Administrative Rulemaking Presenter Name Agency

CLEAR 2011 Board Member Training September 7 Overview Purpose of rules Making good rules Board Member roles in the rulemaking process Delegated rulemaking authority This module has been designed to give an overview of the Rulemaking process as it applies to the role of a regulatory Board/Council member. The content will cover Rules and their various purposes, common processes and policies for writing “good” rules, and the role of a board member in the rulemaking process. It is important to frame this discussion through the source of authority by which regulators are granted this rulemaking power: Given the increasingly complex nature of society, legislatures cannot be expected to enact laws which address every issue of detail in a particular policy area. For that reason, regulatory agencies are often given the power to adopt rules in order to implement the details of that policy.   The extent of such delegated legislative authority – for that is what administrative rulemaking power is – will vary from jurisdiction to jurisdiction and Board members must ensure that they are familiar with the detailed requirements which apply to their own agency. However, some fundamental principles are of general application. Pittsburgh, Pennsylvania

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Authority No inherent power Statutory authority Requirements Consistent with statute and policy Respects rights NOT arbitrary and capricious Rulemaking procedures Rulemaking powers Rulemaking authority is not inherent; it must be delegated by specific legislation The level and scope of authority depends upon the jurisdiction and the specific elements of the statute The statute will indicate whether the rulemaking authority is mandatory or discretionary: “shall” or “must” indicate the authority is mandatory “may” indicates that the organization has the discretion as to whether or not to enact rules   Rules must be: within the statutory rulemaking authority of the agency; consistent with the statute providing the rule making power and the legislative policy which it implements; consistent with constitutional rights; not arbitrary or capricious; adopted in compliance with applicable statutory rulemaking procedures Pittsburgh, Pennsylvania 3

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 What is a rule? Prescribes, implements or interprets Defines procedures and practices Statement of general application A rule generally prescribes, implements or interprets law or policy; or defines the organization or the procedure and practice requirements of a governmental agency. Rules are often described as being of “general applicability and future effect”, in the sense that they apply to a population or category of people as a whole (e.g. all licensees) and do not apply retrospectively. Pittsburgh, Pennsylvania 4

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 What does a rule do? Establishes requirements Sets standards Establishes rates or fees Provides procedures Implements Guides Describes A rule:   Establishes a requirement Sets a standard Establishes a fee or rate Provides a set procedure for interactions with the regulatory authority Tells how a law will be implemented Gives guidance for compliance with a law Describes the requirements for the structure of an organization The rule making powers of regulatory agencies will often depend upon the regulatory model adopted in their jurisdiction. Some individual regulatory agencies are responsible for developing their own substantive rules. In jurisdictions where a centralized body has oversight of individual regulatory agencies, the centralized body may be the rulemaking authority or the task may be divided between that body and the individual agencies. It is important for board members to be clear about the scope and extent of their organization's rule making power . Pittsburgh, Pennsylvania 5

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Types of rules Procedural Substantive Interpretive Three kinds of rules are generally recognized:   Procedural Rules - which set out the regulatory authority’s procedures and establish the rules of practice before it; Substantive Rules - which set out the law, and provide any details and standards as may be directed by government; and Interpretive Rules- which interpret legal standards or phrases. Pittsburgh, Pennsylvania 6

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 When is a rule needed? Required by statute Response to conditions Public benefit Uniformity Clarification Rules are necessary when: a statute requires that the regulatory authority adopt a certain rule a rule is needed in response to a problem, changing environments, technology bodies of knowledge or similar issues the public would benefit from a regulatory intervention uniform procedures and standards need to be established to avoid challenges of arbitrariness clarification is needed, for example, a definition of unprofessional conduct.   However, there is a difference between clarification and change. If a statute is clear, detailed and provides guidelines, a rule may not be necessary, and the agency may not have authority to adopt a rule. Pittsburgh, Pennsylvania 7

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Writing Good Rules Identify need Review enabling legislation Consider Public interest Who affected Costs and benefits Consultations Drafting Manual Developing rules All regulatory authorities should have clear procedures for the development of rules. Often, the law will impose specific procedural requirements on regulatory agencies and other bodies exercising rule making powers, for example, requiring compliance with that jurisdiction's Administrative Procedure Act. Regulatory agencies must comply with all applicable statutory procedures, in order to ensure that rules are validly made.   It is important to approach rule writing by first understanding the issues at stake and what is to be achieved by any new or amended rules. The role of the regulatory authority is to frame the issues, to research and gather relevant information, to conduct appropriate consultations and to present appropriate options or drafts of the rule. The regulatory authority should ensure that the rule-making process is rigorous, principled and in keeping with its authority and mandated responsibility. Good rule writing Rule writing is often a complex and time consuming process and it is advisable to seek the advice of legal counsel early in the process. The process of writing a good rule typically follows these steps: Identify what is to be accomplished by the rule; Re-read the enabling legislation and identify all express or implied rulemaking powers; Consider the following questions: How is the rule in the interest of the public? (e.g. is the rule necessary to prevent or correct a real threat to the public?) Who will be affected by the rule and how? What are the costs and benefits or the rule? Who needs to be consulted and have they been given sufficient opportunity to provide input? Select tentative titles for rules, table of contents, and an outline for logical organization. Review your jurisdiction's drafting manual (if any) for proper procedures, organization and style. Pittsburgh, Pennsylvania 8

