Monday, April 28, 2014

State Seeks Input on Making Program Material Available

by Shannon Allen

The United States Department of State (“DOS”) issued an interim final rule amending regulations to implement Section 1078 of the National Defense Authorization Act of 2013 (“NDAA”); and seeks input on changing the availability of Public Diplomacy Program Materials in the United States.  U.S. public diplomacy outreach includes communications with foreign audiences abroad through Program Material. . . .”  The DOS is amending prior law to permit the DOS and the Broadcasting Board of Governors (“BBG”) to now make public diplomacy program material available within the United States, upon request, following the dissemination of such material abroad . . .”

The U.S. public diplomacy mission is to support the achievement of U.S. foreign policy goals and objectives, advance national interests, and enhance national security by certain means.  Section 501 of the United States Information and Educational Exchange Act of 1948, as amended (22 U.S.C. 1461; “the Smith-Mundt Act”) (“Section 501”), governs the domestic distribution of certain information about the United States, its people, and policies (“Program Material”) prepared for dissemination abroad.  Section 208 of the Foreign Relations Authorization Act, Fiscal Years 1986 and 1987 (22 U.S.C. 1461-1a) (“Section 208”) governs the creation of such (Program Material) material for the purpose of influencing domestic public opinion.  The NDAA amends and clarifies Section 501 and Section 208.  Prior to NDAA, “such material could not be disseminated within the United States . . . .”

 Revised Section 501 permits the DOS and/or the BBG to make such Program Material available within the U.S.  Both the DOS and the BBG must issue necessary regulations: to establish procedures to maintain such material, for reimbursement of reasonable costs incurred in fulfilling requests for such material, and  to ensure that persons seeking the release of such material have secured and paid for necessary U.S. rights and licenses. (The BBG published its interim final rule on July 2, 2013, with a final rule published on November 8, 2013 (78 FR 67025).)

According to the DOS, this interim final rule:
  • benefits the public, media, and other organizations by allowing them to request and access DOS Program Material, which previously could not be disseminated within the United States;
  • will not have a substantial direct effect on the states, on the relationship between the national government and the states, or on the distribution of power and responsibilities among the various levels of government;
  • is in response to a statutory requirement that will make more information available to the public; therefore, the benefits of the rulemaking outweigh any costs;
  • will not have a significant impact upon small businesses;
  • will not have tribal implications, will not impose substantial direct compliance costs on Indian tribal governments, and will not pre-empt tribal law; and
  • will not result in the expenditure by State, local and tribal governments, in the aggregate, or by the private sector, of $100 million in any year and it will not significantly or uniquely affect small governments.
The DOS has determined that normal public rulemaking procedures are not practical, not necessary, and that there is good cause under 5 U.S.C. 553(b)(B) and (d)(3) to exempt this interim final rule from public rulemaking procedures and to implement it upon publication.  In the interests of transparency and public participation, however, the DOS is publishing this rule as an interim final rule with a 60-day provision for public comment.

This interim final rule will be implemented as of April 21, 2014.  However, the DOS will accept comments on the interim final rule from the public until June 20, 2014.  Comments may be submitted by any of the following methods:
  • Online: Persons with access to the Internet may view this rule and provide comments by going to the Web site at:;
  • Mail (paper, disk, or CD-ROM submission): Director, Office of Policy and Outreach, Bureau of International Information Programs, U.S. Department of State, State Annex 5 (SA-5), Floor 5, 2200 C Street NW., Washington, DC 20522-0505; or
  • Email: RIN (1400-AD50) must be included in the subject line.

Thursday, April 24, 2014

Profile on Sally Katzen: Former Head of OIRA

by Nina Hart

Image of Sally  KatzenNotice and Comment Blogger Nina Hart recently had the opportunity to interview Sally Katzen, the former head of the Office of Information & Regulatory Affairs (OIRA) during the Clinton Administration.  Below she shares insight on her administrative law experience and lessons in leadership.

