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SB-353 Regulations: economic analysis.(2011-2012)

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SB353:v97#DOCUMENT

Amended  IN  Senate  June 09, 2011
Amended  IN  Senate  April 07, 2011

CALIFORNIA LEGISLATURE— 2011–2012 REGULAR SESSION

Senate Bill
No. 353

Introduced  by  Senator Blakeslee

February 15, 2011

An act to amend Sections 11342.520, 11344.1, 11346.1, 11346.3, 11346.45, 11346.5, 11346.9, 11349, 11349.1, 11349.3, 11349.7, 11352, 11353, and 11354.1 of, to add Sections 11342.3, 11342.547, 11346.35, 11349.73, and 11349.75 to, and to add Article 1.5 (commencing with Section 13090) to Chapter 2 of Part 3 of Division 3 of, and to repeal Section 11349.5 of, the Government Code, and to amend Section 311 of the Public Utilities Code, relating to regulations.


LEGISLATIVE COUNSEL'S DIGEST


SB 353, as amended, Blakeslee. Regulations: economic analysis.
(1) Existing law, the Administrative Procedure Act, governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law.
This bill would also provide that the activities of the office in reviewing and approving regulations, and amendments or repeal of regulations, as prescribed, be exempt from the California Environmental Quality Act.
(2) The act requires that state agencies proposing to adopt regulations, prior to publication of the notice of proposed action, involve parties that would be subject to the proposed regulations in public discussions regarding those proposed regulations, when the proposed regulations involve complex proposals or a large number of proposals that cannot easily be reviewed during the comment period. The act requires an agency that does not or cannot comply with that requirement to state the reasons for noncompliance with reasonable specificity in the rulemaking record. The act also provides that these requirements are not subject to judicial review or a specified review by the office.
This bill would make the requirement to involve parties that would be subject to the proposed regulations in public discussions regarding those proposed regulations applicable to all proposed regulations. The bill would also require, for a major regulation, as defined, that an agency consider and evaluate reasonable alternatives to a proposed regulation that are proposed by a party who would be subject to the proposed regulation. The bill would require that an agency that does not or cannot comply with these requirements justify its noncompliance by substantial evidence. The bill would repeal the provisions that exempt these requirements from judicial review and review by the office.
(3) The act requires a state agency proposing to adopt, amend, or repeal any administrative regulation to assess the potential for adverse economic impact on California business enterprises and individuals, as prescribed. The act also requires the Department of Finance to adopt and update, as necessary, instructions for inclusion in the State Administrative Manual prescribing the methods that an agency shall use in making certain determinations relating to cost impacts of regulations.
This bill would require each state agency proposing to adopt, amend, or repeal a regulation, in addition to those existing economic analysis requirements, to prepare a cost-benefit economic analysis of the proposed regulation with specified information. Commencing July 1, 2012, this bill would require an agency that proposes to adopt a major regulation to prepare an additional economic competitiveness assessment with specified information.
The bill would establish within the Department of Finance the Office of Economic and Regulatory Analysis, which would be required to review and approve economic analyses of proposed regulations, including economic competitiveness assessments conducted for proposed major regulations, and perform other related duties, as specified. The bill would require the Office of Economic and Regulatory Analysis to adopt guidelines that each agency would be required to follow for purposes of performing the economic assessments, including economic competitiveness assessments.
(4) The act requires a state agency to issue a notice of proposed action, with specified information relating to the proposed regulation, including an informative digest and a statement related to the description of cost impacts known to the agency.
This bill would require additional information to be included in the informative digest, as specified, and would eliminate the requirement that the agency include a prescribed statement in the notice of proposed action when no cost impacts are known to the agency. The bill would also require that the notice of proposed action also include a statement of the results of the economic assessment, including the additional economic competitiveness assessment performed for a major regulation, and the corresponding approval from the Office of Economic and Regulatory Analysis.
(5) The act requires the office to approve or disapprove regulations submitted by an agency within 30 days. The office is required to make determinations regarding submitted regulations using the standards of necessity, authority, clarity, consistency, reference, and nonduplication, as defined. The act requires that the office disapprove and return to the agency a regulation that does not satisfy prescribed requirements of the act. The act authorizes an agency to appeal to the Governor a decision by the office to disapprove a proposed regulation, as specified.
This bill would define the term “cost-effectiveness” “competitiveness” and revise the definition of the term “consistency,” as specified. The bill would increase to 60 days the amount of time in which the office is required to approve or disapprove a submitted regulation. The bill would require the office to review a major proposed regulation for the standard of competitiveness. The bill would repeal the provisions that authorize an agency to appeal an office decision to the Governor.
(6) The act requires the office, at the request of any standing, select, or joint committee of the Legislature, to initiate a priority review of any regulation, group of regulations, or series of regulations that the committee believes does not meet the standards of necessity, authority, clarity, consistency, reference, and nonduplication. If the office determines that the regulation no longer meets those standards, the office is required to file an order of repeal of the regulation with the Secretary of State, as specified. The act requires the office to make its determination within 60 days, and if the office fails to do so, the regulation is deemed to meet those standards.
This bill would repeal the requirement that a regulation be deemed to meet the review standards if the office fails to make a determination within 60 days.
This bill would require the Office of Administrative Law to convene public workshops, as specified, for determining whether regulations should be subject to the priority review process. The bill would require the office to initiate the priority review process for a regulation, if the office determines it no longer meets the required standards and an alternative has been proposed, as specified.

This bill would subject a major regulation to a mandatory priority review, that the office would be required to initiate 7 years after the date that the regulation is implemented, as specified.

(7) The act exempts the State Water Resources Control Board from the procedures of the act, except as provided.
This bill would require the State Water Resources Control Board to comply with the economic assessment requirements of the act and would specify that an exemption for certain requirements and permits and waivers are limited to those for individual applicants, as specified.
(8) This bill would make conforming changes.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

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


SECTION 1.

 Section 11342.3 is added to the Government Code, to read:

11342.3.
 The activities of the office in reviewing and approving regulations, and amendments or repeal of regulations pursuant to this chapter are exempt from the California Environmental Quality Act (Division 13 (commencing with Section 21000) of the Public Resources Code).

SEC. 2.

 Section 11342.520 of the Government Code is amended to read:

11342.520.
 “Agency” means state agency, as defined in Section 11000.

