APA: rulemaking reforms and nonrule policies; a "Catch-22" for state agencies?

AuthorHopping, Wade L.
PositionFlorida

"Catch-22?" Yossarian was stunned. "What the hell does Catch-22 got to do with it?"

"Catch-22 ... says you've always got to do what your commanding officer tells you to do."

"But the Twenty-seventh Air Force says I can go home with forty missions."

"But they don't say you have to go home. And regulations do say you have to obey every order. That's the catch. Even if the colonel were disobeying a Twenty-seventh Air Force order by making you fly more missions, you'd still have to fly them, or you'd be guilty of disobeying an order of his. And then Twenty-seventh Air Force would really jump on you."

"That's some catch, that Catch 22," [Yossarian] observed.

"It's the best there is," Doc Daneeka agreed.(1)

From an agency perspective, the 1996 amendments to Florida's Administrative Procedure Act (APA) must seem somewhat like "Catch-22." On one hand, agencies' rulemaking authority has been significantly restricted;(2) it is easier for affected parties to challenge proposed rules;(3) agencies are liable for attorneys' fees and costs if their proposed rules are held invalid;(4) and agencies remain under the Governor's mandate to reduce their rules by 50 percent.(5) On the other hand, the rulemaking mandate in former F.S. [sections] 120.535 is retained,(6) and the ability of agencies to apply nonrule policy on a case-by-case basis has been narrowed.(7)

This article focuses on these amendments and other provisions of the revised APA that are intended to increase agency accountability in the exercise of delegated legislative authority.

Background

The political climate surrounding the 1996 APA amendments helps to explain the arguably mixed policy signals described above. Put simply, the Governor and the legislature wanted less bureaucracy and more accountability from state agencies. The revisions discussed in this article are infused with these different, but interrelated, policies.

As a means to eliminate agency bureaucracy, the Governor called for the repeal of F.S. [sections] 120.535, which he blamed for the dramatic increase in agency rules since 1991. The legislature and the regulated community, however, objected to the repeal of F.S. [sections] 120.535, claiming that it would result in the return of "phantom government" and, therefore, would reduce agency accountability in the implementation of legislative policy.

Enhancing agency accountability was the focus of many of the rulemaking reforms in the 1996 legislation supported by the business and regulated communities. For example, the new F.S. [sections] 120.536 was based, in part, on the testimony received by legislative committees during the past three sessions describing various agency abuses in the exercise of delegated legislative authority. The regulated community also called for reforms to the rulemaking process. These reforms are designed to reduce bureaucracy in the rulemaking process and to help agencies make better rules by encouraging agencies to provide early and meaningful opportunities for public participation and by requiring agencies to evaluate the economic impacts of the proposed rule and to consider requested lower cost alternatives.

Rulemaking Reform

Many of the rulemaking reforms in the 1996 legislation were modeled after rulemaking procedures already employed by some of the more prolific rulemaking agencies to ensure that these changes do not unduly discourage rulemaking or upset the balance between efficiency and accountability in the rulemaking process.

* Agencies Must Publish Notice of Rule Development

The 1996 legislation makes several changes that are designed to further encourage informed public participation in the rulemaking process, particularly during the early stages. One change requires agencies to provide advance notice of the development of proposed rules by publishing a "notice of rule development" in the Florida Administrative Weekly.(8)

The "notice of rule development" is designed to facilitate early public participation. The notice must describe the subject area to be addressed. It must include a short explanation of the purpose and effect of the rule development and cite the specific legal authority for rule development. The notice of rule development thus provides the public with considerable information at an early stage, and it affords interested persons an opportunity to learn more about the proposal and to inform the agency of relevant matters while the agency is still developing its proposed rule.

* Agencies May Be Required to Hold Public Workshops

Public workshops provide agencies with an opportunity to explore alternatives with interested persons and gather necessary information in an informal setting. Agencies have long been authorized to conduct public workshops.(9) The 1996 legislation recognizes the benefits of providing an early opportunity for public participation by requiring the agency to hold public workshops if requested in writing by any affected person, unless the agency head explains in writing why a workshop is unnecessary.(10) The legislation also requires that, when a workshop or public hearing is held, the agency must ensure that the persons responsible for preparing the proposed rule are available to explain the agency's proposal and to respond to questions or comments regarding the rule being developed.(11)

* Agencies May Choose to Use Negotiated Rulemaking

Some agencies routinely make use of variously constituted advisory committees, working groups, or other forms of negotiated rulemaking to generate a consensus among interested parties prior to promulgating a proposed rule. These agencies have found that negotiated rulemaking often results in faster rulemaking, greater consensus among interested parties, and less litigation.

The 1996 legislation formally authorizes agencies to use negotiated rulemaking in developing and adopting rules, and the legislation encourages agencies to utilize negotiated rulemaking when rules are complex or controversial.(12) "Negotiated rulemaking" uses a committee of designated representatives to draft a mutually acceptable proposed rule.(13) An agency that intends to utilize this specific negotiated rulemaking process must publish notice of the representative groups that will be invited to participate in the process. Other persons may apply to participate. All meetings of the negotiating committee must be noticed and open to the public. The negotiating committee must be chaired by a neutral facilitator or mediator.

* Notice of Proposed Rule Must Include Additional Information

Once an agency settles on its proposed rule, the agency publishes notice of its intended action. The notice includes a short, plain explanation of the purpose and effect of the proposed action, the full text of the proposed rule or amendment, and a summary thereof. In another effort to enhance public participation in the rulemaking process, the 1996 legislation requires this notice to include certain additional information. The notice must include a summary of the agency's statement of the estimated regulatory costs, if one has been prepared.(14) The notice also must include a statement that any person who wishes to provide the agency with information regarding the statement of estimated regulatory costs, or to provide any proposal for a lower cost regulatory alternative, must do so in writing within 21 days of the notice.(15) Finally, the notice must include a description of the procedure for requesting a public hearing on a proposed rule.

* Agencies Must Choose Lower Cost Alternative

Since 1992, agencies engaged in rulemaking have been required to evaluate alternative approaches to any regulatory objective.(16) To the extent allowed by law, agencies also have been required to choose the alternative that imposes the lowest net cost to society or to provide a statement of the reasons for rejecting that alternative in favor of the proposed rule. However, there has been no sanction for an agency's failure to comply with the requirement, so it was often ignored.

Accordingly, the 1996 legislation seeks to put some teeth into this requirement by requiring the agency to consider a good faith written proposal for a lower cost regulatory alternative to the proposal that substantially accomplishes the objectives of the law being implemented.(17) Such a proposal must be submitted by a substantially affected person within 21 days of publication of the notice of proposed rulemaking. The proposal may include the alternative of not adopting any rule, so long as the proposal explains how the lower costs and objectives of the law will be achieved by not adopting any rule.

The submission of the lower cost regulatory alternative triggers a requirement that the agency prepare a statement of estimated regulatory costs (SERC) or revise any previously prepared SERC.(18) The agency then must adopt the proposed alternative or give a statement of its reasons for rejecting the alternative in favor of the proposed rule.(19)

* New Statement of Estimated Regulatory Costs

Administrative rules often impose significant regulatory burdens on affected persons. For thIs reason, the APA has long required agencies to prepare economic impact statements under certain circumstances.(20)...

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