Existing law, the Administrative Procedure Act, governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. The act requires every agency subject to its provisions to prepare, submit to the office with the notice of proposed action, as specified, and make available to the public upon request, among other things, an initial statement of reasons for proposing the adoption, amendment, or repeal of a regulation. The act also requires a state agency proposing to adopt, amend, or repeal any administrative regulation to assess the potential for adverse economic impact, as specified. The act requires an economic assessment prepared under these provisions for a major regulation proposed on or after November 1, 2013, to be prepared as provided and to be included in the above-described initial statement of reasons. impact on California business enterprises and individuals and requires the state agency to adhere to specified requirements in making that assessment.

Existing law, the Administrative Procedure Act, governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. The act requires every agency subject to its provisions to prepare, submit to the office with the notice of proposed action, as specified, and make available to the public upon request, among other things, an initial statement of reasons for proposing the adoption, amendment, or repeal of a regulation. The act also requires a state agency proposing to adopt, amend, or repeal any administrative regulation to assess the potential for adverse economic impact, as specified. The act requires an economic assessment prepared under these provisions for a major regulation proposed on or after November 1, 2013, to be prepared as provided and to be included in the above-described initial statement of reasons.

This bill would make a nonsubstantive change the above-described provisions.

Date of Hearing: May 21, 2025

ASSEMBLY COMMITTEE ON APPROPRIATIONS

Buffy Wicks, Chair

ABPCA Bill Id:AB 1232

Author:(Ávila Farías) – As Amended Ver:March 28, 2025

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

SUMMARY:

This bill requires state agencies to consider the “cost of living regulatory impacts on the residents of the state” that result from proposed regulations (adoption of new regulations and amendment or repeal of existing regulations).

Specifically, the bill defines “cost of living regulatory impacts on the residents of the state” to mean “the cost of essentials and consumer staples, including, but not limited to, housing, transportation, food, taxes, and health care and the increase or decrease in these costs as a result of a proposed regulation in California both at the time of consideration and the foreseeable future.”

This bill (a) requires the Office of Administrative Law (OAL) to adopt a standardized methodology to determine the cost of living impact and (b) requires any state agency that proposes a regulatory change to use the methodology to determine the cost of living impact of the proposed regulation as part of the state agency’s assessment of the potential adverse economic impact of the regulatory change that existing law requires the state agency to conduct. In addition, any time a state agency determines it needs to contract for outside services to perform the assessment of economic impact of the regulatory change, this bill requires the OAL to select the contractor and oversee its work.

The bill also directs the OAL, in its review of a state agency’s proposed regulation, to conduct an independent analysis of the adequacy of an agency’s economic analyses and its own analysis of the cost of living impacts of the proposed regulations on residents of the state, using a methodology and threshold the bill requires OAL to establish. If OAL finds that the cost of living impacts of a proposed regulation are significant, the bill requires OAL to identify means by which the cost of the proposed regulation could be reduced.

Finally, the bill extends, from 30 days to 60 days, the time OAL has to approve a proposed regulation or reject it. The bill further provides that, if one of the reasons for OAL’s disapproval includes a significant cost of living impact, OAL is to specify the means by which the costs of the proposed regulation could be reduced and then require the agency that proposed the regulation to pursue a less costly alternative or explain in detail why a less costly alternative is infeasible.

FISCAL EFFECT:

The cost to any one state agency to review the effect of its proposed amendments on cost of living will vary but, likely in every case, be substantial, ranging in the tens of thousands of dollars to hundreds of thousands of dollars (various funds). Collectively, across all state agencies that propose regulations, costs will likely be in the millions of dollars to tens of millions of dollars annually.

In addition, the OAL will face significant costs, likely in the range of hundreds of thousands of dollars, one time (General Fund), to adopt a standardized methodology to determine the cost of living impact and to several hundreds of thousands of dollars annually ongoing (General Fund) to conduct an independent analysis of the adequacy of agencies’ economic analyses. OAL provided a “preliminary” annual cost estimate of $1.4 million for ten new positions.

