BILL ANALYSIS Ó ------------------------------------------------------------ |SENATE RULES COMMITTEE | AB 1612| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ------------------------------------------------------------ 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). CONTINUED AB 1612 Page 2 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 CONTINUED AB 1612 Page 3 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 CONTINUED AB 1612 Page 4 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) CONTINUED AB 1612 Page 5 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 **** END **** CONTINUED