CA Regulatory Explainer: Underground Regulations and the Role of OAL

CA Regulatory Explainer: Underground Regulations and the Role of OAL By Chris Micheli

            California’s Office of Administrative Law (OAL) is charged with ensuring that agency and department regulations are “clear, necessary, legally valid, and available to the public.” OAL is responsible for reviewing proposed regular and emergency regulations by California’s more than 200 state agencies and departments that have rulemaking authority.

The formal rulemaking process is established by the California Administrative Procedure Act (APA), which is found in the Government Code, and the APA sets forth the criteria by which OAL reviews all of those regulations. OAL reviews regular and emergency rulemaking projects, as well as challenged “underground” regulations.

On the OAL website, readers can track the list of rulemaking actions submitted to OAL for review by executive branch agencies and departments. This list is updated regularly by OAL. The website also contains a listing of underground regulation petitions that are under review by OAL. You can visit their website at: www.oal.ca.gov

Concerning the review of alleged underground regulations, the role of OAL is specified in the California Code of Regulations (CCR), Title 1, Division 1, Chapter 2, which is titled “Underground Regulations.”

 

In Section 250(a) of Title 1, there is the following definition: “’underground regulation’ means any guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule, including a rule governing a state agency procedure, that is a regulation as defined in Section 11342.600 of the Government Code, but has not been adopted as a regulation and filed with the Secretary of State pursuant to the AP A and is not subject to an express statutory exemption from adoption pursuant to the APA.”

 

In CCR Section 260, the submission of underground regulation petitions is addressed. Section 270 deals with the OAL review of these petitions. And, Section 280 describes the suspension of underground regulation actions. In terms of “underground regulations,” OAL is charged with reviewing any such challenged regulatory agency actions by way of a petition filed with OAL.

 

According to OAL, “if a state agency issues, utilizes, enforces, or attempts to enforce a rule without following the APA when it is required to, the rule is called an ‘underground regulation.’ State agencies are prohibited from enforcing underground regulations.” If an individual or entity believes a state agency or department has issued an alleged underground regulation, that issuance can be challenged by filing a written petition with OAL.

 

If OAL accepts the petition for review, then OAL may issue a determination. According to OAL, this program is informally known as the “Chapter Two Unit,” or “CTU,” because OAL’s regulations regarding underground regulations are found in California Code of Regulations, Title 1, Chapter 2. The OAL website provides information on underground regulations and how to submit a written petition to OAL alleging an underground regulation.

 

OAL’s review of an alleged underground regulation is limited to a 3-step analysis to determine whether the alleged underground regulation must be adopted as a regulation pursuant to the APA. First, is the policy or procedure either a rule or standard of general application, or a modification or supplement to such a rule? Second, has the policy or procedure been adopted by the agency to either implement, interpret, or make specific the law enforced or administered by the agency, or govern the agency’s procedure?

 

If the answer to these two questions is “yes,” then the challenged rule is a regulation. However, before a determination is complete, OAL must review the final step of the analysis. Third, has the policy or procedure been expressly exempted by statute from the requirement that it be adopted as a “regulation” pursuant to the APA?

 

If the answer to this final question is yes, then the underground regulation did not have to go through the APA process. However, if the answer to this last question is no, then the rule or standard being used is an underground regulation and cannot be enforced by the agency or department. Instead, it must go through the formal rulemaking process pursuant to the APA.

 

Finally, readers should be aware of Government Code Section 11340.5(e) which provides that, if an interested person has already begun litigation challenging an underground regulation, a determination issued by OAL may not be considered by the court in that pending litigation. Those challenging an alleged underground regulation should determine whether they want to pursue OAL review of the agency action, or whether to go directly to court to challenge it.

Comments

Post a Comment

Popular posts from this blog

Another Reason to Limit Bill Introductions?

Another Reason to Limit Bill Introductions?  By Chris Micheli             As I did my final review of Governor Newsom’s actions on the 1,046 bills sent to him after the 2023 Legislative Session, I noticed that some of the Governor’s veto messages provide additional rationales for limiting bill introductions.             Out of 156 vetoes from the 2023 Session, the number one reason for the Governor’s veto was budget concerns or cost pressures. In fact, 41% of the vetoes used that basis. That by itself is not a reason to limit bill introductions, but another statistic may provide such a reason…             By my count, just over 1/3 of the bills vetoed by Governor Newsom likely should not have been sent to his Desk and, arguably, should not have made it through the process at all. In fact, perhaps they should not have been introduced at all? The bases for just over 1/3 of the vetoes by the Governor included these categories: ·          18% were deemed unnecessary ·         
Read more

Frequently Asked Questions about California’s Budget Process

Frequently Asked Questions about California’s Budget Process  By Chris Micheli             What are the main parts of the California state budget? They are the Budget Bill, Budget Bill Junior, Trailer Bills, and Supplemental Reports.             What is the Budget Bill? This bill contains the appropriations and “Budget Bill Language”. Note that only a Budget Bill (or BBJ) can contain multiple appropriations. It requires a majority vote for passage and the bill takes effect immediately. There is just one Budget Bill. What is the “Budget Bill Jr.”? This is the bill that amends the main Budget Bill by making changes to multiple appropriations. There are often multiple BBJs. What is a Trailer Bill? This bill makes the statutory changes needed to implement the budget. It is the same as any other bill, but it takes effect immediately with a majority vote if it contains an appropriation related to the budget bill and is listed as a “trailer bill” in the Budget Bill. What is a Su
Read more

Can Any Bill Call an Election?

Can Any Bill Call an Election?  By Chris Micheli             In June 2024, we saw two bills that contain a provision to call an election.             Both bills contain a “plus” section at the end of the bill, which is an uncodified statute, stating the following: “this act calls an election within the meaning of Article IV of the California Constitution and shall go into immediate effect.” Such a measure only requires a majority vote, unless some other constitutional provision requires a higher vote threshold (e.g., a tax increase). What is the basis for this statement? Section 8(c)(3) of Article IV of the state Constitution provides: “ Statutes calling elections, statutes providing for tax levies or appropriations for the usual current expenses of the State, and urgency statutes shall go into effect immediately upon their enactment.” However, there is no further guidance in the Constitution, nor in any California Code, regarding what a “statute calling an election” looks like o
Read more