Existing law authorizes the Occupational Safety and Health Standards Board to adopt, amend, or repeal occupational safety and health standards and orders, as defined, and requires the adoption of standards at least as effective as the federal standards for all issues for which federal standards have been promulgated under provisions of the federal Occupational Safety and Health Act of 1970. Existing law exempts a standard or amendment to any standard adopted by the board that is substantially the same as a federal standard from specified provisions of the existing Administrative Procedure Act, including a requirement that a state agency proposing to adopt, amend, or repeal a major regulation, as defined, on or after November 1, 2013, prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance.

This bill would exempt any occupational safety and health standard and order from the standardized regulatory impact analysis requirement.

The Small Business Procurement and Contract Act, in order to encourage the participation of small businesses in the construction of the states infrastructure, as provided in specified infrastructure-related bond acts of 2006, requires each state agency, as defined, to establish a 25% goal for the participation of small businesses in contracts financed with the proceeds of those bond acts, to advertise in the California State Contracts Register all upcoming opportunities to bid on contracts for projects funded by those bond acts, and to provide California small businesses with information regarding available training and technical assistance for understanding and bidding on contracts for projects funded by those bond acts.

This bill would make nonsubstantive changes to these provisions.

SENATE THIRD READING

STR Bill Id:SB 772

Author:(Leyva)

As Amended Ver:September 7, 2017

Majority vote

SENATE VOTE: 26-12

SUMMARY: Exempts any occupational safety and health standard and order from the standardized regulatory impact analysis requirement for major regulations contained in Government Code Section 11346.3(c). Ensures that regardless of whether an occupational safety and health standard and order is a major regulation or is not a major regulation, it shall not be exempted from the requirement to prepare an economic impact assessment pursuant to the procedure for adoption of regulations established in Government Codes Section 11346.3(b).

FISCAL EFFECT: According to the Assembly Appropriations Committee, unknown, but likely significant cost savings for the Department of Occupational Safety and Health (DOSH).

COMMENTS: In 2011, Governor Brown signed SB 617 (Calderon), Chapter 496, which requires state agencies to prepare an in-depth economic assessment of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million dollars, as estimated by the proposing agency. This assessment is referred to as the Standardized Regulatory Impact Assessment (SRIA) and includes $50 million in costs, savings or a combination of the two. Regulations for implementing the SRIA require the proposing agency to submit the assessment to the Department of Finance (DOF) at least 60 days prior to filing a Notice of Proposed Adoption with the Office of Administrative Law (OAL).

According to the author and proponents, conducting a SRIA typically requires the hiring of outside economists and can take up to a year to prepare a report that meets the DOF standards. This is in addition to the thorough and often quite lengthy rule making process for developing regulations already required by the OAL.

The author asserts the $50 million dollar threshold for the SRIA has resulted in the harmful unintended consequence of impacting worker safety. As an example, the author draws attention to a recently approved workplace violence standard that exempted certain health care facilities to avoid meeting the $50 million threshold that would have triggered a SRIA. Had the SRIA process been required, the safety standard would have been delayed by at least one year. According to the author, the delay in adopting safety standards that have already been approved by the Legislature and the Governor may place workers at an increased risk of serious injury or death as a result.

Arguments in Support

Proponents argue this bill will improve workplace safety by eliminating duplicative and burdensome steps from the health and safety rulemaking process. They argue that in the face of federal roll backs, it is essential for state agencies to be able to act quickly to promulgate needed standards to protect workers. Unfortunately, they argue, those efforts have been stymied by a burdensome SRIA process.

Proponents note as an example, the process for implementing SB 1167 (Mendoza), Chapter 839, Statutes of 2016, which directed DOSH to develop an indoor heat safety standard by January 1, 2019. During the 2016 legislative session, the proposed standard – and its potential costs and benefits – were debated at length during numerous policy committees, floor presentations, and other discussions. Now that the bill is law, advisory committee meetings have begun which allow for thorough consideration of the standard's costs and benefits to both workers and employers. Following these meetings, the APA process begins, during which further consideration of the fiscal impact will take place. The proposed standard will then go to the Standards Board for both a public hearing and a public meeting where extensive discussion over costs and benefits will occur at a minimum of two meetings.

According to proponents, the SRIA review, which requires the hiring of outside economists and takes about a year to complete, then, mandates a fifth fiscal analysis, in the middle of this already lengthy process, before regulations can become law. According to proponents, perhaps the most harmful unintended consequence has been the pressure on worker safety advocates to limit or weaken proposed standards to avoid meeting the $50 million threshold.

Proponents argue that this bill reflects the exceptionally detailed fiscal analysis that already takes place at DOSH and allows the agency to focus scarce resources on more effective uses.

Arguments in Opposition

The opponents to this measure argue that it reduces transparency, removes accountability, and runs contrary to California's commitment to good governance. They argue that as stakeholders in the regulatory process they have a strong interest in maintaining a system of rulemaking that promotes efficiency, fully analyzes a rule's impact on California's economy as a whole, and thoughtfully considers potentially less burdensome alternatives before implementation.

Opponents assert that when an agency such as DOSH plans to make a decision that will have a significant impact on all of California, the public needs more information, thoughtfulness, and transparency, not less.

Those opposed to this bill argue that DOSH's fiscal analysis determines the cost of a new rule to the state and a single affected industry. The SRIA analysis is holistic and determines how a new rule will affect all of California, including effects that may fall outside of any individual agency's purview.

Analysis Prepared by: Jennifer Richard / L. & E. / (916) 319-2091 FN: 0001960

SENATE THIRD READING

STR Bill Id:SB 772

Author:(Leyva)

As Amended Ver:April 4, 2017

Majority vote

SENATE VOTE: 26-12

SUMMARY: Exempts any occupational safety and health standard and order from the standardized regulatory impact analysis requirement.

FISCAL EFFECT: According to the Assembly Appropriations Committee, unknown, but likely significant cost savings for the Department of Occupational Safety and Health (DOSH).

COMMENTS: In 2011, Governor Brown signed SB 617 (Calderon), Chapter 496, which requires state agencies to prepare an in-depth economic assessment of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million dollars, as estimated by the proposing agency. This assessment is referred to as the Standardized Regulatory Impact Assessment (SRIA) and includes $50 million in costs, savings or a combination of the two. Regulations for implementing the SRIA require the proposing agency to submit the assessment to the Department of Finance (DOF) at least 60 days prior to filing a Notice of Proposed Adoption with the Office of Administrative Law (OAL).

According to the author and proponents, conducting a SRIA typically requires the hiring of outside economists and can take up to a year to prepare a report that meets the DOF standards. This is in addition to the thorough and often quite lengthy rule making process for developing regulations already required by the OAL.

