Bill Text: CA AB2893 | 2021-2022 | Regular Session | Amended
Bill Title: Administrative Procedure Act: standardized regulatory impact analysis: comments, updates, and format.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Engrossed - Dead) 2022-08-11 - In committee: Held under submission. [AB2893 Detail]
Download: California-2021-AB2893-Amended.html
|
Amended
IN
Assembly
April 21, 2022 |
CALIFORNIA LEGISLATURE—
2021–2022 REGULAR SESSION
Assembly Bill
No. 2893
| Introduced by Assembly Member Daly |
February 18, 2022 |
An act to amend Section Sections 11346.3 and 11346.5 of the Government Code, relating to administrative hearings.
LEGISLATIVE COUNSEL'S DIGEST
AB 2893, as amended, Daly.
Administrative Procedure Act: standardized regulatory impact analysis: comments. comments, updates, and format.
Existing law, the Administrative Procedure Act, among other things, prohibits a state agency from issuing, utilizing, enforcing, or attempting to enforce any guideline, standard of general application, or other rule, among other things, that is a regulation, as defined, unless it has been adopted as a regulation and filed with the Secretary of State. The act requires every agency subject to the act to submit to the Office of Administrative Law a notice of proposed action and make available to the public a copy of an initial statement of reasons, among other things. The act requires each state agency proposing to adopt, amend, or repeal a major regulation on or after November 1, 2013, to prepare a standardized regulatory impact analysis, as described. Existing
described, as part of the initial statement of reasons.
Existing law requires each state agency that has prepared that analysis to submit the analysis to the Department of Finance. Existing law authorizes the state agency to update its analysis to reflect any comments received from the department.
This bill would, instead, require the state agency to update its analysis to reflect any comments received from the department, as described above. The bill would also require, if the proposed major regulation is updated following the department’s comments, the state agency to take public comment for 30 additional days each time the
regulation is updated and the state agency to update its analysis and submit the analysis to the department for comment, as described.
The act requires the notice of proposed action to include, among other things, a statement of the results of an economic impact assessment or the analysis, as applicable, a summary of any of the department’s comments, and the agency’s response to those comments.
This bill would require the department to adopt, by November 1, 2024, and in consultation with the office and other state agencies, regulations for communicating the results of the standardized regulatory impact analysis in a standardized format, as described.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NOBill Text
The people of the State of California do enact as follows:
SECTION 1.
Section 11346.3 of the Government Code is amended to read:11346.3.
(a) A state agency proposing to adopt, amend, or repeal any administrative regulation shall assess the potential for adverse economic impact on California business enterprises and individuals, avoiding the imposition of unnecessary or unreasonable regulations or reporting, recordkeeping, or compliance requirements. For purposes of this subdivision, assessing the potential for adverse economic impact shall require agencies, when proposing to adopt, amend, or repeal a regulation, to adhere to the following requirements, to the extent that these requirements do not conflict with other state or federal laws:(1) The proposed adoption, amendment, or repeal of a regulation shall be based
on adequate information concerning the need for, and consequences of, proposed governmental action.
(2) The state agency, prior to submitting a proposal to adopt, amend, or repeal a regulation to the office, shall 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. For purposes of evaluating the impact on the ability of California businesses to compete with businesses in other states, an agency shall consider, but not be limited to, information supplied by interested parties.
(3) An economic impact assessment prepared pursuant to this subdivision for a proposed regulation that is not a major regulation or that is a major regulation proposed prior to November 1,
2013, shall be prepared in accordance with subdivision (b), and shall be included in the initial statement of reasons as required by Section 11346.2. An economic assessment prepared pursuant to this subdivision for a major regulation proposed on or after November 1, 2013, shall be prepared in accordance with subdivision (c), and shall be included in the initial statement of reasons as required by Section 11346.2.
(b) (1) A state agency proposing to adopt, amend, or repeal a regulation that is not a major regulation or that is a major regulation proposed prior to November 1, 2013, shall prepare an economic impact assessment that assesses whether and to what extent it will affect the following:
(A) The creation or elimination of jobs within the state.
