Letter from GOP 5 Senators to Senate President Pro Tem Darrell Steinberg regarding regulatory reform

Wednesday, August 31, 2011

[PDF Version]

The Honorable Darrell Steinberg
Senate President Pro Tempore
State Capitol
Room 205
Sacramento, CA  95814

Dear Senator Steinberg,

As members of the GOP 5, we write not only to thank you for your desire to reform California’s burdensome regulatory system, but to offer our assistance in developing legislation to address this pressing issue.  With unemployment figures hovering at 12 percent statewide (and considerably higher in some parts of the state), it is clear California’s lagging economy must be spurred by revitalizing our business climate.  By reforming the current regulatory process – which is unpredictable at best and paralyzing at worst – California will be more competitive in attracting businesses to create and retain jobs in the Golden State.

In anticipation of the proposals being put forward by our Democrat colleagues, we want to reiterate our prior offers to work together as partners in this very important endeavor.  California deserves nothing less from all of us, and we are confident you agree.

As you are aware, regulatory reform was one of the pillars of the GOP 5’s recent reform proposal, along with a spending limit, pension reform, and ending abuses of the CEQA process.  Our package was intentionally designed to tackle the problems we feel have aggravated our current budget crisis and stalled critical job growth.  To that end, we introduced SB 353 (Blakeslee) and SB 196 (Cannella, Berryhill, Emmerson, Harman).  Both of these bills have been in print for several months and outline reforms to the regulatory system that would ensure the regulations adopted by agencies are protective of jobs, while achieving their intended goal.

As an overview, the main components of these bills include:

  • Rigorous, standardized economic impact analysis of future major regulations: It is not enough for agencies to just perform these analyses without strict guidelines and oversight.  For the economic impact analysis to be effective, it must be thorough, transparent, and reviewed.  This can be achieved by third-party analysis (SB 196) or by creating an agency tasked with overseeing the analyses and giving “teeth” to the current Administrative Procedure Act process (SB 353).
  • Alternatives analysis: Before adopting regulations, agencies need to consider all the possibilities that both implement statute and do no harm to the business climate.  This would require agencies to receive input from regulated entities and to take into account their proposals for regulations.  Each regulatory approach needs to be thoroughly examined and presented to the agency decision-makers.
  • Selection of the most cost-effective approach: Agencies, in the absence of compelling reasons, ought to be required to select regulations that have the least negative or adverse impact on the economy while achieving the intended regulatory goal.
  • Benefit-cost analysis to justify alternative: If, after considering all the proposed regulatory approaches, an agency decides to select an approach other than the least cost-effective, the agency needs to provide ample justification, explaining how the benefits of the approach selected outweigh the costs.
  • Regulation review: As California’s regulatory system continues to grow, there needs to be a perpetual mechanism whereby regulations are reviewed on a regular basis to ensure that the regulations are still necessary, not duplicative and are not in conflict with other regulations.
  • Economic impact analysis for legislation: While we must address the regulations approved in this state, we must also bear in mind that regulations implement statute.  By providing in-depth economic analysis of pending legislation, lawmakers will be more fully aware of the potential economic consequences of proposed legislation.
  • Judicial review: In order to ensure that all involved agencies comply with these provisions, stakeholders must have judicial recourse.
  • Blanket implementation: Because of the vast web of regulations affecting California’s businesses, no agencies, including Regional Water Quality Control Boards and local air districts, should be exempted from these provisions.
  • Revision of existing regulations: There are currently thousands of existing regulations that were drafted with little or no appreciation to their impact on California jobs or coordination amongst multiple agencies.  Any improvements in our regulatory process must include a provision that allows for rapid review of the most inefficient existing regulations if we are going to get our economy moving again.

As with most legislative proposals, the true quality is to be found in the details.  While we have not yet had the opportunity to review the legislation you and your colleagues are proposing, we are hopeful that it will contain many of the topics listed above; we are similarly hopeful that, if some are not, you will be open to working with us to include them.

Senator Steinberg, with the GOP 5, you have a focused, committed and experienced group of Republican Senators interested in regulatory reform.  We encourage you to broaden your coalition to include those of us who have spent this year prioritizing regulatory reform.  By working together, we can more effectively improve the business climate in California, get people back to work and have an overall positive impact on the economy.

Thank you for your consideration of this sincere offer.  We appreciate your efforts and look forward to collaborating on the critical issue of regulatory reform.

Sincerely,

Tom BerryhilL
Senator, 14th District

Sam Blakeslee
Senator, 15th District

Anthony Cannella
Senator, 12th District

Bill Emmerson
Senator, 37th District

Tom Harman
Senator, 35th District

[PDF Version]