Source: https://www.regulationwriters.com/regulatory_glossary/
Timestamp: 2019-04-24 12:05:36+00:00

Document:
The Regulatory Group, Inc., first compiled this document for its training courses more than 35 years ago. It is frequently amended and revised to stay current with the developments in the Federal regulatory process. In the past, editing support for this glossary has been provided by Professor Jeffrey Lubbers of the Washington College of Law, American University, and author of the comprehensive Guide to Federal Agency Rulemaking (ABA 2018).
TRG’s Regulatory Glossary is copyright protected. Copyright 2019, All Rights Reserved.
Adjudication refers to the process by which an administrative body within an agency makes a determination in an administrative proceeding, like a court. In adjudication, an agency applies statutory requirements, implementing regulations or interpretive policies to a specific party. For example, the adjudicators at the Social Security Administration may apply the Social Security benefits rules to a specific individual to determine eligibility for benefits. In the agency adjudication process, the functions of judge and jury are combined in a single entity—either an administrative law judge, a hearing officer, or some type of board—that conducts a hearing and renders a decision. This decision is usually called an “initial decision.” An “initial decision” becomes a “final decision” unless a party in the case appeals the decision to the agency head or designated agency official or appeals board, according to the agency’s procedures. On appeal, the agency may affirm, reverse, or remand the initial decision, but must explain any departure from the initial decision. The agency’s adjudicative procedures are spelled out in procedural rules, which usually are found in the Code of Federal Regulations.
The agency’s final decision (sometimes called an “opinion”) is usually in writing and sets out the reasons for that decision. It is served on the parties and indexed. A final decision adjudication can serve as a precedent for future cases, but is normally binding only on the named parties. Occasionally, in making such a decision, an agency may announce that the reasoning of that decision will only be applied in future cases. Some agencies, most notably the National Labor Relations Board, make most of their policy through case-by-case adjudication rather than through rulemaking.
The Administrative Conference of the United States (ACUS) is an independent Federal agency dedicated to improving the administrative process through consensus-driven applied research, and providing nonpartisan expert advice and recommendations to improve of Federal agency procedures. Its membership is composed of innovative Federal officials and experts from both the private sector and academia with diverse views and backgrounds. ACUS recommendations are available at http://www.law.fsu.edu/library/admin/acus/acustoc.html.
Administrative Law Judges (ALJs) are Federal employees who are appointed under provisions of the Administrative Procedure Act (APA) (5 U.S.C. § 557) to preside over formal APA hearings at specific agencies. They are considered Article I judges under the U.S. Constitution with limited judicial authority to review administrative “cases or controversies” and render decisions. They must be attorneys. ALJs make initial or recommended decisions that are subject to appeal to the agency head or designee.
Under the APA, ALJs are appointed only after passing comprehensive testing administered by the Office of Personnel Management. The APA guarantees them special protections designed to protect their decisional independence. ALJs enjoy absolute immunity from liability for their judicial acts. They may not be assigned duties that are inconsistent with their position as judges. ALJs are not supervised or directed by agency investigators or prosecutors. They are exempted from performance ratings; their pay is set by statute and based on seniority; and they may not be disciplined or dismissed unless the appointing agency shows good cause before the Merit Systems Protection Board.
As of 2016, more than 30 Federal agencies employ approximately 1,800 ALJs, with 85% employed by the Social Security Administration. ALJs are distinct from the many “administrative judges,” “hearing officers,” and other non-ALJ adjudicators used by agencies to preside over non-APA cases.
The Administrative Procedure Act (APA) (1946) (5 U.S.C. §§ 551-559, 701-706, 1305, 3105, 3344, 5372, 7521) is the statute that governs how Federal agencies propose and establish regulations. The APA also establishes the process for Federal courts to directly review agency adjudications and final decisions. The law spells out the basic "rules of the game."
Under the APA, an agency must minimally complete the following steps to issue most rules—publish a proposal in the Federal Register, invite and consider public comments, and issue a final rule at least 30 days before its effective date.
Besides the procedural requirements established in the APA, an agency may be required to follow additional procedural requirements contained in other statutes. Examples include overarching statutes such as the Regulatory Flexibility Act, and agency-specific statutes like the law that establishes an agency (see Organic Statute) or assigns new functions.
An agency may adopt additional procedural rules beyond those required by the APA or the agency’s own statute. These rules will usually be found in the Code of Federal Regulations, but sometimes are published only as an agency’s internal documents. These additional rules are generally binding on an agency personnel.
An agency may adopt additional procedural rules beyond those required by the APA or the agency’s own statute. These rules usually are found in the Code of Federal Regulations, but sometimes are published only as an agency’s internal documents. These additional rules are generally binding on an agency personnel.
Most States have enacted State equivalent APA laws that prescribe procedures for State administrative agencies.
An Advance Notice of Proposed Rulemaking (ANPRM) is a document that an agency may choose to issue before it is ready to issue a Notice of Proposed Rulemaking (NPRM). It may also be called a “notice of inquiry” or simply a “request for comments.” The ANPRM is used by an agency as a vehicle for obtaining public participation in the formulation of a regulatory change typically before the agency has done significant research or investigation on its own. Thus, one of the primary uses of an ANPRM is to involve the interested public in a potential regulatory action at an early stage, before the agency has arrived at even a tentative decision on a particular regulatory change. In some cases the agency may issue an ANPRM to test public reaction to a proposal.
The Administrative Procedure Act (APA) does not mention the ANPRM as an official part of the rulemaking process. Nor is an agency required to issue an ANPRM unless a specific statute or the agency’s own rules require it to do so. Also, an agency cannot use the ANPRM’s notice-and-comment period as the only basis for issuing a final rule. If an agency chooses to use an ANPRM, it still must issue an NPRM before issuing a final rule on that subject. The ANPRM is typically published in the proposed rule section of the Federal Register.
For the purpose of the Administrative Procedure Act (APA) and most other procedural statutes, “agency” is defined to include every Federal Government entity in the executive branch, whether or not it is within or subject to review by another agency. It thus includes cabinet departments, administrative agencies that are housed within departments, such as the Occupational Safety and Health Administration (OSHA) within the Department of Labor, “independent regulatory agencies,” such as the National Labor Relations Board, and other agencies that are independent of a department, but not “independent regulatory agencies,” such as the Environmental Protection Agency, General Services Administration, and National Aeronautics and Space Administration.
