| Law Encyclopedia: Administrative Agency |
An official governmental body empowered with the authority to direct and supervise the implementation of particular legislative acts. In addition to agency, such governmental bodies may be called commissions, corporations (e.g., F.D.I.C.), boards, departments, or divisions.
Administrative agencies are created by the federal Constitution, the U.S. Congress, state legislatures, and local lawmaking bodies to manage crises, redress serious social problems, or oversee complex matters of governmental concern beyond the expertise of legislators. Although Article I, Section 1, of the federal Constitution plainly states that "[a]ll legislative Powers herein granted shall be vested in a Congress of the United States," the "necessary-and-proper" clause, in the eighth section of the same article, states that Congress shall have power "[t]o make all Laws which shall be necessary and proper for carrying into Execution the foregoing Powers, and all other Powers … in any Department or Officer thereof." With this language, many have argued that the Framers of the Constitution expected, indeed encouraged, the creation of powerful administrative agencies. This argument currently prevails, and courts have therefore allowed the U.S. Congress — and other legislative bodies — to make laws that delegate limited lawmaking authority to administrative agencies. The substance of an administrative agency's powers must be intelligible, and a system of controls must be in place to limit those powers, but courts almost always find that administrative agencies meet these requirements.
Administrative agency rules and regulations often have the force of law against individuals. This has led many critics to charge that the creation of agencies circumvents the constitutional directive that laws are to be created by elected officials. According to these critics, administrative agencies constitute an unconstitutional, bureaucratic fourth branch of government with powers that exceed those of the three recognized branches (the legislative, executive, and judiciary). In response, supporters of administrative agencies note that agencies are created and overseen by elected officials or the president. Agencies are created by an enabling statute, which is a state or federal law that gives birth to the agency and outlines the procedures for the agency's rule making. Furthermore, agencies include the public in their rule-making processes. Thus, by proxy, agencies are the will of the electorate.
Supporters of administrative agencies note also that agencies are able to adjudicate relatively minor or exceedingly complex disputes more quickly or more flexibly than can state and federal courts, which helps preserve judicial resources and promotes swift resolutions. Opponents argue that swiftness and ease at the expense of fairness are no virtues, but while the debate continues, administrative agencies thrive.
Governmental representation in an administrative capacity of any kind can be considered administrative agency. The president is an administrative agent whose enabling statute is the federal Constitution. The thirteen executive departments reporting to the president are administrative agencies. For example, the Department of Justice is a cabinet-level executive department, but it functions as the administrative agency that addresses the legal concerns of the U.S. government and its people. The departments housed within the Department of Justice, such as the Drug Enforcement Administration and the Federal Bureau of Investigation, are also administrative agencies, and they have procedures and rules of their own.
Administrative agencies are made up of experts in the field in which the agency operates. For example, the Maritime Administration employs experts in the areas of sea commerce and navigation to set its rules on merchant marine activities. Many agencies have the power to assess fines or otherwise deprive persons of liberty in hearings conducted by their own judicial bodies, or administrative boards. Given the specialized knowledge within administrative agencies, administrative law judges (ALJs), who hear agency claims and disputes, are loath to overturn the legal conclusions reached by administrative boards. Determinations and sanctions made by ALJs are subject to review by state or federal courts, but a party must exhaust all appeals within the agency before suing in civil court.
An agency's actions must be in accordance with its enabling statute, and courts will examine the agency records to determine whether the agency exceeded its lawmaking or judicial powers. Rigorous judicial oversight of agencies would defeat a cherished feature of administrative agency by eliminating agency flexibility in resolving conflicts. To avoid this, most enabling statutes are worded vaguely, in such a way as to allow the agencies broad discretion in determining their rules and procedures. To keep agencies from wielding unbridled power, the Administrative Procedure Act of 1946 (APA) (5 U.S.C.A. § 551 [1982]) sets standards for the activities and rule making of all federal regulatory agencies. The APA provides federal courts with a framework for reviewing the rules made and procedures used by administrative agencies. Individual states have similar statutes to guide their own courts.
History of Administrative Agency
The first administrative agency was created by Congress in 1789 to provide pensions for wounded Revolutionary War soldiers. Also in the late 1700s, agencies were created to determine the amount of duties charged on imported goods, but it was not until 1887 that the first permanent administrative agency was created. The Interstate Commerce Commission (ICC), created by the Interstate Commerce Act (49 U.S.C.A. § 10101 et seq. [1995]), was invented by Congress to regulate commerce among the states, especially the interstate transportation of persons or property by carriers. The ICC was designed to ensure that carriers involved in interstate commerce provided the public with fair and reasonable rates and services. To buttress the Interstate Commerce Act, the Federal Reserve System was established by the Federal Reserve Act of 1913 (12 U.S.C.A. § 221) to serve as the United States' central bank and execute U.S. monetary policy. One year later, the Federal Trade Commission was established by Congress to promote free and fair competition in interstate commerce by preventing unfair methods of competition.
In 1908, the Federal Bureau of Investigation (FBI) was established to investigate violations of federal laws not assigned to other federal agencies. The FBI is charged with solving crimes such as kidnapping, espionage, sabotage, bank robbery, extortion, interstate transportation of stolen property, civil rights violations, interstate gambling violations, fraud against the government, and the assault or killing of a federal officer or the president. As an agency concerned with criminal apprehension, the FBI is considered an arm of the government, and its directorship is subject to presidential approval. However, the FBI carries out its investigations independent of political influence. It can, for example, probe the actions of presidents and legislators, the very persons responsible for its existence.
