Existing law establishes the Government Operations Agency, which consists of several state entities, including, but not limited to, the State Personnel Board, the Department of General Services, and the Office of Administrative Law. Under existing law, the Government Operations Agency is under the direction of an executive officer known as the Secretary of Government Operations, who is appointed by, and holds office at the pleasure of, the Governor, subject to confirmation by the Senate.

This bill would establish, within the Government Operations Agency, the Commission on Cutting Red Tape, consisting of 5 members appointed by the Governor. The bill would state the goal of the commission is to identify administrative obstacles in governmental procedures that cost time and resources without adding protections, and would provide guidance for the commission to achieve this goal. The bill would also require the Secretary of Government Operations to submit an annual report to the Legislature and to other relevant state agencies detailing the recommendations of the commission.

Date of Hearing: May 1, 2024

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 3242

Author:(Luz Rivas) – As Introduced Ver:February 16, 2024

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

SUMMARY:

This bill establishes the Commission on Cutting Red Tape (Commission).

Specifically, this bill:

1. Establishes, effective July 1, 2025, the Commission within the Government Operations Agency (GovOps) to identify and suggest solutions to administrative obstacles in government procedures that cost time and resources without adding protections. The Commission must undertake certain duties to fulfill this mission, such as developing a website with a portal to provide industry experts, government employees, and the public a mechanism to give feedback on governmental processes.
2. Requires the Commission to consist of five members appointed by the Governor.
3. Requires, beginning March 15, 2026, the GovOps secretary to submit an annual report to the Legislature and other relevant state agencies detailing the Commission’s recommendations.

FISCAL EFFECT:

Ongoing General Fund (GF) costs between $3 million and $6 million to GovOps to establish and operate the Commission. GovOps estimates needing between five to 10 additional employees, depending on the complexity of the Commission management, intra-departmental coordination, online intake portal, data analysis and management needs, and number of expert panels convened each year. Additionally, ongoing GF costs between $250,000 and $500,000 to GovOps to prepare the annual report.

According to the Legislative Analyst’s Office, the GF faces a structural deficit in the tens of billions of dollars over the next several fiscal years.

COMMENTS:

1. Purpose. According to the author:

As the state navigates a $73 billion budget shortfall and the rising cost of living, it is essential to do our part to hold the state fiscally accountable and take a sector-by-sector look at where red tape can be cut and operations streamlined to encourage innovation, stimulate job creation, and free up critical resources, while continuing to protect public health and safety, and the environment.

This bill is supported by various nonprofit and business organizations.

1. Canada’s Efforts to Cut Red Tape. According to the author’s office, this bill is modeled after Alberta, Canada’s Cutting the Red Tape Initiative, an initiative that sought feedback from the public and industry experts to implement a “one-in, one-out” rule for new regulations. The process saved the province $2.75 billion (U.S. dollars) from 2019-2023 and allowed the government to reduce regulatory barriers, improve service delivery, and make it easier for Albertans to access the skills and education needed to compete in the job market. This bill establishes the Commission to identify and suggest solutions to administrative obstacles in government procedures that cost time and resources without adding protections. Although this bill does not propose implementing a “one-in, one-out” rule for new regulations, similar to that established in Alberta, the Commission could recommend such a policy as the best way to cut red tape.

Analysis Prepared by: Irene Ho / APPR. / (916) 319-2081

Date of Hearing: April 17, 2024

ASSEMBLY COMMITTEE ON GOVERNMENTAL ORGANIZATION

Blanca Rubio, Chair

ABPCA Bill Id:AB 3242 (

Author:Luz Rivas) – As Introduced Ver:February 16, 2024

SUBJECT: Commission on Cutting Red Tape: Government Operations Agency

SUMMARY: This bill would establish, within the Government Operations Agency, the Commission on Cutting Red Tape (CCRT), consisting of 5 members appointed by the Governor. The bill would state the goal of the commission is to identify administrative obstacles in governmental procedures that cost time and resources without adding protections, and would provide guidance for the commission to achieve this goal. The bill would also require the Secretary of Government Operations to submit an annual report to the Legislature and to other relevant state agencies detailing the recommendations of the commission. Specifically, this bill:

1) Provides the CCRT is hereby established within the Government Operations Agency. Effective July 1, 2025, the commission shall operate as a stand-alone entity that reports to the Government Operations Agency consistent with other state entities, as defined.

