Rules

Rules in the United States

Rules Meanings

In the history of the term:

  • “Certain limits without the actual walls of the prison, where the prisoner, on proper security previously given to the proper authority, may reside. These limits are considered, for all legal and practical purposes, as merely a further extension of the prison walls.
  • A general principle of law, recognized as such by authorities, and stated usually in the form of a maxim. It is called a rule because in doubtful and unforeseen cases it is a rule for their decision; it embraces particular cases within general principles. (…).
  • An ordinance made by a court having competent jurisdiction. Rules of court are either general or special. The former are the laws by which the practice of the court is governed; the latter are special orders made in particular cases. (…).” (1)

In Administrative Law

The Administrative Procedure Act established the requirements for agencies to follow when creating rules and regulations (Ch. 324, 60 Stat. 237 (1946) (codified as amended at 5 U.S.C. §§ 551–559, 701–706, and other scattered sections of title 5 (2006 & Supp. V 2011))). A “rule” is the whole or a part of an agency statement of general or particular applicability and future effect designed to implement, interpret, or prescribe law or policy or describing the organization, procedure, or practice requirements of an agency and includes the approval or prescription for the future of rates, wages, corporate or financial structures or reorganizations
thereof, prices, facilities, appliances, services or allowances therefor or of valuations, costs,
or accounting, or practices bearing on any of the foregoing . . .  (5 U.S.C. § 551(4) (2006)).

Rules versus Principles in Corporate Law

Both government regulators and self-regulators must decide whether to adopt principles or rules. In response to corporate governance scandals, many commentators have suggested that the U.S. regulatory system is too focused on rules. Although rules can be simple, they also can provide an easy target for manipulation.

Some observers advocate a more principles-based approach to regulation that stresses goals and objectives rather than the particular methods of achieving those ends. Policy responses to the corporate scandals exhibited a tension between rules and principles.The most notable
legislative change has been the passage of the Sarbanes-Oxley Act, which has imposed numerous new, detailed rules on corporations. At the same time, the primary accounting standard setter, FASB, has been criticized for relying too much on detailed rules to determine the appropriate accounting treatment and, as a result, has increasingly emphasized a more conceptual or principles-guided approach in its new proposed standards.

The Strengths and Weaknesses of Rules

In the United States, regulators and industry players often seek refuge in rules. Indeed, industry participants often lobby for a rules-based environment to avoid the unpredictability of later
enforcement. Rules are typically thought to be simpler and easier to follow than principles, demarcating a clear line between acceptable and unacceptable behavior. Rules also reduce discretion on the part of individual managers or auditors, making it less likely that their judgments will be motivated by a desire to achieve personal gain at the expense of investors or the public.

The seminal work in this area is the book “Playing by the Rules,” by Frederick Schauer of the John F. Kennedy School of Government, which analyzes the nature of rules-based decision
making. Despite the virtues of rules, in practice rules can be more complex—and, hence, even more murky—than principles. As lawmakers try to address every conceivable eventuality, the
rulebook becomes harder to understand and harder to follow.

The tax code, for example, is heavily rules-based, and problems often arise when corporations undertake new types of transactions not covered by the code. Determining the appropriate tax
treatment can sometimes be quite difficult, leaving auditors with de facto discretion and creating the need for additional rules to clarify inconsistencies or close gaps. Moreover, even simple and clear rules can be manipulated. An effective planner can use the exact wording of the rule to structure transactions in ways that comply with the letter of the law but circumvent its underlying purpose.

Rules Definition in the Legislative Process

The following is a definition of Rules, by the National Conference of State Legislatures (NCSL): Regulating principles or methods of legislative procedure.

Rules Background

Rules

In Legislation

Rules in the U.S. Code: Title 33, Chapter 34, Subchapter I

The current, permanent, in-force federal laws regulating rules are compiled in the United States Code under Title 33, Chapter 34, Subchapter I. It constitutes “prima facie” evidence of statutes relating to Navigation and Navigable Waters (including rules) of the United States. The reader can further narrow his/her legal research of the general topic (in this case, Navigation Rules of the US Code, including rules) by chapter and subchapter.

Resources

Notes

1. This definition of Rules is based on The Cyclopedic Law Dictionary.

See Also

  • Legislative Power
  • Legislative History
  • Legislative Ethics
  • Parliamentary Law
  • Legislature
  • Legal Aid
  • Legislative Commissions
  • Legislative Branch
  • Legislation
  • Executive Branch
  • Legislative Function

Popular Searches related with the United States Legislature and Rules

  • Legislative Power Definition
  • State Legislature
  • Legislature Calendar
  • Congress
  • Legislature Members
  • Government
  • Legislative Session
  • Judicial
  • Legislators
  • Senate
  • Legal Forms
  • Laws
  • Statutes
  • Governor
  • Judiciary
  • Legislature Bills
  • Legislation Definition
  • Legislation Meaning
  • Legislative Information

Comments

Leave a Reply

Your email address will not be published. Required fields are marked *