BILL ANALYSIS �
AB 425
Page 1
Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 425 (Nestande) - As Introduced: February 14, 2011
SUBJECT : State regulations: review.
SUMMARY : Requires each state entity that promulgates
regulations to review those regulations, and repeal or report to
the Legislature those identified as duplicative, archaic,
inconsistent with statute or other regulations, or deemed to
inhibit economic growth in the state by December 31, 2012.
Specifically, this bill :
1)Requires each state entity that promulgates regulations to
review those regulations by December 31, 2012.
2)Requires state agencies to identify regulations it deems to be
duplicative, archaic, or inconsistent with statute or other
regulations and:
a) Repeal the regulation if authorized by law; or
b) Report to the Legislature on the legislative or other
action needed to repeal the regulation.
3)Requires state agencies to identify and report to the
Legislature regulations it deems as inhibiting economic growth
in the state.
EXISTING LAW authorizes various state entities to promulgate and
implement regulations, subject to specified criteria.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of the bill . According to the author's office, "With
millions of Americans still searching for work, President Obama
recently vowed to remove unneeded federal regulations, ordering
a review of existing rules to weed out those deemed to 'stifle
job creation and make our economy less competitive.'
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"While the nationwide recession is responsible for many of
California's economic troubles, our burdensome regulatory
climate is also to blame for the lack of jobs. Regulations play
a significant role in the decision-making of job creators about
whether they should invest in California or relocate to other
states. To assume that our mild weather is enough to attract
businesses would be na�ve.
"In deciding where to create jobs, businesses are swayed by the
amount of taxes they have to pay and the scope of regulations
they have to comply with. California is at a significant
disadvantage on both counts. The non-partisan Tax Foundation
says we have the second-worst business tax climate in the
nation, which is no surprise to anyone.
"With California's list of rules and regulations numbering in
the thousands of pages, there are surely some that we can
consider duplicative, archaic and unnecessary. This measure
would force state agencies to ask if a particular rule is still
relevant to public health and safety. If it is found to be
unneeded, then it should be gotten rid of immediately.
"This measure would require state agencies to do two things.
First, agencies would be required to identify regulations that
are unnecessary and hurt economic growth in the state. Second,
they would repeal those regulations if they have the power to do
so. For those that they are unable to repeal on their own, they
would report them to the Legislature for action.
"AB 425 will make state government less cumbersome for the
people it serves. Making government less complex would reduce
paperwork, which in turn would reduce costs and foster a more
welcoming business environment in our state."
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
with a 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
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statement to the Office of Administrative Law (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 proposing to
adopt, amend, or repeal any administrative regulation to assess
the potential for adverse economic impact on California business
enterprises and individuals, and avoid imposing unnecessary or
unreasonable regulations. Agencies are required to 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. Additionally, agencies
are required to assess whether and to what extent the proposed
regulation change will affect the creation or elimination of
jobs, the creation of new businesses or the elimination of
existing businesses, and the expansion of businesses currently
doing business within California.
This bill requires each state entity to review previously
adopted regulations, and repeal or report to the Legislature
those identified as duplicative, archaic, inconsistent with
statute or other regulations, or deemed to inhibit economic
growth in the state.
Related legislation . AB 127 (Logue) of 2011, requires that a
regulation or an order of repeal of a regulation become
effective on the following January 1 after a 90-day period
following the date it is filed with the Secretary of State
(SOS), instead of 30 days after the date of filing, except where
already exempted. This bill is pending in the Assembly
Business, Professions and Consumer Protection Committee.
AB 213 (Silva) of 2011, requires agencies to mail or
electronically mail a notice of prosed action to adopt, amend,
or repeal a regulation to local government agencies or local
government agency representatives that are likely to be affected
by the proposed action. This bill is pending in the Assembly
Appropriations Committee.
AB 273 (Valadao) of 2011, requires the Department of Finance
(DOF) to adopt and update instructions for inclusion in the
State Administrative Manual prescribing the methods that any
agency shall use in making certain determinations, estimates,
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statements, and findings relating to the economic and cost
impacts of a regulation on businesses and private individuals.
This bill is pending in the Assembly Business, Professions and
Consumer Protection Committee.
AB 338 (Wagner) of 2011, increases the effective date for a
regulation or an order of repeal of a regulation from 30 days to
90 days and requires the OAL to submit a copy of disapproved
regulations to the Legislature when certain criteria are met, as
specified. This bill is pending in the Assembly Business,
Professions and Consumer Protection Committee.
AB 410 (Swanson) of 2011, requires an agency, upon a request
from a person with a visual disability or other disability for
which effective communication is required to provide that person
a narrative description of the proposed regulation and for an
extended public comment period for that person. This bill is
pending in the Assembly Appropriations Committee.
AB 429 (Knight) of 2011, requires an agency, for any regulation
that it has identified as having a gross cost of $15 million or
more, an increased cost of 5% or more over the cost of an
existing regulation, or both, to submit a copy of the rulemaking
record for that regulation to the appropriate policy committee
in each house of the Legislature when the agency submits the
regulation to the OAL for approval. This bill is pending in the
Assembly Business, Professions and Consumer Protection
Committee.