2) Provides the CCRT shall consist of five members. The members shall be appointed by, and serve at the pleasure of, the Governor.

3) Provides the CCRT’S mission shall be to identify administrative obstacles in governmental procedures that cost time and resources without adding protections, and suggesting regulatory or statutory solutions to remediate them.

4) States the CCRT shall fulfill this mission by:

a) Creating and maintaining a website with a portal to provide a method for industry experts, government employees, and the general public to give feedback regarding governmental processes that are needlessly complex, take too long, serve no purpose, or are duplicative or wasteful.

b) Establishing industry panels to solicit specific feedback from key industries and the nonprofit sector.

c) Reviewing feedback and establishing a process, in consultation with other relevant state agencies, to determine if existing complexity, time, or duplication serves a governmental purpose or provides necessary protections, including, but not limited to, environmental protections, public safety protections, and fiscal accountability.

d) Recommending to the Secretary of Government Operations potential changes within all branches of state government to policies and procedures, regulations, or statutes that may save time, money, and resources, while still protecting the vital interests of the state.

e) The Secretary of Government Operations shall submit a report to the Legislature, as specified, and to each relevant state agency, no later than March 15, 2026, and annually thereafter, detailing the recommendations made by the commission during the prior calendar year.

EXISTING LAW:

1) Establishes the Government Operations Agency, which consists of several state entities, including, but not limited to, the State Personnel Board, the Department of General Services, and the Office of Administrative Law.

2) States that the Government Operations Agency shall be under the direction of an executive officer known as the Secretary of Government Operations, who is appointed by, and holds office at the pleasure of, the Governor, subject to confirmation by the Senate.

3) Provides the Governor, from time to time, shall examine the organization of all agencies and shall determine what changes therein are necessary to accomplish one or more of the following purposes:

(a) To promote the better execution of the laws, the more effective management of the executive and administrative branch of the state government and of its agencies and functions and the expeditious administration of the public business;

(b) To reduce expenditures and promote economy to the fullest extent practicable consistent with the efficient operation of the state government;

(c) To increase the efficiency of the operation of the state government to the fullest extent practicable;

(d) To group, consolidate and coordinate agencies and functions thereof as nearly as possible according to major purposes;

(e) To reduce the number of agencies by consolidating those having similar functions under a single head and to abolish such agencies or functions thereof as may not be necessary for the efficient operation of the state government;

(f) To eliminate overlapping and duplication of effort.

4) The Legislature declares that the public interest requires the carrying out of the purposes set forth in this section, and that such purposes may be accomplished more speedily and effectively under this article than by the enactment of specific legislation. (Government Code Section 12080.1.)

FISCAL EFFECT: This bill has been keyed fiscal by Legislative Counsel.

COMMENTS:

Purpose of the bill. According to the author of this bill, “I am proud to author AB 3242, the Cutting the Red Tape Act, which will grow the economy, reduce wasteful spending, and streamline government operations. As the state navigates a $73 billion budget shortfall and the rising cost of living, it is essential to do our part to hold the state fiscally accountable and take a sector-by-sector look at where red tape can be cut and operations streamlined to encourage innovation, stimulate job creation, and free up critical resources, while continuing to protect public health and safety, and the environment.”

Background.

The California Government Operations Agency. The Government Operations Agency leads implementation of strategic initiatives focused on accelerating innovation in state operations. Its mission is to improve management and accountability of government programs, increase efficiency and promote better and more coordinated operational decisions. The Agency is one of 11 cabinet-level agencies that reports to the Governor. It oversees and supports the work of 13 departments, boards, and offices with more than 22,000 employees and an annual budget of $67 billion.

GO-Biz. The Governor’s Office of Business and Economic Development (GO-Biz) serves as the State of California’s leader for job growth and economic development efforts. GO-Biz offers a range of services to business owners including: attraction, retention and expansion services, site selection, permit streamlining, clearing of regulatory hurdles, small business assistance, international trade development, assistance with state government, and much more. Every two years the agency must have an approved State Leadership Accountability Act report from the State Department of Finance. One of the requirements of this Act, is to have the approved report available for the public.

