Introduction:
The Role of Agencies
Three Sources of the Law
• Legislative
• Judicial
• Executive
– President
– Cabinet
– Administrative Agencies
• are established by legislatures, agencies and are
usually organized under the executive branch of
government, often associated with a Cabinet
position
• conduct legislative, executive, and judicial types of
activities
• exist on both federal and state levels (We will use
the federal system as the paradigm for state
agencies.)
• Examples of executive branch agencies are the
– Environmental Protection Agency
– Department of Transportation
– Federal Reserve Board
– Department of Agriculture
– United States Postal Service
– Department of Veterans’ Affairs
– Federal Aviation Administration
• Because of the scope of Congressional delegation of
authority, each agency is unique in its structure, its
personnel, and the nature of its regulations.
• Unless talking about a specific agency, administrative
agencies’ regulations and decisions must be discussed in
broad generalizations.
Independent Administrative Agencies:
The Fourth Branch of Government?
• There are also agencies that are created by Congress as
part of the executive branch but are not under the direct
control of the president.
• Many of these are independent regulatory commissions.
• The president appoints, but cannot remove commissioners
except for causes specified under the enabling statute.
• These agencies are often called the “headless fourth
branch” of government.
• Examples of regulatory commissions are the
– Civil Aeronautics Board
– Equal Employment Opportunity Commission
– Federal Trade Commission
– National Labor Relations Board
– Nuclear Regulatory Commission
– Securities and Exchange Commission
– Federal Energy Regulatory Commission
– Federal Deposit Insurance Corporation
– Federal Communications Commission
An administrative agency may be called a
– Board
• National Labor Relations Board
– Commission
• Federal Communications Commission
– Corporation
• Federal Deposit Insurance Corporation
– Authority
• Tennessee Valley Authority
– Department
• Department of Transportation
– Administration
• Social Security Administration
– Agency
• Environmental Protection Agency
Role of Administrative Agencies
• Legislative: Granted rulemaking authority
– Congress delegates authority to promulgate regulations
to administrative agencies
• Enact enabling statutes
• Establish the scope of agency authority
– Presidential Executive Order may also delegate
authority to promulgate regulations to administrative
agencies.
• Judicial: Congress may also grant power to hear and settle
disputes arising from the regulation or the enabling statute.
• Executive: Congress may also grant power to investigate
and prosecute violators of regulations.
Role of Administrative Agencies
The Securities and Exchange Commission is an example of
an agency with powers similar to those of all three
branches of government
– Legislative: promulgates regulations governing what
information must be given to investors.
– Judicial: conducts hearings to determine guilt and mete
out punishment to violators of these regulations.
– Executive: enforces these regulations by prosecuting
violators by disciplinary actions and stop orders.
Role of Administrative Agencies
Outcomes of agency actions include
– Rules or regulations (the two words are used
interchangeably), which have the same effect as statutes
– Licenses, which include permits, certificates, other
types of permission
– Advisory opinions, which are authoritative
interpretations of statutes and regulation but are not
binding
– Orders, which are the final disposition of any agency
action, other than rulemaking
– Decisions, which adjudicate controversies arising out of
the interpretation of statutes or regulations; they are
issued in the same manner as court decisions
Comparison of the Roles of Statutes and Regulations
•
•
•
•
•
STATUTES
Passed by Congress
Provide for broad social
and economic goals and
legal requirements
Get their power from the
Constitution
Reviewed by courts for
constitutionality
Representative democracy
– Congress acts to
represent the will of the
people
•
•
•
•
•
REGULATIONS
Issued by agencies
Get their power from
Congress
Prescribe specific legal
requirements to meet
congressional goals
Reviewed by courts to
determine constitutionality,
limits of delegated authority,
and whether they are
arbitrary and capricious
Participatory democracy –
agencies must seek and
consider public comment
The Process of Promulgating
Regulations (Rulemaking)
The initiative behind promulgation of a new regulation or a
change in a regulation can originate from many sources,
including
– legislation that delegates authority
– congressional hearings and reports
– court orders
– Executive Orders and Office of Management and
Budget Circulars
– agency acting on its own initiative
– emergency situations, technological developments, etc.
– political pressures
– Federal Advisory Committee recommendations
– petitions and informal requests from affected parties
Rulemaking Process
• Regulation is proposed
• Office of Management and Budget reviews under
Executive Order 12866
• Proposed rule is published in the Federal Register
• Public comment is invited
• Office of Management and Budget re-reviews regulation
• Final regulation published in the Federal Register
Rulemaking Process
• Final regulation published in the Federal Register
– Responds to comment
– Amends Code of Federal Regulations
– Sets effective date
• 30-day minimum for most regulations
• 60-day minimum for major regulations
• No minimum for good cause
• Agency may delay or withdraw regulation before it
becomes effective
• Agency submits regulation to Congress and Government
Accounting Office, which can nullify the regulation
• Regulation is placed in Code of Federal Regulations
(CFR)
President
Executive
Order
Delegated
Authority
Congress
Agency
Federal
Public
Register
Law
(Enabling
Statute) Delegated Authority Proposed
Regulation
Congressional
Oversight
Judicial
Review
Agency
Federal
Register
Final
Regulation
Agency
Code of
Federal
Regulations
Public Comment