CalChamber-Supported Regulatory Reform Bills Pass Committee

Three California Chamber of Commerce-supported regulatory reform bills passed the Assembly Accountability and Administrative Review Committee yesterday with bipartisan support.

  • AB 2087 (Waldron; R-Escondido) enhances California’s ability to deliver services by improving and updating our state’s information technology systems to take advantage of modern technologies.
  • AB 2671 (Fong; R-Bakersfield) promotes greater accountability, transparency, improved efficiency and modernization of regulations by requiring agencies to review and update their regulations, as well as to submit major regulations to the Legislature for review, which paves the way to effective and least burdensome regulations.
  • AB 2971 (Calderon; D-Whittier) will save taxpayer dollars, streamline government operations, improve public services, and reduce duplication and waste without compromising public policy goals of regulations by requiring state agencies to review all existing regulations to identify overlap, duplication, inconsistencies or provisions that are out of date, and report the findings to the Legislature.

AB 2087: State Agency Modernization 

CalChamber and the coalition of business organizations support AB 2087 because the measure will improve and upgrade California’s IT system to take advance of modern technologies.

The coalition knows that smart investment and the adoption of new technology enhances California’s ability to deliver services and improves stakeholders’ ability to participate meaningfully. Failing to modernize results in state agency operations or supporting statements that are duplicative, inefficient, not well-integrated, costly to maintain, and vulnerable to cyber-attacks.

California’s government should make every effort to be as dynamic as its people and take this opportunity to invest in the innovation that is being pioneered in the state, the coalition wrote in its letter.

AB 2671: Regulatory Reform 

AB 2671 proposes two common-sense measures that improve California’s administrative system.

  • The bill increases legislative oversight of agency rulemaking. The bill would allow the Legislature to review major regulations before they are enacted, affording legislators the opportunity to, instead, pass a statute to address the problem. Lawmakers will have power to confirm that the agency has properly exercised its delegated authority as they intended before a rule takes effect, rather than starting from scratch to solve any issues in a future bill.
  • AB 2671 implements a regulatory “look back” mechanism, a powerful tool to improve California’s rulemaking process. The measure requires that state agencies review and revise existing regulations to address inconsistent, duplicative, overlapping, and outdated provisions. A healthy regulatory system combines both prospective analysis and retrospective review to promote the maintenance, strengthening, or expansion of rules that work well and the streamlining or revision of those that have proven ineffective or unnecessary.

AB 2971: Regulatory Reform

AB 2971 will save taxpayer dollars, streamline government operations, improve public services, and reduce waste without undermining public protections.

California has long recognized the benefit of analyzing the impact of a regulation before it is enacted. The coalition understands that rules are better when agencies account for the intended and unintended consequences of a proposed regulation, and with the participation of stakeholders to analyze its impact.

However, even the best analyses are conducted when we know the least about what a regulation will do, the coalition supporting AB 2971 wrote. A healthy regulatory system must track with reality and revise, simplify, strengthen, expand, or eliminate regulations based on what they do in practice. Yet California agencies have not conducted a comprehensive review of their regulations in nearly 40 years. The state has not adopted any mechanism to systematically review enacted regulations to examine their effects, ensure that they have maintained their integrity over time, are modernized to keep pace with the communities they govern, and are not unnecessarily duplicative or contradictory.

AB 2971 initiates a regulatory “look back,” a policy with bipartisan support and endorsed by good governance experts. The measure requires state agencies to review their existing regulations, identify any that are inconsistent, duplicative, overlapping, or outdated, and submit a report to the Legislature and Governor by January 1, 2021.

The existing role of the Office of Administrative Law in reviewing regulations is procedural, not substantive, and insufficient. The OAL’s purpose is to ensure that agencies follow the Administrative Procedure Act before enacting a rule. This is simply a check to determine whether a state agency has articulated the reasons for the regulation, estimated the regulation’s impact, provided adequate notice, allowed for public comments, and responded to those comments before a regulation is adopted.

The APA requires that agencies state that their regulations do not create unnecessary duplication or conflict. OAL’s limited responsibility is to determine only whether the agency made this statement. The OAL is not required to conduct a substantive review of an agency’s analysis or make an independent judgment about whether an underlying fact is true. Thus, the OAL’s oversight under its present authority is often illusory.

The APA does not require that regulations stay up to date or account for fundamental changes in conditions after they are adopted. OAL does not do a regular, comprehensive, or systematic review of past regulations, as AB 2971 would require.

AB 2971 provides agencies with the flexibility to review their regulations in a manner that is neither cost prohibitive nor overly burdensome. The measure does not specify how an agency may choose to conduct a review.

Similarly, California’s agencies will be able to determine the most efficient method  to review their regulations. This could include absorbing the review into their ordinary operations, relying on public comment, or contracting with a third party.

This measure is not a mandate for agencies to roll back regulations, especially not those they find necessary, effective, or otherwise beneficial. The bill requires only that agencies report “the number and content of regulations the state agency identifies as duplicative, overlapping, inconsistent, or out-of-date, and the state agency’s planned actions to address those regulations.” AB 2971 does not require that agencies take any action to immediately repeal or revise any existing rule. They must simply identify, report, and plan.

Key Votes

AB 2087 passed the Assembly Accountability and Administrative Review Committee 7-0.

Ayes:  Burke (D-Inglewood), Eggman (D-Stockton), Frazier (D-Discovery Bay), Lackey (R-Palmdale), Medina (D-Riverside), Patterson (R-Fresno), Quirk-Silva (D-Fullerton).

AB 2671 passed 4-3:

Ayes: Burke (D-Inglewood), Lackey (R-Palmdale), Patterson (R-Fresno), Quirk-Silva (D-Fullerton).

Noes: Eggman (D-Stockton), Frazier (D-Discovery Bay), Medina (D-Riverside).

AB 2971 passed the committee 6-0.

Ayes: Burke (D-Inglewood), Eggman (D-Stockton), Frazier (D-Discovery Bay), Lackey (R-Palmdale), Patterson (R-Fresno), Quirk-Silva (D-Fullerton).

Not voting: Medina (D-Riverside).

Staff Contact: Marti Fisher