BILL ANALYSIS Ó AB 1286 Page 1 Date of Hearing: May 20, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 1286 (Mayes) - As Amended May 4, 2015 ----------------------------------------------------------------- |Policy |Jobs, Economic Development, |Vote:|9 - 0 | |Committee: |and the Economy | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill establishes the California Regulatory Reform Council (Council) to make reports and recommendations to the Legislature and the Governor related to the structure, organization, operation, and impact of all levels of state and local AB 1286 Page 2 regulations on industries operating within the state. Repeals the council on January 1, 2022. Specifically, this bill: 1)Establishes the 13 member council under the executive branch for the purposes of expenditures for the support of the council, including the expenses of the members of the council, but specifies the council shall not be subject to the control or direction of any officer or employee of the executive branch, except in connection with the appropriation of funds approved by the Legislature. 2)Specifies the functions and makeup of the board, including five appointed by the Governor, two appointed by the Senate, two appointed by the Assembly, two members of the Senate, two members of the Assembly, to serve two-year terms without compensation, except for travel. Requires members to be appointed by March 1, 2016 and hold their first meeting by April 1, 2016. 3)Requires, by January 1, 2017, the council to establish a website and post the following: a list of its ongoing activities; the agenda, list of individuals who testified, and background materials distributed by the council for each meeting; copies of final reports prepared by the council or on behalf of the council. Requires all materials required to be posted to remain accessible from the Internet Web site until January 1, 2022. FISCAL EFFECT: General Fund administrative costs, likely in excess of $1 million, for seven positions, through January 1, 2022. This bill creates a new council to provide recommendations on structure, organization, operation, and impact of all levels of state and AB 1286 Page 3 local regulations on "specific" industries operating within the state. However, the "specific" industries are not identified. The council will need staff to research thousands of regulations, produce meeting agendas, facilitate meetings, and draft a final report. Technical expertise will also be needed to create, monitor and update a new website. COMMENTS: 1)Purpose. This measure proposes the establishment of a Council to provide additional review of selected regulations as to their impact on specific industry sectors. The bill does not define "specific" industry sectors. 2)Opposition. The California Labor Federation is opposed to this bill, stating it would add unnecessary layers of bureaucracy to a regulatory system that currently adequately meets the needs of the public and the Legislature. They note the exhaustive regulatory review process under the Administrative Procedures Act and AB 617 (2011) which further requires a rigorous economic impact analysis to be completed for regulations with significant costs. 3)Related legislation. a) AB 19 (Chang), pending in this committee, requires the Governor's Office of Business and Economic Development (GO-Biz), in consultation with the Office of the Small Business Advocate, to establish a process for the ongoing review of existing regulations adopted prior to January 1, 2016, primarily those affecting small businesses, to AB 1286 Page 4 determine whether the regulations could be less administratively burdensome or costly to affected sectors. b) AB 2723 (Medina) of 2014 proposed a review of costs associated with regulations on the small business be considered when state agencies undertake their economic impact assessment for major regulations. The Governor's veto message of this bill is as follows: This bill would require the economic analysis for major regulations to include a separate assessment of the impact on sole proprietorships and small businesses. I signed legislation in 2011 to require a comprehensive economic analysis of proposed major regulations. The analysis must assess whether, and to what extent, the proposed regulations will affect all California jobs and businesses. Agencies must also identify alternatives that would lessen any adverse impact on small businesses. I am not convinced that an additional layer of specificity based solely on the legal structure of a business would add value to the comprehensive economic analysis already required. c) SB 617 (Calderon), Chapter 496, Statutes of 2011, revises the state Administrative Procedure Act to require each state agency adopting a major regulation to prepare an economic impact analysis and requires state agencies to implement ongoing monitoring of internal auditing and financial controls and other best practices in financial accounting AB 1286 Page 5 Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081