Formal rulemaking
| What is rulemaking in the context of the administrative state? Rulemaking is a process by which administrative agencies amend, repeal, or create an administrative regulation. The most common rulemaking process is informal rulemaking, which solicits written public feedback on proposed rules during a comment period. When required by statute, certain agencies must follow the formal rulemaking process, which incorporates a trial-like hearing in place of the informal comment period, or hybrid rulemaking, which blends specified elements of formal rulemaking into the informal rulemaking process. Learn about rulemaking here. |
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Formal rulemaking, in the context of administrative law, is a rulemaking process that enables federal agencies to amend, repeal, or create an administrative regulation. Unlike informal rulemaking, which calls for a comment period in which members of the public can submit written feedback on a proposed rule, formal rulemaking requires the consideration of a proposed rule during a trial-like hearing process.[1]
Background
The formal rulemaking process was established under the Administrative Procedure Act (APA), enacted in 1946. The specific procedures that federal agencies must follow as part of the formal rulemaking process are outlined in U.S. Code § 556 and § 557.[1]
Most federal agencies use the informal rulemaking process to develop, modify, or repeal administrative rules. According to the APA, formal rulemaking occurs "when rules are required by statute to be made on the record after opportunity for an agency hearing." Generally, formal rulemaking is only required in specific circumstances, such as certain administrative rules pertaining to ratemaking or food additives.[1][2]
Formal rulemaking requires the consideration of a proposed agency action during a trial-like hearing process, which occurs in place of the comment period under informal rulemaking. An agency official or an administrative law judge (ALJ) presides over the hearing and, according to the Congressional Research Service, "traditionally has the authority to administer oaths, issue subpoenas, and exclude 'irrelevant, immaterial, or unduly repetitious evidence.'" Formal rulemaking prohibits any communication between affected parties and agency officials, known as ex parte communications, during the hearing process.[1][3]
Procedure
The majority of the formal rulemaking process mirrors the informal rulemaking process, which the Office of Information and Regulatory Affairs (OIRA) breaks down into nine steps. The difference occurs in step six, which calls for a hearing during formal rulemaking and a comment period during informal rulemaking.[3]
The formal rulemaking process follows the following nine steps:
Step one: Idea for a rule
A federal agency's initial motivation to create, modify, or repeal a rule may come from several sources:
- Congress may pass new legislation that directs a federal agency to take rulemaking action.
- An agency's internal priorities may spur the development or modification of administrative rules.
- External factors, such as new technology, scientific data, or accidents in the field, may influence an agency's rulemaking priorities.
- Required reviews, lawsuits, petitions, and OIRA prompt letters may initiate the rulemaking process.
- Recommendations from other agencies, committees, or groups, may also generate rulemaking proposals.[4][5]
Step two: Discussion
Once an agency has arrived at an idea for a new rule, agency actors must discuss the proposal and determine whether publication of a proposed rule in the Federal Register is required. According to OIRA, provisions of the Administrative Procedure Act (APA) in U.S. Code § 552 require the publication of the following rulemaking actions in the Federal Register:[4]
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The agency must also determine whether the suggested rule requires formal rulemaking. The APA requires formal rulemaking "when rules are required by statute to be made on the record after opportunity for an agency hearing."[1]
Step three: Preparation of proposed rule and notice of formal rulemaking proceedings
- See also: Proposed rule
If the suggested agency action requires formal rulemaking, the agency must prepare a proposed rule outlining the recommended action for publication in the Federal Register. The agency must also prepare to publish a notice of upcoming formal rulemaking proceedings, which includes information about the proposed rule, the time and place of the hearing, and the agency's legal authority for issuing the regulation. The agency may prepare the proposed rule and notice together as a single document or as separate documents for publication in the Federal Register.[3][4][7]
Step four: OMB review of proposed rule
- See also: Presidential Executive Order 12866
