Existing law specifies the dates by which enacted statutes go into effect. Existing law also provides that a statute may be repealed at any time, except when vested rights would be impaired.

This bill would require the automatic repeal of a statute that expressly or implicitly authorizes an executive agency to promulgate regulations two years after the statute goes into effect, unless the Legislature amends the statute to state its intent that the statute not be repealed, or unless the statute was passed in response to an emergency, as defined.

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Isadore Hall, III

Chair

2015 - 2016 Regular

Bill No: 1140 Hearing Date: 4/12/2016

SUBJECT: Legislature: operation of statutes

DIGEST: This bill requires the automatic repeal of a statute that expressly or implicitly authorizes an executive agency to promulgate regulations two years after the statute goes into effect, unless the Legislature amends the statute to state its intent that the statute not be repealed, or unless the statute was passed in response to an emergency, as defined.

ANALYSIS:

Existing law:

1. Specifies the dates by which enacted statutes go into effect.
2. Specifies that any statute may be repealed at any time, except when vested rights would be impaired.
3. Specifies that every concurrent and joint resolution takes effect upon filing of it with the Secretary of State.
4. Governs, under the Administrative Procedure Act (APA), the process for adoption, amendment, or repeal of regulations by state agencies charged with the implementation of statutes, and for legal review of those regulatory actions.
5. Establishes the Office of Administrative Law (OAL) to ensure that agency regulations are clear, necessary, legally valid, and available to the public.
6. Directs the OAL at the request of any standing, select, or joint committee of the Legislature, to initiate a priority review of any regulation that the committee believes does not meet the standards of necessity, authority, clarity, reference, and non-duplication, as defined.
7. Specifies that if OAL is notified of, or on its own becomes aware of, an existing regulation for which the statute has been repealed or becomes ineffective, then the OAL shall order the agency to show cause as to why the regulation should not be repealed, and shall notify the Legislature in writing of this order.

This bill:

1. Requires that a statute that expressly authorizes an executive agency to promulgate regulations, or that gives a new duty or power to an executive agency, shall be repealed two years after it goes into effect, unless the Legislature amends the statute before its repeal to expressly state the Legislature’s intent that the statute not be repealed.
2. Specifies that the provisions of this bill shall not apply to either of the following:
   1. An agency that is constitutionally created.
   2. A statute that is passed in response to a “state of war emergency,” as defined, “state of emergency,” or a “local emergency,” as defined.

Background

Purpose of the bill. The author argues that, “existing law lacks true checks and balances over new regulations. Bureaucracies sometimes produce regulations beyond the intent of the original law, yet there is insufficient oversight on this process. With a built-in sunset, it would provide legislators a vehicle through which to affirm good regulations and to stop others that may be deemed excessive or contrary to a bill’s original intent. Providing a path for the Legislature to review regulations could remedy California’s hostile regulatory environment, which puts extreme burdens on certain industries and affects the state’s business climate.”

Office of Administrative Law. The Office of Administrative Law ensures that agency regulations are clear, necessary, legally valid and available to the public. OAL is responsible for reviewing administrative regulations proposed by over 200 state agencies for compliance with the standards set forth in the APA, for transmitting these regulations to the Secretary of State and for publishing regulations in the California Code of Regulations.

The OAL assists state regulatory agencies through a formal training program, as well as through other less formal methods, to understand and comply with the APA. The OAL also accepts petitions challenging rules issued by state agencies which meet the APA’s definition of a “regulation” but were not adopted pursuant to the APA process and are not expressly exempt.

The APA is designed to provide the public with a meaningful opportunity to participate in the adoption of the rulemaking process through various opportunities to comment on proposed regulations.

Regulatory Process. Before any state agency can adopt a new regulation, the APA requires OAL to review a proposed regulation using the following standards: necessity, authority, clarity, consistency, reference, and non-duplication. For purposes of the APA, “necessity” means that “the record of the rulemaking proceeding demonstrates by substantial evidence the need for a regulation to effectuate the purpose of the statute, court decision, or other provision of law that the regulation implements, interprets, or makes specific, taking into account the totality of the record.”

In addition, the APA defines “authority” as “the provision of law which permits or obligates the agency to adopt, amend, or repeal a regulation.”

Staff Comments. The APA already establishes a mechanism to ensure that any regulation proposed by any state agency is consistent and within the scope of any statute. In other words no regulations could ever be adopted without express, statutory authorization by the Legislature.

In addition, the Legislature already has a system of checks and balances through their authority to demand that the OAL review any regulation that the Legislature believes does not meet the standards of necessity, authority, clarity, reference, and non-duplication.

Prior/Related Legislation

ACA 1 (Donnelly, 2014) would have amended the California Constitution to require state agencies to submit all regulations that have been approved by the OAL to the Legislature for final approval. (Held in Assembly Accountability and Administrative Review Committee)

SB 981 (Huff, 2014) would have required each state agency to review each regulation adopted prior to January 1, 2014, and to develop a report to the Legislature specified information. (Held in Senate Governmental Organization Committee)

AB 1982 (Gorrell, 2012) would have increased the effective date for a regulation or an order of repeal of a regulation from 20 to 90 days and would have required OAL to forward a copy of each major regulation to the Legislature for review. (Held on the Assembly Appropriations Committee Suspense File)

SB 366 (Calderon, 2012) would have required each state agency to review its regulations to identify duplicative, overlapping, inconsistent or outdated provisions and repeal or amend identified regulations. Also, would have created a Streamlined Permit Review Team charged with improving the efficiency of the state permitting process for development projects. (Held in Senate Governmental Organization Committee)

SB 401 (Fuller, 2012 Session) would have required every regulation proposed by an agency after January 1, 2012, to include a provision repealing the regulation in 5 years. (Held in Senate Environmental Quality Committee)

SB 617 (Ron Calderon, Chapter 496, Statutes of 2010) revised various provisions of the APA and required each state agency to prepare a standardized regulatory impact analysis, as specified, with respect to the adoption, amendment, or repeal of a major regulation, proposed on or after November 1, 2013.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

None received

OPPOSITION:

None received

DUAL REFERRAL: Senate Rules Committee