BILL ANALYSIS �
SB 643
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Date of Hearing: June 21, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
SB 643 (Correa) - As Amended: May 10, 2011
SENATE VOTE : 38-0
SUBJECT : Administrative procedures.
SUMMARY : Requires agencies, when submitting an initial
statement of reasons (ISOR) for proposing the adoption,
amendment, or repeal of a regulation to the Office of
Administrative Law (OAL), to include the estimated cost and
benefits of compliance and the related assumptions used in
determining that estimate if a proposed building standard
regulation impacts housing, and requires the agencies to make
this information available to the public.
EXISTING LAW
1)Governs the procedure for the adoption, amendment, or repeal
of regulations by state agencies and for the review of those
regulatory actions by the OAL, under the Administrative
Procedure Act (APA).
2)Requires state agencies to submit to OAL and make available to
the public, a copy of the proposed regulation and an ISOR, as
specified, including the effect of the proposed regulatory
action on housing costs, if any.
3)Requires that the ISOR include facts evidence, documents,
testimony, or other evidence on which the agency relies to
support an initial determination that the action will not have
a significant adverse economic impact on business.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "Since
1982 state agencies have been required to prepare an economic
impact analysis that clearly identifies any adverse economic
impacts on business, small business and housing.
SB 643
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"Currently, the economic impact analysis is most often
accompanied by boiler-plate language that states: 'The agency
has determined that there will be no significant economic impact
on business/housing.'
"This gives no indication to the interested parties as to what
it will actually cost (in dollars) to comply with the proposed
building standard regulation.
"SB 643 would require a state agency that develops a building
standard regulation that impacts housing to include in their
initial statement of reasons the estimated cost of compliance
and the related assumptions used in determining that estimate.
"This bill will provide a bridge for the regulated community to
be able to assess the building standard regulations and make
smart and informed business decisions. And more importantly,
this bill will assist in the transparency of regulations,
thereby alleviating much of the unknown that keeps investment
from occurring."
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.
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.
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This bill requires agencies, when submitting an ISOR to OAL to
include the estimated cost and benefits of compliance and the
related assumptions used in determining that estimate, if a
proposed building standard regulation impacts housing.
Support . The sponsor of this bill, California Building Industry
Association (CBIA), writes in support, "�CBIA is] pleased to
inform you that we strongly support SB 643, which will assist in
presenting a clear understanding of economic impacts to the
ailing residential construction industry by providing
transparency to those affected by new housing related
regulations.
"With regards to regulations related to housing, this bill would
require the proposing agency to specifically cite its "estimated
cost of compliance" with the proposed regulation and to make
available upon request the assumptions/analysis used in arriving
at that estimated cost of compliance.
"Bottom line: If an agency is able to make the determination
that a regulation will have no significant impact on the
economy, that agency should know what the proposed regulation
will cost."
Related legislation . 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 Senate Rules Committee.
REGISTERED SUPPORT / OPPOSITION :
Support
California Building Industry Association (sponsor)
American Council of Engineering Companies California
California Apartment Association
California Association of Realtors
California Business Properties Association
California Chamber of Commerce
California Manufacturers & Technology Association
Opposition
SB 643
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None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301