COMMENTS:

State law authorizes various state agencies to adopt regulations to implement, interpret, or make specific the law enforced or administered by it, or to govern its procedure. Such an agency must submit its proposed regulation to OAL, which reviews the proposed amendment, according to the requirements of the Administrative Procedures Act (APA), for necessity, authority, clarity, consistency, reference and nonduplication. The law requires an agency submitting a proposed regulation to OAL to estimate whether the regulation will have an economic impact on California business enterprises and individuals in an amount exceeding $50 million, in which the regulation meets the standard of “major regulation” and the agency will need to undertake additional analysis of the proposed regulation’s economic effects. However, there is no requirement in law that an agency proposing a regulation assess the effect of the proposed regulation on the cost of living of residents of the state. This bill creates such a requirement.

According to the author:

AB 1232 requires agencies to ask: what impact does this regulation have on the cost of everyday essentials, such as food, water, energy, gas, and housing? In addition, it would require the Office of Administrative Law (OAL) to add cost of living to its review of proposed regulations, empowering OAL to not only examine cost of living impacts independently, but also reject proposed regulations that significantly impact cost of living in favor of a more affordable alternative. Through this process, agencies must transparently consider the impacts of their regulations on Californians’ and must seek to find alternatives that reduce cost impacts

The bill is supported by a collection of industry associations, who together write:

By requiring honest, independent analysis of cost-of-living impacts, this bill will arm decision-makers with the information they need to shape better policy, improve regulatory efficiency, and ensure government actions reflect the economic realities of Californians.

The committee is unaware of opposition to this bill.

Analysis Prepared by: Jay Dickenson / APPR. / (916) 319-2081

Date of Hearing: April 29, 2025

ASSEMBLY COMMITTEE ON JUDICIARY

Ash Kalra, Chair

ABPCA Bill Id:AB 1232

Author:(Ávila Farías) – As Amended Ver:March 28, 2025

proposed consent

SUBJECT: Administrative Procedure Act: proposed regulations: cost of living impact on residents of the state

KEY ISSUE: should state agencies consider the cost of living impacts of potential regulations as a part of the standardized regulatory impact assessment or economic impact assessment process?

SYNOPSIS

California law authorizes the agencies and departments of the executive branch to adopt regulations any time additional legal requirements are necessary to implement, interpret, or make specific the law enforced or administered by the agency or department. The California Administrative Procedure Act governs the adoption and revision of regulations. The Administrative Procedure Act, generally, requires agencies to post regulations, receive public comment, and respond to the comments. Additionally, the Administrative Procedure Act requires agencies to conduct economic analysis of regulations to determine the impact to the state’s economy.

Arguing that the existing processes for examining the economic impact of regulations is insufficient and results in increased costs to Californians this bill would require agencies adopting regulations to account for the regulations impact to the “cost of living” as a part of the standardized regulatory impact analysis or economic impact assessment. The bill then directs the Office of Administrative Law to conduct an independent review of the adequacy of the cost of living study, and if the Office believes the study is inadequate, propose their own solutions to reduce cost.

This bill is supported by a coalition of business and agricultural interests. The supporters bemoan the existing regulatory process and contend that agencies and departments do not do enough to reduce the cost burdens of regulations. Although the bill is purported to assist California consumers reduce costs, no consumer advocates have registered a position in support of this measure. This bill has no known opposition and was unanimously approved by the Committee on Economic Development, Growth, and Household Impact.

