Background on Rulemaking

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

How do Rules Differ from Adjudications?

6 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 should adopt 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 case, 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

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 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

What is a Rule?

16 Definition of a Rule APA 551(4) 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 State Definitions Critical term is general applicability Property tax assessment for your house is an adjudication Standards for conducting an assement and the tax rate are rules. If you do not get a hearing, 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 What if it is not a Rule? Interpretive Guidance Does not need notice and comment It is only explaining the law Prosecution guidelines are classic examples

20 Is it an Interpretative Rule? (Mead) Do they have legal effect? The legally binding test Does the agency treat them as binding? Key - are there cases when they do not follow them? Does the agency call them interpretations when it publishes them? Do they conflict with previous rules?

21 Prospectivity and Retroactivity Legislation is often retroactive - Superfund Rules are not supposed to be retroactive, but what does that mean? I cannot go back and say that you can no longer get paid for in office chemotheraphy and then ask for a refund I can say you can no longer get paid for in office chemo and make your investment in your stand alone cancer center worthless Only real limit is ex post facto provision in the Constitution

22 Can Interpretative Guidance be Retroactive? Why does this ban on retroactive rules not apply to interpretive rules? How is this like the court system when a judge finds a new tort cause of action? Could congress create an exception to the APA and allow a retrospective rule?

Exemptions to Notice and Comment Requirements Is notice and comment a constitutional requirement?

24 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 who subject to reproductive restrictions in China Was this just an individual benefit or part of a foreign policy?

25 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

26 Actions where Secrecy is Important Wage and price controls Bidding on contracts Negotiations on land purchases and sales

27 Emergency Proceedings Emergency Rules 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