The author asserts the $50 million dollar threshold for the SRIA has resulted in the harmful unintended consequence of impacting worker safety. As an example, the author draws attention to a recently approved workplace violence standard that exempted certain health care facilities to avoid meeting the $50 million threshold that would have triggered a SRIA. Had the SRIA process been required, the safety standard would have been delayed by at least one year. According to the author, the delay in adopting safety standards that have already been approved by the Legislature and the Governor may place workers at an increased risk of serious injury or death as a result.

Arguments in Support

Proponents argue this bill will improve workplace safety by eliminating duplicative and burdensome steps from the health and safety rulemaking process. They argue that in the face of federal roll backs, it is essential for state agencies to be able to act quickly to promulgate needed standards to protect workers. Unfortunately, they argue, those efforts have been stymied by a burdensome SRIA process.

Proponents note as an example, the process for implementing SB 1167 (Mendoza), Chapter 839, Statutes of 2016, which directed DOSH to develop an indoor heat safety standard by January 1, 2019. During the 2016 legislative session, the proposed standard – and its potential costs and benefits – were debated at length during numerous policy committees, floor presentations, and other discussions. Now that the bill is law, advisory committee meetings have begun which allow for thorough consideration of the standard's costs and benefits to both workers and employers. Following these meetings, the APA process begins, during which further consideration of the fiscal impact will take place. The proposed standard will then go to the Standards Board for both a public hearing and a public meeting where extensive discussion over costs and benefits will occur at a minimum of two meetings.

According to proponents, the SRIA review, which requires the hiring of outside economists and takes about a year to complete, then, mandates a fifth fiscal analysis, in the middle of this already lengthy process, before regulations can become law. According to proponents, perhaps the most harmful unintended consequence has been the pressure on worker safety advocates to limit or weaken proposed standards to avoid meeting the $50 million threshold.

Proponents argue that this bill reflects the exceptionally detailed fiscal analysis that already takes place at DOSH and allows the agency to focus scarce resources on more effective uses.

Arguments in Opposition

The opponents to this measure argue that it reduces transparency, removes accountability, and runs contrary to California's commitment to good governance. They argue that as stakeholders in the regulatory process they have a strong interest in maintaining a system of rulemaking that promotes efficiency, fully analyzes a rule's impact on California's economy as a whole, and thoughtfully considers potentially less burdensome alternatives before implementation.

Opponents assert that when an agency such as DOSH plans to make a decision that will have a significant impact on all of California, the public needs more information, thoughtfulness, and transparency, not less.

Those opposed to this bill argue that DOSH's fiscal analysis determines the cost of a new rule to the state and a single affected industry. The SRIA analysis is holistic and determines how a new rule will affect all of California, including effects that may fall outside of any individual agency's purview.

Analysis Prepared by: Jennifer Richard / L. & E. / (916) 319-2091 FN: 0001228

Date of Hearing: June 21, 2017

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Tony Thurmond, Chair

SBPCA Bill Id:SB 772

Author:(Leyva) – As Amended Ver:April 4, 2017

SENATE VOTE: 26-12

SUBJECT: Occupational safety and health: regulations

SUMMARY: Would exempt any occupational safety and health standard and order from the standardized regulatory impact analysis requirement.

EXISTING LAW:

1. Establishes, under the Administrative Procedure Act (APA) rulemaking procedures and standards for state agencies to follow when adopting regulations to ensure that these are clear, necessary and legally valid. (Government Code §11340 et seq.)
2. Establishes and charges the Office of Administrative Law (OAL) with the responsibility of reviewing adopted regulations with the intent of reducing the number of administrative regulations and to improve the quality of those regulations. (Government Code §11340.1)
3. Establishes the Occupational Safety and Health Standards Board (Standards Board), within the Department of Industrial Relations (DIR), to promote, adopt, and maintain reasonable and enforceable standards, that are at least as effective as federal standards, that will ensure a safe and healthful workplace for California workers. (Labor Code §140)
4. Requires a state agency proposing to adopt, amend, or repeal a major regulation to prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance intended to provide agencies and the public with tools to determine whether the regulatory proposal is an efficient and effective means of implementing the policy decisions enacted in statute or by other provisions of law in the least burdensome manner. (Government Code §11346.3)
5. Defines “major regulation” as any proposed adoption, amendment, or repeal of a regulation subject to review by the OAL that will have an economic impact on California business enterprises and individuals in an amount exceeding fifty million dollars ($50,000,000), as estimated by the agency.
6. Requires the standardized regulatory impact analysis to, among other things, assess whether and to what extent the proposed regulation will affect the creation or elimination of jobs; the competitive advantages and disadvantages for businesses currently doing business in the state; and the benefits of the regulation to the health, safety, and welfare of California residents, worker safety and the state’s environment and quality of life.
7. Requires the Department of Finance, in consultation with the OAL and other state agencies, to develop regulations for conducting the required standardized regulatory impact analyses. The regulations, at a minimum, must assist agencies in specifying methodologies on how to:
   1. Assess the benefits and costs of the proposed regulation;
   2. Determine the impact on the state economy, businesses, and the public welfare;
   3. Assess the effects of a regulatory proposal on the General Fund and special funds of the state and affected local government agencies;
   4. Determine the cost of enforcement and compliance to the agency and affected business enterprises and individuals.
8. Requires the state agency to submit the regulatory impact analysis to the Department of Finance upon completion for comment.
9. Exempts from the standardized regulatory impact analysis requirement the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS: In 2011, Governor Brown signed SB 617 (Calderon) which requires state agencies to prepare an in-depth economic assessment of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million dollars, as estimated by the proposing agency. This assessment is referred to as the Standardized Regulatory Impact Assessment (SRIA) and includes $50 million in costs, savings or a combination of the two. Regulations for implementing the SRIA require the proposing agency to submit the assessment to the Department of Finance (DOF) at least 60 days prior to filing a Notice of Proposed Adoption with OAL.

According to the author and proponents, conducting an SRIA typically requires the hiring of outside economists and can take up to a year to prepare a report that meets the DOF standards. This is in addition to the thorough and often quite lengthy rule making process for developing regulations already required by the OAL.

The author asserts the $50 million dollar threshold for the SRIA has resulted in the harmful unintended consequence of impacting worker safety. As an example, the author draws attention to a recently approved workplace violence standard that exempted certain health care facilities to avoid meeting the $50 million threshold that would have triggered a SRIA. Had the SRIA process been required, the safety standard would have been delayed by at least one year. According to the author, the delay in adopting safety standards that have already been approved by the Legislature and the Governor may place workers at an increased risk of serious injury or death as a result.

Arguments in Support

According to the sponsors, this bill will improve workplace safety by eliminating duplicative and burdensome steps from the health and safety rulemaking process. They argue that in the face of federal roll backs, it is essential that state agencies be able to act quickly to promulgate needed standards to protect workers. Unfortunately, they argue, those efforts have been stymied by a burdensome process requiring an in-depth economic assessment (SRIA) resulting in a process that costs more, takes longer, and protects fewer workers.