The arbitrary-or-capricious test is a term of art for the scope-of-judicial-review provision in section 706(2)(A) of the Administrative Procedures Act (APA) directing courts to invalidate agency actions found to be "arbitrary, capricious, an abuse of discretion, or otherwise not in accordance with law."
This test applies to all agency action, specifically the review of the factual basis for agency rulemaking. In this context, reviewing courts have overturned agency rules if the underlying policy judgments, reasoning, or asserted factual premises of the action are so unreasonable as to be arbitrary.
The APA requires a different test, the "substantial evidence" test, to be used in decisions made after formal hearings (i.e., formal adjudications and formal rulemakings). But court interpretations of these two tests have indicated that there is not much difference between their application.
In the case of Auer v. Robbins, 519 U.S. 452 (1997), the Supreme Court deferred to a Department of Labor interpretation of its own existing regulation even though it was provided for the first time in a brief. This “Auer deference,” provided to agency interpretations of their own regulations, is seemingly equal to the “Chevron deference” courts give to agency interpretations of ambiguous statutes they administer. However, the Court has declined to apply it to agency interpretations of regulations that simply “parrot” the statute, nor to changed interpretations applied in an enforcement proceeding to a party that had fairly relied on an earlier interpretation.
Recent Supreme Court decisions have been quite critical of Auer deference. See Talk America Inc. v. Michigan Bell Telephone Co., 564 U.S. __ (2011), Christopher v. SmithKline Beecham Corp., 567 U.S. __(2012) and Perez, et al. v. Mortgage Bankers Association, et al., 575 U.S. __ (2015).
The 1984 Supreme Court decision in Chevron U.S.A., Inc. v. NRDC, 467 U.S. 837, sets forth rules for judicial review of agency interpretations of statutes they administer.
The Chevron decision established a two-step test to be used by courts when agency policies are challenged in court as being unfounded in the agency’s statutory authority. Under "step one" of the Chevron doctrine, the court determines whether Congress has directly spoken to the precise question at issue. If it has, that is the "end of the matter." If however the statute is silent or ambiguous on the issue, the court moves to "step two." The question then is whether the agency's answer is based on a "permissible" construction of the statute. If so, then the court should defer to the agency. Under this test, courts usually defer to the agency interpretation if they get to step two. Therefore the key question tends to be the step-one question of whether the statute is clear.
The Chevron case itself involved an interpretation made in an EPA regulation issued after notice-and-comment rulemaking. Later cases have made clear that the Chevron test normally does not apply to agency interpretations made in less formal settings, such as policy statements or rulings made without notice and comment. Such interpretations are given less deference by the courts. (See Skidmore Deference) More recently, statistical studies have raised questions as to whether use of Chevron or Skidmore deference is really determinative in many cases.
The Code of Federal Regulations (CFR) contains the rules and regulations of Federal agencies in a codified format, similar to the U.S. Code, which codifies laws enacted by Congress. The CFR is divided into 50 titles or subject areas, each broken down into chapters, subchapters, parts, and sections. Each agency's regulations are found in one or more chapters of the CFR, depending on the function and variety of that agency's responsibilities. For example, the Nuclear Regulatory Commission's regulations, for example, appear in Chapter 1 of Title 10.
The paper CFR comprises approximately 235 volumes and totals more than 175,000 pages. Each title of the CFR is revised annually at which time all of the additions and amendments to that title that have appeared in the Federal Register over the past year are inserted into their proper places. In the interim, changes can be found in the List of CFR Sections Affected. The CFR is now available on-line at http://www.gpoaccess.gov/ecfr/ and at http://www.gpoaccess.gov/cfr/index.html.
The Administrative Procedure Act (APA) requires that Federal agencies give “interested persons an opportunity to participate” in rulemaking. In notice-and-comment rulemaking, the public is given a set period of time to submit written comments on a rule. The time allotted for agency receipt of public comments is referred to as the comment period. Federal agencies typically invite public comments on Requests for Information, Advance Notice of Proposed Rulemakings, Notice of Proposed Rulemakings, Direct Final Rules and Interim Final Rules. While the APA sets no time frame for the comment period, Executive Orders 12866 and 13563 provide that a comment period generally should be no less than 60 days.
A “conditional rule” is a rule whose applicability is dependent on a future act or acts or on a particular factual determination. The following are examples of conditional rules: (1) the National Highway Traffic Safety Administration rule published in 1987 requiring the installation of automatic restraints in all new cars beginning with the 1990 model, unless prior to that date States enact mandatory seat belt laws that cover at least 2/3 of the U.S. population (49 CFR 571.208); (2) DOT's random drug testing rule that requires 50% of all covered employees to be tested annually, but if after two consecutive years the reported positive rate is less than 1%, the number tested annually could be dropped to 25% (49 CFR 382.305(g)); (3) an NRC rule that requires monitoring the performance or condition of certain structures, systems, and components, but relieves the monitoring requirement if appropriate preventive maintenance effectively controls the structure, system, or component so that it remains capable of performing its intended function (10 CFR 50.65(a)).
In 1996, as part of the Small Business Regulatory Enforcement Fairness Act (SBREFA), Congress enacted a new procedure under which all Federal agencies are required to submit each “rule” to both Houses of Congress and to the Government Accountability Office before it can take effect. Because “rule” is broadly defined, many documents are sent to Congress by the agencies every day. Section 251 of SBREFA codified these new procedures in 5 U.S.C. Chapter 8, Congressional review of agency rulemaking. These new procedures are often referred to as the Congressional Review Act (CRA), as if they were a distinct Act.
Under this Congressional review of agency rulemaking procedure, a “major” rule’s effective date is automatically stayed for 60 days while Congress reviews it. The Act also contains a procedure for expedited review by Congress when a Member introduces a “resolution of disapproval.” The rule becomes null and void if the resolution is passed by both Houses of Congress and is signed by the President (or enacted over his veto). The Act also prohibits an agency from issuing a similar rule unless authorized by a subsequent law.
Because the process requires both Congressional and Presidential approval (or a veto override) it is likely to be used infrequently and has only been successfully used once since 1996—the “veto” of the Clinton Administration’s OSHA “ergonomics” rule, which was issued in late 2000 but was overturned at the beginning of the Bush Administration. Agencies should be attentive to the law’s implications and to its procedural requirements.
