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1 Declaratory Orders 1 (2015)

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               ADMINISTRATVE CONFERENCE OF THE UNITED STATES




           Administrative Conference Recommendation 2015-3

                                  Declaratory Orders

                              Adopted December 4, 2015


       Providing clarity and certainty is an enduring challenge of administrative governance,

particularly in the regulatory context. Sometimes statutes and regulations fail to provide

sufficient clarity with regard to their applicability to a particular project or transaction. In such

instances, businesses and individuals may be unable or unwilling to act, and the consequences

for the economy, society, and technological progress can be significant and harmful. The

predominant way agencies address this problem is by providing guidance to regulated parties.1

Although the many forms of agency guidance-such as interpretive rules and policy statements-

do much to dispel regulatory uncertainty, they cannot eliminate it entirely. This is because they

are generally informal and not legally binding on the agency that issues them. Regulated parties

may usually be able to rely upon them, but if an agency changes its position after a transaction is

completed, the consequences for the affected party can be severe. As the potential costs of

misplaced reliance rise, even a small chance that an agency will not adhere to a position offered

in guidance can become intolerable.


       When it enacted the Administrative Procedure Act (APA) in 1946, Congress included a

provision designed to address this difficult problem. In 5 U.S.C. § 554(e), it provided that an


1 The Administrative Conference has adopted a number of recommendations on agency guidance. See
Recommendation 2014-3, Guidance in the Rulemaking Process, 79 Fed. Reg. 35,992 (June 25, 2014), available at
https://www.acus.gov/recommendation/guidance-rulemaking-process; Recommendation 92-2, Agency Policy
Statements, 57 Fed. Reg. 30,103 (July 8, 1992), available at https://www.acus.gov/recommendation/agency-policy-
statements; Recommendation 76-5, Interpretive Rules of General Applicability and Statements of General Policy, 41
Fed. Reg. 56,769 (Dec. 30, 1976), available at https://www.acus.gov/recommendation/interpretive-rules-general-
appl icabil ity-and-statements-general-policy; Recommendation 75-9, Internal Revenue Service Procedures: Taxpayer
Services and Complaints, 41 Fed. Reg. 3986 (Jan. 27, 1976), available at https://www.acus.gov/recommendation/
internal-revenue-service-procedures-taxpayer-services-and-complaints; Recommendation 71-3, Articulation of
Agency Policies, 38 Fed. Reg. 19,788 (July 23, 1973), available at https://www.acus.gov/recommendation/
articulation-agency-policies.

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