SEC. 3.

 Section 11342.547 is added to the Government Code, to read:

11342.547.
 For purposes of this chapter, “major regulation” means either of the following:
(a) Any regulation, or a group of regulations authorized by the same statute, that is proposed for adoption, amendment, or repeal by a regional office, board, or department of a state agency that has a gross economic cost of at least five million dollars ($5,000,000) in any given year, as estimated by the economic assessment required by subdivision (a) of Section 11346.3.
(b) Any regulation, or group of regulations authorized by the same statute, that is proposed for adoption, amendment, or repeal by a state agency that has a gross economic cost of at least twenty-five million dollars ($25,000,000) in any given year, as estimated by the economic assessment required by subdivision (a) of Section 11346.3.

SEC. 4.

 Section 11344.1 of the Government Code is amended to read:

11344.1.
 The office shall do all of the following:
(a) Provide for the publication of the California Regulatory Notice Register, which shall be an official publication of the State of California and which shall contain the following:
(1) Notices of proposed action prepared by regulatory agencies, subject to the notice requirements of this chapter, and which have been approved by the office.
(2) A summary of all regulations filed with the Secretary of State in the previous week.
(3) Summaries of all regulation decisions issued in the previous week detailing the reasons for disapproval of a regulation, the reasons for not filing an emergency regulation, and the reasons for repealing an emergency regulation. The California Regulatory Notice Register shall also include a quarterly index of regulation decisions.
(4) Material that is required to be published under Sections 11349.7 and 11349.9.
(5) Determinations issued pursuant to Section 11340.5.
(b) Establish the publication dates and manner and form in which the California Regulatory Notice Register shall be prepared and published and ensure that it is published and distributed in a timely manner to the presiding officer and rules committee of each house of the Legislature and to all subscribers.
(c) Post on its Internet Web site, on a weekly basis:
(1) The California Regulatory Notice Register. Each issue of the California Regulatory Notice Register on the office’s Internet Web site shall remain posted for a minimum of 18 months.
(2) One or more Internet links to assist the public to gain access to the text of regulations proposed by state agencies.

SEC. 5.

 Section 11346.1 of the Government Code is amended to read:

11346.1.
 (a) (1) The adoption, amendment, or repeal of an emergency regulation is not subject to any provision of this article or Article 6 (commencing with Section 11349), except this section and Section 11349.6.
(2) At least five working days before submitting an emergency regulation to the office, the adopting agency shall, except as provided in paragraph (3), send a notice of the proposed emergency action to every person who has filed a request for notice of regulatory action with the agency. The notice shall include both of the following:
(A) The specific language proposed to be adopted.
(B) The finding of emergency required by subdivision (b).
(3) An agency is not required to provide notice pursuant to paragraph (2) if the emergency situation clearly poses such an immediate, serious harm that delaying action to allow public comment would be inconsistent with the public interest.
(b) (1) Except as provided in subdivision (c), if a state agency makes a finding that the adoption of a regulation or order of repeal is necessary to address an emergency, the regulation or order of repeal may be adopted as an emergency regulation or order of repeal.
(2) Any finding of an emergency shall include a written statement that contains the information required by paragraphs (2) to (6), inclusive, of subdivision (a) of Section 11346.5 and a description of the specific facts demonstrating the existence of an emergency and the need for immediate action, and demonstrating, by substantial evidence, the need for the proposed regulation to effectuate the statute being implemented, interpreted, or made specific and to address only the demonstrated emergency. The finding of emergency shall also identify each technical, theoretical, and empirical study, report, or similar document, if any, upon which the agency relies. The enactment of an urgency statute shall not, in and of itself, constitute a need for immediate action.
A finding of emergency based only upon expediency, convenience, best interest, general public need, or speculation, shall not be adequate to demonstrate the existence of an emergency. If the situation identified in the finding of emergency existed and was known by the agency adopting the emergency regulation in sufficient time to have been addressed through nonemergency regulations adopted in accordance with the provisions of Article 5 (commencing with Section 11346), the finding of emergency shall include facts explaining the failure to address the situation through nonemergency regulations.
(3) The statement and the regulation or order of repeal shall be filed immediately with the office.
(c) Notwithstanding any other provision of law, no emergency regulation that is a building standard shall be filed, nor shall the building standard be effective, unless the building standard is submitted to the California Building Standards Commission, and is approved and filed pursuant to Sections 18937 and 18938 of the Health and Safety Code.
(d) The emergency regulation or order of repeal shall become effective upon filing or upon any later date specified by the state agency in a written instrument filed with, or as a part of, the regulation or order of repeal.
(e) No regulation, amendment, or order of repeal initially adopted as an emergency regulatory action shall remain in effect more than 180 days unless the adopting agency has complied with Sections 11346.2 to 11347.3, inclusive, either before adopting an emergency regulation or within the 180-day period. The adopting agency, prior to the expiration of the 180-day period, shall transmit to the office for filing with the Secretary of State the adopted regulation, amendment, or order of repeal, the rulemaking file, and a certification that Sections 11346.2 to 11347.3, inclusive, were complied with either before the emergency regulation was adopted or within the 180-day period.
(f) If an emergency amendment or order of repeal is filed and the adopting agency fails to comply with subdivision (e), the regulation as it existed prior to the emergency amendment or order of repeal shall thereupon become effective and after notice to the adopting agency by the office shall be reprinted in the California Code of Regulations.
(g) If a regulation is originally adopted and filed as an emergency and the adopting agency fails to comply with subdivision (e), this failure shall constitute a repeal of the regulation and after notice to the adopting agency by the office, shall be deleted.
(h) The office may approve not more than two readoptions, each for a period not to exceed 90 days, of an emergency regulation that is the same as or substantially equivalent to an emergency regulation previously adopted by that agency. Readoption shall be permitted only if the agency has made substantial progress and proceeded with diligence to comply with subdivision (e).

SEC. 6.