Administrative agencies are usually created in response to a felt public need. Some older agencies, for example, were created after the Civil War to address economic matters critical to the United States' expanding government. After the stock market crash of October 1929, and during the Great Depression of the 1930s, Congress created numerous agencies in an effort to regulate the production and marketing of goods. Agencies such as the Social Security Administration (created by the Social Security Act of 1935 [42 U.S.C.A. § 301 et seq.]), the Federal Savings and Loan Insurance Corporation (established by a 1933 amendment to the Federal Reserve Act, 12 U.S.C.A. § 264, and now codified at 12 U.S.C.A. §§ 1811-1831) helped provide financial security for many Americans. The National Industrial Recovery Act (NIRA) (48 15 U.S.C.A. § 701 et seq., 40 U.S.C.A. § 401 et seq.) created the National Recovery Administration to ensure fair market competition. However, the NIRA gave the president limitless authority to impose sanctions, and it was declared invalid by the Supreme Court in the "sick chicken" case, Schechter Poultry v. United States, 295 U.S. 495, 55 S. Ct. 837, 79 L. Ed. 1570 (1935). The National Labor Relations Board (created by the National Labor Relations Act of 1935 [29 U.S.C.A. § 151 et seq.], later amended by acts of 1947 and 1959) also helped to ease the devastating effects of the Depression, by protecting employees' rights to organize, preventing unfair labor practices, and promoting collective bargaining between employers and labor unions.
Congress installed the Federal Radio Commission (FRC) in 1927 after entrepreneurs discovered the commercial potential of radio airwaves. In 1934, the FRC was merged into the Federal Communications Commission (FCC), which was created by the Communications Act of 1934 (47 U.S.C.A. § 151 et seq.) to tackle the myriad issues presented by the sudden widespread use of radio waves. In the wake of tele- vision's popularity, the Communications Satellite Act of 1962 (47 U.S.C.A. §§ 701-744) was enacted by Congress to broaden the FCC's powers to include regulation of television broadcasting; telephone, telegraph, and cable television operation; two-way radio and radio operation; and satellite communication.
When the United States entered World War II, more agencies were created or enlarged to mobilize human resources and production, and to administer price controls and rationing. The social upheaval of the 1960s spawned agencies designed to improve urban areas, provide opportunities to people who were historically disadvantaged and marginalized, and promote artistic endeavors. In the 1970s, 1980s, and 1990s, pressing issues such as human and environmental health were addressed through the creation of agencies such as the Environmental Protection Agency and a new, enlarged Department of Energy.
Federal Administrative Agencies
On the federal level, business and individual matters are addressed by such agencies as the Farm Credit Administration, Small Business Administration, Commodity Futures Trading Commission, Federal Trade Commission, Federal Deposit Insurance Corporation, Office of Thrift Supervision, Internal Revenue Service, Department of Commerce, Interstate Commerce Commission, and Securities and Exchange Commission.
Governmental money matters are overseen and assisted by the General Accounting Office, Office of Management and Budget, Office of the Comptroller of the Currency, Treasury Department, General Services Administration, Congressional Budget Office, and Federal Reserve Board.
Public services are handled by administrative agencies that include the Department of Education, Department of Transportation, Environmental Protection Agency, Food and Drug Administration, Department of Health and Human Services, Department of Housing and Urban Development, Department of Interior, Immigration and Naturalization Service, and National Highway Traffic Safety Administration.
Work-related administrative agencies include the Tennessee Valley Authority, Office of Technology Assessment, Occupational Safety and Health Administration, Occupational Safety and Health Review Commission, National Labor Relations Board, Mine Safety and Health Administration, Mine Safety and Health Review Commission, Merit Systems Protection Board, Department of Labor, Equal Employment Opportunity Commission, and Office of Personnel Management.
Police and military functions are served by the Central Intelligence Agency, Department of Defense, Department of Justice, Department of Veterans Affairs, Federal Bureau of Investigation, and National Security Council.
The administrative agency that directly affects the most U.S. citizens is the Social Security Administration (SSA). The SSA collects contributions from workers and pays out cash benefits when a worker retires, dies, or becomes disabled.
State and Local Administrative Agen- cies
State and local administrative agencies often mirror federal agencies. Thus, the individual states have agencies that control transportation, public health, public assistance, education, natural resources, labor, law enforcement, agriculture, commerce, and revenue. Any regulation established by such an agency that conflicts with a federal regulation will not be legally valid, but this does not keep state agencies from developing regulations that differ from those promulgated by their federal counterparts. In the spirit of administrative agency, state and local governments also create additional agencies that help address compelling, peculiarly local concerns.
Just like federal agencies, state and local administrative agencies are often empowered to hold hearings. These hearings are conducted by their administrative boards, which are obligated to represent the public interest. By contrast, courts must remain impartial to the two parties before them. A parole board, for example, holds informal hearings where prisoners are allowed to offer evidence of their suitability for early release from incarceration. The strict rules observed in a courtroom do not apply to these hearings, and the board's decisions must account for the public interest as well as the rights of the prisoners.
See: Administrative Conference of the United States; Administrative Law and Procedure; Bureaucracy; Schechter Poultry Corp. v. United States.