Cost-benefit analysis (CBA) (sometimes called benefit-cost analysis) is a method of analysis used by the government to compare the anticipated benefits and costs of various policy decisions it is considering. CBA is increasingly important in Federal rulemaking, driven primarily by requirements in Presidential executive orders and judicial decisions.
CBA is the primary tool agencies use for regulatory analysis. Agencies are required to perform regulatory analyses for any economically “significant regulatory actions” as part of the Office of Information and Regulatory Affairs (OIRA) review under Executive Order (E.O.) 12866, Regulatory Planning and Review, section 3(f)(1).
Government use of CBA originated from Presidential Executive Orders (E.O.). President Carter’s E.O. 12044 required agencies to undertake a “regulatory analysis,” including an analysis of the economic consequences, of the proposed rule for major rules with an economic impact of over $100 million. President Reagan’s E.O. 12291 substituted the term “regulatory impact analysis” and was more specific in requiring an analysis of costs and benefits. President Clinton’s E.O. 12866 requires an “assessment” of costs and benefits for major rules. These analyses form one of the main bases for OIRA review (See Presidential Review of Rules). The Office of Management and Budget (OMB) issued guidance to agencies on preparing cost-benefit analyses, in OMB Circular A-4 (2003), OMB Circular A-4 (2003), Regulatory Impact Analysis: A Primer (2011), and Regulatory Impact Analysis: Frequently Asked Questions (FAQs) (2011).
A direct final rule is a rule published first as a final rule with an accompanying statement indicating that the rule will take effect in a specified number of days unless someone submits a significant adverse or negative comment, or a notice of intent to submit such a comment, within a stated number of days. If no adverse or negative comment or notice of intent is received, the rule automatically takes effect. If an adverse or negative comment is received, and the agency wishes to go forward, the agency must republish the document as a proposed rule and proceed with normal notice-and-comment rulemaking. Agencies developed the direct final rulemaking to expedite rulemaking for non-controversial rulemaking actions.
A docket is simply a file. In most agencies a docket is opened and given a specific number or letter identification whenever a rulemaking or adjudicatory action begins. The docket usually includes all relevant public information about that rulemaking or adjudication if the agency intends to use that information in reaching a decision. For example, all public comments received on a proposed rule will be in the docket on that rulemaking. Each agency has its own way of identifying dockets. There is no consistency among agencies, so one cannot assume that one agency's numbering system is applicable to another agency. When writing to an agency about a proceeding, it is very important to use the appropriate docket number, if there is one, so that the information submitted will reach the correct destination. The docket number usually appears near the beginning of a rulemaking document when it is published in the Federal Register.
Many agencies historically maintained a central docket room where all of the agency’s public rulemaking files and related material were made available. However, most agencies have established electronic docket systems so that it is possible to research docket contents electronically through the agency’s website. See also Regulations.gov.
E-rulemaking (a.k.a., electronic rulemaking, eRulemaking) refers generally to the use of digital technologies to enhance the ability of the public to participate in the development of Federal agency rules and regulations. The Federal Government’s eRulemaking Initiative was established by the E-Government Act of 2002 and lead to development and implementation of the Federal Docket Management System (FDMS). Federal agency users access the system through www.FDMS.gov and public users access the system through www.Regulations.gov. The goals of the Federal Government’s eRulemaking initiative are to increase public access to regulatory materials, increase public participation and understanding of the rulemaking process and improve agency efficiency and effectiveness in developing rules.
The term “ex parte” means “on one side only.” In administrative actions, ex parte communication means an off-the-record communication from one participant in a proceeding to a decision-maker in that matter. Usually, the person communicating with the decision-maker in this manner does not want other persons to know about the contact or to know what was said. Ex parte communications are considered to be improper in contested proceedings in our judicial system. If a judge is to render an impartial decision based on evidence presented in a courtroom, the judge should not have private meetings with one side of a case and listen to arguments that the other side has no opportunity to rebut. Therefore, ex parte communications are prohibited in judicial situations, including administrative adjudication.
Traditionally, however, the rationale for prohibiting ex parte communications did not apply to the legislative process. Legislators, whether they are members of Congress or the city council, are free to talk to constituents, lobbyists, or anyone else on issues before them, so, since agency rulemaking is considered a quasi-legislative process, the Administrative Procedure Act’s bar on ex parte communications does not apply to agency rulemaking unless it is “formal” rulemaking, or perhaps in certain rulemakings where a few parties are contesting over a valuable privilege. See Sangamon Valley Television Corp. v. United States, 269 F.2d 221 (D.C. Cir. 1959). Agencies, however, are free to establish stronger rules limiting ex parte communication in rulemaking and many have, based on ACUS Recommendation 77-3. Most such rules limit ex parte contacts after the NPRM and provide that if such contacts do occur, they are documented and placed in the rulemaking docket.
An Executive Order (E.O.) is one formal way the President directs Executive Branch agencies, other than independent regulatory agencies, to act. While Executive Orders are directed to officials in the Executive Branch of Government and do not provide the public with judicially enforceable rights, an Executive Order can have important indirect impacts on private citizens. Since the Nixon Administration, one important use of Executive Orders has been to assert White House review over executive agency rulemakings (See Presidential Review of Rules).
Presidents also issue Proclamations that can contain requirements, although in recent years most Presidents have used Proclamations only for announcing ceremonial events like Thanksgiving, Mother’s Day, and National Country Music Week. Presidents also issue Presidential memoranda, which have less formality in their preparation and publication, but are still binding on executive officials.
The Federal Advisory Committee Act (FACA) (1972) (5 U.S.C. App.) is a law that establishes procedures an agency must follow when seeking advice from an outside group, unless the authorizing statutes specifically excludes its application. FACA is intended to ensure the information is objective and accessible to the public. It includes requirements for the chartering of advisory committees, committee membership (including conditions on the participation of Government employees), and public participation at open meetings. The General Services Administration (GSA) has Government-wide oversight authority under FACA. GSA’s implementing regulations are published in 41 CFR Chapter 102-3. Agencies must keep FACA in mind when planning consultations with outside groups before or during the rulemaking process.
