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The rulemaking process refers to the regulation-creating mechanisms employed by administrative agencies. There are three branches of government: the executive, legislative, and judiciary branches. The executive branch carries out the laws made by the legislative branch, and the President exercises the executive power vested by the United States Constitution. The legislative branch drafts and passes the law and statutes, and Congress exercises the enacting power vested by the United States Constitution. The judiciary branch interprets and evaluates the law passed by Congress and the federal courts exercise the power to interpret laws vested by the United States Constitution.

Agencies are the administrative authorities of legislative bodies that Congress authorized to promulgate regulations to enforce, monitor, and regulate laws created by Congress. Since Congress cannot take charge of all the enforcement of laws passed by Congress, they delegated the general power to implement laws enacted by Congress to the agencies. Since the agencies are only authorized narrowly to achieve a certain goal explicitly stated by Congress (for example, the Department of State is authorized to only advise the President in foreign affairs and policy issues), the agency must stay within the statutory authority to not violate the Constitution. The agency may make rules, amend already existing rules, or repeal a rule. A rule made by the agency may be legislative, non-legislative, and organizational.

  • Legislative (substantive): A legally binding rule that creates new rights. For example, a legislative rule may require broadcast towers to turn on lights after sundown to prevent aviation accidents.
  • Non-legislative: There are the policy statements and the interpretive rules.
    • Policy statements explain to the public how the agency plans to exercise its discretionary power. For example, a policy statement may depict how an act would violate the agency’s rules and the penalties imposed for violating such rules.
    • Interpretive rules clarify and illustrate how the language of the legislative rule or statute is administered by the agencies
    • Organizational (procedural) rules: Organizational rules state how an agency makes its rules.
      • For example, an organizational rule from an agency may state how that agency is structured and how it undergoes its particular decision-making process.

The agencies must publish a regulatory plan and a regulatory agenda every year. By publishing these agendas, the agencies announce their intentions on future rulemaking processes and inform the public of the completed and impending regulatory activities. If an agency decides to issue a new rule, then it must engage in preliminary steps such as gathering information and consulting experts on the subject matter.

See: Federal Trade Commission’s rulemaking process, rulemaking activities of the U.S. Securities and Exchange Commission, rulemaking process of the U.S. Department of Transportation, Federal Register.

[Last updated in April of 2024 by the Wex Definitions Team]