RulemakingBureaucratic Politics

Introduction

• Rules affect almost every part of our lives:• Antitrust regulations• Banking• Securities• Environmental regulations• Foods• Drugs• Immigration• Speed limits• Health information• TV and Radio• Car emissions

• Rules get authority from:• Constitution• Congress• Other acts:

• Administrative Procedures Act (APA)

What is a rule?

• § 551 of the Administrative Procedures Act• Rule – Agency statement of general or particular applicability and future

effect designed to implement, interpret or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency.

• Types of rules:• Substantive (implement law or policy) – rules relating to the substance of

matters, as distinct from procedural rules.• Procedural (describe and agencies procedures) – rules that govern the

practices and procedures of an administrative agency.• Exempt from APA rulemaking requirements.• Agencies are not required to adopt procedural rules, but must publish them in the

Federal Register if they do.• Interpretive (explanatory statements) – administrative rules that interpret

or clarify an agency’s position as to its duties or responsibilities based on a controlling statute or promulgated legislative rule.• Exempt from APA rulemaking requirements.

What is a rule?

• Why is rulemaking needed?• Create rules• Amend rules• Scrap old rules

• Key values in rulemaking:• Information• Accountability• Participation• Reasoned decision making• We are concerned with these values because we want to ensure that when

agencies create rules:• They don’t violate their guiding statute.• They don’t exceed the agency’s authority.

Types of Rulemaking Procedures

• Informal Rulemaking• Governed by §553 of the APA• Also called Notice and Comment Rulemaking

• Formal Rulemaking • Guided by sections §556 & 557 of the APA

• Same sections that guide adjudication.• The guiding statute of the agency will stipulate if and when formal rulemaking is required.

• Hybrid Rulemaking• Evolved process• Process is to elaborate on informal rulemaking to prevent arbitrary rules• Develops rulemaking record

• Judicial review• Peer review• Legislative oversight• Public information• Reconsideration/archival

Notice and Comment Rulemaking Procedure

• Steps in the Process:• Regulatory analysis and executive pre-clearance and various impact assessments

• Policy analysis• Compare with state programs of the same sort

• Regulatory Flexibility Analysis• Small Business Act of 1953

• Created the Small Business Administration• Regulatory Flexibility Act of 1980

• Minimize the effects of regulations on small businesses and non-profit organizations.• Regulatory flexibility analysis – seeks to minimize the effects of regulations on small businesses, but also considers

any flexible measures that could be incorporated to assist small businesses in compliance and reporting requirements.• OMB clearance.

• Notice of Proposed Rulemaking (NPR)• Published in the Federal Register• Includes:

• A statement of the time, place, nature of the public rulemaking proceedings.• Reference to the legal authority under which the rule is proposed• Either the terms or substance of the proposed rule or a description of the subjects and issues involved.

• Many agencies just include the full text of the proposed rule.• This stage applies to both formal and informal rulemaking.

Notice and Comment Rulemaking Procedure

• Comment period• Agency must provide interested persons an opportunity to participate.• Participation includes:• Submission of written data, views, or arguments.• Sometimes opportunity for oral presentation.

• Minimum of 30 days for comments from the public• Hearings• This is not required in Notice and Comment rulemaking, but agencies may

include this if they so choose.• Publication of the Final Rule• Minimum of 30 days after published in the Federal Register• Rule summary and final rule are codified in the Code of Federal Regulations and

the Federal Register

The Code of Federal Regulations

• The Code of Federal Regulations (CFR) is a codification of the general and permanent rules published in the Federal Register by federal government agencies.

• 50 Titles divided by subject area and subdivided into chapters

Formal Rulemaking Procedure

• The APA states that “when rules are required by statute to be made on the record after opportunity for an agency hearing,” rulemaking must follow the provisions for formal adjudication.• Agencies may also choose to engage in formal rulemaking.

• Steps:• Notice of Proposed Rulemaking• Agency conducts a trial-type hearing instead of comment period.

• Presided over by an administrative law judge (ALJ)• ALJ makes finding of fact and conclusions of law and issues a preliminary opinion that is forwarded to

the administrative commission.• Rules of evidence are relaxed compared to a formal judicial proceeding.• Hearing creates a rulemaking record that is useful to the agency if judicial review occurs.

• Administrative commission makes a final decision.• Final Rule is published in the Federal Register and the Code of Federal Regulations.

Hybrid Rulemaking

• In the 1960’s many critics argued that notice and comment rulemaking did not satisfy due process requirements.

• Critics also argued about the complexity of formal rulemaking.• As a result, federal appellate courts began compelling agencies to provide

procedures that were neither required by the APA nor mandated by Congress.• Example:

• Requirement to disclose data upon which proposed rules were based.• Falls between informal and formal rulemaking.• Vermont Yankee Nuclear Power v. Natural Resources Defense Council • Ruled that courts may not impose such requirements on agencies.• The choice was now up to the agency as to whether to include such extra

requirements.