BILL ANALYSIS Ó SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION Senator Isadore Hall, III Chair 2015 - 2016 Regular Bill No: AB 12 Hearing Date: 7/14/2015 ----------------------------------------------------------------- |Author: |Cooley | |-----------+-----------------------------------------------------| |Version: |4/22/2015 Amended | ----------------------------------------------------------------- ------------------------------------------------------------------ |Urgency: |No |Fiscal: |Yes | ------------------------------------------------------------------ ----------------------------------------------------------------- |Consultant:|Arthur Terzakis | | | | ----------------------------------------------------------------- SUBJECT: State government: administrative regulations: review DIGEST: This bill requires each state agency, on or before January 1, 2018, to review, adopt, amend or repeal any applicable regulations that are duplicative, overlapping, inconsistent, or out of date and revise those identified regulations, as specified. ANALYSIS: Existing law: 1)Provides a process, known as the Administrative Procedure Act (APA), for the adoption, amendment, or repeal of regulations by state agencies charged with the implementation of statutes, and for legal review of those regulatory actions by the Office of Administrative Law (OAL). (Government Code Section 11340 et seq.) 2)Directs OAL, at the request of any standing, select, or joint committee of the Legislature, to initiate a priority review of any regulation that the committee believes does not meet the standards of (a) necessity, (b) authority, (c) clarity, (d) reference, and (e) nonduplication. (Government Code Section 11349.7) 3)Specifies that if OAL is notified of, or on its own becomes aware of, an existing regulation for which the statutory authority has been repealed or becomes ineffective, then the AB 12 (Cooley) Page 2 of ? OAL shall order the agency to show cause why the regulation should not be repealed, and shall notify the Legislature in writing of this order. (Government Code Section 11349.8) 4)Authorizes an agency that is considering adopting, amending, or repealing a regulation to consult with interested persons before initiating any regulatory action. (Government Code Section 11346) 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 at least one public hearing, notice that hearing on the Internet and accept public comment on proposed revisions. 3)Requires state agencies to notify the appropriate policy and fiscal committees of the Legislature of the proposed revisions to regulations, and then to report to the Governor and the Legislature the number and content of the regulations identified as duplicative, overlapping, inconsistent, or out of date and actions to address those regulations. 4)Requires specified agencies to identify any existing regulations of a department, board, or other unit within that agency that may be duplicative, overlapping or inconsistent with regulations of other departments, boards or units within that agency. 5)Contains various legislative findings that the APA does not require agencies to individually review their regulations to identify overlapping, inconsistent, duplicative, or out-of-date regulations that may exist. Also, finds and declares that it is important that state agencies systematically undertake to identify, publicly review, and eliminate overlapping, inconsistent, duplicative, or out-of-date regulations, both to ensure they more efficiently implement and enforce laws and to reduce unnecessary and outdated rules and regulations. 6)Contains a January 1, 2019 sunset provision. AB 12 (Cooley) Page 3 of ? Background Purpose of AB 12. The author's office notes that "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." 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, the number of regulations adopted totaled 67,176. Of those, state agencies had repealed 14,319, or approximately 21%. With 52,857 regulations still active, the author believes more needs to be done. This bill requires state agencies to review their regulatory framework within a two-year timeframe. The author's office cites an October 2011 report published by the Milton Marks Little Hoover Commission on California State Government Organization and Economy (Little Hoover Commission) titled, Better Regulation: Improving California's Rulemaking Process which contained several recommendations for improving the state's rulemaking process, including the state establishing a look-back mechanism to determine if regulations are effective and still needed. According to the author's office, this bill is intended to implement the "look-back mechanism" approach by establishing 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 provides for public hearings and comments and requires that regulatory changes be reported to the Legislature and the Governor. Staff comments. While it is no doubt true that California has seen a significant increase in the volume and scope of administrative agency regulations in recent years, it should be noted