Inside Track: What’s the Difference? Rules, Guidance Documents, and Agency Publications:

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  • August
    05
    2020

    What’s the Difference? Rules, Guidance Documents, and Agency Publications

    Amy Buchmeyer distinguishes procedures and authority for rules, guidance documents and agency publications under recent legislation, and a recent supreme court decision.

    Amy Buchmeyer

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    Aug. 5, 2020 – Spurred on by the recent pandemic, suppose a Wisconsin administrative agency created a chart with step-by-step handwashing instructions.

    Would it have to do anything else before posting the chart on its website? The answer depends on whether the chart is a rule, guidance document, or agency publication.

    Previously, the Wisconsin Legislature mandated different levels of notice and comment for each type of document. But a recent Wisconsin Supreme Court decision means now only rules require further procedure.

    Administrative Authority

    Administrative agencies can only operate within the explicit boundaries of their enabling legislation.1 To use legislatively delegated authority, agencies typically must follow the procedure detailed in the Wisconsin Administrative Procedure Act (Chapter 227).2

    Amy BuchmeyerAmy Buchmeyer (U.W. 2020) works as counsel and director of development at the Great Lakes Legal Foundation where she specializes in administrative law.

    Previously, only rules went through Chapter 227 procedure. But with 2017 Wisconsin Act 369, the legislature added “guidance documents” and “agency publications” as two new categories of generally applicable agency action requiring Ch. 227 procedures.

    This past July, however, in SEIU v. Vos, 2020 WI 67, the Wisconsin Supreme Court struck down the new categories as unconstitutional violations of separation of powers.

    Under the court’s reasoning, guidance documents and agency publications do not use legislative authority, so the legislature has no grounds to regulate them. As a result, once again, only rules go through legislatively mandated procedure.

    Though it eliminated the procedure associated with them, the court’s decision upheld the statutory definitions of guidance documents and agency publications.

    Thus, the three categories of agency action still exist. But as the court made clear, rules and guidance documents represent the difference between agency use of legislative and executive authority. Practically, it also means a significant difference in the amount of time and resources an agency must expend on a document. Rulemaking can take years, guidance documents now mere minutes.

    Now more than ever, agencies and practitioners advising the regulated community must understand the difference between a rule and a guidance document. For those regulated, the lack of formal procedure for guidance documents means less formal opportunity to evaluate whether an agency actually needed to promulgate a rule.

    And from an agency’s perspective, failure to promulgate a rule can result in serious consequences for any regulatory requirements stemming from it, including invalidation of permit terms and conditions. A clear understanding of the definition of both rules and guidance documents will help clarify when an agency must engage in rulemaking.

    What is a Rule?

    Say the hypothetical agency from the beginning of this article has an enabling statute that allows it to develop cleanliness standards. It could fulfill this mandate by promulgating a rule, or in other words, a regulation with the effect of law. 

    Under Chapter 227, an agency must promulgate as a rule “each statement of general policy and each interpretation of a statute which it specifically adopts to govern its enforcement or administration of that statute.”3

    To determine whether an action is a rule, Wisconsin courts look to the definition of a rule under Wis. Stat. § 227.01(13). The definition has five elements: “(1) a regulation, standard, statement of policy or general order; (2) of general application; (3) having the effect of law; (4) issued by an agency; (5) to implement, interpret or make specific legislation enforced or administered by such agency.” 

    The first element, “(1) a regulation, standard, statement of policy or general order,” relates to an agency’s position on a statute.

    Agency policies include mimeographed instruction sheets, “To Whom It May Concern” letters, and department memorandums.4

    Caselaw implies agency actions might also sufficiently reflect a statement of policy, so long as the agency consistently applies it.5 In other words, as long as the agency sets forth policies via word or deed on an issue under its authority, it meets the first element.

    The second element, “(2) of general application,” does not mean an agency action must apply universally. Rather, “even though an action applies only to persons within a small class, the action is of general application if that class is described in general terms and new members can be added.”6 This distinguishes general agency actions from actions that apply to an individual, such as adjudications.

    Actions “(3) having the effect of law” occur “where criminal or civil sanctions can result as a violation; where licensure can be denied; and where the interest of individuals in a class can be legally affected through enforcement of the agency action.”7

    Wis. Stat. § 227.0l(1) defines “agency” as: “a board, commission, committee, department or officer in the state government, except the governor, a district attorney or a military or judicial officer.”

