Bill Text: CA SB560 | 2011-2012 | Regular Session | Introduced
Bill Title: Regulations: small businesses.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2012-01-31 - Returned to Secretary of Senate pursuant to Joint Rule 56. [SB560 Detail]
Download: California-2011-SB560-Introduced.html
BILL NUMBER: SB 560 INTRODUCED
BILL TEXT
INTRODUCED BY Senator Wright
FEBRUARY 17, 2011
An act to amend Sections 11346, 11346.2, 11346.3, 11346.45,
11346.5, 11349.1, 11350, 11350.3, and 11357 of, and to add Section
11346.6 to, the Government Code, relating to regulations.
LEGISLATIVE COUNSEL'S DIGEST
SB 560, as introduced, Wright. Regulations: small businesses.
(1) The Administrative Procedure Act generally sets forth the
requirements for the adoption, publication, review, and
implementation of regulations by state agencies. An agency that is
considering adopting, amending, or repealing a regulation is
authorized to consult with interested persons before initiating
regulatory action, and requires an agency to do so when the
regulation involves complex or numerous proposals.
This bill would require the agency, if it does not, or is unable
to, consult with these parties to inform in writing the Office of
Small Business Advocate and the Department of Finance of its decision
and the reasons for not consulting the impacted businesses.
(2) The act requires every state agency subject to the act to
submit, with the notice of the proposed adoption, amendment, or
repeal of a regulation, an initial statement of reasons for proposing
the adoption, amendment, or repeal of a regulation, which is
required to include, among other things, a description of any
reasonable alternatives that would lessen any adverse impact on small
business and the agency's reasons for rejecting those reasonable
alternatives. The act specifies that the agency is not required, in
this initial statement, to artificially construct alternatives,
describe unreasonable alternatives, or justify why it has not
described alternatives.
This bill would require the agency to describe the agency's
reasons for rejecting each specific alternative, and would delete the
specification that an agency is not required to artificially
construct alternatives, describe unreasonable alternatives, or
justify why it has not described alternatives.
(3) The act requires a state agency to assess the potential of a
proposal to adopt, amend, or repeal a regulation to adversely affect
business enterprises and individuals.
This bill would also require an agency to submit an economic
impact statement that makes that assessment and would also require an
agency, before submitting a proposal, to prepare a small business
economic impact statement that contains specified information.
This bill would also require an agency that adopts a regulation
that requires the use of a new or emerging technology or equipment in
order to achieve the identified purpose of the regulation to post,
as specified, prior to the effective date of the regulation, that the
required technology or equipment is commercially available or will
be commercially available prior to the effective date of the
regulation. This bill would, if the required technology or equipment
is not commercially available on the effective date of a regulation,
prohibit an agency from enforcing a violation of the regulation until
at least 6 months after the technology or equipment becomes
commercially available and the agency posts that information, as
specified. This bill would also provide that the agency be required
to reimburse a business or individual for the costs incurred in
purchasing the required new or emerging technology or other equipment
if that technology or other requirement is determined to not
function as intended, as specified.
(4) Under the act, the agency must issue a notice of proposed
action that includes prescribed information, including, if a state
agency makes an initial determination that the adoption, amendment,
or repeal of a regulation will not have a significant statewide
adverse economic impact directly affecting business, a declaration of
that determination.
This bill would delete that requirement and instead require, if an
agency declares that it is not aware of any cost impact, that the
notice of proposed action include a statement describing how a
private person or business could comply with the proposed regulation
without incurring a cost.
This bill would also require that the notice of proposed action
include the small business economic impact statement that this bill
requires an agency to prepare.
(5) 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 any agency is
required to use in making the determinations relating to mandates on
local agencies or school districts, as specified.
This bill would also require the Department of Finance to adopt
and update, as necessary, instructions prescribing the methods that
any agency is required to use in making the determinations relating
to significant, statewide adverse economic impacts directly affecting
business, as specified.
(6) The act requires the Office of Administrative Law to review
and approve regulations that are adopted, amended, or repealed, using
prescribed standards. The act requires that the office reject a
proposed regulation in specified circumstances.
This bill would require that the office reject a proposed
regulation if the adopting agency does not provide specified
information relating to the small business economic impact statement.
(7) The act authorizes any interested person to obtain a judicial
declaration as to the validity of specified regulations or orders of
repeal, by bringing an action for declaratory relief in the superior
court in accordance with the Code of Civil Procedure.
This bill would specify that an interested person includes, but is
not limited to, a small business or an organization or trade
association that represents small businesses and whose members are
affected by the regulation.