SUMMARY: Requires state agencies adopting regulations to assess the regulation’s impact to the cost of living in the state. Specifically, this bill:

1. Requires state agencies, as a part of the Standardized Regulatory Impact Assessment of major regulations, to study the cost of living impacts to the residents of the state.
2. Requires state agencies, for non-major regulations, to study the cost of living impacts of the regulations as a part of the economic impact assessment.
3. Requires the Office of Administrative Law to conduct an independent analysis of the adequacy of an agency’s economic analyses, and to also conduct its own analysis of the cost of living impacts on residents of the state of a proposed regulation.
4. Requires that if the Office of Administrative Law finds that the cost of living impacts of a proposed regulation are significant, the office must identify means by which the cost of the proposed regulation could be reduced.
5. Extends the period of time in which the Office of Administrative Law must approve or disapprove major regulations from 30 working days to 60 working days.
6. Defines “cost of living impacts on residents of the state” to mean the cost of essentials and consumer staples, including, but not limited to, housing, transportation, food, taxes, and health care and the increase or decrease in these costs as a result of a proposed regulation in California both at the time of consideration and the foreseeable future.

EXISTING LAW:

1. Establishes the Office of Administrative Law and tasks the Office with reviewing all regulations proposed by state agencies. (Government Code Section 11340.2.)
2. Prohibits a state agency from issuing, utilizing, enforcing, or attempting to enforce any guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule, which is a regulation, as defined, unless the guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule has been adopted as a regulation and filed with the Secretary of State. (Government Code section 11340.5.)
3. Requires every state agency to do the following:
   1. Transmit to the office for filing with the Secretary of State a certified copy of every regulation adopted or amended by it except one that is a building standard;
   2. Transmit to the office for filing with the Secretary of State a certified copy of every order of repeal of a regulation;
   3. Within 15 days of the office filing a state agency’s regulation with the Secretary of State, post the regulation on its internet website for at least 60 days after filing the regulation in an easily marked and identifiable location;
   4. Deliver to the Office of Administrative Law, at the time of transmittal for filing a regulation or order of repeal, a citation of the authority pursuant to which it or any part thereof was adopted;
   5. Deliver to the Office of Administrative Law a copy of the notice of proposed action; and
   6. Transmit to the California Building Standards Commission for approval a certified copy of every regulation, or order of repeal of a regulation, that is a building standard, as specified. (Government Code Section 11343.)
4. Requires a state agency proposing to adopt, amend, or repeal any administrative regulation to assess the potential for adverse economic impact on California business enterprises and individuals, avoiding the imposition of unnecessary or unreasonable regulations or reporting, recordkeeping, or compliance requirements by conducting a Standardized Regulatory Impact Assessment. (Government Code Section 11346.3.)
5. Defines “regulation” as every 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, or to govern its procedure. (Government Code Section 11342.600.)
6. Defines “major regulation” as any proposed adoption, amendment, or repeal of a regulation subject to review by the Office of Administrative Law pursuant to Article 6 (commencing with Section 11349) 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. (Government Code Section 11342.548.)

FISCAL EFFECT: As currently in print this bill is keyed fiscal.

COMMENTS: As California consumers grapple with the inflationary pressures of the post-pandemic economy, now being exacerbated by the on-again, off-again tariff policy of the present federal administration, this bill seeks to expand the consideration of the cost of living impacts of proposed regulations. Although state agencies are already required to conduct an economic impact analysis of all regulations, and for major regulations, agencies must conduct comprehensive regulatory impact assessments, the author and proponents of this bill contend these existing requirements do not sufficiently study the impact of regulations on everyday Californians. This bill would require agencies developing, modifying, or repealing regulations to study the impact of such an action on the cost of living in this state. In support of the bill the author states:

Affordability is one of the top concerns for everyday Californians today. The PPIC recently reported that over two-thirds of Californians expect bad economic times in the next year. On top of that, California consistently ranks among the top highest cost of living states in the nation.

While state agencies currently must consider economic impacts of their regulations, there is no real oversight of this process nor do those analyses require the consideration of the regulation on cost of living. AB 1232 helps achieve the state’s affordability goals by requiring state agencies to specifically examine what impacts their proposed regulation would have on the cost of living for Californians.

