BILL ANALYSIS �
Senate Appropriations Committee Fiscal Summary
Senator Kevin de Le�n, Chair
SB 1091 (Galgiani) - Administrative procedures.
Amended: As introduced Policy Vote: GO 8-0
Urgency: No Mandate: No
Hearing Date: April 7, 2014
Consultant: Mark McKenzie
This bill meets the criteria for referral to the Suspense File.
Bill Summary: SB 1091 would require state agencies to provide
advance notice of specified meetings and hearings that occur
prior to publication of formal notice of proposed regulatory
action in the California Regulatory Notice Register (Register).
The new notice must be published in the Register at least 15
days in advance of the meeting or hearing. The bill would also
require the Office of Administrative Law (OAL) to make the
Register available in an electronically searchable web-based
format and provide for specified subscription services related
to the Register by January 1, 2017.
Fiscal Impact:
Estimated one-time information technology costs of $975,000
(General Fund) to make the Register available in a web-based
searchable format and provide for subscription services by
January 1, 2017. Additional ongoing IT support costs of
approximately $410,000 annually (General Fund).
OAL costs of approximately $61,000 annually for the
addition of one permanent staff services analyst position to
manage the publication of the new notices and administer
activities related to the web-based Register (General Fund).
Reduction in contract revenues related to publication of
the Register, likely in the range of $50,000 to $100,000
annually related to the new notice requirements (General
Fund). Additional reductions in contract revenues are
expected as a result of the requirements for the Register to
include web-based search functionality. (See staff comments)
Unknown potentially significant aggregate impact on over
200 state agencies related to the increased notice
publication requirements. (General Fund and Various Special
Funds).
Background: The OAL is charged with ensuring that agency
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regulations are clear, necessary, legally valid, and available
to the public. OAL is responsible for reviewing administrative
regulations proposed by over 200 state regulatory agencies for
compliance with the standards set forth in California's
Administrative Procedure Act (APA), for transmitting these
regulations to the Secretary of State, and for publishing
regulations in the California Code of Regulations (CCR). OAL
oversees the publication and distribution, in print and on the
Internet, of the CCR and the California Regulatory Notice
Register. Existing law requires OAL, on a weekly basis, to post
a copy of the Register and links to regulations proposed by
state agencies on its website.
Existing law requires all state agencies to provide public
notice of proposed action at least 45 days prior to a hearing
and close of public comment period on the adoption, amendment,
or repeal of a regulation. State agencies considering adopting,
amending, or repealing a regulation are authorized to consult
with interested persons before initiating any formal regulatory
action. When a state agency is proposing to adopt complex or
numerous regulatory proposals, existing law requires the agency,
prior to publication of a required notice of public regulations,
to involve parties who would be subject to those proposed
regulations in public discussions. The OAL is specifically
exempted from participation in any such preliminary discussions.
Proposed Law: SB 1091 would require state agencies to publish
notice of "pre-rulemaking" activities in the Register, as
specified, and require OAL to make the Register available in a
searchable web-based format that allows for subscription
services by January 1, 2017. Specifically, this bill would:
Require OAL to publish additional notices specified
below in the Register.
Require OAL to make the Register available in an
electronically searchable Internet-Web based format by
January 1, 2017, and include the ability for interested
parties to subscribe to an email notification of the
Register and specific notices.
Require state agencies to submit notices of "proposed
rulemaking activity" to OAL for publication in the Register
at least 15 days prior to a noticed meeting or hearing
date.
Define "proposed rulemaking activity" as any meeting or
activity that occurs prior to the mailing or posting of
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specified rulemaking notices (45-day notices of proposed
action) for which an agency posts a public notice of a
meeting or hearing on its website.
Specify that "proposed rulemaking activity" includes the
following: informational hearings, workshops, scoping
hearings, preliminary meetings, and public and stakeholder
outreach meetings.
Require the contents of the notice of proposed
rulemaking activity to include the agency organizing the
meeting, logistical information about the meeting, and
website links to the public meeting notice and any
information connected to the meeting.
Specify that if an agency fails to publish a proposed
rulemaking activity notice, such a failure will not
invalidate actions by the agency taken during the 45-day
comment period, as long as the agency submits the required
notice for publication in the Register and permits public
comment related to the unnoticed meeting for an additional
15 days after all relevant materials are posted to its
website, as specified.
