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AB-691 Agency regulations and economic impact.(2011-2012)

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AB691:v97#DOCUMENT

Amended  IN  Assembly  April 15, 2011
Amended  IN  Assembly  March 31, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Assembly Bill
No. 691


Introduced  by  Assembly Member Perea
(Coauthor(s): Assembly Member Galgiani, Olsen)

February 17, 2011


An act to add Article 10 (commencing with Section 590) to Chapter 3 of Part 1 of Division 1 of the Food and Agricultural Code, and to amend Sections 11346.2, 11346.3, 11346.5, and 11346.9 of the Government Code, relating to permitting regulations.


LEGISLATIVE COUNSEL'S DIGEST


AB 691, as amended, Perea. Department of Food and Agriculture: ombudsman. Agency regulations and economic impact.
Existing law requires the Department of Food and Agriculture to regulate various laws regulating agriculture and farmland in the state. Existing law provides that the department is under the control of a civil executive officer known as the Secretary of Food and Agriculture and authorizes the department to provide for the issuance and renewal on a two-year 2-year basis of licenses, certificates of registration, or other indicia of authority issued by the department or any agency in the department.
This bill would designate the secretary as the ombudsman for the department all state agriculture regulations and would require the ombudsman to provide assistance in understanding the process for obtaining permits, assistance in the expeditious completion of the process for obtaining permits, and agriculture related agriculture-related information and education to assist policy development regarding agricultural issues. The bill would make the ombudsman responsible for reviewing and identifying duplicative agriculture regulations that exist within the state and other government agencies, and to conduct a cumulative impact report prior to any new agriculture regulation. The bill would authorize the ombudsman to initiate the review of duplicative regulations by the Office of Administrative Law, as provided and that may have a negative impact on the agricultural industry, and make recommendations regarding changes necessary to alleviate those negative impacts. The bill would also require the ombudsman to report these recommendations to the President pro Tempore of the Senate and to the Speaker of the Assembly on an annual basis, as specified.
Existing law sets forth procedures for the adoption of administrative regulations. Among other requirements, these provisions require that every agency submit an initial statement of reasons for proposing the adoption, amendment, or repeal of a regulation, including facts, evidence, documents, testimony, or other evidence on which the agency relies to support an initial determination that the action will not have a significant adverse economic impact on business.
This bill would repeal the requirement that every agency include in the initial statement facts, evidence, documents, testimony, or other evidence on which the agency relies to support an initial determination that the action will not have a significant adverse economic impact on business.
Existing law requires that the notice of proposed adoption, amendment, or repeal of a regulation include specified information, including, if the agency makes an initial determination that the action will not have a significant statewide adverse economic impact directly affecting business, a declaration to that effect. Existing law also requires every agency to prepare and submit with an adopted regulation a final statement of reasons that includes, among other things, an explanation setting forth the reasons for rejecting any proposed alternatives that would lessen the adverse economic impact on small businesses.
Existing law also requires state agencies proposing to adopt, amend, or repeal any administrative regulation to assess the potential for adverse economic impact on California business enterprises and individuals, as specified.
The bill would also revise these requirements with respect to the final statement to require that it include an explanation setting forth the reasons for rejecting any proposed alternatives that would lessen the adverse economic impact on any business, rather than small businesses.
The bill would also require an agency to provide in the notice of proposed action documentation of the assessment described above to include cumulative adverse economic impacts, as defined, in addition to other adverse impacts, on California business.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 Article 10 (commencing with Section 590) is added to Chapter 3 of Part 1 of Division 1 of the Food and Agricultural Code, to read:
Article  10. Ombudsman

590.
 (a) The Legislature finds and declares that although many state agencies are responsible for regulating agriculture in this state, none are responsible for determining the cumulative effect of their activities on agriculture.
(b) The secretary is hereby designated as the ombudsman for the Department of Food and Agriculture. The ombudsman shall for state agriculture regulations. The ombudsman shall provide all of the following:
(1) Assistance in understanding the process for obtaining permits required by the department state, and in resolving concerns with that process.
(2) Appropriate direction and assistance in the expeditious completion of the process for obtaining permits required by the department state.
(3) Agriculture-related information and education to assist policy development regarding agricultural issues.