AB 1232 requires agencies to ask: what impact does this regulation have on the cost of everyday essentials, such as food, water, energy, gas, and housing? In addition, it would require the Office of Administrative Law (OAL) to add cost of living to its review of proposed regulations, empowering OAL to not only examine cost of living impacts independently, but also reject proposed regulations that significantly impact cost of living in favor of a more affordable alternative. Through this process, agencies must transparently consider the impacts of their regulations on Californians’ and must seek to find alternatives that reduce cost impacts.

Although largely driven by pandemic-era economic disruptions and questionable economic decisions by the federal government, rising costs are a major concern for everyday Californians. According to Cal Matters, since the onset of the COVID-19 pandemic consumer prices in California have increased approximately 20 percent. (Levi Sumagaysay, Californians face higher costs for goods and services than before the pandemic despite inflation slowing, Cal Matters (Mar. 6, 2024) available at: https://calmatters.org/economy/2024/03/california-inflation/.) Even more problematic, Bureau of Labor Statistics data suggests that wages have not been able to keep up with rising prices, as Californians’ wages have only increase by 15 percent since 2020. (Ibid.) Although most pronounced, food prices are not the only aspect of life that costs more in the post-pandemic era. According to Bankrate.com, car insurance costs have risen by 17 percent and housing costs are 38 percent higher in California when compared with the rest of the nation. (Ibid.)

It would be an understatement to note that the factors driving post-pandemic prices are complex and some inflation can be traced to the pandemic-era fiscal policies enacted by government. However, the Brookings Institute notes that most price increases were driven by “sharp increases in global commodity prices and sectoral price spikes driven by a combination of pandemic-induced kinks in supply chains and a huge shift in demand during the pandemic to goods from services.” (Ben Bernanke & Olivier Blanchard, What caused the U.S. pandemic-era inflation?, The Brookings Institute (June 13, 2023) available at: https://www.brookings.edu/articles/what-caused-the-u-s-pandemic-era-inflation/.) While governmental policies can play a role in keeping prices stable, the current cost-of-living issues plaguing California appear to be largely driven by free market forces and not governmental overreach into the economy.

This bill seeks to enhance the consideration of state regulations’ impact on the cost of living for everyday Californians. Recognizing that keeping everyday Californians’ living expenses as low as possible requires a whole of government approach, this bill would task state agencies with studying the impact potential regulations would have on the cost-of-living. The bill would require agencies, as a part of the Standardized Regulatory Impact Assessment (SRIA) for major regulations, or the economic impact assessment for all other regulations, to study the regulation’s cost of living impact to Californians. The bill would require the Office of Administrative Law to determine the adequacy of the cost impact study and would require the Office to reject any final regulatory package that the Office deemed to have inadequately accounted for cost-of-living impacts. Furthermore, the bill tasks the Office of Administrative Law with determining how to lessen the impact of a regulation on the cost of living if the Office determined an agency conducted an inadequate cost study. Finally, given the expansive new role this bill contemplates for the Office of Administrative Law, the bill provides the Office an additional 30 days to review final versions of major regulations.

Although well intentioned, this bill will almost certainly result in additional delays in the already cumbersome regulatory process and thus increase costs to taxpayers, contrary to the bill’s stated intent. California’s regulatory process can be complex and cumbersome. A regulation is “every rule, regulation, order, or standard of general application, or the amendment, supplement, revision or any rule, regulation, order or standard adopted by any state agency to implement, interpret, or make specific the law enforced or administered by it, or to govern its procedure.” (Government Code Section 11342.600.) Each year, California’s executive branch agencies promulgated dozens of regulations to further refine the law as enacted in statute. Although the Administrative Procedures Act specifies how the formal rulemaking process must play out, many agencies now utilize information “pre-rulemaking” process to engage stakeholders before the formal rulemaking process ever begins. Despite many agencies seeking stakeholder engagement long before entering formal rulemaking, the proponents of this bill contend the process is, “resulting in regulations that are neither cost-effective nor grounded in realities…” The proponents of this measure contend that the state is currently considering too many regulations at once and that agencies seek out solutions that are too cumbersome to be implemented.