 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.
(b) (1) A state agency proposing to adopt, amend, or repeal a regulation, or a group of regulations authorized by the same statute, shall prepare an analysis of the benefits and costs, expressed in monetary terms to the extent feasible and appropriate. Benefits and costs shall be identified separately and calculated on a gross basis. Benefits and costs shall be calculated for any year in which benefits or costs are projected to occur in the 10 years following the date the regulation is proposed to be adopted.
(2) Allstate 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.
(3) This subdivision does not apply to the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.
(4) 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.
(d) Commencing July 1, 2012, an agency shall prepare the economic assessment required in subdivision (b) consistent with the guidelines adopted by the Office of Economic and Regulatory Analysis pursuant to Section 13092.
(e) Commencing July 1, 2012, an agency shall not submit an initial statement of reasons pursuant to Section 11346.2 or a final statement of reasons pursuant to Section 11346.9 unless and until the agency has received approval from the Office of Economic and Regulatory Analysis pursuant to Section 13093 that the economic assessment required by subdivision (b) was prepared in accordance with the guidelines adopted by the Office of Economic and Regulatory Analysis pursuant to Section 13092.

SEC. 7.

 Section 11346.35 is added to the Government Code, to read:

11346.35.
 (a) (1) Each state agency proposing to adopt, amend, or repeal a major regulation, or a group of regulations authorized by the same statute and that includes a major regulation, shall prepare an additional economic economic competitiveness assessment of the proposed regulation in the preparation of the initial statement of reasons pursuant to Section 11346.2, and shall prepare an economic competitiveness assessment for each of the alternatives considered by the agency in the preparation of the final statement of reasons pursuant to Section 11346.9.
(2) The economic competitiveness assessment shall evaluate the degree to which the proposed major regulation impacts the cost of doing business in California compared to other states and shall include all of the following:

(A)The economic assessment prepared pursuant to Section 11346.3.

(B)An analysis of the benefits and costs that cannot feasibly or appropriately be expressed in monetary terms, enumerated and presented in a manner that allows for the consideration of both quantified and nonquantified impacts.

(C)

(A) A distributional assessment that evaluates how certain specific industries, income groups, or geographic regions experience benefits or costs as a consequence of the regulation, including, but not limited to, the following: industries, income groups, and geographic regions, in both the short term and the long term, will experience job creation or elimination in the state as a result of the regulation.

(i)The analyses of benefits and costs prepared pursuant to subparagraphs (A) and (B).

(ii)The short-term and long-term creation or elimination of jobs.

(iii)The cumulative economic impact of the regulation and existing federal, state, and local regulations.

(iv)

(B) The potential for economic leakage as a result of the regulation in which economic activity is relocated from California to another state or country.

(v)

(C) The impact on the ability of California businesses to compete with other states and to attract businesses to locate in the state.
(D) The effects on sales tax, income tax, and corporation tax revenue to the General Fund, and fee revenues to special funds, as a result of changes in economic activity.

(E)An analysis of the cumulative impact of the proposed regulation and any other related regulations enacted pursuant to the same authorizing statute.

(E) An estimated timeframe for how long it will take a regulated entity to comply with the regulation.
(b) The agency shall prepare the economic competitiveness assessment required in subdivision (a) consistent with the guidelines adopted by the Office of Economic and Regulatory Analysis pursuant to Section 13092.
(c) Prior to submitting the initial statement of reasons pursuant to Section 11346.2, the agency shall have received approval from the Office of Economic and Regulatory Analysis pursuant to Section 13093 that the economic competitiveness assessment required by subdivision (a) for the proposed regulation was prepared according to the guidelines adopted by the Office of Economic and Regulatory Analysis pursuant to Section 13092.
(d) Prior to submitting a final statement of reasons pursuant to Section 11346.9, the agency shall have received approval from the Office of Economic and Regulatory Analysis pursuant to Section 13093 that the additional economic economic competitiveness assessment required by subdivision (a) for the proposed regulation and each of the alternatives considered by the agency were prepared according to the guidelines established by the Office of Economic and Regulatory Analysis pursuant to Section 13092.
(e) This section shall become operative on July 1, 2012.

SEC. 8.

 Section 11346.45 of the Government Code is amended to read:

11346.45.
 (a) In order to increase public participation and improve the quality of regulations, state agencies proposing to adopt regulations shall, prior to publication of the notice required by Section 11346.5, involve parties that would be subject to the proposed regulations in public discussions regarding those proposed regulations.
(b) For any major regulation, an agency shall consider and evaluate alternatives, including the preparation of an economic assessment pursuant to Section 11346.3 and an economic competitiveness assessment pursuant to Section 11346.35 for those alternatives. The consideration and evaluation of alternatives shall also include any reasonable alternative proposed to the agency by a party that would be subject to the proposed regulation.
(c) If the agency does not or cannot comply with the provisions of subdivision (a), it shall state the reasons for noncompliance with reasonable specificity in the rulemaking record. of subdivision (a), the record of the rulemaking proceeding shall justify the reasons for noncompliance by substantial evidence.

(d)The provisions of this section shall not be subject to judicial review.

SEC. 9.

 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 regulation.
(D) An evaluation of whether the proposed regulation is inconsistent or incompatible with other 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.
(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.
(10) (A) A statement of the results of the economic assessment required by subdivision (a) of Section 11346.3 and the approval from the Office of Economic and Regulatory Analysis as required pursuant to Section 11346.3.
(B) For a major regulation, a statement of the results of the additional economic economic competitiveness assessment required by subdivision (a) of Section 11346.35 and the approval from the Office of Regulatory and Economic Analysis as required pursuant to subdivision (c) of Section 11346.35.
(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. 10.

 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 cost-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. For a major regulation, the determination shall be based upon the economic competitiveness assessments of the proposed regulation and each of the alternatives considered by the agency, as required pursuant to subdivision (a) of Section 11346.35. The agency shall include, as supporting information, the approval of the economic competitiveness assessments by the Office of Economic and Regulatory Analysis, as required pursuant to Section 11346.35.
(5) An explanation setting forth the reasons for rejecting any proposed alternatives that would lessen the adverse economic impact on small businesses. For a major regulation, the explanation shall be based upon the economic competitiveness assessments of the proposed regulation and each of the alternatives considered by the agency, as required pursuant to subdivision (a) of Section 11346.35. The agency shall include, as supporting information, the approval of the economic competitiveness assessments by the Office of Economic and Regulatory Analysis, as required pursuant to Section 11346.35.
(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.

SEC. 11.