An Unexpected Path

Sally Katzen says that her path to law school began unexpectedly.  “I wanted to be a math major at Smith College,” she recounts, but the College refused to give her credit for her AP Calculus class.  “I was bored, so I went casting about for other things.”  She settled on Government 101, and liked her professor so much that she enrolled in his Constitutional Law course.  Even with this burgeoning interest in the law, Katzen recounts that the details of why she decided on law school are a bit fuzzy.  “My senior year in college, on my 21st birthday, President Kennedy was assassinated, and apparently over the weekend I applied to law schools.”

Katzen graduated from the University of Michigan Law School, and spent one year clerking for Judge J. Skelly Wright of the U.S. Court of Appeals for the District of Columbia Circuit.  After that year, she went to work for what was then the small firm of Wilmer Cutler & Pickering.  Here, she began developing an expertise in both economics and administrative law.  “The firm did a lot of communications law, and I was fortunate to spend a lot of time representing CBS and the Communications Satellite Corporation,” Katzen says.  “I drafted comments and participated in hearings at the FCC.” 

After working on a number of cases before the FCC, Katzen branched out to appear before other agencies as well, such as the Civil Aeronautics Board and the Interstate Commerce Commission.  “After a series of adventures [before the FCC],” Katzen notes, “it was relatively easy to work on matters before other agencies”; their procedures are very similar, so it was simply a matter of learning new subject matter.  One of the most prominent cases she worked on was United States v. Allegheny-Ludlum Steel, which was the companion to the well-known case United States v. Florida East Coast Railway Co. 

During this period Katzen gained her reputation as an administrative law expert, which led Alfred Kahn, Chairman of the Council of Wage & Price Stability, to offer Katzen the position of General Counsel for the Office.  As Katzen describes it, her function “was to administer a program run by economists,” which led her to “learn an enormous amount about incomes policy in a very short period of time.” 

It was in this position that Katzen first came into contact with the ABA Section of Administrative Law & Regulatory Practice.  After the Council of Wage & Price Stability released its draft procedures for the program, Katzen learned that the Section’s Executive Council was going to vote on a resolution condemning the procedures.  “I took this personally because I had drafted the procedures.”  So, Katzen requested and was granted an opportunity to defend her program before the Executive Council.  Recalling the meeting, Katzen said that she was “very impressed” with the questions and engagement of the Council.  Her presentation must have impressed the Council as well—after leaving the Carter Administration, Katzen was asked to join the Executive Council, and served as both an Officer and Chair.
During the 1980s, after Katzen had returned as a partner to Wilmer, OIRA’s visibility and political salience grew.  In fact, the Office’s activities became an issue during the 1992 presidential campaign after congressional leaders threatened to defund the agency for lack of transparency and allegedly favoring business interests.  Katzen served as a surrogate for the Clinton campaign on the issue, and, after being asked if she would like to serve in the Administration, jumped at the chance to lead OIRA.

Lessons in Leadership

“I believe in OIRA,” says Katzen.  “If OIRA did not exist, any sensible president, Republican or Democrat, would have to invent it.” 

Katzen’s view stems from the basic reality that regulations often have unanticipated consequences.  OIRA can mitigate those consequences and promote sensible regulation through two means.  First, agencies are required by Executive Order to perform cost-benefit analyses (CBA) for certain regulations, and OIRA reviews agency compliance with this requirement.  Second, OIRA facilitates the interagency review process, which occurs when OIRA receives draft regulations and distributes them to all other interested agencies.  This multi-agency review simply “makes sense when you have a single president responsible for the whole Administration,” Katzen says.  Moreover, this interagency review “is essential today when no problem is one-dimensional.”  Describing this regulatory spillover, Katzen remarked, “I remember chairing lots of meetings where someone said, ‘It’s not that you’re invading our turf, but this is going to have an effect on our programs.’  Labor or Treasury might say, ‘before you do this, you have to understand the implications of this for the workforce or for the industry.’ Another agency might say ‘we’re attacking the same problem but doing it in a different way; shouldn’t we try to coordinate?’”