(8) The bill would also make conforming changes to the act.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated local program: no.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. This act shall be known, and may be cited, as the
Regulatory Reform Act of 2011.
SEC. 2. The Legislature finds and declares all of the following:
(a) California lost nearly 400,000 manufacturing jobs between the
years 2000 and 2007 according to a report by the Milken Institute.
Silicon Valley, for instance, has 130,000 fewer jobs now than it had
a decade ago and has an office space vacancy rate above 20 percent.
(b) A survey conducted by Los Angeles-based Kosmont Cos. and the
Rose Institute of State and Local Government that examined
business-related fees determined that California is one of the more
expensive places to do business.
(c) For the second consecutive year, CEO Magazine has ranked
California last among the states where companies preferred to do
business.
(d) Since 1999, according to California Lutheran University,
California has seen a far steeper decline than the national average
in households earning an income between $35,000 and $75,000.
(e) California's regulatory burdens are often cited as one of the
main causes that businesses prefer to expand into other states.
(f) It is the intent of the Legislature to create a regulatory
structure that is aware and sensitive to the cost burdens imposed on
businesses.
SEC. 3. Section 11346 of the Government Code is amended to read:
11346. (a) It is the purpose of this chapter to establish basic
minimum procedural requirements for the adoption, amendment, or
repeal of administrative regulations. Except as provided in Section
11346.1, the provisions of this chapter
are applicable applies to the exercise of any
quasi-legislative power conferred by any statute heretofore or
hereafter enacted, but nothing in this chapter repeals or diminishes
additional requirements imposed by any statute. This chapter shall
not be superseded or modified by any subsequent legislation except to
the extent that the legislation shall do so expressly.
(b) An agency that is considering adopting, amending, or repealing
a regulation may consult with interested persons
parties who would be subject to the proposed regulations
before initiating regulatory action pursuant to this article. If
the agency does not, or is unable to, consult with parties who would
be subject to the proposed regulation, it shall inform in writing
the Office of Small Business Advocate and th e Department
of Finance of its decision and the reasons for not consulting the
impacted businesses.
SEC. 4. Section 11346.2 of the Government Code, as amended by
Section 1 of Chapter 398 of the Statutes of 2010, is amended to read:
11346.2. Every agency subject to this chapter shall prepare,
submit to the office with the notice of the proposed action as
described in Section 11346.5, and make available to the public upon
request, all of the following:
(a) A copy of the express terms of the proposed regulation.
(1) The agency shall draft the regulation in plain,
straightforward language, avoiding technical terms as much as
possible, and using a coherent and easily readable style. The agency
shall draft the regulation in plain English.
(2) The agency shall include a notation following the express
terms of each California Code of Regulations section, listing the
specific statutes or other provisions of law authorizing the adoption
of the regulation and listing the specific statutes or other
provisions of law being implemented, interpreted, or made specific by
that section in the California Code of Regulations.
(3) The agency shall use underline or italics to indicate
additions to, and strikeout to indicate deletions from, the
California Code of Regulations.
(b) An initial statement of reasons for proposing the adoption,
amendment, or repeal of a regulation. This statement of reasons shall
include, but not be limited to, all of the following:
(1) A statement of the specific purpose of each adoption,
amendment, or repeal and the rationale for the determination by the
agency that each adoption, amendment, or repeal is reasonably
necessary to carry out the purpose for which it is proposed. Where
the adoption or amendment of a regulation would mandate the use of
specific technologies or equipment, a statement of the reasons why
the agency believes these mandates or prescriptive standards are
required.
(2) An identification of each technical, theoretical, and
empirical study, report, or similar document, if any, upon which the
agency relies in proposing the adoption, amendment, or repeal of a
regulation.
(3) (A) A description of reasonable alternatives to the regulation
and the agency's reasons for rejecting those alternatives
each specific alternative . In the case of a
regulation that would mandate the use of specific technologies or
equipment or prescribe specific actions or procedures, the imposition
of performance standards shall be considered as an alternative.
(B) A description of reasonable alternatives to the regulation
that would lessen any adverse impact on small business and the agency'
s reasons for rejecting those alternatives
each specific alternative .
(C) Notwithstanding subparagraph (A) or (B), an agency is not
required to artificially construct alternatives,
describe unreasonable alternatives , or justify why it has
not described alternatives .
(4) Facts, evidence, documents, testimony, or other evidence on
which the agency relies to support an initial determination that the
action will not have a significant adverse economic impact on
business.
