• Administrative agencies increasingly influence state and local governments, schools, businesses, and citizens through agency “guidance,” rather than the formal rulemaking process they are required to follow.
• Guidance includes manuals, letters, policy statements, and similar documents. While it is not legally binding, certain incentives lead those who are regulated to feel constrained by it – meaning it can serve as a way to change a regulation without the open public process required for regulatory changes.
• To start addressing the challenges to self-government raised by governing through guidance, states need to demand transparency in such guidance.

​A couple years ago, Utah stopped its practice of using funny messages on highway signs to encourage drivers to be safe. At the time, the Deseret News mentioned that the Federal Highway Administration (FHWA) had concerns about the practice. Earlier this year, that federal disapproval appeared to point to the end of similar signage in Arizona (which had some clever ones, including Taylor Swift-themed messages for a concert). The problem was that the agency changed its Manual on Uniform Traffic Control Devices to discourage the “use of humor and pop culture references in changeable message signs that may confuse or distract drivers.”

An FHWA spokesperson clarified that the manual change was “guidance” rather than an explicit ban. Of course, when FHWA oversees the significant amount of federal transportation funding that the state relies upon to build and maintain critical roadways, the line between guidance and an outright ban becomes pretty blurry.

In a recent Defending Ideas podcast, Tony Woodlief of the Center for Practical Federalism noted that agency guidance of this type has significant implications not only for states, but also for businesses and individuals. In recent years, for instance, Utah has faced controversies arising from federal guidance related to who can use which locker room in public schools, segregation of services to people with disabilities, and gender discrimination in Utah prisons.

So, what is agency guidance?

Federal administrative agencies are intended to enforce laws passed by Congress. As these agencies have proliferated over the last century, their enforcement efforts have impacted larger segments of the population across a wider range of issues. Although the constitutional grant to make laws is given to Congress, agencies are active in doing things that look a lot like lawmaking.

In 1946, Congress enacted the Administrative Procedure Act to create a formal procedure for agencies to make rules which are legally binding on those affected by them. Simplifying drastically, to make an “informal rule,” the most common type, an agency must provide notice of a proposed rule by publishing it in the Federal Register, allow time for public comments, respond to the significant comments, and then publish the rule 30 days before it goes into effect.

By contrast, guidance is not legally binding. It consists of a range of documents such as “interpretive memos, policy statements, circulars, memoranda, bulletins, and advisories” and agencies issue “anywhere from about ten to over a hundred guidance documents each year.” Some may be familiar with “Dear Colleague” letters that agencies send to those they regulate (for instance, letters from the U.S. Department of Education to public school administrators).

Since this guidance is not legally binding, why is it significant? As the U.S. Department of Justice explains, this guidance tells the public how an agency is likely to apply its rules. Thus, those who are regulated by the agency would reasonably expect that ignoring the guidance is risky. The nature of the regulator/regulated relationship also incentivizes adherence to guidance even when it is not technically binding.

To understand the way this works, think of a broad statute like Title IX, which says schools cannot discriminate against women in education. No school wants to do that, and no school wants to have federal regulators charging them with discrimination, so if the Department of Education has adopted a “policy interpretation” that says that in enforcing the statute it will be looking to see if the proportion of male and female athletes is comparable to the proportion of men and women in the student body, the school is probably likely to adopt that goal rather than wait to argue in court that it sees equality in athletic opportunities differently.

Additionally, if a future administration chose to reform the policy interpretation of Title IX, it could significantly change the policy being enforced by the regulation – effectively changing the regulation, but without having to do so publicly, thus sidestepping the public comment process.

A careful report of the issue concluded that “regulated parties often face overwhelming pressure to follow guidance.” It also found that guidance is ubiquitous:

Guidance comes in an endless variety of labels and formats, depending on the agency: advisories, circulars, bulletins, memos, interpretive letters, enforcement manuals, fact sheets, FAQs, highlights, you name it. Nobody knows exactly how much guidance there is, because it is not comprehensively collected anywhere, but its page count for any given agency is estimated to dwarf that of actual regulations by a factor of twenty, forty, or even two hundred.

The serious problems posed by the proliferation of and reliance on agency guidance should be obvious. Reliance on guidance undercuts core constitutional principles such as self-government, accountability of the government to those it governs, separation of powers, and preventing arbitrary uses of power.

There are important proposals for responding to this challenge, but an initial hurdle is knowing what guidance agencies are issuing. The Administrative Conference of the United States, an independent federal agency, recognizes that a lack of transparency about guidance is a concern.

State governments, much less citizens, at this point, do not necessarily know the nature of this “regulatory dark matter.” Understanding the scope and nature of the guidance is a good first step. States would be wise to collect and make publicly available the guidance they are given so that it can be assessed and, as necessary, criticized and challenged.

Perhaps that process will then lead to a more fundamental effort to check the growth of the administrative state.