Legislative Oversight
Legislative oversight of agency rulemaking is an issue that the Florida Legislature has struggled with since it first adopted the Administrative Procedure Act (APA) in 1974.1 The issue became somewhat more acute, however, during the 1990s. First, due to the development of case law standards which provided much deference to agency rulemaking, there was a perception that agency rules often went far beyond the intentions of the legislature as expressed in the enabling statutes, the very authority on which these rules were to be based. Second, in an era when the benefits of deregulation were widely touted, the impact of increasing numbers of rules on government and private sector efficiency caused concern. Additionally, as the legislature began permitting agencies greater flexibility in the performance of their duties, such as through performance-based budgeting, the competing ideals of regulatory certainty and regulatory flexibility were pushed to the fore.
The conflict between regulatory certainty and regulatory flexibility hampered enactment of revisions to the APA in general and to provisions affecting legislative oversight in particular until the 1996 regular legislative session. More specifically, conflict over whether to retain the requirements of F.S. §120.53 that agency statements that meet the definition of a rule must be adopted as soon as feasible and practicable, was a primary reason for the veto of the 1995 APA reform bill, Committee Substitute for Committee Substitute for Senate Bill 536 (CS/CS/SB 536). Reform of the APA was stymied until the executive and legislative branches were able to resolve their differences on this issue.
Resolution of this conflict was aided by the Governor’s Administrative Procedure Act Review Commission. Somewhat surprisingly, the final report of the commission was in agreement with many of the fundamental provisions of the vetoed CS/CS/SB 536. Significantly, the final report recommended that the requirement that agencies adopt rules as soon as feasible and practicable be retained, while also recommending that agencies be authorized to grant waivers of and variances from these rules, a position that was favorably received by the legislature.
In 1996, Senate Bill 2290, which was identical to the vetoed CS/CS/SB 536, and Senate Bill 2288, which contained many of the recommendations of the commission’s final report, were filed. In the House of Representatives, House Bill 1179 was filed as a short form bill. Ultimately, a Committee Substitute for Senate Bills 2290 and 2288 (CS/CS/SB 2290 and 2288) was adopted which contained provisions of House Bill 1179. CS/SB 2290 and 2288 were passed by both houses of the legislature, presented to the Governor, and signed into law. The CS/SB 2290 and 2288 brought about the most comprehensive revision to the APA since the 1974 act.
Consideration of Rulemaking Prior to Enacting Law
While there are practical reasons why some statutes are not as specific as may be desirable, the lack of specificity in enabling statutes at times results in the adoption of rules which do not adequately implement “legislative intent.” One of the most obvious means of improving legislative oversight of agency rulemaking is through legislative consideration of rulemaking prior to enacting laws that will require implementation through rule.
Chapter 96-159 of the Laws of Florida provides a statement of intent that the legislature will consider the impact of any agency rulemaking required by proposed legislation and determine whether the proposed legislation provides adequate and appropriate standards and guidelines to direct the agency’s implementation of that legislation. There is, however, no sanction for legislation that passes without legislative consideration of whether adequate standards are explicated or of what the impact of rulemaking will be. Two practical means of encouraging legislative consideration of rulemaking prior to enacting law are by requiring such consideration through legislative rule or through the bill analysis process. Whether each house of the legislature adopts a rule requiring such consideration or amends its analysis forms to encourage rulemaking consideration remains to be seen.
Probably one of the most effective means of ensuring legislative consideration of these issues, however, is through involvement in the legislative process by the regulated public and regulatory agencies. Pro-active agencies may wish to monitor closely legislation which affects their duties and responsibilities in order to advise the legislature whether the standards are clear or whether revisions need to be made to clarify legislative intent. Legislative consideration of adequate rulemaking standards and rulemaking impacts also could result in a more detailed legislative record and, as a result, aid in determining legislative intent.
Restricted Statutory Rulemaking Standards
In 1991, the legislature disapproved the judicial notion that rulemaking was a matter of agency discretion by enacting F.S. §120.535. In 1996, the legislature repealed F.S. §120.535 but retained the standards of that section. As a result, each agency statement that meets the definition of a rule still must be adopted as soon as feasible and practicable. F.S. §§120.54(1), 120.56(4), 120.595(4).
