BILL ANALYSIS                                                                                                                                                                                                    



          SENATE COMMITTEE ON APPROPRIATIONS
                             Senator Ricardo Lara, Chair
                            2015 - 2016  Regular  Session

          AB 12 (Cooley) - State government:  administrative regulations:   
          review
          
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          |Version: April 22, 2015         |Policy Vote: G.O. 13 - 0        |
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          |Urgency: No                     |Mandate: No                     |
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          |Hearing Date: August 24, 2015   |Consultant: Mark McKenzie       |
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          This bill meets the criteria for referral to the Suspense File. 







          Bill  
          Summary: AB 12 would require every state agency to review all  
          provisions of the California Code of Regulations (CCR) it has  
          adopted, and to adopt, amend, or repeal any regulations  
          identified as duplicative, overlapping, or out of date by  
          January 1, 2018.


          Fiscal  
          Impact:  
           Office of Administrative Law (OAL) costs of approximately  
            $744,000 in the 2016 calendar year and approximately $695,000  
            in 2017 for 7 PY of full-time, limited-term staff and  
            associated costs to manage a significant increase in workload  







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            over two years. (General Fund)

           Unknown, major aggregate state costs, likely in the millions  
            and potentially over ten million annually for two years, for  
            over 200 state agencies to review all current regulations,  
            make necessary revisions to identified regulations through the  
            Administrative Procedure Act (APA) process, coordinate with  
            other agencies and departments, and report to the Governor and  
            Legislature. (General Fund and various special funds)


          Background:  The Administrative Procedures Act (APA) requires the Office of  
          Administrative Law to ensure that state agency regulations are  
          clear, necessary, legally valid, and available to the public.   
          In seeking adoption of a proposed regulation, state agencies  
          must comply with procedural requirements that include publishing  
          the proposed regulation along with a supporting statement of  
          reasons, mailing and publishing a notice of the proposed action  
          45 days before a hearing or before the close of the public  
          comment period, and submitting a final statement to OAL that  
          summarizes and responds to all objections, recommendations and  
          proposed alternatives raised during the public comment period.   
          The OAL is then required to approve or reject the proposed  
          regulation within 30 days.

          The OAL is responsible for reviewing administrative regulations  
          proposed by over 200 state regulatory agencies for compliance  
          with the standards set forth in the APA, for transmitting these  
          regulations to the Secretary of State and for publishing  
          regulations in the California Code of Regulations (CCR).  On  
          average, OAL reviews nearly 600 files that affect approximately  
          4,000 regulations packages per year.  In 2014, 4,761 proposed  
          regulations were submitted by state agencies for APA review.   
          There are currently nearly 53,000 active regulations in the CCR.

          Existing law requires OAL, at the request of any standing,  
          select, or joint committee of the Legislature, to initiate a  
          priority review of any regulation that committee believes does  
          not meet the standards of necessity, authority, clarity,  
          reference, and nonduplication.  If OAL is made aware of an  
          existing regulation for which statutory authority has been  
          repealed or becomes ineffective, it must order the agency that  
          adopted the regulation to show cause why it should not be  
          repealed, and notify the Legislature of the order.








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          Proposed Law:  
            AB 12 would require each state agency, as defined, to review  
          all provisions of the California Code of Regulations (CCR)  
          adopted by that agency and adopt, amend, or repeal regulations  
          identified as duplicative, overlapping, inconsistent, or out of  
          date.  An agency acting on this requirement must hold at least  
          one noticed public meeting to accept public comment, and notify  
          the appropriate committees of the Legislature of the proposed  
          revisions to regulations prior to initiating the APA process.   
          Each state agency must also report to the Governor and  
          Legislature on the number and content of regulations identified  
          as duplicative, overlapping, inconsistent, or out of date, and  
          the agency's actions to address those regulations.  Each agency  
          must complete all of these duties by January 1, 2018.
          The bill also requires each cabinet-level agency, by January 1,  
          2018, to notify departments, boards, or other units within the  
          agency of any regulations it has adopted that may be  
          duplicative, overlapping, or inconsistent with a regulation  
          adopted by another department, board, or unit within the agency.  
           A department within an agency must notify that agency of any  
          proposed revisions to regulations at least 90 days prior to the  
          specified noticed public hearing noted above, and the agency  
          must review the proposal and make recommendations to the  
          department within 30 days.  Cabinet-level agencies must also  
          notify other agencies of existing regulations that may  
          duplicate, overlap, or be inconsistent with that agency's  
          regulations.


          The bill's provisions would sunset on January 1, 2019.




          Related  
          Legislation:  SB 981 (Huff), which was held in the Senate  
          Governmental Organization Committee in 2014, would have required  
          state agencies to review regulations adopted in the past and  
          report specified information on each regulation to the  
          Legislature, including whether a regulation is duplicative,  
          still relevant, or needs to be updated to be less burdensome or  
          more effective.








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          SB 366 (Calderon), which was referred to the Senate Governmental  
          Organization Committee in 2011 but never heard, included  
          provisions that were nearly identical to the introduced version  
          of this bill.




          Staff  
          Comments:  This bill is intended to implement a recommendation  
          from an October, 2011 Little Hoover Commission Report entitled  
          Better Regulation: Improving California's Rulemaking Process.   
          Among the Commission's recommendations was a suggestion that the  
          state establish a "look-back" mechanism to determine if  
          regulations are effective and still necessary.
          The last comprehensive review of state agency regulations  
          occurred when OAL was established in 1980.  At that time there  
          were over 125 state agencies and over 40,000 regulations printed  
          in the CCR, and today there are over 200 agencies and nearly  
          53,000 regulations.  In addition, OAL had a staff of 50  
          employees, including 17 attorneys, while they currently have a  
          staff of 20, half of which are attorneys.  OAL anticipates it  
          would need an additional five attorneys and two support staff on  
          a full-time, limited-term basis to manage the significant  
          increase in workload to ensure compliance with the APA for state  
          agency proposals to adopt, amend, or repeal regulations over the  
          next two years.  Anticipated staff costs are noted above.


          AB 12 would impose significant costs on every state office,  
          department, board, bureau, and commission to review all  
          regulations that each entity has in the CCR,  and adopt, amend,  
          or repeal any that are identified as duplicative, overlapping,  
          inconsistent, or outdated.  The bill would also require  
          cabinet-level agencies to review the regulations of all of their  
          constituent entities and notify them of any duplication,  
          inconsistency, or overlap with the regulations of one of its  
          other constituent entities.  Costs are difficult to quantify in  
          the aggregate since there are over 200 entities that must review  
          regulations, and costs and staffing needs would vary for each of  
          them.  For individual agencies, costs could be relatively minor  
          for smaller state entities that have few regulations in the CCR,  
          but likely in the low hundreds of thousands annually for two  
          years for many other agencies that have more, and/or more  








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          complex regulations on the books.  Some state entities may have  
          costs that exceed $1 million for each of the next two years.


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