Proponents note as an example, the process for implementing SB 1167 (Leyva/Mendoza) from last year which directed Cal/OSHA to develop an indoor heat safety standard by January 1, 2019. During the 2016 legislative session, the proposed standard – and its potential costs and benefits – were debated at length during numerous policy committees, floor presentations, and other discussions. Now that the bill is law, advisory committee meetings have begun which allow for thorough consideration of the standard’s costs and benefits to both workers and employers. Following these meetings, the APA process begins, during which further consideration of the fiscal impact will take place. The proposed standard will then go to the Standards Board for both a public hearing and a public meeting where extensive discussion over costs and benefits will occur at a minimum of two meetings.

According to proponents, the SRIA review, which requires the hiring of outside economists and takes about a year to complete, then, mandates a fifth fiscal analysis, in the middle of this already lengthy process, before regulations can become law. According to proponents, perhaps the most harmful unintended consequence has been the pressure on worker safety advocates to limit or weaken proposed standards to avoid meeting the $50 million threshold.

Proponents argue that this bill reflects the exceptionally detailed fiscal analysis that already takes place at Cal/OSHA and allows the agency to focus scarce resources on more effective uses.

Arguments in Opposition

The opponents to this measure argue that it reduces transparency, removes accountability, and runs contrary to California’s commitment to good governance. They argue that as stakeholders in the regulatory process they have a strong interest in maintaining a system of rulemaking that promotes efficiency, fully analyzes a rule’s impact on California’s economy as a whole, and thoughtfully considers potentially less burdensome alternatives before implementation.

Opponents assert that when an agency such as Cal/OSHA plans to make a decision that will have a significant impact on all of California, the public needs more information, thoughtfulness, and transparency, not less.

Those opposed to this bill argue that Cal/OSHA’s fiscal analysis determines the cost of a new rule to the state and a single affected industry. The SRIA analysis is holistic and determines how a new rule will affect all of California, including effects that may fall outside of any individual agency’s purview.

Prior Related Legislation

AB 866 (Linder) of 2013 would have modified the requirements for preparing the economic impact analyses and would have reduced the SRIA threshold from $50 to $15 million. The bill stalled in the Assembly Accountability and Administrative Review Committee.

AB 1504 (Morell) of 2012 would have revised various provisions of the APA and would have lowered the threshold for major regulations from $50 to $25 million. The bill died in Assembly Business, Professions and Consumer Protection Committee.

AB 2090 (B. Berryhill) of 2012 would have modified the requirements for preparing impact analyses and would have lowered the threshold for a major regulation from $50 to $15 million. The bill died in the Assembly Appropriations Committee.

SB 617 (Calderon) Chapter 496, Statutes of 2011 revised various provisions of the Administrative Procedures Act and requires 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.

REGISTERED SUPPORT / OPPOSITION:

Support

American Federation of State, County and Municipal Employees

California Labor Federation, AFL-CIO (co-sponsor)

California Nurses Association/National Nurses United (co-sponsor)

California Professional Firefighters

California State Council of Laborers

California Teamsters Public Affairs Council

International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers

International Association of Heat and Frost Insulators and Allied Workers

International Brotherhood Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers

International Brotherhood of Electrical Workers

International Union of Bricklayers and Allied Craftworkers

International Union of Elevator Constructors

International Union of Operating Engineers

National Employment Law Project

Operative Plasterer's and Cement Mason's International Association

Painters and Allied Trades International Union

Plumber, Pipefitters, Steamfitters, Sprinklerfitters Service Technicians Union

Service Employees International Union California

Sheet Metal Workers International Union

State Building and Construction Trades Council (co-sponsor)

United Union of Roofers, Waterproofers & Allied Workers

Western Occupational and Environmental Medicine Association

Worksafe

Opposition

Agricultural Council of California

American Chemistry Council

American Forest and Paper Association

American Wood Council

Associated Builders and Contractors, Inc, Central California Chapter

Associated Builders and Contractors, Inc, San Diego California Chapter

Associated Builders and Contractors, Inc, Southern California Chapter

Associated General Contractors of California

Atkinson, Andelson, Loya, Ruud & Romo

California Association of Boutique & Breakfast Inns

California Association of Joint Powers Authorities

California Association of Nurseries and Garden Centers

California Attractions and Parks Association

California Business Properties Association

California Chamber of Commerce

California Citrus Mutual

California Construction and Industrial Materials Association

California Cotton Ginners and Growers Association, Inc.

California Farm Bureau Federation

California Framing Contractors Association

California Fresh Fruit Association

California Grocers Association

California Hospital Association

California Hotel & Lodging Association

California Lodging Industry Association

California Manufacturers & Technology Association

California Metals Coalition

California Professional Association of Specialty Contractors

California Restaurant Association

California Retailers Association

California Trucking Association

Chemical Industry Council of California

Construction Employers’ Association

Family Business Association of California

Far West Equipment Dealers Association

Food & Beverage Association of San Diego

Industrial Environmental Association

National Elevator Industry, Inc.

National Federation of Independent Business – California

Nor-Cal Beverage Co, INC

Northern California Allied Trades

Plumbing-Heating-Cooling Contractors Association of California

Residential Contractors Association

San Gabriel Valley Economic Partnership

United Contractors

Wall and Ceiling Alliance

Walter & Prince LLP

Western Agricultural Processors Association

Western Electrical Contractors Association

Western Growers Association

Western Plant Health Association

Western Steel Council

Wine Institute

Analysis Prepared by: Jennifer Richard / L. & E. /

Date of Hearing: July 19, 2017

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Lorena Gonzalez Fletcher, Chair

SBPCA Bill Id:SB 772

Author:(Leyva) – As Amended Ver:April 4, 2017

Urgency: No State Mandated Local Program: No Reimbursable: No

SUMMARY:

This bill exempts a state agency from the requirement that it must prepare a standardized regulatory impact analysis (SRIA) when proposing to adopt, amended, or repeal a major regulation related to occupational safety and health standards.

FISCAL EFFECT:

Unknown, but likely significant cost savings for the Department of Occupational Safety and Health (DOSH).

COMMENTS

1. Background. SB 617 (Calderon), Chapter 617, Statutes of 2011, requires state agencies to prepare an economic assessment, also referred to as the SRIA, of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million dollars, as estimated by the proposing agency. Regulations for implementing the SRIA require the proposing agency to submit the assessment to the Department of Finance (DOF) at least 60 days prior to filling a Notice of Proposed Adoption with the Office of Administrative Law (OAL).
2. Purpose. According to the author, conducting an SRIA typically requires significant resources and time, and the existing thresholds that trigger an SRIA have an unintended negative impact on worker safety. Supporters point to a recent workplace violence standard that exempted certain health facilities to avoid the $50 million threshold that would have triggered a SRIA, while including these facilities and completing an SRIA would have resulted in significant delays that also would have put worker safety in jeopardy. SB 772 is intended to protect worker safety by eliminating the SRIA requirement for rules and regulations related to workplace safety.
3. Related legislation. There have been a number of legislative attempts to modify the SRIA, those bills include:

AB 866 (Linder), of 2013-14 Legislative Session, would have modified the requirements for preparing the economic impact analyses and would have reduced the SRIA threshold from $50 to $15 million. This bill was parked in Assembly Accountability and Administrative Review Committee.