The legislature also attempted to improve legislative oversight by enacting statutory restrictions on agency rulemaking. Legislative action to limit rulemaking authority has been an ongoing process. In 1974, the legislature authorized rule challenges if a rule was an “invalid exercise of delegated legislative authority.” This term, however, was not defined by statute until 1987.
While the courts used a variety of standards to determine rule invalidity, legislative discontent tended to focus on expansive judicial interpretations, such as the standard that agencies have “wide discretion in the exercise of their lawful rulemaking authority, clearly conferred or fairly implied and consistent with the agencies’ general statutory duties.”2 Of particular legislative concern was the standard which found that agency authority to adopt rules could be “fairly implied” from several statutory sections when coupled with the authority to adopt such rules as the agency deems necessary to effectively administer and enforce the law, consistent with the legislative intent.3 Also of concern was the standard that a rule would be upheld if it was reasonably related to the purposes of the enabling legislation and was not arbitrary and capricious.
The legislature provided a definition for the term “invalid exercise of delegated legislative authority” in 1987, after a review of the case law. F.S. §120.52(8). The term was defined as agency action that goes beyond the “powers, functions, and duties delegated by the Legislature.” The definition listed criteria that had been enunciated in various cases, including the standard that a rule could not enlarge, modify, or contravene the enabling statute.4 Included in the list was a portion of the “arbitrary and capricious” standard.5 That portion of the standard which authorized rules if they were “reasonably related to the purposes of the enabling statute” was not codified. While the codification of the definition of “invalid exercise of delegated legislative authority” was recognized in case law,6 some rules were still upheld based upon the standard that they were “reasonably related to the legislative purpose and not arbitrary and capricious.”7
The legislature has disapproved some of the broader judicial standards by enacting rulemaking restrictions in the definition of “invalid exercise of delegated legislative authority,” F.S. §120.52(8) and reiterated in §120.536(1). Those sections provide that:
A grant of rulemaking authority is necessary but not sufficient to allow an agency to adopt a rule; a specific law to be implemented is also required. An agency may adopt only rules that implement, interpret, or make specific the particular powers and duties granted by the enabling statute. No agency shall have authority to adopt a rule only because it is reasonably related to the purpose of the enabling legislation and is not arbitrary and capricious, nor shall an agency have the authority to implement statutory provisions setting forth general legislative intent or policy. Statutory language granting rulemaking authority or generally describing the powers and functions of an agency shall be construed to extend no further than the particular powers and duties conferred by the same statute.
The first sentence of the new rulemaking standard reiterates the rule that rulemaking authority is a legislatively delegated power, a grant from the policymaking body to the executive. F.S. §120.54(1)(e).8 This general grant of power, however, cannot be construed as sufficient in and of itself for an agency to adopt any rule it desires. An agency only may adopt a rule that implements a specific law.9 The second sentence, which authorizes only rules that implement, interpret, or make specific particular powers and duties reiterates a requirement that has been in the APA since 1975. F.S. §120.54(6) (1975).
Agency rulemaking authority is additionally restricted by the third sentence which forbids the use of statutory provisions which set forth general legislative intent or policy to support a rule. The third sentence is intended to overrule a portion of the judicial standard that permits a rule if it is “reasonably related to the purpose of the enabling legislation and the rule is not arbitrary or capricious.”10 The language is a clear direction to administrative law judges, whose responsibility it is to determine if a rule is an invalid exercise of delegated legislative authority, and the appellate court that the standard of review is whether the administrative law judge’s determination is based on competent substantial evidence.
The restrictive statutory standards enunciated in §120.536(1) are a legislative rejection of broader judicial standards for determining rule validity. While the bases for agency rulemaking authority have been restricted by the act, it remains to be seen how the enunciated standard will be applied by the courts. In the meantime, agencies will have to balance the broad standard that policies which meet the definition of a rule must be adopted as soon as feasible and practicable with the restrictive requirements of §120.536(1).
Legislative oversight of agency rulemaking also was increased by provisions in the Committee Substitute for Senate Bills 1626 and 1654, which require agencies to review their rules and report their findings to the legislature. Two rule reviews and reports are required, one of which will be a recurring review. The first review is related to the new rulemaking standard enunciated in §120.536(1) and is provided in §120.536(2). The second recurring review is related to rule reviews first initiated by the Governor and the Senate president during the 1995 legislative interim.
