The Federal Aviation Administration (FAA) is responsible for developing, administering, enforcing, and revising an effective, enforceable set of aviation safety regulations that enhance aviation safety and security and promote the efficient use of airspace. Generally, a regulation is an agency statement that is designed to implement, interpret, or prescribe law or policy or to describe procedural requirements. The process by which FAA and other federal agencies develop regulations is called rulemaking. FAA’s rulemaking activities encompass all of the agency’s areas of responsibility, including air traffic control, aviation security, and commercial space transportation. FAA must address both long-standing and emerging issues in its rulemaking efforts. For example, questions about the safety of aging aircraft and the adequacy of flight duty rest requirements for airline pilots have been debated for decades. In contrast, the issues of fire safety standards for cargo compartments and the transport of oxygen generators emerged after the Valujet crash outside of Miami in May 1996. Rulemaking can be a complex and time-consuming process, and the Congress expressed its concerns about the speed of FAA’s rulemaking in 1996, when it enacted legislation that established time frames for steps in the process. While some rules may need to be developed quickly to address safety issues or guide the use of new technologies, rules must be carefully considered before being finalized because they can have a significant impact on individuals, industries, the economy, and the environment. Figure 4 provides a case study of FAA’s efforts to address a complex, long- standing aviation safety issue by creating a rule to regulate flight duty and rest requirements for flight crew members. Rulemaking involves three stages of agency activity. First, an agency identifies a need for rulemaking. Second, it initiates the rulemaking process, develops a proposed rule, and publishes it for public comment. After a public comment period, the agency finalizes the rule by considering the comments received and drafting and publishing the final rule. Figure 5 provides an overview of the process as it applies to FAA. A rulemaking issue may be identified internally or externally. For example, FAA staff may find that changes in aviation technology or operations or the emergence of a safety problem warrant rulemaking. Alternatively, the public or the aviation industry may petition the agency to develop a new rule or provide an exemption from existing rules. At the beginning of fiscal year 2001, FAA was responding to 57 petitions for rulemaking and 415 petitions for exemptions while reviewing 84 recommendations by its advisory committee—the Aviation Rulemaking Advisory Committee (ARAC). In addition, the Congress, the President, or the Secretary of the Department of Transportation (DOT) may direct FAA to develop a rule, or the National Transportation Safety Board (NTSB) may issue a safety recommendation. After a rulemaking issue is identified, an agency must consider the issue in light of its resources and other rulemaking issues that may be equally compelling. Some rulemaking issues may require study and analysis before an agency’s management can decide whether to initiate the rulemaking process and devote resources to developing a proposed rule. Once an agency has decided to initiate rulemaking, the basic process for developing and issuing regulations is spelled out in section 553 of the Administrative Procedure Act of 1946 (APA). Most federal agencies, including FAA, use notice and comment rulemaking. Once rulemaking is initiated, agencies generally must develop and publish a proposed rule or “notice of proposed rulemaking” in the Federal Register. A public comment period follows, during which interested persons have the opportunity to provide “written data, views, or arguments.” After the comment period ends, the agency finalizes the rule by reviewing the comments, revising the rule as necessary, and publishing the final rule in the Federal Register at least 30 days before it becomes effective. Most rules are later incorporated into the Code of Federal Regulations (CFR). For the remainder of this report, we will use the term “rulemaking” to refer to the notice and comment process by which FAA’s rules are developed and codified in the CFR. Rules vary in importance, complexity, and impact. Under Executive Order 12866, federal agencies and the Office of Management and Budget (OMB) categorize proposed and final rules in terms of their potential impact on the economy and the industry affected. Executive Order 12866 defines a regulatory action as “significant” if it has an annual impact on the economy of $100 million or more; adversely affects the economy in a material way (in terms of productivity, competition, jobs, environment, public health or safety, or state, local, or tribal governments or communities); creates a serious inconsistency or interferes with another agency’s materially changes the budgetary impact of entitlements, grants, user fees, or loan programs or the rights and obligations of recipients thereof; or raises novel legal or policy issues arising out of legal mandates, the President’s priorities, or the principles set forth in the order. Since 1996, significant rulemaking entries have constituted about half of all of FAA’s rulemaking entries in the Unified