(5) A department, board, or commission within the Environmental
Protection Agency, the Resources Agency, or the Office of the State
Fire Marshal shall describe its efforts, in connection with a
proposed rulemaking action, to avoid unnecessary duplication or
conflicts with federal regulations contained in the Code of Federal
Regulations addressing the same issues. These agencies may adopt
regulations different from federal regulations contained in the Code
of Federal Regulations addressing the same issues upon a finding of
one or more of the following justifications:
(A) The differing state regulations are authorized by law.
(B) The cost of differing state regulations is justified by the
benefit to human health, public safety, public welfare, or the
environment.
(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 subdivision (b) 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 that the agency
proposes to adopt or amend that are different from the corresponding
provisions of the federal regulation.
(d) This section shall be inoperative from January 1, 2012, until
January 1, 2014.
SEC. 5. Section 11346.2 of the Government Code, as added by
Section 2 of Chapter 398 of the Statutes of 2010, is amended to read:
11346.2. Every agency subject to this chapter shall prepare,
submit to the office with the notice of the proposed action as
described in Section 11346.5, and make available to the public upon
request, all of the following:
(a) A copy of the express terms of the proposed regulation.
(1) The agency shall draft the regulation in plain,
straightforward language, avoiding technical terms as much as
possible, and using a coherent and easily readable style. The agency
shall draft the regulation in plain English.
(2) The agency shall include a notation following the express
terms of each California Code of Regulations section, listing the
specific statutes or other provisions of law authorizing the adoption
of the regulation and listing the specific statutes or other
provisions of law being implemented, interpreted, or made specific by
that section in the California Code of Regulations.
(3) The agency shall use underline or italics to indicate
additions to, and strikeout to indicate deletions from, the
California Code of Regulations.
(b) An initial statement of reasons for proposing the adoption,
amendment, or repeal of a regulation. This statement of reasons shall
include, but not be limited to, all of the following:
(1) A statement of the specific purpose of each adoption,
amendment, or repeal and the rationale for the determination by the
agency that each adoption, amendment, or repeal is reasonably
necessary to carry out the purpose for which it is proposed.
(2) An identification of each technical, theoretical, and
empirical study, report, or similar document, if any, upon which the
agency relies in proposing the adoption, amendment, or repeal of a
regulation.
(3) Where the adoption or amendment of a regulation would mandate
the use of specific technologies or equipment, a statement of the
reasons why the agency believes these mandates or prescriptive
standards are required.
(4) (A) A description of reasonable alternatives to the regulation
and the agency's reasons for rejecting those alternatives
each specific alternative .
(B) A description of any performance standard that was considered
as an alternative. In the case of a regulation that would mandate the
use of specific technologies or equipment or prescribe specific
actions or procedures, the imposition of performance standards shall
be considered as an alternative.
(C) A description of reasonable alternatives to the regulation
that would lessen any adverse impact on small business and the agency'
s reasons for rejecting those alternatives
each specific alternative .
(D) Notwithstanding subparagraph (A), (B), or (C), an agency is
not required to artificially construct alternatives,
describe unreasonable alternatives , or justify
why it has not described alternatives .
(5) Facts, evidence, documents, testimony, or other evidence on
which the agency relies to support an initial determination that the
action will not have a significant adverse economic impact on
business.
(6) A department, board, or commission within the Environmental
Protection Agency, the Resources Agency, or the Office of the State
Fire Marshal shall describe its efforts, in connection with a
proposed rulemaking action, to avoid unnecessary duplication or
conflicts with federal regulations contained in the Code of Federal
Regulations addressing the same issues. These agencies may adopt
regulations different from federal regulations contained in the Code
of Federal Regulations addressing the same issues upon a finding of
one or more of the following justifications:
(A) The differing state regulations are authorized by law.
(B) The cost of differing state regulations is justified by the
benefit to human health, public safety, public welfare, or the
environment.
(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 subdivision (b) 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 that the agency
proposes to adopt or amend that are different from the corresponding
provisions of the federal regulation.
(d) This section shall become operative on January 1, 2012.
(e) This section shall remain in effect only until January 1,
2014, and as of that date is repealed, unless a later enacted
statute, that is enacted before January 1, 2014, deletes or extends
that date.
SEC. 6. Section 11346.3 of the Government Code is amended to read:
11346.3. (a) State agencies An agency
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.