Review for Compliance
With New Standard
Rules adopted after October 1, 1996, must meet the new standard. Literally thousands of rules have been adopted prior to that date, however. In order to conform these pre-existing rules to the new restrictive standard, a rule review and reporting requirement was instituted. Each agency must provide to the Joint Administrative Procedures Committee (JAPC) by October 1, 1997, a list of previously adopted rules, which includes portions of rules, which exceed the rulemaking authority permitted by the new standard.
Depending upon the number of rules that are determined to exceed the new standard, the act sets forth a very ambitious review schedule. It requires JAPC to combine the agency lists and provide a cumulative listing to the president of the Senate and the speaker of the House of Representatives. During the 1998 regular session, the legislature will consider whether specific legislation authorizing the identified rules or rule sections should be enacted. If the legislature does not adopt authorizing legislation for particular rules at that time, agencies are required to initiate rule repeal by January 1, 1999. JAPC must submit to the legislature by February 1, 1999, a report that identifies those rules for which repeal proceedings have not been initiated.
Prior to July 1, 1999, a challenge to a rule which was adopted before October 1, 1996, may not be filed using as a basis for the challenge the new standard. After that time, JAPC or any substantially affected person may file a rule challenge petition which relies on the new standard. The act, however, specifically prohibits use of the new standard and rule review period to change the legal status of a rule that has been judicially or administratively determined to be invalid.
Section 120.74
Review and Report
The second rule review and legislative report has its genesis in reviews that were required by the Governor pursuant to executive order11 and by the Senate president during the 1995 legislative interim. Both of these rule reviews placed an emphasis on regulatory streamlining and rule reduction. The Senate president requested that each agency develop and submit a recommendation regarding which rules the agency could repeal. The bases for rule repeal were the lack of necessity for the rule, redundancy, the rule overlapping another rule, or obsolescence. Agencies were to include in their review rules that would require legislative action prior to repeal. Significantly, the Senate president also requested agencies to review how their rules dictate the implementation of programs and the operation of the agency. Agencies were requested to report to the standing Senate committees how those rules could be modified or repealed in order to increase effectiveness and efficiency, including cost savings.
The Governor also requested agencies to review and repeal their rules. Executive Order Number 95-256 required agencies to perform a “page by page review” of all rules in order “to eliminate or revise those that are unduly cumbersome, restrictive, punitive or otherwise in need of revision.” Reports were to be provided every 60 days, with the initial report being filed no later than September 1, 1995.
Agencies began filing large numbers of rules for repeal as a result of the legislative request and the executive order. As a result, an estimated 57 percent of the rules that were adopted in 1995 were actually repeals of rules. The repeal of rules in 1995 was of historic magnitude.
As a result of the rule review process of 1995, it was determined that regular rule review by agencies would be beneficial. The Senate Committee on Governmental Reform and Oversight introduced Senate Bills 1626 and 1654 to remedy identified problems of lack of regular rule review, rule inefficiency, lack of coordination, excess rules, and rule inflexibility. These two bills were combined in a committee substitute, amended, and after passing both houses of the legislature, allowed to become law by the Governor.
Section 120.74 now requires agencies to perform a formal review of their rules. The section requires agencies to: 1) identify and correct rule deficiencies; 2) clarify and simplify rules; 3) delete obsolete or unnecessary rules; 4) delete rules that are redundant of statutes; 5) seek to improve efficiency, reduce paperwork or decrease costs to government and the private sector; and 6) contact agencies that have concurrent or overlapping jurisdiction to determine whether their rules can be coordinated to promote efficiency, reduce paperwork, or decrease costs to government and the private sector.
Beginning October 1, 1997, and by October 1 of every other year thereafter, the head of each agency must file a report with: 1) the president of the Senate; 2) the speaker of the House of Representatives; and 3) each appropriate standing committee of the legislature. The agency head must certify in the report that the agency has complied with the requirements of the act. As well, the report must specify any changes to rules made by the agency as a result of the review and, when appropriate, recommend statutory changes that will promote efficiency, reduce paperwork, or decrease costs to government and the private sector.
