BILL ANALYSIS Ó
AB 1711
SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
Senator Jerry Hill, Chair
2013-2014 Regular Session
BILL NO: AB 1711
AUTHOR: Cooley
AMENDED: April 3, 2014
FISCAL: Yes HEARING DATE: June 25, 2014
URGENCY: No CONSULTANT: Rachel Machi
Wagoner
SUBJECT : ADMINISTRATIVE PROCEDURES ACT: ECONOMIC IMPACT
ASSESSMENT
Existing law :
1)The Administrative Procedure Act (APA) governs the
procedures for the adoption, amendment, or repeal of
regulations by state agencies and for the review of those
regulatory actions by the Office of Administrative Law
(OAL).
2)Establishes OAL to administer APA and ensure that state
agency regulations are clear, necessary, legally valid, and
available to the public.
3)Requires agencies, when submitting to OAL an Initial
Statement of Reasons (ISOR) for a proposed regulation to
identify the problem the agency intends to address, and
enumerate the benefits anticipated from the regulatory
action, including the benefits or goals provided in the
authorizing statute.
The benefits may include non-monetary benefits such as the
(a) protection of public health and safety; (b) worker
safety; (c) the environment; (d) the prevention of
discrimination; (e) the promotion of fairness or social
equity; and (f) the increase in openness and transparency in
business and government, among other things.
4)On and after November 1, 2013, requires the agency to
include in its ISOR for a proposed major regulation a
standardized regulation impact assessment that is prepared
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in a manner prescribed by the Department of Finance (DOF).
The assessment shall address:
a) The creation or elimination of jobs within the state;
b) The creation of new businesses or the elimination of
existing
businesses within the state;
c) The competitive advantages or disadvantages for
businesses currently
doing business within the state;
d) The increase or decrease of investment in the state;
e) The incentives for innovation in products, material, or
processes; and,
f) The benefits of the regulations, including benefits to
the health, safety,
and welfare of California residents, worker safety, and
the state's
environment and quality of life, among any other
benefits identified by the agency.
5)Defines a "major regulation" to mean any proposed adoption,
amendment, or repeal of a regulation that will have an
economic impact on California business enterprises and
individuals in an amount exceeding $50 million, as estimated
by the agency.
6)Requires DOF and OAL to periodically review the standardized
regulatory impact analyses for adherence to regulations
adopted by DOF.
This bill : This bill requires an Economic Impact Assessment
(EIA) to be included in the ISOR that a state agency submits
to 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.
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2)Directs 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.
COMMENTS :
1) Purpose of Bill . According to the author, a state agency
that proposes a rulemaking action affecting only non-major
regulations (less than $50 million impact) is required to
prepare an economic impact assessment (EIA) for purposes of
assessing the potential adverse economic impact of the
proposed regulations. Currently the Administrative
Procedure Act does not establish when the economic impact
assessment for non-major regulations is to be prepared and
made available to the public for comment. AB 1711 resolves
this issue by ensuring that the EIA for non-major
regulations is included in the initial regulatory notice
document, thereby making the statement available to the
public for comment at the onset of the rulemaking process
when it can be most useful.
2) Previous Legislation . AB 12 (Cooley), 2013-14 Regular
Session would have required DOF and OAL to review annually
the standardized regulatory impact analyses for adherence
to the regulations adopted by a state agency, and report
back to the Legislature. Governor Brown vetoed AB 12
stating, "Two years ago, I signed legislation that
significantly revised the regulatory review process. As a
result, beginning this November the Department of Finance
will review the economic impact of regulations before they
are published. The annual review proposed by this bill
would duplicate those efforts."
SB 617 (Calderon), Chapter 496, Statutes of 2011, requires
all state agencies that create, modify, or repeal a major
regulation with an economic impact of $50 million or more
to issue a standardized economic impact report, and enacts
requirements for a regulatory impact report to be completed
by DOF and OAL.
3) Balanced Assessment . The purpose of an ISOR is to
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articulate the problem the agency intends to address and
the rationale for the determination by the agency that each
adoption, amendment, or repeal is reasonably necessary to
carry out the purpose and address the problem for which it
is proposed.
The statement shall enumerate the benefits anticipated from
the regulatory action, including the benefits or goals
provided in the authorizing statute.
The benefits may include, to the extent applicable,
nonmonetary benefits such as the protection of public
health and safety, worker safety, or the environment, the
prevention of discrimination, the promotion of fairness or
social equity, and the increase in openness and
transparency in business and government, among other
things.
The standardized regulation impact assessment for major
regulations or the EIA for non-major regulations considers
the economic impact as well as the benefit of the proposed
regulation and is intended to be a part of the overall and
holistic analysis of the benefit and costs of a proposed
regulatory package. For major regulations the statute
specifies that the standardized regulation impact analysis
shall be part of the ISOR. This bill specifies that the
EIA shall be a part of ISOR for non-major regulations.
4) Double Referral to Senate Governmental Organization
Committee . This measure was heard in Senate Governmental
Organization Committee on June 10, 2014, and passed out of
committee with a vote of 8-0.
SOURCE : Author
SUPPORT : Office of Administrative Law
OPPOSITION : None on file
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