Despite the benefits associated with OIRA review, Katzen says there are challenges.  First and foremost, the agencies lack sufficient resources, which impairs their ability to carry out their statutory mandates.  Katzen attributes this largely to the current political climate and lack of understanding that the public has for what the agencies actually do.  “We have run from government, at least the federal government,” Katzen says.  In polls, the public responds favorably to reducing the size of government, but when asked about whether individual programs ought to be cut, the resounding response is, “no.”  There is a strong sentiment against government-managed health care, but seniors love their Medicare; people are often put off by government providing benefits, but farmers love their crop insurance and hurricane victims love their loans or grants; people don’t want the federal government in their businesses, but they invariably support food labeling, FDA testing before a drug goes on the market, and USDA meat inspections.  And even those people who acknowledge support for some or many government programs often do not translate that to respect for the people who are working in government.  Rather than appreciate the dedication and public service of the government employees, the public focuses on “bureaucrat bashing.”  “Bureaucrat has become a bad word,” Katzen says.  “I think it should be taken off the books.”

A second shortcoming of the current system is that centralized review does not extend to independent regulatory commissions (IRCs).  Katzen said that although she initially supported this distinction between executive agencies and IRCs, “In retrospect, I think it was the wrong decision.  There are aspects of IRCs that are very different from executive branch agencies, and I respect those.  But when they do rulemaking they are doing the same kind of processes.”  Undertaking adequate CBA for rulemaking is a discipline that the agencies subject to OIRA review have learned over time.  However, the IRCs have not been forced to learn, and also may not have the incentive to do so.  As Katzen says, “they too are strapped for resources and do not have unlimited funds, so if they don’t have to undertake CBA, they won’t.  As a result,  I think the work product suffers, but it may or may not be because they don’t have the capacity; they may just not have the will.”

Apart from these systemic challenges, ensuring efficient and sensible regulation will depend, to an extent, on the relationships that exist between OIRA and the agencies.  As Katzen noted, “At any moment of time, the relationships can be very different.”  This is because good relationships depend on good communication, which in turn depends on the personalities involved.  Thus, for Katzen, approaching agencies with a collaborative mindset and openness is important.  Katzen explained, “It’s the agencies that read the comments and deal with the stakeholders every day.  And here comes these people at OIRA who don’t have that background, who are suggesting changes and appear to be second-guessing.”  Due to this potential for resentment, “how those views are communicated and when can make a big difference.” 

Thus, there are two ways for an OIRA Administrator to approach the agencies.  One way, is to say, “This is the right way; take it or leave it.”  As Katzen noted, this attitude prevailed during the Reagan-Bush years.  “When I first arrived [at OIRA] I heard a great deal about the tension, suspicion and hostility that existed between OIRA and the agencies.”  Katzen rejected this approach, and, instead, focused on reaching out to the agency heads and their staffs.  As each agency head was confirmed, Katzen invited him or her to lunch.  In her candid way, she would say, “‘You are going to hear that my staff or I did something which you will not believe.  And it’s not believable because it’s probably not true.  I will hear from my staff that you or your staff did something unbelievable, and, again, it’s not believable because it’s also probably not true.  So if you hear something like that, pick up the phone and call me.  We are trying to make sure that you can achieve your objectives in the most efficient and effective way possible; we’re on your side.’”  In addition to reaching out to the agency heads, Katzen traveled to each agency to speak with the staff.  “I said, ‘this is who I am.  I don’t have horns.  I admire and respect you.  I want to work with you.’”  Katzen’s approach took some agency officials by surprise, but helped facilitate productive communications and productive relationships.

The ability to communicate and work well together could yield positive results.  Katzen recounted an instance when the FDA wanted to revamp its regulations on seafood safety.  At the time, the USDA had multiple inspectors in each meat plant, but seafood plants were visited rarely and only by a single inspector.  To rectify the disparity, the FDA came up with a complicated inspection regime, and presented it to OIRA very early in the drafting process.  Katzen’s staff listened and then suggested that the FDA consider a performance-based approach, which became known as the Hazard Analysis & Critical Control Points (HACCP) plan.  HACCP requires manufacturers to identify points at which there are risks or hazards, and present a way to resolve it; for instance, if something must be frozen, then the temperature must always be below 30-something degrees.  The FDA agreed to pursue the HACCP approach, and undertook the requisite notice-and-comment procedures.  Katzen concluded, “I remember the day the final rule was released, the head of the FDA called me to say, ‘I just saw the headlines on the editorial page of a Seattle newspaper—‘FDA Issues Sensible Regulations.’  From that moment on, our relationship with the FDA was different than it had been because they understood we could be a friend, a helper.”

