Essentials Of Business Law
Chapter 5
Administrative Law
McGraw-Hill/Irwin
Copyright © 2007 The McGraw-Hill Companies, Inc. All rights reserved.
Administrative Agencies
Governmental body
 Controls and supervises a particular public
activity
•
•
•
•
Energy
Transportation
Environmental pollution
Communication
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Administrative Agencies
Established by legislatures
 Specify the purpose, powers, and actions the
agency can take
Like governments within a government
 Combine all three functions
• Legislative
• Executive
• Judicial
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Federal Agencies
Consumer Product Safety Commission
Equal Employment Opportunity Commission
Environmental Protection Agency
Federal Communications Commission
Federal Trade Commission
Internal Revenue Service
Nuclear Regulatory Commission
Occupational Safety and Health Administration
Securities and Exchange Commission
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State Agencies
Alcoholic Beverage Control Board
Department of Insurance
Public Service Commission
Workers’ Compensation Board
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Local Agencies
Board of Education
Board of Health
Consumer Protection Agency
Department of Weights and Measures
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Organization Of Governments
Government operates at federal, state,
and local levels
Three branches at each level
 Legislative
 Executive
 Judicial
Each branch has specific duties and
powers
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Legislative
Branch Of Government
Elected representatives
 Pass laws representing the will of the people
Federal level
 Two houses of Congress
• House of Representatives
• Senate
State level
 General assembly
• Two houses (except in Nebraska)
Local Level
 City council
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Executive
Branch Of Government
Enforce enacted legislation
Federal level
 President
State level
 Governor
Local level
 Mayor, county executive, or someone with a
similar title
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Judicial Branch Of Government
Determines if there have been violations of the
law
Interprets the law
Federal level
 District courts, appeals courts, U.S. Supreme Court
State level
 Trial courts, appeals courts, and a supreme court
Local level
 Municipal courts, justices of the peace, and
magistrates courts
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Functions Of
Administrative Agencies
Regulating conduct
 Price, entry into geographic area or type of business
Fulfilling government requirements
 Collect taxes
 Raise revenues
Disbursing benefits
 Distribute subsidies and benefits
Providing goods and services
 Electricity, water, hospital care, and public housing
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Why An Administrative Agency
Is Formed
Legislatures lack time and expertise to:
 Create rules to govern complex social and
economic areas
 Supervise the details on a day-to-day basis
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Administrative Agencies And
Governments
Similarities
 Organizational format is similar to government
 Carry out all three functions
• Executive, legislative, and judicial
Differences
 Voters do not elect executives in or out of
office
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Criticism Of
Administrative Agencies
Regulators are too closely aligned with
enterprises they were created to regulated
 Complex industries need experienced
regulators
 Regulators are influenced by the industry
because of their former association
Regulators are not elected by popular vote
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