Chapter 7
Powers and Functions of
Administrative Agencies
Administrative Law
That body of rules, orders,
and decisions issued by
administrative agencies such
as the following:
Enabling Legislation
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Administrative agencies are created by
enabling legislation, which usually
specifies the name, composition, and
powers of the agency.
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Agency Creation
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Agencies allow congress to regulate
something more closely and more expertly.
Congress passes enabling legislation (state
or federal).
Specifies the name, purpose, functions, and
powers of agency.
Describes the procedures of the agency.
Provides for judicial review of agency orders.
Types of Agencies
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Independent regulatory agencies.
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Executive administrative agencies.
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The difference between the two types lies in
the accountability of the regulators.
– Executive agencies are subject to the authority of
the president who can appoint and remove their
officers (ex. Commerce Department).
– Independent agencies’ officers serve for fixed
terms and cannot be removed without just cause
(ex. Securities and Exchange Commission).
Agency Powers and the Constitution
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Under the “delegation doctrine” Congress
has the power to establish agencies that can
create rules for implementing those laws
(Article 1).
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Administrative agencies exercise powers
normally divided among the three branches of
government.
– Rulemaking.
– Enforcement of the rules.
– Adjudication.
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Agency Functions and Procedures
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The Administrative Procedure Act (APA) of
1946 imposes procedural requirements on
agencies that they must follow in their
rulemaking, adjudication, and other functions.
Rulemaking
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Notice of the Proposed Rulemaking.
– Proposed rule and its rationale is published in the Federal
Register, inviting comment.
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Comment Period.
– Interested parties can express their views on the proposed
rule in writing or orally at the hearing.
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The Final Rule.
– The final rule is published and compiled in the Code of
Federal Regulations. Final rules have a binding legal effect.
Enforcement
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The enforcement function of an
administrative agency occurs largely
within the framework of its rulemaking
and adjudication functions.
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Agency enforcement involves the
exercise of investigative and
prosecutorial powers.
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Investigations
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After final rules are issued, agencies conduct
investigations to monitor compliance.
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Investigative Tools
– Inspection and Tests
– Subpoenas (ordinary - appear at hearing or to
hand over books, papers, records, or documents)
– Searches and Seizures - In most instances, a
search warrant is issued.
Limits on
Administrative Investigations
Limits on administrative investigations include the
following:
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The investigation must have a legitimate purpose.
The information being sought must be relevant.
The demand for testimony or documents must be
specified.
The burden of the demand is on the party from whom
the information is sought.
Adjudication
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During this phase of the process, the agency
may make an offer to negotiate a
settlement.
If no settlement reached, a formal complaint
is issued. This is a public document and is
accompanied by a press release.
Case then goes to a hearing presided over by
an Administrative Law Judge.
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Role of the ALJ
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ALJ presides over hearing, rules on
questions of evidence, and makes
determinations of fact.
ALJ must be an unbiased adjudicator
(judge). ALJ must be separate from the
agency’s investigative and prosecutorial
staff.
ALJ is protected from agency actions.
Adjudication
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Hearing procedures.
– Resembles a trial.
– Parties can use the discovery process,
hear testimony, present evidence, and
cross- examine witnesses.
– Significant difference between a trail and
an administrative agency hearing is the
relaxation of evidentiary rules ( hearsay
can be introduced as evidence).
Requirements for Judicial Review
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The party challenging the agency action must
show that the nature of the action is
reviewable before the court.
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The challenger must have standing to sue the
agency.
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The challenger must have exhausted all
possible administrative remedies.
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Article III, Section 2, of Constitution requires
that an actual controversy be at issue.
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Other Controls Over Administrative
Agencies
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Executive Controls.
– Presidential veto power.
– president’s authority to appoint and remove.
federal officers.
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Legislative Controls.
– Congress can abolish or take away power.
– Congress’s power of the purse.
– Congress can amend an enabling act.
– Congress can “freeze” the implementation of
its statutory laws.
Public Accountability
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Freedom of Information Act (1966) - requires
the federal government to disclose “certain
records” to “any person” on request, even
without any reason.
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Government-in-the-Sunshine Act (1976) requires that “every portion of every meeting of
an agency” that is headed by a collegial body
must be open to “public observation.”
Public Accountability (cont.)
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Regulatory Flexibility Act (1980) - The agency
must conduct a regulatory flexibility analysis
whenever a new regulation will have a
“significant impact upon a substantial number of
small entities.”
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Small Business Regulatory Enforcement
Fairness Act (1996) - Allows Congress a 60
day review of federal regulations prior to taking
effect.
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