Improve the Effectiveness and Efficiency of Agency Rulemaking Processes

State agencies should improve the effectiveness and efficiency of their rulemaking processes to reduce complexity and to better communicate state policy.


Background
Faced with recurring state budget shortfalls and possible budget cuts, state agencies must find the most cost-effective ways to meet their customers demands for services. Their customers want information on the laws the agencies administer and with which they must comply. This information should be provided in the agencies administrative rules.

As the possibility of staff reductions increases, it becomes more important to provide administrative rules that respond to the customers needs for timely, clear, and complete information. Agencies should review how they adopt administrative rules to ensure that the process is effective, efficient and useful for their customers.

A rule formalizes and defines policies adopted by the state agency or explains statutes administered by the agency. Rules have the force and effect of law if the requirements of the Administrative Procedure and Texas Register Act (APTRA) are followed when the rules are adopted and if the agency has the legal authority to adopt them.

In conjunction with the agency s Renaissance Project, the Comptroller recently appointed a team to review the agency s rulemaking process and recommend improvements. The team interviewed the major participants in the rulemaking process. Surveys were sent to other state agencies, local government officials, taxpayers, tax practitioners and Comptroller employees. The team also gathered statistical information to determine the time currently required for each step in the rulemaking process.

Interview and survey participants were asked how the Comptroller s rulemaking compared with that of other agencies or states. Persons within the agency were asked if they knew of similar agency processes. From the information obtained, the team identified the major areas of concern raised responsiveness, accountability, communication and education and developed appropriate recommendations.

Rules must respond to the users needs inside and outside the agency. Timeliness, input and clarity are critical to measuring the rulemaking process responsiveness. The review revealed that rulemaking is not as timely as it could be and that more input from users inside and outside the agency should be obtained at early stages in the process.

The team also found that lack of planning, resource management and central oversight contributes to rulemaking delays. In some agencies, for example, no one manages or tracks the process from beginning to end, assigning appropriate priorities and resources to ensure that the rule is completed in an efficient and timely manner.

The team learned that the Comptroller s office has no standardized sequence of activities for rulemaking. Many agency employees and members of the public, therefore, do not understand the steps needed to revise or adopt rules, how long the process takes or when they may provide information or opinion on the rules.

The team also concluded that the input of employees and taxpayer groups is not sought early enough in the process. Problems or concerns may be identified only after considerable time and effort has been expended on a rule. The process must then be repeated policies previously decided must be reconsidered and possibly reversed, and drafts must be reviewed, rewritten and resubmitted for appr oval. This results in a less productive and efficient process, which leads to further delays, frustration among employees and customers alike, and a loss of confidence in the process.


Recommendations
Based on the analysis of rulemaking policies in the Comptroller s office, several recommendations were made. These may apply in varying degrees to rulemaking in various state agencies.

A. To encourage the adoption of rules more quickly and to promote the complete and efficient use of available employees and resources, the rulemaking process should involve planning and control procedures.

The Comptroller s review team recommended standardizing the rulemaking process with plans specifying deadlines. The plan will ensure that users have an opportunity to add ress meaningful issues during the process. To monitor the progress of a rule plan, the team recommended implementing an automated tracking system and generating weekly status reports to keep management and employees informed of the rules status so that management can exercise centralized oversight and control.

B. Agency employees and customers should be given more opportunity to provide comments and suggestions at appropriate stages of the rulemaking process.

The agency should publicize its rulemaking intentions in agency publications early in the process and identify employees and outside parties to provide input on rule drafts at appropriate times.

C. General information about the nature of rules and the rulemaking process should be made available to employees and the public.

Agencies could develop information explaining rulemaking to help promote realistic expectations of the amount of time needed to complete the rulemaking process. A brochure also could tell the public and agency personnel at w hat point in the process their views are needed.

Training classes explaining rulemaking could be developed for employees involved in the process and for employees who respond to the public s questions about rules and rulemaking. Training also should be provided to enable rule drafters to perform their jobs more efficiently.

D. To reduce the large number of agency rules, state law should require agencies to eliminate two rules for every new rule adopted, unless they can demonstrate that doing so would harm the public or inhibit the state s ability to effectively deliver services.

This simple expedient is a straightforward mechanism to force agencies to examine the efficiency of their existing rules.


Implications
Improvements in planning and control procedures, communications, opportunities for input and education will mean that employees are better informed and more productive and can provide better service to the public and that rules are more timely and responsi ve to the users needs.

However, some agencies may contend that developing rules and seeking input from affected parties during the process will increase their workload, not decrease it.


Fiscal Impact
The purpose of these improvements in the rulemaking process is to make the process more efficient (and less demanding of resources) and of greater value to agency customers. Since rulemaking policies will vary widely among agencies, the fiscal implications of this issue cannot be estimated.