BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
                              Senator Isadore Hall, III
                                        Chair
                                2015 - 2016  Regular 

          Bill No:           AB 12            Hearing Date:    7/14/2015
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          |Author:    |Cooley                                               |
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          |Version:   |4/22/2015    Amended                                 |
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          |Urgency:   |No                     |Fiscal:      |Yes             |
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          |Consultant:|Arthur Terzakis                                      |
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          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          inconsistent, or out of date and revise those identified  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  







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            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.








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          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








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          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,  








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          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








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          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.