Preparing the Next Generation

Katzen spent five years as Administrator of OIRA.  During the Clinton Administration she also served as Deputy Assistant to the President for Economic Policy; Deputy Director of the National Economic Council; and Deputy Director for Management in the Office of Management and Budget.

Today, Katzen is passing on her expertise to students at New York University School of Law.  In the fall, she co-teaches a clinic with Bob Bauer in Washington DC.  The clinic places students in government agencies, and focuses on the role that lawyers play in government as well as how various offices interact with Congress.  In the spring, she teaches Legislation & the Regulatory State, a 1L requirement that introduces students to statutory interpretation and the workings of the administrative state.

Tuesday, April 22, 2014

Message from Section Chair Joe Whitley

Good morning,


As Chair of the ABA’s Section of Administrative Law & Regulatory Practice, I would like to invite you to register and join us this week for ourSPRING CONFERENCE on Friday, April 25, 2014.  The program will be held at the Grand Hyatt Buckhead in Atlanta, Georgia.  Please see the attached agenda and announcement below.


Registration for the Spring Conferenceis reasonable and group discounts are available.  I look forward to seeing you on Friday!


Friday, April 18, 2014

Text-to-911 Possible by End of 2014?

by Elisabeth Ulmer
The Federal Communications Commission (FCC) seeks comment on a proposed rule relating to the timing and different aspects of implementing text-to-911.  Given the FCC’s core mission of “promoting the safety of life and property of the American public through the use of wire and radio communications,” it has a vested interest in ensuring that the technologies with which Americans are most comfortable are the ones available to them in emergencies.
While subscribers’ monthly voice usage between 2009 and 2011 decreased, U.S. mobile data traffic between 2010 and 2011 increased by 270 percent.  Moreover, 81 percent of adult American cell phone owners use texting, and 63 percent of teens text daily.  All of these statistics reflect a “continued evolution from a predominantly voice-driven medium of communication to one based more on data transmissions.”
Thus, according to the FCC, as the use of texting applications increases, the 911 system must evolve to accommodate the use of this technology.  Text-to-911 will “vastly enhance the [911] system's accessibility for over 40 million Americans with hearing or speech disabilities” and will “provide a vital and lifesaving alternative to the public in situations where 911 voice service is unavailable or placing a voice call could endanger the caller.”  Furthermore, implementing text-to-911 will aid in the transition of the current 911 system to a Next Generation 911 system.  The NG911 system is expected to enable Public Safety Answering Points (PSAPs) to receive not only texts but also photos, videos, and data.
In its proposed rule, the FCC first invites comment on its deadline of December 31, 2014, by which all text providers must provide text-to-911 capability.  AT&T, Sprint Nextel, T-Mobile, and Verizon – the four largest wireless carriers – have committed to making text-to-911 available by May 15, 2014 (Carrier-NENA-APCO Agreement).  They initially intend to use SMS-based text.  The FCC is looking into text-to-911 for other IP-based text applications as well.
Second, the FCC seeks further comment on the following issues, as discussed in the proposed rule:
  1. Developing the capability to provide Phase II-comparable location information in conjunction with emergency texts;
  2. Delivering text-to-911 over non-cellular data channels; and
  3. Supporting text-to-911 for consumers while roaming on Commercial Mobile Radio Service (CMRS) networks;
Comments were due on April 4, 2014, but interested parties are invited to submit reply comments by May 5, 2014, by any of the following methods:
  • Federal Communications Commission's Web site:
  • Mail: Federal Communications Commission, 445 12th Street SW., Washington, DC 20554
All comments must include PS Docket No. 10-255, and PS Docket No. 11-153.

Monday, April 14, 2014

Brown Bag Lunch: MSPB CY 2013 Year in Review

On April 17, 2014, the Section Government Personnel Committee will host a brown bag lunch on the latest developments at the Merit Systems Protection Board, including a review of significant cases decided in the last year.  Confirmed panelists include:
  • Bryan G. Polisuk, General Counsel, MSPB
  • Ronald J. Weiss, Administrative Judge, Office of Regional Operations, MSPB
  • Martin J. Crane, Attorney, Office of Appeals Counsel, MSPB
  • Andrew J. Perlmutter (Moderator), Attorney, Passman & Kaplan, P.C.
Download the registration form here.  Hope to see you there!