    Finally, “(5) to implement, interpret or make specific legislation enforced or administered by such agency” means any agency’s implementation of a statute, interpretation of it, or both, potentially invokes rulemaking.

    What is a Guidance Document?

    If the agency did not want to enforce its handwashing chart with force of law, it might instead issue a guidance document. Guidance documents resemble rules but lack force of law. The quintessential example is a handbook.

    Wis. Stat. § 227.01(3m)(a) defines guidance as:

    any formal or official document or communication issued by an agency, including a manual, handbook, directive, or informational bulletin, that does any of the following:

    1. Explains the agency's implementation of a statute or rule enforced or administered by the agency, including the current or proposed operating procedure of the agency.

    2. Provides guidance or advice with respect to how the agency is likely to apply a statute or rule enforced or administered by the agency, if that guidance or advice is likely to apply to a class of persons similarly affected.

    Guidance documents share much in common with rules. They both reflect an agency’s position on a matter within its jurisdiction. They both apply when a position implicates “a class of persons similarly affected.” Both involve agency action. And finally, both can occur when an agency either explains implementation or interprets a statute.

    But by law, agencies cannot create regulatory standards through guidance documents. SEIU v. Vos described guidance documents this way:

    They are not law, they do not have the force or effect of law, and they provide no authority for implementing or enforcing standards or conditions. They simply “explain” statutes and rules, or they “provide guidance or advice” about how the executive branch is “likely to apply” a statute or rule. They impose no obligations, set no standards, and bind no one. They are communications about the law – they are not the law itself. They communicate intended applications of the law – they are not the actual execution of the law. Functionally, and as a matter of law, they are entirely inert. That is to say, they represent nothing more than the knowledge and intentions of their authors.

    In summary, agencies cannot enforce the requirements in a guidance document as law unless those requirements first went through rulemaking.

    What Is an Agency Publication?

    The final category of agency actions, agency publications, by definition encompasses both rules and guidance documents. Effectually, an agency publication exists under Wis. Stat. § 227.05 whenever an agency publishes anything: “whether in print or on the agency's Internet site, including guidance documents, forms, pamphlets, or other informational materials, regarding the laws the agency administers.”

    But SEIU v. Vos made it clear that when agency publications are also guidance documents, the legislature cannot require further procedure from agencies issuing them. And as almost any agency publication regarding “the laws the agency administers” would also meet the definition of a guidance document or rule, distinguishing this category accomplishes very little.

    Conclusion

    Is the handwashing chart described at the beginning of this article a rule or a guidance document? It meets the first and third element of a guidance document as a “formal or official document…issued by an agency.”

    It applies generally to all handwashers, the second element. And, under its enabling statute, it “explains the agency's implementation of a statute,” the fourth element. There’s a strong argument the chart is a guidance document. But is it also a rule?

    On its face, the answer is most likely no – noncompliance does not implicate force of law. However, if the agency starts denying licenses or otherwise impose legal sanctions for noncompliance with the chart, it could become an unpromulgated (and thus illegal) rule. Rules and guidance documents look similar, but only one can bind the regulated community because only one uses legislative authority.

    Endnotes

    1 Wis. Stat. § 227.10(2m).

    2 Wis. Stat. Chapter 227.

    3 Wis. Stat. § 227.10(1).

    4 Frankenthal v. Wisconsin Real Estate Brokers' Bd., 3 Wis.2d 249, 257b, 88 N.W.2d 352 (1958); Josam Mfg. Co. v. State Bd. of Health, 26 Wis.2d 587, 595, 133 N.W.2d 301 (1965); State ex rel. Clifton v. Young, 133 Wis.2d 193, 394 N.W.2d 769 (Ct. App. 1986).

    5 See Wisconsin Elec. Power Co. v. DNR, 93 Wis. 2d 222, 287 N.W.2d 113 (1980) (DNR’s practice of “adoption and uniform application” of chlorine limitations in its permit approvals counted as a statement of policy and therefore a rule, even though DNR never announced or placed the limitations in a document of general application).

    6 Citizens for Sensible Zoning, Inc. v. DNR, 90 Wis. 2d 804, 280 N.W.2d 702 (1979).

    7 Cholvin v. DHFS, 2008 WI App 127, 313 Wis. 2d 749, 758 N.W.2d 118.




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