2 Three Sources of the Law LegislativeJudicialExecutivePresidentCabinetAdministrative Agenciesare established by legislatures, agencies and are usually organized under the executive branch of government, often associated with a Cabinet positionconduct legislative, executive, and judicial types of activitiesexist on both federal and state levels (We will use the federal system as the paradigm for state agencies.)
3 Examples of executive branch agencies are the Environmental Protection AgencyDepartment of TransportationFederal Reserve BoardDepartment of AgricultureUnited States Postal ServiceDepartment of Veterans’ AffairsFederal Aviation AdministrationBecause of the scope of Congressional delegation of authority, each agency is unique in its structure, its personnel, and the nature of its regulations.Unless talking about a specific agency, administrative agencies’ regulations and decisions must be discussed in broad generalizations.
4 Independent Administrative Agencies: The Fourth Branch of Government? There are also agencies that are created by Congress as part of the executive branch but are not under the direct control of the president.Many of these are independent regulatory commissions.The president appoints, but cannot remove commissioners except for causes specified under the enabling statute.These agencies are often called the “headless fourth branch” of government.
5 Examples of regulatory commissions are the Civil Aeronautics BoardEqual Employment Opportunity CommissionFederal Trade CommissionNational Labor Relations BoardNuclear Regulatory CommissionSecurities and Exchange CommissionFederal Energy Regulatory CommissionFederal Deposit Insurance CorporationFederal Communications Commission
6 An administrative agency may be called a BoardNational Labor Relations BoardCommissionFederal Communications CommissionCorporationFederal Deposit Insurance CorporationAuthorityTennessee Valley AuthorityDepartmentDepartment of TransportationAdministrationSocial Security AdministrationAgencyEnvironmental Protection Agency
7 Role of Administrative Agencies Legislative: Granted rulemaking authorityCongress delegates authority to promulgate regulations to administrative agenciesEnact enabling statutesEstablish the scope of agency authorityPresidential Executive Order may also delegate authority to promulgate regulations to administrative agencies.Judicial: Congress may also grant power to hear and settle disputes arising from the regulation or the enabling statute.Executive: Congress may also grant power to investigate and prosecute violators of regulations.
8 Role of Administrative Agencies The Securities and Exchange Commission is an example of an agency with powers similar to those of all three branches of governmentLegislative: promulgates regulations governing what information must be given to investors.Judicial: conducts hearings to determine guilt and mete out punishment to violators of these regulations.Executive: enforces these regulations by prosecuting violators by disciplinary actions and stop orders.
9 Role of Administrative Agencies Outcomes of agency actions includeRules or regulations (the two words are used interchangeably), which have the same effect as statutesLicenses, which include permits, certificates, other types of permissionAdvisory opinions, which are authoritative interpretations of statutes and regulation but are not bindingOrders, which are the final disposition of any agency action, other than rulemakingDecisions, which adjudicate controversies arising out of the interpretation of statutes or regulations; they are issued in the same manner as court decisions
10 Comparison of the Roles of Statutes and Regulations Passed by CongressProvide for broad social and economic goals and legal requirementsGet their power from the ConstitutionReviewed by courts for constitutionalityRepresentative democracy – Congress acts to represent the will of the peopleREGULATIONSIssued by agenciesGet their power from CongressPrescribe specific legal requirements to meet congressional goalsReviewed by courts to determine constitutionality, limits of delegated authority, and whether they are arbitrary and capriciousParticipatory democracy – agencies must seek and consider public comment
11 The Process of Promulgating Regulations (Rulemaking) The initiative behind promulgation of a new regulation or a change in a regulation can originate from many sources, includinglegislation that delegates authoritycongressional hearings and reportscourt ordersExecutive Orders and Office of Management and Budget Circularsagency acting on its own initiativeemergency situations, technological developments, etc.political pressuresFederal Advisory Committee recommendationspetitions and informal requests from affected parties
12 Rulemaking Process Regulation is proposed Office of Management and Budget reviews under Executive Order 12866Proposed rule is published in the Federal RegisterPublic comment is invitedOffice of Management and Budget re-reviews regulationFinal regulation published in the Federal Register
13 Rulemaking Process Final regulation published in the Federal Register Responds to commentAmends Code of Federal RegulationsSets effective date30-day minimum for most regulations60-day minimum for major regulationsNo minimum for good causeAgency may delay or withdraw regulation before it becomes effectiveAgency submits regulation to Congress and Government Accounting Office, which can nullify the regulationRegulation is placed in Code of Federal Regulations (CFR)
14 President Executive Order Congressional Oversight Judicial Review DelegatedAuthorityCongressionalOversightJudicialReviewCongressAgencyAgencyAgencyPublicLaw(EnablingStatute)FederalRegisterProposedRegulationFederalRegisterFinalRegulationCode ofFederalRegulationsDelegated AuthorityPublic Comment