BILL NUMBER: SB 1160 AMENDED
BILL TEXT
AMENDED IN SENATE JUNE 2, 2010
AMENDED IN SENATE APRIL 5, 2010
INTRODUCED BY Senator Dutton
FEBRUARY 18, 2010
An act to amend Section 11346.3 of, and to add
Sections 9143.5 and 13305.5 to , the Government
Code, relating to state fiscal analysis.
LEGISLATIVE COUNSEL'S DIGEST
SB 1160, as amended, Dutton. State fiscal analysis.
(1) Existing
Existing law requires the Legislative Analyst
, operating under the authority of the Joint Legislative Budget
Committee, and the Department of Finance to
provide the Legislature with specified fiscal analyses of matters
affecting state finances , including the annual state budget
.
This bill would require the Legislative Analyst and the
department , to the extent that any fiscal estimate of the
annual state budget involves one or more proposed changes
a change in state tax law having a
designated fiscal impact, to prepare the , to
estimate, except as specified, on the basis of assumptions
that estimate the probable behavioral responses of taxpayers and
others to the proposed changes, and to include in the fiscal estimate
a statement identifying those assumptions. the
statewide economic impact of the change, using a dynamic economic
analysis that includes probable behavioral responses of taxpayers,
businesses, and other residents of the state, and the impact of the
change on state spending reductions, including reductions in
education spending.
(2) Existing law requires a state agency proposing to adopt,
amend, or repeal any administrative regulation to assess the effect
of the proposed regulation on jobs and businesses within the state.
This bill would require the assessment to be performed using a
dynamic analysis technique under specified conditions.
(3) Existing law requires the Department of Finance to perform
various duties pertaining to the preparation and analysis of the
annual state budget, and the fiscal analysis of legislative proposals
before the Legislature.
This bill would require the Department of Finance, to the extent
that any fiscal impact estimate involves one or more proposed changes
in state tax law having a designated fiscal impact, to prepare the
estimate, except as specified, on the basis of assumptions that
estimate the probable behavioral responses of taxpayers and others to
the proposed changes, and to include in the fiscal estimate a
statement identifying those assumptions.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. It is the intent of the Legislature
to ensure that, to the extent reasonable, dynamic estimating
techniques are used in predicting the fiscal impact of proposals to
enact laws and promulgate regulations.
SEC. 2. SECTION 1. Section 9143.5 is
added to the Government Code, to read:
9143.5. To the extent that any fiscal estimate prepared by the
Legislative Analyst regarding the annual state budget involves one or
more proposed changes in state tax law, including, but not
limited to, new taxes, tax rate changes, new credits, deductions,
exclusions, or exemptions, or changes to credits, deductions,
exclusions, or exemptions, the Legislative Analyst
shall prepare the estimate, except where it is unreasonable to do so,
on the basis of assumptions that estimate the probable behavioral
responses of taxpayers, businesses, and other citizens to those
proposed changes, and shall include in the fiscal estimate a
statement identifying those assumptions. The requirement set
s hall estimate the statewide economic
impact of the change or changes, using dynamic economic analysis that
takes into account probable behavioral responses of taxpayers,
businesses, and other residents of the state, except where it is
unreasonable to do so. The Legislative Analyst shall also estimate
the economic impact of the state spending reductions that would be
necessitated by the proposed state tax reduction, in accordance with
the constitutional requirement that the state enact a balanced budget
each year. The Legislative Analyst's estimate of the economic impact
of spending reductions shall identify the reductions in state
education spending required by the tax reduction proposal, and the
long-term effect of reduced education spending on the growth of the
state domestic product. The requirement set forth in this
section applies only to a proposed change in state tax law determined
by the Legislative Analyst, pursuant to a static fiscal estimate, to
have a fiscal impact in excess of ten million dollars ($10,000,000)
in any one fiscal year.
