BILL ANALYSIS �
AB 2091
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Date of Hearing: April 24, 2012
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2091 (Bill Berryhill) - As Introduced: February 23, 2012
SUBJECT : Regulations: new or emerging technology.
SUMMARY : Requires state agencies proposing to adopt, amend or
repeal an administrative regulation requiring the use of a new
or emerging technology or equipment to determine if that
technology is available and effective for at least two years, as
specified. Specifically, this bill :
1)Requires state agencies proposing to adopt, amend, or repeal
any administrative regulation requiring the use of a new or
emerging technology or equipment in order to achieve the
identified purpose of the regulation to determine if that
technology is available and effective.
2)Specifies that a technology is available and effective if the
agency provides findings and evidence that both of the
following conditions are met:
a) The technology is currently commercially available, or
will be commercially available by the time that the
regulation is effective; and,
b) The technology has been available, and has been proven
to be effective, for at least two years.
3)Requires any regulation proposed to be adopted, amended, or
repealed, pursuant to this bill, to include the following
provisions:
a) If the new technology is not commercially available on
the effective date of the regulation, the adopting agency
is prohibited from enforcing a violation of that regulation
with respect to the use of that technology until at least
six months after it becomes commercially available, and the
agency posts on its Internet Web site and in the California
Regulatory Notice Register that the required technology has
become commercially available; and,
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b) If a person or entity incurs any costs purchasing a new
technology required by the regulation, and the agency
ultimately determines that the regulatory program is
unfeasible because the new technology does not function as
intended by the agency, the agency is required to reimburse
the person or entity for any costs incurred in complying
with the regulation.
4)Exempts from these provisions proposed regulations requiring
the use of a new or emerging technology or equipment if the
requirement is only being imposed on the industry that is
directly responsible for developing or manufacturing the new
or emerging technology as a part of that industry's core
business.
5)Provides that this bill does not prohibit an agency from
adopting new or additional standards for new or emerging
technology or other equipment.
6)Requires agencies to include with its notice of proposed
action to adopt, amend or repeal a regulation to the Office of
Administrative Law (OAL) a statement that the agency has
complied with the above requirements, when applicable.
7)Requires OAL to return any regulation to the adopting agency
if the adopting agency does not comply with the requirements
of this bill, as specified.
8)Defines "commercially available" to mean that the technology
is available on the market from at least two providers or
manufacturers.
EXISTING LAW :
1)Establishes requirements for the adoption, publication,
review, and implementation of regulations by state agencies,
and for review of those regulatory actions by the OAL under
the Administrative Procedure Act (APA).
2)Requires an agency that is proposing an administrative
regulation to prepare and submit to the OAL, and make
available to the public upon request, specified information
including when applicable, a statement of the reasons why the
agency believes mandating the use of a specific technology or
equipment is necessary, a description of reasonable
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alternatives and the agency's reason for rejecting those
alternatives.
3)Requires the OAL to return to the adopting agency any proposed
regulation that does not meet certain requirements.
FISCAL EFFECT : Unknown
COMMENTS : According to the author, "CEO magazine has rated
California as the worst state in the nation to do business in
for seven straight years. The regulatory climate in California
has driven major companies out of state or caused small
businesses to close down. The effects of this are hard to
ignore: According to 2011 statistics from United States
Department of Labor, California has the second highest
unemployment rate in the nation.
"Oftentimes, a state agency will implement a regulation that
requires businesses to adopt a technology that has not yet been
invented. To account for this, the agency will provide a window
of time for compliance, thereby giving the manufacturer time to
develop the product. The problem occurs, however, when the
technology, merely an idea at the time the regulation has been
adopted, remains under-tested by the date businesses are forced
to comply. If the product breaks down, business slows down
while waiting for repairs. Large companies may be able to
absorb the cost; though they will get passed down to consumers.
However, smaller businesses have been forced to lay off
employees or even shut their doors as a result of business
slowing down.
"For example, in 2007 the California Air Resources Board (CARB)
adopted a regulation requiring off-road diesel trucks to
retrofit filters by 2009, in order to comply with new emissions
standards. Unfortunately, the parts were rushed into production
to meet the compliance deadline resulting in several trucking
companies going out of business due to faulty products.
"California gas stations have experienced the same frustrations
regarding CARB regulations. In 2000, a regulation was approved
that required the gas stations to update their pumps with new
vapor recovery technology. When the deadline loomed in 2009,
over 60% of gas stations remained out of compliance. The
problem is that during the nine years the gas stations were
given to comply, a lack of manufacturing competition kept EVR
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equipment prices high while California's economic downturn had
caused lending practices to become much more inhibited than they
had been in decades prior.
"In both of these cases, the problem became so burdensome for
businesses that CARB was forced to grant extensions or amend the
regulations to make compliance more feasible. The goal of this
bill is to prevent such hindrances; to more effectively find
balances between that of concern for the quality of public goods
and the needs of businesses to provide services to the market.
"Currently, the Government Code requires a state agency that is
requesting review of a proposed regulation from the OAL to
submit a statement of purpose, listing the terms and reasons for
adopting the regulation. AB 2091 will also require the agency
to determine if the new or emerging technology has been
available, effective and on the market for at least two years
and from at least two providers. If not, violations of that
regulation may not be enforced until at least 6 months after the
technology does become available. Also, any cost burdens
associated with such mandated and under-tested technology will
be passed onto the regulating agency."
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 Secretary of State.
More specifically related to this bill, 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 supporting evaluation and documentation
supporting a proposed regulation that requires the use of a
specific technology or which could have a negative impact on
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business.
Policy considerations . This bill would prohibit the adoption of
a regulation that requires the use of a specific technology
unless the technology has been available and proven effective
for two years. This prohibition may thwart the effective and
efficient administration and enforcement of laws by precluding
the use of technologies that are developed specifically to meet
a regulatory need. For example, the state has enacted a law the
requires businesses that manufacture, distribute, or sell
pharmaceutical drugs, to implement a drug tracking system that
will preclude counterfeit drugs from entering the stream of
commerce and compromising the health and safety of consumers.
If a single new technology is developed to provide the
interoperability and other features that will be necessary for
all businesses in this chain of commerce to comply with this
important consumer protection law, this bill could effectively
preclude the law from ever taking effect because of the two year
moratorium on the use of new technology. The APA currently
requires proposed regulations that prescribe a specific
technology to justify that specificity with scientific and
empirical evidence to support the requirement to use a specific
technology, as well as an evaluation of reasonable alternatives.
Further, regulations provide administration and enforcement
procedures for laws duly enacted by the Legislature.
Accordingly, prohibiting the adoption of regulations without
repealing the laws they implement could prevent state agencies
from adequately administering and enforcing those laws.
Previous legislation . 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
California Independent Oil Marketers Association
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Opposition
American Lung Association in California
Bay Area Quality Management District
California Air Pollution Control Officers
Health Access California
Union of Concerned Scientists
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301