Rulemaking Part I Jargon Alert Legislative rule (regulation) Has the effect of law Generally just called a rule or regulation Non-Legislative rule Has no legal effect, but shows what the agency thinks the law is Many names - interpretive rule, guidelines, guidance document, anything but rule or regulation 2 Administrative Rules The Legislature can delegate the power to make rules to the agency Some agencies do not have rulemaking authority Rules cannot exceed the authority in the agency's enabling legislation or the Constitution Properly promulgated rules have the same effect as statutes 3 The Agency as Legislature The shift from adjudications to rulemaking started in the 1950s The courts try to allow an agency to make rules Parallels the growth of state and federal agencies 4 How do you make a Rule? Publish the proposed rule and what it is based on for public comment The Federal Register and LA Register are where rules are published first Review and address public comments and publish these along with any modifications in the rule Codify the rule after it is effective Rules are Codified in Code of Federal Regulation and the LA Administrative Code 5 How do Rules Differ from Adjudications? Participation and Generality Allow Public Participation Adjudications are limited to the parties Allow Political input Rulemaking is a public process which allows politicians input Appropriate Procedure Adjudications are tied to specific facts and parties Rules are generally applicable, although they may be very specific 7 Prospective v. Retrospective Retroactivity Adjudications are based on things that have already happened Adjudications can be treated as treated as precedent, but this is not binding Adjudications are driven by the available cases Rules are prospective Not bound by existing facts 8 Uniformity Adjudications, like trials, are driven by specific facts and can treat similar situations differently Rules set up a general framework that treats all parties uniformly Rules are the fairest way to make big regulatory changes 9 Adoption of National Standards National standards can be adopted through agency rules, harmonizing practice across jurisdictions National building codes CDC guidelines on food sanitation Recommendations of the Advisory Committee on Immunization Practices LA and building codes 10 Agency Efficiency While a rulemaking can be expensive and time consuming, it can settle issues across a large number of adjudications Rulemaking can also eliminate many hearings by resolving factual questions In disability cases, rules can be used to establish what constitutes a disability, rather than making it as case by case determination. 11 Better Guidance for the Public Rules are published and codified State rules were hard to find, but the Internet is making this better Agency adjudications, especially at the state level, are often not published There may be no transcript of the full adjudication Rules are binding on everyone, not just the parties 12 Agency Oversight You can control the outcome of rulemaking much easier than that of adjudication Not Dependant on ALJs Why is this especially important in LA? More input from across the agency Directly controlled by agency policy makers 13 Downside of Rulemaking Adjudications can be more flexible in the individual cases Rules can be so abstract or overbroad that they are expensive or difficult to follow Like statutes Adjudications are useful when you are not sure what the rule should be and need more info and a chance to experiment Does not do away with the need for adjudications 14 Rulemaking Ossification Rulemaking has gotten so complex and time consuming it has lost some of its value Rulemaking can go on for years What is the legal value of a proposed rule that has not been finalized? This was the problem for the anti-kickback regulations Complicated by regulatory conflict and incompetent agency practice The courts and legislature have increased the burden on rulemaking 15 What is a Rule? Definition of a Rule APA 551(4) (4) 'rule' means the whole or a part of an 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 and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs, or accounting, or practices bearing on any of the foregoing; Not a clear definition Things that are not adjudications or licensing 17 Functional Definitions Critical term is general applicability Remember the standards for a hearing? If you do not get a hearing, and there is no special exception such as an emergency or national security, it is probably a rule 18 LA Definition 6) "Rule" means each agency statement, guide, or requirement for conduct or action, exclusive of those regulating only the internal management of the agency and those purporting to adopt, increase, or decrease any fees imposed on the affairs, actions, or persons regulated by the agency, which has general applicability and the effect of implementing or interpreting substantive law or policy, or which prescribes the procedure or practice requirements of the agency. "Rule" includes, but is not limited to, any provision for fines, prices or penalties, the attainment or loss of preferential status, and the criteria or qualifications for licensure or certification by an agency. A rule may be of general applicability even though it may not apply to the entire state, provided its form is general and it is capable of being applied to every member of an identifiable class. The term includes the amendment or repeal of an existing rule but does not include declaratory rulings or orders or any fees. 19 Exemptions to Notice and Comment Requirements Is notice and comment a constitutional requirement? Military and foreign affairs Why exempt these? Limiting the term of residence for Iranian nationals after the hostage incident National security issues? Extending asylum to persons subject to reproductive restrictions in China Was this just an individual benefit or part of a foreign policy? 21 Agency Procedures Like the code of civil procedure Does not change the substantive rights of the parties Does not change the regulated behavior, only the process in agency procedures 22 Actions where Secrecy is Important Wage and price controls Bidding on contracts Negotiations on land purchases and sales 23 Emergency Proceedings Emergency Rules http://www.state.la.us/osr/osr.htm Interim Final Rules Published and in effect, but will be modified after comments are in. Calculations and other non-discretionary rules Technical corrections Can require notice and comment if the correction causes a different result 24 Non-APA Requirements APA is only the default if there is no other statutory guidance National Environmental Policy Act imposes requirements if the rule affects the environment Regulatory Flexibility Act - small business Executive Order 12866 - more $100M impact The book calls these hybrid rulemaking, do no confuse this with court imposed hybrid rulemaking as in Vermont Yankee 25 Beginning Rule Making Why was the court willing to order the agency to make a rule in the Regulators? Why do agencies often fail to follow congressional direction to make rules? What is a request for a rulemaking and what does it force the agency to do? 26 553(b) - Exceptions to Notice Requirements 1) Interpretative rules, general statements of policy, and rules of agency organization, procedure, and practice; and 2) Rules when the agency finds for good cause that notice and public procedure are impracticable, unnecessary, or contrary to the public interest. No notice means no comment under 553(c) 27 Exception 1 - Interpretative Rules It is only explaining the law or providing guidance for action Prosecution guidelines IRS audit guidelines Since they do not change the law, they have no legal effect Does that mean you can ignore them? 28 How do you know if it an Interpretive Rule or a Legislative Rule? Why would an agency want to use an interpretive rule rather than a legislative rule? What is the risk to the agency if they do and the court disagrees? What is the benefit to the regulated parties of interpretive rules? What if the agency is prevented from providing guidance documents? 29 The Nature of the Enabling Act Very general laws Little effective guidance in the statute Makes any interpretative rule more likely to been seen as a legislative rule Very specific laws - like the ADA No room for legislative rules Everything is guidence 30 EPA Example - Wetlands EPA makes a rule that states that the term “waters of the United States” (which defines the jurisdiction of EPA under the Clean Water Act) includes wetlands that potentially provide habitat to migratory birds. Is this an interpretative rule or a legislative rule? Can we tell just looking at the rule? 31 What Do We Need to Know? Will the agency say that the rule is binding? The substantial impact test How might this rule affect the buyers of wetlands? Is this a substantial impact? What is the agency's defense? Is the substantial impact test circular? 32 The “Legally Binding” or “Force of Law” Test What is the enforcement test? What do we need to know to tell whether the agency can enforce the law without this rule? Is the agency required to define wetlands? Was the agency doing enforcement before this rule? Under this test, is this an interpretative rule? What if statute allows the agency to define toxic substances that cannot be dumped into lakes? Would a list of these substances be legislative? 33