Administrative Agencies An administrative agency is a governmental body responsible for the control and supervision of a particular activity or area of public interest. Legislatures lack the time and expertise to: Make the necessary rules to govern the operations of complex areas of our social and economic life. Supervise the many details of these complex areas on a daily basis. Thus, legislatures delegate these to administrative agencies, or regulators. Learning Outcome: 6-1: Describe the purpose of administrative agencies. Page: 91

Organization of Governments Our traditional constitutional governments operate at federal, state and local levels. Each level of government has three branches: Legislative Executive Judicial Each branch has specific duties and powers. Learning Outcome 6-2: Discuss the organization of governments and define the specific duties of the three branches of government. Page: 92

Legislative Branch The legislative branch at all levels of government consists of elected representatives who have the responsibility for passing laws that represent the will of the people. At the federal level, the two houses of Congress are: House of Representatives Senate At the state level, the legislative branch is often called the general assembly. It consists of two houses (except in Nebraska). At the local level, the legislative branch is often called a city council or given a similar name. Learning Outcome 6-2: Discuss the organization of governments and define the specific duties of the three branches of government. Page: 92

Executive Branch The executive branch at all levels of government ensures that all enacted legislation is enforced. Federal level: Executive branch is headed by the president. State level: Executive is the governor. Local level: Executive is the mayor, county executive, or someone with a similar title. Learning Outcome 6-2: Discuss the organization of governments and define the specific duties of the three branches of government. Page: 92

Judicial Branch The judicial branch of government determines if there have been violations of the law. It also interprets the law if there are questions about what the law means in particular situations. Federal level: District courts, appeals courts, and the U.S. Supreme Court. State level: Several levels of courts including trial courts, appeals courts, and a supreme court. Local level: Municipal courts, justice-of-the-peace courts, and magistrate courts. Learning Outcome 6-2: Discuss the organization of governments and define the specific duties of the three branches of government. Page: 92

Functions of Administrative Agencies Regulating conduct Price, entry into a particular geographical area, or entry into a particular kind of business. Satisfying government requirements Collection of taxes and revenues through various licensing laws. Disbursing benefits Subsidies and benefits of various kinds to farmers, persons in need of public assistance, students, the unemployed, and the elderly. Providing goods and services Electricity, water, highway maintenance, hospital care, and public housing. Learning Outcome 6-3: List and provide examples of the functions of administrative agencies. Page: 92

Formation of an Administrative Agency An administrative agency might be formed to protect the public. Example: From unlawful or deceptive businesses. The agency would implement the law that was passed by the city council, to ensure that the businesses comply. If the businesses do not adhere to the law and correct the problem, their license could be revoked by the agency and their business could be closed. Generally, before such measures are taken, business owners are issued a subpoena, or an order requiring the recipient to appear at a hearing to provide testimony. Learning Outcome 6-4: Explain why and how an administrative agency is formed. Page: 92

Formation of an Administrative Agency (cont.) To comply with the subpoena, the merchant must attend a hearing at a specified time and place to answer an agency inspector’s complaints. This is an Administrative Hearing – a trial-like judicial proceeding without a jury, in which an administrative agency notes on matters of the law that the agency is charged with enforcing. Learning Outcome 6-4: Explain why and how an administrative agency is formed. Page: 92

Similarities between Administrative Agencies and Governments Executive Function: Daily operation of the agency and establishment of policies and objectives. Legislative Function: Rules and regulations resemble the laws passed by a legislature. Judicial Function: Holds hearings and oversees compliance with its decisions. Learning Outcome 6-5: Explain the similarities and differences between administrative agencies and governments. Page: 94

Differences between Administrative Agencies and Governments Executive Function Voters have the opportunity to vote the executive into and out of office. But voters do not elect the administrator of a regulatory agency There are two general patterns in the executive organization of an administrative agency. In some agencies, the executive is appointed by and serves at the discretion of the elected executive of the government subject to approval by the legislature. These executives can be removed from office either with or without cause. In other cases, Congress has created agencies outside the executive branch that are headed by groups or individuals. Such boards or commissions carry out the executive function of the agency. Once appointed to their multiyear terms, members may not be removed by the president without cause. Learning Outcome 6-5: Explain the similarities and differences between administrative agencies and governments. Page: 94

Differences between Administrative Agencies and Governments Legislative Function Rules and regulations are established by the agency, not by elected representatives. However, Congress has the power to review and override unjust rules The voter does not have direct control. Administrators are usually appointed by the executive with the advice and consent of the legislature. This practice gives the public some indirect control over the operations of administrative agencies. After administrators have been approved, it is generally very difficult to remove them. The only recourse is to bring pressure on the executive or legislative branch to change the agency or to remove the administrator. Learning Outcome 6-5: Explain the similarities and differences between administrative agencies and governments. Page: 94

Differences between Administrative Agencies and Governments Judicial Function Hearings conducted by an administrative agency do not have a jury and the procedures are not as formal, when compared to a regular court hearing. The “judge” at an administrative agency hearing is not entirely impartial. The determinations reached at a hearing conducted by an administrative agency can be appealed through the regular court system. Learning Outcome 6-5: Explain the similarities and differences between administrative agencies and governments. Page: 95

Differences between Administrative Agencies and Governments (cont Differences between Administrative Agencies and Governments (cont.) Judicial Function There was an early debate over whether a legislature could delegate to an administrative agency the authority to function as judge in certain matters This question was largely settled in the case of Crowell v. Benson, 285 U.S. 22 (1932), in which the Supreme Court decided that an administrative agency does have such authority. Learning Outcome 6-5: Explain the similarities and differences between administrative agencies and governments. Page: 95

Criticism of Administrative Agencies Some critics allege that certain administrative agencies have been “captured” by the enterprises they were created to regulate. Because of the economic benefits or burdens that administrative agencies can bestow on a firm or an industry, those regulated have a powerful incentive to secure favorable rulings. The need for specialized expertise in a given area can usually come only from the industry being regulated. Learning Outcome 6-6: Discuss criticism of administrative agencies. Page: 96