The power to make rules and regulations can be delegated by the legislature to an administrative agency. Regulatory power is not granted by the Constitution, but only through delegation by the legislature. An agency draws the regulatory power from a statute authorizing such power. If the administrative agency does not hold an inherent legislative power, authority may be constitutionally exercised by promulgating rules within the boundaries of its legislative delegation. Statutory authority to promulgate rules may be either express or implied. However, mere necessity of a regulation does not give an agency the authority to regulate. An agency’s power to create regulations is evolved from the whole statute and not by specific words.
According to the Federal Courts, Congress may clearly express the delegation of rule making power to an agency. An administrative program created by Congress can be executed in its full sense only by formulating policy and crafting rules to fill any gap.
In Salisbury Nursing & Rehab. Ctr., Inc. v. Div. of Admin. Law Appeals, 448 Mass. 365, 372 (Mass. 2007), plaintiff nursing home challenged Medicaid rates set by defendant Massachusetts Division of Health Care Finance and Policy. Defendant Massachusetts Division of Administrative Law Appeals (DALA) dismissed the appeal. The nursing home appealed to the Massachusetts Suffolk Superior Court and defendants filed motions for judgment on the pleadings or for summary judgment. In the appeal against the trial court’s judgment for defendants, the Court contended that all rational presumptions in favor of the validity of the administrative action must be applied before declaring it void unless its provisions cannot by any reasonable construction be interpreted in harmony with the legislative mandate.