BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  SB 401
          Author:   Hueso (D)
          Amended:  4/8/13
          Vote:     21

           
           SENATE TRANSPORTATION & HOUSING COMMITTEE  :  11-0, 4/30/13
          AYES:  DeSaulnier, Gaines, Beall, Cannella, Galgiani, Hueso,  
            Lara, Liu, Pavley, Roth, Wyland

           SENATE APPROPRIATIONS COMMITTEE  :  6-0, 5/20/13
          AYES:  De León, Walters, Gaines, Hill, Padilla, Steinberg
          NO VOTE RECORDED:  Lara


           SUBJECT  :    Administrative practices

           SOURCE  :     Author


           DIGEST  :    This bill requires any state entity proposing  
          amendments to non-residential model building codes, and when  
          requested for new standards within the model codes, to estimate  
          the cost of compliance and the potential benefits of the new  
          standard as well as disclose the assumptions used to determine  
          the estimates.

           ANALYSIS  :    The California Building Standards Law establishes  
          the California Building Standards Commission (BSC) and the  
          process for adopting state building standards.  Under this  
          process, state agencies propose building standards for building  
          types under their jurisdiction.  For example, the Department of  
          Housing and Community Development is the relevant state agency  
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          for residential building standards.  The Office of Statewide  
          Health Planning and Development is responsible for hospitals and  
          clinics, and the Division of the State Architect is the relevant  
          agency for schools and emergency service buildings.  In  
          addition, the California Energy Commission develops building  
          standards relating to energy efficiency for all occupancies.  

          State agencies begin with a model code developed by a national  
          code-writing entity.  They then propose amendments to the model  
          codes to reflect California needs and priorities and submit to  
          the BSC the amended model codes.  The BSC must then adopt,  
          modify, or reject the proposed building standards.  

          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 of whether or not the  
          changes would have a significant effect on housing costs and,  
          separately, a description of all cost impacts known to the  
          agency that a representative private person or business would  
          necessarily incur in reasonable compliance with the proposed  
          action.  If the agency is unaware of cost impacts on private  
          persons or businesses, it may state that instead.  

          AB 1612 (Lara, Chapter 471, Statutes of 2012), requires the ISOR  
          for any California amendment to a model building code that  
          impacts housing to include the estimated cost of compliance, the  
          estimated potential benefits, and the related assumptions used  

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          to determine the estimates.  For changes in the model codes  
          themselves, AB 1612 requires the ISOR to include the estimated  
          cost of compliance, the estimated potential benefits, and the  
          related assumptions used to determine the estimates for that  
          specific change only if an interested party has made a request  
          to the agency to examine that specific section.  No longer may a  
          state agency developing building standards that relate to  
          housing state that changes to the standards do not have a  
          significant effect on housing costs without publicly  
          substantiating that determination with cost data. 

          This bill:

          1.Applies the AB 1612 ISOR rules to any building standard, not  
            just a building standard that impacts housing.

          2.Requires any state entity proposing building codes to include  
            in the ISOR the estimated cost of compliance, the estimated  
            potential benefits, and the related assumptions used to  
            determine the estimates for any California amendment to a  
            model building code.

          3.Requires a state entity include in the ISOR the estimated cost  
            of compliance, the estimated potential benefits, and the  
            related assumptions used to determine the estimates for any  
            change in the model codes themselves if an interested party  
            has made a request to the agency to examine that specific  
            section.

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

          According to the Senate Appropriations Committee:

             Potential costs to the BSC of up to $89,000 annually for  
             estimating impacts and underlying assumptions for all  
             building standards, and for sections of the model codes upon  
             request (Building Standards Administration Special Revolving  
             Fund).

             Minor costs to other state agencies who propose building  
             standards regulations (General Fund, various special funds).

           SUPPORT  :   (Verified  5/21/13)

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          American Council of Engineering Companies - California 
          Building Owners and Managers Association of California 
          California Apartment Association 
          California Association of Realtors 
          California Building Industry Association 
          California Business Properties Association 
          California Chamber of Commerce 
          Commercial Real Estate Development Association - National  
            Association of Industrial And Office Properties of California 
          International Council of Shopping Centers


           ARGUMENTS IN SUPPORT  :    According to the author's office, it is  
          critical to consider the impacts of changes in state building  
          standards on all businesses, not just on the residential  
          construction industry.  If an agency is able to make the  
          determination that a new standard will have no significant  
          impact on business, it should know what the proposed standard  
          will cost.  This bill creates parity between residential and  
          non-residential building standards.


          JA:nk  5/21/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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