STATE OF MICHIGAN

FRANK J. KELLEY, ATTORNEY GENERAL

Opinion No. 6875

October 4, 1995

STATE BOARD OF EDUCATION:

The promulgation of administrative rules

ADMINISTRATIVE PROCEDURES ACT OF 1969:

The promulgation of administrative rules

The Legislature has not given the State Board of Education the statutory authority to adopt rules implementing sections 504a and 514a of the School Code of 1976 without complying with the requirements of the Administrative Procedures Act of 1969; and the "Rules for Public School Academy Temporary Debt" approved by the State Board of Education at its meeting of August 16, 1995, are invalid.

Honorable James G. Agee

State Representative

The Capitol

Lansing, Michigan

You have asked two questions regarding the authority the Legislature has given the State Board of Education to adopt administrative rules. You are particularly concerned about rules the Board has adopted to implement sections 504a and 514a of the School Code of 1976, MCL 380.504a and 380.514a; MSA 15.4504(1) and 15.4514(1). Both of these sections authorize public school academies:

At its meeting of August 16, 1995, the State Board of Education approved what it termed rules for public school academy temporary debt. In approving these rules, the State Board did not comply with any of the rulemaking requirements established by the Legislature in the Administrative Procedures Act of 1969 (APA), MCL 24.201 et seq; MSA 3.560(101) et seq. These requirements include, for example, giving notice of and holding a public hearing, obtaining review as to form by the Legislative Service Bureau and submitting the proposed rules to the legislative Joint Committee on Administrative Rules for review. See sections 41 and 45 of the APA.

Your first question is whether the Legislature has given the State Board of Education the statutory authority to adopt rules implementing sections 504a and 514a of the School Code of 1976, without complying with the requirements of the APA.

In Clonlara, Inc v State Bd of Education, 442 Mich 230, 240; 501 NW2d 88 (1993), the Supreme Court distinguished between legislative rules and interpretive "rules." An interpretive "rule," which is technically not a rule at all, states an agency's interpretation of the substantive requirements of a statute and relies on the underlying statute. If the agency's interpretation is held to be incorrect, the "rule" loses all force and effect. Legislative rules, however, have the force of law and are enforceable in and of themselves.

Quoting Bienenfeld, Michigan Administrative Law (2d ed), ch 4, p 18.

The only statutory sections authorizing a public school academy to incur temporary debt are sections 504a and 514a of the School Code of 1976. The rules approved by the State Board establish detailed regulations for borrowing of money by public school academies in anticipation of receipt of funds. They clearly are intended to have the force and effect of law and be legislative rules. The Michigan Supreme Court has said that:

Clonlara, at 442 Mich 237; quoting Michigan Farm Bureau v Workmen's Compensation Bureau, 408 Mich 141, 150; 289 NW2d 699 (1980). [Emphasis in opinion.]

The School Code of 1976, section 5(11), defines the term "rule" as meaning a rule promulgated pursuant to the APA or a rule or regulation prescribed by the State Board under section 15 of the organizational statute for the State Board of Education, MCL 388.1015; MSA 15.1023(15). In section 3(2) of the APA, dealing with the promulgation of administrative rules by state agencies, the Legislature has not exempted the State Board of Education from the definition of "[a]gency."

In Clonlara, supra, at 422 Mich 239, the Supreme Court declared:

As the State Board did not follow the APA procedures in approving the rules being considered, they are invalid unless MCL 388.1015; MSA 15.1023(15), authorizes their adoption. It provides that:

This section clearly does not grant unlimited authority to the State Board to prescribe rules and regulations. Rather, any rules and regulations must be prescribed in accordance with 1943 PA 88 and 1952 PA 197. These acts were the predecessors of the current APA. These acts were repealed by section 111 of the APA. Section 112 of the APA then provides that:

Thus, any rule or regulation prescribed by the State Board of Education under MCL 388.1015; MSA 15.1023(15), must be promulgated in accordance with the procedures of the APA. The rules under consideration were not.

It is my opinion, therefore, in answer to your first question, that the Legislature has not given the State Board of Education the statutory authority to adopt rules implementing sections 504a and 514a of the School Code of 1976 without complying with the requirements of the Administrative Procedures Act of 1969; and that the "Rules for Public School Academy Temporary Debt" approved by the State Board of Education at its meeting of August 16, 1995, are invalid.

Your second question is whether these rules, which establish different debt repayment schedules for public school academies than for school districts, violate equal protection. The answer to your first question makes an answer to your second question unnecessary.

Frank J. Kelley

Attorney General