that none of those regulations could ever have been adopted without express, statutory authorization by the Legislature. Prior/Related Legislation AB 12 (Cooley) Page 4 of ? AB 797 (Steinorth, 2015) requires OAL to submit to the appropriate policy committees of each house of the Legislature for review a copy of each major regulation that it submits to the Secretary of State. The bill also provides that a regulation does not become effective if the Legislature passes a statute to override the regulation. (Held in this committee at author's request) SB 981 (Huff, 2014) would have required each state agency to review each regulation adopted prior to January 1, 2014, and to develop a report to the Legislature containing prescribed information. (Held in this Committee) SB 617 (Calderon, Chapter 496, Statutes of 2011) revised various provisions of the APA and required each state agency to prepare a standardized regulatory impact analysis, as specified, with respect to the adoption, amendment, or repeal of a major regulation, proposed on or after November 1, 2013. SB 591 (Gaines, 2011) would have enacted the California Smart Regulation Act and required state agencies to reduce the total number of regulations they impose by 33 percent. (Held in this Committee) SB 553 (Fuller, 2011) would have required that a regulation or an order of repeal of a regulation that has been identified by the agency as having, or as being reasonably likely to have, an adverse economic impact of at least $10 million become effective 180 days after the date it is filed with the Secretary of State, except as provided. (Held in this Committee) SB 401 (Fuller, 2011), among other things, would have required every regulation proposed by an agency after January 1, 2012, include a provision repealing the regulation in 5 years. (Held in Senate Environmental Quality Committee) SB 396 (Huff, 2011) would have required each agency to review each regulation adopted prior to January 1, 2011, and develop a report with prescribed information to be submitted to the Legislature on or before January 1, 2013. (Held in Senate Environmental Quality Committee) SB 366 (Calderon, 2011) would have required each state agency to review its regulations to identify duplicative, overlapping, AB 12 (Cooley) Page 5 of ? inconsistent or outdated provisions and repeal or amend identified regulations. Also, would have created a Streamlined Permit Review Team charged with improving the efficiency of the state permitting process for development projects. (Held in this Committee) AB 429 (Knight, 2011) would have required an agency, for any regulation that it has identified as having a gross cost of $15million or more, an increased cost of 5% or more over the cost of an existing regulation, or both, to submit a copy of the rulemaking record for that regulation to the appropriate policy committee in each house of the Legislature when the agency submits the regulation to OAL for approval. (Held in Assembly policy committee) SB 942 (Dutton, 2010) would have established an Economic Analysis Unit within OAL and would have required agencies to make publicly available and submit to the unit specified cost estimates related to a proposed regulation and specified information used to develop the cost estimates. (Held in Senate Appropriations Committee) FISCAL EFFECT: Appropriation: No Fiscal Com.: Yes Local: No SUPPORT: American Federation of State, County and Municipal Employees Associated Builders and Contractors of California Building Owners and Managers Association of California California Asian Pacific Chamber of Commerce California Association of Bed & Breakfast Inns California Building Industry Association California Business Properties Association California Business Roundtable California Chamber of Commerce California Construction and Industrial Materials Association California Grocers Association California Hotel & Lodging Association California League of Food Processors California Manufacturers & Technology Association California Retailers Association California Taxpayers Association Commercial Real Estate Development Association AB 12 (Cooley) Page 6 of ? Consumer Specialty Products Association Family Business Association Industrial Environmental Association International Council of Shopping Centers National Federation of Independent Business/California Small Business California USANA Health Services, Inc. Western States Petroleum Association OPPOSITION: None received ARGUMENTS IN SUPPORT: Proponents state that "AB 12 simply directs agencies to look at their regulations and ask the basic questions of necessity, contradiction and complication. We believe that the answers to these regulations will provide greater balance to the laws and regulations and open the door for modernization as the California economy changes with the advent of new industries and technologies." Proponents also contend that reducing regulatory overlaps, contradictions, and complications would diminish the cost of compliance for California businesses without lowering environmental, health, and safety standards.