Ch16-SG - PowersandFunctions ofAdministrative Agencies...

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Chapter 16: Powers and Functions of Administrative  Agencies W HAT   THIS  C HAPTER  I S  A BOUT Federal,  state, and  local administrative  agencies  regulate  virtually  every  aspect  of a business’s operation.  Agencies’ rules, orders, and  decisions make up  the body of administrative law.  How  agencies function is the subject   of this chapter. C HAPTER  O UTLINE I. AGENCY CREATION AND  POWERS Congress delegates some of its authority  to make and  implement  laws, particularly in highly technical areas,  to administrative agencies. A. E NABLING  L EGISLATION To create an agency, Congress passes enabling legislation, which specifies the powers of the agency.   B. T YPES   OF  A GENCIES 1. Executive Agencies Includes  cabinet departments  and  their subagencies.  Subject to the authority  of the president,  who   can appoint and  remove their officers. 2. Independent Regulatory Agencies Includes  agencies outside  the major executive departments.  Their officers serve for fixed terms and   cannot be removed  without  just cause. C. A GENCY  P OWERS   AND   THE  C ONSTITUTION Agency  powers  include  functions  associated  with  the  legislature  (rulemaking),  executive  branch  (en- forcement), and  courts  (adjudication).  Under  Article I of the Constitution  and  the delegation  doctrine,  Congress has the power  to establish agencies to create rules for implementing  laws. II. ADMINISTRATIVE PROCESS Rulemaking,  investigation,  and  adjudication  make  up  the  administrative  process.    The  Administrative   Procedure  Act (APA) of 1946 imposes procedural requirements that agencies must follow. A. R ULEMAKING Rulemaking  is the  formulation  of new  regulations.  Legislative  rules  are  as  binding  as  the  laws  that  Congress makes. Interpretive rules are not binding  but indicate how  an agency will apply a statute. 1. Notice of the Proposed Rulemaking An  agency  begins  by publishing,  in the   Federal Register,  a notice  that  states  where  and  when  pro- ceedings  will be held, terms  or subject matter  of the proposed  rule, the agency’s legal authority  for  making the rule. 2. Comment Period 131
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132 UNIT 5: THE REGULATORY ENVIRONMENT Interested  parties  can  express  their  views.  An  agency  must  respond  to  significant  comments  by  modifying the final rule or explaining, in a statement  accompanying  the final rule, why  it did  not. 3. The Final Rule The agency publishes the final rule in the  Federal Register .  The final rule has binding  legal effect un - less overturned  by a court.
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