CHAPTER 3 AN OVERVIEW OF THE RULEMAKING PROCESS
| Jurisdiction | United States |
(Nov 1999)
AN OVERVIEW OF THE RULEMAKING PROCESS
Parsons Behle & Latimer
Salt Lake City, Utah
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201 South Main St. #1500
"The message is as clear as it is repugnant: under our so-called federal system, the Congress is constitutionally empowered to launch programs the scope, impact, consequences and workability of which are largely unknown, at least to the Congress, at the time of enactment; the federal bureaucracy is legally permitted to execute the congressional mandate with a high degree of befuddlement as long as it acts no more befuddled than the Congress must reasonably have anticipated; ..."
American Petroleum Inst. V. Knecht, 456 F. Supp. 889 (C.D. Cal. 1978)
Introduction and Scope of Paper
Administrative regulations have become the dominant tool for governing private conduct, particularly for those industries involved in the development of natural resources and the use of public lands. This paper provides an overview of the process of informal rulemaking by federal agencies. In an effort to narrow the scope and increase the usefulness of this paper, it will address only what is commonly referred to as "notice and comment" rulemaking. This paper will not deal with administrative adjudication or formal rulemaking and will not attempt to resolve the slippery distinctions between legislative, interpretive and prescriptive rules.
The Federal Rulemaking Process
I. The Nature of Rulemaking
A "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 ..." 5 U.S.C. § 551 (4).1 The simplest definition of a federal rule is one that is published on the Code of Federal Regulations ("C.F.R."), though there are exceptions to that general requirement. "Rulemaking" includes agency processes for formulating, amending, or repealing a rule. 5 U.S.C. § 551 (5).
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Rules "implement" law or policy when that law or policy has been fully developed in a statute, an executive order or a judicial decision. These rules give instructions, but add nothing of substance to the statutory provisions.
Rules "interpret" law or policy when the law or policy are well established, but may confront unanticipated or changing circumstances.
Rules "prescribe" law or policy when Congress has established the goals or objectives, but has provided few details as to how the goals or objectives will be achieved. See, e.g. 43 U.S.C. § 1732(b) (FLPMA requirement that "[i]n managing the public lands, the Secretary shall, by regulation or otherwise, take any action necessary to prevent unnecessary or undue degradation of the lands.").
II. Initiating a Rulemaking
A. Statutory Authority
All agency rulemaking must flow from Congressional action. Through law, Congress explicitly or implicitly grants the agency the authority to engage in rulemaking. Enabling statutory authority may include a broad variety (even within a single statute) of provisions that authorize rulemaking.
Delegation of rulemaking authority must conform to Constitutional requirements. In American Trucking Ass'n v. U.S. E.PA., 175 F.3d 1027, 1033 (D.C. Cir. 1999), the Court of Appeals for the D.C. Circuit invalidated rules promulgated by EPA under the Clean Air Act because it found, inter alia, that the "construction of the Clean Air Act on which EPA relied in promulgating the [regulations] at issue here effects an unconstitutional delegation of legislative power." According to the D.C. Circuit, the Constitution requires that the agency articulate an "intelligible principle" to describe its interpretation of its statutory rulemaking authority. The Court found that EPA failed to articulate such an "intelligible principle" to limit its rulemaking discretion. EPA is expected to seek review of the decision by the Supreme Court.
1. Explicit Statutory Direction
Congress may specifically direct an agency to promulgate regulations to achieve a particular objective or address a certain topic. Such requirements are common in environmental statutes. See, e.g., 33 U.S.C. § 1316(b) (Clean Water Act provision directing EPA administrator to promulgate new source performance standards). Alternatively, Congress may grant discretionary regulatory authority to accomplish general or broad purposes. See, e.g., 43 U.S.C. § 1732(b) (FLPMA provision directing Secretary of Interior to "by regulation or otherwise, take any action necessary to prevent unnecessary or undue degradation of the [public] lands."); FOGRMA § 301(a) (directing the Secretary of Interior to "prescribe such rules and regulations as
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he deems reasonably necessary to carry out" the Federal Oil and Gas Royalty Management Act of 1982).