(3) It is not the intent of this
section An agency, before submitting a
proposal to impose additional criteria on agencies,
above that which exists in current law, in assessing adverse economic
adopt, amend, or repeal a regulation to the office,
shall consider the proposal's impact on California
small business enterprises,
by preparing a small business economic impact statement. An
agency shall consider, but only to assure that the
assessment is made early in the process of initiation and development
of a proposed adoption, amendment, or repeal of a regulation.
not be limited to, information supplied by interested
parties. The small business economic impact statement shall include
all of the following:
(A) An identification and estimate of the number of small
businesses subject to the proposed regulation.
(B) The estimated annual average cost of compliance by a small
business subject to the proposed regulation.
(C) The estimated statewide annual average cost of compliance by
small businesses subject to the proposed regulation.
(b) (1) 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.
(2) This subdivision does not apply to the University of
California, the Hastings College of the Law, or the Fair Political
Practices Commission.
(3) 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) The office shall ensure compliance with the provisions of this
section in all filings to adopt, amend, or repeal any administrative
regulation, pursuant to Section 11349.1.
SEC. 7. 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 who 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.
(b) This section does not apply to a state agency in any instance
where that state agency is required to implement federal law and
regulations for which there is little or no discretion on the part of
the state to vary.
(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.
record and to the Office of the Small Business Advocate and the
Department of Finance.
(d) The provisions of this section shall not be subject to
judicial review or to the provisions of Section 11349.1.
SEC. 8. 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, if appropriate, the specific objectives.
(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.
An agency's initial determination and declaration that a proposed
adoption, amendment, or repeal of a regulation may have or will not
have a significant, adverse impact on businesses, including the
ability of California businesses to compete with businesses in other
states, shall not be grounds for the office to refuse to publish the
notice of proposed action.
(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. If an agency
declares, pursuant to this paragraph, that it is not aware of any
cost impact that a representative private person or business would
incur in compliance with the proposed adoption, amendment, or repeal
of a regulation, the agency shall include a statement describing how
a private person or business could comply with the proposed adoption,
amendment, or repeal of a regulation without incurring a cost.
If no cost impacts are known to the agency, it shall state the
following:
"The agency is not aware of any cost impacts that a representative
private person or business would necessarily incur in reasonable
compliance with the proposed action."
(10) A The small business economic impact
statement that is required by subdivision (a) of
Section 11346.3, and a statement of the results of the
assessment required by subdivision (b) of Section 11346.3.
(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. 9. Section 11346.6 is added to the Government Code, to
read:
11346.6. (a) (1) An agency that adopts a regulation that requires
the use of a new or emerging technology or other equipment in order
to achieve the identified purpose of the regulation shall post on its
Internet Web site, if available, and in the California Regulatory
Notice Register, prior to the effective date of the regulation, that
the required technology is commercially available or will be
commercially available prior to the effective date of the regulation.
(2) For purposes of this section, new or emerging technology or
other equipment shall not be determined to be commercially available
unless it is available on the market from at least two providers or
manufacturers.
(b) Notwithstanding any other law, if new or emerging technology
or other equipment, whose use is required by a regulation, is not
commercially available on the effective date of the regulation, the
adopting agency shall not enforce a violation of that regulation
until at least six months after the required technology or other
equipment becomes commercially available and the agency posts on its
Internet Web site, if available, and in the California Regulatory
Notice Register, that the required technology or other equipment has
become commercially available.
(c) In the event that a person or business incurs costs purchasing
new or emerging technology or other equipment that is required by an
adopted regulation, but the agency ultimately determines that the
regulatory program is not workable because the new or emerging
technology or other equipment does not function as intended by the
adopting agency, the agency shall be responsible for reimbursing the
person or business for those incurred costs.
(d) Nothing in this section shall be construed to require an
agency to readopt a regulation already approved by the office and
filed with the Secretary of State.
(e) An agency shall not be required to comply with the
requirements of this section if an adopted regulation that requires
the use of a new or emerging technology or other equipment imposes
that requirement on the industry that is directly responsible for
developing or manufacturing the new or emerging technology or other
equipment as a part of that industry's core business.
(f) Nothing in this section shall be construed to prohibit an
agency from adopting new or additional standards for new or emerging
technology or other equipment.
SEC. 10. 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.
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) The agency has not complied with Section 11346.3.
(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 adopting agency has not provided the small business
economic impact statement required pursuant to paragraph (10) of
subdivision (a) of Section 11346.5, or if the small business economic
impact statement does not contain the elements required pursuant to
Section 11346.3.
(5) The adopting agency has not provided the estimate or
description required pursuant to paragraph (9) of subdivision (a) of
Section 11346.5.