AB 1504 (Morell), of 2011-12 Legislative Session, would have lowered the threshold for major regulations from $50 to $25 million. This bill died in Assembly Business, Professions and Consumer Protection Committee.

AB 2090 (B. Berryhill), of 2011-12 Legislative Session, would have modified the requirements for preparing impact analyses and would have lowered the threshold for a major regulation from $50 to $15 million. This bill died in this committee.

Analysis Prepared by: Luke Reidenbach / APPR. / (916) 319-2081

Date of Hearing: June 21, 2017

ASSEMBLY COMMITTEE ON LABOR AND EMPLOYMENT

Tony Thurmond, Chair

SBPCA Bill Id:SB 772

Author:(Leyva) – As Amended Ver:April 4, 2017

SENATE VOTE: 26-12

SUBJECT: Occupational safety and health: regulations

SUMMARY: Would exempt any occupational safety and health standard and order from the standardized regulatory impact analysis requirement. Specifically, this bill:

1. Establishes, under the Administrative Procedure Act (APA) rulemaking procedures and standards for state agencies to follow when adopting regulations to ensure that these are clear, necessary and legally valid. (Government Code §11340 et seq.)
2. Establishes and charges the Office of Administrative Law (OAL) with the responsibility of reviewing adopted regulations with the intent of reducing the number of administrative regulations and to improve the quality of those regulations. (Government Code §11340.1)
3. Establishes the Occupational Safety and Health Standards Board (Standards Board), within the Department of Industrial Relations (DIR), to promote, adopt, and maintain reasonable and enforceable standards, that are at least as effective as federal standards, that will ensure a safe and healthful workplace for California workers. (Labor Code §140)
4. Requires a state agency proposing to adopt, amend, or repeal a major regulation to prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance intended to provide agencies and the public with tools to determine whether the regulatory proposal is an efficient and effective means of implementing the policy decisions enacted in statute or by other provisions of law in the least burdensome manner. (Government Code §11346.3)
5. Defines “major regulation” as any proposed adoption, amendment, or repeal of a regulation subject to review by the OAL that will have an economic impact on California business enterprises and individuals in an amount exceeding fifty million dollars ($50,000,000), as estimated by the agency.
6. Requires the standardized regulatory impact analysis to, among other things, assess whether and to what extent the proposed regulation will affect the creation or elimination of jobs; the competitive advantages and disadvantages for businesses currently doing business in the state; and the benefits of the regulation to the health, safety, and welfare of California residents, worker safety and the state’s environment and quality of life.
7. Requires the Department of Finance, in consultation with the OAL and other state agencies, to develop regulations for conducting the required standardized regulatory impact analyses. The regulations, at a minimum, must assist agencies in specifying methodologies on how to:
   1. Assess the benefits and costs of the proposed regulation;
   2. Determine the impact on the state economy, businesses, and the public welfare;
   3. Assess the effects of a regulatory proposal on the General Fund and special funds of the state and affected local government agencies;
   4. Determine the cost of enforcement and compliance to the agency and affected business enterprises and individuals.
8. Requires the state agency to submit the regulatory impact analysis to the Department of Finance upon completion for comment.
9. Exempts from the standardized regulatory impact analysis requirement the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.

FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs.

COMMENTS: In 2011, Governor Brown signed SB 617 (Calderon) which requires state agencies to prepare an in-depth economic assessment of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million dollars, as estimated by the proposing agency. This assessment is referred to as the Standardized Regulatory Impact Assessment (SRIA) and includes $50 million in costs, savings or a combination of the two. Regulations for implementing the SRIA require the proposing agency to submit the assessment to the Department of Finance (DOF) at least 60 days prior to filing a Notice of Proposed Adoption with OAL.

According to the author and proponents, conducting an SRIA typically requires the hiring of outside economists and can take up to a year to prepare a report that meets the DOF standards. This is in addition to the thorough and often quite lengthy rule making process for developing regulations already required by the OAL.

The author asserts the $50 million dollar threshold for the SRIA has resulted in the harmful unintended consequence of impacting worker safety. As an example, the author draws attention to a recently approved workplace violence standard that exempted certain health care facilities to avoid meeting the $50 million threshold that would have triggered a SRIA. Had the SRIA process been required, the safety standard would have been delayed by at least one year. According to the author, the delay in adopting safety standards that have already been approved by the Legislature and the Governor may place workers at an increased risk of serious injury or death as a result.

Arguments in Support

According to the sponsors, this bill will improve workplace safety by eliminating duplicative and burdensome steps from the health and safety rulemaking process. They argue that in the face of federal roll backs, it is essential that state agencies be able to act quickly to promulgate needed standards to protect workers. Unfortunately, they argue, those efforts have been stymied by a burdensome process requiring an in-depth economic assessment (SRIA) resulting in a process that costs more, takes longer, and protects fewer workers.

Proponents note as an example, the process for implementing SB 1167 (Leyva/Mendoza) from last year which directed Cal/OSHA to develop an indoor heat safety standard by January 1, 2019. During the 2016 legislative session, the proposed standard – and its potential costs and benefits – were debated at length during numerous policy committees, floor presentations, and other discussions. Now that the bill is law, advisory committee meetings have begun which allow for thorough consideration of the standard’s costs and benefits to both workers and employers. Following these meetings, the APA process begins, during which further consideration of the fiscal impact will take place. The proposed standard will then go to the Standards Board for both a public hearing and a public meeting where extensive discussion over costs and benefits will occur at a minimum of two meetings.

According to proponents, the SRIA review, which requires the hiring of outside economists and takes about a year to complete, then, mandates a fifth fiscal analysis, in the middle of this already lengthy process, before regulations can become law. According to proponents, perhaps the most harmful unintended consequence has been the pressure on worker safety advocates to limit or weaken proposed standards to avoid meeting the $50 million threshold.

Proponents argue that this bill reflects the exceptionally detailed fiscal analysis that already takes place at Cal/OSHA and allows the agency to focus scarce resources on more effective uses.

Arguments in Opposition

The opponents to this measure argue that it reduces transparency, removes accountability, and runs contrary to California’s commitment to good governance. They argue that as stakeholders in the regulatory process they have a strong interest in maintaining a system of rulemaking that promotes efficiency, fully analyzes a rule’s impact on California’s economy as a whole, and thoughtfully considers potentially less burdensome alternatives before implementation.

Opponents assert that when an agency such as Cal/OSHA plans to make a decision that will have a significant impact on all of California, the public needs more information, thoughtfulness, and transparency, not less.

