|
WASHINGTON'S SHADOW GOVERNMENT
Returning Power To The People
In a system where government gets its authority from us, government
should be held accountable to us. When it comes to government rulemaking in Washington,
D.C., however, the chain of command is reversed. Individual citizens are at the mercy of
federal bureaucrats, lacking adequate means to protest unfair, burdensome, or unpublished
regulations.
Regulations serve an important purpose. By setting out a clear, stable,
and dependable blueprint of the regulatory process, they keep government in check and
provide crisp guidelines for private citizens. But in the absence of a mechanism that
allows citizens to participate in the rulemaking process, or to have their objections
heard when bureaucrats overstep their boundaries, we lose some of our authority over
government. Florida’s Administrative Procedure Act (APA) establishes that mechanism
for citizens of the Sunshine State |
 |
Cover Story
by terry cole & jeff brown
Washington’s Shadow Government
Changing The Federal Administrative
Procedure Act To Return Power To The People
In a system where government gets its
authority from us, government should be held accountable to us. When it comes to
government rulemaking in Washington, D.C., however, the chain of command is reversed.
Individual citizens are at the mercy of federal bureaucrats, lacking adequate means to
protest unfair, burdensome, or unpublished regulations.
Regulations serve an important
purpose. By setting out a clear, stable, and dependable blueprint of the regulatory
process, they keep government in check and provide crisp guidelines for private citizens.
But in the absence of a mechanism that allows citizens to participate in the rulemaking
process, or to have their objections heard when bureaucrats overstep their boundaries, we
lose some of our authority over government. Florida’s Administrative Procedure Act
(APA) establishes that mechanism for citizens of the Sunshine State. In comparison, the
federal APA is a source of weak and unreliable protection for those who fall under federal
regulations.
It yields power to the shadow
government of unelected bureaucrats.
The Triumph of excess
Both the Florida and the
federal acts spell out the procedures agencies must follow in developing rules, including
allowance for citizen input on rules before they are finalized. Both acts also define the
process by which citizens can challenge either the rules themselves or the decisions made
pursuant to the rules.
In some cases, federal agencies
simply elude the confines of the federal APA by developing so-called guidance documents
that allow them to avoid the formality of rule-adoption proceedings. A "guidance
document" is a common label used by federal agencies when announcing the
agency’s detailed position in the interpretation of a statute and when undertaking
other policy initiatives. By preparing a guidance document an agency can avoid following
the formal procedural requirements of providing advance public notice and opportunity for
comment that must be followed when adopting rules. The federal APA does not adequately
discourage the promulgation of, and agency reliance upon, guidance documents. As a result,
citizens have no advance notice of policies formulated by federal agencies and no
meaningful opportunity to provide input.
The provisions allowing citizens
to challenge rules or regulatory decisions under the federal APA are similarly
ineffective. Federal administrative agencies are able to appoint employees within the
agency to serve as administrative law judges. In effect, one of the parties to the dispute
is also the referee, setting up an unavoidable conflict of interest.
The problems with the federal APA
are particularly acute with agencies such as the Environmental Protection Agency, which
increasingly forsakes science-based rules for ones seemingly based on the preferences of
whichever administration is currently in charge. A number of examples illustrate this,
most recently EPA’s particulate and ozone standards.
Those standards were promulgated
under the Clean Air Act, ostensibly to protect citizens from respiratory ailments caused
by smog and soot. EPA set new, more stringent standards even though its Clean Air
Scientific Advisory Committee recommended against doing so. The rules were challenged and,
in May of this year, a federal appeals court ruled against EPA, finding that some of its
air-quality standards were arbitrarily defined and others defined so broadly that EPA had
exceeded its power in setting them.
Regulatory excess in Washington,
D.C., is no small matter. According to one widely used analysis, the cost of complying
with federal regulations in 1996 was $677 billion; the cost was estimated to rise to $721
billion in 2000. Reining in overzealous and indiscriminate regulations would help lower
that burden. Replicating the APA lessons learned in Florida would give citizens the means
to do so.
Florida’s Model for Rulemaking
The first version of
Florida’s APA was adopted in 1974. Over the next 20 years, legislative amendments and
judicial interpretation revised the original statute by transferring to administrative
agencies immense leeway in the exercise of discretion in establishing policy within their
purported fields of expertise. The result was a proliferation of written and unwritten
regulations.
In 1992, representatives of the
regulated community began clamoring for reform of Florida’s APA. An extensive rewrite
of the law, approved by the Florida Legislature in 1995, was vetoed by Gov. Lawton Chiles.
The next year, the reformers went back to work and crafted a package that became law.
Subsequent revisions to the 1996 reforms reinforced the Legislature’s intent to limit
agency discretion and to enforce procedural fairness in dealing with citizens.
Florida agencies are creatures of
statute and have no powers other than those that can be fairly derived from legislation.
This principle advances public accountability by assuring that public policy originates in
elected legislative bodies. The Florida Legislature recently acted to protect that
assurance by narrowing the areas that agencies may address through regulation. Agencies
may adopt only those rules that "implement, interpret, or make specific the
particular powers and duties granted by the enabling statute."
Limits on rulemaking authority
are useless, however, unless agencies are required to set policy through formal
rule-adoption procedures. In the past, using flexibility as their excuse, agencies
effectively enacted legislation in the guise of case-by-case adjudication. By developing
"statements of general applicability," implemented outside the guidelines of the
APA, agencies gave themselves the power to interpret rules and statutes as they saw fit in
individual cases, and thereby greatly expanded upon the powers conferred upon them by the
Legislature.