The rule review, revision, and reporting requirement of §120.74 could affect rule quality positively if the process is performed diligently. The legislative reporting requirement could ensure that the review process is taken seriously if legislative staff and committees carefully review the reports.
Rule Uniformity
and Simplification
Prior to the 1996 act, the Administration Commission (The Governor and Cabinet) was required to promulgate one or more sets of model rules of procedure. The Model Rules of Procedure were the rules of procedure for agencies to the extent that each agency did not “adopt a specific rule of procedure covering the subject matter contained in the model rules applicable to that agency.” Under the new APA, the Administration Commission is required to adopt uniform rules of procedure by July 1, 1997, and authorization for agency specific rules of procedure has been eliminated, except under certain circumstances. Agencies are required to comply with the uniform rules by July 1, 1998.
The act requires an agency to file a petition with the Administration Commission in order to obtain an exception. The Administration Commission may approve exceptions only to the extent necessary to implement other statutes, to conform to requirements imposed as conditions precedent to receive federal funds or tax benefits under federal law, or for the most efficient operation of the agency as determined by the Administration Commission. No rule providing an exception may be filed by an agency with the Department of State prior to receiving approval from the Administration Commission. Exceptions must be published in a separate chapter in the Florida Administrative Code.
The legislature also required the adoption of other uniform rules. Chapter 96-399 of the Laws of Florida creates more rule uniformity by providing for the creation, where practical, of uniform rules that each agency must follow, while authorizing exceptions where necessary. Uniform personnel rules, uniform selective service system registration administration rules, uniform rules regarding appointments and promotions and use of volunteers, uniform sexual harassment rules, uniform design-build contracts, and uniform leasing procedures are now required. As in the case of the uniform rules of procedure, exceptions are authorized, but approval must be obtained prior to rule adoption.
Simplified Rules
The act also encourages agencies to draft rules in “readable language,” avoiding the use of: 1) obscure words and unnecessarily long or complicated constructions; and 2) unnecessary technical or specialized language that is understood only by members of particular trades or professions. F.S. §120.54(2). The section is not mandatory and no penalty is provided for failure to comply with its provisions. The enunciated standard may be difficult to meet in some instances. Given that rules often regulate complex, specialized areas, technical language is likely to remain in many rules. Nevertheless, there are many rules which could be improved by adhering to the standard.
Amendments to the
Duties and Powers of JAPC
JAPC is required to examine all proposed administrative rules and is authorized to examine any existing rule. While the review of rules by JAPC results in the establishment of a “legislative check on legislatively created authority,” JAPC does not directly control agency rulemaking in that agencies are not required to acquiesce to JAPC’s objections. F.S. §120.545.
The revised act attempts to improve legislative oversight by amending the duties and powers of JAPC. JAPC is required to maintain a continuous review of the rulemaking process, including a review of agency procedures and of complaints based on such procedures. The act also requires JAPC to establish measurement criteria to evaluate whether agencies are complying with legislative authority in adopting and implementing rules. Further, JAPC is required by the act to undertake a systematic and continuous review of statutes that authorize agencies to adopt rules. When JAPC determines changes to delegations of legislative authority would be appropriate, it must so recommend to standing committees of the legislature. F.S. §11.60.
The contents of the annual report that JAPC files with the legislature was modified by the act, as well. Specifically, JAPC must report how many times in the previous year it: a) voted objections to rules; b) voted to suspend rules; c) filed administrative determinations on the invalidity of a proposed or existing rule; and d) filed petitions for judicial review on the invalidity of a proposed or existing rule. The report also must include the outcome of any actions taken. Additionally, the annual report must include a schedule for the required systematic review of existing statutes, a summary of the status of the review, and any recommendations provided to the standing committees during the preceding year. F.S. §11.60(2)(f).
JAPC has had standing to seek administrative and judicial review of any administrative rule that it has voted an objection to, that has not been withdrawn, modified, repealed, or amended to meet the objection. Upon a determination by JAPC to seek judicial review, the APA provides a “reasonable opportunity” for resolution of the dispute with the agency by requiring JAPC to notify the head of the agency involved and the Governor of its intent to seek review. While no time limit on the consultation period was previously imposed, the act now limits to 60 days the amount of time the Governor and agency head have to consult with JAPC regarding an objection. F.S. §11.60(2)(k).
