Today's Law As Amended


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AB-1504 Administrative regulations.(2011-2012)



As Amends the Law Today


SECTION 1.

 Section 11342.548 of the Government Code is amended to read:

11342.548.
 “Major regulation” means any proposed adoption, amendment, or repeal of a regulation subject to review by the Office of Administrative Law pursuant to Article 6 (commencing with Section 11349) that will have an economic impact on California business enterprises and individuals in an amount exceeding fifty twenty-five  million dollars ($50,000,000), ($25,000,000),  as estimated by the agency.

SEC. 2.

 Section 11346 of the Government Code is amended to read:

11346.
 (a) It is the purpose of this chapter to establish basic minimum procedural requirements for the adoption, amendment, or repeal of administrative regulations. Except as provided in Section 11346.1, the provisions of this chapter are applicable to the exercise of any quasi-legislative power conferred by any statute heretofore or hereafter enacted, but nothing in this chapter repeals or diminishes additional requirements imposed by any statute. This chapter shall not be superseded or modified by any subsequent legislation except to the extent that the legislation shall do so expressly.
(b) An  As provided in Sections 11346.25 and 11346.3, an  agency that is considering adopting, amending, or repealing a regulation may shall  consult with interested persons before initiating regulatory action pursuant to this article.

SEC. 3.

 Section 11346.25 is added to the Government Code, to read:

11346.25.
 (a) An agency that is considering adopting, amending, or repealing a regulation shall complete an economic assessment of the proposed action 90 days prior to submitting a notice of proposed action to the office.
(b) The economic assessment shall be subject to public comment and shall include all of the following:
(1) An assessment of the costs associated with the proposed action, including whether the proposed action, if adopted, may result in the expenditure of moneys by any individual, business, state government entity, or local government entity.
(2) A description of the expenditure of any moneys identified pursuant to paragraph (1), including examples of how the proposed action may result in the expenditure of moneys by an individual, business, state entity, or local entity.
(3) An analysis of how the proposed action shall implement or meet the statutory purpose for which the proposed action is necessary, and the reason for its necessity.
(4) An analysis that takes into consideration and addresses the public comments received by the agency.
(5) In the case of a major regulation, an analysis that considers alternative regulations, which shall also be included in the analysis required under Section 11346.37.
(c) The agency shall notify the public of the public comment period for the economic assessment 90 days prior to submitting a notice of proposed action to the office, pursuant to the following:
(1) The agency shall identify all interested parties that may be affected by the proposed regulation.
(2) The agency shall post that identification on its Internet Web site along with a preliminary notice of proposed rulemaking and initial statement of reasons.
(3) The agency shall make public all comments that are received under this section.
(d) The economic assessment required by this section shall be prepared in addition to the economic impact analysis required under Section 11346.3, and shall be filed with the office with the notice of proposed action.

SEC. 4.

 Section 11346.3 of the Government Code is amended to read:

11346.3.
 (a) A state agency  State agencies  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  analysis  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 (b). An economic analysis  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 All  state agency agencies  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 analysis  that assesses whether and to what extent it will affect the following:
(A) The creation or elimination of jobs within the state. State of California. 
(B) The creation of new businesses or the elimination of existing businesses within the state. State of California. 
(C) The expansion of businesses currently doing business within the state. State of California. 
(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 agencies  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 assessment  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.
(G) An analysis of reasonable alternatives as required under Section 11346.37.
(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 assessment  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 assessment  pursuant to subdivision (c), shall submit that analysis assessment  to the Department of Finance upon completion. The department shall comment, within 30 days of receiving that analysis, such assessment,  on the extent to which the analysis assessment  adheres to the regulations adopted pursuant to Section 11346.36. Upon receiving the comments from the department, the agency may 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.

SEC. 5.

 Section 11346.36 of the Government Code is amended to read:

11346.36.
 (a) Prior to November 1, 2013, the Department of Finance, in consultation with the office and other state agencies, shall adopt regulations for conducting the standardized regulatory impact analyses required by subdivision (c) of Section 11346.3.
(b) The regulations, at a minimum, shall assist the agencies in specifying the methodologies for:
(1) Assessing and determining the benefits and costs of the proposed regulation, expressed in monetary terms to the extent feasible and appropriate. Assessing the value of 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, the increase in the openness and transparency of business and government and other nonmonetary benefits consistent with the statutory policy or other provisions of law.
(2) Comparing proposed regulatory alternatives with an established baseline so agencies can make analytical decisions for the adoption, amendment, or repeal of regulations necessary to determine that the proposed action is the most effective, or equally effective and less burdensome, alternative in carrying out the purpose for which the action is proposed, or the most cost-effective alternative to the economy and to affected private persons that would be equally effective in implementing the statutory policy or other provision of law.
(3) Determining the impact of a regulatory proposal on the state economy, businesses, and the public welfare, as described in subdivision (c) of Section 11346.3.
(4) Assessing the effects of a regulatory proposal on the General Fund and special funds of the state and affected local government agencies attributable to the proposed regulation.
(5) Determining the cost of enforcement and compliance to the agency and to affected business enterprises and individuals.
(6) Making the estimation described in Section 11342.548.
(7) Complying with the requirements under Section 11346.37.
(c) To the extent required by this chapter, the department shall convene a public hearing or hearings and take public comment on any draft regulation. Representatives from state agencies and the public at large shall be afforded the opportunity to review and comment on the draft regulation before the regulation is adopted in final form.
(d) State agencies shall provide the Director of Finance and the office ready access to their records and full information and reasonable assistance in any matter requested for purposes of developing the regulations required by this section. This subdivision shall not be construed to authorize an agency to provide access to records required by statute to be kept confidential.
(e) The standardized regulatory impact analysis prepared by the proposing agency shall be included in the initial statement of reasons for the regulation as provided in subdivision (b) of Section 11346.2.
(f) On or before November 1, 2013, the department shall submit the adopted regulations to the Senate and Assembly Committees on Governmental Organization and shall publish the adopted regulations in the State Administrative Manual.

SEC. 6.

 Section 11346.37 is added to the Government Code, to read:

11346.37.
 (a) An agency that proposes to adopt a major regulation pursuant to Section 11346.3 shall include in its standardized regulatory impact assessment both of the following:
(1) An assessment of the cost effectiveness of alternatives that meet the statutory purpose of the proposed major regulation and a determination of which alternative is the lowest cost alternative.
(2) A demonstration that the proposed major regulation is the most cost-effective approach to meeting the statutory purpose of the regulation as compared to all other alternatives.
(b) In implementing this section, an agency shall make a substantial effort to engage all regulated and interested parties in the development of alternatives that would satisfy the statutory purpose of the proposed major regulation. Public comment under Section 11346.25 shall be taken into consideration and utilized to refine the analysis under this section and to develop additional alternatives. The agency shall consider and address all comments made during the public comment period under Section 11346.25 pertaining to its analysis of the alternatives, including why the agency selected the proposed major regulation as compared to the alternatives.
(c) The requirements of this section shall be in addition to the analysis required under paragraph (5) of subdivision (b) of Section 11346.2.
(d) For purposes of this section, “alternative” means any other alternative approach or project that could be, or could have been, considered by the agency in lieu of the proposed major regulation.