The Federal Register is a publication of the Federal Government published every weekday, except holidays, that provides official notification and record of Federal agency rulemaking actions, proposed rulemakings, and a host of notices and announcements of other agency actions and meetings. It (and past issues) is available online through the Federal Digital System (www.gpo.gov/fdsys/). The Federal Registration Act of 1935 established the Federal Register. Over the years numerous laws and Executive Orders have expanded and modified the use of the Federal Register in the Federal rulemaking process.
A “final rule” generally refers to the publication in the Rules and Regulations section of the Federal Register of a document establishing a new regulation, amending an existing regulation or removing a regulation. The “final rule” is the culmination of the Administrative Procedure Act rulemaking process, which typically requires notice-and-comment rulemaking under 5 U.S.C. 553. The publication of the “final rule” in the Federal Register provides the public notice, and is generally accompanied by a preamble that explains the basis for the rule, responds to comments received on the Notice of Proposed Rulemaking, and contains a variety of analyses required by statutes and executive orders. The term “final rule” encompasses Direct Final rules and Interim Final rules (a.k.a., final rule with request for comments). Final rules generally take effect 30 days after publication.
Formal rulemaking is a type of rulemaking in which the agency, by statute, may issue a rule only after an opportunity for a “hearing on the record.” The proceeding must be conducted according to the formal hearing provisions of the APA (sections 556-557 of title 5). Because such procedures are quite cumbersome for rulemaking, few statutes require formal rulemaking.
After receiving a written request for information under FOIA, an agency has 20 working days (subject to one extension) to either comply with the request or send a written denial specifically invoking one or more of the exemptions. The denial letter must contain instructions for appealing the decision within the agency. If an agency rejects the appeal, the requester has the option of taking the agency to court.
If portions of a document are deemed exempt from release, the agency must release the rest of the document where feasible. The Privacy Act also permits an agency to redact certain information in a FOIA releasable document to protect personally identifiable information. Agencies retain the discretion to release exempt documents in many situations. The Act also provides rules concerning fees that may be charged to requesters.
Before the enactment of FOIA, except for those types of information either subject to discovery in litigation with the Federal Government, or required by law to be made public, Federal agencies could arbitrarily decide what documents to release to the public and who could receive certain types of information.
The FOIA was updated by the 1996 Electronic Freedom of Information Act Amendments (Pub. L. No. 104-231) and the Open Government Act of 2007 (Pub. L. No 110-175).
NOTE: Although current section 552 still contains the publication requirements of the original Administrative Procedure Act and is one of the U.S.C. sections collectively referred to as the Administrative Procedure Act, section 552 itself is typically referred to as the Freedom of Information Act.
(5 U.S.C. 552b(c)). In effect, the Sunshine Act requires that Federal commission, boards, and advisory committee meetings be open to the public, unless one of the above exemption applies. Regardless of whether the meeting is closed or open, agencies are required to publish a notice in the Federal Register announcing any open or closed meetings seven days in advance.
The implementation of the Sunshine Act is somewhat mixed. Agencies vary in their inclination to close their meetings, as well as in their willingness to provide the background papers that can help make the discussion at the meetings more understandable to the members of the public in attendance.
Guidance is an all-inclusive term used to describe interpretive rules, policy statements and other materials issued by agencies to explain the meaning of, or provide advice about, their statutes or regulations. For example, the Federal Aviation Administration has an Advisory Circular System; the Nuclear Regulatory Commission has Regulatory Guides. Virtually every regulatory agency has comparable publications. Virtually every agency states clearly that its guidance material is just that—a guide—and is not intended to be binding. While this may be true as a technical matter—because to be binding a regulation must be issued after notice-and-comment rulemaking—some agencies give their guidance a great deal of practical effect. Indeed, in the hands of many Federal field office employees, guidance material often becomes indistinguishable from enforceable regulations. Thus, from the perspective of a person who must deal with a Federal regulatory agency, guidance can be just as important as actual regulations.
In most agencies, the volume of guidance material usually far exceeds the volume of legally enforceable regulations. There are several reasons for the wide use of guidance. In most situations, it is much easier to issue guidance than a regulation. Guidance does not have to be published for public comment (see Rulemaking Exceptions), and in most agencies it does not have to be approved at as high a level as regulations. Thus, when questions arise about the meaning of a regulation or about acceptable methods of complying with a regulation—and such questions arise constantly—the easiest way for an agency to respond is by issuing guidance. Guidance is frequently issued as a result of pressure from the regulated public who insist on more specific direction than the regulation contains. Most guidance is issued to answer questions, not because the agency is deliberately attempting to skirt the rulemaking requirements.
Similarly, the fact that an agency’s field staff treats guidance material as if it were “mandatory” is more a result of a large and scattered bureaucracy than it is deliberate. When a regulation is vague and when someone wants an answer to a specific question that could require a considerable exercise of judgment, it is not unusual for a field office employee to look to guidance material for answers. The citizen who must comply with a general regulation is often forced to make a choice between asking for a new interpretation—which could mean months of delay—or complying with the “acceptable” directions Washington headquarters has set down as guidance. Thus, guidance material issued with the best of intentions frequently becomes binding in day-to-day practice.
ACUS Recommendations 92-2 and 2014-3 and OMB’s “Final Bulletin for Agency Good Guidance Practices” (January 18, 2007) provide best practices for agencies in this area.
Hybrid rulemaking, as its name implies, is a cross between informal and formal rulemaking procedures. Hybrid rulemaking results when Congress directs an agency to follow specific procedural requirements in addition to those required by the informal rulemaking procedures of the Administrative Procedure Act (APA). This requires agencies to comply with procedures that are more formal than the APA’s notice-and-comment, informal rulemaking, but less formal than on-the-record, trial-like, formal rulemaking. Various hybrid procedures include creation of a formal record, holding hearings, allowing interested persons to submit oral testimony, multi-stage rulemaking, and issuance of detailed findings and reasons. Some significant regulatory statutes, mostly enacted in the 1970’s, such as the Clean Air Act, Occupational Safety and Health Act, and the Federal Trade Commission’s rulemaking statute, require hybrid rulemaking.
