40728.7.
(a) For purposes of this section, the following terms have the following meanings:(1) “Assessment” means the assessment of socioeconomic impacts of a proposed adoption, amendment, or repeal of a rule or regulation required to be conducted by the state board or a district pursuant to subdivision (a) of Section 40728.5.
(2) “Proposed action” means the proposed adoption, amendment, or repeal of a rule or regulation being contemplated by the state board or a district.
(3) “Third-party contractor” means a third party with whom the state board or a district contracts, consistent with state and local laws, rules, and
regulations, to conduct an assessment of socioeconomic impacts, or portion thereof, required pursuant to subdivision (a) of Section 40728.5.
(b) (1) This section outlines the minimum standards applicable to the state board or a district that is required to conduct an assessment of socioeconomic impacts required pursuant to subdivision (a) of Section 40728.5. Nothing in this section shall prohibit the state board or a district from creating additional requirements or imposing additional requirements on a third-party contractor relating to the assessment.
(2) Neither the state board nor a district shall approve an assessment pursuant to Section 40728.5 if the assessment does not comply with the requirements of this section.
(3) Nothing in this section shall be construed to supersede, modify, or
otherwise affect, or exempt the state board or a district from, applicable state or local laws, rules, or regulations relating to the ability or authority of the state board or a district to contract with an outside third party to conduct the assessment, including, but not limited to, the State Contract Act (Chapter 1 (commencing with Section 10100) of Part 2 of Division 2 of the Public Contract Code).
(c) (1) A state board or a district may contract with a third-party contractor to conduct an assessment, or portion thereof, and shall require the prospective third-party contractor to include all of the following in the prospective third-party contractor’s proposal for the assessment:
(A) A conflicts statement that includes both of the following:
(i) A description of all work performed by the
prospective third-party contractor in the last five years that potentially relates to or could potentially be directly impacted by the proposed action.
(ii) All financial, personal, or familial relationships of any person employed by the prospective third-party contractor with either of the following:
(I) An employee of the state board or a district that holds a designated position listed in Appendix A of Section 95000 of Title 17 of the Code of Regulations.
(II) An executive officer of any business or corporation that could potentially be directly impacted by the proposed action.
(B) A statement of the prospective third-party contractor’s experience and key staff’s expertise in conducting socioeconomic impact studies, or similar studies that involve
cost analysis of environmental rules and regulations and their economic and demographic impacts, that includes both of the following:
(i) A list of socioeconomic impact studies or similar studies conducted by the prospective third-party contractor in the last five years.
(ii) The curriculum vitae of the team leader and key professional team members whom the prospective third-party contractor proposes to conduct the assessment that includes the relevant expertise, education, and certifications, if any, of the proposed team leader and key professional team members.
(C) A proposed schedule for the assessment that includes the date by which the prospective third-party contractor will provide a draft assessment to the state board or a district for review.
(D) A proposed budget for the assessment.
(2) The state board or a district may disqualify a prospective third-party contractor if the state board or a district determines either of the following:
(A) The prospective third-party contractor’s conflicts statement submitted pursuant to subparagraph (A) of paragraph (1) reveals a material conflict of interest that violates Section 18730 of Title 2 of the California Code of Regulations.
(B) The experience and qualifications of the prospective third-party contractor or its employees identified pursuant to subparagraph (B) of paragraph (1) are insufficient to conduct the assessment.
(d) The state board or a district shall include, or require a third-party contractor with whom the state board or
a district contracts to include, at a minimum, all of the following in the assessment:
(1) All of the information and analysis required pursuant to subdivision (f) of Section 40728.5.
(2) (A) A description of the specific methodologies employed by the state board, a district, or the third-party contractor to conduct the assessment.
(B) The state board, a district, and the third-party contractor shall comply with the Department of Finance’s methodological standards for state agencies outlined in Chapter 1 (commencing with Section 2000) of Division 3 of Title 1 of the California Code of Regulations in conducting the assessment.
(3) An analysis of the disproportionate impact, if any, of the proposed action on any racial, ethnic, or
gender subgroup. If no disproportionate impact is identified, the state board, a district, or the third-party contractor shall describe the basis for its conclusion that there is no disproportionate impact.
