BILL ANALYSIS �
Bill No: SB
688
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Roderick D. Wright, Chair
2011-2012 Regular Session
Bill Analysis
SB 688 Author: Wright
Amended: March 29, 2011
Hearing Date: April 12, 2011
Consultant: Paul Donahue
SUBJECT : Regulations: Legislative notification and delayed
effective date
SUMMARY : Requires a state agency to notify the fiscal and
appropriate policy committees of the Legislature if the
estimated cumulative statewide cost impacts of a regulation
exceed $10 million for affected businesses, and delays the
effective date for such a regulation.
Existing law :
1) The Administrative Procedure Act establishes rulemaking
procedures and standards for the adoption, amendment, or
repeal of regulations by state agencies charged with the
enforcement of state laws, and for the review of those
regulatory actions by the Office of Administrative Law
(OAL). (Govt. Code � 11340 et seq.)
2) Requires a state agency that is proposing to adopt,
amend, or repeal a regulation to assess the potential for
adverse economic impact on California business enterprises
and individuals.
3) Specifies that a regulation or an order of repeal of a
regulation becomes effective on the 30th day after it is
filed with the Secretary of State, unless:
a) The statute authorizing adoption of the regulation
prescribes a different date.
b) A later date is prescribed by the state agency in a
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written document filed with the regulation or order of
repeal.
c) The agency makes a written request to OAL showing
good cause for an earlier effective date, in which
case OAL may prescribe an earlier date.
This bill :
1) States that the economic impact assessment required in
connection with the adoption of a regulation shall include
a detailed estimate of the cumulative statewide cost
impacts for affected businesses and individuals.
2) Requires the agency to notify the fiscal and appropriate
policy committees of the Legislature if the estimated
cumulative statewide cost impacts for affected businesses
exceed $10 million.
3) Specifies that a regulation that has cumulative
statewide cost impact in excess of $10 million shall not
take effect until January 1, next, one year following the
date that the regulation is filed with the Secretary of
State.
COMMENTS :
1) The author states that California's burdensome
regulatory climate is driving California businesses - and
jobs - to other states. According to the non-partisan
Southern California Leadership Council, over 2,562
companies with 3 or more employees relocated out of the
state since January 2007, taking over 100,000 jobs with
them. The author reports that a 2010 Kosmont-Rose
Institute survey on the cost of doing business, based on a
variety of fees and taxes, found that California is home to
one third of the 40 most expensive cities.
2) Support : The supporters note that smart regulations are
necessary, cost effective, fairly enforced and regularly
updated to reflect changing conditions and needs. Currently
California regulations are adopted, reviewed, and approved
under a system established in 1979 and only modestly
changed thereafter. Since that time the Legislature has
granted massive new powers to government agencies and there
has been exponential growth in regulations concerning every
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aspect of the economy, mostly outside the control or even
awareness of elected officials. "We should modernize the
system to enable policymakers to take more informed role in
shaping regulations that now have a tremendous impact on
the California economy."
Supporters favor extending the time before a regulation
becomes effective from 30 days to 180 days unless good
cause is shown to give the Legislature time to review the
regulations and take action if necessary before the
regulations goes into effect.
3) Note : This bill is double referred to the Senate Rules
Committee
4) Related Legislation :
SB 396 (Huff, 2011) . Requires each state agency to review
each regulation adopted prior to January 1, 2012, and
report to the Legislature on the regulations. Beginning in
2018, at least every 5 years afterwards, each agency is
directed to review its regulations that have been in effect
for at least 20 years and submit a report to the
Legislature on its findings associated with the review. (On
calendar today in this Committee)
SB 401 (Fuller, 2011) . Specifies that every regulation
proposed by an agency after January 1, 2012, include a
provision repealing the regulation in 5 years. Prohibits
OAL from approving a proposed regulation unless it contains
repeal provisions. (On calendar today in this Committee)
SB 553 (Fuller, 2011) . Specifies that a regulation that
has or is likely to have an adverse economic impact of $10
million or more becomes effective 180 days after adoption.
(On calendar today in this Committee)
AB 127 (Logue, 2011) . Specifies that a regulation or an
order of repeal required to be filed with the Secretary of
State shall become effective on January 1 next following a
90-day period after the date of filing. (Pending in
Assembly)
SB 954 (Harman, 2010) . Would have required the Assembly
Committee on Rules and the Senate Committee on Rules to
refer any bill that may have a statewide economic impact
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affecting business, as specified, to a newly created Joint
Committee for the preparation of an economic impact
analysis and a hearing and approval. Would have required
the Joint Committee to move a bill estimated to generate a
fiscal impact of $10,000 or more on small business, or
$50,000 or more on any other business, to the suspense file
of the committee for further consideration. (Dropped)
SUPPORT:
American Chemistry Council
American Council of Engineering Companies of California
California Association of Bed and Breakfast Inns
California Building Industry Association
California Business Properties Association
California Chapter of the American Fence Association
California Construction and Industrial Material Association
California Fence Contractors' Association
California Grocers Association
California Hotel and Lodging Association
California League of Conservation Voters
California Manufacturers and Technology Association
California Restaurant Association
California Retailers Association
Coalition of Small and Disabled Veteran Businesses
Consumer Specialty Products Association
Engineering and Utility Contractors Association
Engineering Contractors' Association
Flasher Barricade Association
Golden State Builders Exchanges
Marin Builders' Association
National Federation of Independent Business
OPPOSE:
American Lung Association
Breathe California
Clean Water Action
Sierra Club California
Union of concerned Scientists
FISCAL COMMITTEE: Yes
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