BILL ANALYSIS �
Bill No: SB
981
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
SB 981 Author: Huff
As Amended: April 10, 2014
Hearing Date: April 22, 2014
Consultant: Paul Donahue
SUBJECT
Regulations: Review process
DESCRIPTION
This bill would require each state agency to review each
regulation adopted prior to January 1, 2014, and to develop
a report to the Legislature containing prescribed
information. Specifically, this bill :
1)Requires each agency to review each regulation adopted
prior to January 1, 2014, and develop a report that
includes at least the following information for each
regulation:
a) The date that the Office of Administrative Law
(OAL) approved the regulation.
b) The purpose.
c) The statutory authority.
d) The identification of impacted sectors.
e) The direct costs by sector.
f) Whether the regulation is duplicative of other
regulations.
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g) Whether the regulation is still relevant.
h) Whether the regulation needs to be updated in order
to become more effective or less burdensome.
2)Requires the agency to consult with parties affected by
the regulation in developing the report, and submit the
report to the Legislature by January 1, 2016.
3)Specifies that, to the extent that an agency is a
component member of another agency, the member agency
shall submit a copy of its report to the highest ranking
agency head prior to submitting the report to the
Legislature.
4)Requires an agency head to review the reports for each
component agency to identify duplicative or conflicting
regulations between departments.
5)Requires each agency, by January 1, 2021, and at least
every 5 years thereafter, to conduct additional reviews
of regulations that have been in effect for at least 20
years, as specified, and to submit an annual report to
the Legislature that identifies the regulations reviewed
during that year and the associated findings, as outlined
above.
EXISTING LAW
1)The Administrative Procedure Act (APA) governs the
process for adoption, amendment, or repeal of regulations
by state agencies charged with the implementation of
statutes, and for legal review of those regulatory
actions. (Govt. Code � 11340 et seq.)
2)Directs the OAL, at the request of any standing, select,
or joint committee of the Legislature, to initiate a
priority review of any regulation that the committee
believes does not meet the standards of (1) necessity,
(2) authority, (3) clarity, (4) reference, and (5)
nonduplication. (Govt. Code � 11349.7)
3)Specifies that if OAL is notified of, or on its own
becomes aware of, an existing regulation for which the
statutory authority has been repealed or becomes
ineffective, then the OAL shall order the agency to show
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cause why the regulation should not be repealed, and
shall notify the Legislature in writing of this order.
(Govt. Code � 11349.8)
4)Authorizes an agency that is considering adopting,
amending, or repealing a regulation to consult with
interested persons before initiating any regulatory
action. (Govt. Code � 11346)
BACKGROUND
1)Author's statement : The author's office states that,
today, there are well over 28,000 pages of regulations,
with hundreds of new agency laws added each year by
unelected bureaucracies. All of these regulations carry
the same force of law as any legislation, yet there is no
systematic review of agency regulations to determine
whether or not they are duplicative or excessive. The
author notes that OAL does not review the accuracy of
cost information supplied by state agencies when
promulgating regulations. The author predicts that SB 981
will provide policy makers with the objective information
needed to identify job-killing regulations and allow the
state to take appropriate action to reform or repeal
these regulations. The author says that California's
arduous and vast regulatory laws are hampering business
expansion and job growth, and lists specific examples of
the consequences, some of which include:
a) A Sacramento State University study found the total
cost of regulation is approximately $493 billion, or
3.8 million lost jobs - a tenth of the state's
population. Today, there are well over 28,000 pages of
regulations with hundreds of new agency laws added
each year by unelected bureaucracies. All of these
carry the same force of law as any legislation.
b) According to the 2013 Bureau of Labor Statistics,
California ranks the 5th worst state in unemployment.
c) Forbes Magazine ranks California as the most costly
state to do business, while the Chief Executive
Magazine finds California's business climate as the
worst in the nation for 9 years in a row.