Specify that an intentional failure of the public to
delay notice to an agency of a known publication oversight
constitutes a waiver of the right to object and shall not
invalidate an agency's rulemaking action if the agency
published the required public comment period in the
Register and has made every reasonable effort to remedy the
publication oversight.
Prohibit an agency from conditioning consideration of
comments received during the 45-day comment period on
attendance at proposed rulemaking activities, and require
an agency to consider relevant issues raised outside of
those activities.
Related Legislation: SB 176 (Galgiani), which was held on the
Assembly Appropriations Committee Suspense File last year, would
have, among other things, required state agencies to include
parties that would be subject to a proposed regulation in public
discussions prior to the publication of the rulemaking notice,
regardless of the complexity of the proposal.
Staff Comments: This bill will likely cause OAL to re-negotiate
the contract it currently has with the publisher (West
Publishing Corporation) of the California Regulatory Notice
Register. Pursuant to the terms of the current contract, West
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pays the state $400,000 annually, plus 7% royalties, through the
2015 calendar year for the privilege of publishing the Register
and California Code of Regulations. The contract includes a
provision specifying that if there are any changes to California
law that result in the alteration of publication services, and
such changes result in increased costs to the contractor (West),
an equitable adjustment to the compensation must be negotiated.
Since this bill would likely result in a substantial increase in
the number of pages in the weekly publication of the Register,
as well as an increase in workload to the publisher, it is
likely that the bill would result in a reduction in contract
revenues that accrue to the General Fund. The publishing
contract currently results in approximately $600,000 annually in
payments to the General Fund. Staff estimates that this bill
would likely reduce contract revenues by up to $100,000
annually.
OAL indicates that the bill would require the addition of one
permanent staff services analyst position at a cost of
approximately $61,000 to review, process, manage, monitor, and
prepare the weekly publication of additional notices required by
the bill, and administer subscription services and electronic
mail notifications related to the web-based Register
requirements. Although the number of new notices submitted by
state agencies for publication in the Register is
indeterminable, it is likely that figures would range in the
hundreds annually for notices of informational hearings,
workshops, scoping hearings, preliminary meetings, public and
stakeholder outreach meetings, and other meetings related to
"proposed rulemaking activity" for which an agency posts a
notice on its website.
Costs for state agencies to comply with the bill are
unquantifiable, but likely significant. There are approximately
225 state agencies with rulemaking powers, and compliance costs
would depend upon how each of these entities interprets what
constitutes a "proposed rulemaking activity" that occurs in
advance of publication of the current 45-day notice of proposed
regulatory action in the Register. The bill requires state
agencies to submit a notice to OAL for publication in the
Register at least 15 days in advance of any meeting or hearing
that occurs prior to the formal notice of regulatory action, for
which the agency posts a public notice on its website. The bill
also includes a non-exclusive list of the types of meetings or
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hearings that constitute a "proposed rulemaking activity" for
which a notice is required. Each notice of these specified
meetings and hearings that are provided to the OAL for
publication in the Register is likely to involve numerous
bureaucratic steps for review within each agency (legal,
regulatory, and executive staff, at a minimum). Lastly, staff
notes that OAL requires state agencies to submit notices for
publication in the Register at least 10 days in advance of the
Friday on which the Register is published. As such, the
requirement in the bill that the notice of "proposed rulemaking
activity" appear in the Register at least 15 days prior to the
meeting or hearing is effectively a minimum of 25 day period for
agency planning purposes.
SB 1091 also includes two distinct IT components that OAL must
implement prior to January 1, 2017: (1) the Register must be
made available in an "electronically searchable Internet-Web
based format;" and (2) the functionality must include the
availability for interested parties to subscribe to an
electronic mail notification subscription of the Register or any
specific notices contained therein. Preliminary estimates from
the Department of Technology indicate that the new IT
requirements would result in one-time costs of approximately
$975,000 for application development and infrastructure in the
first year, and ongoing support costs of approximately $410,000
annually. These costs do not include any pre-project approval
activities, such as the development of a business analysis or
feasibility study report, which are required for all new IT
projects. In addition, the IT components are likely to result
in new costs for West Publishing that are outside the parameters
of the existing contract. Under the current contract with West,
the Register is provided in hardcopy and PDF format. Depending
on the specific requirements for search functionality, West
would likely have to provide Register data in a new format,
resulting in higher costs to West, and decreased contract
payments to the General Fund.