 Section 11349 of the Government Code is amended to read:

11349.
 The following definitions govern the interpretation of this chapter:
(a) “Necessity” means the record of the rulemaking proceeding demonstrates by substantial a preponderance of the evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record. For purposes of this standard, evidence includes, but is not limited to, facts, studies, and expert opinion.
(b) “Authority” means the provision of law which permits or obligates the agency to adopt, amend, or repeal a regulation.
(c) “Clarity” means written or displayed so that the meaning of regulations will be easily understood by those persons directly affected by them.
(d) “Consistency” means being in harmony with, and not in conflict with or contradictory to, existing statutes, court decisions, other regulations, or other provisions of law.
(e) “Reference” means the statute, court decision, or other provision of law which the agency implements, interprets, or makes specific by adopting, amending, or repealing a regulation.
(f) “Nonduplication” means that a regulation does not serve the same purpose as a state or federal statute or another regulation. This standard requires that an agency proposing to amend or adopt a regulation must identify any state or federal statute or regulation which is overlapped or duplicated by the proposed regulation and justify any overlap or duplication. This standard is not intended to prohibit state agencies from printing relevant portions of enabling legislation in regulations when the duplication is necessary to satisfy the clarity standard in paragraph (3) of subdivision (a) of Section 11349.1. This standard is intended to prevent the indiscriminate incorporation of statutory language in a regulation.
(g) “Cost-effectiveness” or “cost effective” “Competitiveness” means that the record of the rulemaking proceeding demonstrates by a preponderance of the evidence that a proposed major regulation would be the least costly alternative to those persons subject to the regulation and would be at least equally effective in effectuating would be the most protective of California jobs, a competitive business climate in this state, and state revenue sources, as compared to alternatives and the results of the economic competitiveness assessment required pursuant to Section 11346.35, in effectuating the purpose of the authorizing statute, court decision, or other provision of law that the major regulation implements, interprets, or makes specific.

SEC. 12.

 Section 11349.1 of the Government Code is amended to read:

11349.1.
 (a) The office shall review all regulations adopted, amended, or repealed pursuant to the procedure specified in Article 5 (commencing with Section 11346) and submitted to it for publication in the California Code of Regulations Supplement and for transmittal to the Secretary of State and make determinations using all of the following standards:
(1) Necessity.
(2) Authority.
(3) Clarity.
(4) Consistency.
(5) Reference.
(6) Nonduplication.
(7) Cost-effectiveness Competitiveness, for a major regulation.
In reviewing regulations pursuant to this section, the office shall restrict its review to the regulation and the record of the rulemaking proceeding. The office shall approve the regulation or order of repeal if it complies with the standards set forth in this section and with this chapter.
(b) In reviewing proposed regulations for the criteria in subdivision (a), the office may consider the clarity of the proposed regulation in the context of related regulations already in existence.
(c) The office shall adopt regulations governing the procedures it uses in reviewing regulations submitted to it. The regulations shall provide for an orderly review and shall specify the methods, standards, presumptions, and principles the office uses, and the limitations it observes, in reviewing regulations to establish compliance with the standards specified in subdivision (a). The regulations adopted by the office shall ensure that it does not substitute its judgment for that of the rulemaking agency as expressed in the substantive content of adopted regulations.
(d) The office shall return any regulation subject to this chapter to the adopting agency if any of the following occur:
(1) The adopting agency has not prepared the estimate required by paragraph (6) of subdivision (a) of Section 11346.5 and has not included the data used and calculations made and the summary report of the estimate in the file of the rulemaking.
(2) (A) The agency has not complied with Section 11346.3. For purposes of this subparagraph, noncompliance shall include a failure by the agency to demonstrate approval of the economic assessment of the proposed regulation by the Office of Economic and Regulatory Analysis.
(B) For a major regulation, the agency has not complied with Section 11346.35. For purposes of this subparagraph, noncompliance shall include a failure by the agency to demonstrate approval of the economic assessment of the proposed regulation by the Office of Economic and Regulatory Analysis, a failure by a failure by the agency to prepare, and receive approval of, an additional economic competitiveness assessment for each alternative considered by the agency, including an economic competitiveness assessment of each reasonable alternative proposed by a party that would be subject to the proposed regulation.
(3) The adopting agency has prepared the estimate required by paragraph (6) of subdivision (a) of Section 11346.5, the estimate indicates that the regulation will result in a cost to local agencies or school districts that is required to be reimbursed under Part 7 (commencing with Section 17500) of Division 4, and the adopting agency fails to do any of the following:
(A) Cite an item in the Budget Act for the fiscal year in which the regulation will go into effect as the source from which the Controller may pay the claims of local agencies or school districts.
(B) Cite an accompanying bill appropriating funds as the source from which the Controller may pay the claims of local agencies or school districts.
(C) Attach a letter or other documentation from the Department of Finance which states that the Department of Finance has approved a request by the agency that funds be included in the Budget Bill for the next following fiscal year to reimburse local agencies or school districts for the costs mandated by the regulation.
(D) Attach a letter or other documentation from the Department of Finance which states that the Department of Finance has authorized the augmentation of the amount available for expenditure under the agency’s appropriation in the Budget Act which is for reimbursement pursuant to Part 7 (commencing with Section 17500) of Division 4 to local agencies or school districts from the unencumbered balances of other appropriations in the Budget Act and that this augmentation is sufficient to reimburse local agencies or school districts for their costs mandated by the regulation.
(4) The proposed regulation conflicts with an existing regulation and the agency has not identified the manner in which the conflict may be resolved.

(5)For a major regulation, the office determines that the agency is not proposing to adopt the most efficient and cost-effective regulatory alternative.

(5) For a major regulation, the agency is not proposing to adopt the regulatory alternative that meets the competitiveness standard.
(e) The office shall notify the Department of Finance of all regulations returned pursuant to subdivision (d).
(f) The office shall return a rulemaking file to the submitting agency if the file does not comply with subdivisions (a) and (b) of Section 11347.3. Within three state working days of the receipt of a rulemaking file, the office shall notify the submitting agency of any deficiency identified. If no notice of deficiency is mailed to the adopting agency within that time, a rulemaking file shall be deemed submitted as of the date of its original receipt by the office. A rulemaking file shall not be deemed submitted until each deficiency identified under this subdivision has been corrected.
This subdivision shall not limit the review of regulations under this article, including, but not limited to, the conformity of rulemaking files to subdivisions (a) and (b) of Section 11347.3.

SEC. 13.

