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Friday, January 02, 2009
Ind. Law - Quirks of the Rules of the State Lottery Commission and Horse Racing Commission
The General Assembly possesses the legislative power of state government, the power to pass laws. The theory goes that the legislature may delegate its lawmaking power to state administrative agencies, by granting rulemaking authority in the agency's governing statute, but that the language has to set the parameters of the agency's delegated rulemaking power. In other words, the rules are only to implement the provisions of laws passed by the state legislature
There have been challenges to rules adopted by one or another state agency, claiming that they go beyond the authority delegated to the agency by the General Assembly, or that the parameters spelled out in the agency's statute are too broad, without sufficient standards, so that the agency is making law on its own, rather than simply fleshing in the outline set by the General Assembly.
Challenges may also be posed to state agency rules on the grounds that they were improperly promulgated. The general rulemaking statute, IC 4-22-2 -- Adoption of Administrative Rules, prescribes the formal steps that must be followed by a state agency to properly adopt (promulgate) a rule.
This law is designed to insure openness and public participation in the rulemaking process. Those rulemakings that do not follow the steps are invalid. See IC 4-22-2-44 - "A rulemaking action that does not conform with this chapter is invalid."
Normally, the statute requires a proposed rule to be published in the Indiana Register at least once, with a formal opportunity for submission of written comments and/or public hearing. (BTW, in the case of environmental rules, the General Assembly has added a number of additional steps to the general rulemaking process - here is a chart comparing the steps for general, environmental, and emergency rulemaking.)
After adoption by the agency, the proposed rule must be reviewed and approved by the Attorney General (IC 4-22-2-31 & 32) for legality (including whether it has been adopted with statutory authority) and by the Governor (IC 4-22-2-33 & 34), and a minimum of 30 days must pass (IC 4-22-2-36) after the finalized rule is filed with the publisher (LSA) before it goes into effect. Again, the procedure is set by statute, and following the steps involved may mean a rule takes months, or even years, to finalize.
Emergency rules. There are exceptions to the above, that apply to certain agencies under certain conditions. These are spelled out in IC 4-22-2-37.1.
If you look online, you will notice that there are several versions of section 37.1. This section is one of the most amended in the Indiana Code and nearly every session a number of amendments change it. It is also one of the most complex to read and apply.
Under section 37.1, certain agencies are allowed to shortcut, for a time, the lengthy rulemaking process set out in the rest of IC 4-22-2, through use of temporary or "emergency" rulemaking procedures.
Section 37.1 begins: "(a) This section applies to a rulemaking action resulting in any of the following rules:" A list of 31 different situations follows.
Subsection (b) provides that the rest of the rulemaking requirements -- i.e. those set out in IC 4-22-2-24--36, do not apply in the 31 situations. Instead, as provided in subsection (c), the agency simply adopts the emergency rule and files it with LSA. And by virtue of subsection (f), no waiting is required for the rule to go into operation; it may go into effect the day of filing.
Looking through the list of 31 situations where this shortcut is allowed, #8 is "An emergency rule adopted by the state lottery commission under IC 4-30-3-9" and #12 is "An emergency rule adopted by the Indiana horse racing commission under IC 4-31-3-9.."
Generally a rule adopted under section 37.1 expires in 90 days, as set out in subsection (g). However, over the years subsection (g) has been burdened with more and more exceptions.
But those interested in emergency rules of the lottery or horse racing commissions need not concern themselves with subsection (g), because a separate subsection, (h), applies. It reads:
(h) A rule described in subsection ... (a)(8) [An emergency rule adopted by the state lottery commission under IC 4-30-3-9] , [or] (a)(12) [An emergency rule adopted by the Indiana horse racing commission under IC 4-31-3-9], ... expires on the earlier of the following dates:What does this mean? I read it to mean that an emergency rule adopted by the lottery commission or horse racing commission, that does not itself include an expiration date, does not expire. It is a permanent rule.
(1) The expiration date stated by the adopting agency in the rule.
(2) The date that the rule is amended or repealed by a later rule adopted under sections 24 through 36 of this chapter or this section.
In short, the state lottery commission and the horse racing commission may adopt permanent rules with no notice, no opportunity for public participation, and no warning. Neither the Attorney General nor the Governor are involved. And the rules may go into operation the day they are filed with the LSA. And they may be permanently amended or repealed just as quickly.
So how would one challenge such a rule? Suppose your concern is that the agency has issued an ultra vires rule -- one beyond its statutorily granted authority? Or that a rule does not contain ascertainable standards, and so cannot withstand a challenge for vagueness?
In my opinion, you would begin in court. An emergency rule issued by the lottery or horse racing commission is a final agency action. There are no available administrative remedies of any sort to exhaust.
Posted by Marcia Oddi on January 2, 2009 08:49 AM
Posted to Indiana Law