BILL ANALYSIS
AB 2529
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Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2529 (Fuentes) - As Amended: April 14, 2010
SUBJECT : State agencies: regulations: review.
SUMMARY : Requires the State Auditor (SA) to conduct a cost
benefit analysis of any proposed state agency regulation.
Specifically, this bill :
1)Extends the effective date of a regulation or an order of
repeal from the 30th day to the 60th day after filing with the
Secretary of State.
2)Requires the SA to conduct a cost benefit analysis of any
proposed regulation before an agency issues a notice of
proposed action, as specified.
3)Requires the SA to make a determination, to be included in the
cost benefit analysis, as to both of the following:
a) Whether the proposed regulation will have an annual statewide
economic cost of at least $10 million; and,
b) Whether the proposed regulation, considered in its totality,
has regulatory benefits that equal or exceed the overall
economic costs.
4)Requires the state agency proposing the regulation to provide
the SA with any information deemed necessary to conduct the
cost benefit analysis, as specified.
5)Requires the notice of proposed adoption, amendment, or repeal
of a regulation to include, among other things, the results of
the cost benefit analysis issues by the SA.
6)Requires the Office of Administrative Law (OAL) to identify
the determination made by the SA, as specified, and notify the
Committee on Appropriations of each house of the Legislature
of the determination. The notification shall include, but not
be limited to, the text of the regulation and the SA's cost
benefit analysis.
AB 2529
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7)Requires the Committee on Appropriations of each house of the
Legislature to review each regulation for which it receives a
notification from the OAL and issue a recommendation as to
whether the regulation should be invalidated by statute.
EXISTING LAW :
1)Establishes requirements for the adoption, publication,
review, and implementation of regulations by state agencies,
under the Administrative Procedure Act (APA).
2)Requires a state agency to submit to the OAL an initial
statement of reasons for proposing the adoption, amendment,
repeal of a regulation that includes a description of
reasonable alternatives to the regulation.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "While
an assessment of the economic impact on California business
enterprises and individuals comprises part of the rulemaking
process, an agency's assessment is not reviewed by an
independent third party to ensure accuracy, and therefore could
result in regulations with significant adverse economic impacts
on Californians, impacts that may not have been the intent of
the legislature's original statute. This bill remedies this
deficiency."
Background . The APA governs the adoption of regulations by
state agencies for purposes of ensuring that they 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 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 which summarizes
and responds to all objections, recommendations, and proposed
alternatives that were raised during the public comment period.
The OAL is then required to approve or reject the proposed
regulation within 30 days.
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More specifically related to this bill, the APA requires an
evaluation of the negative impact a proposed regulation would
have on businesses and reasonable alternatives that would
eliminate undue burdens. The APA also requires state agencies
to justify their proposed regulations by evaluating the
technical and empirical evidence that supports the proposed
regulation in comparison to reasonable alternatives.
In 1993, President Clinton signed Executive Order 12866, which
dealt with regulatory planning and review. The Executive Order
gave the Office of Information and Regulatory Affairs, within
the Office of Management and Budget, the power to review and
edit agency regulations and made cost-benefit analyses a
significant factor in rulemaking. At the federal level,
agencies must conduct a cost-benefit analysis and select the
least costly, most cost-effective, or least burdensome
alternative before promulgating any proposed or final rule that
may result in expenditures of $100 million or more in any one
year or adversely affect the economy, productivity, competition,
jobs, the environment, public health or safety or State, local,
or tribal government or communities. This bill seeks to achieve
similar regulatory benefits within the state.
Support . Supporters argue, "This approach should be adopted in
California to provide more transparency on the true costs and
benefits of significant regulations. With valid information
agency officials and lawmakers can work to improve regulations,
provide mitigating support for impacted parties, or otherwise
address the issue within their discretion or authority. As a
result, the public will have more confidence that government is
working for their best interests and considering all relevant
factors in regulatory decision making."
Related legislation .
AB 2466 (Smyth) would revise a regulation's effective date from
30 to 90 days after the filing date with the Secretary of State
and require the OAL to submit a copy of the regulation to the
Legislature for review. This bill will be heard in this
committee on April 20, 2010.
AB 2603 (Gaines) would require every state agency to reduce its
total number of regulations by 33% by December 31, 2012. This
bill will be heard in this committee on April 20, 2010.
AB 2529
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AB 2738 (Niello) would require a state agency, when submitting
proposed regulations to OAL, to acknowledge that the imposition
of a performance standard is generally the preferred alternative
to mandating specific methods of compliance, identify and
describe the elements of a regulation that require, or may
require through at least one alternative method of compliance,
the use of specific technologies, equipment, actions, or
procedures, or other potentially proprietary compliance scheme,
methodology, or process, and provide a justification for
departing from the acknowledged preference of imposing
performance standards and a detailed specification as to why
certain technologies, equipment, actions, or procedures are
required to meet the goals of the regulation, instead of
imposing a performance standard. This bill will be heard in
this committee on April 20, 2010.
REGISTERED SUPPORT / OPPOSITION :
Support
Automotive Aftermarket Industry Association
California Automotive Wholesalers' Association
California Building Industry Association
California Business Properties Association
California Chapter of the American Fence Association
California Construction and Industrial Materials Association
California Fence Contractors' Association
California Forestry Association
California Grocers Association
California Independent Oil Marketers Association
California League of Food Processors
California Manufacturers & Technology Association
California Retailers Association
California Taxpayers Association
Chemical Industry Council of California
Consumer Specialty Products Association
Engineering Contractors' Association
Flasher/Barricade Association
Independent Waste Oil Collectors
Industrial Environmental Association
Marin Builders' Association
National Federation of Independent Business
Western Growers
Western States Petroleum Association
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Opposition
None on file.
Analysis Prepared by : Marina Wiant / B.,P. & C.P. / (916)
319-3301