(B) The creation of new businesses or the elimination of existing businesses within the state.
(C) The expansion of businesses currently doing business within the state.
(D) The benefits of the regulation to the health and welfare of California residents, worker safety, and the state’s environment.
(2) This subdivision does not apply to the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.
(3) Information required from a state agency for the purpose of completing the assessment may come from existing state publications.
(4) (A) For purposes of conducting the economic impact assessment pursuant to this subdivision, a state agency may use the consolidated definition of small business in subparagraph (B) in order to determine the number of small businesses within the economy, a specific industry sector, or geographic region. The
state agency shall clearly identify the use of the consolidated small business definition in its rulemaking package.
(B) For the exclusive purpose of undertaking the economic impact assessment, a “small business” means a business that is all of the following:
(i) Independently owned and operated.
(ii) Not dominant in its field of operation.
(iii) Has fewer than 100 employees.
(C) Subparagraph (A) shall not apply to a regulation adopted by the Department of Insurance that applies to an insurance company.
(c) (1) Each state agency proposing to adopt, amend, or repeal a major regulation on or after November 1, 2013, shall prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance pursuant to Section 11346.36. The standardized regulatory impact analysis shall address all of the following:
(A) The creation or elimination of jobs within the state.
(B) The creation of new businesses or the elimination of existing businesses within the state.
(C) The competitive advantages or disadvantages for businesses currently doing business within the state.
(D) The increase or decrease of investment in the
state.
(E) The incentives for innovation in products, materials, or processes.
(F) The benefits of the regulations, including, but not limited to, benefits to the health, safety, and welfare of California residents, worker safety, and the state’s environment and quality of life, among any other benefits identified by the agency.
(2) This subdivision shall not apply to the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.
(3) Information required from state agencies for the purpose of completing the analysis may be derived from existing state, federal, or academic publications.
(d) Any administrative regulation adopted on or after January 1, 1993, that requires a report shall not apply to businesses, unless the state agency adopting the regulation makes a finding that it is necessary for the health, safety, or welfare of the people of the state that the regulation apply to businesses.
(e) Analyses conducted pursuant to this section are intended to provide agencies and the public with tools to determine whether the regulatory proposal is an efficient and effective means of implementing the policy decisions enacted in statute or by other provisions of law in the least burdensome manner. Regulatory impact analyses shall inform the agencies and the public of the economic consequences of regulatory choices, not reassess statutory policy. The baseline for the
regulatory analysis shall be the most cost-effective set of regulatory measures that are equally effective in achieving the purpose of the regulation in a manner that ensures full compliance with the authorizing statute or other law being implemented or made specific by the proposed regulation.
(f) Each state agency proposing to adopt, amend, or repeal a major regulation on or after November 1, 2013, and that has prepared a standardized regulatory impact analysis pursuant to subdivision (c), shall submit that analysis to the Department of Finance upon completion. The department shall comment, within 30 days of receiving that analysis, on the extent to which the analysis adheres to the regulations adopted pursuant to Section 11346.36. Upon receiving the comments from the department, the agency shall update its analysis to reflect any
comments received from the department and shall summarize the comments and the response of the agency along with a statement of the results of the updated analysis for the statement required by paragraph (10) of subdivision (a) of Section 11346.5.
(g) If the proposed major regulation is updated following the Department of Finance’s comments pursuant to subdivision (f), all of the following apply:
(1) The state agency shall take public comment for 30 additional days each time the proposed major regulation is updated.
(2) The state agency shall update its standardized regulatory impact analysis and submit the analysis to the department. The department shall comment on the analysis and the state agency shall update the analysis in compliance with subdivision (f). This requirement shall apply each time the proposed major regulation is updated following the department’s comments under subdivision (f) or this paragraph.
SEC. 2.
Section 11346.5 of the Government Code is amended to read:11346.5.
(a) The notice of proposed adoption, amendment, or repeal of a regulation shall include the following:(1) A statement of the time, place, and nature of proceedings for adoption, amendment, or repeal of the regulation.
