by Jon Sanders
Research Editor and Senior Fellow, Regulatory Studies, John Locke Foundation
Rules created by a state agency can carry the full force of law. But in our system of government, legislators are the ones who make law. How are agencies able to make rules? Because “lawmaking” authority was delegated to them by the legislature so they could create rules to implement the laws passed by the legislature.
This power is supposed to be highly limited, but it’s easy to abuse. There is a multistep process for creating a new rule, and the legislature can vote to disapprove a rule, but the actual disapproval votes are rare. It’s much easier to create a rule than stop one. Read my “Take the Reins” Spotlight report for more discussion why.
Some executive agencies have also discovered it’s even easier to skip the whole process of making a rule altogether, and instead issue “guidance” statements and other documents that they then police and enforce as if they are rules. Regulation expert Clyde Wayne Crews Jr. calls them “regulatory dark matter“:
“Regulatory dark matter” refers to the thousands of executive branch and independent agency actions including guidance documents, proclamations, memoranda, bulletins, circulars, letters and more that are subject to little scrutiny or democratic accountability but carry practical, binding regulatory effects.
In 2018, the U.S. Government Accountability Office determined that federal agency “guidance” documents function as rules, which meant they were subject to the Congressional Review Act. At the time it meant that even Clinton-era agency guidance could be overturned by Congress. Going forward, it means that agencies can not expect to get away with trickery to forge a rule without following proper rulemaking procedures.
Basically, a rule is defined by how it acts and affects people (“practical, binding regulatory effects”), not what it’s called.
A bill currently before the NC Senate would bring to light and force a reckoning on regulatory dark matter in the state Division of Social Services (DSS). A proposed committee substitute to House Bill 612, sponsored by Reps. Sarah Stevens (R-Alleghany), Dennis Riddell (R-Alamance), and Donna McDowell White (R-Johnston), would do the following:
It’s the right and proper action for the legislature to take. DSS has rulemaking authority on loan from the General Assembly. To the extent that DSS is trying to regulate by publishing guidelines and then treating those guidelines as actionable rules, they need to be brought to heel.
The bill would give DSS one year to identify all of its policies, guidelines, publications, procedures, etc. and determine whether or not they are effectively rules, which should have been adopted under the state’s formal rulemaking process. DSS would then have another year to decide which of those guidelines, etc. — now defined as interim rules — were worth adopting as permanent rules or else be repealed.
The bill’s latter sections are also noteworthy. They would allow people to challenge in court whether the guidelines, etc., an agency is enforcing against them violated the state’s rulemaking procedures. Courts generally give broad deference to agencies, since legislatures have, but in doing this the legislators would be signaling to judges their intent that the agencies stay within their legally defined boundaries. It would be an important change.
For more information, see: