Out of the Shadows: Ending Regulation-by-Guidance
Most of us picture lawmaking as a public process: a bill is introduced, debated, amended, approved by the legislature, signed by the governor, and scrutinized carefully.
But agencies are increasingly bypassing that public process. In Washington and state capitals such as Lincoln, agency staff can use guidance documents—such as memos, policy letters, and online instructions—to set expectations without going through formal lawmaking.
A recent Wall Street Journal opinion piece on the federal Guidance Out of Darkness (GOOD) Act highlights a national frustration: informal agency memos, FAQ sheets, and advisory letters can function like laws while carrying “zero formal accountability.” Because small business owners, farmers, and citizens often lack the resources to challenge agency interpretations, regulators can impose mandates without public notice, comment periods, or legislative authorization.
The Scale of the Problem
The practice appears widespread. Federal tracking systems and watchdog groups have identified more than 100,000 guidance documents. Agencies use these documents not only to explain existing rules but also, at times, to broaden how those rules are applied, including environmental requirements and business compliance standards.
State agencies face the same pressure to use guidance instead of formal rules. The Administrative Procedure Act requires public notice, hearings, and checks on agency power. An agency can avoid those steps by issuing a memo or changing a policy and then treating the new direction as binding.
Nebraska’s Fight: The Push for LB 565
Nebraska has already taken steps to limit this problem. State law requires agencies to list their guidance documents and include notices explaining that guidance cannot create new penalties. Even so, critics argue that agencies can still use informal statements to enforce requirements that lawmakers never passed.
That remaining gap prompted LB 565, part of the Platte Institute’s Government Oversight, Accountability, and Transparency (GOAT) legislative package. The proposal aimed to ensure that agencies use the formal rulemaking process when creating binding requirements.
Senator Quick introduced LB 565 to stop Nebraska agencies from using guidance as if it were law. The bill set a simple rule: if a requirement has the force of law, the agency must adopt it through the public process required by the Administrative Procedure Act. Agencies could not enforce informal advice or memos as binding rules unless federal law required them to do so. Unfortunately, the 109th Legislature did not pass LB 565.
Why Transparency Is Only Step One
Transparency is an important first step, but it does not resolve the underlying issue. The GOOD Act would help the public find federal guidance in searchable databases. Proposals such as LB 565 would go further by preventing Nebraska agencies from treating guidance as binding law.
When agency staff can rewrite rules through FAQs or policy letters, representative government breaks down. Nebraskans deserve rules enacted by elected lawmakers, not imposed through informal agency directives. Restoring the separation of powers means keeping guidance what it was intended to be: advice, not backdoor law.