Rulemaking

The U.S. Administrative Procedure Act, which defines a process by which agencies may promulgate regulations and establishes a procedure to provide court access for reviewing agency decisions. When an agency wishes to make any kind of change to its body of rules—whether that be to promulgate a new rule, abolish an old rule, or make an amendment to an existing rule—it must follow the procedure outlined in the act. A principal objective of this procedure is to ensure that there is some opportunity for the public to provide input relevant to the proposed change.

This procedure can take one of two forms, referred to as "informal" and "formal" rulemaking. The informal process is also sometimes referred to as a "notice and comment" process, identifying its two basic components.6 With this process, the agency publishes its proposed rule changes and establishes a time period over which members of the public are permitted to offer comments. This time period is usually thirty, sixty, or ninety days, and comments are typically received from a wide range of sources. It is not uncommon for individual members of the public to provide comments that express their views, although the more substantive comments tend to come from organizations that have an interest in the particular rules. For instance, when the Environmental Protection Agency (EPA) proposes a rule change that affects nanotechnology, professional scientific and engineering societies involved in nanotechnology research might generate and submit comments, as might nanotechnology corporations that would be affected by the rule changes. Legal societies and associations are frequent sources of comments, and they typically offer a perspective on how the rule changes will successfully or unsuccessfully integrate with other regulations.

After the comment period has closed, the agency reviews all the comments and issues final rules, usually providing a detailed response to the comments that were received and explaining how the proposed rules were modified to address the comments. This basically concludes the informal process, with the final rules then forming the current set of regulations. The ability of the public to provide input in the informal process is limited to submitting comments on proposed rules. In some cases, members of the public may still object to the form of the final rules. While it is possible to challenge such final rules as an overreaching of the authority of the agency, they will stand as enforceable regulations if they are within the proper scope of the agency's power.

In actual practice, this comment procedure is very valuable. It frequently highlights ambiguities in the form of the rules as proposed and often highlights concerns that the agency failed to appreciate fully when formulating its proposal. Currently, the ability of the public to provide comments is greater than it has ever been. All rulemaking proposals for all U.S. agencies are published in the Federal Register. Organizations that are governed by specific regulatory agencies thus routinely check the Federal Register to identify any proposed rules that might affect them. The Internet also provides access to all proposed rules for U.S. agencies at www.regulations.gov. Many agencies additionally publish received comments on their individual Web sites. The World Wide Web provides a wonderful mechanism by which interested members of the public can read the comments that have been submitted by others, permitting them to elaborate on issues that might not have been ideally expressed or to offer a different perspective on the same issue.

Much less widely used is the formal rulemaking process.7 This process is essentially used only when the agency is precluded from using the informal process because of some specific congressional directive, usually embodied within some other statute. The formal process requires that a trial-like hearing be held, overseen by an administrative law judge. During the hearing, interested persons are to have an opportunity to testify and be cross-examined before a rule can be promulgated. A number of notorious proceedings have resulted in the formal rulemaking process having been largely discredited. Most famous are the peanut butter proceedings that were held to determine whether a product labeled peanut butter must have at least 87 percent or 90 percent peanuts. The formal process took nine years and resulted in a transcript having more than 7500 pages.8

The regulatory authority that is delegated to agencies is thus significant. These agencies have the power to promulgate rules that can have profound effects on industries. The major constraint on agency activities is the ability of the legislature to reassume some of the power it has delegated. Through legislation, there are a number of ways in which the power of agencies can be limited: specific agency decisions can be overruled by the targeted legislation; the scope of authority of an agency can be altered by more general forms of legislation; it even remains an option to dissolve the agency if circumstances warrant.

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