(2) Reference to the authority under which the regulation is proposed and a reference to the particular code sections or other provisions of law that are being implemented, interpreted, or made specific.
(3) An informative digest drafted in plain English in a format similar to the Legislative Counsel’s digest on legislative bills. The informative digest shall include the following:
(A) A concise and clear summary of existing laws and regulations, if any, related directly to the proposed action and of the effect of the proposed action.
(B) If the proposed action differs substantially from an existing comparable federal regulation or statute, a brief description of the significant differences and the full citation of the federal regulations or statutes.
(C) A policy statement overview explaining the broad objectives of the regulation and the specific benefits anticipated by the proposed adoption, amendment, or repeal of a regulation, including, to the extent applicable, nonmonetary benefits such as the protection of public health and safety, worker safety, or the environment, the prevention of discrimination, the promotion of fairness or social equity, and the increase in openness and transparency
in business and government, among other things.
(D) An evaluation of whether the proposed regulation is inconsistent or incompatible with existing state regulations.
(4) Any other matters as are prescribed by statute applicable to the specific state agency or to any specific regulation or class of regulations.
(5) A determination as to whether the regulation imposes a mandate on local agencies or school districts and, if so, whether the mandate requires state reimbursement pursuant to Part 7 (commencing with Section 17500) of Division 4.
(6) An estimate, prepared in accordance with instructions adopted by the Department of Finance, of the cost or savings to any state agency, the cost to any local agency or school district that is required to be
reimbursed under Part 7 (commencing with Section 17500) of Division 4, other nondiscretionary cost or savings imposed on local agencies, and the cost or savings in federal funding to the state.
For purposes of this paragraph, “cost or savings” means additional costs or savings, both direct and indirect, that a public agency necessarily incurs in reasonable compliance with regulations.
(7) If a state agency, in proposing to adopt, amend, or repeal any administrative regulation, makes an initial determination that the action may have a significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states, it shall include the following information in the notice of proposed action:
(A) Identification of the types of businesses that would be
affected.
(B) A description of the projected reporting, recordkeeping, and other compliance requirements that would result from the proposed action.
(C) The following statement: “The (name of agency) has made an initial determination that the (adoption/amendment/repeal) of this regulation may have a significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states. The (name of agency) (has/has not) considered proposed alternatives that would lessen any adverse economic impact on business and invites you to submit proposals. Submissions may include the following considerations:
(i) The establishment of differing compliance or reporting requirements or timetables that take into account the resources available to
businesses.
(ii) Consolidation or simplification of compliance and reporting requirements for businesses.
(iii) The use of performance standards rather than prescriptive standards.
(iv) Exemption or partial exemption from the regulatory requirements for businesses.”
(8) If a state agency, in adopting, amending, or repealing any administrative regulation, makes an initial determination that the action will not have a significant, statewide adverse economic impact directly affecting business, including the ability of California businesses to compete with businesses in other states, it shall make a declaration to that effect in the notice of proposed action. In making this declaration, the agency shall provide in the record facts, evidence, documents,
testimony, or other evidence upon which the agency relies to support its initial determination.
An agency’s initial determination and declaration that a proposed adoption, amendment, or repeal of a regulation may have or will not have a significant, adverse impact on businesses, including the ability of California businesses to compete with businesses in other states, shall not be grounds for the office to refuse to publish the notice of proposed action.
(9) A description of all cost impacts, known to the agency at the time the notice of proposed action is submitted to the office, that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.
If no cost impacts are known to the agency, it shall state the following:
“The agency is not aware of any cost
impacts that a representative private person or business would necessarily incur in reasonable compliance with the proposed action.”
(10) A In accordance with regulations adopted pursuant to subdivision (c), a statement of the results of the economic impact assessment required by subdivision (b) of Section 11346.3 or the standardized regulatory impact analysis if required by subdivision (c) of Section 11346.3, a summary of any comments submitted to the agency pursuant to subdivision (f) of Section 11346.3 and the agency’s response to those comments.
