Code dump for my personal reference. I'll build on this topic as I continue to learn.

Inside of modulename_rules.inc

 function modulename_rules_action_info() {
  $defaults = array(
    'parameter' => array(
      'account' => array(
        'type' => 'user',
        'label' => t('User'),
        // Saves any changes made to the user object,
        // or changes made in modulename_action_user_test().
        'save' => TRUE,
      ),
    ),
    'group' => t('User'),
    // Defined in user.rules.inc within the rules module.
    'access callback' => 'modulename_user_integration_access',
  );
  
  $actions['user_test'] = $defaults + array(
    'label' => t('user test'),
    'base' => 'rules_action_user_test',
  );
  
  return $actions;
}

/**
 * Action: Create a message to see if it works.
 */
function modulename_action_user_test($account) {
  drupal_set_message('New action works!');
  // We can make changes to $account
  // $account->status= 1;
}

This adds a new action that you can manually add to an existing rule.