Even though JAPC has had standing to seek administrative and judicial review of an agency rule, it has been inhibited from seeking either type of review. First, F.S. §11.60(2)(k) did not specify in what forum JAPC should bring an original action. Second, there was some concern about a legislative committee bringing a challenge to a rule in an administrative forum that was in the executive branch. These concerns have been resolved by the deletion of authority to seek review in an administrative forum.
Temporary Suspension
of Rules
One of the more popular, but controversial, methods of improving legislative oversight of agency rulemaking is rule suspension. The act now authorizes a “voluntary” rule suspension process. It is “voluntary” because the act does not require an agency to suspend the adoption of a proposed rule or the operation of an existing rule upon a request from JAPC. Furthermore, an agency is not under threat of a penalty for refusing to comply with a request to suspend. F.S. §120.545(10).
Under the terms of the rule suspension process, JAPC must certify to the promulgating agency that it has voted to recommend the introduction of legislation to modify or suspend a rule within five days of that determination. An agency has three options upon receipt of this certification. It may temporarily suspend its existing rule, suspend the adoption process of a proposed rule, or advise JAPC in writing that it refuses to temporarily suspend the existing rule or the adoption process. Timeframes for agency response to the certification are dependent upon the type of agency head. When a collegial body heads the agency, a response must be given 45 days after receipt of the certification. If a single individual heads the agency, the agency must respond within 30 days after receipt of the certification. If an agency does not respond within these timeframes, the act provides that this constitutes a refusal to suspend. F.S. §120.545(10)(b).
Notice of suspension, which is effective upon publication, must be given in the Florida Administrative Weekly if the agency agrees to the JAPC request. Prior to expiration of the suspension, no agency action may be based upon a suspended rule or suspended proposed rule. Nevertheless, the rule continues to be subject to administrative determination and judicial review as provided by law. F.S. §120.545(10)(b).
JAPC may submit to the president of the Senate and the speaker of the House a recommendation that legislation be introduced to modify or suspend the adoption of a proposed rule, or amend or repeal a rule, if JAPC votes an objection to a proposed or existing rule and the agency fails to initiate administrative action to modify, amend, withdraw, or repeal the rule consistent with the objection within 60 days, or thereafter fails to proceed in good faith to complete the action. The act requires JAPC to prepare for prefiling and introduction in the next regular session of the legislature a bill to modify or suspend the adoption of a proposed rule or amend or repeal an existing rule.
JAPC is not authorized to file the bill for introduction, however. It is only authorized to present the bill to the Senate president and the speaker of the House with the committee’s recommendation. There is no requirement that either the president or the speaker file the bill for introduction. Nevertheless, individual members of JAPC or other interested members could file legislation that reflects the JAPC position on the rule. F.S. §120.545(10)(c).
When a rule suspension bill becomes law, a proposed rule will be suspended until specific delegated legislative authority for it is enacted. If a bill to modify a proposed rule or amend a rule becomes law, the suspension expires upon publication of notice of modification or amendment in the FAW. If a proposed rule suspension bill fails to become law, either because it does not pass both houses of the legislature or due to gubernatorial veto, the suspension of the proposed rule expires. If a bill to repeal a rule becomes law, the suspension remains in effect until notification of repeal of the rule is published in the Florida Administrative Weekly. F.S. §120.545(10)(d).
The Department of State must publish in the next available issue of the Florida Administrative Weekly the final legislative action taken. Presumably, the Florida Administrative Weekly will also provide notice of any gubernatorial action taken on rule suspension bills, though this is not specifically required by the act. The department must conform a rule to the provisions of the law in the Florida Administrative Code and publish a reference to the law as a history note to the rule if a bill modifying or suspending the adoption of a proposed rule or amending or repealing a rule becomes law. F.S. §120.545(10)(e).