The contention by the proponents that the regulatory process moves too quickly and overlooks the concerns of ordinary Californians appears to misconstrue the actual reality of the regulatory process. In the last decade, several dozen high-profile regulatory efforts were effectively stalled by stakeholder disagreements. For example, although the Legislature enacted SB 1137 (Gonzalez) Chap. 365, Stats. 2022, to adopt safety setbacks between housing developments and oil and gas wells three years ago, the Department of Conservation only released a “discussion draft” of the permanent implementing regulations last month. (https://www.conservation.ca.gov/calgem/Documents/Discussion%20Draft%20SB%201137%20Health%20Protection%20Zone%20Regulations.pdf.) Similarly, even though the Legislature adopted AB 3074 (Friedman) Chap. 259, Stats. 2020, five years ago, the regulations surrounding ember resistant zones around housing have still not been adopted. Had such regulations been in place in January 2025, the devastation wrought by the Eaton and Palisades Fires may been mitigated.

These examples are not designed to criticize the state agencies trying to implement critical health and safety regulations but rather to highlight how adequate stakeholder engagement can dramatically slow down the regulatory process. Indeed, both regulatory packages will be required to conduct a SRIA, the lengthy and detailed economic analysis of major regulations’ cost impacts to the state. Should this bill be enacted, and require agencies to conduct even more economic analysis of regulations, the already time-consuming regulatory process will likely face additional delays as well as costs to the state. It is certainly understandable that the business groups sponsoring this measure dislike regulatory requirements and the cost to comply with the law. However, the Legislature must seriously consider whether additional cost studies are a worthwhile trade-off, when such studies will almost certainly increase the fiscal tag of virtually every bill enacted by the Legislature and will add delays to the implementation of critical regulations like those designed to protect everyday Californians from wildfires or toxic emissions from oil and gas wells.

While the Office of Administrative Law is one of the mostly highly trained and competent agencies within state government, this bill tasks the Office with duties that appear to be well outside the Office’s current capacities. As briefly noted above, all regulations proposed by state agencies must undergo an economic impact assessment. Since the Legislature adopted SB 617 (Calderon) Chap. 496, Stats. 2011, all major regulations, those estimated to cost more than $50 million to implement, must undergo additional economic impact reviews through the SRIA process. In accordance with regulations adopted by the Department of Finance, the Department is required to review the completed SRIA submitted by agencies and provide comments to the agency on the extent to which the assessment adequately studies the impact of the proposed regulations. If the Department of Finance’s Economic Research Unit believes an agency did not sufficiently study the cost impact of proposed regulations, the Department can reject the SRIA and require the agency to conduct additional cost studies. (https://dof.ca.gov/forecasting/economics/major-regulations/.) Although the proponents of this bill appear to believe that this process is inadequate, a review of the Department of Finance’s “Major Regulations Calendar” highlights that the Department has rejected numerous SRIA’s, since 2013, for failing to utilize proper methodology for studying the economic impact of regulations. (https://dof.ca.gov/forecasting/economics/major-regulations/major-regulations-table/.)

The existing SRIA framework, as adopted in SB 617, properly recognizes the Department of Finance’s role as one of California’s critical economic policy advisory bodies. However, unlike SB 617, this bill tasks the Office of Administrative Law with conducting the final review of the adequacy of the cost of living assessment proposed by this bill. While it is true that the Administrative Procedures Act vests the Office of Administrative Law with the authority to approve or disapprove all final rulemaking documents, the existing law largely tasks the Department of Finance with oversight of the economic impact documents within a rulemaking file. This division of labor recognizes the fact that while the Office of Administrative Law is staffed with numerous highly competent attorneys and other legal support staff, the Office does not have expertise in the state’s economy.

