BILL ANALYSIS
AB 2603
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Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2603 (Gaines) - As Amended: April 12, 2010
SUBJECT : Administrative regulations: reductions.
SUMMARY : Requires every state agency to reduce its total
number of regulations by 33% by December 31, 2012.
Specifically, this bill :
1)Requires every state agency to determine how many regulations
it imposes by July 1, 2011.
2)Requires every state agency to reduce its total number of
regulations identified above by 33%, by December 31, 2012, and
requires every agency to:
a) Prioritize eliminating regulations that increase the
regulatory burden on businesses; and,
b) Submit a report of the regulations eliminated or
identified for elimination to the State Auditor (SA).
3)Requires the SA to evaluate the regulations and determine the
impact that the regulations' elimination will have on
business, and to report the results to the Legislature.
4)Requires the Legislature to appropriate funds to the SA to
cover duties imposed under this bill.
5)Requires the state agency to eliminate a regulation for each
regulation proposed, until December 21, 2021.
6)Sunsets the provisions of this bill on January 1, 2022.
EXISTING LAW :
1)Establishes the Administrative Procedure Act (APA), setting
forth the requirements for the adoption, publication, review,
and implementation of regulations by state agencies.
2)Establishes the Office of Administrative Law (OAL) for the
AB 2603
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orderly review of adopted regulations.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office,
"California fosters one of the most heavily regulated
environments for businesses in the world. Businesses are
folding everyday and others are leaving California because of
the burden the state has placed on them. Many people are
dissuaded from opening new businesses once they realize the
amount of paperwork needed to be done here. To address this
crisis, California must be open to all possibilities and try
methods that have shown proven results.
"In 2001, British Columbia (BC) began an effort to reduce its
regulatory requirements, recognizing that their current system
created an environment that did not foster economic investment,
ingenuity, and growth. Before the start of this program, BC
counted 383, 660 regulations that were on the books. The target
for 2004 was a 33% reduction; this [percentage] was exceeded.
In 2004, there has been additional reduction, for a total
reduction of 165,124 regulations?for a total of 218,536
regulations left on the books.
"AB 2603 will take a three-tier approach to address regulation
in California: 1) state departments must review and audit their
own regulations; 2) reduce, streamline or consolidate
regulations that are a detriment to job creation by 33%; and, 3)
create a 10-year period for zero increase in regulation - any
regulation developed must identify a current regulation to
eliminate."
Background . 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. OAL ensures
that agency regulations are clear, necessary, legally valid, and
available to the public. Existing law already authorizes OAL to
recommend the elimination of obsolete or unnecessary
regulations. Requiring the SA to review regulations,
particularly if 600-800 regulations are proposed annually, would
require the SA to asumme OAL's responsibities and increase the
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SA's workload.
This bill requires state agencies to eliminate regulations that
place a burden on businesses and the business climate. An
overarching consideration regarding this bill is its prohibition
against any regulation that would place an undue burden on
California business on an annual basis and would result in a
significant loss of jobs. This strict prohibition fails to
recognize that the APA currently requires an evaluation of the
negative impact a proposed regulation would have on businesses
and reasonable alternatives that would eliminate undue burdens.
Further, regulations merely provide administration and
enforcement procedures for laws duly enacted by the Legislature.
Accordingly, prohibiting the adoption of regulations without
repealing the laws they implement could prevent state agencies
from adequately administering and enforcing those laws.
The Legislature has the authority to enact legislation to repeal
regulations. This bill requires state agencies to eliminate
regulations it has approved, despite the substance or necessity
of the regulations.
In addition, this bill will not guarantee that the number of
regulations will be reduced. For example, if a stage agency is
required to reduce its number of regulations, the state agency
can take the proposed changes that normally would be spread out
among several regulations and combine it into a single proposed
regulation, to meet the bill's target reduction requirements.
Previous Legislation . AB 3511 (Jones), Chapter 1306, Statutes
of 2002, requires state agencies proposing to adopt or amend any
administrative regulation to assess the potential for adverse
economic impact on California business enterprises and
individuals, and to avoid the imposition of unnecessary or
unreasonable regulations or reporting, recordkeeping, or
compliance requirements.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
AB 2603
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None on file.
Analysis Prepared by : Joanna Gin / B.,P. & C.P. / (916)
319-3301