BILL ANALYSIS                                                                                                                                                                                                    Ó





                                                                  AB 12

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          GOVERNOR'S VETO
          AB 12 (Cooley)
          As Amended  May 24, 2013
          2/3 vote


           ADMINISTRATIVE REVIEW         13-0 APPROPRIATIONS   17-0        


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          |     |Frazier, Achadjian,       |Ayes:|Gatto, Harkey, Bigelow,   |
          |     |Allen, Buchanan, Ian      |     |Bocanegra, Bradford, Ian  |
          |     |Calderon, Cooley, Gorell, |     |Calderon, Campos,         |
          |     |Hagman, Holden, Medina,   |     |Donnelly, Eggman, Gomez,  |
          |Ayes:|Olsen, Quirk-Silva, Salas |     |Hall, Ammiano, Linder,    |
          |     |                          |     |Pan, Quirk, Wagner, Weber |
          |     |                          |     |                          |
          |-----+--------------------------+-----+--------------------------|
          |     |                          |     |                          |
           ----------------------------------------------------------------- 
           ----------------------------------------------------------------- 
          |ASSEMBLY:  |77-0 |(May 29, 2013)  |SENATE: |39-0 |(September 9,  |
          |           |     |                |        |     |2013)          |
           ----------------------------------------------------------------- 
            
          SUMMARY  :  Requires the Department of Finance (DOF) and the  
          Office of Administrative Law (OAL) to annually review the  
          standardized regulatory impact analyses for adherence to the  
          regulations adopted by a state agency and report to the  
          Legislature.  Additionally, this bill:
           
          1)Requires the report to include any recommendations improving  
            state agency performance and compliance.

          2)Requires the OAL to post the report and notice of  
            noncompliance on their Internet Web site.

           EXISTING LAW  establishes the Administrative Procedure Act (APA)  
          to create a public process by which those persons or entities  
          affected by a regulation have a voice in its creation as well as  
          notice of the law's new requirements.  The APA establishes a  










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          specific process for state agencies including assessing the cost  
          of the regulations, providing for public notice of proposed  
          regulations, an opportunity for interested parties to comment,  
          and, with some exceptions, review by the OAL.

           FISCAL EFFECT  :  According to the Assembly Appropriations  
          Committee, costs associated with this legislation should be  
          minor and absorbable within existing DOF resources.

           COMMENTS  :  Current law requires DOF and OAL to review "from time  
          to time" the standardized regulatory impact analyses for  
          adherence to the regulations adopted by the state agency and  
          report to the Legislature.  This report is required to be  
          delivered on or before November 1, 2015.  This language creates  
          uncertainty as to when and how often subsequent reports  
          reviewing the standardized regulatory impact analyses are  
          delivered to the Legislature.

          This bill eliminates that uncertainty by requiring DOF and OAL  
          to annually review the standardized regulatory impact analyses  
          and report to the Legislature on or before November 1, 2015, and  
          annually thereafter, with DOF reviewing new analyses as they  
          come in each year.

          Existing law also states OAL "may notify" the Legislature of  
          noncompliance of the regulations by a state agency.  This gives  
          OAL the discretion to not notify the Legislature of  
          noncompliance by a state agency if it so chooses.

          This bill eliminates that discretion by requiring OAL to include  
          in its annual report a discussion of noncompliance and any  
          recommendations the Legislature might consider for improving  
          state agency performance and compliance in the creation of the  
          standardized regulatory impact analyses.  This bill also  
          requires the OAL to post the report and notice of noncompliance  
          on its Internet Web site.

          SB 617 (Calderon), Chapter 496, Statutes of 2011, was enacted to  
          strengthen the economic impact reports required under the APA.   
          Specifically, SB 617 requires all state agencies that create,  
          modify, or repeal a major regulation with an economic impact of  










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          $50 million or more to issue a standardized economic impact  
          report addressing the following: 

          1)The creation or elimination of new business.

          2)The creation or elimination of jobs.

          3)The competitive advantages or disadvantages to California  
            businesses.

          4)The increase or decrease in investment in the state.

          5)The incentives for innovation in products, materials or  
            processes. 

          6)The benefits to the health, safety and welfare of  
            Californians.
           
          GOVERNOR'S VETO MESSAGE  :

          "Two years ago, I signed legislation that significantly revised  
          the regulatory review process. As a result, beginning this  
          November the Department of Finance will review the economic  
          impact of regulations before they are published. The annual  
          review proposed by this bill would duplicate those efforts."  


          Analysis Prepared by  :    William Herms / A. & A.R. / (916)  
          319-3600 


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