Existing law establishes the Government Operations Agency, which consists of several departments including the Office of Administrative Law (OAL). 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 OAL. Existing law requires the OAL to provide for the publication of the California Regulatory Notice Register and to include specified information in the register, including notices of proposed action prepared by regulatory agencies, a summary of regulations filed with the Secretary of State, and a summary of regulation decisions issued, as specified.

This bill, until January 1, 2035, would establish the Office of Regulatory Counsel in state government within the Governors office, under the direction and control of a director. The bill would require the director to be appointed by the Governor, subject to confirmation of the Senate and for the directors term to be coterminous with that of the appointing power, except as provided.

This bill would require the 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 OAL for publication in the California Regulatory Notice Register. The bill would make related legislative findings and declarations.

Existing law establishes the Government Operations Agency, which consists of several departments including the Office of Administrative Law (OAL). 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 OAL. Existing law requires the OAL to provide for the publication of the California Regulatory Notice Register and to include specified information in the register, including notices of proposed action prepared by regulatory agencies, a summary of regulations filed with the Secretary of State, and a summary of regulation decisions issued, as specified.

This bill, until January 1, 2035, would establish the Office of Regulatory Counsel in state government within the Governors office, under the direction and control of a director. The bill would require the director to be appointed by the Governor, subject to confirmation of the Senate and for the directors term to be coterminous with that of the appointing power, except as provided.

This bill would require the 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 OAL for publication in the California Regulatory Notice Register.

SENATE COMMITTEE ON APPROPRIATIONS

Senator Anna Caballero, Chair

2025 - 2026 Regular Session

SB 688 (Niello) - Office of Regulatory Counsel

Bill Summary:

SB 688 establishes the Office of Regulatory Counsel (ORC) in the Governor’s office and tasks the ORC with drafting and assisting 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 (OAL).

Fiscal Impact:

Unknown significant one-time and ongoing costs, likely in the millions of dollars, to stand-up and maintain the new office (General Fund). Costs to establish the office would include, but not be limited to, leasing office space, purchasing equipment, and for other IT operating expenses. Ongoing costs would include staff and outreach resources to support the ORC. Given the number of state agencies and the complexity and specificity of regulations that these agencies may seek assistance with, the ORC will likely need specialized staff with the technical and legal expertise to support its operations.

For comparison, the 2025-26 proposed Governor’s Budget for OAL includes funding for 26.3 PY of full time staff and a total budget of approximately $5.89 million (General Fund and various special funds). The ORC may require comparable resources.

It is unclear how the ORC will recoup its operating expenses. To the extent that the office cannot be sustained through the redirection of existing state resources, pro rata, or other billing mechanism, costs will be borne from the General Fund.

Background:

OAL ensures that agency regulations are clear, necessary, legally valid, and available to the public. Since its creation on July 1, 1980, OAL is responsible for reviewing administrative regulations proposed by over 200 state agencies for compliance with the standards set forth in California’s Administrative Procedure Act (APA), for transmitting these regulations to the Secretary of State, and for publishing regulations in the California Code of Regulations.

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. When adopting regulations, every department, division, office, officer, bureau, board or commission in the executive branch of the California state government must follow the rulemaking procedures in the APA and regulations adopted by the OAL, unless expressly exempted by statute from some or all of these requirements.

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.

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, opportunities for public participation, OAL’s review, and effective dates for the regulations.

Proposed Law:

• Establishes the Office of Regulatory Counsel within the Governor’s office and tasks ORC with drafting and assisting 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 OAL for publication in the California Regulatory Notice Register.
• Provides the ORC is under the direction and control of an executive officer known as the director, who shall be appointed by the Governor and subject to Senate confirmation. Specifies the director’s term is coterminous with that of the appointing power, except the director is subject to reappointment.
• Sunsets the ORC on January 1, 2035.
• States legislative findings and declarations.

Related Legislation:

SB 1104 (Niello, 2024) is nearly identical to this bill and would have established the ORC within the Governor’s Office. SB 1104 was held on the Suspense File in this committee.

