7.3: Agency Functions
- Page ID
- 42027
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\(\newcommand{\avec}{\mathbf a}\) \(\newcommand{\bvec}{\mathbf b}\) \(\newcommand{\cvec}{\mathbf c}\) \(\newcommand{\dvec}{\mathbf d}\) \(\newcommand{\dtil}{\widetilde{\mathbf d}}\) \(\newcommand{\evec}{\mathbf e}\) \(\newcommand{\fvec}{\mathbf f}\) \(\newcommand{\nvec}{\mathbf n}\) \(\newcommand{\pvec}{\mathbf p}\) \(\newcommand{\qvec}{\mathbf q}\) \(\newcommand{\svec}{\mathbf s}\) \(\newcommand{\tvec}{\mathbf t}\) \(\newcommand{\uvec}{\mathbf u}\) \(\newcommand{\vvec}{\mathbf v}\) \(\newcommand{\wvec}{\mathbf w}\) \(\newcommand{\xvec}{\mathbf x}\) \(\newcommand{\yvec}{\mathbf y}\) \(\newcommand{\zvec}{\mathbf z}\) \(\newcommand{\rvec}{\mathbf r}\) \(\newcommand{\mvec}{\mathbf m}\) \(\newcommand{\zerovec}{\mathbf 0}\) \(\newcommand{\onevec}{\mathbf 1}\) \(\newcommand{\real}{\mathbb R}\) \(\newcommand{\twovec}[2]{\left[\begin{array}{r}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\ctwovec}[2]{\left[\begin{array}{c}#1 \\ #2 \end{array}\right]}\) \(\newcommand{\threevec}[3]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\cthreevec}[3]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \end{array}\right]}\) \(\newcommand{\fourvec}[4]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\cfourvec}[4]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \end{array}\right]}\) \(\newcommand{\fivevec}[5]{\left[\begin{array}{r}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\cfivevec}[5]{\left[\begin{array}{c}#1 \\ #2 \\ #3 \\ #4 \\ #5 \\ \end{array}\right]}\) \(\newcommand{\mattwo}[4]{\left[\begin{array}{rr}#1 \amp #2 \\ #3 \amp #4 \\ \end{array}\right]}\) \(\newcommand{\laspan}[1]{\text{Span}\{#1\}}\) \(\newcommand{\bcal}{\cal B}\) \(\newcommand{\ccal}{\cal C}\) \(\newcommand{\scal}{\cal S}\) \(\newcommand{\wcal}{\cal W}\) \(\newcommand{\ecal}{\cal E}\) \(\newcommand{\coords}[2]{\left\{#1\right\}_{#2}}\) \(\newcommand{\gray}[1]{\color{gray}{#1}}\) \(\newcommand{\lgray}[1]{\color{lightgray}{#1}}\) \(\newcommand{\rank}{\operatorname{rank}}\) \(\newcommand{\row}{\text{Row}}\) \(\newcommand{\col}{\text{Col}}\) \(\renewcommand{\row}{\text{Row}}\) \(\newcommand{\nul}{\text{Nul}}\) \(\newcommand{\var}{\text{Var}}\) \(\newcommand{\corr}{\text{corr}}\) \(\newcommand{\len}[1]{\left|#1\right|}\) \(\newcommand{\bbar}{\overline{\bvec}}\) \(\newcommand{\bhat}{\widehat{\bvec}}\) \(\newcommand{\bperp}{\bvec^\perp}\) \(\newcommand{\xhat}{\widehat{\xvec}}\) \(\newcommand{\vhat}{\widehat{\vvec}}\) \(\newcommand{\uhat}{\widehat{\uvec}}\) \(\newcommand{\what}{\widehat{\wvec}}\) \(\newcommand{\Sighat}{\widehat{\Sigma}}\) \(\newcommand{\lt}{<}\) \(\newcommand{\gt}{>}\) \(\newcommand{\amp}{&}\) \(\definecolor{fillinmathshade}{gray}{0.9}\)Administrative agencies carry out their purpose through the exercise of power in three ways that mirror the three branches of government:
- Agencies engage in rulemaking, which is a quasi-legislative function;
- Agencies engage in enforcement, which is a quasi-executive function; and
- Agencies engage in adjudication, which is a quasi-judicial function.
Rulemaking
The enabling statute dictates the types of rules an agency can make to implement and enforce the legislation for which it is responsible. Generally, administrative rules are characterized as internal, procedural, interpretive, and legislative.
| Types of Rulemaking | Description |
|---|---|
| Internal | Policies and procedures adopted for in-house operations |
| Procedural | Policies and procedures related to how the agency functions & interacts with businesses and individuals |
| Interpretive | Guidelines issued by the agency to businesses and individuals about how to comply with the law |
| Legislative | Regulations that have the full force of law because they are an extension of the underlying statute |
Legislative rulemaking may be formal or informal. Formal rulemaking is agency rulemaking that, when required by the enabling statute, must be on the record after an opportunity for an agency hearing, and must comply with certain procedures, such as allowing evidence and the cross-examination of witnesses. Formal rulemaking provides an opportunity to publicly and thoroughly debate the propriety of a suggested rule. However, this process is very expensive and is sometimes subject to political delays.
Informal rulemaking occurs when the agency publishes a proposed regulation and receives public comments on it, after which the regulation can take effect without the necessity of a formal hearing on the record. Informal rulemaking is the most common procedure followed by an agency when issuing substantive rules because it is less expensive and more efficient.
Agencies will sometimes blend the the two types of rulemaking into a hybrid rulemaking approach. This type of rulemaking requires notice and a hearing on a proposed rule but the hearing is not as extensive as in formal rulemaking and cross-examination of witnesses is not available.
Enforcement
Agencies are empowered to enforce administrative rules and the underlying legislation identified in the agency’s enabling act. Unlike law enforcement investigations, agencies do not need probable cause to initiate an investigation. Generally, agencies are authorized to investigate simply to ensure the rules are being followed. For example, the Internal Revenue Service may audit a business’s taxes without any suspicion of wrongdoing.
Agencies are limited in their power to subpoena evidence in the form of testimony from witnesses and in obtaining documents and evidence. To be lawful, an agency’s subpoena must:
- Establish that the purpose of the investigation is legitimate;
- Establish that the agency has the power to conduct the investigation;
- Describe the requested information;
- Explain the relationship between the purpose of the investigation and the requested information; and
- Show that the requested information does not create an unreasonable burden on the business or individual in possession of it.
Businesses do not have all the Constitutional protections as individuals do, especially when it comes to agency investigations. In particular, a business cannot assert a Fifth Amendment right against self-incrimination to prevent agencies from obtaining business records. If an agency subpoenas documents, a business is required to turn them over, even if doing so exposes the business and individuals to potential criminal liability.
Adjudication
Adjudication is the legal process of resolving a dispute. In an agency context, this is the trial-like procedure or hearing used by agencies to enforce their actions and determine whether a business or individual has violated the law or regulations.
Adjudication can be either formal or informal. Formal adjudication is like a trial and is usually overseen by an administrative law judge (ALJ). The ALJ will decide what evidence is relevant and admissible, hear testimony, and determine the outcome of the dispute in a written finding. If appropriate, the ALJ also will determine a penalty.
Like the judiciary, agencies have an internal appeal process for adjudication. If a party wants to appeal a hearing officer or ALJ’s decision, the case will be reviewed internally by the agency. Often, appeals boards will consist of three to five agency experts who review the determination.