(11) The finding prescribed by subdivision (d) of Section 11346.3, if required.
(12) (A) A statement that the action would have a significant effect on housing costs, if a state agency, in adopting, amending, or repealing any administrative regulation, makes an initial determination that the action would have that effect.
(B) The agency officer designated in paragraph (14) shall make available to the public, upon request, the agency’s evaluation, if any, of the effect of the proposed regulatory action on housing costs.
(C) The statement described in subparagraph (A) shall also include the estimated costs of compliance and potential benefits of a building standard, if any, that were included in the initial statement of reasons.
(D) For purposes of model codes adopted pursuant to Section 18928 of the Health and Safety Code, the agency shall comply with the
requirements of this paragraph only if an interested party has made a request to the agency to examine a specific section for purposes of estimating the costs of compliance and potential benefits for that section, as described in Section 11346.2.
(13) A statement that the adopting agency must determine that no reasonable alternative considered by the agency or that has otherwise been identified and brought to the attention of the agency would be more effective in carrying out the purpose for which the action is proposed, would be as effective and less burdensome to affected private persons than the proposed action, or would be more cost effective to affected private persons and equally effective in implementing the statutory policy or other provision of law. For a major regulation, as defined by Section 11342.548, proposed on or after November 1, 2013, the statement shall be based, in part, upon the standardized regulatory impact analysis of
the proposed regulation, as required by Section 11346.3, as well as upon the benefits of the proposed regulation identified pursuant to subparagraph (C) of paragraph (3).
(14) The name and telephone number of the agency representative and designated backup contact person to whom inquiries concerning the proposed administrative action may be directed.
(15) The date by which comments submitted in writing must be received to present statements, arguments, or contentions in writing relating to the proposed action in order for them to be considered by the state agency before it adopts, amends, or repeals a regulation.
(16) Reference to the fact that the agency proposing the action has prepared a statement of the reasons for the proposed action, has available all the information upon which its proposal is based, and has
available the express terms of the proposed action, pursuant to subdivision (b).
(17) A statement that if a public hearing is not scheduled, any interested person or his or her their duly authorized representative may request, no later than 15 days prior to the close of the written comment period, a public hearing pursuant to Section 11346.8.
(18) A statement indicating that the full text of a regulation changed pursuant to Section 11346.8 will be available for at least 15 days prior to the date on which the agency adopts, amends, or repeals the resulting regulation.
(19) A statement explaining how to obtain a copy of the final
statement of reasons once it has been prepared pursuant to subdivision (a) of Section 11346.9.
(20) If the agency maintains an Internet Web site internet website or other similar forum for the electronic publication or distribution of written material, a statement explaining how materials published or distributed through that forum can be accessed.
(21) If the proposed regulation is subject to Section 11346.6, a statement that the agency shall provide, upon request, a description of the proposed changes included in the proposed action, in the manner provided by Section 11346.6, to accommodate a person with a visual or other disability for which effective communication is required under
state or federal law and that providing the description of proposed changes may require extending the period of public comment for the proposed action.
(b) The agency representative designated in paragraph (14) of subdivision (a) shall make available to the public upon request the express terms of the proposed action. The representative shall also make available to the public upon request the location of public records, including reports, documentation, and other materials, related to the proposed action. If the representative receives an inquiry regarding the proposed action that the representative cannot answer, the representative shall refer the inquiry to another person in the agency for a prompt response.
(c) For purposes of paragraph (10) of subdivision (a), by November 1, 2024, the Department
of Finance shall adopt, in consultation with the office and other state agencies, regulations for communicating the results of the standardized regulatory impact analysis in a standardized format. The standardized format shall include, at minimum, a single-page summary that includes a summary of all the information required in subdivision (c) of Section 11346.3 for the proposed regulation alongside any proposed regulatory alternatives.
(c)
(d) This section shall not be construed in any manner that results in the invalidation of a regulation because of the alleged inadequacy of the notice content or the summary or cost estimates, or the alleged
inadequacy or inaccuracy of the housing cost estimates, if there has been substantial compliance with those requirements.