Incorporation by reference (IBR) is a technique used by Federal agencies to include, and make enforceable, materials published elsewhere without republishing those materials in full text in the agencies’ regulations. Typically agencies use this technique to incorporate widely-used voluntary industry-developed standards such as the National Fire Protection Code. For example, the Federal Aviation Administration frequently incorporates by reference part or all of manufacturer service bulletins in Airworthiness Directives.
The Administrative Procedure Act (5 U.S.C. § 552(a)(1)) requires each agency to obtain the approval of the Director of the Office of the Federal Register for each document it wishes to incorporate by reference. Regulations governing this approval are set out in 1 CFR part 51.
Recently, questions have been raised about the impact of the advent of e-rulemaking on incorporation by reference of voluntary industry standards. E-rulemaking makes it much more feasible for agencies to publish, for comment and compliance purposes, the full text of such standards in proposed and final rules, but many such standards are copyrighted. ACUS has issued Recommendation 2011-5 on this subject and, accordingly, the Office of the Federal Register is considering changes to Part 51.
The term “independent regulatory agency” refers to Federal agencies that have a certain independence from Presidential oversight. Although their attributes depend on their individual statutes, most independent regulatory agencies are multi-member boards and commissions, such as the Federal Communications Commission, Federal Trade Commission, National Labor Relations Board and Securities and Exchange Commission. Although the President appoints the members, he usually may not choose more than a bare majority from his own party. While the President typically may select the chairperson, he may not seek to remove members without “cause.” Such an agency may also have special authority to transmit its budget or legislative proposals to Congress without approval from the Office of Management and Budget (OMB) and/or to litigate in court independent of the Department of Justice.
Despite these important structural differences, these agencies operate under the Administrative Procedure Act and most other procedural statutes in the same way that departments and other agencies do. There are, however, a few significant differences. Independent regulatory agencies are not subject to most provisions of Presidential Executive Orders. Therefore, independent regulatory agencies do not have to submit their rules to OIRA for review pursuant to E.O. 12866—although they are required to participate in the Unified Agenda. Independent regulatory agencies are also exempted from the Unfunded Mandates Reform Act. Under the Paperwork Reduction Act, independent regulatory agencies are empowered, by majority vote, to override an OMB rejection of an information collection request. That Act contains the only statutory definition of “independent regulatory agency”—see 44 U.S.C § 3502(5) (containing a non-exclusive list of 19 such agencies).
Informal rulemaking, also called “notice-and-comment rulemaking” and “Section 553 rulemaking,” is the rulemaking process set out in section 553 of the Administrative Procedure Act (APA). Informal rulemaking is to be distinguished from the rarely used formal (trial-type) rulemaking. (See Formal Rulemaking) In its most basic form, it involves: (1) publishing a proposed rule in the Federal Register; (2) inviting public comment; (3) considering the public comment; and (4) publishing a final rule in the Federal Register. But beyond these APA procedures, many other requirements added by other statutes and Executive Orders apply to the process and this has made informal rulemaking more formalized.
According to the APA’s informal rulemaking procedures, an agency has discretion when deciding whether or not to hold an oral hearing. (Sometimes an agency’s own statute requires it to hold hearings in certain rulemaking matters; see Hybrid Rulemaking) If an agency decides to hold a hearing, the agency sets the ground rules for the hearing. The hearing may be a very informal legislative-like one at which people read or state their views for the record or it may be very formal with sworn witnesses and cross-examination.
It should be noted that some types of rules are exempt from notice-and-comment procedures (see Rulemaking Exceptions).
An Information Collection Request (ICR) is a request an agency makes to the Office of Management and Budget’s (OMB) Office of Information and Regulatory Affairs (OIRA) for approval of a “collection of information” as broadly defined by the Paperwork Reduction Act. The ICR is a set of documents that describe reporting, record keeping, survey, or other information collection requirements Federal agencies impose on the public. Each agency request to conduct an information collection must be sent to and approved by OMB before a collection begins. The ICR provides a justification for the collection, and estimates the cost and time for the public to respond. The agency submits the ICR to OIRA through an electronic system called ROCIS. (See ROCIS) Independent regulatory agencies have the power under the Act to override an OIRA disapproval of an ICR by a majority vote. However, this power is rarely exercised.
An “interim final rule” is a rule adopted without prior public input (skipping the NPRM stage), but still invites post-promulgation comments from the public. It is permissible as an exception under section 553 of the Administrative Procedure Act (APA), which allows agencies to skip the proposed rulemaking step and go directly to a final rule. (See Rulemaking Exceptions) Generally, it is issued under one of the “good cause” exceptions, which cover situations when an agency finds that inviting public comment would be “impracticable, unnecessary, or contrary to the public interest.” In effect, the agency issues a final rule without a prior NPRM and provides post-promulgation opportunity for comment. In the preamble of the interim final rule the agency must explain the good cause exception that applies and address any analyses required by statutes and executive orders.
Agencies are increasingly using interim final rules to directly publish a final rule while still providing some opportunity for public comment. The APA does not specifically mention this technique. This technique is most often used (and more easily justified) when an agency is acting under a new law that requires agency action within a short period of time.
NOTE: This would be better described as “final rule with request for comments” than the term “interim final rule,” because “interim” suggests the action will have a termination date and most do not.
The Federal Aviation Administration originally invented this technique and named it “Final Rule with Request for Comments.” This original name is a better choice than “Interim Final Rule.” The word “interim” implies that the rule will only exist for a finite duration. If the document does not specify a termination date then labeling it “interim” is misleading.
Agencies sometimes issue interpretations or rulings that are applicable to (and may only be relied on by) the individuals who request them. An Internal Revenue Service “Letter Ruling” is an example.
When a court finds that an agency rule is arbitrary or capricious or was issued after improper procedure, normally the court will vacate the rule and remand it to the agency. For example, if an agency did not go through the proposed rulemaking stage, a court could decide that the agency did not have sufficient grounds for skipping that stage and could order the agency to start over again.
Before 1970 few cases involved judicial review of Federal agency rulemaking actions. because the challenge could only come when a person sued over an enforcement action after non-compliance to a regulation. This made challengers reluctant. However, the Supreme Court made it possible for a regulation to be challenged before enforcement at about the same time that Congress was enacting numerous new laws that spawned a large volume of Federal regulations. (See Abbott Laboratories v. Gardner, 387 U.S. 136 (1967)) The result was a great increase in court challenges to agency rules.
