BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
SB 176 (Galgiani) - Administrative Procedures.
Amended: April 24, 2013 Policy Vote: GO 11-0
Urgency: No Mandate: No
Hearing Date: May 23, 2013 Consultant: Mark McKenzie
SUSPENSE FILE. AS PROPOSED TO BE AMENDED.
Bill Summary: SB 176 would require state agencies to engage
interested parties who would be subject to regulations in public
discussions prior to publishing a notice of proposed regulatory
actions.
Fiscal Impact (as approved on May 23, 2013):
Likely minor ongoing costs to over 200 state agencies to
involve interested parties in discussions prior to proposing
regulations. (General Fund and Various Special Funds).
Background: The Office of Administrative Law (OAL) is charged
with ensuring that agency regulations are clear, necessary,
legally valid, and available to the public. OAL is responsible
for reviewing administrative regulations proposed by over 200
state regulatory agencies for compliance with the standards set
forth in California's Administrative Procedure Act (APA), for
transmitting these regulations to the Secretary of State and for
publishing regulations in the California Code of Regulations
(CCR). OAL oversees the publication and distribution, in print
and on the Internet, of the CCR and the California Regulatory
Notice Register.
Existing law authorizes a state agency that is considering
adopting, amending, or repealing a regulation to consult with
interested persons before initiating any regulatory action.
When a state agency is proposing to adopt complex or numerous
regulatory proposals, existing law requires the agency, prior to
publication of a required notice of public regulations, to
involve parties who would be subject to those proposed
regulations in public discussions. The OAL is specifically
exempted from participation in any such preliminary discussions.
Proposed Law: SB 176 would require state agencies, boards, and
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commissions to publish notice in the Notice Register at least 15
days in advance of any meeting or report seeking public input,
including but not limited to formal, official, or organized
informational hearings, workshops, scoping hearings, preliminary
meetings, and public and stakeholder outreach meetings. The
bill would also require these entities to submit a notice for
publication in the Register upon issuance or publication of the
following:
Any notice indicating changes to a proposed regulation, for
which a 15-day comment period is required.
Any notice sent to specified interested parties identifying
a study or report added to the rulemaking record after
notice of proposed action has been published.
Links to informational reports prepared for public review
and posted on an agency, board, or commission website in
connection with proposed regulations.
Staff Comments: This bill will likely cause OAL to re-negotiate
the contract it currently has with the publisher (West
Publishing Corporation) of the California Regulatory Notice
Register. Pursuant to the terms of the current contract, West
pays the state $400,000 annually, plus 7% royalties, through the
2014 calendar year for the privilege of publishing the Register
and California Code of Regulations. The contract includes a
provision specifying that if there are any changes to California
law that result in the alteration of publication services, and
such changes result in increased costs to the contractor (West),
an equitable adjustment to the compensation must be negotiated.
Since this bill would likely result in a substantial increase in
the number of pages in the weekly publication of the Register,
as well as an increase in workload to the publisher, it is
likely that the bill would result in a reduction in contract
revenues that accrue to the General Fund. In the prior contract
between OAL and the publisher, the publisher paid California
$600,000 annually through the 2010 calendar year, plus
royalties.
OAL indicates that the bill would require the addition of one
permanent office technician position at a cost of approximately
$50,000 to review, process, manage, monitor, and prepare the
weekly publication of additional notices required by the bill.
OAL estimates there would be approximately 260 additional 15-day
notifications annually, in addition to an unknown number of
notices (likely hundreds annually) concerning informational
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hearings, workshops, scoping hearings, preliminary meetings,
public and stakeholder outreach meetings, and any other meeting
in which public input is sought.
Costs for state agencies to comply with the bill are
indeterminate, but likely significant. There are approximately
225 state agencies with rulemaking powers, and compliance costs
would depend upon how each of these entities interprets what
constitutes "meetings and reports seeking public input" for
purposes of the notice requirements. The bill specifies that
this term includes, but is not limited to, formal, official, or
organized informational hearings, workshops, scoping hearings,
preliminary meetings, and public and stakeholder outreach
meetings. It is conceivable that the legal staff of state
agencies could take a conservative approach in order to avoid
lawsuits challenging the validity of regulations, and issue
guidance to regulatory affairs staff indicating that in order to
comply with the statute, they must provide notice for every
meeting involving a stakeholder who may provide input. This
could include any meeting with an interested party, the
solicitation of any data, or a meeting between an Agency
Secretary and the CEO of a business that may be impacted by a
regulation. In addition, each notice provided through the OAL
Register is likely to involve numerous bureaucratic steps for
review within each agency (legal, regulatory, and executive
staff, at a minimum). As a result, this bill may have the
unintended effect of discouraging state agencies from engaging
interested parties in advance of the formal regulatory process,
which is contradictory to the bill's premise.
Recommended Amendments: The author may wish to consider amending
the bill to narrow the scope and clarify the definition of
"meeting or report" that is subject to publication in the
Register. Alternatively, the bill could be amended to require
state agencies to involve parties who would be subject to all
proposed regulations prior to publishing a notice of proposed
action, rather than just those agencies proposing to adopt
complex or numerous regulations, as specified in current law.
PROPOSED AUTHOR AMENDMENTS would make the following changes:
Specify that the notice requirements apply to a "meeting
or hearing" seeking public input, rather than "meeting or
report."
Prescribe the contents of notices that must be printed
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in the Register.
Delete the term "but are not limited to" in the
provision that defines the meetings and hearings that
require notice.
Specify that informational reports do not include
standard rulemaking documents that are required as part of
the rulemaking process.
COMMITTEE AMENDMENTS would delete the current provisions and
instead require state agencies to engage interested parties in
public discussions before proposing regulations.