BILL ANALYSIS �
AB 273
Page 1
Date of Hearing: May 18, 2011
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Felipe Fuentes, Chair
AB 273 (Valadao) - As Introduced: February 7, 2011
Policy Committee: Business and
Professions Vote: 9 - 0
Accountability and Admin Review 11 - 0
Urgency: No State Mandated Local Program:
No Reimbursable:
SUMMARY
This bill requires the Department of Finance (DOF) to review
state agencies' determinations, estimates and other findings
related to costs and economic impacts of proposed regulations.
Specifically, this bill:
1)Requires DOF to update the State Administrative Manual to
include directions on the methods that state departments are
required to use to estimate the costs of proposed regulations
and determine the economic impact.
2)Requires all state agencies to use the new DOF developed
format and estimating formulas to determine whether or not a
proposed regulation has a significant, statewide adverse
economic impact on individuals and businesses.
3)Requires DOF to review all determinations, estimates and
findings.
4)Requires DOF, if it concludes the determinations, estimates,
and finding are erroneous or inconsistent with the prescribed
guidelines, to report that in a public statement to the
agency.
FISCAL EFFECT
1)DOF does not have an estimate of the impact of this bill at
this time. However, the workload costs associated with DOF
updating the State Administrative Manual and making the
required changes to the Department of Finance STD Form 399,
AB 273
Page 2
which departments submit with their notice of proposed
rulemaking, would likely exceed several hundred thousand
dollars (GF).
2)Requiring DOF to review all of the required determinations,
estimates and findings on 700 proposed regulations packages
each year and provide a public statement for those that it
deems inconsistent or erroneous would likely cost in excess of
$250,000 (GF) per year.
3)Unknown, significant on-going costs potentially in excess of
$1 million cumulatively for all departments to use the
required format and criteria for estimating the economic
impact of the proposed regulations, including the impact on
private individuals and businesses.
4)On-going costs, likely in excess of $150,000 for the Office of
Administrative Law (OAL) to ensure that all submitted
regulations meet the new standard outlined in this
legislation, particularly the requirement that Form 399
information include determinations, statements and findings
relating to the economic impact of a regulation. OAL currently
reviews 700 proposed regulations packages consisting of tens
of thousands of pages of documents in order to ensure that the
proposed regulations meet the required rulemaking standard set
forth in the Administrative Procedures Act (APA). To the
extent that this legislation increases the complexity of those
proposed regulations and size of those regulations packages it
would result in increased costs for OAL.
COMMENTS
1)Rationale . The intent of this legislation is to create more
stringent and uniform fiscal estimating requirements for
proposed regulations by requiring DOF to develop, and
departments to adopt, estimating formulas for determining
economic impacts. In addition, the bill develops a new
rulemaking standard by requiring DOF's STD Form 399, which
accompanies all proposed regulations, to include detailed
information pertaining to the development of the economic
impact of a regulation.
The author claims that most of these requirements for DOF were
already established by the former governor through a 2003
executive order. However, the bill adds to that executive
AB 273
Page 3
order by requiring DOF to provide a public statement to the
agency if it finds that the estimates are erroneous or
inconsistent with their guidelines.
2)Background . The Administrative Procedures Act (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 that 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.
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. Existing
law requires OAL to review all regulations for necessity and
non-duplication, and requires OAL to print a summary of all
regulations filed with SOS in the previous week in the
California Regulatory Notice Register. On average, OAL
reviews 700 regulations packages per year. Those packages can
be anywhere from 1 to 400 pages long. In 2010, over 5,000
different regulations sections were reviewed by OAL.
3)Related Legislation . Over the last two years, dozens of bills
have been introduced in the Legislature that attempt to
change, streamline, or improve the regulations process. Among
the bills pending in the Assembly are AB 127 (Logue), AB 213
(Silva), AB 338 (Wagner), AB 410 (Swanson), AB 425 (Nestande),
AB 429 (Knight), AB 530 (Smyth), AB 535 (Morrell), AB 586
(Garrick), AB 632 (Wagner), AB 691 (Perea), AB 1213 (Nielsen),
and AB 1322 (Bradford).
Analysis Prepared by : Julie Salley-Gray / APPR. / (916)
319-2081
AB 273
Page 4