(b)

(c) The ombudsman shall be responsible for the following:
(1) Reviewing and identifying duplicative agricultural regulations that exist within the state and other government agencies. The ombudsman may initiate review of a duplicative regulations by the Office of Administrative Law pursuant to the process specified in Article 7 (commencing with Section 11349.7) of Chapter 3.5 of Part 1 of Division 3 of Title 2 of the Government Code.
(2)Conducting a cumulative impact report prior to the enactment of any new agricultural regulation. that may have a negative impact on the agricultural industry in this state, including, but not limited to, duplicative regulations, and making recommendations regarding necessary changes to state statutes or regulations to alleviate those negative impacts.
(2) The ombudsman shall report to the President pro Tempore of the Senate and the Speaker of the Assembly on or before January 1, 2013, and on and before January 1, each year thereafter, regarding the recommendations made pursuant to paragraph (1).
(3) A report submitted pursuant to paragraph (2) shall be submitted in compliance with Section 9795 of the Government Code.

SEC. 2.

 Section 11346.2 of the Government Code, as added by Section 2 of Chapter 398 of the Statutes of 2010, is amended to read:

11346.2.
 Every agency subject to this chapter shall prepare, submit to the office with the notice of the proposed action as described in Section 11346.5, and make available to the public upon request, all of the following:
(a) A copy of the express terms of the proposed regulation.
(1) The agency shall draft the regulation in plain, straightforward language, avoiding technical terms as much as possible, and using a coherent and easily readable style. The agency shall draft the regulation in plain English.
(2) The agency shall include a notation following the express terms of each California Code of Regulations section, listing the specific statutes or other provisions of law authorizing the adoption of the regulation and listing the specific statutes or other provisions of law being implemented, interpreted, or made specific by that section in the California Code of Regulations.
(3) The agency shall use underline or italics to indicate additions to, and strikeout to indicate deletions from, the California Code of Regulations.
(b) An initial statement of reasons for proposing the adoption, amendment, or repeal of a regulation. This statement of reasons shall include, but not be limited to, all of the following:
(1) A statement of the specific purpose of each adoption, amendment, or repeal and the rationale for the determination by the agency that each adoption, amendment, or repeal is reasonably necessary to carry out the purpose for which it is proposed.
(2) An identification of each technical, theoretical, and empirical study, report, or similar document, if any, upon which the agency relies in proposing the adoption, amendment, or repeal of a regulation.
(3) Where the adoption or amendment of a regulation would mandate the use of specific technologies or equipment, a statement of the reasons why the agency believes these mandates or prescriptive standards are required.
(4) (A) A description of reasonable alternatives to the regulation and the agency’s reasons for rejecting those alternatives.
(B) A description of any performance standard that was considered as an alternative. In the case of a regulation that would mandate the use of specific technologies or equipment or prescribe specific actions or procedures, the imposition of performance standards shall be considered as an alternative.
(C) A description of reasonable alternatives to the regulation that would lessen any adverse impact on small business and the agency’s reasons for rejecting those alternatives.
(D) Notwithstanding subparagraph (A), (B), or (C), an agency is not required to artificially construct alternatives, describe unreasonable alternatives, or justify why it has not described alternatives.

(5)Facts, evidence, documents, testimony, or other evidence on which the agency relies to support an initial determination that the action will not have a significant adverse economic impact on business.

(6)

(5) A department, board, or commission within the California Environmental Protection Agency, the Natural Resources Agency, or the Office of the State Fire Marshal shall describe its efforts, in connection with a proposed rulemaking action, to avoid unnecessary duplication or conflicts with federal regulations contained in the Code of Federal Regulations addressing the same issues. These agencies may adopt regulations different from federal regulations contained in the Code of Federal Regulations addressing the same issues upon a finding of one or more of the following justifications:
(A) The differing state regulations are authorized by law.
(B) The cost of differing state regulations is justified by the benefit to human health, public safety, public welfare, or the environment.
(c) A state agency that adopts or amends a regulation mandated by federal law or regulations, the provisions of which are identical to a previously adopted or amended federal regulation, shall be deemed to have complied with subdivision (b) if a statement to the effect that a federally mandated regulation or amendment to a regulation is being proposed, together with a citation to where an explanation of the provisions of the regulation can be found, is included in the notice of proposed adoption or amendment prepared pursuant to Section 11346.5. However, the agency shall comply fully with this chapter with respect to any provisions in the regulation that the agency proposes to adopt or amend that are different from the corresponding provisions of the federal regulation.
(d) This section shall become operative on January 1, 2012.
(e) This section shall remain in effect only until January 1, 2014, and as of that date is repealed, unless a later enacted statute, that is enacted before January 1, 2014, deletes or extends that date.

SEC. 3.

 Section 11346.3 of the Government Code is amended to read:

11346.3.
 (a) 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.

It is not the intent of this section to impose additional criteria on agencies, above that which exists in current law, in assessing adverse economic impact on California business enterprises, but only to assure that the assessment is made early in the process of initiation and development of a proposed adoption, amendment, or repeal of a regulation.