Under Florida’s new law,
however, statements of general applicability must be adopted through formal rulemaking
proceedings, with opportunities for public comments, questions, and, if necessary,
challenges to the proposed rule. Of even greater practical utility, Florida has created a
statutory procedure for the challenge of an "agency statement" that should,
by law, have been adopted by rule. One added sanction provides an incentive for agency
heads to prevent their staffs from applying unadopted rules: An agency that evades its
duty to initiate rulemaking must pay the attorneys’ fees and costs of challenging
parties, an expense that is taken from the budget of the agency head.
Furthermore, all rules
challenges, including those to agency statements, are assigned to an administrative law
judge employed by the Division of Administrative Hearings, a separate, independent agency
under the executive branch, rather than to an employee of the agency itself. This is yet
another area where Florida’s system of administrative procedure has progressed beyond
the federal model. Assigning rules challenges directly to an independent administrative
law judge, or hearing officer, eliminates the opportunity for and the appearance of a
conflict of interest. The hearing officer enters the final order, which can be directly
appealed to an appellate court without further review by the agency.
The hearing officers also decide
cases where a citizen is not challenging a proposed rule, but rather a proposed decision
under a rule, such as denial of a permit. The hearing officer presides over a formal
hearing on the dispute over facts alleged by the agency and then submits a proposed order
to the agency. After the hearing officer submits the recommended order, the agency then
has the obligation to issue a final order and to address the hearing officer’s
proposed findings of fact and conclusions of law.
The Florida APA imposes stringent
limits on the agency’s ability to reject or modify the hearing officer’s
findings of fact. Such a rejection or modification is justified only when the findings
were not based upon competent substantial evidence, or when the proceedings did not comply
with the essential requirements of the law. Although the agency is given more discretion
to change or reject the hearing officer’s proposed conclusions of law, an agency may
reject or modify only the conclusions of law and rule interpretations over which it has
substantive jurisdiction.
The agency’s findings of
fact and conclusions of law are then stated in a final order, which is subject to judicial
review. If the appellate court determines that the agency improperly reversed the hearing
officer’s findings of fact, the agency is required to pay the attorney’s fees of
the opposing party. Under these refinements to the manner in which formal hearings are
conducted, the Florida APA provides citizens with additional assurances of fair and
impartial hearings when disputing proposed agency actions.
There are some who recommend
further restrictions to an agency’s authority in reviewing a hearing officer’s
proposed order, but the Legislature has not yet acted on those recommendations.
Nevertheless, by assigning rule challenges and factual disputes to an independent
tribunal, Florida’s APA helps to remove the appearance of favoritism that inevitably
arises when cases are decided by an employee of the agency defending the challenge.
Reversing the Flow of Authority
Can Florida’s successful
experience with regulatory reform be transplanted to Washington, D.C.? Obviously,
provision must be made for constitutional differences between government at the state and
federal levels, (e.g. the Office of the President, national defense and security, and
diplomacy), but a comparison between the weaknesses of the federal APA and the strengths
of the Florida act illuminates how such a transfer can be made. Furthermore, there should be no
significant budget impact since implementation of a federal APA based on the Florida model
can, for the most part, be accomplished within existing budgets. A new federal division of
administrative hearings, for example, could be created by transferring the budget and
staff of existing administrative law judges out of each regulatory agency and into an
independent agency or division. Administrative law judges would then be prohibited from
hearing cases involving their former agencies. Florida’s experience
demonstrates, yet again, that the revolutionary idea of providing citizens with rights and
standing equivalent to that of agencies does not bring government to a halt. Although
federal agencies can be expected vigorously to oppose any limits to their power, their
objections should not be allowed to scuttle regulatory reform. One approach to accomplishing
this task would be for the retention of several respected law professors to develop draft
legislation for appropriate congressional committees, as was done in Florida. Another
would be to ask an organization such as the American Bar Association to form a special
committee to develop such legislation.
Regardless of the method used,
the acquiring of fair rights in dealing with federal regulatory agencies is of crucial
importance to business as well as all citizens who are required to deal with these
agencies.
Some Features Of Florida’s Administrative Procedure Act
- Limitation of agency rulemaking authority
- Mandatory rule adoption and statutory rule challenge procedures
- Mandatory review of economic impacts and risk assessment for health-based rules
- Creation of an independent division of administrative law judges
- Provision to assure that the citizen is on an equal footing with the agency in a dispute
so that there is not a presumption of agency correctness
- Agencies have the burden of establishing the technical and scientific justification for
proposed rules
Transplanting Florida’s Success In The
Nation’s Capital
Using the Florida model, the
following are some principles that should guide federal APA reform:
- Federal agencies should be bound to enact policy through formal rule-adoption
proceedings.
- Rule adoption should include a mandatory analysis of economic impacts.
- Risk assessments should be required of certain agencies when a proposed rule is intended
to reduce the risk of public harm.
- Adjudication of a dispute should be assigned to a separate and independent
administrative law judge, instead of to an employee within the agency in litigation.
- Federal agencies should have the burden of proving the validity of a rule, including
compliance with legislative intent, fairness in procedure, and evidence of scientific and
technical support for proposed rules.
- Strict schedules should be provided on the maximum amount of time an agency has to take
action on a permit application.
- Provision should be made for formally answering questions posed by citizens.
In Florida the process is known as a declaratory statement. Timelines are provided for
responding to such a request. Decisions are publicly noticed.
- Uniform procedural rules should be adopted, which apply to all regulatory agencies.
Terry Cole and Jeff Brown are with the Tallahassee law firm of Oertel, Hoffman,
Fernandez & Cole, P.A. (e-mail: tcole@ohfc.com or jbrown@ohfc.com)
Sept./October 1999 -- Florida Business Insight, PO Box 784, Tallahassee,
Fla. 32302
(850)224-7173, insight@aif.com