 Section 11349.3 of the Government Code is amended to read:

11349.3.
 (a) The office shall either approve a regulation submitted to it for review and transmit it to the Secretary of State for filing or disapprove it within 60 working days after the regulation has been submitted to the office for review. If the office fails to act within 60 days, the regulation shall be deemed to have been approved and the office shall transmit it to the Secretary of State for filing.
(b) If the office disapproves a regulation, it shall return it to the adopting agency within the 60-day period specified in subdivision (a) accompanied by a notice specifying the reasons for disapproval. Within seven calendar days of the issuance of the notice, the office shall provide the adopting agency with a written decision detailing the reasons for disapproval. No regulation shall be disapproved except for failure to comply with the standards set forth in Section 11349.1 or for failure to comply with this chapter.
(c) If an agency determines, on its own initiative, that a regulation submitted pursuant to subdivision (a) should be returned by the office prior to completion of the office’s review, it may request the return of the regulation. All requests for the return of a regulation shall be memorialized in writing by the submitting agency no later than one week following the request. Any regulation returned pursuant to this subdivision shall be resubmitted to the office for review within the one-year period specified in subdivision (b) of Section 11346.4 or shall comply with Article 5 (commencing with Section 11346) prior to resubmission.
(d) The office shall not initiate the return of a regulation pursuant to subdivision (c) as an alternative to disapproval pursuant to subdivision (b).

SEC. 14.

 Section 11349.5 of the Government Code is repealed.

SEC. 15.

 Section 11349.7 of the Government Code is amended to read:

11349.7.
 The office, at the request of any standing, select, or joint committee of the Legislature, or upon its own determination pursuant to Section 11349.75, shall initiate a priority review of any regulation, group of regulations, or series of regulations that the committee believes does not meet the standards set forth in Section 11349.1.
The office shall notify interested persons and shall publish notice in the California Regulatory Notice Register that a priority review has been requested, shall consider the written comments submitted by interested persons, the information contained in the rulemaking record, if any, and shall complete each priority review made pursuant to this section within 90 calendar days of the receipt of the committee’s written request or, for a review initiated pursuant to Section 11349.75, the date the notice is published in the California Regulatory Notice Register indicating that the review process has been initiated. During the period of any priority review made pursuant to this section, all information available to the office relating to the priority review shall be made available to the public. In the event that the office determines that a regulation does not meet the standards set forth in Section 11349.1, it shall order the adopting agency to show cause why the regulation should not be repealed and shall proceed to seek repeal of the regulation as provided by this section in accordance with the following:
(a) In the event it determines that any of the regulations subject to the review do not meet the standards set forth in Section 11349.1, the office shall within 15 days of the determination order the adopting agency to show cause why the regulation should not be amended or repealed. In issuing the order, the office shall specify in writing the reasons for its determination that the regulation does not meet the standards set forth in Section 11349.1. The reasons for its determination shall be made available to the public. The office shall also publish its order and the reasons therefor in the California Regulatory Notice Register. In the case of a regulation for which no, or inadequate, information relating to its necessity can be furnished by the adopting agency, the order shall specify the information which the office requires to make its determination.
(b) No later than 60 days following receipt of an order to show cause why a regulation should not be repealed, the agency shall respond in writing to the office. Upon written application by the agency, the office may extend the time for an additional 30 days.
(c) The office shall review and consider all information submitted by the agency in a timely response to the order to show cause why the regulation should not be repealed, and determine whether the regulation meets the standards set forth in Section 11349.1. The office shall make this determination within 60 days of receipt of an agency’s response to the order to show cause. If the office does not make a determination within 60 days of receipt of an agency’s response to the order to show cause, the regulation shall be deemed to meet the standards set forth in subdivision (a) of Section 11349.1. In making this determination, the office shall also review any written comments submitted to it by the public within 30 days of the publication of the order to show cause in the California Regulatory Notice Register. During the period of review and consideration, the information available to the office relating to each regulation for which the office has issued an order to show cause shall be made available to the public. The office shall notify the adopting agency within two working days of the receipt of information submitted by the public regarding a regulation for which an order to show cause has been issued. If the office determines that a regulation fails to meet the standards, it shall which an order to show cause has been issued.
(d) If the office determines that a regulation fails to meet the standards set forth in Section 11349.1, it shall prepare a statement specifying the reasons for its determination. The statement shall be delivered to the adopting agency, the Legislature, and the Governor and shall be made available to the public and the courts. Thirty days after delivery of the statement required by this subdivision the office shall prepare an order of repeal of the regulation and shall transmit it to the Secretary of State for filing. However, the office shall not prepare the order of repeal if, within those 30 days, the agency undertakes to amend the regulation pursuant to Article 5 (commencing with Section 11346), in a manner that will eliminate the identified deficiency for the regulation.

(d)

(e) In the event that the office orders the repeal of a regulation, it shall publish the order and the reasons therefor in the California Regulatory Notice Register.

SEC. 16.Section 11349.73 is added to the Government Code, to read:
11349.73.

(a)A major regulation shall be subject to a mandatory priority review pursuant to Section 11349.7, which the office shall initiate seven years from the date the regulation is implemented.

(b)The agency shall prepare an updated economic assessment pursuant to Sections 11346.3 and 11346.35, which shall be subject to approval by the Office of Economic and Regulatory Analysis pursuant to Section 13093.

(c)The agency shall submit the approved updated economic assessment to the office as part of the priority review. Failure to provide an approved updated economic assessment shall be grounds for the office to order the repeal of the regulation. The office shall consider the approved updated economic assessment, among other information submitted by the agency, in its determination of whether the regulation meets the standards set forth in Section 11349.1.

SEC. 17.SEC. 16.

