BILL ANALYSIS                                                                                                                                                                                                    Ó



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

          Bill No:           SB 1140          Hearing Date:    4/12/2016
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          |Author:    |Moorlach                                             |
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          |Version:   |2/18/2016    Introduced                              |
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          |Urgency:   |No                     |Fiscal:      |No              |
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          |Consultant:|Felipe Lopez                                         |
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          SUBJECT: Legislature:  operation of statutes


            DIGEST:    This bill requires the automatic repeal of a statute  
          that expressly or implicitly authorizes an executive agency to  
          promulgate regulations two years after the statute goes into  
          effect, unless the Legislature amends the statute to state its  
          intent that the statute not be repealed, or unless the statute  
          was passed in response to an emergency, as defined.

          ANALYSIS:
          
          Existing law:
          
          1)Specifies the dates by which enacted statutes go into effect. 

          2)Specifies that any statute may be repealed at any time, except  
            when vested rights would be impaired.  

          3)Specifies that every concurrent and joint resolution takes  
            effect upon filing of it with the Secretary of State.

          4)Governs, under the Administrative Procedure Act (APA), the  
            process for adoption, amendment, or repeal of regulations by  
            state agencies charged with the implementation of statutes,  
            and for legal review of those regulatory actions.

          5)Establishes the Office of Administrative Law (OAL) to ensure  
            that agency regulations are clear, necessary, legally valid,  







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            and available to the public.

          6)Directs the 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 necessity, authority, clarity,  
            reference, and non-duplication, as defined. 

          7)Specifies that if OAL is notified of, or on its own becomes  
            aware of, an existing regulation for which the statute has  
            been repealed or becomes ineffective, then the OAL shall order  
            the agency to show cause as to why the regulation should not  
            be repealed, and shall notify the Legislature in writing of  
            this order. 

          This bill:

          1)Requires that a statute that expressly authorizes an executive  
            agency to promulgate regulations, or that gives a new duty or  
            power to an executive agency, shall be repealed two years  
            after it goes into effect, unless the Legislature amends the  
            statute before its repeal to expressly state the Legislature's  
            intent that the statute not be repealed.

          2)Specifies that the provisions of this bill shall not apply to  
            either of the following:

             a)   An agency that is constitutionally created.
             b)   A statute that is passed in response to a "state of war  
               emergency," as defined, "state of emergency," or a "local  
               emergency," as defined.

          Background

          Purpose of the bill.  The author argues that, "existing law  
          lacks true checks and balances over new regulations.   
          Bureaucracies sometimes produce regulations beyond the intent of  
          the original law, yet there is insufficient oversight on this  
          process.  With a built-in sunset, it would provide legislators a  
          vehicle through which to affirm good regulations and to stop  
          others that may be deemed excessive or contrary to a bill's  
          original intent.  Providing a path for the Legislature to review  
          regulations could remedy California's hostile regulatory  
          environment, which puts extreme burdens on certain industries  
          and affects the state's business climate."








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          Office of Administrative Law.  The Office of Administrative Law  
          ensures that agency regulations are clear, necessary, legally  
          valid and available to the public.  OAL is responsible for  
          reviewing administrative regulations proposed by over 200 state  
          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. 

          The OAL assists state regulatory agencies through a formal  
          training program, as well as through other less formal methods,  
          to understand and comply with the APA.  The OAL also accepts  
          petitions challenging rules issued by state agencies which meet  
          the APA's definition of a "regulation" but were not adopted  
          pursuant to the APA process and are not expressly exempt. 

          The APA is designed to provide the public with a meaningful  
          opportunity to participate in the adoption of the rulemaking  
          process through various opportunities to comment on proposed  
          regulations. 

          Regulatory Process.  Before any state agency can adopt a new  
          regulation, the APA requires OAL to review a proposed regulation  
          using the following standards: necessity, authority, clarity,  
          consistency, reference, and non-duplication.  For purposes of  
          the APA, "necessity" means that "the record of the rulemaking  
          proceeding demonstrates by substantial evidence the need for a  
          regulation to effectuate the purpose of the statute, court  
          decision, or other provision of law that the regulation  
          implements, interprets, or makes specific, taking into account  
          the totality of the record."

          In addition, the APA defines "authority" as "the provision of  
          law which permits or obligates the agency to adopt, amend, or  
          repeal a regulation."  

          Staff Comments.  The APA already establishes a mechanism to  
          ensure that any regulation proposed by any state agency is  
          consistent and within the scope of any statute.  In other words  
          no regulations could ever be adopted without express, statutory  
          authorization by the Legislature. 

          In addition, the Legislature already has a system of checks and  
          balances through their authority to demand that the OAL review  








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          any regulation that the Legislature believes does not meet the  
          standards of necessity, authority, clarity, reference, and  
          non-duplication.

          Prior/Related Legislation
          
          ACA 1 (Donnelly, 2014) would have amended the California  
          Constitution to require state agencies to submit all regulations  
          that have been approved by the OAL to the Legislature for final  
          approval.  (Held in Assembly Accountability and Administrative  
          Review Committee)

          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 specified information.   
          (Held in Senate Governmental Organization Committee)

          AB 1982 (Gorrell, 2012) would have increased the effective date  
          for a regulation or an order of repeal of a regulation from 20  
          to 90 days and would have required OAL to forward a copy of each  
          major regulation to the Legislature for review.  (Held on the  
          Assembly Appropriations Committee Suspense File)

          SB 366 (Calderon, 2012) would have required each state agency to  
          review its regulations to identify duplicative, overlapping,  
          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  
          Senate Governmental Organization Committee) 

          SB 401 (Fuller, 2012 Session) would have required every  
          regulation proposed by an agency after January 1, 2012, to  
          include a provision repealing the regulation in 5 years. (Held  
          in Senate Environmental Quality Committee)

          SB 617 (Ron Calderon, Chapter 496, Statutes of 2010) 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. 

          FISCAL EFFECT:                 Appropriation:  No    Fiscal  
          Com.:             No           Local:          No









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            SUPPORT:  

          None received

          OPPOSITION:

          None received

          DUAL REFERRAL:  Senate Rules Committee