Throughout the 1970s, Federal courts raised questions about the adequacy of the procedures that agencies followed in issuing their regulations. Sometimes courts ordered agencies to hold hearings or allow cross-examination of witnesses during informal rulemaking procedures even though the APA does not have such a requirement. However, the Supreme Court, in Vermont Yankee Nuclear Power Corp. v. NRDC, 435 U.S. 519 (1978), put a stop to this by stating emphatically that courts must not require additional procedures not mandated by the APA or any other statute.
The Supreme Court narrowed the scope of when Chevron deference is applied to agency actions in this 2001 case, US v. Mead Corp., 533 U.S. 218, 121 S. Ct. 2164 (2001).
This decision held that "administrative implementation of a particular statutory provision qualifies for Chevron deference when it appears that Congress delegated authority to the agency generally to make rules carrying the force of law, and that the agency interpretation claiming deference was promulgated in the exercise of that authority."
The National Environmental Policy Act (NEPA) (1970) (42 U.S.C. 4321-4347) requires all Federal agencies to include a detailed environmental impact statement in every proposal for a major Federal action (including rules) that significantly affect the quality of the human environment. The environmental impact statement must address the subjects and apply substantive criteria set forth in the Act. The Council on Environmental Quality (CEQ) issued regulations to implement the procedural provisions of NEPA (40 CFR parts 1500-1508). Every agency with legislative rulemaking authority should have supplementary regulations establishing its procedures for assessing the need for an environmental impact statement and for preparing and obtaining comments on such statements.
Negotiated rulemaking (sometimes known as “regulatory negotiation” or “reg-neg”) is a technique used by Federal agencies to bring interested parties into the rule-drafting process at an early stage.
In negotiated rulemaking, the agency announces in the Federal Register that it is considering using reg-neg and seeks interested participants. The agency, then, with the assistance of a neutral adviser known as a “convenor,” assembles a committee of representatives of all affected stakeholders to negotiate the text of a proposed rule. (This aspect of the process is subject to the Federal Advisory Committee Act) The goal of the process is to reach consensus on a policy decision and text that all parties can accept. The agency is also represented by an official who is able to speak authoritatively on behalf of the agency. Negotiating sessions are chaired, not by the agency representative, but by a neutral mediator or “facilitator” skilled in assisting in the resolution of multi-party disputes. If the committee achieves consensus, the agency generally publishes the draft rule based on that consensus in a notice of proposed rulemaking—and the agency would have committed itself in advance to doing so. Even negotiations that fail to result in consensus on a draft rule can be very useful to the agency by narrowing the issues in dispute.
Negotiated rulemaking should be viewed as a supplement to the rulemaking provisions of the Administrative Procedure Act (APA). This means that the negotiation sessions generally take place prior to the issuance of the notice of proposed rulemaking. Negotiated rulemaking does not reduce in any way the agency’s obligations to follow the APA process, to produce a rule within its statutory authority, or to adequately explain the justification and result.
Congress has endorsed this process in the Negotiated Rulemaking Act of 1990, (5 U.S.C. § 561-570), and it is also endorsed in E.O. 12866.
The notice of proposed rulemaking (NPRM, NPR, NOPR) informs the public that a Federal agency is proposing a new rule or regulatory change, and provides a period for the public to comment on the proposal. The NPRM provides the proposed regulatory text, and generally includes an explanation of the basis and purpose of the proposed rule and the issues involved in the rulemaking.
Procedurally, the NPRM must be published in the Federal Register unless all of the persons who would be subject to the proposed change are named and either personally served or otherwise have actual notice.
[PRACTICAL TIP] The Administrative Procedure Act is silent on the length of the comment period. Courts generally require at least 30 days and E.O. 12866 suggests that at least 60 days is appropriate for most rules.
In most cases, the agency invites the public to submit written comments on the proposal to the agency. If the agency holds a public hearing, the time and place of the hearing are often announced in the NPRM. If the agency does not hold a public hearing until after the NPRM is published, the hearing is usually announced in a separate Federal Register notice.
No particular format is required for written comments. They may be as simple as a letter or postcard or as formal as a printed legal brief. The great majority of comments are submitted electronically, either on the agency’s website, or on Regulations.gov. Most agencies maintain all of the comments received on a particular NPRM in a single file, usually referred to as the “docket.” As part of the final rule, an agency is required (by case law) to consider all comments received and include a response to significant comments in the preamble to the published final rule.
The Office of Information and Regulatory Affairs, usually known by its acronym, OIRA, is an important office in the Office of Management and Budget. The Paperwork Reduction Act of 1980 created OIRA to administer the requirements of that Act. OIRA was also subsequently assigned the responsibility to oversee the process of Presidential review of rules. Thus, OIRA has become the central office of regulatory review for the White House. Its Administrator is appointed by the President subject to Senate confirmation.
An organic statute is a law that establishes a Federal agency. The Atomic Energy Act and Federal Aviation Act are examples. An organic statute often gives an agency specific authority to issue rules and regulations. In such cases, it may also be called an "enabling statute" or the agency's "statutory authority." The latter two terms also may include "program statutes" or laws that give an agency authority to act in a certain area. An example is the Noise Control Act of 1972, which gives the FAA authority to regulate aircraft noise.
OIRA’s regulations provide for a different process for reviewing and clearing free-standing information collection requests (e.g., tax forms) and information requests embedded in proposed regulations.
A regulation written as a performance standard (also known as a “performance-based regulation”) tells the regulated party the desired outcome of the regulation, but does not prescribe how to achieve that outcome. Performance standards contrast with prescriptive regulations (i.e., specification standards, “command-and-control” regulations). With performance standards, regulated entities are responsible for meeting a particular regulatory target, but they are free to choose or to invent the most efficient method of compliance. While regulated industries often prefer performance standards, many guidance documents are issued in response to requests from regulated entities for specifics on how to meet a performance standard, and performance standards often include illustrative examples which are prescriptive in nature.