Friday, April 11, 2014

BIS Proposes Changes To Required Support Documents Under EAR

by Shannon Allen

The Commerce Department’s (“DOC’s”) Bureau of Industry and Security (“BIS”) issued a proposed rule to amend regulations regarding support documents required for license application submissions under the Export Administration Regulations (“EAR”) and changes to BIS’s role in issuing documents for the Import Certificate and Delivery Verification system.  The Export Administration Act of 1979 (“EAA”) has been in lapse since August 21, 2001.  Effectively, however, the President has continued it under the International Emergency Economic Powers Act (“IEEPA”).  Pursuant to Executive Order 13222 as amended by Executive Order 13637, the BIS continues to carry out the provisions of the EAA.

Under Executive Order 13563, agencies are mandated to “periodically review its existing significant regulations to determine whether any such regulations should be modified, streamlined, expanded, or repealed so as to make the agency's regulatory program more effective or less burdensome in achieving the regulatory objectives.”  The purpose of this review is, among other things, to allow for public participation and an open exchange of ideas, as well as to promote predictability and reduce uncertainty.

On August 5, 2011, the BIS published a notice of inquiry on retrospective regulatory review seeking public input on parts or sections of the EAR that are not immediately affected by the Export Control Reform initiative and that improve clarity. . .  streamline requirements . . . improve efficiency and reduce burden.  This proposed rule is in direct response to public comments received.  BIS’s rule proposes to:
  • remove the requirement to obtain an International Import Certificate or Delivery Verification (“IC/DV”) in connection with license applications;
  • require a Statement by Ultimate Consignee and Purchaser for most license applications previously requiring an International Import Certificate;
  • increase the license application value requirement for obtaining a Statement by Ultimate Consignee and Purchase from $5,000 to $50,000;
  • cease issuing U.S. Import Certificates or Delivery Verifications for imports into the United States; and
  • revise the rules’ structure and description of support document requirements to improve clarity.
The BIS believes that these proposals are beneficial for many reasons, including, but not limited to:
  • increasing U.S. exporters competitiveness;
  • furthering national security and foreign policy objectives of the United States;
  • reducing unnecessary burdens imposed on license applicants;
  • improving timeliness for shipping under an approved license;
  • eliminating the need for BIS to request that a DV be obtained from a foreign government for a transaction;
  • not requiring U.S. exporters to wait for an original Statement by Ultimate Consignee and Purchaser before shipping under an approved license so long as the exporter receives the original within 60 days from the date the document is signed by the ultimate consignee;
  • only requiring the engagement of parties directly involved in the transaction;
  • increasing the prevention of diversion by providing an affirmative statement on the actual end use of the item by the ultimate consignee or end user;
  • increasing awareness among participating countries of potential enforcement concerns; and
  • furthering the aims of Executive Order 13563.
Interested parties are invited to submit comments by June 9, 2014, through any of the following methods:
  • Federal eRulemaking Portal: The identification number for this rulemaking is BIS-2014-0009;
  • By email: to Include RIN 0694-AG00 in the subject line; OR
  • By mail or delivery: to Regulatory Policy Division, Bureau of Industry and Security, U.S. Department of Commerce, Room 2099B, 14th Street and Pennsylvania Avenue NW., Washington, DC 20230. Refer to RIN 0694-AG00.

Friday, April 4, 2014

PBGC Seeks Comment on Amending Treatment of Title IV Rollovers

by Shannon Allen

The Pension Benefit Guaranty Corporation (“PBGC”) proposes to amend its regulations to offer direction on Title IV treatment of rollovers.  In expectation of greater use of rollovers and as a part of its efforts to promote retirement security, the PBGC proposes a rule to guide the treatment of rollovers from defined contribution plans to defined benefit plans and to promote lifetime income options.

