BILL ANALYSIS Ó
AB 1612
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator S. Joseph Simitian, Chairman
2011-2012 Regular Session
BILL NO: AB 1612
AUTHOR: Lara
AMENDED: As introduced
FISCAL: Yes HEARING DATE: June 18, 2012
URGENCY: No CONSULTANT: Randy Pestor
SUBJECT : ADMINISTRATIVE PROCEDURE ACT
SUMMARY :
Existing law :
1) Under the Administrative Procedure Act (APA) (Government
Code §11340 et seq.), establishes rulemaking procedures and
standards for state agencies. State regulations must also
be adopted in compliance with regulations adopted by the
Office of Administrative Law (OAL). The APA, among other
things:
a) Requires every agency to prepare and submit a
specified notice of the proposed action and make certain
information available to the public (e.g., draft
regulation in "plain English"; statement of reasons for
proposing the adoption, amendment, or repeal of a
regulation; the problem the agency intends to address;
benefits anticipated from the regulatory action;
evidence to support a determination that the action will
not have a significant adverse economic impact on
business). (§11346.2). The statement of reasons must
identify each technical, theoretical, and empirical
report upon which the agency relies in proposing the
regulation. (§11346.2(b)(3)). A standardized
regulatory impact analysis is required for a major
regulation proposed on or after January 1, 2013.
(§11346.2(b)(2)).
b) Requires state agencies in proposing to adopt, amend,
or repeal any regulation to assess the potential for
adverse economic impact on California business
AB 1612
Page 2
enterprises and individuals. In assessing the potential
for adverse economic impact, state agencies must meet
certain requirements (e.g., be based on adequate
information concerning the need for, and consequences
of, proposed action; consider industries affected
including the ability to compete with businesses in
other states). State agencies must also assess whether,
and to what extent, regulations will affect certain
matters (e.g., creation or elimination of jobs in the
state, creation of new businesses or elimination of
existing businesses in the state, expansion of
businesses currently doing business in the state;
benefits of the regulation). Additional requirements
are specified for major regulations adopted, amended, or
repealed after November 13, 2013, and for economic
impact analyses of regulations (§11346.3). OAL must
return any regulation to the adopting agency under
certain conditions, including failure to complete the
economic impact assessment or failure to include the
assessment in the rulemaking proceeding. (§11349.1).
c) Requires the notice of proposed adoption, amendment,
or repeal of a regulation to include certain matters
(e.g., policy statement overview explaining the broad
objectives of the regulation and specific anticipated
benefits; an evaluation of whether the proposed
regulation is inconsistent or incompatible with existing
state regulations; specified information if there may be
a significant, statewide adverse economic impact;
description of all cost impacts to be incurred by a
private person or business; statement of the results of
the economic impact assessment; a statement of the
results of the economic impact analysis; a statement
that the action would have a significant effect on
housing costs if that is the case along with information
on the effect on housing costs to be provided to the
public upon request). (§11346.5).
d) Requires OAL to either approve a submitted regulation
and transmit it to the Secretary of State for filing, or
disapprove it, within 30 working days. If OAL fails to
act within 30 days, the regulation is deemed approved
AB 1612
Page 3
and OAL must transmit it to the Secretary of State.
(§11349.3).
e) Requires a regulation that is required to be filed
with the Secretary of State to become effective 30 days
after the date of filing unless: a) otherwise
specifically provided by statute under which the
regulation was adopted, in which case it is effective on
that date; b) a later date is prescribed by the state
agency or is part of the regulation; or c) the agency
makes a written request to OAL demonstrating good cause
for an earlier effective date, in which case OAL may
prescribe an earlier date. (§11343.4).
f) Requires OAL to compile, print, publish the adopted,
amended, or repealed regulations, and to also make this
available on the Internet. (§11344).
2) Provides the California Air Resources Board (ARB) with
primary responsibility for control of mobile source air
pollution, including adoption of rules for reducing vehicle
emissions and the specification of vehicular fuel
composition. (Health and Safety Code §39000 et seq. and
§39500 et seq.). When making information available to the
public under the APA relating to studies and reports that
ARB relied upon, ARB must also make information public that
is related to, but not limited to, air emissions, public
health impacts, and economic impacts before the comment
period for any regulation proposed for adoption by the ARB.
