BILL ANALYSIS Ó AB 12 Page 1 GOVERNOR'S VETO AB 12 (Cooley) As Amended May 24, 2013 2/3 vote ADMINISTRATIVE REVIEW 13-0 APPROPRIATIONS 17-0 ----------------------------------------------------------------- | |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 AB 12 Page 2 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 AB 12 Page 3 $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 FN: 0002915