Ad Hoc Rulemaking: What is it and why does it matter?

A lot of people think the Administrative Procedures Act (how state and federal agencies make rules) is a hurdle to be avoided, but avoiding it can have consequences. In Texas, the consequence is called ad hoc rulemaking.

There’s always discussion about rulemaking. Rulemaking is an essential part of what an agency does at the state or federal level. It helps the essentially carryout what the legislature has charged them to do. In Texas, we have an issue called “ad hoc” rulemaking. This is where the state agency has created a rule that doesn’t quite live up to the expectations of the Texas Administrative Procedures Act’s formalities (even though they are essentially the informal rulemaking process at the federal level). In Texas, state agencies are essentially required to give public notice of a proposed rule, receive comments on the proposed rule, and respond to public comments. This is commonly known as the notice and comment rulemaking process.

Before we get much further, we want to make sure you understand the difference between a “rule” and a “regulation” promulgated from a Texas agency. The difference is that there isn’t one. The term “rule” and “regulation” are often used interchangeably. Here, we’re going to use the term “rule” since it is a legal term of art.

Ad hoc rulemaking happens when an agency creates a rule or practice that meets the definition of a rule under the Texas Administrative Procedures Act, but hasn’t gone through the formal promulgation process–the notice and comment process. A rule under the Texas APA has three major components:

#1: State agency statement of general applicability that either (i) implements, interprets, or prescribes law or policy or (ii) describes the procedure or practice requirements of a state agency;

#2: Includes the amendment or repeal of a prior rule; and

#3: does not include a statement regarding only the internal management or organization of a state agency and does not affect private rights or procedures.

So how does this usually shake out in real life? At the state agency, this is why the attorneys are generally hesitant to let you send out letters that are dictating how claims or the like are processed (i.e. timelines, reporting, and forms) in ways that haven’t been detailed in the Texas Administrative Code. Sometimes though, it’s accidental. Such as when there is guides and interpretraory material issued by a state agency that inadvertently creates a new policy of the agency. Often, the agency didn’t maliciously intend to violate the rule, it was merely accidental.

So what’s the upshot? Essentially, it’s don’t avoid the APA. If you need to go through the APA, do it. It’s painful at first, but after a while it becomes easy. When you get public input, often you get a better rule than what you started with. We’re all on the same team.