The United States is a constitution-based federal system, meaning power is distributed between a national (federal) government and local (state) governments.
Although the Supremacy Clause states that the Constitution, federal laws, and treaties are the “supreme law of the land,” according to the Supreme Court, it is clear that the Constitution created a federal government of limited powers. The Supreme Court has noted that “every law enacted by Congress must be based on one or more of its powers enumerated in the Constitution.”
These limited powers are set forth as what are termed “enumerated powers” in Article I, Section 8 of the Constitution. These enumerated powers include, among other things, the power to levy taxes, regulate commerce, establish a uniform law of naturalization, establish federal courts (subordinate to the Supreme Court), establish and maintain a military, and declare war.
In addition, the Necessary and Proper Clause has been interpreted by the Supreme Court to define “implied powers,” those which are necessary to carry out those powers enumerated in the Constitution. In McCulloch v. Maryland, Justice John Marshall set forth the doctrine of implied powers, stating, that a government entrusted with great powers must also be entrusted with the power to execute them.
While the Constitution thus grants broad powers to the federal government, they are limited by the 10th Amendment, which states that “[t]he powers not delegated to the United States by the Constitution, nor prohibited by it to the States, are reserved to the States respectively, or to the people.”
As James Madison explained, “[t]he powers reserved to the several States will extend to all the objects which, in the ordinary course of affairs, concern the lives, liberties, and properties of the people, and the internal order, improvement, and prosperity of the State.”
These reserved powers have generally been referred to as “police powers,” such as those required for public safety, health, and welfare.
Finally, certain powers are called concurrent powers, which the states and the federal government both may exercise. These can include, for example, setting up courts, levying taxes, and spending and borrowing money. Typically, these are powers necessary for maintenance of public facilities.
As can be appreciated, one of the difficulties in the federal system is determining which entity, if any, has the power to legislate in a particular realm. In general, the problem of conflicting laws between the states and the federal government has given rise to what is called the doctrine of preemption.
Under this doctrine, based on the Supremacy Clause, if a state or local law conflicts with a federal law, the state or local law must give way (unless the federal law is itself unconstitutional, in other words, it exceeds the power of the federal government). As Justice Marshall put it in McCulloch v. Maryland, “[s]tates have no power, by taxation or otherwise, to retard, impede, burden, or in any manner control the operations of the Constitutional laws enacted by Congress to carry into execution the powers vested in the Federal Government.”
Under this doctrine, the Supreme Court has indicated that the Supremacy Clause may entail preemption of state law either by express provision, by implication, or by a conflict between federal and state law. If there is an express provision in the legislation, or if there is an explicit conflict between the state law at issue and the federal law, the state law provision is immediately invalid. Field preemption occurs when Congress legislates in a way that is comprehensive to an entire field of an issue. Impossibility preemption occurs when it would be impossible for someone to comply with both state and federal laws. Purposes and objectives preemption occurs when the purposes and objectives of the federal law would be thwarted by the state law.
The Attorney-General's Department has policy responsibility for legislative frameworks. This includes the harmonisation of regulatory powers across the Commonwealth statute book, through supporting the implementation of the Regulatory Powers (Standard Provisions) Act 2014 (the Regulatory Powers Act).
The Administrative Law Section manages the Regulatory Powers Act and provides policy advice on legislative proposals involving the use of regulatory powers. Agencies seeking further information should contact the Administrative Law Section.
Introduction to regulatory powers
Regulatory powers are the powers used by government agencies and regulators to ensure individuals and industry comply with legislative requirements, and to respond to instances of non-compliance. In the context of the Regulatory Powers Act, these powers are divided into two categories—coercive and enforcement powers – and include:
- monitoring powers, which can be used to monitor compliance with provisions of an Act and to monitor whether information given to the Commonwealth is correct (Part 2);
- investigation powers, which can be used to gather material that relates to the contravention of an offence or civil penalty provision (Part 3);
- the power to apply to a court for civil penalty orders and injunctions (Parts 4 and 7);
- the power to issue infringement notices (Part 5); and
- the power to accept and seek enforcement of undertakings relating to compliance with legislative provisions (Part 6).
Coercive powers, in the form of monitoring and investigation powers, may be used to ‘check’ compliance with a provision to which a civil penalty or offence applies. An authorised person exercising monitoring or investigation powers is using those powers to evaluate the conduct of a person and gather requisite information and evidence in the case of a contravention.
Enforcement powers are typically used after coercive powers are used and may include the issuing of infringement notices, applying for civil penalty orders or injunctions, or entering into enforceable undertakings.
The Regulatory Powers Act provides for a standard suite of provisions in relation to monitoring and investigation powers, as well as enforcement provisions through the use of civil penalties, infringement notices, enforceable undertakings and injunctions. The Act commenced on 1 October 2014, but only has effect where Commonwealth Acts are drafted or amended to trigger its provisions.
The standard provisions of the Regulatory Powers Act are an accepted baseline of powers required for an effective monitoring, investigation or enforcement regulatory regime, whilst providing adequate safeguards and protecting important common law privileges.
New or amending Acts that require monitoring, investigation or enforcement powers of the kind available under the Regulatory Powers Act should be drafted to trigger the relevant provisions of that Act, unless there are compelling policy reasons to the contrary.
The Administrative Law Section should be consulted on any legislative proposals that involve monitoring, investigation or enforcement powers of the type available under the Regulatory Powers Act.
The Regulatory Powers (Standardisation Reform) Act 2021 made minor and technical amendments to the Regulatory Powers Act.
Read more about the background to the Regulatory Powers Act.
Benefits of applying the Regulatory Powers Act
The Regulatory Powers Act not only reduces the volume of provisions dealing with monitoring, investigation and enforcement on the Commonwealth statute book, but also ensures greater consistency between different regulatory regimes and reduces the administrative burden on agencies or regulators exercising different regulatory powers.
Standard regulatory powers across the Commonwealth:
- significantly reduces the length of legislation governing each regulatory regime;
- provides greater clarity and consistency for agencies that exercise powers under multiple regimes;
- facilitates the development of a common body of law;
- makes it easier for businesses that are subject to multiple regimes to understand and comply with the law; and
- makes it easier for individuals and businesses to know their rights and responsibilities, and more readily comply with the law.
Implementation of the Regulatory Powers Act supports the government’s regulatory reform agenda, as it simplifies and streamlines Commonwealth regulatory powers across the statute book.
Additional guidance in relation to the Regulatory Powers Act
In addition to the information provided here, agencies and regulators may wish to refer to the following resources for matters relating to the Regulatory Powers Act and policy regarding civil and administrative penalties:
- The Guide to Framing Commonwealth Offences, Infringement Notices and Enforcement Powers;
- The Office of Parliamentary Counsel's Drafting Direction No. 3.5A, which includes examples of provisions triggering the Regulatory Powers Act;
- Report No. 48 of the Administrative Review Council, The Coercive Information-gathering Powers of Government Agencies; and
- Report No. 95 of the Australian Law Reform Commission, Principled Regulation: Federal Civil and Administrative Penalties in Australia.