Senate Republicans Welcome Regulatory Reform Effort as a Good First Step

Thursday, September 1, 2011

Senate Republican Leader Bob Dutton (Rancho Cucamonga) released the following statement in anticipation of a proposed regulatory reform package being announced today by Senate pro Tem Darrell Steinberg:

Senate Republicans are pleased that regulatory reform is finally being seriously considered by our Democrat colleagues and we applaud Senate pro Tem Darrell Steinberg for coming forward with a regulatory reform proposal.

It is unacceptable that two million Californians remain unemployed. This is due in large part to an unbelievably unfriendly regulatory climate that is driving businesses and jobs out of this state.

It is critical that we provide serious regulatory reform that will provide the certainty California employers need to retain and grow jobs here.

As the Legislature contemplates the issue of much-needed reform, the following questions should be considered:

  • As California’s regulatory system continues to grow, there needs to be a mechanism whereby regulations are reviewed on a regular basis to ensure that the regulations are still necessary, not duplicative, and not in conflict with other regulations. Why not provide for a perpetual review process to clean up the regulatory codes similar to Senator Huff’s SB 396 which would have required an ongoing regulatory review process which requires agencies, every five years, to review all regulations that are at least 20 years old and have not been reviewed in 10 years?

  • Transparency and oversight by the public provide for a better public policy making process. 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. Agencies need to affirmatively explain if they reject reasonable alternatives offered by stakeholders. Wouldn’t it be better to have agencies justify their reasons why a stakeholder process would be inferior to their process? Any regulatory review process would only benefit from more eyes and input on proposed rules and regulations.

  • Individual agencies and departments are less likely to scrutinize their own regulations with much objectivity, and in fact, may be likely to burden the process with more precision and prescription in the name of streamlining, unintentionally stripping away valuable flexibility for unique circumstances. Why not create an agency tasked with overseeing the analyses and giving more “teeth” to the current Administrative Procedure Act process as was contemplated in Senator Blakeslee’s SB 353?

  • It is not enough for agencies to complete these analyses without strict guidelines and oversight. For the economic impact analysis to be effective, it must be thorough, transparent, and reviewed. Why not allow for a third-party review and analysis of agency assessments as was dealt with the Republican regulatory proposal, SB 196?

  • Agencies, in the absence of compelling reasons, ought to select regulations that have the least negative impact on the economy. In some cases, might that mean that a viable alternative would be that the agency does nothing—or at a minimum, delay implementation—until the economy recovers to a certain benchmark (as determined by the agency) so that impacted enterprises can absorb the impacts of a certain regulation? This is especially the case for major regulations in this economy.

  • Why not allow the regulated community to have additional time to prepare for the imposition of a new or amended regulation as Senator Fuller proposed in SB 553, which would have delayed the implementation of regulations with a $10 million or more impact until 180 days after it is filed with the Secretary of State, rather than after 30 days as is current law?

  • The federal government already has a process for establishing the methodologies for analyzing economic impacts through the President’s Office of Management and Budget (OMB). Why not provide statutory language that will give the Department of Finance those tools so that it can standardize the process for California regulations?

  • Proposals have been floated for a method for the Office of Administrative Law (OAL) to recommend actions that the Legislature might consider for improving state agency performance. This should not be limited to the regulations only. Why not require the AOL to notify the Legislature if the bill estimate exceeds $50 million?

  • Clearly now, even the Democrats acknowledge that the regulatory process is broken and in need of substantial reforms. Why wait to implement major parts of this measure until sometime in 2012? Why not ask the Governor to immediately halt all rulemaking efforts in the state that do not directly impact the health and safety of our citizens—as governors in six other states have done over the last two years—and put an urgency clause? Why not have agencies get started immediately cleaning out their codes and identify those regulations that are duplicative, overlapping, inconsistent, or out of date, and adopting, amending, or repealing regulations to reconcile or eliminate any duplication, overlap, inconsistency, or out-of-date provisions, after conducting a publicly noticed hearing and using procedures for adopting emergency regulations?

