State Agencies and Their Role in Public Policy

Photo courtesy Franco Folini, flickr

Photo courtesy Franco Folini, flickr

California’s agencies, as well as the departments, boards and commissions under them, engage in a tremendous amount of public policy making through both the rulemaking process and their interpretation and enforcement of existing statutes and regulations. These agencies are the ones who generally run the day-to-day operations of state government and implement the statutes adopted by the Legislature and signed by the governor.

With over 200 of these entities in California government, these state agencies influence policy by adopting regulations and implementing statutes. Moreover, they engage in policy making when these agencies issue guidelines, legal opinions, management memos, and other written documents that interpret the laws and implementing regulations.

Practitioners should be aware of the California Constitution Article III, Section 3.5. It provides that an administrative agency has no power to declare a statute unenforceable, or refuse to enforce a statute, on the basis of it being unconstitutional unless an appellate court has made such a determination. And agencies have no power to declare a statute unconstitutional.

This, for instance, when a Los Angeles Superior Court recently held that various teacher tenure and dismissal statutes were unconstitutional, local school districts, the Superintendent of Public Instruction, and the Department of Education were without authority to implement this decision. Without an appellate court ruling on the matter of constitutionality, local and state agencies must continue to abide by the challenged law.

When dealing with a given state agency, it is important first of all to know whether it is a plural executive, independent, or governor’s line authority agency. Generally speaking, the governor has less control over “plural executive” and “independent” agencies. These separate agencies are generally able to manage their daily affairs and conduct rulemaking without supervision or oversight from the governor. On the other hand, the governor has considerable authority to manage line authority agencies, including the ability to direct or restrict their rulemaking activities.

It is also important to know that state agencies within the executive branch of government consist of three major varieties:

  • Plural executive agencies” that are under the direction of an official elected on a statewide basis. For example, the Attorney General heads the Department of Justice, the Superintendent of Public Instruction heads the Department of Education, and the Insurance Commissioner heads the Department of Insurance. There are nine of these agencies in California headed by constitutional officers that are elected by statewide voters every four years.
  • “Independent agencies” that operate outside of the line control of the governor by virtue of constitutional provision, statute or common law. Some of the major independent agencies and their governing bodies include the University of California, governed by the Board of Regents; the California State University, governed by the Board of Trustees; the California Community Colleges, governed by the Board of Governors; the Public Utilities Commission, governed by the Public Utilities Commission; and the California State Lottery, governed by the Lottery Commission.
  • “Line agencies” include all the other agencies and departments within the executive branch that are under the line control and authority of the governor. Most state agencies and departments (more than 90 percent of them) within the executive branch of government are of this type. Many of these line authority agencies and departments have been organized into a hierarchy of major agencies or departments. The heads of these major agencies and departments sit on the governor’s cabinet.

When dealing with agencies that are under the line authority of the governor, it is important to know where they fit in terms of the organizational hierarchy. Departments or agencies that are under larger agencies or departments are subject to supervision and coordination by those agencies or departments. Their interactions with the governor also tend to be limited.

However, when it comes to rulemaking (i.e., the adoption of regulations under the state’s Administrative Procedures Act), the supervising or coordinating agencies usually allow significant latitude to the agency or department that is directed by statute to adopt such regulations.

Generally speaking, the authority of state agencies to adopt policy (by their rulemaking ability) is defined and restricted by statute. State statutes usually prescribe each agency’s authority to adopt policy; and, it is an established principle of administrative law that an agency cannot go beyond its legally-prescribed authority to regulate.

On the other hand, many statutes confer broad powers to some state agencies regarding matters that directly affect the general public (such as the Department of Motor Vehicles, the Air Resources Board, and the Department of Fair Employment and Housing). The regulations and administrative practices of these agencies affect millions of Californians in their daily lives.

Interested parties have significant access to the rulemaking activities of state agencies by virtue of the California Administrative Procedure Act (APA). In addition, every state agency is required to annually adopt a “rulemaking calendar” (Government Code Section 11017.6) that describes regulatory actions the agency anticipates taking during the calendar year. The APA is overseen by the Office of Administrative Law (OAL).

The OAL website includes helpful information for interested parties to track pending and adopted regulations. OAL also produces a guidebook on the rulemaking process that is of value to those who are getting acquainted with the APA process or those participating in the rulemaking process for the first time. In either instance, it is important to understand the rulemaking process and the role of state agencies.

A list of state agencies that have adopted regulations can be found on OAL’s website, which also provides direct access to the California Code of Regulations (CCR), which is organized under various subject matter titles. The following are the 28 titles comprising the CCR:

Title 1 – General Provisions

Title 2 – Administration

Title 3 – Food and Agriculture

Title 4 – Business Regulations

Title 5 – Education

Title 6 – Governor’s Regulations (currently has no regulations)

Title 7 – Harbors and Navigation

Title 8 – Industrial Relations

Title 9 – Rehabilitative and Developmental Services

Title 10 – Investment

Title 11 – Law

Title 12 – Military and Veterans Affairs

Title 13 – Motor Vehicles

Title 14 – Natural Resources

Title 15 – Crime Prevention and Corrections

Title 16 – Professional and Vocational Regulations

Title 17 – Public Health

Title 18 – Public Revenues

Title 19 – Public Safety

Title 20 – Public Utilities and Energy

Title 21 – Public Works

Title 22 – Social Security

Title 23 – Waters

Title 24 – Building Standards Code

Title 25 – Housing and Community Development

Title 26 – Toxics

Title 27 – Environmental Protection

Title 28 – Managed Health Care

An interesting phenomenon is that businesses cannot rely in good faith upon the written determinations issued by state agencies. For example, even if a business asks for and receives written guidance from a state agency as to how a law is interpreted, the business does not have any legal protection against a liability suit. This is an instance where the state agency’s written interpretation is not given any legal weight by a reviewing court. The courts can consider these determinations, but they do not provide an affirmative defense to those receiving them.

In other words, despite being charged with interpreting, implementing and enforcing California statutes and regulations, individuals and businesses that obtain written guidance from state agencies have no protection from legal liability even if they follow that guidance. However, there are a few agencies that provide limited protections.  For example, the Fair Political Practices Commission has advice letters to requesters that provide immunity from liability. The Franchise Tax Board and the Board of Equalization each have Chief Counsel Rulings that provide protection to taxpayers.

State agencies play a key role in public policy development in California through their rulemaking activities, as well as their interpretation and enforcement of statutes and regulations. There are both public (through interested parties) and private (administration with line control agencies) influences on these agencies in their policy role.

Thomas Nussbaum is the former Chancellor of the California Community Colleges.  Chris Micheli is a lobbyist with Aprea & Micheli, Inc. Both are Adjunct Professors of Law at McGeorge School of Law.