Monday, March 26, 2007

admin. law - policies v. regulations

Eastwood Nursing & Rehab. Center v. DPW - 910 A.2d 134 (Pa. Cmwlth. 2006)

DPW issued a Statement of Policy (SOP), which the petitioner argued was an improper and ineffective unpromulgated regulation. "It is well settled law that an agency's substantive regulations, when properly enacted under the Commonwealth Documents Law (CDL), [45 P.S. sec. 1102-1602] have the force and effect of law and enjoy a general presumption of reasonableness....The CDL defines a 'regulation' as 'any rule or regulation, or order in the nature of a rule or regulation, promulgated by an agency under statutory authority in the administration of any statute administered by or relating to the agency....' 45 P.S. § 1102(12). When an agency issues a regulation, the CDL requires the agency to provide notice of a proposed rule to the public, receive comments from interested parties, and hold hearings when appropriate. 45 P.S. §§ 1201, 1202...."

"Conversely, an interpretive rule, referred to in Section 102 of the CDL as a"statement of policy," is defined as: 'any document, except an adjudication or a regulation, promulgated by an agency which sets forth substantive or procedural personal or property rights, privileges, immunities, duties, liabilities or obligations of the public or any part thereof, and includes, without limiting the generality of the foregoing, any document interpreting or implementing any act of Assembly enforced or administered by such agency. 45 P.S. § 1102(13). In other words, a statement of policy is 'one that tracks a statute and does not expand upon its plain meaning; such a rule need not be issued in accord with the CDL.' " (emphasis added)

In PHRC v. Norristown Area School District, 374 A.2d 671, 679 (Pa. 1977), the Supreme Court "articulated the distinction between substantive rules which must be promulgated through rule-making procedures and statements of policy which require no such procedures" as follows: The critical distinction between a substantive rule and a general statement of policy is the different practical effect that these two types of pronouncements have in subsequent administrative proceedings. . . . A properly adopted substantive rule establishes a standard of conduct which has the force of law. . . . The underlying policy embodied in the rule is not generally subject to challenge before the agency. general statement of policy, on the other hand, does not establish a 'binding norm'. [It is not finally determinative of the issues or rights to which it is addressed. The agency cannot apply or rely upon a general statement of policy as law because a general statement of policy only announces what the agency seeks to establish as policy.] A policy statement announces the agency's tentative intentions for the future. When the agency applies the policy in a particular situation, it must be prepared to support the policy just as if the policy statement had never been issued. "

The statement of policy is an "informational device...[which] erves several beneficial functions. By providing a formal method by which an agency can express its views, the general statement of policy encourages public dissemination of the agency's policies prior to their actual application in particular situations. Thus the agency's initial views do not remain secret but are disclosed well in advance of their actual application. Additionally, the publication of a general statement of policy facilitates long range planning within the regulated industry and promotes uniformity in areas of national concern.

"A regulation is a governmental agency's exercise of delegated legislative power to create a mandatory standard of beha-vior. A regulation is binding on a reviewing court if it conforms to the grant of delegated power, is issued in accordance with proper procedures, and is reasonable. In contrast, a statement of policy is a governmental agency's statutory interpretation which a court may accept or reject depending upon how accurately the agency's interpretation reflects the meaning of the statute.....

"Pennsylvania follows the 'binding norm test' to assess whether an agency's pronouncement is a regulation or a statement of policy..... 'A binding norm' means that the agency is bound by the statement until the agency repeals it, and if the statement is binding on the agency, it is a regulation . [I]n determining whether an agency action is a regulation or a statement of policy, one must look to the extent to which the challenged pronouncement leaves the agency free to exercise discretion to follow or not follow the announced policy in an individual case...... In ascertaining whether an agency has established a binding norm, the reviewing court must consider: (1) the plain language of the provision; (2) the manner in which the agency has implemented the provision; and, (3) whether the agency's discretion is restricted by the provision. "