Drafting Considerations CLEAR 2011 Board Member Training September 7 Drafting Considerations Understandable Multiple interpretations Clear standards Clear definitions Vague language Enforcement Drafting considerations Grammar Clarity of writing and interpretation Appropriate use of “shall” and “may” Avoiding use of jargon, abbreviations and un-defined terms Contain acceptable criteria and clear, enforceable language Avoid loopholes Pittsburgh, Pennsylvania 9

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Avoiding Problems Repeat or change statute Improperly delegate or reference Use unclear standards Use ambiguous language Unnecessarily burden Avoiding Problem Areas Do not draft rules that: repeat statutory provisions or purport to change the language of a statute improperly delegate authority fail to set clear and objective standards contain unclear or ambiguous language put a burden on the regulatory authority rather than the licensee or the public Pittsburgh, Pennsylvania 10

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Adopting Rules Notice of intent Public comment Consideration Publication Adopting Rules Proper procedures for adopting rules vary between jurisdictions but often include: Written public notice of the intention to make a rule and publication of the proposed rule itself Opportunity for public comment/hearing Consideration of comments Publication of the final rule Pittsburgh, Pennsylvania 11

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Notice of Intent Substance of rule Authority & statute Text of the rule Request for comments Notice and Publication Notice generally contains: Statement of the substance of the proposed rule Statement of the statute that provides authority Statement of the statute to which the rule relates The text of the rule or information about where it can be found Request for comments, deadline and method for submission Pittsburgh, Pennsylvania 12

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Public Comment Stakeholders Form of comment Hearing Professional standards Public and Stakeholder Comment Give reasonable opportunity to submit research, comments, data Regulatory agency must consider the comments May include written comments and/or public forum/hearing   Use of Professional Association Standards May only be used as rules if they have gone through the proper rulemaking procedures Pittsburgh, Pennsylvania 13

Consideration of Comments CLEAR 2011 Board Member Training September 7 Consideration of Comments Views presented Options: Adopt as proposed Withdraw Minor changes Major changes After consideration of the views presented in comments or at a hearing, if a regulatory authority is considering making major changes to its original proposals then, in some jurisdictions, it may be required to treat the revised proposals as a new rule and to repeat the entire consultation process.   Regulatory agencies should not regard stakeholder engagement as a burden. It is often a valuable and time saving exercise, especially where rulemaking may be contentious. Even where doing so is not mandatory (and provided that it is legally permissible), regulatory agencies will often find it beneficial to undertake some form of voluntary stakeholder engagement. Pittsburgh, Pennsylvania 14

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Adopting Rules Publication Emergency rulemaking Sunset provisions Emergency Rulemaking Special circumstances where rules can be established, in an emergency, without going through regular processes Must adhere to the emergency standards and generally will have limited scope to respond only to the specific situation   Sunset Provisions Sunset provisions may have an impact on the rulemaking authority, so board members must be familiar with the provisions and plan rulemaking activities accordingly Pittsburgh, Pennsylvania 15

The Board’s Role: Oversight and Decision-Making Identify or confirm the need Provide resources for a sound process Approve rule in principle Consider input Focus on purpose Decide While these components have been included in the preceding slides at the various stages of rulemaking and development, it is important to collect and consider them as the core elements on which Board Members must provide effective oversight. Ultimately, you will be responsible for the effect the rule has on the public and the profession; focusing your attention on these core elements in your process will help to ensure you have the appropriate foundation for your rulemaking decisions.

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Summary Clear and simply stated rules Comply with notice requirements Make sure all interested parties have opportunity to obtain a copy of the rule Pittsburgh, Pennsylvania 17

CLEAR 2011 Board Member Training Pittsburgh, Pennsylvania September 7 Summary Provide adequate notice of hearing Keep a record of the comments or testimony and official responses Remember: board members are responsible for ensuring that rules are fair and in the public interest Pittsburgh, Pennsylvania 18

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