(b) (1) All state agencies proposing to adopt, amend, or repeal any administrative regulations shall assess whether and to what extent it will affect the following:
(A) The creation or elimination of jobs within the State of California.
(B) The creation of new businesses or the elimination of existing businesses within the State of California.
(C) The expansion of businesses currently doing business within the State of California.
(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 state agencies for the purpose of completing the assessment may come from existing state publications.
(c) No administrative regulation adopted on or after January 1, 1993, that requires a report shall 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.

SEC. 4.

 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, if appropriate, the specific objectives.
(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) (A) 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 notice facts, evidence, documents, testimony, or other evidence upon which the agency relies to support its initial determination. The agency shall provide in the notice documentation of the assessment made pursuant to subdivision (a) of Section 11346.3 that shall include cumulative adverse economic impacts, in addition to other adverse economic impacts, on California business.

An

(B) 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.
(C) For purposes of this paragraph, the phase “cumulative adverse economic impact” refers to the impact on the economy which results from the incremental economic impact of the regulations when added to other past, present, and reasonably foreseeable future regulations regardless of which agency adopts those regulations. In addition, cumulative adverse economic impacts may result from individually minor but collectively significant regulations taking place over a period of time.
(9) (A) 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

(B) 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 statement of the results of the assessment required by subdivision (b) of Section 11346.3.
(11) The finding prescribed by subdivision (c) of Section 11346.3, if required.
(12) 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. In addition, 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.
(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 or would be as effective and less burdensome to affected private persons than the proposed action.
(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 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 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.
(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) 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.

SEC. 5.

 Section 11346.9 of the Government Code is amended to read:

11346.9.
 Every agency subject to this chapter shall do the following:
(a) Prepare and submit to the office with the adopted regulation a final statement of reasons that shall include all of the following:
(1) An update of the information contained in the initial statement of reasons. If the update identifies any data or any technical, theoretical or empirical study, report, or similar document on which the agency is relying in proposing the adoption, amendment, or repeal of a regulation that was not identified in the initial statement of reasons, or which was otherwise not identified or made available for public review prior to the close of the public comment period, the agency shall comply with Section 11347.1.
(2) A determination as to whether adoption, amendment, or repeal of the regulation imposes a mandate on local agencies or school districts. If the determination is that adoption, amendment, or repeal of the regulation would impose a local mandate, the agency shall state whether the mandate is reimbursable pursuant to Part 7 (commencing with Section 17500) of Division 4. If the agency finds that the mandate is not reimbursable, it shall state the reasons for that finding.
(3) A summary of each objection or recommendation made regarding the specific adoption, amendment, or repeal proposed, together with an explanation of how the proposed action has been changed to accommodate each objection or recommendation, or the reasons for making no change. This requirement applies only to objections or recommendations specifically directed at the agency’s proposed action or to the procedures followed by the agency in proposing or adopting the action. The agency may aggregate and summarize repetitive or irrelevant comments as a group, and may respond to repetitive comments or summarily dismiss irrelevant comments as a group. For the purposes of this paragraph, a comment is “irrelevant” if it is not specifically directed at the agency’s proposed action or to the procedures followed by the agency in proposing or adopting the action.
(4) A determination with supporting information that no alternative considered by the agency would be more effective in carrying out the purpose for which the regulation is proposed or would be as effective and less burdensome to affected private persons than the adopted regulation.
(5) An explanation setting forth the reasons for rejecting any proposed alternatives that would lessen the adverse economic impact on small businesses any business.
(b) Prepare and submit to the office with the adopted regulation an updated informative digest containing a clear and concise summary of the immediately preceding laws and regulations, if any, relating directly to the adopted, amended, or repealed regulation and the effect of the adopted, amended, or repealed regulation. The informative digest shall be drafted in a format similar to the Legislative Counsel’s Digest on legislative bills.
(c) A state agency that adopts or amends a regulation mandated by federal law or regulations, the provisions of which are identical to a previously adopted or amended federal regulation, shall be deemed to have complied with this section if a statement to the effect that a federally mandated regulation or amendment to a regulation is being proposed, together with a citation to where an explanation of the provisions of the regulation can be found, is included in the notice of proposed adoption or amendment prepared pursuant to Section 11346.5. However, the agency shall comply fully with this chapter with respect to any provisions in the regulation which the agency proposes to adopt or amend that are different from the corresponding provisions of the federal regulation.
(d) If an agency determines that a requirement of this section can be satisfied by reference to an agency statement made pursuant to Sections 11346.2 to 11346.5, inclusive, the agency may satisfy the requirement by incorporating the relevant statement by reference.