BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | SB 401| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED SB 401 Page 2 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 CONTINUED SB 401 Page 3 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) CONTINUED SB 401 Page 4 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 **** END **** CONTINUED