 Section 11349.75 is added to the Government Code, to read:

11349.75.
 (a) The office shall convene public workshops, no less than one time annually, to solicit stakeholder input to identify major regulations, groups of major regulations, or series of major regulations that should be subject to a priority review pursuant to Section 11349.7. In particular, the office shall request stakeholders, including agencies, to demonstrate whether major regulations satisfy the standards for review established in Section 11349.1. At least 30 days prior to the public workshop, the office shall notify interested persons and shall publish notice in the California Regulatory Notice Register that a public workshop will be held to identify major regulations that should be subject to a priority review pursuant to Section 11349.7. The office shall consider the written comments and information submitted by interested persons at the public workshop.
(b) Within 30 days of a public workshop, based on the written comments submitted by interested persons and the information provided at the public workshop, the office shall make an initial determination whether a major regulation continues to meet the standards of review established in Section 11349.1 and shall notify the adopting agency in writing of the determination. The office shall make a determination that a major regulation does not meet the standards of review only if an alternative is proposed. If the office makes an initial determination that the major regulation does not meet the standards of review in Section 11349.1 it may, and an alternative has been proposed, it shall require a priority review of the regulation pursuant to Section 11349.7. The office shall provide written notification of this determination to the adopting agency and shall publish notice in the California Regulatory Notice Register that a priority review has been initiated.
(c) The office shall prioritize major regulations for a priority review that the interested persons are able to demonstrate, by substantial evidence, are not utilizing the most cost-effective alternative.

SEC. 18.Section 11352 of the Government Code is amended to read:
11352.

The following actions are not subject to this chapter:

(a)The issuance, denial, or waiver of any water quality certification as authorized under Section 13160 of the Water Code.

(b)The issuance, denial, or revocation of waste discharge requirements and permits to individual applicants pursuant to Sections 13263 and 13377 of the Water Code and waivers issued to individual applicants pursuant to Section 13269 of the Water Code.The exception in this subdivision shall not apply to any issuance, denial, or revocation of waste discharge requirements and permits issued pursuant to Sections 13263 and 13377 of the Water Code and waivers issued pursuant to Section 13269 of the Water Code, as to actions taken by the State Water Resources Control Board if the waste discharge requirement, permit, or waiver is applicable statewide or in an entire region, and as to actions taken by a regional water quality control board if the waste discharge requirement, permit, or waiver is applicable throughout the region, including, but not limited to, comprehensive conditional waivers adopted by regional boards pursuant to the Irrigated Lands Regulatory Program.

(c)The development, issuance, and use of the guidance document pursuant to Section 13383.7 of the Water Code.

SEC. 17.

 Section 11352 of the Government Code is amended to read:

11352.
 The following actions are not subject to this chapter:
(a) The issuance, denial, or waiver of any water quality certification as authorized under Section 13160 of the Water Code.
(b) The issuance, denial, or revocation of waste discharge requirements and permits to individual applicants pursuant to Sections 13263 and 13377 of the Water Code and waivers issued to individual applicants pursuant to Section 13269 of the Water Code. However, the exception described in this subdivision shall not apply to the adoption, amendment, or repeal of the program for which the conditions of waste discharge requirements and permits issued pursuant to Sections 13263 and 13377 of the Water Code and waivers pursuant to Section 13269 are established.
(c) The development, issuance, and use of the guidance document pursuant to Section 13383.7 of the Water Code.

SEC. 19.SEC. 18.

 Section 11353 of the Government Code is amended to read:

11353.
 (a) Except as provided in subdivision (b) and (c), this chapter does not apply to the adoption or revision of state policy for water quality control and the adoption or revision of water quality control plans and guidelines pursuant to Division 7 (commencing with Section 13000) of the Water Code.
(b) (1) Any policy, plan, or guideline, or any revision thereof, that the State Water Resources Control Board has adopted or that a court determines is subject to this part, after June 1, 1992, shall be submitted to the office.
(2) The State Water Resources Control Board shall include in its submittal to the office all of the following:
(A)A clear and concise summary of any regulatory provisions adopted or approved as part of that action, for publication in the California Code of Regulations.
(B) The administrative record for the proceeding. Proposed additions to a policy, plan, or guideline shall be indicated by underlined text and proposed deletions shall be indicated by strike-through text in documents submitted as part of the administrative record for the proceeding.
(C) A summary of the necessity for the regulatory provision.
(D) A certification by the chief legal officer of the State Water Resources Control Board that the action was taken in compliance with all applicable procedural requirements of Division 7 (commencing with Section 13000) of the Water Code.
(E) The results of the economic assessment required by Section 11346.3 and, for a major regulation, the additional economic economic competitiveness assessment required by Section 11346.35.
(3) Paragraph (2) does not limit the authority of the office to review any regulatory provision which is part of the policy, plan, or guideline submitted by the State Water Resources Control Board.
(4) The office shall review the regulatory provisions to determine compliance with the standards of necessity, authority, clarity, consistency, reference, nonduplication, and efficiency set forth in subdivision (a) of Section 11349.1. The office shall also review the responses to public comments prepared by the State Water Resources Control Board or the appropriate regional water quality control board to determine compliance with the public participation requirements of the Federal Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.). The office shall review the regulatory provisions for compliance with the economic assessment required by Section 11346.3 and, for a major regulation, the additional economic economic competitiveness assessment required by Section 11346.35. The office shall restrict its review to the regulatory provisions and the administrative record of the proceeding. Sections 11349.3, 11349.4, and 11350.3 shall apply to the review by the office to the extent that those sections are consistent with this section.
(5) The policy, plan, guideline, or revision shall not become effective unless and until the regulatory provisions are approved by the office in accordance with subdivision (a) of Section 11349.3.
(6) Upon approval of the regulatory provisions, the office shall transmit to the Secretary of State for filing the clear and concise summary of the regulatory provisions submitted by the State Water Resources Control Board.
(7) Any proceedings before the State Water Resources Control Board or a California regional water quality control board to take any action subject to this subdivision shall be conducted in accordance with the procedural requirements of Division 7 (commencing with Section 13000) of the Water Code, together with any applicable requirements of the Federal Water Pollution Control Act (33 U.S.C. Sec. 1251 et seq.), and the requirements of this chapter, other than the requirements of this section, shall not apply.
(8) This subdivision shall not provide a basis for review by the office under this subdivision or Article 6 (commencing with Section 11349) of any such policy, plan, or guideline adopted or revised prior to June 1, 1992.
(c) The State Water Resources Control Board shall perform the economic assessment required by Section 11346.3 and, for a major regulation, the additional economic economic competitiveness assessment required by Section 11346.35 for any policy, plan, or guideline, or any revision thereof, that it adopts after July 1, 2012.
(d) Subdivision (a) does not apply to a provision of any policy, plan, guideline, or revision, as applied to any person who, as of June 1, 1992, was a party to a civil action challenging that provision on the grounds that it has not been adopted as a regulation pursuant to this chapter.
(e) Copies of the policies, plans, and guidelines to which subdivision (a) applies shall be maintained at central locations for inspection by the public. The State Water Resources Control Board shall maintain, at its headquarters in Sacramento, a current copy of each policy, plan, or guideline in effect. Each regional water quality control board shall maintain at its headquarters a current copy of each policy, plan, or guideline in effect in its respective region. Any revision of a policy, plan, or guideline shall be made available for inspection by the public within 30 days of its effective date.