Those opposed to this bill argue that Cal/OSHA’s fiscal analysis determines the cost of a new rule to the state and a single affected industry. The SRIA analysis is holistic and determines how a new rule will affect all of California, including effects that may fall outside of any individual agency’s purview.

Prior Related Legislation

AB 866 (Linder) of 2013 would have modified the requirements for preparing the economic impact analyses and would have reduced the SRIA threshold from $50 to $15 million. The bill stalled in the Assembly Accountability and Administrative Review Committee.

AB 1504 (Morell) of 2012 would have revised various provisions of the APA and would have lowered the threshold for major regulations from $50 to $25 million. The bill died in Assembly Business, Professions and Consumer Protection Committee.

AB 2090 (B. Berryhill) of 2012 would have modified the requirements for preparing impact analyses and would have lowered the threshold for a major regulation from $50 to $15 million. The bill died in the Assembly Appropriations Committee.

SB 617 (Calderon) Chapter 496, Statutes of 2011 revised various provisions of the Administrative Procedures Act and requires 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.

REGISTERED SUPPORT / OPPOSITION:

Support

American Federation of State, County and Municipal Employees

California Labor Federation, AFL-CIO (co-sponsor)

California Nurses Association/National Nurses United (co-sponsor)

California Professional Firefighters

California State Council of Laborers

California Teamsters Public Affairs Council

International Association of Bridge, Structural, Ornamental and Reinforcing Ironworkers

International Association of Heat and Frost Insulators and Allied Workers

International Brotherhood Boilermakers, Iron Ship Builders, Blacksmiths, Forgers & Helpers

International Brotherhood of Electrical Workers

International Union of Bricklayers and Allied Craftworkers

International Union of Elevator Constructors

International Union of Operating Engineers

National Employment Law Project

Operative Plasterer's and Cement Mason's International Association

Painters and Allied Trades International Union

Plumber, Pipefitters, Steamfitters, Sprinklerfitters Service Technicians Union

Service Employees International Union California

Sheet Metal Workers International Union

State Building and Construction Trades Council (co-sponsor)

United Union of Roofers, Waterproofers & Allied Workers

Western Occupational and Environmental Medicine Association

Worksafe

Opposition

Agricultural Council of California

American Chemistry Council

American Forest and Paper Association

American Wood Council

Associated Builders and Contractors, Inc, Central California Chapter

Associated Builders and Contractors, Inc, San Diego California Chapter

Associated Builders and Contractors, Inc, Southern California Chapter

Associated General Contractors of California

Atkinson, Andelson, Loya, Ruud & Romo

California Association of Boutique & Breakfast Inns

California Association of Joint Powers Authorities

California Association of Nurseries and Garden Centers

California Attractions and Parks Association

California Business Properties Association

California Chamber of Commerce

California Citrus Mutual

California Construction and Industrial Materials Association

California Cotton Ginners and Growers Association, Inc.

California Farm Bureau Federation

California Framing Contractors Association

California Fresh Fruit Association

California Grocers Association

California Hospital Association

California Hotel & Lodging Association

California Lodging Industry Association

California Manufacturers & Technology Association

California Metals Coalition

California Professional Association of Specialty Contractors

California Restaurant Association

California Retailers Association

California Trucking Association

Chemical Industry Council of California

Construction Employers’ Association

Family Business Association of California

Far West Equipment Dealers Association

Food & Beverage Association of San Diego

Industrial Environmental Association

National Elevator Industry, Inc.

National Federation of Independent Business – California

Nor-Cal Beverage Co, INC

Northern California Allied Trades

Plumbing-Heating-Cooling Contractors Association of California

Residential Contractors Association

San Gabriel Valley Economic Partnership

United Contractors

Wall and Ceiling Alliance

Walter & Prince LLP

Western Agricultural Processors Association

Western Electrical Contractors Association

Western Growers Association

Western Plant Health Association

Western Steel Council

Wine Institute

Analysis Prepared by: Jennifer Richard / L. & E. /

 THIRD READING  

Bill No: SB 772

Author:

:

Vote:

SENATE LABOR & IND. REL. COMMITTEE: 4-1, 4/26/17

AYES: Bradford, Atkins, Jackson, Mitchell

NOES: Stone

SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8 

SUBJECT:

SOURCE: California Labor Federation, AFL-CIO

California Nurses Association/National Nurses United

State Building and Construction Trades Council

DIGEST:

This bill exempts any occupational safety and health standard and order from the currently required standardized regulatory impact analysis before final adoption, amendment or repeal of a regulation.

ANALYSIS:

Existing law:

1. Establishes, under the Administrative Procedure Act (APA), rulemaking procedures and standards for state agencies to follow when adopting regulations to ensure that these are clear, necessary and legally valid. (Government Code §11340 et seq.)
2. Establishes and charges the Office of Administrative Law (OAL) with the responsibility of reviewing adopted regulations with the intent of reducing the number of administrative regulations and improve the quality of those regulations. (Government Code §11340.1)
3. Establishes the Occupational Safety and Health Standards Board (Standards Board), within the Department of Industrial Relations, to promote, adopt, and maintain reasonable and enforceable standards, that are at least as effective as federal standards, that will ensure a safe and healthful workplace for California workers. (Labor Code §140)
4. Requires a state agency proposing to adopt, amend, or repeal a major regulation to prepare a Standardized Regulatory Impact Analysis (SRIA) in the manner prescribed by the Department of Finance (DOF) intended to provide agencies and the public with tools to determine whether the regulatory proposal is an efficient and effective means of implementing the policy decisions enacted in statute or by other provisions of law in the least burdensome manner. [Government Code §11346.3]
5. Defines “major regulation” as any proposed adoption, amendment, or repeal of a regulation subject to review by the OAL that will have an economic impact on California business enterprises and individuals in an amount exceeding $50 million, as estimated by the agency.
6. Requires the DOF, in consultation with the OAL and other state agencies, to develop regulations for conducting the SRIA. The regulations, at a minimum, must assist agencies in specifying methodologies on how to:
   1. Assess the benefits and costs of the proposed regulation;
   2. Determine the impact on the state economy, businesses, and the public welfare;
   3. Assess the effects of a regulatory proposal on the General Fund and special funds of the state and affected local government agencies;
   4. Determine the cost of enforcement and compliance to the agency and affected business enterprises and individuals.
7. Requires the state agency to submit the SRIA to the DOF upon completion for comment.
8. Exempts from the standardized regulatory impact analysis requirement the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.

This bill exempts any occupational safety and health standard and order from the standardized regulatory impact analysis requirement.

Background

OAL. Established on July 1, 1980, the OAL ensures that regulations proposed by the over 200 California state agencies are clear, necessary, legally valid, and available to the public. OAL is responsible for ensuring that state agencies comply with the rulemaking procedures and standards set forth in California’s APA which are designed to provide the public with a meaningful opportunity to participate in the adoption of regulations or rules that have the force of law. A “regulation” is any rule, regulation, order or standard of general application or the amendment, supplement, or revision of any rule, regulation, order, or standard adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it.

