BILL ANALYSIS
AB 2738
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Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2738 (Niello) - As Introduced: February 19, 2010
SUBJECT : Regulations: agency statement of reasons.
SUMMARY : Revises current law related to the adoption,
amendment, or repeal of regulations by state agencies.
Specifically, this bill:
1)Requires a state agency, when submitting proposed regulations
to the Office of Administrative Law (OAL), to:
a) Acknowledge that the imposition of a performance standard is
generally the preferred alternative to mandating specific
methods of compliance;
b) 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.
c) 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.
2)Delete the requirement, for a regulation that mandates the use
of specific technologies or equipment or prescribe specific
actions or procedures, that the imposition of performance
standards be considered as an alternative.
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,
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repeal of a regulation that includes a description of
reasonable alternatives to the regulation.
3)Requires, for a regulation that would mandate the use of
specific technologies or equipment or prescribe specific
actions or procedures, that the imposition of performance
standards be considered as an alternative.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "AB
2738 would improve on current law by requiring greater
justification, transparency, and specificity when an agency
promulgates regulations that mandate the use of a specific
technology.
"During the rulemaking process, a state agency is required to
prepare an Initial Statement of Reasons (ISOR) whenever it
proposes to create, repeal or amend a regulation. (Govt. Code,
11346.2(b)) An ISOR describes the basis of the regulation, the
purpose of the rule, how it is intended to be implemented and
the data on which the public agency relied to develop the
proposed regulatory change. Importantly, an ISOR must provide a
description of reasonable alternatives to the rule being
proposed.
"AB 2738 would retain the requirements for an agency to review
reasonable alternatives, but it would amend the language
regarding the consideration of a performance standard as an
alternative.
"AB 2738 would instead require an agency to acknowledge that a
performance standard is generally a preferred alternative to a
specific technology mandate, specify all ways in which specific
technology may be mandated, and provide a detailed justification
of why a specific technology is being proposed over the
preferred alternative. As the statutorily defined preferred
alternative, a performance standard would still be included in
any agency's review of reasonable alternatives, as under current
law."
Background . The APA governs the adoption of regulations by
state agencies for purposes of ensuring that they are clear,
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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.
More specifically, the APA 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, and specifically requires
specific supporting evaluation and documentation supporting a
proposed regulation that requires the use of a specific
technology or which could have a negative impact on business.
Previous legislation . AB 2118 (Villines) of 2008 prohibited
state agencies from adopting regulations requiring the use of a
specific technology unless it has been operational and proven
effective for more than two years, or would place an undue
burden on business on an annual basis and result in a
significant loss of jobs. The bill was held in the Assembly
Business and Professions Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
American Council of Engineering Companies of California
California Board of Accountancy
California Business Properties Association
California Chamber of Commerce
California Manufacturers & Technology Association
California Retailers Association
Pacific Merchant Shipping Association (PMSA)
Western Propane Gas Association
Opposition
None on file.
AB 2738
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Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301