SEC. 20.SEC. 19.

 Section 11354.1 of the Government Code is amended to read:

11354.1.
 (a) For purposes of this section, “commission” means the San Francisco Bay Conservation and Development Commission.
(b) This chapter does not apply to any policy, plan, or guideline adopted by the commission prior to January 1, 1996, pursuant to Chapter 5 (commencing with Section 66650) of Title 7.2 of this code or Division 19 (commencing with Section 29000) of the Public Resources Code.
(c) The issuance or denial by the commission of any permit pursuant to subdivision (a) of Section 66632, and the issuance or denial by, or appeal to, the commission of any permit pursuant to Chapter 6 (commencing with Section 29500) of Division 19 of the Public Resources Code, are not subject to this chapter.
(d) (1) Any amendments or other changes to the San Francisco Bay Plan or to a special area plan pursuant to Chapter 5 (commencing with Section 66650) of Title 7.2, adopted by the commission on or after January 1, 1996, and any amendments or other changes to the Suisun Marsh Protection Plan, as defined in Section 29113 of the Public Resources Code, or in the Suisun Marsh local protection program, as defined in Section 29111 of the Public Resources Code, adopted by the commission on and after January 1, 1996, shall be submitted to the office but are not subject to this chapter except as provided in this subdivision.
(2) The commission shall include in its submittal to the office pursuant to paragraph (1) both of the following documents:
(A) A clear and concise summary of any regulatory provision adopted or approved by the commission as part of the proposed change for publication in the California Code of Regulations.
(B) The administrative record for the proceeding, and a list of the documents relied upon in making the change. Proposed additions to the plans shall be indicated by underlined text, and proposed deletions shall be indicated by strike-through text in documents submitted as part of the administrative record for the proceeding.
(3) The office shall review the regulatory provisions to determine compliance with the standards of necessity, authority, clarity, consistency, reference, and nonduplication set forth in subdivision (a) of Section 11349.1. The office shall also review the responses to public comments prepared by the commission to determine compliance with the public participation requirements of Sections 11000 to 11007, inclusive, of Title 14 of the California Code of Regulations, and to ensure that the commission considers all relevant matters presented to it before adopting, amending, or repealing any regulatory provision, and that the commission explains the reasons for not modifying a proposed plan change to accommodate an objection or recommendation. The office shall restrict its review to the regulatory provisions and the administrative record of the proceeding. Sections 11349.3, 11349.4, and 11350.3 shall apply to the review by the office to the extent that those sections are consistent with this section.
(4) In reviewing proposed changes to the commission’s plans for the criteria specified in subdivision (a) of Section 11349.1, the office shall consider the clarity of the proposed plan change in the context of the commission’s existing plans.
(5) The proposed plan or program change subject to this subdivision shall not become effective unless and until the regulatory provisions are approved by the office in accordance with subdivision (a) of Section 11349.3.
(6) Upon approval of the regulatory provisions, the office shall transmit to the Secretary of State for filing the clear and concise summary of the regulatory provisions submitted by the commission.
(e) Except as provided in subdivisions (b), (c), and (d), the adoption of any regulation by the commission shall be subject to this chapter in all respects.

SEC. 24.SEC. 20.

 Article 1.5 (commencing with Section 13090) is added to Chapter 2 of Part 3 of Division 3 of the Government Code, to read:
Article  1.5. Office of Economic and Regulatory Analysis

13090.
 There is within the Department of Finance, the Office of Economic and Regulatory Analysis. Pursuant to this chapter, the office shall review and approve economic analyses assessments, including economic competitiveness assessments, of proposed regulations, review alternative analyses of regulations, and set standards for economic analyses and alternative analyses assessments, including economic competitiveness assessments,.

13091.
 (a) The office shall be under the direction and control of the Director of Finance, who shall administer this chapter and perform all duties, exercise all powers, and discharge all responsibilities under the jurisdiction of the office.
(b) The office may employ personnel necessary to carry out the purposes of this article. All personnel shall be appointed pursuant to the State Civil Service Act (Part 2 (commencing with Section 18500) of Division 5 of Title 2). The director may also enter into contracts for services of experts in economics and policy analysis for carrying out the purposes of this article.

13092.
 (a) On or before June 30, 2012, the office shall adopt guidelines, including specific methodologies, for agencies to follow in doing all of the following:
(1) Preparing economic assessments required by subdivision (b) of Section 11346.3
(2) Preparing additional economic economic competitiveness assessments for major regulations required by subdivision (a) of Section 11346.35.

(3)Selecting the most cost effective alternative for a major regulation as required by Section 11349.1.

(3) Evaluating the competitiveness of a proposed major regulation and alternatives, as required by Section 11349.1.
(b) The department shall publish the adopted guidelines in the State Administrative Manual.
(c) The guidelines adopted pursuant to this article shall not be subject to the requirements of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1).

13093.
 (a) Each state agency proposing to adopt, amend, or repeal a regulation shall submit the economic assessment prepared pursuant to subdivision (b) of Section 11346.3 to the office. Within 30 days of receipt of an economic assessment, the office shall review the economic assessment to determine if the agency prepared the economic assessment consistent with the guidelines established in Section 13092.
(1) The office shall disapprove and return to the agency any economic assessment that it determines is not prepared consistent with the guidelines established in Section 13092. The office shall issue a written statement of its determination to the agency, and notify the Office of Administrative Law, including the specific reasons for the disapproval.
(2) The office shall approve any economic assessment that it determines is prepared consistent with the guidelines established in Section 13092, including, but not limited to, the determination as to whether the regulation is a major regulation. The office shall issue a written statement of its determination to the agency, and notify the Office of Administrative Law of the economic assessment’s approval.
(b) Each state agency proposing to adopt, amend, or repeal a major regulation shall submit the additional economic economic competitiveness assessment prepared pursuant to subdivision (a) of Section 11346.35 to the office. Within 30 days of receipt of an economic competitiveness assessment, the office shall review the economic competitiveness assessment to determine if the agency prepared the economic competitiveness assessment consistent with the guidelines established in Section 13092.
(1) The office shall disapprove and return to the agency any additional economic economic competitiveness assessment that it determines is not prepared consistent with the guidelines established in Section 13092. The office shall issue a written statement of their its determination to the agency, and notify the Office of Administrative Law, that includes the specific reasons for the disapproval.
(2) The office shall approve any additional economic economic competitiveness assessment that it determines is prepared consistent with the guidelines established in Section 13092. The office shall issue a written statement of their its determination to the agency, and notify the Office of Administrative Law, of their its approval.