Process for the Adoption of Occupational Safety and Health Regulations. Existing law charges the Standards Board with the responsibility of adopting regulations that are at least as effective as federal standards for all issues under the Federal Occupational Safety and Health Act of 1970 within six months of the effective date of the federal standard (Labor Code Section 142.3). The Division of Occupational Safety and Health, better known as Cal/OSHA, protects and improves the health and safety of working men and women in California and the safety of passengers riding on elevators, amusements rides, and tramways – through specified activities including setting and enforcing standards. The policy of the Standards Board is that all regulations must be enforceable, reasonable, understandable, and contribute directly to the safety and health of California employees.

Once a state agency decides to conduct a regular rulemaking action, it engages in preliminary rulemaking activities wherein the agency typically researches and gathers materials and information necessary to develop the documents required to conduct a formal APA rulemaking proceeding. After the necessity for a rulemaking action is established, proposed regulation changes are developed by either the Standards Board or Cal/OSHA staff, generally with the assistance and recommendations of an advisory committee. Advisory committees consist of representatives from industry, labor, the public, and other interested groups.

The proposal is then scheduled for hearing at one of the Standard Board's public hearings. Written and oral testimony is encouraged and received at public hearings. Following the public hearing, all testimony is returned to the originating staff for review, and the proposed regulation change may be revised in response to written and oral comments. When all comments and testimony have been addressed, the staff schedules the proposed standard for consideration and adoption at the Standards Board business meeting.

Regarding the financial impact of a proposed regulation, agencies are required to conduct an Economic Impact Statement (STD. 399) to be included with any proposed regulation if there will be an estimated fiscal impact on state or local government. Additionally, for any major regulation, as defined, with an estimated cost exceeding $50 million, agencies are also required to conduct an SRIA. SRIAs are required to be submitted to the DOF for review and comments at least 60 days prior to filing with OAL.

Following adoption at the agency, a copy of the proposed rule, in addition to the required impact assessments, is sent to the OAL for approval. After approval, the regulations are published in Title 8 of the California Code of Regulations.

Stated need for this bill? In 2011, Governor Brown signed SB 617 (Calderon, Chapter 496) which requires state agencies to prepare an in-depth economic assessment of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million, as estimated by the proposing agency. This assessment is referred to as the SRIA and includes $50 million in costs, savings or a combination of the two. Conducting an SRIA typically requires the hiring of outside economists and can take up to a year to prepare a report that meets the DOF standards.

According to the author and sponsors, the $50 million threshold for the SRIA has resulted in the harmful unintended consequence of impacting worker safety. As an example, the author draws attention to a recently approved workplace violence standard that exempted certain health care facilities to avoid meeting the $50 million threshold that would have triggered an SRIA. Had the SRIA process been required, the safety standard would have been delayed by at least one year. According to the author, the delay in adopting safety standards that have already been approved by the Legislature and the Governor may place workers at an increased risk of serious injury or death as a result.

This bill exempts Cal/OSHA from the requirement to perform an SRIA on any proposed major regulation that costs over $50 million. All other existing layers of review, including internal fiscal analyses, the advisory committee process, public hearings and meetings, and the standard rulemaking process remain in place.

Related/Prior Legislation

AB 866 (Linder, 2013) would have modified the requirements for preparing the economic impact analyses and would have reduced the SRIA threshold from $50 to $15 million. The bill was parked in Assembly Accountability and Administrative Review Committee.

AB 1504 (Morell, 2012) would have revised various provisions of the APA and would have lowered the threshold for major regulations from $50 to $25 million. The bill died in Assembly Business, Professions and Consumer Protection Committee.

AB 2090 (B. Berryhill, 2012) would have modified the requirements for preparing impact analyses and would have lowered the threshold for a major regulation from $50 to $15 million. The bill died in the Assembly Appropriations Committee.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT: (Verified 5/9/17)

California Labor Federation, AFL-CIO (co-source)

California Nurses Association/National Nurses United (co-source)

State Building and Construction Trades Council (co-source)

American Federation of State, County and Municipal Employees, AFL-CIO

California Professional Firefighters

National Employment Law Project

Service Employees International Union California

Worksafe

OPPOSITION: (Verified 5/11/17)

California Association of Boutique & Breakfast Inns

California Association of Joint Powers Authorities

California Chamber of Commerce

California Farm Bureau Federation

California Hotel & Lodging Association

California Manufacturers & Technology Association

California Professional Association of Specialty Contractors

California Retailers Association

Chemical Industry Council of California

Construction Employers’ Association

Industrial Environmental Association

National Elevator Industry, Inc.

National Federation of Independent Business – California

Walter & Prince LLP

Western Growers Association

Wine Institute

ARGUMENTS IN SUPPORT: According to the sponsors, this bill will improve workplace safety by eliminating duplicative and burdensome steps from the health and safety rulemaking process. They argue that in the face of federal roll backs, it is essential that state agencies be able to act quickly to promulgate needed standards to protect workers. Unfortunately, they argue, those efforts have been stymied by a burdensome process requiring an in-depth economic assessment (SRIA) resulting in a process that costs more, takes longer, and protects fewer workers.

Proponents note as an example, the process for implementing SB 1167 (Leyva/Mendoza) from last year which directed Cal/OSHA to develop an indoor heat safety standard by January 1, 2019. During the 2016 legislative session, the proposed standard – and its potential costs and benefits – were debated at length during numerous policy committees, floor presentations, and other discussions. Now that the bill is law, advisory committee meetings have begun which allow for thorough consideration of the standard’s costs and benefits to both workers and employers. Following these meetings, the APA process begins, during which further consideration of the fiscal impact will take place. The proposed standard will then go to the Standards Board for both a public hearing and a public meeting where extensive discussion over costs and benefits will occur at a minimum of two meetings.

According to proponents, the SRIA review, which requires the hiring of outside economists and takes about a year to complete, then, mandates a fifth fiscal analysis, in the middle of this already lengthy process, before regulations can become law. According to proponents, perhaps the most harmful unintended consequence has been the pressure on worker safety advocates to limit or weaken proposed standards to avoid meeting the $50 million threshold.

ARGUMENTS IN OPPOSITION: Opponents of the bill argue that this bill allows for a state agency to ignore economic impacts it may have on those it regulates, ignore less burdensome and more efficient alternatives for employers that also meet intended policy goals, and ignore the Legislature’s effort to improve transparency and accountability in California’s regulatory process. According to opponents, SRIAs were designed to identify the most cost effective means to meet policy goals when regulations are drafted.

Opponents argue that by exempting Cal/OSHA from conducting this analysis, the evaluation of alternatives that may be less costly for employers to implement would also be eliminated, which is likely to result in increased costs to employers, decreased investment, and other unintended consequences. According to opponents, Cal/OSHA does not conduct a comprehensive analysis of alternative regulatory approaches, nor does the Legislature or the stakeholders in the rulemaking process.

