Legal Definitions - substantive rule

A substantive rule (often referred to as a legislative rule) is a regulation issued by a government agency that carries the full force and effect of law. Unlike rules that merely explain existing statutes (interpretive rules) or govern an agency's internal operations (procedural rules), a substantive rule creates new legal rights, duties, or obligations, or significantly alters existing ones. These rules are binding on individuals and entities and typically undergo a public notice and comment process before they are finalized.

• Example 1: Environmental Standards

  The Environmental Protection Agency (EPA) issues a new regulation establishing a maximum allowable level for a specific industrial chemical in wastewater discharged into public waterways. Any facility exceeding this limit faces penalties.

  Explanation: This is a substantive rule because it creates a new legal obligation for industrial facilities to treat their wastewater to meet a specific standard. It directly impacts their operations and establishes a new environmental protection standard that carries legal consequences for non-compliance, thereby altering existing duties and rights related to water quality.

• Example 2: Consumer Product Safety

  The Consumer Product Safety Commission (CPSC) promulgates a rule requiring all children's toys containing small parts to include a prominent choking hazard warning label for children under three years old.

  Explanation: This rule is substantive because it imposes a new, mandatory duty on toy manufacturers and retailers to include specific warning labels on certain products. It directly affects how products are manufactured and sold, creating a new obligation for businesses and enhancing the right of consumers to receive critical safety information.

• Example 3: Financial Disclosure

  The Securities and Exchange Commission (SEC) issues a regulation mandating that all publicly traded companies must disclose in their annual reports any significant cybersecurity risks they face and the measures taken to mitigate them.

  Explanation: This is a substantive rule because it creates a new legal obligation for publicly traded companies to provide specific information about cybersecurity risks to investors. It alters existing financial disclosure requirements, establishing a new duty for companies and a new right for investors to access more comprehensive risk assessments, which can influence investment decisions.