

¹⁹ Cornelius Kerwin and Scott Furlong, “Time and Rulemaking: An Empirical Test of
Theory,” Journal of Public Administration Research and Theory 2 (1992), pp.113-138.
²⁰ Cary Coglianese, “Assessing Consensus: The Promise and Performance of Negotiated
Rulemaking,” Duke Law Journal 46 (1997), pp. 1255-1349.
²¹ Steven J. Balla and John R. Wright, “Consensual Rulemaking and the Time it Takes to
Develop Rules,” presented at the Fifth National Public Management Research Conference,
College Station, TX, Dec. 3-4, 1999.
²² Laura I. Langbein and Cornelius M. Kerwin, “Regulatory Negotiation versus
Conventional Rulemaking: Claims, Counterclaims, and Empirical Evidence,” Journal of
Public Administration Research and Theory 10 (2000), pp. 599-632. See also Jody Freeman
and Laura I. Langbein, “Regulatory Negotiation and the Legitimacy Benefit,” New York
University Environmental Law Journal 9 (2000), pp. 60-151.
²³ Philip J. Harter, “Assessing the Assessors: The Actual Performance of Negotiated
Rulemaking,” New York University Environmental Law Journal 9 (2000), pp. 32-59; and
Cary Coglianese, “Assessing the Advocacy of Negotiated Rulemaking: A Response to Philip
Harter,” New York University Environmental Law Journal 9 (2001), pp. 386-447.