(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. 11. Section 11350 of the Government Code is amended to read:
11350. (a) Any interested person , including, but not
limited to, a small business or an organization or trade association
that represents small businesses and whose members are affected by
the regulation, may obtain a judicial declaration as to the
validity of any regulation or order of repeal by bringing an action
for declaratory relief in the superior court in accordance with the
Code of Civil Procedure. The right to judicial determination shall
not be affected by the failure either to petition or to seek
reconsideration of a petition filed pursuant to Section 11340.7
before the agency promulgating the regulation or order of repeal. The
regulation or order of repeal may be declared to be invalid for a
substantial failure to comply with this chapter, or, in the case of
an emergency regulation or order of repeal, upon the ground that the
facts recited in the finding of emergency prepared pursuant to
subdivision (b) of Section 11346.1 do not constitute an emergency
within the provisions of Section 11346.1.
(b) In addition to any other ground that may exist, a regulation
or order of repeal may be declared invalid if either of the following
exists:
(1) The agency's determination that the regulation is reasonably
necessary to effectuate the purpose of the statute, court decision,
or other provision of law that is being implemented, interpreted, or
made specific by the regulation is not supported by substantial
evidence.
(2) The agency declaration pursuant to paragraph (8) of
subdivision (a) of Section 11346.5 is in conflict with substantial
evidence in the record.
(c) The approval of a regulation or order of repeal by the office
or the Governor's overruling of a decision of the office disapproving
a regulation or order of repeal shall not be considered by a court
in any action for declaratory relief brought with respect to a
regulation or order of repeal.
(d) In a proceeding under this section, a court may only consider
the following evidence:
(1) The rulemaking file prepared under Section 11347.3.
(2) The finding of emergency prepared pursuant to subdivision (b)
of Section 11346.1.
(3) An item that is required to be included in the rulemaking file
but is not included in the rulemaking file, for the sole purpose of
proving its omission.
(4) Any evidence relevant to whether a regulation used by an
agency is required to be adopted under this chapter.
SEC. 12. Section 11350.3 of the Government Code is amended to
read:
11350.3. Any interested person , including, but not limited
to, a small business or an organization or trade association that
represents small businesses and whose members are affected by the
regulation, may obtain a judicial declaration as to the
validity of a regulation or order of repeal which the office has
disapproved pursuant to Section 11349.3,
11349.3 or 11349.6, or of a regulation that has been ordered
repealed pursuant to Section 11349.7 by bringing an action for
declaratory relief in the superior court in accordance with the Code
of Civil Procedure. The court may declare the regulation valid if it
determines that the regulation meets the standards set forth in
Section 11349.1 and that the agency has complied with this chapter.
If the court so determines, it may order the office to immediately
file the regulation with the Secretary of State.
SEC. 13. Section 11357 of the Government Code is amended to read:
11357. (a) The Department of Finance shall adopt and update, as
necessary, instructions for inclusion in the State Administrative
Manual prescribing the methods that any agency subject to this
chapter shall use in making the determination
determinations and estimates required by paragraph
paragraphs (5) and the estimate
required by paragraph (6) to (10), inclusive, of
subdivision (a) of Section 11346.5. The instructions shall include,
but need not be limited to, the following:
(1) Guidelines governing the types of data or assumptions, or
both, that may be used, and the methods that shall be used, to
calculate the estimate of the cost or savings to public agencies
or small businesses mandated by the regulation for which the
estimate is being prepared.
(2) The types of direct or indirect costs and savings that should
be taken into account in preparing the estimate.
(3) The criteria that shall be used in determining whether the
cost of a regulation must be funded by the state pursuant to Section
6 of Article XIII B of the California Constitution and Part 7
(commencing with Section 17500) of Division 4.
(4) The criteria that shall be used in determining whether the
cost of a regulation will have a significant, statewide adverse
economic impact on businesses.
(5) The criteria that shall be used in determining what costs, if
any, may be incurred by an individual or business that complies with
a proposed regulation.
(4)
(6) The format the agency preparing the estimate shall
follow in summarizing and reporting its estimate of the cost or
savings to state and local agencies, school districts, and in federal
funding of state programs that will result from the regulation.
(b) Any action by the Department of Finance to adopt and update,
as necessary, instructions to any state or local agency for the
preparation, development, or administration of the state budget,
including any instructions included in the State Administrative
Manual, shall be exempt from this chapter.
(c) The Department of Finance may review any estimate prepared
pursuant to this section for content including, but not limited to,
the data and assumptions used in its preparation.
