BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



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          |SENATE RULES COMMITTEE            |                  AB 1612|
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                                 THIRD READING


          Bill No:  AB 1612
          Author:   Lara (D)
          Amended:  8/21/12 in Senate
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMM  :  8-0, 6/12/12
          AYES:  DeSaulnier, Gaines, Harman, Kehoe, Lowenthal, 
            Pavley, Rubio, Wyland
          NO VOTE RECORDED:  Simitian

          SENATE ENVIRONMENTAL QUALITY COMMITTEE  :  7-0, 6/18/12
          AYES:  Simitian, Strickland, Blakeslee, Hancock, Kehoe, 
            Lowenthal, Pavley

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8
           
          ASSEMBLY FLOOR  :  74-0, 4/12/12 - See last page for vote


           SUBJECT  :    Administrative practices

           SOURCE  :     California Building Industry Association


           DIGEST  :    This bill requires a state entity proposing 
          changes to building standards that impact housing to 
          include information on the estimated costs and benefits of 
          the changes.

           Senate Floor Amendments  of 8/21/12 add double-jointing 
          provisions to avoid chaptering out issues relating to SB 
          1520 (Calderon) and AB 2041 (Swanson).
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           ANALYSIS  :    The California Building Standards Law 
          establishes the California Building Standards Commission 
          and the process for adopting state building standards.  
          Under this process, relevant state agencies propose 
          amendments to model building codes, which the Commission 
          must then adopt, modify, or reject.  The Department of 
          Housing and Community Development is the relevant state 
          agency for residential building standards.  In addition, 
          the California Energy Commission develops building 
          standards relating to energy efficiency for all 
          occupancies, including housing.  

          State agencies developing building standards begin with a 
          model code developed by a national code-writing entity.  
          State agencies then make amendments to the model codes to 
          reflect California needs and priorities. 

          Building standards qualify as regulations.  Therefore, the 
          adoption of building standards is subject to the 
          Administrative Procedures Act, which establishes the 
          general process for the adoption of regulations.  As part 
          of the Act, an entity proposing new or amended regulations 
          must prepare and submit to the Office of Administrative Law 
          a notice of the proposed action and an initial statement of 
          reasons (ISOR) for proposing the change in regulation.  
          Among other things, the ISOR must include a statement of 
          the specific purpose for each change, the problem the 
          agency intends to address, and the rationale for why the 
          change is reasonably necessary to carry out the purpose and 
          address the problem for which it is proposed.  The ISOR 
          must also enumerate the benefits anticipated from the 
          regulatory action, both monetary and non-monetary, and 
          include evidence to support an initial determination that 
          the change may have or will not have a significant, 
          statewide adverse impact directly affecting business.  

          The notice of proposed action that accompanies the ISOR 
          must include, among other things, a statement that the 
          change would have a significant effect on housing costs, if 
          the agency makes an initial determination that the action 
          would have that effect, and, separately, a description of 
          all cost impacts known to the agency that a representative 
          private person or business would necessarily incur in 

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          reasonable compliance with the proposed action.  If the 
          agency is unaware of cost impacts on private persons or 
          businesses, it may state that instead.  

          This bill requires a state entity proposing changes to 
          building standards that impact housing to include 
          additional information on the estimated costs and benefits 
          of the changes.  Specifically, the bill:

          1.For any California amendment to a model code that impacts 
            housing, requires the ISOR to include the estimated cost 
            of compliance, the estimated potential benefits, and the 
            related assumptions used to determine the estimates.

          2.For a particular change added to a model code by a 
            national code-writing entity, requires for that specific 
            change only that the ISOR include the estimated cost of 
            compliance, the estimated potential benefits, and the 
            related assumptions used to determine the estimates if an 
            interested party has made a request in writing at least 
            30 days before the submittal of the ISOR to the agency to 
            examine that specific section. 
          
          3.Requires a state entity to include with any statement in 
            the notice of proposed action that a change in building 
            standards would have a significant effect on housing 
            costs and the estimated costs of compliance and potential 
            benefits of a building standard, if any, that were 
            included in the ISOR.  This applies to all California 
            amendments to model codes and, if requested for a 
            particular change, to changes in the model codes 
            themselves.

          4.Expresses the intent of the Legislature that the 
            requirements of this bill only apply to those state 
            agencies that have statutory authority to propose or 
            adopt residential building standards, and not to the 
            California Air Resources Board, air pollution control 
            districts, or air quality management districts.

          5.Contains double-jointing language with SB 1520 (Calderon) 
            and AB 2041 (Swanson).

           Comments

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          An agency proposing changes to building standards that 
          impact housing is required to provide the cost of 
          compliance if it expects a proposed building standard to 
          have a significant effect on housing costs.  If the agency 
          determines, however, that the standard will not have a 
          significant impact, or if it is unaware of any significant 
          impact, the agency must only say that and need not supply 
          any explicit information on the cost of compliance.  
          According to the author, 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 the costs related to proposed 
          building standards, businesses and the public cannot 
          provide informed input, nor can they fully prepare for the 
          standard.  The author believes this bill will provide 
          greater transparency and clarity with respect to the costs 
          and benefits of proposed building standards.

          When national code-writing entities issue new model codes, 
          they often include numerous changes from the previous 
          edition.  The Department of Housing and Community 
          Development estimates that there are 1500 such changes 
          affecting housing in the newest model codes.  California 
          amendments to the model codes, however, are much less 
          frequent.  In recognition of the potential workload 
          associated with having to provide cost and benefit 
          information on every change to building standards, this 
          bill limits the requirement for an agency to provide cost 
          and benefit information just to California amendments and 
          to those changes within model codes that an interested 
          party requests information on.

          Existing law requires the notice of proposed action, if 
          relevant, to include a statement that a proposed building 
          standard change would have a significant effect on housing 
          costs.  As a result, this bill only adds value with respect 
          to changes that the state agency deems insignificant.  

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

           SUPPORT  :   (Verified  8/7/12)

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          California Building Industry Association (source) 
          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



           ASSEMBLY FLOOR  :  74-0, 4/12/12
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Beall, 
            Bill Berryhill, Block, Blumenfield, Bonilla, Bradford, 
            Brownley, Buchanan, Butler, Charles Calderon, Campos, 
            Carter, Chesbro, Conway, Davis, Dickinson, Donnelly, Eng, 
            Feuer, Fong, Fuentes, Furutani, Beth Gaines, Galgiani, 
            Gatto, Gordon, Gorell, Grove, Hagman, Halderman, Hall, 
            Harkey, Hayashi, Roger Hernández, Hill, Huber, Hueso, 
            Huffman, Jeffries, Jones, Knight, Lara, Logue, Bonnie 
            Lowenthal, Ma, Mansoor, Mendoza, Miller, Mitchell, 
            Monning, Morrell, Nestande, Nielsen, Norby, Olsen, Pan, 
            Perea, V. Manuel Pérez, Portantino, Silva, Smyth, 
            Solorio, Swanson, Torres, Valadao, Wagner, Williams, 
            Yamada, John A. Pérez
          NO VOTE RECORDED:  Cedillo, Cook, Fletcher, Garrick, 
            Skinner, Wieckowski


          JJA:nd  8/22/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

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