BILL ANALYSIS Ó AB 1711 Page 1 Date of Hearing: April 9, 2014 ASSEMBLY COMMITTEE ON APPROPRIATIONS Mike Gatto, Chair AB 1711 (Cooley) - As Amended: April 3, 2014 Policy Committee: Accountability and Administrative Review Vote: 11-0 Urgency: No State Mandated Local Program: No Reimbursable: SUMMARY This bill requires an economic impact assessment (EIA) to be included in the initial statement of reasons (ISOR) that a state agency submits to the Office of Administrative Law (OAL) when adopting, amending, or repealing a non-major regulation. Specifically, this bill: 1)Requires a state agency to include an EIA in the ISOR that is submitted to OAL when adopting, amending, or repealing a non-major regulation. 2)Directs the Department of Finance (DOF) to adopt and update, as necessary, instructions prescribing the methods that an agency must use in preparing the EIA, and include those instructions in the State Administrative Manual. FISCAL EFFECT Negligible. Existing law requires state agencies proposing non-major regulations to prepare and submit EIAs. Negligible costs to state agencies to submit an EIA as part of the ISOR. Minor and absorbable costs to the Department of Finance (DOF) to include updated instructions in the State Administrative Manual. COMMENTS 1)Purpose . Under the Administrative Procedures Act (APA), a state agency proposing a non-major regulation is required to prepare an EIA for purposes of assessing the potential adverse AB 1711 Page 2 economic impact of the proposed regulation. However, the APA does not currently require the EIA to be included in the ISOR. This bill, sponsored by the Office of Administrative Law (OAL), is intended to clarify that the EIA must be submitted as a part of the ISOR so that it is made available to the public for comment at the onset of the rulemaking process. In addition, this bill includes requirements specifically instructing state agencies when to prepare the EIA and how to make it available to the public for comment. 2)Consistency . The OAL is responsible for reviewing administrative regulations proposed by over 200 state agencies for compliance with the standards set forth in the APA. Among other things, the APA requires a state agency to prepare a standardized regulatory impact analysis for a proposed major regulation, defined as having an economic impact of $50 million or more, and include that in the ISOR which is made available to the public for comment. The APA also requires a state agency proposing a non-major regulation to prepare an EIA to assess the potential adverse economic impact of the proposed regulation. However, the APA does not currently require the EIA to be included in the ISOR, yet it is required to be available for public comment. This bill would conform the submission requirements for non-major regulations to those of major regulations regarding EIAs to improve and streamline the administrative process for making these documents available for public comment. 3)State Administrative Manual . This manual is a reference guide for statewide policies, procedures, requirements and information jointly published by the DOF and the Department of General Services. Analysis Prepared by : Jennifer Swenson / APPR. / (916) 319-2081 AB 1711 Page 3