2. 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)
3. 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.
4. 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.
5. 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
6. 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.
7. 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
8. 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
9. 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.
10. 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.
