BILL ANALYSIS Ó AB 12 Page 1 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 Page 2 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to review, adopt, amend or repeal any applicable regulations that are duplicative, overlapping, inconsistent, or out of date.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using procedures provided in current law, those regulations identified as duplicative, overlapping, inconsistent or out of date. 2)Requires state agencies to hold public hearings, notice on the Internet and accept public comment, as specified. 3)Requires state agencies to notify the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and the Legislature the number and content of the regulations identified as duplicative, overlapping, inconsistent or out of date. 5)Requires specified agencies to identify any existing regulations of a department, board, or other unit within that agency that are duplicative, overlapping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. AB 12 Page 3 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 AB 12 Page 4 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%. AB 12 Page 5 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