Agenda, a semiannual report of federal regulatory activities. Figure 6 shows the total number of FAA’s rulemaking entries and the number of significant rulemaking entries listed in the October Unified Agendas from 1995 through 2000. Significant rules often take longer to issue than nonsignificant rules. They may require extensive regulatory analyses of the potential economic, social, and environmental impacts of one or more alternatives. These analyses may take months to complete and are needed to ensure that the projected economic impact has been correctly quantified and that the costs the rule will impose on the affected industry and individuals are justified. Significant rules typically require more levels of review than nonsignificant rules. Executive Order 12866 requires that OMB review agencies’ proposed and final significant rules before they are published in the Federal Register. Moreover, clearances for proposed and final rules may be required at the departmental level for those agencies that are part of a cabinet-level department. To reduce this burden, the Federal Aviation Reauthorization Act of 1996 grants rulemaking authority directly to the Administrator, except that the Administrator may not issue a proposed or final rule without obtaining the Secretary’s approval if that rule is significant as defined by statute. The Wendell H. Ford Aviation Investment and Reform Act for the 21st Century narrowed the scope of rules that would be considered to be significant, setting the threshold for economic significance to $250,000,000 and eliminating inconsistency and interference with other agencies’ actions and material changes to budgetary impact of entitlements, grants, user fees, or loan programs and recipients’ rights and obligations as criteria. Nevertheless, agencies that report to the Office of the Secretary of Transportation (OST), including FAA, have also been required by the Secretary to submit for review all rules deemed significant under the executive order as well as rules that OST has indicated are to be considered to be “significant” under supplemental guidelines. These additional criteria increase the number of rules for which agencies within DOT are expected to complete regulatory analyses. For example, FAA published a significant rule in April 2000 that limited the number of commercial air tours permitted in the Grand Canyon. While the rule was not considered a significant regulatory action under Executive Order 12866, and would not have been significant under the statute, it was considered significant under the Department’s supplemental guidelines because the rulemaking had a potentially substantial economic impact on Native American tribes. Specifically, the rule was expected to have a significantly adverse impact on the Hualapai Tribe’s economic development and self-sufficiency, since the trive relied on income from air tour operations and tourist dollars brought to the reservation by the air tours. The additional analyses and reviews required for significant rules are incorporated into the basic process that all federal agencies use for rulemaking: developing a proposed rule, releasing the proposed rule for public comment, and developing a final rule. Various offices within FAA conduct the required analyses and reviews of rulemaking documents, as shown in table 1. In the early stages of rulemaking, each rule is the responsibility of a program office with technical expertise in a specific area. This office develops the initial rulemaking documents, as indicated in table 1. Depending on the content of the rule, the program office may be a staff office, like the Office of Chief Counsel, that also has the additional responsibility of reviewing all significant rules. Alternatively, it may be an office with responsibility for a technical area, such as the Office of Civil Aviation Security Policy and Planning. Each of these offices has managers who can become involved in the rulemaking process by reviewing the work of its representatives on a rulemaking team. Generally, FAA’s rulemaking teams consist of representatives from the program office, the Office of Rulemaking, the Office of Aviation Policy and Plans, and the Office of the Chief Counsel. In addition to significant and nonsignificant rulemaking, the staff in these offices also work on other projects, including airworthiness directives, airspace actions, and responses to petitions and exemptions. The ultimate goal of the federal rulemaking process is to develop and issue a quality rule in a timely and efficient manner. Time is of particular importance when safety is at stake or when the pace of technological development exceeds the pace of rulemaking. Many of the problems federal agencies face in developing and publishing rules are long-standing and similar across agencies, and they have been cited in studies and discussions of the process since at least the 1970s. For example, a Senate study in July 1977 cited deficiencies in decisionmaking, planning, and priority-setting by top management as causes of delay in federal rulemaking. In July 2000, DOT’s Office of the Inspector General (OIG) reviewed the Department’s rulemaking process and found that the Department had taken as long as 12 years to issue significant rules. The OIG attributed the lack of timeliness of the Department’s rulemaking partly to a lack of timely decisionmaking and prioritization.