Accordingly, assuming that the proponents of this bill seek meaningful reviews of the cost of living impacts of proposed regulations and not simply to slow the regulatory process, should this bill advance, the author is strongly encouraged to vest oversight authority over the cost of living assessment proposed by this bill with the Department of Finance and not the Office of Administrative Law.

ARGUMENTS IN SUPPORT: This measure is supported by a coalition of business interests including the California Business Roundtable. In addition to casting aspersions on state regulators and the regulatory process, the support coalition jointly writes in favor of this bill:

California is in the midst of an affordability crisis. According to recent data, it costs 46.8% more to live in California than the national average—placing an unsustainable burden on families and businesses. While current law requires agencies to evaluate how regulations may impact jobs, it does not require them to assess how those same regulations affect residents’ day-to-day cost of living. This is a glaring omission.

AB 1232 corrects this by requiring agencies to integrate a cost-of-living analysis into the Standardized Regulatory Impact Assessments (SRIAs)—not just for new regulations, but also for amendments or proposals to repeal. The bill also empowers the Office of Administrative Law (OAL) to independently review the adequacy of agency analyses and recommend strategies to reduce unnecessary regulatory burdens. Simply put, the current system is broken.

Analyses conducted by agency-selected consultants are frequently biased, underestimating economic costs and minimizing the true impact of proposed regulations on taxpayers and consumers. Even more, agencies often justify costly regulations based on speculative long-term savings, while ignoring the present-day financial strain these policies impose on California residents. While potential future benefits of regulations—if realized—can be positive, they cannot come at the expense of their immediate, real-world impacts on affordability. This short-sighted approach not only deepens the affordability crisis in California, but also undermines public confidence in government decision-making.

Today, more than 50 regulations are under consideration across a broad spectrum of agencies— including those overseeing transportation, education, healthcare, agriculture, and environmental policy. Yet there remains no consistent framework to evaluate the cost-of-living toll of these regulations on California’s working families. AB 1232 will help restore balance. By requiring honest, independent analysis of cost-of-living impacts, this bill will arm decision-makers with the information they need to shape better policy, improve regulatory efficiency, and ensure government actions reflect the economic realities of Californians.

REGISTERED SUPPORT / OPPOSITION:

Support

Associated General Contractors of California
Associated General Contractors San Diego
California Building Industry Association
California Business Properties Association
California Business Roundtable
California Cattlemen's Association
City of Sacramento Department of Utilities
Southern California Leadership Council
Western Growers Association

Opposition

None on file

Analysis Prepared by: Nicholas Liedtke / JUD. / (916) 319-2334

Date of Hearing: April 22, 2025

ASSEMBLY COMMITTEE ON ECONOMIC DEVELOPMENT, GROWTH, AND HOUSEHOLD IMPACT

José Solache, Chair

ABPCA Bill Id:AB 1232 (

Author:Ávila Farías) – As Amended Ver:March 28, 2025

SUBJECT: Administrative Procedure Act: proposed regulations: cost of living impact on residents of the state

SUMMARY: The bill requires assessments of regulations to consider the cost of living impacts on California residents. It applies to both major and non-major regulations. Agencies must notify GO-Biz when contracting for analysis services, and GO-Biz will oversee the process and adopt a standardized cost of living methodology. If significant impacts are found, GO-Biz will suggest ways to reduce them. For major regulations, the approval period is extended to 60 working days, and agencies must pursue less costly alternatives or explain why they're infeasible. This bill adds consideration to the existing Department of Finance (DOF) Standardized Regulatory Impact Assessment (SRIA) process.

