BILL ANALYSIS                                                                                                                                                                                                    

                                                                    AB 1286

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          Date of Hearing:  May 20, 2015


                                 Jimmy Gomez, Chair

          1286 (Mayes) - As Amended May 4, 2015

          |Policy       |Jobs, Economic Development,    |Vote:|9 - 0        |
          |Committee:   |and the Economy                |     |             |
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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          This bill establishes the California Regulatory Reform Council  
          (Council) to make reports and recommendations to the Legislature  
          and the Governor related to the structure, organization,  
          operation, and impact of all levels of state and local  


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          regulations on industries operating within the state. Repeals  
          the council on January 1, 2022.  Specifically, this bill:

          1)Establishes the 13 member council under the executive branch  
            for the purposes of expenditures for the support of the  
            council, including the expenses of the members of the council,  
            but specifies the council shall not be subject to the control  
            or direction of any officer or employee of the executive  
            branch, except in connection with the appropriation of funds  
            approved by the Legislature.

          2)Specifies the functions and makeup of the board, including  
            five appointed by the Governor, two appointed by the Senate,  
            two appointed by the Assembly, two members of the Senate, two  
            members of the Assembly, to serve two-year terms without  
            compensation, except for travel. Requires members to be  
            appointed by March 1, 2016 and hold their first meeting by  
            April 1, 2016.

          3)Requires, by January 1, 2017, the council to establish a  
            website and post the following: a list of its ongoing  
            activities; the agenda, list of individuals who testified, and  
            background materials distributed by the council for each  
            meeting; copies of final reports prepared by the council or on  
            behalf of the council. Requires all materials required to be  
            posted to remain accessible from the Internet Web site until  
            January 1, 2022.
          FISCAL EFFECT:

          General Fund administrative costs, likely in excess of $1  
          million, for seven positions, through January 1, 2022. This bill  
          creates a new council to provide recommendations on structure,  
          organization, operation, and impact of all levels of state and  


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          local regulations on "specific" industries operating within the  
          state. However, the "specific" industries are not identified.   
          The council will need staff to research thousands of  
          regulations, produce meeting agendas, facilitate meetings, and  
          draft a final report. Technical expertise will also be needed to  
          create, monitor and update a new website.


          1)Purpose.  This measure proposes the establishment of a Council  
            to provide additional review of selected regulations as to  
            their impact on specific industry sectors.  The bill does not  
            define "specific" industry sectors.

          2)Opposition. The California Labor Federation is opposed to this  
            bill, stating it would add unnecessary layers of bureaucracy  
            to a regulatory system that currently adequately meets the  
            needs of the public and the Legislature. They note the  
            exhaustive regulatory review process under the Administrative  
            Procedures Act and AB 617 (2011) which further requires a  
            rigorous economic impact analysis to be completed for  
            regulations with significant costs. 

          3)Related legislation. 

             a)   AB 19 (Chang), pending in this committee, requires the  
               Governor's Office of Business and Economic Development  
               (GO-Biz), in consultation with the Office of the Small  
               Business Advocate, to establish a process for the ongoing  
               review of existing regulations adopted prior to January 1,  
               2016, primarily those affecting small businesses, to  


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               determine whether the regulations could be less  
               administratively burdensome or costly to affected sectors.

             b)   AB 2723 (Medina) of 2014 proposed a review of costs  
               associated with regulations on the small business be  
               considered when state agencies undertake their economic  
               impact assessment for major regulations. The Governor's  
               veto message of this bill is as follows:

               This bill would require the economic analysis for major  
               regulations to include a separate assessment of the impact  
               on sole proprietorships and small businesses.  I signed  
               legislation in 2011 to require a comprehensive economic  
               analysis of proposed major regulations. The analysis must  
               assess whether, and to what extent, the proposed  
               regulations will affect all California jobs and businesses.  
                Agencies must also identify alternatives that would lessen  
               any adverse impact on small businesses.  I am not convinced  
               that an additional layer of specificity based solely on the  
               legal structure of a business would add value to the  
               comprehensive economic analysis already required.

             c)   SB 617 (Calderon), Chapter 496, Statutes of 2011,  
               revises the state Administrative Procedure Act to require  
               each state agency adopting a major regulation to prepare an  
               economic impact analysis and requires state agencies to  
               implement ongoing monitoring of internal auditing and  
               financial controls and other best practices in financial  



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          Analysis Prepared by:Misty Feusahrens / APPR. / (916)