BILL ANALYSIS �
AB 429
Page 1
Date of Hearing: May 3, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 429 (Knight) - As Introduced: February 14, 2011
SUBJECT : Regulations: effective date.
SUMMARY : Increases the number of days before an approved
regulation becomes effective from 30 to 180 after the regulation
is filed with the Secretary of State (SOS), for regulations
costing more than $15 million or that are a 5% increase over an
existing regulation. Specifically, this bill :
-----------------------------------------------------------------
|1)Specifies that an approved regulation identified by the |
| adopting agency as having a gross cost of $15 million or more, |
| an increased cost of 5% or more over an existing regulation, |
| or both, shall become effective on the 180th day after the |
| approved regulation has been filed with the SOS. |
| |
|2)Requires an agency, when it submits a proposed adoption, |
| amendment, or repeal of a regulation meeting the above |
| threshold to the Office of Administrative Law (OAL) for |
| approval, to submit a copy of the rulemaking record to the |
| appropriate policy committee in each house of the Legislature. |
| |
|3)Specifies that these requirements apply only to a proposed |
| adoption, amendment or repeal of a regulation identified by |
| the proposing agency in the rulemaking record as meeting the |
| above threshold. |
| |
| |
| |
-----------------------------------------------------------------
EXISTING LAW :
1)Governs the procedure of the adoption, amendment, or repeal of
a regulation by state agencies and for the review of those
regulatory actions by the Office of Administrative Law OAL
under the Administrative Procedure Act (APA).
2)Provides that a regulation or an order of repeal become
effective on the 30th day after it is filed with the SOS.
AB 429
Page 2
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office,
"California businesses have some of the most rigorous
regulations in place in the nation. The burdens these
businesses face leave little incentive for them to remain in
California. Currently, hundreds of regulatory agencies in
California have the ability to create and enact regulations that
business owners are required to live by. With high taxes and
unpredictable regulations constantly going into effect, is a
state agency more suited than the elected legislative body to
expand the scope of law through regulation?
"Regulations are intended to implement laws passed by the
Legislature. Unelected regulators are not qualified to ensure
that regulations are consistent with the lawmakers' intent.
Major regulations that are enacted have substantial impacts on
the way everyday business is conducted. Additional oversight as
well as more time after elected committee members file the
regulation with the SOS, will help avoid unforeseeable negative
impacts to businesses in the future.
Background . The 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 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. Regulations take effect 30 days
after being filed by the OAL with the SOS.
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
AB 429
Page 3
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 increases the number of days before an approved
regulation becomes effective from 30 to 180 after filing with
the SOS, for regulations costing more than $15 million or that
are a 5% increase over an existing regulation. This bill also
requires copies of the rulemaking record for regulations meeting
those thresholds to be submitted to the Legislature.
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,
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,
AB 429
Page 4
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 425 (Nestande) of 2011, requires each state entity that
promulgates regulations to review those regulations, and repeal
or report to the Legislature those identified as duplicative,
archaic, or inconsistent with statute or other regulations or
deemed to inhibit economic growth in the state by December 31,
2012. 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
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 429
Page 5
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.
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
AB 429
Page 6
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.
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
AB 429
Page 7
American Council of Engineering Companies of California
Associated Builders and Contractors of California
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
Howard Jarvis Taxpayers Association
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