SEC. 3. Section 11346.3 of the Government Code
is amended to read:
11346.3. (a) State agencies proposing to adopt, amend, or repeal
any administrative regulation shall assess the potential for adverse
economic impact on California business enterprises and individuals,
avoiding the imposition of unnecessary or unreasonable regulations or
reporting, recordkeeping, or compliance requirements. For purposes
of this subdivision, assessing the potential for adverse economic
impact shall require agencies, when proposing to adopt, amend, or
repeal a regulation, to adhere to the following requirements, to the
extent that these requirements do not conflict with other state or
federal laws:
(1) The proposed adoption, amendment, or repeal of a regulation
shall be based on adequate information concerning the need for, and
consequences of, proposed governmental action.
(2) The state agency, prior to submitting a proposal to adopt,
amend, or repeal a regulation to the office, shall consider the
proposal's impact on business, with consideration of industries
affected including the ability of California businesses to compete
with businesses in other states. For purposes of evaluating the
impact on the ability of California businesses to compete with
businesses in other states, an agency shall consider, but not be
limited to, information supplied by interested parties.
It is not the intent of this section to impose additional criteria
on agencies, above that which exists in current law, in assessing
adverse economic impact on California business enterprises, but only
to assure that the assessment is made early in the process of
initiation and development of a proposed adoption, amendment, or
repeal of a regulation.
(b) (1) All state agencies proposing to adopt, amend, or repeal
any administrative regulations shall assess whether and to what
extent it will affect the following:
(A) The creation or elimination of jobs within the State of
California.
(B) The creation of new businesses or the elimination of existing
businesses within the State of California.
(C) The expansion of businesses currently doing business within
the State of California.
(2) If the static estimate first shows that a regulation will have
an annual cost to the private sector of one hundred million dollars
($100,000,000) or more when fully operational, then a state agency
shall assess the regulation in compliance with paragraph (1) by using
a dynamic analysis.
(3) This subdivision does not apply to the University of
California, the Hastings College of the Law, or the Fair Political
Practices Commission.
(4) Information required from state agencies for the purpose of
completing the assessment may come from existing state publications.
(c) No administrative regulation adopted on or after January 1,
1993, that requires a report shall apply to businesses, unless the
state agency adopting the regulation makes a finding that it is
necessary for the health, safety, or welfare of the people of the
state that the regulation apply to businesses.
SEC. 4. SEC. 2. Section 13305.5 is
added to the Government Code, to read:
13305.5. To the extent that any fiscal impact
estimate prepared by the Department of Finance regarding the
annual state budget involves one or more proposed
changes in state tax law, the department shall prepare the estimate,
except where it is unreasonable to do so, on the basis of assumptions
that estimate the probable behavioral responses of taxpayers,
businesses, and other citizens to those proposed changes, and shall
include in the fiscal impact estimate a statement identifying those
assumptions. The requirement set forth in this section shall apply
only to a proposed change in state tax law determined by the
Department of Finance, pursuant to a static changes in
state tax law, including, but not limited to, new taxes, tax rate
changes, new credits, deductions, exclusions, or exemptions, or
changes to credits, deductions, exclusions, or exemptions, the
department shall estimate the statewide economic impact of the change
or changes, using dynamic economic analysis that takes into account
probable behavioral responses of taxpayers, businesses, and other
residents of the state, except where it is unreasonable to do so. The
department shall also estimate the economic impact of the state
spending reductions that would be necessitated by the proposed state
tax reduction, in accordance with the constitutional requirement that
the state enact a balanced budget each year. The department's
estimate of the economic impact of spending reductions shall identify
the reductions in state education spending required by the tax
reduction proposal, and the long-term effect of reduced education
spending on the growth of the state domestic product. The requirement
set forth in this section applies only to a proposed
change in state tax law determined by the department, pursuant to a
static fiscal estimate, to have a fiscal impact in excess of
ten million dollars ($10,000,000) in any one fiscal year.