A more thorough explanation:

Formal rulemaking is a process used by administrative agencies to create administrative rules. This process is governed by the Administrative Procedure Act (APA) and involves following specific procedural requirements.

Formal rulemaking requirements apply when a statute requires an agency to make rules on the record after an opportunity for an agency hearing. This means that the agency must follow the procedural requirements set out in sections 553(a),(b),(d),(e), 556, and 557 of the APA.

For example, if a statute requires the Environmental Protection Agency (EPA) to create rules for regulating air pollution, the EPA must follow the formal rulemaking process if the statute requires the rules to be made on the record after an opportunity for a hearing.

When an agency is required to follow formal rulemaking procedures, the process resembles an adjudication. This means that an administrative law judge receives evidence in adversary proceedings.

For example, if the EPA is required to follow formal rulemaking procedures to create rules for regulating air pollution, an administrative law judge would receive evidence from interested parties in an adversarial proceeding.

The agency must also give notice of the proposed rulemaking in accordance with section 553 of the APA. The administrative law judge appointed by the agency has the power to administer oaths, take evidence, regulate the course of the hearing, and make or recommend decisions. Finally, section 557 describes how the agency creates the final decision, and how interested parties may submit their input. The decision of the judge becomes a final rule, codified in the Code of Federal Regulations.

Overall, formal rulemaking is a process used by administrative agencies to create administrative rules. This process involves following specific procedural requirements set out in the APA and resembles an adjudication.