Welcome to the second installment of Ballotpedia’s Learning Journey on agency dynamics!
Today we review agency dynamics in the context of agency functions.
The Administrative Procedure Act
Agency functions at the federal level are governed by the Administrative Procedure Act (APA). The APA is a federal law passed in 1946 establishing uniform procedures for agency rulemaking (a process through which agencies propose and issue regulations) and adjudication (a process through which agencies settle regulatory disputes with individuals or other entities). The APA also addresses policy statements and licenses issued by agencies and provides for judicial review of agency adjudications and other final decisions. Prior to the APA, there were no federal laws governing the general conduct of administrative agencies.
All 50 states have enacted similar legislation, largely modeled on the federal APA, establishing procedures for administrative agencies in their respective states.
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Rulemaking
The APA established two rulemaking processes for agencies: informal rulemaking (also known as notice-and-comment rulemaking) and formal rulemaking. Some statutes may require agencies to use a hybrid form of rulemaking that combines elements of the informal and formal processes. Agency use of formal rulemaking has drastically declined since the U.S. Supreme Court's 1973 decision in United States v. Florida East Coast Railway. The case held that formal rulemaking is only required when a governing statute calls for a hearing, in its words, "on the record." The resulting decline in the use of formal rulemaking led Justice Clarence Thomas to describe the process as the “Yeti of administrative law” in his 2015 concurrance in Perez vs. Mortgage Bankers Association.
Formal rulemaking
The formal rulemaking process defined by the APA requires an agency to conduct a recorded hearing with procedures similar to those used in a court of law. These proceedings are usually overseen by an administrative law judge. The process is used in cases in which an agency is required by statute to issue rules after a recorded hearing or, according to the Electronic Privacy Information Center, "in rulemakings that involve adjudicative facts, or facts specific to the rights of an individual."
Informal rulemaking
Informal rulemaking, the minimum procedural requirement for most agency rules, requires agencies to publish a notice of proposed rulemaking in the Federal Register (includes the rule's substance, the proposed effective date, and the legal authority under which the agency is proposing the rule), provide a comment period for the public and interested parties to submit comments and recommendations, and publish a revised final rule in the Federal Register, at least 30 days before the rule is scheduled to take effect.
Adjudication
Adjudication is the process used by an administrative agency to make decisions about how the programs and regulations it oversees apply to specific parties in a specific case. The adjudication process usually involves a written, oral, or in-person administrative hearing, which is similar to a judicial proceeding. These hearings are overseen by an administrative law judge, administrative judge, hearing officer, or board. Though judge is in the title, administrative law judges and administrative judges are not Article III judges.
As with rulemaking, there are both formal and informal types of adjudication. The APA only covers formal adjudications, which are expressly required by law to be held "on the record after opportunity for an agency hearing" and presided over by an administrative law judge. The law does not cover informal adjudications, meaning that an agency may adopt its own procedures for such proceedings. Since the Florida East Coast Railway decision, agencies have increased the use of informal adjudication, which now makes up nearly 90 percent of adjudication proceedings.
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Arguments about agency functions
Arguments about agency functions are a key area of disputation among scholars and practitioners of administrative law. These arguments generally concern the use of formal versus informal procedures. The following arguments summarize key claims in the debate surrounding agency functions:
Argument: Informal procedures are insufficient to govern agency action
The ease of informal rulemaking, according to this argument, has contributed to the growth of the administrative state by minimizing rulemaking requirements. Supporters of this argument generally claim that a revival of formal rulemaking procedures would increase the value of agency deliberations on matters of technical expertise.
Argument: Informal procedures are sufficient to govern agency action
Supporters of informal procedures, including informal rulemaking and informal adjudication, argue that informal processes are sufficient to govern agency action because informal processes have received support from the U.S. Supreme Court and other institutions.
Argument: The APA is out of date and needs to be modernized
The APA, according to this argument, is out of date and must be modernized in order to sufficiently govern agency action. This argument suggests that the APA is in need of an update to align its standards with current practices.
Argument: The APA needs to be resuscitated to strengthen agency procedures
A return to the formal rulemaking and adjudication procedures outlined in the APA, according to this argument, would strengthen agency procedures by allowing for the cross-examination of experts on the record.
What's Next?
Tomorrow, we wrap up our Learning Journey on agency dynamics.
Go Deeper:
Check out the following Ballotpedia pages to dive deeper into today’s key concepts:
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