(4) An econometric analysis that includes all of the following:
(A) A baseline estimate of the costs, revenues, income, and other relevant economic factors for businesses and consumers affected by the proposed action. The baseline estimate shall take into account all economic and regulatory factors, including, but not limited to, relevant rules or regulations that have been enacted or are under active consideration by the state board or a district.
(B) A detailed description of the assumptions supporting the baseline estimate required pursuant to subparagraph (A), and which assumptions shall be based on the
conditions specific to the region affected by the proposed action.
(C) An estimate of the impacts of the proposed action on the baseline estimate developed pursuant to subparagraph (A).
(D) An estimate of the impact that the proposed action will have on state and local revenues, including corporate, personal, sales, and property tax revenues.
(5) A hyperlink or citation to each data source relied on in the assessment so that any person can view the original data source.
(6) Identification of the key assumptions and inputs entered into any model created or used for the assessment, including, but not limited to, assumptions regarding the responsiveness of labor supply to changes in wage rates and the responsiveness of consumer spending to changes in
product or service prices.
(7) (A) Except as provided in subparagraph (B), a detailed description of any manipulation, calculation, interpolation, or extrapolation of original source data so that any person can reproduce the same estimates presented in the assessment.
(B) Complex calculations using generally accepted and publicly available input-output econometric models, such as the Regional Input-Output Modeling System (RIMS II) published by the Bureau of Economic Analysis of the United States Department of Commerce and the proprietary Economic Impact Analysis for Planning (IMPLAN), are exempt from the requirement in subparagraph (A) if the state board, a district, or the third-party contractor documents all inputs.
(e) In developing the estimate of the impacts of the proposed actions on
baseline estimates pursuant to subparagraph (C) of paragraph (4) of subdivision (d), the state board, a district, or the third-party contractor shall do all of the following:
(1) Identify the direct cost of the proposed action on the entities impacted by the proposed action, including separately identifying the costs for permitting, planning, purchasing, installation, and ongoing operations associated with any major investment needed to comply with the proposed action.
(2) Identify the basis for each component of the estimate.
(3) Consider input from entities affected by the proposed action in developing the estimate.
(4) Ensure that the estimate reflects local market conditions.
(5) If
there is uncertainty regarding the estimate, indicate the basis for the assumptions used for the estimate, develop a reasonable range surrounding the estimate, and describe in detail the impacts of the range on the costs and benefits of the proposed action.
(6) (A) If the proposed action will require significant expenditures by affected entities, include an estimate of the impacts of the proposed action on affected entities' profits and cash flows.
(B) In developing the estimate required pursuant to subparagraph (A), the state board, a district, or a third-party contractor shall do all of the following:
(i) Estimate the impacts on the affected entities’ profits and cash flows over a multiple-year period, as necessary, to capture the proposed actions impacts over time.
(ii) Include information regarding sources and costs of financing for necessary equipment and infrastructure investments.
(iii) Consider whether installation of necessary equipment and infrastructure will significantly disrupt the output of affected entities and, if so, the impacts of those disruptions on the marketplace.
(7) Analyze the likely behavioral changes by affected entities and individuals in response to the proposed action, including, but not limited to, the extent to which costs or benefits are retained by the affected entities or individuals or are passed on to others, including, but not limited to, customers, employees, suppliers, and owners.
(8) Take into account specific market conditions for the industry and the location where the
proposed action will have an impact, including, but not limited to, the degree of competition from outside suppliers, price elasticity of demand for products and services provided by the affected entities, and labor market conditions specific to the types of occupations that would be impacted by job cutbacks or increases associated with the proposed action.
(9) Estimate direct, indirect, and induced impacts within the region impacted by the proposed action of both the cost of the proposed action on affected entities and, if relevant, the cost-shifting that is assumed to occur, including, but not limited to, the impacts on consumer prices, employment, wages, household discretionary income of employees and consumers by income level, consumer spending, and output in the region affected by the proposed action.
(f) The provisions of this section are severable. If any provision of this
section or its application is held invalid, that invalidity shall not affect other provisions or applications that can be given effect without the invalid provision or application.