The suspension of an adopted rule could affect longstanding interpretations of a statute which an agency has used for enforcement purposes or disrupt the procedures by which an agency performs its duties. As well, the rule suspension process could substantially delay implementation of a proposed rule. For example, if rule promulgation begins during a regular legislative session, and the proposed rule is temporarily suspended, a proposed rule could remain “in limbo” for a year or more. When the adoption of a proposed rule is suspended, however, there is less likelihood of disruption to agency processes, even though there still may be confusion about what standards apply. From a process orientation, therefore, limiting rule suspension to proposed rules would be less disruptive.
In most instances, agencies amend their rules to comply with JAPC objections, thereby obviating the need for the suspension of either adopted or proposed rules. Nevertheless, the potential threat of rule suspension could provide JAPC with increased leverage to coerce an agency to modify its rules.
Conclusion
Legislative oversight of agency rule- making was enhanced by the enactment of amendments to the APA in 1996. In particular, the legislature reasserted its policymaking role by encouraging legislative consideration of the impact of legislation on rulemaking and by restricting rulemaking authority. Additionally, the legislature attempted to restrict the number of administrative rules by requiring the use of more uniform rules. As well, the legislature required agency rule review and improved coordination between agencies and the legislature by requiring agencies to report to the legislature on their rule review findings. Furthermore, the legislature assigned JAPC additional duties and oversight responsibilities, and adopted a voluntary rule suspension process. These various amendments are far reaching, but the ultimate impact remains to be seen. q
1 Fla. Stat. §§120.50-.71 (1975).
2 Dept. of Professional Regulation, Board of Medical Examiners v. Durrani, 455 So. 2d 515, 517 (Fla. 1st D.C.A. 1984).
3 General Motors Corporation v. Florida Dept. of Highway Safety and Motor Vehicles, 625 So. 2d 76 (Fla. 1st D.C.A. 1993).
4 Grove Isle, Ltd. v. State Dept. of Environmental Regulation, 454 So. 2d 571 (Fla. 1st D.C.A. 1984).
5 Agrico Chemical Co. v. State Dept. of Environmental Regulation, 365 So. 2d 759 (Fla. 1st D.C.A. 1978).
6 Adam Smith Enterprises, Inc. v. Dept. of Environmental Regulation, 553 So. 2d 1260 (Fla. 1st D.C.A. 1990).
7 Pershing Industries, Inc. v. Dept. of Banking and Finance, 591 So. 2d 991, 993 (Fla. 1st D.C.A. 1991), and Dept. of Labor and Employment Security v. Bradley, 636 So. 2d 802, 807 (Fla. 1st D.C.A. 1994).
8 Dept. of Business Regulation v. Salvation Limited, Inc., 452 So. 2d 65, 66 (Fla. 1st D.C.A. 1984).
9 Board of Trustees v. Board of Professional Land Surveyors, 566 So. 2d 1358, 1360 (Fla. 1st D.C.A. 1990); Dept. of Professional Regulation v. Florida Society of Professional Land Surveyors, 475 So. 2d 939, 942 (Fla. 1st D.C.A. 1985).
10 General Telephone Co. of Florida v. Florida Public Service Commission, 446 So. 2d 1063 (Fla. 1984); Dept. of Labor and Employment Security, Division of Workers’ Compensation v. Bradley, 636 So. 2d 802 (Fla. 1st D.C.A. 1994).
11 Fla. Exec. Order No. 95-74 (Feb. 27, 1995), and Fla. Exec. Order No. 95-256 (July 12, 1995).
Patrick L. “Booter” Imhof is on the staff of the House of Representatives Committee on Utilities and Communications. He was formerly chief legislative analyst for the House of Representatives Select Committee on Streamlining Governmental Regulations from 1994-1996, which had jurisdiction over legislation dealing with the Administrative Procedure Act during those two years. He has been employed by the Florida Legislature for over 15 years in both the Senate and the House of Representatives, and has been employed by the House since 1983.
James Parker Rhea is an attorney analyst for the Florida Senate Committee on Governmental Reform and Oversight. Prior to being employed by the Florida Senate, he was employed as an attorney for the Department of Business Regulation, the Associated Industries of Florida, and the Southwest Florida Water Management District. Mr. Rhea received a J.D. and an M.S. in urban and regional planning from the Florida State University in 1986. He is a member of the Administrative Law Section of The Florida Bar.
The views expressed in this article are solely those of the authors and are not intended to reflect the views of the Florida Senate or House of Representatives.