Executive Order 12866 requires that the Office of Management and Budget (OMB) review any proposed rules, except those from independent federal agencies, that are deemed to be significant rules. The OMB has 90 days (with a possible 30 day extension) to complete its review of a significant rule.[4][8][9]
The proposed rule cannot be published in the Federal Register until the OMB completes its review without recommendations or the review period expires. The OMB may choose to send the proposed rule back to the agency for reconsideration if the agency fails to justify the regulation, if the analysis is faulty, or if it the proposed rule is not in line with the president's priorities. Agencies must reconsider any rule returned with comments or changes following the review.[10]
Step five: Publication of proposed rule and notice of formal rulemaking proceedings
- See also: Federal Register
Following preparation of the proposed rule and review by the OMB (if applicable), the proposed rule is published in the Federal Register. Proposed rules follow a standard format that begins with a preamble, which includes several subsections, continues with a statement of authority, and concludes with the full text or narrative description of the proposed measure. The agency must also publish a notice of formal rulemaking proceedings in the Federal Register, which includes information about the proposed rule, the time and place of the hearing, and the agency's legal authority for issuing the regulation. The proposed rule and notice may be published as a single document or as separate documents in the Federal Register.[3][4][7][11]
Step six: Hearing
The hearing stage of the formal rulemaking process is similar to proceedings in a court of law. An agency official or an administrative law judge (ALJ) presides over the hearing and, according to the Congressional Research Service, "traditionally has the authority to administer oaths, issue subpoenas, and exclude 'irrelevant, immaterial, or unduly repetitious evidence.'" The hearing process outlined in the APA begins with a hearing to allow for interested parties to state their position on the proposed rule and present evidence. The hearing is followed by cross-examination, if necessary. A transcript of the hearing must record evidence and testimony in order to serve as the basis for the presiding officer's decision. Formal rulemaking prohibits any communication between affected parties and agency officials, known as ex parte communications, during the hearing process.[3][12]
Step seven: Preparation of final rule
- See also: Final rule
After the conclusion of the hearing, the decision of the presiding authority is generally drafted into a final rule. In formal rulemaking, the final rule must include information about the rationale for the regulation as well as relevant fact findings and conclusions from the record.[3][4][12]
Step eight: OMB review of final rule
Executive Order 12866 requires that the OMB review any final rules, except those from independent federal agencies, that are deemed to be significant rules. Similar to the OMB review of the proposed rule, agencies must reconsider any draft final rules returned with comments or changes following the review.[4]
Step nine: Publication of final rule
Following OMB review, if applicable, the agency must publish the final rule in the Federal Register. Final rules generally follow a standard format that begins with a preamble, which includes several subsections, continues with a statement of authority, and concludes with the full text of the measure. In most cases, a final rule cannot take effect until the rule has been submitted to both houses of Congress and the General Accounting Office (GAO). After publication in the Federal Register, a final rule is added to the Code of Federal Regulations.[4][11]
See also
External links
Footnotes
- ↑ 1.0 1.1 1.2 1.3 1.4 Congressional Research Service, "A Brief Overview of Rulemaking and Judicial Review," March 21, 2012
- ↑ Department of Transportation, "E-Rulemaking," accessed August 22, 2017
- ↑ 3.0 3.1 3.2 3.3 3.4 3.5 JUSTIA, "Formal rulemaking," accessed August 21, 2017
- ↑ 4.0 4.1 4.2 4.3 4.4 4.5 4.6 4.7 4.8 Office of Information and Regulatory Affairs, "Reg Map," accessed August 15, 2017
- ↑ JUSTIA, "Informal Rulemaking," accessed August 15, 2017
- ↑ Note: This text is quoted verbatim from the original source. Any inconsistencies are attributable to the original source.
- ↑ 7.0 7.1 Office of the Federal Register, "Document Drafting Handbook," August 1, 2017
- ↑ Federal Register, "Executive Order 12866," October 4, 1993
- ↑ Center for Effective Government, "Executive Order 12866," accessed July 20, 2017
- ↑ Office of Information and Regulatory Affairs, "OIRA Return Letters," accessed August 18, 2017
- ↑ 11.0 11.1 Federal Register, "A Guide to the Rulemaking Process," accessed August 16, 2017
- ↑ 12.0 12.1 The George Washington Law Review, "How the Supreme Court Derailed Formal Rulemaking," accessed August 22, 2017
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