BILL ANALYSIS                                                                                                                                                                                                    



                                                                        AB 12


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          ASSEMBLY THIRD READING


          AB  
          12 (Cooley)


          As Amended  April 22, 2015


          Majority vote


           ------------------------------------------------------------------ 
          |Committee       |Votes |Ayes                 |Noes                |
          |                |      |                     |                    |
          |                |      |                     |                    |
          |----------------+------+---------------------+--------------------|
          |Accountability  |9-0   |Salas, Lackey,       |                    |
          |                |      |Brough, Burke,       |                    |
          |                |      |Frazier, Beth        |                    |
          |                |      |Gaines, Irwin,       |                    |
          |                |      |Medina, Rodriguez    |                    |
          |                |      |                     |                    |
          |----------------+------+---------------------+--------------------|
          |Appropriations  |17-0  |Gomez, Bigelow,      |                    |
          |                |      |Bonta, Calderon,     |                    |
          |                |      |Chang, Daly, Eggman, |                    |
          |                |      |Gallagher,           |                    |
          |                |      |                     |                    |
          |                |      |                     |                    |
          |                |      |Eduardo Garcia,      |                    |
          |                |      |Gordon, Holden,      |                    |
          |                |      |Jones, Quirk,        |                    |
          |                |      |Rendon, Wagner,      |                    |
          |                |      |Weber, Wood          |                    |
          |                |      |                     |                    |
          |                |      |                     |                    |
           ------------------------------------------------------------------ 








                                                                        AB 12


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          SUMMARY:  Requires state agencies and departments to review,  
          adopt, amend or repeal any applicable regulations that are  
          duplicative, overlapping, inconsistent, or out of date.   
          Specifically, this bill:



          1)Requires state agencies, on or before January 1, 2018, to adopt,  
            amend or repeal, using procedures provided in current law, those  
            regulations identified as duplicative, overlapping, inconsistent  
            or out of date.



          2)Requires state agencies to hold public hearings, notice on the  
            Internet and accept public comment, as specified.



          3)Requires state agencies to notify the appropriate policy and  
            fiscal committees of the Legislature of the proposed revisions  
            to regulations.



          4)Requires state agencies to report to the Governor and the  
            Legislature the number and content of the regulations identified  
            as duplicative, overlapping, inconsistent or out of date.



          5)Requires specified agencies to identify any existing regulations  
            of a department, board, or other unit within that agency that  
            are duplicative, overlapping or inconsistent with regulations of  
            other departments, boards or units within that agency.










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          6)Requires the provisions of this bill remain in effect only until  
            January 1, 2019, unless later statute is enacted that deletes or  
            extends that date.

          EXISTING LAW:  

          1)Establishes, under the Administrative Procedure Act (APA), basic  
            minimum procedural requirements for the adoption, amendment, or  
            repeal of administrative regulations.

          2)Permits an agency, subject to the approval of the Office of  
            Administrative Law (OAL), to add to, revise or delete text  
            published in the California Code of Regulations (CCR) without  
            complying with the rulemaking procedures specified in the APA  
            only if the change does not materially alter any requirement,  
            right, responsibility, condition, prescription or other  
            regulatory element of any CCR provision.

          FISCAL EFFECT:  According to the Assembly Appropriations  
          Committee:


          1)Annual costs (for two years) to the OAL of approximately  
            $695,000 (General Fund) for seven additional positions (five  
            attorneys, one legal analyst, and one office technician) and  
            additional rent and supplies, to accommodate the additional  
            workload within the two-year timeframe.


          2)One-time costs of approximately $50,000 (General Fund) to OAL  
            for office equipment associated with the additional staff.



          3)Unknown, but potentially significant costs to state agencies to  
            review and revise, as necessary, all existing regulations.   
            Departments with a large number of regulations may require  
            additional staff, managerial oversight, and administrative  








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            support to accommodate the increased workload, public hearings,  
            and reporting requirements.  There are currently over 200 state  
            agencies and departments with nearly 53,000 active regulations.



          COMMENTS:  In October of 2011, the Little Hoover Commission (LHC)  
          published a report titled, Better Regulation: Improving  
          California's Rulemaking Process.  The LHC included several  
          recommendations for improving the state's rulemaking process,  
          including that the state should establish a look-back mechanism to  
          determine if regulations are still needed and whether or not they  
          work.



          The author's approach to this "look-back mechanism" is to create a  
          two-year window within which agencies, and the departments, boards  
          and other units within them, must review all regulations that  
          pertain to the mission and programs under their statutory  
          authority.  Upon completion of this review, the identified  
          regulations that are deemed to be duplicative, overlapping,  
          inconsistent or out of date may be repealed using the existing  
          processes already provided in the APA.  This bill also allows for  
          public hearings and comment and requires regulatory changes be  
          reported to the Legislature and the Governor.



          The provisions of this bill sunset on January 1, 2019, making the  
          regulatory review, as outlined in this bill, a one-time  
          application.  Under current law, any state agency may review,  
          adopt, amend or repeal any regulation within its statutory  
          authority at any time.  The OAL reports that as of December 26,  
          2014, (Register 2014, No. 52) the number of regulations adopted  
          totaled 67,176.  Of those, state agencies had repealed 14,319,  
          leaving 52,857 regulations still active.  This represents a repeal  
          rate of just over 21%.  









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          Whether this 21% regulatory repeal rate is robust enough remains a  
          question.  Both the LHC and the author believe more needs to be  
          done.  The author states, "?numerous economists and business  
          leaders agree that one of the greatest obstacles to California job  
          growth is the 'thicket' of government regulations that constrain  
          business owners."  The author's bill recognizes that state  
          agencies "may" review their regulatory framework at any time, but  
          specifies that state agencies "shall" review their regulatory  
          framework within the two-year timeframe as provided.  



          Finally, this bill contains language stating it is not meant to  
          weaken or undermine established statute, or to affect the  
          authority state agencies have to promulgate regulations.  A  
          January 1, 2019, sunset date will ensure no long-term changes to  
          current APA requirements.




          Analysis Prepared by:                                               
                          William Herms / A. & A.R. / (916) 319-3600  FN:  
          0000627