Congress may also supplement the procedural requirements of the APA. In these "hybrid" rulemaking statues, Congress may require informal public hearings, cross-examination of witnesses, more extensive statements of justification for proposed and/or final rules, and the application of the "substantial evidence" test to judicial review of agency rules. Jeffrey S. Lubbers, A Guide to Federal Agency Rulemaking 14 (1998). Congress may also impose rulemaking deadlines and/or "hammers"—onerous legal requirements that will become effective if the agency fails to complete the rulemaking by the statutory deadline. Id. at 15-16.
2. Agency-Initiated Rules
An agency may initiate a rulemaking to address a new (or newly recognized) problem, to implement a new policy, or to update or modify existing regulations, as long as the rulemaking is within the agency's statutory authority. See, e.g., Memorandum from Secretary of Interior to Director, BLM, directing revisions to BLM's 3809 regulations (Jan. 6, 1997). Agencies may also be directed to initiate rulemakings by the President. See, e.g., Memorandum from the President to the Secretary of Agriculture to develop and propose regulations "to provide appropriate long-term protection" for "roadless" areas (Oct. 13, 1999). Where rulemaking authority is not explicitly granted, there must be some implicit grant of statutory authority to the agency to promulgate rules to carry out the statute.
3. Petitions for Rulemaking
The APA requires that "[e]ach agency shall give an interested person the right to petition for the issuance, amendment, or repeal of a rule." 5 U.S.C. § 553(e). This is not a very common practice, but an agency is required to acknowledge and consider each petition.
III. Preparing A Draft Rule
A. Unified Agenda of Federal Regulatory and Deregulatory Actions
Executive Order 12866, 58 Fed. Reg. 51735 (Oct. 4, 1993), and the Paperwork Reduction Act ("PRA"), 5 U.S.C. § 602 require that federal agencies publish a semiannual regulatory agenda describing regulatory actions that are under development or review. The regulatory agenda must contain, at a minimum, a brief summary of the action (or proposed action), the legal authority for the action, any legal deadline for the action, and the name and telephone number of a knowledgeable agency official. Executive Order 12866, Sec. 4(b). The Unified Agenda may provide advance notice that an agency is considering a rulemaking in a particular area. The Unified Agenda is published in the Federal Register in April and October of each year. See, e.g. 64 Fed. Reg. 20939 (April 26, 1999) (introduction to April, 1999 Unified Agenda).
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B. Advance Notice of Proposed Rulemaking
An agency may publish an Advance Notice of Proposed Rulemaking ("ANPRM") to inform the public that it is planning to promulgate rules in a particular area and to collect public comment on the need for rules or regulatory alternatives. See, e.g., 63 Fed. Reg. 36741 (July 7, 1998) (EPA's ANPRM "to initiate discussions on what if any changes are needed in the national water quality standards program to improve the effectiveness of water quality standards in restoring and maintaining the quality of the Nation's water.") Use of an ANPRM is encouraged by Executive Order 12866 which directs agencies to seek the involvement of those who are intended to benefit from and those expected to be burdened by any regulation before issuing a notice of proposed rulemaking. Executive Order 12866, Sec. 6(a).
C. Compliance With Legal Requirements in Addition to the APA
1. National Environmental Policy Act ("NEPA")
NEPA requires that federal agencies prepare an environmental impact statement ("EIS") to accompany any "major federal action significantly affecting the quality of the human environment." 42 U.S.C. § 4332. Regulatory proposals are subject to the EIS requirement. 40 C.F.R. § 1502.4(b). Compliance with NEPA is subject to judicial review and an agency's failure to comply with NEPA's requirement, i.e., to prepare an adequate EIS, can result in judicial invalidation of the regulations. A discussion of NEPA's requirements is far beyond the scope of this outline. For a recent discussion, see Karin P. Sheldon and Mark Squillace, editors, The NEPA Litigation Guide (1998).
2. Regulatory Flexibility Act, As Amended by the Small Business Regulatory Enforcement Fairness Act
The Regulatory Flexibility Act ("RFA") was initially enacted in 1980 to encourage federal agencies to consider the impacts of their actions, including rulemaking, on small entities, particularly small businesses. RFA precluded judicial review of an agency's compliance with its requirements. In response to concerns that agencies were ignoring their RFA responsibilities, Congress amended the RFA by enacting the Small Business Regulatory Enforcement Fairness Act ("SBREFA") in 1996.2 As discussed below, SBREFA provided for judicial review of an agency's compliance with certain of the procedural obligations imposed by the RFA...
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