Further, opponents argue that one of the misplaced assumptions of SB 772 is that the SRIA process prohibits Cal/OSHA from expediting worker safety initiatives. They argue that Cal/OSHA has various means for implementing worker safety measures outside of the SRIA process. For example, they note that Cal/OSHA enforcement has the authority to shut down a business where an imminent threat to workplace safety or health is present, and a Special Order can be issued to specifically address hazards in the workplace. Thus, they argue that additional time required to conduct the SRIA does not reduce workplace protections.

Prepared by:

5/11/17 11:32:35

**** END ****

SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS

Senator Steven Bradford, Chair

2017 - 2018 Regular

Bill No: SB 772 Hearing Date: April 26, 2017

Subject: Occupational safety and health: regulations

KEY ISSUE

Should the Legislature exempt agencies proposing to adopt occupational safety and health standards and orders from having to complete a Standardized Regulatory Impact Assessment (SRIA) in order to expedite the adoption of safety orders that impact worker safety?

ANALYSIS

Existing law:

1. Under the Administrative Procedure Act (APA), establishes rulemaking procedures and standards for state agencies to follow when adopting regulations to ensure that these are clear, necessary and legally valid. (Government Code §11340 et seq.)
2. Establishes and charges the Office of Administrative Law (OAL) with the responsibility of reviewing adopted regulations with the intent of reducing the number of administrative regulations and improve the quality of those regulations. (Government Code §11340.1)
3. Establishes the Occupational Safety and Health Standards Board (Standards Board), within the Department of Industrial Relations (DIR), to promote, adopt, and maintain reasonable and enforceable standards, that are at least as effective as federal standards, that will ensure a safe and healthful workplace for California workers. (Labor Code §140)
4. Requires a state agency proposing to adopt, amend, or repeal a major regulation to prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance intended to provide agencies and the public with tools to determine whether the regulatory proposal is an efficient and effective means of implementing the policy decisions enacted in statute or by other provisions of law in the least burdensome manner. [Government Code §11346.3]
5. Defines “major regulation” as any proposed adoption, amendment, or repeal of a regulation subject to review by the Office of Administrative Law that will have an economic impact on California business enterprises and individuals in an amount exceeding fifty million dollars ($50,000,000), as estimated by the agency.
6. Requires the standardized regulatory impact analysis to, among other things, assess whether and to what extent the proposed regulation will affect the creation or elimination of jobs; the competitive advantages and disadvantages for businesses currently doing business in the state; and the benefits of the regulation to the health, safety, and welfare of California residents, worker safety and the state’s environment and quality of life.
7. Requires the Department of Finance, in consultation with the OAL and other state agencies, to develop regulations for conducting the required standardized regulatory impact analyses. The regulations, at a minimum, must assist agencies in specifying methodologies on how to:
   1. Assess the benefits and costs of the proposed regulation;
   2. Determine the impact on the state economy, businesses, and the public welfare;
   3. Assess the effects of a regulatory proposal on the General Fund and special funds of the state and affected local government agencies;
   4. Determine the cost of enforcement and compliance to the agency and affected business enterprises and individuals.
8. Requires the state agency to submit the regulatory impact analysis to the Department of Finance upon completion for comment.
9. Exempts from the standardized regulatory impact analysis requirement the University of California, the Hastings College of the Law, or the Fair Political Practices Commission.

This Bill would exempt any occupational safety and health standard and order from the standardized regulatory impact analysis requirement.

COMMENTS

1. Background on the Office of Administrative Law:

Established on July 1, 1980, the Office of Administrative Law (OAL) ensures that regulations proposed by the over 200 California state agencies are clear, necessary, legally valid, and available to the public. OAL is responsible for ensuring that state agencies comply with the rulemaking procedures and standards set forth in California’s Administrative Procedure Act (APA).  The APA requirements are designed to provide the public with a meaningful opportunity to participate in the adoption of regulations or rules that have the force of law by California state agencies and to ensure the creation of an adequate record for the OAL and judicial review. A “regulation” is any rule, regulation, order or standard of general application or the amendment, supplement, or revision of any rule, regulation, order, or standard adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it.

Regulations subject to the APA are generally adopted through the “Regular” or “Emergency” rulemaking processes. The rulemaking process used by an agency to adopt regulations will dictate what procedural requirements must be followed, including but not limited to the contents of the rulemaking record, timeframes, public participation opportunities, OAL’s review and effective dates for the regulations.

2. Process for the Adoption of Occupational Safety and Health Regulations:

Existing law charges the Occupational Safety and Health Standards Board (Standards Board) with the responsibility of adopting regulations that are at least as effective as federal standards for all issues under the Federal Occupational Safety and Health Act of 1970 within six (6) months of the effective date of the federal standard (Labor Code Section 142.3). When emergency federal standards are adopted, the Standards Board must adopt an emergency regulation at least as effective as the federal emergency standard as soon as possible (Labor Code Section 142.4). The Division of Occupational Safety and Health (DOSH), better known as Cal/OSHA, protects and improves the health and safety of working men and women in California and the safety of passengers riding on elevators, amusements rides, and tramways – through specified activities including setting and enforcing standards.

The policy of the Standards Board is that all regulations must be enforceable, reasonable, understandable, and contribute directly to the safety and health of California employees. This basic policy extends to all regulations regardless of the source with few exceptions for regulations substantially the same as federal standards. The public hearing and adoption process is governed by the Administrative Procedure Act (APA) in the Government Code.

Once a state agency decides to conduct a regular rulemaking action, it engages in preliminary rulemaking activities wherein the agency typically researches and gathers materials and information necessary to develop the documents required to conduct a formal APA rulemaking proceeding. After the necessity for a rulemaking action is established, proposed regulation changes are developed by either the Standards Board or Cal/OSHA staff, generally with the assistance and recommendations of an advisory committee. Advisory committees consist of representatives from industry, labor, the public, and other interested groups.

The proposal is then scheduled for hearing at one of the Standard Board's public hearings. Written and oral testimony is encouraged and received at public hearings. Following the public hearing, all testimony is returned to the originating staff for review, and the proposed regulation change may be revised in response to written and oral comments. When all comments and testimony have been addressed, the staff schedules the proposed standard for consideration and adoption at the Standards Board business meeting. Regarding the financial impact of a proposed regulation, agencies are required to conduct an Economic Impact Statement (STD. 399) to be included with any proposed regulation if there will be an estimated fiscal impact on state or local government. Additionally, for any major regulation, as defined, with an estimated cost exceeding $50 million dollars, agencies are also required to conduct a Standardized Regulatory Impact Assessment (SRIA). SRIA’s are required to be submitted to the Department of Finance for review and comments at least 60 days prior to filing with OAL.

Following adoption at the agency, a copy of the proposed rule, in addition to the required impact assessments, is sent to the Office of Administrative Law for approval. After approval, the regulations are published in Title 8 of the California Code of Regulations.

