BILL ANALYSIS �
AB 1711
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Date of Hearing: March 26, 2014
ASSEMBLY COMMITTEE ON ACCOUNTABILITY AND ADMINISTRATIVE REVIEW
Jim Frazier, Chair
AB 1711 (Cooley) - As Amended: March 20, 2014
SUBJECT : Administrative Procedures Act: economic impact
assessment
SUMMARY : Requires an economic impact assessment (EIA) to be
included in the initial statement of reasons (ISOR) that a state
agency submits to the Office of Administrative Law (OAL) when
adopting, amending, or repealing a non-major regulation.
Specifically, this bill :
1)Requires a state agency to include an EIA in the ISOR that is
submitted to OAL when adopting, amending, or repealing a
non-major regulation.
2)Directs the Department of Finance (DOF) to adopt and update,
as necessary, instructions prescribing the methods that an
agency must use in preparing the EIA.
3)Requires the instructions to be included in the State
Administrative Manual, which is a reference guide for
statewide policies, procedures, requirements and information
jointly published by the DOF and the Department of General
Services.
EXISTING LAW:
1)Establishes the OAL to administer the Administrative Procedure
Act (APA) and ensure that state agency regulations are clear,
necessary, legally valid, and available to the public.
2)Prescribes a specific process in the APA for state agencies to
follow that includes assessing the cost of regulations,
providing public notice of proposed regulations and
opportunity for interested parties to comment, and review by
the OAL.
3)Requires state agencies proposing to adopt, amend, or repeal a
regulation to assess the potential for adverse economic impact
on California business enterprises and individuals, as
specified, and to assess whether, and to what extent, the
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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.
4)Defines a "major regulation" to mean any proposed adoption,
amendment, or repeal of a regulation that will have an
economic impact on California business enterprises and
individuals in an amount exceeding $50 million, as estimated
by the agency.
5)Requires a state agency to prepare a standardized regulatory
impact analysis for a proposed major regulation and include
the analysis in the ISOR.
FISCAL EFFECT : This bill has not yet been analyzed by a fiscal
committee.
COMMENTS : The OAL is responsible for reviewing administrative
regulations proposed by over 200 state agencies for compliance
with the standards set forth in the APA. Among other things,
the APA requires a state agency to prepare a standardized
regulatory impact analysis for a proposed major regulation,
defined as having an economic impact of $50 million or more, and
include that in the ISOR. According to the OAL, this
requirement affects approximately 2% of the 600 or so rulemaking
actions each year. The other 98% of rulemaking actions affect
non-major regulations, i.e. those with an economic impact of
less than $50 million.
Under the APA, a state agency proposing a non-major regulation
is required to prepare an EIA for purposes of assessing the
potential adverse economic impact of the proposed regulation.
However, the APA does not currently require the EIA to be
included in the ISOR. The OAL is sponsoring this bill to
clarify that the EIA must be part of the ISOR so that it is made
available to the public for comment at the onset of the
rulemaking process. In addition, this bill includes
requirements specifically instructing state agencies when to
prepare the EIA and how to make the EIA available to the public
for comment.
PRIOR LEGISLATION :
1)AB 12 (Cooley) of 2013 would have required the DOF and the OAL
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to annually review the standardized regulatory impact analyses
for adherence to the regulations adopted by a state agency and
report to the Legislature. AB 12 was vetoed by Governor Brown
who stated that it would have duplicated efforts by the DOF to
review the economic impact of regulations before they are
published.
2)SB 617 (Calderon) Chapter 496, Statutes of 2011, establishes
the $50 million economic impact threshold for a major
regulation and requires a state agency that creates, modifies,
or repeals a major regulation to prepare a standardized
regulatory impact analysis.
REGISTERED SUPPORT / OPPOSITION :
Support
Office of Administrative Law (sponsor)
Opposition
None on file.
Analysis Prepared by : Cassie Royce / A. & A.R. / (916)
319-3600