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Procedural Rules; Policy Statements

Procedural rules and policy statements are two categories of rules developed by administrative agencies in the exercise of lawmaking powers.  Sometimes, the legislature delegates its lawmaking power to administrative agencies when the agencies possess the expertise and specialization to deal with certain matters.  According to the federal Administrative Procedure Act (APA), rules developed by agencies can be categorized into legislative rules, interpretive rules, procedural rules, and general statements of policy.

An administrative agency creates procedural rules to deal with the agency’s organization and method of operation.  Procedural rules do not change the agency’s basic regulatory standards.  An administrative agency is not restrained from developing the agency’s procedural rules unless express constraints are imposed by the U.S. constitution or other statutes.  Most states allow agencies to create their procedural rules even without explicit statutory authorization.

Procedural rules do not change the rights or interest of parties involved.  However, procedural rules create or alter the procedure in which parties present themselves or their ideas before an agency.[i] Procedural rules prescribe an agency’s mode of performing its functions.  Procedural rules also provide the requirements parties should follow in an agency.  An example for procedural rule is rule that prescribes a timetable for affirming substantive rights of parties.  Procedural rules have no binding effect on parties.[ii]

Procedural rules can be substantial in nature when an alteration in a procedural rule has a substantial effect on party’s rights and duties.  For example, when a new rule of evidence is introduced it can have substantial impact on people’s right.  Therefore, an agency’s rule which modifies a substantial right can only be theoretically procedural rule.

According to the APA, public can participate in administrative agency’s rulemaking.  The public should be informed about agency created rules.  Therefore, notice on the rule must be published and comments received from the public should be applied to the rules if they are not against government policy.[iii] Generally, procedural rules can claim exception from notice and comment rule because they only influence the agency’s mode of operation.  However, to grant the exception procedural rules should not have substantial impact on affected parties.

General policy statement of an administrative agency is one among the agency rules.  Agency policy statements operate as a guide to an administrative agency’s exercise of discretion.[iv] Agency policy statements are not enforceable as they are flexible.  Generally, agency policy statements do not have substantial influence over parties, and therefore are not considered as legislative rules.

A policy statement of an administrative agency does not have a binding effect.  An agency’s general statement of policy differs from a legislative rule because a policy statement is neither a rule nor a precedent.  A policy statement merely announces to the public the policy which the agency hopes to implement in future adjudication.

However, when an agency policy statement has substantial impact on the public it can be considered as a legislative rule.[v] When an agency policy statement has a binding effect, there can be no exception from applying the notice and comment rule under the APA.[vi] An agency policy statement can be invalidated if it imposes obligations or limits on rights of the public but does not provide the public adequate information to participate in the rulemaking process.

State laws provide that administrative agency’s policy statements need not be notified as rules.  However, rules which have substantial impact on public have the effect of regulations and should be notified to the public.

[i] Chamber of Commerce of the United States v. United States DOL, 174 F.3d 206 (D.C. Cir. 1999)

[ii] Overgaard v. Rock County Bd. of Comm’rs, 2003 U.S. Dist. LEXIS 13001 (D. Minn. July 25, 2003)

[iii] Miami Nation of Indians of Indiana, Inc. v. Babbitt, 887 F. Supp. 1158 (N.D. Ind. 1995)

[iv] Home Builders Ass’n of Chester & Del. Counties v. Commonwealth, 828 A.2d 446 (Pa. Commw. Ct. 2003)

[v] Eastwood Nursing & Rehab. Ctr. v. Dep’t of Pub. Welfare, 910 A.2d 134 (Pa. Commw. Ct. 2006)

[vi] Nat’l Mining Ass’n v. Sec’y of Labor, Mine Safety & Health Admin., 589 F.3d 1368 (11th Cir. 2009)

Inside Procedural Rules; Policy Statements