Plain language, sometimes called Plain English or Plain Writing, is communication an audience can readily understand the first time they read or hear it. In the administrative law arena, plain language is writing that clearly explains what the Federal Government requires and why, in an effort to improve the relationship between the Government and the public it serves. On June 1, 1998, President Clinton issued a memorandum requiring the use of plain language in Government documents, both regulatory and non-regulatory, that are intended to be read and used by the public (63 Fed. Reg. 31,885; June 10, 1998). In addition to the President Clinton Memorandum, agencies are also instructed to write clear documents by the Paperwork Reduction Act and several Executive Orders (e.g., E.O. 12866, E.O. 12988, E.O. 13563). In spite of the redundancy, on October 13, 2010, Congress passed the “Plain Writing Act of 2010” (Pub. L. No. 111-274, 124 Stat. 2861). The stated goal of the law was to establish that “Government documents issued to the public must be written clearly.” For unknown reasons, the unnecessary (clear writing is important, but more mandates to write clear documents isn’t the solution) law specifically excludes “regulation” from the requirement to write clearly. On April 13, 2011, the Office of Information and Regulatory Affairs issued a memorandum implementing the Plain Writing Act of 2010 (M-11-15) and listing the other Federal mandates requiring that regulations also must be written clearly.
Some of the techniques of plain language are writing skills—using simple words and phrases instead of unnecessarily complicated word choices. Others are presentation skills—displaying the information in a way that is readable and visually appealing. The principles of plain language to remember include: (1) Use reader-oriented writing. Write for the customers, not for other Government employees. (2) Use natural expression. To the extent possible, write as you would speak. Write with commonly used words in the way that they are commonly used. (3) Make your document visually appealing. Present the text in a way that highlights the main points you wish to communicate.
A preamble is the part of a rulemaking document that explains the reasons for the regulatory action of a Federal agency. The preamble of a proposed rule contains information about the basis for the proposal, possible hearings, contact persons, comment dates, and related materials that are available to the public. The preamble of a final rule contains the statement of “basis and purpose” of a regulation as required by the Administrative Procedure Act. This also normally includes the agency’s response to comments filed by the public.
A preamble is usually published in the Federal Register, but is not a part of the regulatory text, and therefore does not appear in the Code of Federal Regulations. A preamble is not legally enforceable, but it is an important aid in gaining an understanding of why an agency is acting or refusing to act. A preamble is also part of the “informal record”—the material that is reviewed by a court to determine if an agency rule is arbitrary or capricious.
The review conducted by OIRA applies only to regulations of purely Executive agencies (i.e., the Cabinet Departments and certain other agencies, like EPA). It does not apply to the “independent regulatory agencies” such as the FCC, FTC and SEC. However President Obama issued a follow-up E.O. 13579, extending the terms of E.O. 13563 to the independent regulatory agencies.
OMB has performed a similar review function with respect to agency legislative proposals for many years.
The Privacy Act (5 U.S.C. § 552a) was enacted in 1974 in response to rapidly developing computer technology. There was a growing fear that this technology would allow the Federal Government to amass a large amount of information on individuals without their consent or without informing them how the information would be used or disseminated. The Privacy Act protects individuals by requiring Federal agencies to make public what “system of records” they maintain on individuals and to inform individuals about how any personal information will be used prior to collecting it. In addition, any person can request copies of the records an agency has on him or her and may make corrections or amendments to any portion of the information that he or she feels is inaccurate. No one except the individual named can request copies of any material containing personal information. The Privacy Act is similar to the Freedom of Information Act (FOIA) in that there is an elaborate system of procedures and exemptions that agencies follow in responding to requests for information. There is a tension between the Privacy Act and FOIA. The former is intended to protect certain Government-held information from disclosure, while the latter is intended to promote disclosure.
Following early initiatives in the Clinton and Bush (II) administrations, and spurred by the enactment of the E-Government Act of 2002, the Government developed and has gradually refined a central rulemaking portal, www.Regulations.gov. The website serves as a central place for the public to comment on pending proposed rules and review comments filed by others, and as an archive for the dockets of past rulemakings.
The EPA serves as the managing partner of the overall e-Rulemaking Program. EPA established a Program Management Office to oversee the system development, maintenance and collaboration of agency partners. In addition, an Executive Committee, comprised of Chief Information Officers, Regulatory Policy Officers, and Deputy Secretaries from 30 departments and agencies, helps to govern the operation of the website. An advisory board, made up of senior representatives from partner agencies and workgroups, provide additional technical and business process expertise in a variety of areas, including usability, budget and legal issues.
A regulatory agency is a common name for an agency with delegated authority by Congress to issue regulations, to issue licenses, to establish rates, or to undertake a combination of these actions. Traditionally, when people referred to a “regulatory agency” they usually had in mind one of the multi-member, “independent” regulatory boards or commissions, like the Federal Communications Commission or Federal Energy Regulatory Commission, that issue licenses and otherwise regulate the economic status of a particular industry. (See Independent Regulatory Agency) In recent years Congress has given more and more regulatory authority to Executive Branch Departments and single-headed agencies, such as the Occupational Safety and Health Administration in the Department of Labor, National Highway Traffic Safety Administration in the Department of Transportation, and the Environmental Protection Agency. Today there are approximately 100 regulatory agencies of the Federal Government.
Regulatory reform is a catch-all term used to describe attempts or proposals to change the way the Federal Government regulates. In its most common usage, it is a label given to a series of efforts begun during the Ford Administration that attempted to gain some control over the increasing impact of Federal regulation on the private sector. President Ford’s Executive Order (E.O.) 11821 (“Inflation Impact Statement”), President Carter’s E.O. 12044 (“Improving Government Regulations”), President Reagan’s E.O. 12291 (“Federal Regulation”), President Clinton’s E.O. 12866 (“Regulatory Planning and Review”), and President Obama’s E.O. 13563 (“Improving Regulation and Regulatory Review”) were all “regulatory reform” initiatives. Congress passed the Paperwork Reduction Act (Pub. L, No. 96-511) and the Regulatory Flexibility Act (Pub. Law 96-354) in 1980, the Unfunded Mandates Reform Act (Pub. L. No. 104-4) in 1995, and the Small Business Regulatory Enforcement Fairness Act (Pub. L. No. 104-121, title II) in 1996, as regulatory reform measures. Deregulation of airlines, trucking, and railroads are also included under the regulatory reform label.