Specifically, this bill:

1. Includes among those requirements for assessing the potential for adverse economic impact the consideration of the proposal’s cost of living impacts on residents of the state, as defined.
2. Requires the assessment for non-major regulations to include to what extent it will affect the cost of living impacts on residents of the state, and would require the standardized regulatory impact analysis for major regulations to address the cost of living impacts on residents of the state.
3. Requires an agency to notify the office when the agency determines it needs to contract for outside services to perform the analyses and would require the office to select the contractor and oversee its work.
4. Requires the office to adopt a standardized cost of living methodology for use by all agencies.
5. Would add to those standards the cost of living impacts on residents of the state.
6. Requires the office, in reviewing proposed regulations for that criteria, to conduct an independent analysis into the adequacy of an agency’s economic analyses, to conduct its own analysis into the cost of living impacts on residents in the state, and, if the office finds those costs of living impacts are significant, to identify means by which the costs of the proposed regulation could be reduced.
7. Requires the office to return a regulation to the adopting agency if the office has independently evaluated the cost of living impacts on residents of the state and found that the impacts are significant, and would require the office to establish a methodology and threshold to determine when a cost of living impact becomes significant.
8. For major regulations, increases the period of time for approval or disapproval to 60 working days. If one of the reasons for disapproval includes a significant cost of living impact, the bill would require the written decision to specify the means by which the costs of the proposed regulation could be reduced and would require the agency to pursue a less costly alternative or explain why a less costly alternative is infeasible.

EXISTING LAW:

1. The Administrative Procedure Act, governs the procedure for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law.
2. Requires the office to return any regulation to the adopting agency upon the occurrence of specified events.
3. Requires the office to return a regulation to the adopting agency if the office has independently evaluated the cost of living impacts on residents of the state and found that the impacts are significant, and would require the office to establish a methodology and threshold to determine when a cost of living impact becomes significant.
4. Requires the office to either approve a regulation or disapprove it within 30 working days after a regulation has been submitted to the office for review. Existing law requires the office, if it disapproves a regulation, to provide the adopting agency with a written notice detailing the reasons for disapproval.

FISCAL EFFECT: Unknown. According to the author, some staff time at regulatory agencies and at OAL for a more detailed review.

COMMENTS: According to Sarah Bohn’s, Public Policy Institute of California (PPIC) Vice President and Director of the PPIC Economic Policy Center, public testimony, “Californians are very concerned about the economy and their chances of getting ahead financially. In the latest PPIC Statewide Survey, 69% of Californians said they expect bad times economically in the next twelve months. This concern has been persistent both here and nationally since the pandemic, even as the job market has shown signs of strength. New uncertainties about the economy stem from potential trade wars as well as federal actions on immigration, funding, and government employment.”

A Forbes analysis based on 2023 numbers estimates California’s cost of living to be $53,171 annually, which is higher than all but two states in the nation. Transportation costs are estimated at $6,597; food at $5,262; and income tax at $6,312. Housing costs are significant, with a median home price of $743,632 and a monthly mortgage cost of $4,442. California leads the nation with the highest median overall housing cost at $2,111 per month. (https://www.forbes.com/advisor/mortgages/cost-of-living-by-state/)

Author’s Statement: “Affordability is one of the top concerns for everyday Californians today. The PPIC recently reported that over two-thirds of Californians expect bad economic times in the next year. On top of that, California consistently ranks among the top highest cost of living states in the nation.

While state agencies currently must consider economic impacts of their regulations, there is no real oversight of this process nor do those analyses require the consideration of the regulation on cost of living. AB 1232 helps achieve the state’s affordability goals by requiring state agencies to specifically examine what impacts their proposed regulation would have on the cost of living for Californians.

AB 1232 requires agencies to ask: what impact does this regulation have on the cost of everyday essentials, such as food, water, energy, gas, and housing? In addition, it would require the Office of Administrative Law (OAL) to add cost of living to its review of proposed regulations, empowering OAL to not only examine cost of living impacts independently, but also reject proposed regulations that significantly impact cost of living in favor of a more affordable alternative. Through this process, agencies must transparently consider the impacts of their regulations on Californians’ and must seek to find alternatives that reduce cost impacts”.

REGISTERED SUPPORT / OPPOSITION:

Support

California Business Roundtable

Opposition

None on file

Analysis Prepared by: Carla Castilla / E.D., G., & H.I. / (916) 319-2090