(§39601.5).
3) Requires each board, department, and office within the
California Environmental Protection Agency, before adopting
any major regulation, to evaluate alternatives and consider
whether there is a less costly alternative or combination
of alternatives that would be equally effective in
achieving increments of environmental protection in a
manner that ensures full compliance with statutory mandates
within the same amount of time as the proposed regulatory
requirements. Under this provision, "major regulation"
means any regulation that will have an economic impact on
the state's business enterprises in an amount exceeding $10
AB 1612
Page 4
million. (Public Resources Code §57005).
This bill , under the APA:
1) Requires the initial statement of reasons (#1 a above) for
a proposed regulation that is a building standard to
include the estimated cost of compliance, the estimated
potential benefits, and the related assumptions used to
determine the estimates. Model codes must be exempt from
this requirement unless an interested party has made a
request to the agency to examine a specific section for
purposes of estimating the compliance cost and potential
benefits for that section, including the related
assumptions used to determine the estimates.
2) Requires the information on housing costs (#1 c above) to
also include the estimated costs of compliance and
potential benefits of a building standard, if any, that
were included in the above initial statement of reasons.
The agency must comply with this requirement for purposes
of a model code only if an interested person has made a
request to the agency to examine a specific section for
purposes of estimating the costs of compliance and
potential benefits for that section as provided above.
COMMENTS :
1) Purpose of Bill . According to the author, "Currently, when
an agency proposes a new regulation, it must prepare an
analysis of the economic impact that the agency expects
that regulation to have on business and housing. The
agency is required to state whether or not the regulation
will have a significant effect on business and housing. AB
1612 would simply require an agency proposing a residential
building standard to include in the analysis an estimate of
the cost of complying with the building standard, the
benefits of the building standard, and the assumptions used
to reach these estimates. The bill would exempt model
codes from these requirements, unless a party specifically
requests that estimates be provided on a certain code."
2) Legislature addresses Administrative Procedure Act issues
AB 1612
Page 5
in 2011 . SB 617 (Calderon and Pavley) Chapter 496,
Statutes of 2011, made several revisions to the
Administrative Procedure Act relating to reasonable
alternatives to regulations, economic impact assessments,
standardized regulatory impact analysis for a major
regulation which must be reviewed by the Department of
Finance, enumeration of anticipated benefits, determination
of more cost effective alternatives, and various other
matters.
3) Trying again . AB 1612 is similar to SB 643 (Correa) of
2011, which was approved by the Environmental Quality
Committee May 2, 2011 (5-0), approved by the Senate May 31,
2011 (38-0), and held on the Assembly Appropriations
Committee suspense file. AB 1612 differs with SB 643 by:
a) specifying how requests for information regarding model
codes are to be made, and b) providing technical and
clarifying amendments.
AB 1612 was approved by the Senate Transportation and Housing
Committee June 12, 2012 (8-0), with technical amendments to
be taken in the Environmental Quality Committee as follows:
a) on page 4, line 2, after "request" insert: "in
writing"; b) on page 4, line 2, after "agency" insert: "at
least 30 days prior to submittal of the initial statement
of reasons"; c) on page 6, line 38, after "request" insert:
"in writing"; d) on page 6, line 38, after "agency"
insert: "at least 30 days prior to submittal of the
initial statement of reasons"; e) on page 10, line 38,
strike "(i)"; f) on page 11, line 3, strike "(ii)" and
insert: "(D)"; g) on page 11, line 3, strike "a model
code" and insert: "model codes"; and h) on page 11, line
5, strike "subparagraph" and insert "paragraph".
4) Letter to the Assembly Journal . The author has drafted a
letter to the Assembly Journal regarding agencies having
statutory authority to propose or adopt a residential
building standard that must comply with AB 1612
requirements (e.g., Department of Housing and Community
Development, California Energy Commission), as well as
entities that do not fall under the requirements of this
bill (e.g., California Air Resources Board, air quality
AB 1612
Page 6
management districts). These requirements should be
specified in statute rather than a letter to the Journal.
SOURCE : California Building Industry Association
SUPPORT : 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, Golden State Builders
Exchange, Palm Desert Area Chamber of Commerce,
Southwest California Legislative Council,
United Contractors, Western Electrical
Contractors Association
OPPOSITION : None on file.