In addition to the described measures, many other regulation-related laws were considered reforms at the time of their enactment. Some examples include the 1966 Freedom of Information Act (FOIA) and the FOIA Amendments of 1974; the National Environmental Policy Act of 1970; the Federal Advisory Committee Act of 1972; the Privacy Act of 1974; and the Government in the Sunshine Act of 1976.
In the past several decades, Congress has also considered different versions of “comprehensive” Regulatory Reform Acts, which would significantly amend the Administrative Procedure Act, but none have been enacted.
Retrospective Regulatory Review (also referred to as “Retrospective Analyses of Existing Rules”) refers to a “look back” requirement in Executive Order (E.O.) 13563, Improving Regulation and Regulatory Review. Section 6 of the E.O. requires agencies to periodically review significant regulations in search of regulations that “may be outmoded, ineffective, insufficient, or excessively burdensome, and to modify, streamline, expand, or repeal them in accordance with what has been learned.” E.O. 13610 (“Identifying and Reducing Regulatory Burdens”) provided additional details about the required Retrospective Regulatory Review. E.O. 13610 requires Executive agencies to submit draft reports based on their retrospective reviews to OIRA on the second Monday of January and July each year. This system of review of existing regulations is a more detailed version of similar requirements for retrospective regulatory review required by section 5 of E.O. 12866 and predecessor Executive Orders.
The Regulatory Information Service Center (RISC) and the Office of Information and Regulatory Affairs (OIRA) have worked together to create a computer system to manage both RISC’s and OIRA’s missions. The system is known as “ROCIS” (RISC/OIRA Consolidated Information System), which is pronounced “ROW-kiss.” ROCIS supports OIRA’s ability to communicate with Federal agencies and the public. ROCIS is comprised of the regulatory agenda module, the regulatory review module, and the information collection review module. ROCIS also supports the System of Records Notices (SORN) document review module.
ROCIS allows OIRA to track agency submissions and manage its own workflow. ROCIS also provides the ability to prepare final regulatory documents in a format that agencies can use for submission to the Federal Register for publication. OIRA and RISC have been collecting data on regulations and information collections since the early 1980s. The ROCIS database contains historical data and will continue to collect and incorporate similar information on current activity. Most information submitted by agencies through ROCIS (www.rocis.gov) is available to the public on www.RegInfo.gov.
A “rule” is defined broadly in the Administrative Procedure Act to include any agency statement of future effect designed to: (1) implement, interpret or prescribe law or policy; or (2) describe the agency’s organization, procedure or practice requirements. As such, it includes nearly every type of agency pronouncement other than an order made in an adjudication—from the broadest substantive regulatory standard to the most trivial sort of procedural memorandum or guidance document. However, although the definition is quite expansive, the rulemaking process for rules differs depending on the nature of the rule being issued by the agency. To have the force of law the rule must be issued under delegated authority from Congress and according to appropriate rulemaking requirements. Violation of a validly adopted rule can result in a sanction just as severe as one received for violation of a statute passed by Congress.
Under the Administrative Procedure Act (APA) rulemaking process, agencies must normally publish a notice of proposed rulemaking in the Federal Register. However, the APA also contains a number of rulemaking exceptions that allow agencies to avoid the general rulemaking requirement of notice and comment.
Two broad categories of rules—those dealing with military or foreign affairs functions and those relating to agency management or personnel or to public property, loans, grants, benefits, or contracts—are excepted from all of the requirements of 5 U.S.C § 553. Despite these rather broad subject-matter exceptions, agencies engaged in rulemaking covered by these exceptions are often required to provide for public participation by other laws or directives. For example, the Social Security Act provides that regulations prescribing standards for benefits eligibility are subject to section 553 rulemaking procedures.
Finally, the APA authorizes agencies to dispense with certain procedures for rules when they find “good cause” to do so. Under section 553(b)(3)(B), the requirements of notice and opportunity for comment do not apply when the agency, for good cause, finds that those procedures are “impracticable, unnecessary, or contrary to the public interest.” Section 553(d)(3) allows an agency, upon finding good cause, to make a rule effective immediately, thereby avoiding the 30-day delayed effective date requirement in section 553. These two exceptions give agencies flexibility by allowing them to dispense with certain procedures in promulgating rules, but like other exceptions, they are construed narrowly by the courts. Moreover, an agency must give supporting reasons for invoking the good cause exceptions.
A rulemaking record is a file normally created by the agency in informal rulemaking. (See also Docket) At a minimum, the informal record contains the notice of proposed rulemaking (NPRM), any studies or reports referred to in the NPRM, public comments, records of any hearings or meetings, and the published final rule. Agencies must anticipate that courts will conduct a thorough review of informal rulemaking and that they will require the agency to produce an administrative record that shows that the agency has taken a hard look at the relevant evidence and policy alternatives. Thus, it is in the agency’s interest to include in its administrative record anything that it would want to use to support its policy decisions. Although not mentioned in the Administrative Procedure Act, the development of the concept of a rulemaking record for informal rulemaking is reflected in the decisions of reviewing courts, and in certain hybrid rulemaking statutes with detailed record requirements.
Skidmore deference refers to the four-part test established by the Supreme Court in Skidmore v. Swift & Co., 323 U.S. 134 (1944). Skidmore deference is often referred to as “respect under Skidmore,” because the court is not deferring to the agency’s view, but instead demonstrating an appropriate level respect for the agency’s expert opinion based on an examination of four factors. Under Skidmore the court should gauge its respect for the agency’s judgment depending on: (1) the thoroughness of the agency's consideration of the issues; (2) the validity of its reasoning; (3) the consistency with its previous interpretations; and (4) other factors that aid the persuasiveness of the agency’s judgment.
The Supreme Court narrowed the scope of when Chevron deference is applied to agency statutory interpretations in the 2001 case, U.S. v. Mead Corp., 533 U.S. 218 (2001).
Based on court decisions, if an agency makes significant substantive changes between the NPRM and the final rule, the public must be given an opportunity to comment on the revisions. (See Logical Outgrowth Test) In such a case, the agency issues an SNPRM and considers comments on that notice before proceeding to the final rule. “Significant substantive changes” mean new requirements that go beyond the scope of the requirements proposed in the NPRM. The agency may proceed with a final rule on other parts of the proposal while comments on the SNPRM are being made.
Although the Act is enforced in the Presidential Review of Rules process, judicial review of agency actions under the Act is quite limited.

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