Regulatory Agency Advocacy: Is a Different Approach Required?

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By Chris Micheli

What is regulatory agency advocacy? How different, if at all, is it from legislative advocacy? Sometimes a regulatory agency provides a new opportunity to continue the battle seemingly lost in the Legislature. And sometimes it means defending your legislative success, or even getting a better result than you had achieved in the Legislature.

The state’s regulatory process, while an integral part of developing California’s public policy, is a world of its own with separate rules and procedures. The Administrative Procedure Act (APA) establishes rulemaking procedures and standards that must be followed by state agencies in California.

There are some lobbyists who specialize in dealing with the rulemaking process who help their clients meaningfully engage in the public comment period and formal administrative hearings, as well as navigate the agency process for adopting and amending regulations.

However, many lobbyists do not operate in the regulatory world. They generally focus exclusively on the legislative arena. The regulatory process is often left to lawyers practicing in particular policy areas, such as telecommunications at the Public Utilities Commission or environmental waste at the Department of Toxic Substances Control.

These state administrative entities engage in both quasi-judicial and quasi-legislative activities. These departments and agencies interpret and enforce the laws under their jurisdiction (quasi-judicial) and they engage in rulemaking by adopting or amending regulations (quasi-legislative).

Generally speaking, the authority of state agencies and departments to adopt policy (i.e., rulemaking) is defined and restricted by statute. Statutes usually prescribe each agency’s authority to adopt regulations; and, it is an established principle of administrative law that an agency cannot exceed its legally-prescribed authority.

On the other hand, many statutes adopted by the Legislature confer broad powers to some state agencies regarding matters that directly affect the general public (e.g., Department of Motor Vehicles, Air Resources Board, and Department of Fair Employment and Housing).

Interested parties have significant access to and participation in the rulemaking activities of state agencies by virtue of the California Administrative Procedure Act. In addition, every state agency is required to annually adopt a “rulemaking calendar” pursuant to Government Code Section 11017.6 that describes regulatory actions the agency anticipates taking during the calendar year.

A central principle of the APA is that a state agency must consider recommendations and objections from the public before the agency adopts or changes any regulation that is not specifically exempted from the APA. The APA is overseen by the Office of Administrative Law (OAL).

The OAL publishes an excellent resource guide entitled, “How to Participate in the Rulemaking Process: The Statutes, Regulations and Case Law You Need to Make Your Voice Heard in the

California Rulemaking Process.”

There are numerous instances where the public can participate in an agency’s rulemaking activities, including:

• Commenting on the initial proposal

• Commenting on modifications to the initial proposal

• The 45day comment period

• The public hearing

• Opportunity for public comment based upon new material relied upon

• Summary and response to comments

Effective comments are based on an understanding of the statutes and factual material the agency relies on in proposing the regulation, on an understanding of what the proposed regulation is intended to do, and on an understanding of the standards the regulation must satisfy. The Authority and Reference citations that follow the text of each regulation section identify the statutes on which the section is based.

The initial statement of reasons (“ISOR”) describes the purpose and rationale of each regulation and identifies the factual material upon which the agency relies in proposing it. The response to comments in the final statement of reasons (“FSOR”) must demonstrate that each relevant, timely comment has been considered by the agency.

As with other forms of advocacy, it is important that an advocate make an effective presentation to the state agency during the rulemaking process, including keeping in mind the following key points:

Expect the unexpected regarding the attentiveness of the audience, questions, and interruptions;

Stay on point and within the time limits given, with your presentation designed to engage the audience;

Be honest—lies and deceit can ruin an advocate; and,

Remember that presentations are just one component of regulatory agency advocacy.

Regulatory advocates should also be aware of potential avenues of impacting proposed regulations. For example, how does the Governor influence state agencies? He or she can exert considerable influence via his or her authority over the state budget, via the power to reorganize the executive branch, and via personal persuasion, as well as creating positive or negative publicity regarding the proposed rulemaking.

If the agency is within the line authority of the Governor, or if the Governor appoints the director of the agency, the Governor can issue directives to the agency or to the CEO. If the Governor appoints all or some of the governing board members of an independent agency, the Governor can influence these appointees.

How does the Legislature influence state agencies? When conferring the power or authority to regulate, the Legislature can choose to grant a broad scope of authority or a very limited grant of authority. Another key function of legislative bodies is the role of oversight. Through the annual budget process, the Legislature can exert influence by providing or removing funding or by adopting “budget control language” that specifically directs agency activities.

In addition, the Legislature can hold hearings to review an agency’s actions in adopting regulations and implementing laws. The Legislature can direct one of its control agencies (State Auditor, Legislative Analyst) to investigate the agency’s actions to regulate or implement. The Legislature can ask OAL to review regulations.

Moreover, through the annual Budget, the Legislature can provide or remove funding, and direct agency activities through budget control language. Finally, agencies can be pressured via numerous informal and behind-the-scenes techniques applied by committees, leaders, or individual legislators.

How do interest groups influence state agencies? The main route is by taking advantage of the extensive opportunities to participate in the rulemaking activities. Most interest groups go well beyond simply participating in the regulatory processes. Groups can and often do resort to the legislative arena in order to influence rulemaking activities.

For example, interest groups may work with the Governor as a means of pressuring state agencies to act or not act. Unhappy with a given regulatory action, they can initiate litigation to challenge the agency’s rulemaking activities. They can instigate media attention and press coverage regarding the state agency’s actions.

Regulatory lobbyists may try to influence agency heads responsible for developing regulations and boards or commissions (including individual members) responsible for adopting regulations. They may instigate actions within the legislative branch (e.g., audits, investigations, special hearings, follow-up legislation) to address concerns or apply added pressure to agencies.

Also of interest are two major ways for interested persons to challenge an agency’s rulemaking: Any interested person may petition an agency requesting the adoption, amendment or repeal of a regulation. The agency has 30 days to respond pursuant to Government Code Sections 11340.6 and 11340.7.

Or, any interested person may obtain a judicial declaration as to the validity of any regulation or order of repeal by bringing an action for declaratory relief in the superior court in accordance with the Code of Civil Procedure. The right to judicial determination is not affected by the failure either to petition or to seek reconsideration of a petition pursuant to Government Code Section 11350.

As readers can see, there are numerous instances wherein advocates can attempt to influence the rulemaking process of state agencies. With over 200 state entities authorized to adopt limited or expansive regulations, there is plenty of opportunity to engage in the regulatory process. Advocates should be aware of the nuances of the APA and the role of OAL.

 

Chris Micheli is an attorney and registered lobbyist with the Sacramento government relations firm of Aprea & Micheli, Inc. He serves as an Adjunct Professor at McGeorge School of Law.

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