The Little Hoover Commission. The Little Hoover Commission, formally known as the Milton Marks “Little Hoover” Commission on California State Government Organization and Economy, is an independent state oversight agency. By statute, the Commission is a bipartisan board composed of five public members appointed by the Governor, four public members appointed by the Legislature, two Senators and two Assembly members. In creating the Commission in 1962, the Legislature declared its purpose:

...to secure assistance for the Governor and itself in promoting economy, efficiency and improved services in the transaction of the public business in the various departments, agencies and instrumentalities of the executive branch of the state government, and in making the operation of all state departments, agencies and instrumentalities, and all expenditures of public funds, more directly responsive to the wishes of the people as expressed by their elected representatives....

The Commission fulfills this charge by listening to the public, consulting with the experts and conferring with the wise. In the course of its investigations, the Commission typically empanels advisory committees, conducts public hearings and visits government operations in action. Its conclusions are submitted to the Governor and the Legislature for their consideration. Recommendations often take the form of legislation, which the Commission supports through the legislative process.

The Red Tape Reduction Act - Government of Alberta. The Red Tape Reduction Act, which was enacted in 2019, allowed the Alberta government in Canada to: 1) create an inventory of current regulations and assess if they are effective; 2) focus on outcomes instead of processes to ensure all regulations are necessary, effective, efficient and proportional to their intended outcome; 3) develop red tape reduction plans in all departments to make sure current and new regulations are free of red tape; and 4) coordinate cross-government activities and report on outcomes to make this initiative fully transparent to Albertans.

Previous Red Tape Efforts in New Jersey. In order to review out-of-date regulations, New Jersey established a Red Tape Review Group and subsequently a Red Tape Review Commission during the Chris Christie administration. The commission issued annual reports outlining problematic regulations and detailing areas where statutory changes could help make improvements to the regulatory system. Many of these concepts were eventually adopted. The commission was bipartisan and independent—it comprised members of the governor’s cabinet as well as minority and majority members from the legislature.

Policy consideration. For this type of measure that establishes a new agency within state government, it might be proper to add a sunset date to allow for the future review of the new state entity and to determine whether that new state agency is efficiently and effectively providing its intended functions. Therefore, if this bill moves forward, the author may wish to consider including a 10-year sunset date as a future amendment.

In support. The Los Angeles Area Chamber of Commerce writes, “AB 3242 is needed to save the public time and money by eliminating duplicative processes and regulations that fail to provide additional protections to the public’s health and safety or the environment. The Chamber supports policies that foster good governance and promote fiscal responsibility. This bill would reduce cost pressures on the state budget and allow for a growing economy by identifying opportunities for streamlining. We welcome the creation of a Commission and a centralized and publicly available website to solicit recommendations from the public, private businesses, and non-profits on the administrative burdens that hinder their functions and progress. Further, this bill aligns with the Chamber’s mission to design and advance opportunities and solutions for a thriving regional economy that is balanced, inclusive, and globally competitive.”

In support of the bill, the California Association of Nonprofits writes, “California nonprofits provide vital services to our communities, including 32% of all Medi-Cal services, and routinely step up to respond quickly and flexibly to meet the needs of Californians. 60% of our members surveyed during 2020 were providing essential services as defined by state government, and over half supported state programs through grants and contracts with the state. We appreciate the state’s interest in collaborating with nonprofits to, promote uninterrupted and high-quality service to Californians, while minimizing unnecessary costs and administrative burdens (for both the state and nonprofit partners), and ensuring accountability and transparency.”

Related legislation. SB 1104 (Niello) of 2024. This bill would establish the Office of Regulatory Counsel (ORC), in the Governor’s office, to draft and assist in the preparation, consideration, amendment, and repeal of regulations for a state agency, before the state agency submits a proposed action regarding that regulation to the Office of Administrative Law for publication in the California Regulatory Notice Register, as specified. (Pending in the Senate Committee on Appropriations)

REGISTERED SUPPORT / OPPOSITION:

Support

California Association of Nonprofits
Corporation for Supportive Housing
Housing California
Los Angeles Area Chamber of Commerce
National Alliance to End Homelessness
Valley Industry and Commerce Association (VICA)

Opposition

None on file

Analysis Prepared by: Eric Johnson / G.O. / (916) 319-2531