SEC. 25.SEC. 21.

 Section 311 of the Public Utilities Code is amended to read:

311.
 (a) The commission, each commissioner, the executive director, and the assistant executive directors may administer oaths, certify to all official acts, and issue subpoenas for the attendance of witnesses and the production of papers, waybills, books, accounts, documents, and testimony in any inquiry, investigation, hearing, or proceeding in any part of the state.
(b) The administrative law judges may administer oaths, examine witnesses, issue subpoenas, and receive evidence, under rules that the commission adopts.
(c) The evidence in any hearing shall be taken by the commissioner or the administrative law judge designated for that purpose. The commissioner or the administrative law judge may receive and exclude evidence offered in the hearing in accordance with the rules of practice and procedure of the commission.
(d) Consistent with the procedures contained in Sections 1701.1, 1701.2, 1701.3, and 1701.4, the assigned commissioner or the administrative law judge shall prepare and file an opinion setting forth recommendations, findings, and conclusions. The opinion of the assigned commissioner or the administrative law judge is the proposed decision and a part of the public record in the proceeding. The proposed decision of the assigned commissioner or the administrative law judge shall be filed with the commission and served upon all parties to the action or proceeding without undue delay, not later than 90 days after the matter has been submitted for decision. The commission shall issue its decision not sooner than 30 days following filing and service of the proposed decision by the assigned commissioner or the administrative law judge, except that the 30-day period may be reduced or waived by the commission in an unforeseen emergency situation or upon the stipulation of all parties to the proceeding or as otherwise provided by law. The commission may, in issuing its decision, adopt, modify, or set aside the proposed decision or any part of the decision. Where the modification is of a decision in an adjudicatory hearing it shall be based upon the evidence in the record. Every finding, opinion, and order made in the proposed decision and approved or confirmed by the commission shall, upon that approval or confirmation, be the finding, opinion, and order of the commission.
(e) Any item appearing on the commission’s public agenda as an alternate item to a proposed decision or to a decision subject to subdivision (g) shall be served upon all parties to the proceeding without undue delay and shall be subject to public review and comment before it may be voted upon. For purposes of this subdivision, “alternate” means either a substantive revision to a proposed decision that materially changes the resolution of a contested issue or any substantive addition to the findings of fact, conclusions of law, or ordering paragraphs. The commission shall adopt rules that provide for the time and manner of review and comment and the rescheduling of the item on a subsequent public agenda, except that the item may not be rescheduled for consideration sooner than 30 days following service of the alternative item upon all parties. The alternate item shall be accompanied by a digest that clearly explains the substantive revisions to the proposed decision. The commission’s rules may provide that the time and manner of review and comment on an alternate item may be reduced or waived by the commission in an unforeseen emergency situation.
(f) The commission may specify that the administrative law judge assigned to a proceeding involving an electrical, gas, telephone, railroad, or water corporation, or a highway carrier, initiated by customer or subscriber complaint need not prepare, file, and serve an opinion, unless the commission finds that to do so is required in the public interest in a particular case.
(g) (1) Prior to voting on any commission decision not subject to subdivision (d), the decision shall be served on parties and subject to at least 30 days public review and comment. Any alternate to any commission decision shall be subject to the same requirements as provided for alternate decisions under subdivision (e). For purposes of this subdivision, “decision” also includes resolutions, including resolutions on advice letter filings.
(2) The 30-day period may be reduced or waived in an unforeseen emergency situation, upon the stipulation of all parties in the proceeding, for an uncontested matter in which the decision grants the relief requested, or for an order seeking temporary injunctive relief.
(3) This subdivision does not apply to uncontested matters that pertain solely to water corporations, or to orders instituting investigations or rulemakings, categorization resolutions under Sections 1701.1 to 1701.4, inclusive, or orders authorized by law to be considered in executive session. Consistent with regulatory efficiency and the need for adequate prior notice and comment on commission decisions, the commission may adopt rules, after notice and comment, establishing additional categories of decisions subject to waiver or reduction of the time period in this section.
(h) Notwithstanding any other provision of law, amendments, revisions, or modifications by the commission of its Rules of Practice and Procedure, shall be submitted to the Office of Administrative Law for prior review in accordance with Sections 11349, 11349.3, 11349.4, 11349.6, and 11350.3 of, and subdivisions (a) and (b) of Section 11349.1 of, the Government Code. If the commission adopts an emergency revision to its Rules of Practice and Procedure based upon a finding that the revision is necessary for the preservation of the public peace, health and safety, or general welfare, this emergency revision shall only be reviewed by the Office of Administrative Law in accordance with subdivisions (b) to (d), inclusive, of Section 11349.6 of the Government Code. The emergency revision shall become effective upon filing with the Secretary of State and shall remain in effect for no more than 120 days. A petition for writ of review pursuant to Section 1756 of a commission decision amending, revising, or modifying its Rules of Practice and Procedure shall not be filed until the regulation has been approved by the Office of Administrative Law, the Governor, or a court pursuant to Section 11350.3 of the Government Code. If the period for filing the petition for writ of review would otherwise have already commenced under Section 1733 or 1756 at the time of that approval, then the period for filing the petition for writ of review shall continue until 30 days after the date of that approval. Nothing in this subdivision shall require the commission to comply with Article 5 (commencing with Section 11346) of Chapter 3.5 of Part 1 of Division 3 of Title 2 of the Government Code. This subdivision is only intended to provide for the Office of Administrative Law review of procedural commission decisions relating to commission Rules of Practice and Procedure, and not general orders, resolutions, or other substantive regulations.
(i) The commission shall immediately notify the Legislature whenever the commission reduces or waives the time period for public review and comment due to an unforseen emergency situation, as provided in subdivision (d), (e), or (g).