Powers and Functionsof Administrative Agencies

Question - Net-NeutralityFTC Announced Final Regulations – Late February 2015

Imagine you are a member of the U.S. Congress and are concerned that the internet is not regulated enough as there is a fear that internet service providers might slow or block some content, maybe competitors. You are considering legislation to prevent this.

Do you know enough about this to pass legislation? How would you learn more? How would you create the rules for complying with the law, enforce the law, and

adjudicate issues arising from the law? Assume you want to pass a law regulating the internet would you use an

administrative agency? Why?

Agency Creation and Powers

Under the U.S. Constitution, Congress may delegate the task of implementing its laws to government agencies.– Enabling legislation

Executive Departments and Important Subagencies

Administrative Process

Three functions of administrative process are:

Adjudication

Rulemaking Enforcement

Rulemaking

Notice of Proposed Rulemaking— Begins with the publication of the proposed regulation in the Federal Register.

Opportunity for Comment— After notice is published, time is allowed for private parties to comment on the proposed rule.

Publication of the Final Rule —After the agency reviews the comments, it drafts the final rule and publishes it.

Agencies Investigate

Inspections and Tests

Used to gather information and to correct or prevent

undesirable conditions.

Subpoenas

Orders that direct individuals to appear at

a hearing or to hand over specified documents.

Limits on administrative investigations include the following:• Legitimate purpose.• The information being sought must be relevant.• The demand for testimony or documents must be specified.• The burden of the demand is on the party from whom the information is

sought.

Agencies Adjudicate

End of Chapter Q: 6-3Can an agency inspect a plant without a search warrant? In this case the agency found evidence the plant was wrongfully putting pollutants into the water system. The evidence was found on company property but the pipe ran to a public access less than 300 feet away where the agency could have taken a water sample.

– Fishing Vessel ExampleMaking a fishing vessel except a female inspector on board

Limitations on Agency Powers

Power of Agencies. Combining the functions normally divided among the three branches of government into an administrative agency concentrates considerable power in a single organization.

Controls on Agencies. As a result, several controls exist to place such power in check, including:– Judicial Controls– Executive Controls– Legislative Controls E

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Judicial Review – Mayo Foundation v. U.S.

Case 6.2 Issue – Whether a medical resident and employer must pay payroll taxes.

Law. Exception to payroll taxes for students if work is “as an incident to and for the purpose of pursuing an education.”

IRS Ruling. Medical residents are primarily employees getting some education rather than students with some employment.

Standard of Review. Chevron test: (1) does the law directly address the issue (no), and (2) is the agencies interpretation reasonable. Also did the agency follow proper rulemaking process in making the rule.

US Supreme Court Case – King v. BurwellHeard March 4, 2015 Law says: “established by the state”

• IRS Ruling. Can be established by a state or the federal government

Public Accountability

Freedom of Information Act of 1966. Requires the government to disclose records to “any person” on request.

Government-in-the-Sunshine Act of 1976– “[E]very portion of every meeting of an agency” must be open to

“public observation.”– Procedures must be implemented to ensure that the public is

provided with adequate advance notice of the agency’s scheduled meeting and agenda.

Regulatory Flexibility Act of 1980– Concern over the effects of regulation on the efficiency of

business, particularly smaller ones, led Congress to pass the Regulatory Flexibility Act in 1980.

– The act requires a regulatory flexibility analysis whenever a new regulation will have a “significant impact upon a substantial number of small entities.”

Extra Slides

End-of-Chapter Q 6-5

States Sue EPA Over Greenhouse Gasses. Nineteen states sued the EPA over its failure to regulate carbon dioxide from cars under the Clean Air Act.

EPA Refused to Regulate. The EPA says that Congress did not intend for it to regulate cars or carbon dioxide from cars based on a 1990 amendment to the Clean Air Act.

Issue: Doe the EPA get to decide what the Clean Air Act says? Can a court override the EPA? Can the states force the EPA to regulate carbon dioxide?

State Administrative Agencies

States also have administrative agencies If state and federal conflict – federal wins.

For Review

1. How are federal administrative agencies created?

2. What are the three operations that make up the basic functions of most administrative agencies?

3. What sequence of events must normally occur before an agency rule becomes law?

4. How do administrative agencies enforce their rule?5. How do the three branches of government limit the

power of administrative agencies?