2)The regulatory process : Before any state agency can adopt
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a new regulation, the Administrative Procedure Act
(APA)<1> requires OAL to review a proposed regulation
using the following standards: necessity, authority,
clarity, consistency, reference, and non-duplication.<2>
In this regard, "necessity" means that "the record of the
rulemaking proceeding demonstrates by substantial
evidence the need for a regulation to effectuate the
purpose of the statute [or court decision]?" In addition,
the APA defines "authority" as "the provision of law
which permits or obligates the agency to adopt, amend, or
repeal a regulation."<3>
Thus, while it is no doubt true that California has seen
a significant increase in the volume and scope of
administrative agency regulations in recent years, it
should be noted that none of those regulations could ever
have been adopted without express, statutory
authorization by the Legislature.
3)Support : A coalition of business associations contend
that the information provided by SB 981 will help
legislators understand the scope and impact of
regulations to aid their development of sensible state
policies and budgets. Supporters also note that existing
regulations are oftentimes never really reviewed again.
Supporters note that the Legislature retains an important
oversight role in connection with the broad authority
which has been delegated to state agencies on matters of
great importance, such as public health and safety,
consumer protection, business operations and
environmental protections. Finally, small business
advocates note that the overlapping, duplicative or even
obsolete regulations make it difficult for small
businesses to keep up with the changing regulatory
landscape.
4)Opposition : Opponents contend that SB 981 would undermine
the efficiency of state government by requiring all state
agencies to review every regulation they have ever
adopted and write a report about them. Instead, opponents
state, state agencies should be protecting the health and
-------------------------
<1> Govt. Code � 11340 et seq.
<2> Govt. Code � 11349.1
<3> Govt. Code � 11349
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safety of the workers, families, and communities of
California. Opponents state that working people in this
state depend upon their state agencies to make sure that
they are paid fairly, that they have a safe workplace,
and that their children have access to clean air and
water.
5)Technical amendments : On page 2, lines 1 and 2, the
following amendments are suggested:
11349.10. (a) Each agency shall review each regulation
that it adopted prior to January 1, 2014. The review
shall be developed ?
On page 2, lines 25 to 27, inclusive should be amended,
to read:
(e) This section shall remain in effect only until
January 1, 2020, and as of that date is repealed, unless
a later enacted statute, that is enacted before January
1, 2010 2020, deletes or extends that date.
PRIOR/RELATED LEGISLATION
SB 396 (Huff), 2011-2012 Session. Would have required each
agency to review each regulation adopted prior to January
1, 2011, and develop a report with prescribed information
that shall be submitted to the Legislature on or before
January 1, 2013. (Held in Senate Environmental Quality
Committee)
SB 366 (Calderon), 2011-2012 Session. Would have required
each state agency to review its regulations to identify
duplicative, overlapping, inconsistent or outdated
provisions and repeal or amend identified regulations.
Creates a Streamlined Permit Review Team charged with
improving the efficiency of the state permitting process
for development projects. (Held in this Committee)
SB 401 (Fuller), 2011-2012 Session. Would have required
every regulation proposed by an agency after January 1,
2012, include a provision repealing the regulation in 5
years. (Held in Senate Environmental Quality Committee)
SB 942 (Dutton), 2009-2010 Session. Would have required
state agencies that are proposing a regulatory action to
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submit more detailed cost information. (Held in Senate
Appropriations Committee)
SUPPORT:
California Asian Pacific Chamber of Commerce
California Business Properties Association
California Business Roundtable
California Chamber of Commerce
California Manufacturers and Technology Association
California Restaurant Association
Consumer Specialty Products Association
Howard Jarvis Taxpayers Association
Industrial Environmental Association
National Aerosol Association
National Federation of Independent Business
Pacific Merchant Shipping Association
OPPOSE:
California Conference of Machinists
California Conference of the Amalgamated Transit Union
California Labor Federation
California Teamsters Public Affairs Council
Engineers & Scientists, IFPTE Local 20
International Longshore and Warehouse Union, Coast Division
Professional & Technical Engineers, IFPTE Local 21
State Building and Construction Trades Council
UNITE HERE
Utility Workers Union of America, Local 132
FISCAL COMMITTEE: Senate Appropriations Committee
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