3. Need for this bill?

In 2011, Governor Brown signed SB 617 (Calderon) which requires state agencies to prepare an in-depth economic assessment of any major regulation estimated to have an economic impact on California business enterprises and individuals in an amount exceeding $50 million dollars, as estimated by the proposing agency. This assessment is referred to as the Standardized Regulatory Impact Assessment (SRIA) and includes $50 million in costs, savings or a combination of the two. Regulations for implementing the SRIA require the proposing agency to submit the assessment to the Department of Finance (DOF) at least 60 days prior to filling a Notice of Proposed Adoption with OAL. According to the author and proponents, conducting an SRIA typically requires the hiring of outside economists and can take up to a year to prepare a report that meets the DOF standards.

As noted above, in addition to the SRIA, an agency proposing a regulation must follow strict rule setting procedures that includes additional economic impact assessments (STD. 399), public forums where all stakeholders have the opportunity to participate, advisory committee meetings, public voting of the regulation and final approval by the OAL.

According to the author and sponsors, the $50 million dollar threshold for the SRIA has resulted in the harmful unintended consequence of impacting worker safety. As an example, the author draws attention to a recently approved workplace violence standard that exempted certain health care facilities to avoid meeting the $50 million threshold that would have triggered a SRIA. Had the SRIA process been required, the safety standard would have been delayed by at least one year. According to the author, the delay in adopting safety standards that have already been approved by the Legislature and the Governor may place workers at an increased risk of serious injury or death as a result.

This bill would exempt Cal/OSHA from the requirement to perform a SRIA on any proposed major regulation that costs over $50 million. All other existing layers of review, including internal fiscal analyses, the advisory committee process, public hearings and meetings, and the standard rulemaking process remain in place.

4. Proponent Arguments:

According to the sponsors, this bill will improve workplace safety by eliminating duplicative and burdensome steps from the health and safety rulemaking process. They argue that in the face of federal roll backs, it is essential that state agencies be able to act quickly to promulgate needed standards to protect workers. Unfortunately, they argue, those efforts have been stymied by a burdensome process requiring an in-depth economic assessment (SRIA) resulting in a process that costs more, takes longer, and protects fewer workers.

Proponents note as an example, the process for implementing SB 1167 (Leyva/Mendoza) from last year which directed Cal/OSHA to develop an indoor heat safety standard by January 1, 2019. During the 2016 legislative session, the proposed standard – and its potential costs and benefits – were debated at length during numerous policy committees, floor presentations, and other discussions. Now that the bill is law, advisory committee meetings have begun which allow for thorough consideration of the standard’s costs and benefits to both workers and employers. Following these meetings, the APA process begins, during which further consideration of the fiscal impact will take place. The proposed standard will then go to the Standards Board for both a public hearing and a public meeting where extensive discussion over costs and benefits will occur at a minimum of two meetings.

According to proponents, the SRIA review, which requires the hiring of outside economists and takes about a year to complete, then, mandates a fifth fiscal analysis, in the middle of this already lengthy process, before regulations can become law. According to proponents, perhaps the most harmful unintended consequence has been the pressure on worker safety advocates to limit or weaken proposed standards to avoid meeting the $50 million threshold.

According to the author, this bill ensures that worker safety standards that have already been approved by the Legislature and Governor can be enacted in a timely manner. Proponents argue that the bill reflects the exceptionally detailed fiscal analysis that already takes place at Cal/OSHA and allows the agency to focus scarce resources on more effective uses.

5. Opponent Arguments:

Opponents of the measure argue that this bill allows for a state agency to ignore economic impacts it may have on those it regulates, ignore less burdensome and more efficient alternatives for employers that also meet intended policy goals, and ignore the legislature’s effort to improve transparency and accountability in California’s regulatory process. According to opponents, SRIAs were designed to identify the most cost effective means to meet policy goals when regulations are drafted. They argue that these SRIAs go beyond a simple accounting of costs and consider any unintended consequences of a proposed rule, as well as alternatives to achieving the same goals in an attempt to help regulators select the most efficient and effective method to achieve the policies set by the legislature.

Opponents argue that by exempting Cal/OSHA from conducting this analysis, the evaluation of alternatives that may be less costly for employers to implement would also be eliminated, which is likely to result in increased costs to employers, decreased investment, and other unintended consequences. Further, opponents argue that this bill circumvents and subverts good governance as regulations improve with more information and transparency, not less. According to opponents, Cal/OSHA does not conduct a comprehensive analysis of alternative regulatory approaches, nor does the legislature or the stakeholders in the rulemaking process.

Further, opponents state that Cal/OSHA already has the statutory authority to immediately protect worker’s safety by using expedited processes, like the Emergency Rulemaking authority, directives, bulletins, citations, or other enforcement actions. According to opponents, one of the misplaced assumptions of SB 772 is that the SRIA process prohibits Cal/OSHA from expediting worker safety initiatives. They argue that Cal/OSHA has various means for implementing worker safety measures outside of the SRIA process. For example, they note that Cal/OSHA enforcement has the authority to shut down a business where an imminent threat to workplace safety or health is present, and a Special Order can be issued to specifically address hazards in the workplace. Thus, they argue that additional time in the rulemaking process required to conduct the SRIA does not reduce workplace protections.

6. Prior Related Legislation:

AB 866 (Linder) of 2013 would have modified the requirements for preparing the economic impact analyses and would have reduced the SRIA threshold from $50 to $15 million. This bill was parked in Assembly Accountability and Administrative Review Committee.

AB 1504 (Morell) of 2012 would have revised various provisions of the APA and would have lowered the threshold for major regulations from $50 to $25 million. This bill died in Assembly Business, Professions and Consumer Protection Committee.

AB 2090 (B. Berryhill) of 2012 would have modified the requirements for preparing impact analyses and would have lowered the threshold for a major regulation from $50 to $15 million. This bill died in the Assembly Appropriations Committee.

SB 617 (Calderon) of 2011 revised various provisions of the APA and requires agencies to prepare a standardized regulatory impact analysis, as specified, for major regulations with an economic impact exceeding $50 million dollars. Chapter 496, Statutes of 2011.

SUPPORT

California Labor Federation, AFL-CIO (Co-Sponsor)

California Nurses Association/National Nurses United (Co-Sponsor)

State Building and Construction Trades Council (Co-Sponsor)

American Federation of State, County and Municipal Employees, AFL-CIO

California Professional Firefighters

National Employment Law Project

Service Employees International Union California

Worksafe

OPPOSITION

California Manufacturers & Technology Association

California Chamber of Commerce

California Association of Boutique & Breakfast Inns

California Association of Joint Powers Authorities

California Hotel & Lodging Association

California Professional Association of Specialty Contractors

California Retailers Association

Chemical Industry Council of California

Industrial Environmental Association

National Federation of Independent Business – California

Walter & Prince LLP

Western Growers Association

Wine Institute

-- END --