Under Title IV of the Employee Retirement Income Security Act of 1974 (“ERISA”), the PBGC administers the single-employer pension plan termination insurance program.  Premiums are paid to PBGC each year to cover program private-sector, single-employer defined benefit plans.  Normally, PBGC is appointed statutory trustee of the plan when a plan terminates.  The PBGC is then responsible for paying benefits in accordance with the provisions of Title IV.   ERISA describes that when a plan terminates in a distress termination or an involuntary termination, each participant’s plan benefit is assigned to one or more of six “priority categories.”  Benefits in Priority Category 2 (“PC2”) have a higher claim on plan assets than almost all other benefits under the plan and plan assets are normally adequate to pay accrued benefits derived from mandatory employee contributions.  Thus, participants’ accrued benefits derived from mandatory employee contributions are assigned to PC2.

Occasionally, plans trusteed by PBGC, also contain contributions made by employees that fund part of the benefit under the plan.  The PBGC proposes to amend its regulations on allocation of assets and benefits payable in terminated single-employer plans in order to spell out the treatment of benefits resulting from a rollover distribution from a defined contribution plan.  401(k) retirement savings rollover availability expands opportunities for participants to choose lifetime annuity options.

The Department of the Treasury (“Treasury”) and the Internal Revenue Service (“IRS”) issued Rev. Rul. 2012-4, 2012-8 I.R.B. 386 (“Ruling”), in February 21, 2012.  The Ruling explained particular qualification requirements under 401(a) of the Code for use of rollover amounts to provide an additional benefit under a defined benefit plan.  Under the Ruling, a qualified defined benefit plan will accept a direct rollover of a distribution from a qualified defined contribution plan maintained by the same employer for an employee or former employee of the employer who departs from the company after fifty five years of age with ten plus years of service and chooses an immediate annuity of the employee’s benefit under the plan.

For purposes of section 411(c) of the Code, the Ruling recognizes the amounts rolled over as mandatory employee contributions.  This satisfies section 411(c)(2) of the Code because:
  1. The benefit resulting from the direct rollover is provided as an immediate annuity determined as the actuarial equivalent of the amount rolled over; and
  2. In the event payment is delayed after the rollover, interest on the rollover contribution is accumulated and the benefit derived from the rollover is not forfeitable upon death prior to the annuity starting date.
In response to the Treasury’s and IRS’s rollover clarifications in the Rule, the PBGC proposes to amend its regulations to provide guidance on Title IV treatment of rollovers. The proposal amends the PBGC’s regulations on Benefits Payable in Terminated Single-Employer Plans (29 CFR part 4022) and Allocation of Assets in Single-Employer Plans (29 CFR part 4044).  These amendments would create or explain the rules for treatment of rollovers in plans that terminate underfunded, including, but not limited to the following:
  • A benefit resulting from rollover amounts would be treated as an accrued benefit derived from mandatory employee contributions in PC2.
  • Unlike other PC2 benefits, PC2 benefits resulting from rollover amounts would generally not be payable in lump sum form.
  • The portion of any benefit resulting from rollover amounts that exceeds the accrued benefit derived from mandatory employee contributions would be a guaranteeable benefit in PC3, PC4, or PC5, as applicable.
  • The participant’s accrued benefit resulting from rollover amounts generally would not be subject to PBGC’s maximum guaranteeable benefit limitation under ERISA and thus would not be taken into account in applying that limitation.
  • However, the maximum guaranteeable benefit limitation would apply to any benefit resulting from rollover amounts that exceeds the accrued benefit treated as derived from mandatory employee contributions.
  • The participant’s accrued benefit resulting from rollover amounts generally would not be subject to the five-year phase-in limitation on the guarantee of benefit increases.
  • However, the phase-in limitation would apply to any benefit resulting from rollover amounts that exceeds the accrued benefit treated as derived from mandatory employee contributions, with the phase-in period beginning as of the date the rollover contributions were received by the plan.
The PBGC seeks public comment of this proposed rule.  Interested parties are invited to submit comments, identified by Regulatory Information Number (RIN 1212-AB23), by June 2, 2014, by any by the following methods:
  • Federal eRulemaking Portal: Follow the Web site instructions for submitting comments;
  • Email:;
  • Fax: 202-326-4224; OR
  • Mail or Hand Delivery: Legislative and Regulatory Department, Pension Benefit Guaranty Corporation, 1200 K Street NW., Washington, DC 20005-4026.