Administrative Procedure Act
Congress laid out the basic framework under which rulemaking is conducted when it enacted the Administrative Procedure Act (APA) in 1946. It remains the basic legislative standard even though its processes have been affected by more recent statutes.
The rapid growth of federal agencies and programs during the New Deal era was accompanied by the increasing use of regulations. Regulations allow agencies to set wide-ranging policies. They are not limited to individual cases, as are adjudications, which in earlier years had been the primary vehicle for agency decisions.
The soon exploding use of regulations led to a concern in Congress and in the Executive Branch about a lack of uniformity among the agencies in formulating policies. An Attorney General's Committee on Administrative Proceedings was created in 1939 and issued a report and recommendations to Congress in 1941.
The Administrative Procedure Act (5 USC 551-559, 701-706), enacted in 1946, implemented many of the recommendations of the Attorney General's Committee. Passage of the act was followed in 1947 by the issuance of The Attorney General's Manual on the Administrative Procedure Act, which clarified some of the terms and procedures in the APA.
The Administrative Procedure Act defined "rule" as:
[T]he 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 . . .
The Attorney General's Manual took the definition one step further to contrast rulemaking from adjudication. The definition are important because agencies face different procedural requirements under APA, depending on how an agency action is classified.
The Attorney General's Manual said that rulemaking is:
[A]gency action which regulates the future conduct of either groups of persons or a single person; it is essentially legislative in nature, not only because it operates in the future but because it is primarily concerned with policy considerations.
Adjudication, on the other hand, is the quasi-judicial "determination of past and present rights and liabilities."
The APA describes two kinds of rulemaking — formal and informal. "Formal rulemaking" calls for a trial-like, on-the-record proceeding. Most federal agencies, however, develop rules through "informal rulemaking." The main requirements for informal rulemaking are:
- Publication of a "Notice of Proposed Rulemaking" (NPRM) in the Federal Register;
- Opportunity for public participation by submission of written comments;
- Consideration by the agency of the public comments and other relevant material; and
- Publication of a final rule not less than 30 days before its effective date, with a statement explaining the purpose of the rule.
While the APA does not require all agencies to follow one single model for rulemaking, it does impose minimum procedural conditions that all agencies are expected to follow. This is to ensure that the public has the opportunity to participate in the formulation and revision of government regulations, and that there be minimum standards for judicial review.
The requirements are quite minimal, yet as basic rules they provide the foundation for the development of further procedures. For example, although the APA does not require a public file or record of the rulemaking process, agencies usually compile one to prove their process is fair and reasonable.
Also, an agency is free to publish an Advance Notice of Proposed Rulemaking (ANPRM) when the agency wants to test out a proposal or solicit ideas before it drafts its Notice of Proposed Rulemaking. On the other hand, if an agency need to respond quickly to an emergency it can implement a final regulation while still accepting and considering public comments.
Rules that are exempt from the "notice-and-comment" requirements of the APA are 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."
Agencies often voluntarily waive an exemption, although when they do so, they still retain the power to omit notice-and-comment when for "good cause" the procedures would be "impracticable, unnecessary, or contrary to the public interest." Congress may, of course, require an agency to follow a specific public participation procedure.
There are other exemptions from notice-and-comment procedures:
- Rule of "agency organization, procedure or practice;"
- "Interpretative rules" that add little substantive interpretation of the law; or
- "General statements of policy."
- Agencies may run into difficulties in the courts trying to invoke these exemptions, however, if the proposed action has a major impact on the public.
While the APA governs the rulemaking process, as a practical matter its influence on rulemaking has been diminished by the Reagan executive orders, and Clinton's subsequent E.O. 12866, that placed OMB in a position to shape agency decision-making at its earliest stages.