  • In establishing a Streamlined Permit Review Team in state government, consisting of the Secretary of Business, Transportation and Housing, the Secretary for Environmental Protection, and the Secretary of the Natural Resources Agency, why would we sunset this process in 2015? Do we only want to streamline regulations for only a couple years and go back to a lengthy, duplicative and onerous process only a few years hence?

  • Will this streamlined permit review process also include an expedited CEQA process?

  • The "one-stop permitting process" established as proposed in SB 366 (Calderon), in fact, reduce some red-tape in the permitting process for those projects that must receive permits from departments, boards, bureaus, and commissions under the Business, Transportation and Housing Agency, the California Environmental Protection Agency, or the Natural Resources Agency. However, if, as the author's office contents, this process has been successful in the past, why is it not a permanent part of California law? Why must the businesses in this state wait for a catastrophe, whether natural or economic, in order to receive relief from onerous and duplicative permitting entities?

It is also important to note the numerous regulatory reform bills that have been introduced by both Democrats and Republicans that been killed in committee.

  • SB 396 (Huff-R) of 2011 requires the review of existing regulations to reduce duplicative, obsolete and ineffective regulations. Furthermore, it establishes an on-going review of regulations by requiring departments, every five years, to review all regulations that are at least 20 years old and have not been reviewed in 10 years. KILLED IN SENATE EVIRONMENTAL QUALITY COMMITTEE

  • SB 400 (Dutton-R) of 2011 expands the criteria that state agencies analyze and report as part of their required assessments of the potential for adverse economic impact on California business enterprises and individuals for any proposed new or amendments to regulations. Furthermore, it requires the Office of Administrative Law (OAL) to determine whether the assessment is based upon sound economics as part of its regulatory review process. Finally, the bill requires the OAL to reject a regulation that it judges that the assessment is based bad economics. KILLED IN SENATE EVIRONMENTAL QUALITY COMMITTEE

  • SB 401 (Fuller-R) of 2011 requires all regulations promulgated by any state agency include a provision repealing the regulation after five years. The bill authorizes the agency to seek to extend regulations beyond the initial repeal date after a substantial public review and comment period. KILLED IN SENATE EVIRONMENTAL QUALITY COMMITTEE

  • SB 560 (Wright-D) of 2011 requires agencies, when adopting regulations, to affirm the availability of required new technologies necessary for implementing the regulations, and to include implementation schedules, procedures, and forms necessary for compliance in the proposed regulation. KILLED IN SENATE EVIRONMENTAL QUALITY COMMITTEE

  • SB 591 (Gaines-R) of 2011 enacts the California Smart Regulation Act and requires state agencies to reduce the total number of regulations they impose by 33 percent. KILLED IN SENATE GOVERNMENTAL ORGANIZATION COMMITTEE

  • SB 643 (Correa-D) of 2011 provides that, if the proposed adoption, amendment, or repeal of regulations by state agencies impacts housing, the initial statement of reasons for proposing the regulatory change shall include the estimated cost of compliance and the related assumptions used in determining that estimate. PASSED SENATE. HELD IN ASSEMBLY APPROPRIATIONS COMMITTEE

  • SB 688 (Wright-D) of 2011 requires state agencies, as part of their assessments of the potential for adverse economic impact on California business enterprises and individuals for any proposed new or amendments to regulations, a detailed estimate of the cumulative statewide cost impacts for affected businesses. Furthermore, it requires the agency to notify the relative committees of the Legislature if the estimate exceeds $10 million and delays implementation of such regulations until January 1st one year following the filing date with the Secretary of State. KILLED IN SENATE EVIRONMENTAL QUALITY COMMITTEE

Republicans have been pushing for regulatory reform and we continue to offer to engage in a bipartisan effort to implement the necessary reforms to help put unemployed Californians back to work.

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