BILL ANALYSIS Ó
AB 1612
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Date of Hearing: March 13, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 1612 (Lara) - As Introduced: February 7, 2012
SUBJECT : Administrative practices.
SUMMARY : Requires state agencies, when submitting a notice to
the Office of Administrative Law (OAL) proposing the adoption,
amendment, or repeal of a building standard regulation, to
include with the initial statement of reasons (ISOR), the
estimated cost and benefits of compliance and the related
assumptions used in determining that estimate, if the proposed
building standard regulation impacts housing, and requires the
agencies to make this information available to the public.
Specifically, this bill :
1)Requires state agencies to include in the ISOR and make
available to the public, the estimated cost of compliance, the
estimated potential benefits, and the related assumptions used
to determine those estimates, if the proposed building
standard regulation impacts housing.
2)Exempts adopted model codes, as specified, from these
requirements, unless an interested party requests to examine a
specific section for purposes of estimating the cost of
compliance, the potential benefits for that section, and the
related assumptions used to determine the estimates, as
specified.
3)Makes conforming changes.
EXISTING LAW :
1)Governs the procedure for the adoption, amendment, or repeal
of regulations by state agencies and for the review of those
regulatory actions by the OAL, under the Administrative
Procedure Act (APA).
2)Requires state agencies to submit to OAL and make available to
the public, a copy of the proposed regulation and an ISOR, as
specified, including the effect of the proposed regulatory
action on housing costs, if any.
AB 1612
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3)Requires that the ISOR include facts evidence, documents,
testimony, or other evidence on which the state agency relies
to support an initial determination that the action will not
have a significant adverse economic impact on business.
4)Requires state agencies adopting or proposing adoption of a
model code, national standard, or specification to reference
the most recent edition of applicable model codes, national
standards, or specifications, as specified.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author, "An agency is
required to provide the cost of compliance if it expects a
proposed building standard to have a significant effect on
housing.
However, if it determines that the standard will not have a
significant impact, or if it is unaware of any significant
impact, the agency simply has to state something to that effect,
such as: 'The agency has determined that there will be no
significant economic impact on housing.'
"The subjectivity of the term 'significant,' and the lack of an
estimate of the cost of compliance leave the public without a
clear indication of the actual costs of proposed building
standards. Without a firm understanding of proposed building
standards, businesses and the public cannot provide informed
input, nor can they fully prepare for the standard."
Background . The APA governs the adoption of regulations by
state agencies for purposes of ensuring that they are clear,
necessary, legally valid, and available to the public. In
seeking adoption of a proposed regulation, state agencies must
comply with procedural requirements that include publishing the
proposed regulation with a supporting statement of reasons;
mailing and publishing a notice of the proposed action 45 days
before a hearing or before the close of the public comment
period; and submitting a final statement to OAL which summarizes
and responds to all objections, recommendations, and proposed
alternatives that were raised during the public comment period.
The OAL is then required to approve or reject the proposed
regulation within 30 days.
AB 1612
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More specifically, the APA requires state agencies proposing to
adopt, amend, or repeal any administrative regulation to assess
the potential for adverse economic impact on California business
enterprises and individuals, and avoid imposing unnecessary or
unreasonable regulations. State agencies are also required to
determine and advise the OAL accordingly, if the proposal has a
significant effect on housing costs.
This bill requires agencies, when submitting an ISOR to OAL to
include the estimated cost and benefits of compliance and the
related assumptions used in determining that estimate, if a
proposed building standard regulation impacts housing. This
bill is a substantially similar to SB 643 (Correa) of 2011,
which was held in the Assembly Appropriations Committee.
Support . The sponsor of this bill, the California Building
Industry Association, writes in support, "Since 1982, state
agencies have been required to prepare an economic impact
analysis that clearly identifies any adverse economic impacts on
business, small business and housing.
Currently, the economic impact analysis is most often
accompanied by boiler-plate language that states: 'The agency
has determined that there will be no significant economic impact
on business/housing.' This gives no indication to the interested
parties as to what it will actually cost (in dollars) to comply
with the proposed regulation.
"With regards to regulations related to housing, this bill would
require the proposing agency to specifically cite its 'estimated
cost and benefit of compliance' with the proposed regulation and
to make available upon request the assumptions/analysis used in
arriving at the estimate.
"Bottom line: If an agency is able to make the determination
that a regulation will have no significant impact on the
economy, that agency should know what the proposed regulation
will cost."
Previous legislation . SB 643 (Correa) of 2011, requires
agencies, when submitting an ISOR for proposing the adoption,
amendment, or repeal of a regulation to the OAL, to include the
estimated cost and benefits of compliance and the related
assumptions used in determining that estimate if a proposed
building standard regulation impacts housing, and requires the
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agencies to make this information available to the public. This
bill was held in the Assembly Appropriations Committee.
Additionally, the following APA-related bills were referred to
the Assembly Business, Professions and Consumer Protection
Committee during the 2011 legislative session: AB 127 (Logue);
AB 213 (Silva); AB 273 (Valadao); AB 338 (Wagner); AB 410
(Swanson); AB 425 (Nestande); AB 429 (Knight); AB 530 (Smyth);
AB 535 (Morrell); AB 541 (Morrell); AB 586 (Garrick); AB 632
(Wagner); AB 1037 (V. Manuel Perez); AB 1213 (Nielsen); AB 1322,
(Bradford); and, SB 617 (Ron Calderon).
REGISTERED SUPPORT / OPPOSITION :
Support
California Building Industry Association (sponsor)
American Council of Engineering Companies California
California Apartment Association
California Association of Realtors
California Business Properties Association
California Chamber of Commerce
California Manufacturers & Technology Association
California Chamber of Commerce
Opposition
None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301