arrangements. However, this advantage cannot be realized unless the Commissioners have time to devote to regulatory problems. Moreover, an agency limited to the regulatory function could be staffed with Commissioners who are experts in the required technical disciplines.

(b) Which form of organization can be expected to be more attractive in drawing able personnel to its staff? This is a matter about which it is hard to make any flat judgments, particularly because the quality of personnel may depend on factors other than organizational arrangements.

Conceding this, it will be recognized that new agencies frequently have an easier time attracting high-caliber personnel than older ones have in retaining such personnel. This would be particularly true if the statute creating the agency gave it a challenging mandate to promote the development of engineering standards and to develop a regu latory pattern which would at once provide greater assurance of safety and be less onerous for industry.

There are countervailing considerations. The opportunity for close contact with scientists and engineers engaged in reactor development work may be an attraction of the present arrangement. Again, technical people might move more freely between the two functionsdevelopmental and regulatory-if they were in one agency. However, steps could be taken to counteract or at least mitigate these disadvantages of a separate agency. In the net, we believe that on the staffing question there is no clear-cut advantage to either form of organization.

7. Careful study would have to be given to allocation between the Commission and a new regulatory agency of research and development responsibilities involving safety matters. This problem is important but not insoluble. Alternate approaches are available. The principal problem will be avoiding overlapping effort.

8. There is a danger that, in accordance with the operation of Parkinson's law, a new agency charged only with regulation may be tempted to make the process more detailed, more cumbersome and more timeconsuming. We do not deprecate this risk, but there are factors which could at least mitigate and hopefully overcome this tendency.

One would consist of appropriate provisions in the basic statute. Again, a new agency limited to the regulatory function would be relatively small and therefore much more manageable. This would permit more effective control by the heads of the agency as well as by means of congressional appropriations.

9. Assuming that a case can be made for separation, what is the most appropriate time to carry out this separation? An initial question is whether the industry and its regulatory problems have reached a stage where an agency devoting full time to regulation is justified. There is room for difference of opinion, but our own view is that this stage here, or at least, fast approaching. Even if it is assumed that it is only fast approaching, there is a case for anticipating the need. For one thing, the longer separation is postponed, the greater may be the organizational wrench incident to separation.

10. A crucial question is-What will be the terms of the statute creating the new agency? The desirability of the separate agency will obviously depend on these terms.

Some of the specific matters which might be dealt with in the bill creating the new agency have been mentioned earlier in this paper. For the present, we would like to emphasize only two points.

(a) There should be single responsibility for rulemaking and for licensing facilities and materials; both tasks should be assigned to the new agency.

(b) At the outset of this paper, we have mentioned the fluid character of the technology and the industry and the consequent need for continuing study and a systematic periodic reexamination of the regulatory pattern. Hopefully, any new statute would provide for

this.

B. Licensing board within the Commission

Establishment of a licensing board within the Commission has also been advanced as a possibility. This would have some potential for a more rational decision process than that presently followed. Also there may be some savings in housekeeping functions in the use of such a device. The advantages of interchange between Commission scientists and engineers engaged in research and development and those engaged in regulation could more easily be preserved. There would be no problem of allocating responsibility for research and development relating to safety. Finally, it can be argued that the transition to a separate agency, if that is indicated as desirable in the long run, should be made gradually rather than abruptly.

Still we are not clear what is envisioned in terms of relations between the Commission members and the licensing board, and in terms of the relations of the licensing and regulatory staff to either the Commission or the board or both.

Who picks the licensing board members-the Commission or the President? Are they subject to Senate confirmation? What powers of removal will be provided?

To whom would the present licensing and regulatory staff reportthe Commission or the board or would some of the staff report to the Commission and some to the board?

Will the licensing board have the power to prescribe regulations as well as to pass on license applications?

It seems to us in general, that a licensing board would not solve some of the problems inherent in the present organization, that it has some advantages but also some of the disadvantages of both courses and that when all factors are considered, the arguments in favor of establishing a licensing board become essentially arguments in favor of going further and establishing a separate agency.

Respectfully submitted.

WILLIAM F. KENNEDY, FRITZ F. HEIMANN, Counsel for General Electric Co.

DECEMBER 1, 1960.

APPENDIX 8

EXCERPTS FROM BUREAU OF BUDGET MANAGEMENT STUDIES OF OTHER FEDERAL REGULATORY AGENCIES

Excerpts are reproduced in this appendix from the following Bureau of the Budget management studies:

A. Organization and Procedures Survey of the Interstate Commerce Commission.

B. Increasing the Effectiveness of the Civil Aeronautics Board.

A. ORGANIZATION AND PROCEDURES SURVEY OF THE INTERSTATE COMMERCE COMMISSION

"Six interrelated key problems face the ICC. First, the 11member Commission is overburdened with decisional and management issues. Second, there is no effective Commission or agency level focus of management responsibility. Third, the decisional processes are overly judicialized and permit far too many reconsiderations of the some case and far too much of the caseload to rise to the Commission level. Fourth, the organization and activities of the 10 semiautonomous bureaus suffer from a multiplicity of conflicting rationales. Fifth, there is no coordination of field activities at either the field or headquarters level below the Commission itself. Sixth, while the handling of large quantities of data is vital to activities in all areas, (1) relatively little advantage presently is taken of modern equipment and techniques for massive processing of data, and (2) there is inadequate analysis of available data for, and use of it in, policy formulation and the relating of individual cases to the overall situation."