AB 530 (Smyth) of 2011, requires a state agency, when it files a
notice of proposed action with the OAL, to include technical,
theoretical, and empirical studies, reports, or similar
documents, upon which the agency relied in rejecting each
reasonable alternative. Additionally, this bill would prohibit
an agency from rejecting a reasonable alternative unless the
statement of reasons includes at least one of these documents.
Further, this bill requires an agency to determine whether a
proposed regulation will have a significant adverse economic
impact by completing an economic impact statement, using a form
developed by DOF, as specified. This bill is pending in the
Assembly Business, Professions and Consumer Protection
Committee.
AB 535 (Morrell) of 2011, requires a state agency to review and
report to the Legislature on regulations that it adopts or
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amends on and after January 1, 2012, 5 years after adoption, as
specified. This bill is pending in the Assembly Business,
Professions and Consumer Protection Committee.
AB 541 (Morrell) of 2011, requires the California Small Business
Board, until January 1, 2014, to review the state's licensing
and permitting regulations as they impact small businesses, with
special attention to the regulatory impact on small business
startups, and would require each state agency to cooperate with
the board in that review. This bill is pending in the Assembly
Appropriations Committee.
AB 586 (Garrick) of 2011, requires standing committees of the
Legislature to hold informational hearings regarding proposed
regulation with a gross cost in excess of $10 million. This
bill is pending in the Assembly Business, Professions and
Consumer Protection Committee.
AB 632 (Wagner) of 2011, requires state agencies to submit to
the Legislature a notice of a proposed action to adopt, amend or
repeal a regulation, if the notice identifies an economic
impact, cost impact, statement or finding related to the
proposed regulation, as specified. This bill is pending in the
Assembly Business, Professions and Consumer Protection
Committee.
AB 1037 (V. Manuel Perez) of 2011, increases the threshold for
business activities under the definition of "small business" and
requires agencies to reassess regulations five years after
adoption, as specified. This bill is currently pending in the
Assembly Jobs, Economic Development, and the Economy Committee.
AB 1213 (Nielsen) of 2011, authorizes a chair or vice chair of a
standing, select, or joint committee of the Legislature to
initiate a priority review of any regulation, as specified.
This bill is pending in the Assembly Business, Professions and
Consumer Protection Committee.
AB 1322 (Bradford) of 2011, adopts the regulatory philosophy and
the principles of regulation, as outlined in Presidential
Executive Order 12866, in order to achieve the same regulatory
benefits within the state, as specified. This bill is pending
in the Assembly Business, Professions and Consumer Protection
Committee.
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Previous legislation . AB 1833 (Logue) of 2010, requires the
California Environmental Protection Agency, the Division of
Occupational Safety and Health and the State Air Resources Board
to complete an economic impact analysis prior to adopting,
amending, or repealing an administrative regulation. This bill
was held in the Assembly Business, Professions and Consumer
Protection Committee.
AB 1949 (Logue) of 2010, requires a state agency to review and
report on regulations that it adopts or amends on and after
January 1, 2011, five years after adoption, as specified. This
bill was held in the Assembly Business, Professions and Consumer
Protection Committee.
AB 1957 (Silva) of 2010, requires state agencies, when providing
notice of proposed adoption, amendment, or repeal of a
regulation, to mail the notice to local government agencies or
local government agency representatives that the agency believes
may be interested in, or impacted by, the proposed action. This
bill was held in the Assembly Appropriations Committee.
AB 2466 (Smyth) of 2010, requires the OAL submit all regulations
packages to the Legislature and require that the appropriate
legislative policy committees review those regulations. This
bill was held in the Assembly Appropriations Committee.
AB 2529 (Fuentes) of 2010, establishes, until January 1, 2016, a
process for peer review of economic impacts analyses for a
proposed regulation and requires OAL to send specified
regulations to the fiscal committees in both houses of the
Legislature if they meet certain criteria. This bill was held
in the Senate Business, Professions and Economic Development
Committee.
AB 2603 (Gaines) of 2010, requires every state agency to reduce
its total number of regulations by 33% by December 31, 2012.
This bill was held in the Assembly Business, Professions and
Consumer Protection Committee.
AB 2738 (Niello), Chapter 398, Statutes of 2010, requires the
initial statement of reasons submitted by an agency to the OAL
to include a description of any performance standard that was
considered as an alternative to a proposed adoption, amendment,
or repeal of a regulation.
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AB 2118 (Villines) of 2008, prohibits state agencies from
adopting regulations that require the use of a specific
technology unless it has been operational and proven effective
for more than two years, or that would place an undue burden on
business on an annual basis and result in a significant loss of
jobs. This bill was held in the Assembly Business and
Professions Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
American Council of Engineering Companies of California
Associated Builders and Contractors of California
California Association of Physician Groups
California Building Industry Association
California Business Properties Association
California Forestry Association
California Grocers Association
California League of Food Processors
California Manufacturers & Technology Association
California Retailers Association
Chemical Industry Council of California
Consumer Specialty Products Association
Engineering and Utility Contractors Association
Golden State Builders Exchanges
Industrial Environmental Association
National Federation of Independent Business
USANA Health Sciences, Inc.
Western Growers
Opposition
None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301