SEVERAL PROCESSES ARE UTILIZED TO PERFORM REGULATORY FUNCTIONS

"The legislative, judicial and executive functions of the ICC are carried out by a variety of processes identified with the courtroom, the legislature, the expert body, and the administrator and his policetype investigation and enforcement units.

"Judicial-type processes, involving hearings with right of cross examination and decisions on the record, dominate the activity of the ICC. The tendency until recent years has been strongly in the direction of further judicialization. The pressure of the late 1930's and early 1940's led in 1946 to the passage of the Administrative Procedure Act which fostered a further broad movement toward judicializa

tion. Resultant processes frequently stretch out for a year and a half to 3 years in the general run of contested cases.

"Legislative or expert body-type processes also are frequently used. In many areas where private applications are uncontested, issues are clear or rules of procedure afford opportunity for resort to judicialized process at a later stage. Too little use is made of the greater degree of informality of procedure and expedition afforded by these processes, the essence of which is decision by a responsible body on matters whose primary character is public interest rather than private right, or which are procedural in nature."

ALTERNATIVE AVENUES EXIST WITH RESPECT TO THE PHILOSOPHY OF PROCESS AND PROCEDURE UTILIZED

"Third, substantial decrease in the judicialization of ICC processes would reduce the caseload burden and speed decisionmaking. Moreover, in view of the very considerable and continuing backlog of cases, and delays in reaching final decisions, no greater contribution to effective justice could be made than that which would result from prompter decisions. Advantages to be gained from increased use of executive and expert board processes far outweigh disadvantages of any alleged reductions in ‘due process' as long as recourse to the courts is available. Thus some considerable steps toward dejudicialization of the processes of the ICC would certainly expedite the regulatory task with no real damage to fundamental rights.

ALTERNATIVE AVENUES ARE ALSO AVAILABLE WITH

ORGANIZATIONAL FRAMEWORK ADOPTED

RESPECT ΤΟ THE

"Commission organization, of course, could continue the present rationale of a multiple executive. However, it is of key importance that Commission structure and assignment of responsibilities be adapted to the policymaking role. This, in fact, will require (1) reservation of Commission attention to key issues and (2) delegation of executive direction of the agency to an 'administrator' reporting to the Chairman of the Commission.'

B. INCREASING THE EFFECTIVENESS OF THE CIVIL AERONAUTICS BOARD

THE MAJOR PROBLEMS OF THE CAB

"The extent to which the Board has been able to successfully meet its total responsibilities and to effectively control its increasing workload has been hampered, our inquiries indicate, by these factors:

"1. The complex and time-consuming, decision-making processes used in the CAB, which have promoted ineffective utilization of available manpower and excessive processing delays. While statutory changes would do much to relieve this situation, increased Board attention to workload preventive measures, to processing improvements, and to improved manpower utilization is equally important.

63485-61-pt. 2- 37

"2. The time of the Board itself, our analyses reveal, is unduly concentrated on only two activities: (a) adjudication, which consumes approximately 65 percent of its time; and (b) international affairs, which take almost 20 percent of its time.

"This concentration of Board effort has denied adequate attention to its other major responsibilities, e.g., formulating substantive plans and policies, and planning the efforts of and appraising the effectiveness of its 750-member staff."

PROCESSING METHODS USED

"(a) The formal proceeding

"Formal proceedings are proceedings which are determined on the record after agency hearing. The procedural steps in this process were developed to safeguard the rights of all parties in issues brought before the agency.

"While these steps do provide the safeguards they were designed to accomplish, their complexity has not made them inducive to expeditious processing.

"In many of these cases, the factors of the specific case do not in fact require nor really use the judicial safeguards inherent in the adjudicatory method.

"The requirement for formally processing all cases pertaining to a specific section of the act (regardless of the factors of the specific case), we believe, has these disadvantages:

"1. It places unnecessary processing time demands on the Board and its staff.

"2. It lengthens significantly the processing cycle of the specific

case.

"3. It contributes to lengthening the processing cycle of all dockets by preempting limited manpower resources of the Board."

CHANGES TO IMPROVE THE BOARD'S EFFECTIVENESS

"3. To provide the Board sufficient time to adequately meet all its responsibilities, we propose:

(a) Lessen the Board's emphasis on case-by-case adjudication, e.g.

"(1) Delegate more responsibility to the staff, particularly on cases that are usually noncontested, e.g., foreign permit applications, interlocking relationship cases, mail rate cases, and section 412 agreements.

"(2) Limit the Board's participation in adjudication by:

"a. Limiting the Board's review on appeal only to cases involving major points of law or major issues of policy. "b. Limit Board consideration of cases accepted for review to major points of law or major issues of policy in question, rather than trying the case de novo."