Staff Comments:

This bill includes uncodified intent language, which attempts to require personnel and other related costs of establishing the ORC be “absorbed from existing state resources so that there are no new or additional costs incurred to the state.” This uncodified intent language will essentially disappear if the bill is signed into law, and cannot direct how the ORC will be funded or how state resources shall be redirected.

Legislative findings and declarations are not enforceable by themselves as legal mandates. These are statements occasionally made by the Legislature at the beginning of a bill that usually explain the purpose, intent, or reasoning behind the proposed law. They may be codified, but are often not. Generally, legislative findings and declarations may provide context for a proposed law’s purpose and application and do not create directly enforceable legal obligations. This includes being used as a means to circumvent the cost implications of a bill.

Recommended Amendments:

Strike (c) of Section 1.

-- END --

SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION

Senator Steve Padilla

Chair

2025 - 2026 Regular

Bill No: 688 Hearing Date: 3/25/2025

SUBJECT: Office of Regulatory Counsel

DIGEST: This bill establishes, until January 1, 2035, the Office of Regulatory Counsel (ORC) to draft and assist in the preparation, consideration, amendment, and repeal of regulations for a state agency, as specified.

ANALYSIS:

Existing law:

1. Establishes the Government Operations Agency (GovOps), which consists of several departments including the Office of Administrative Law (OAL).
2. The Administrative Procedures Act (APA) governs the procedures for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the OAL.
3. Requires the OAL to provide for the publication of the California Regulatory Notice Register and to include specified information in the register, including notices of proposed action prepared by regulatory agencies, a summary of regulations filed with the Secretary of State (SOS), and a summary of regulation decisions issued, as specified.
4. Defines “regulation” to mean every rule, regulation, order, or standard of general application or the amendment, supplement, or revision of any rule, regulation, order, or standard adopted.

This bill:

1. Establishes the ORC in state government, within the Governor’s Office, under the direction and control of an executive officer who shall be known as the director.
2. Provides that the director’s term of office shall be coterminous with that of the appointing power, except that the director shall be subject to reappointment.
3. Requires the director to be appointed by the Governor, and subject to the confirmation of the Senate.
4. Requires the ORC 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 OAL for publication in the California Regulatory Notice Register, as specified.
5. Includes a repeal date for the ORC of January 1, 2035.

Background

Author Statement. According to the author’s office, “SB 688 will improve the regulatory environment in California by having experienced personnel drafting regulations for all state entities. Having such an office will improve clarity and understanding of California’s regulations which will reduce misinterpretations, ease compliance, and bring better outcomes for Californians striving to comply with state laws and rules.”

Office of Legislative Counsel. Established in 1913, the Office of Legislative Counsel (OLC) has continuously operated in state government for more than a century to assist the Legislature, Governor, and other state officers by providing nonpartisan legal services relating to the legislative process. Beginning in the 1970s, at the request of the Legislature, the OLC began to implement computer capabilities to support the process of drafting and printing legislation. Since then, the office has delivered an array of technology services to improve the efficiency of additional business processes and expand public access to legislative information.

According to its internet website, attorneys in the OLC, with the assistance of highly trained support staff: draft bills, constitutional amendments, resolutions, and proposed amendments to those measures; render legal opinions on issues of constitutionality, statutory interpretation, and other legal matters; provide counsel to the Members and committees of the Legislature; represent the Senate and Assembly in litigation; prepare contracts for services to the Senate and Assembly; provide various legal services to the Governor; assist in the preparation of an initiative measure when requested to do so by 25 or more electors; and assist judges in the drafting of legislation.

Office of Administrative Law. Established in July, 1980, the OAL ensures that agency regulations are clear, necessary, legally valid, and available to the public. Since its creation, OAL has been and continues to be responsible for reviewing administrative regulations proposed by over 200 state agencies for compliance with the standards set forth in California’s APA, for transmitting these regulations to the SOS and for publishing regulations in the California Code of Regulations.

OAL assists state regulatory agencies through a formal training program, as well as through other less formal methods, to understand and comply with the APA. OAL also accepts petitions challenging alleged underground regulations–those rules issued by state agencies which meet the APA’s definition of a “regulation” but were not adopted pursuant to the APA process and are not expressly exempt. OAL also oversees the publication and distribution, in print and online, of the California Code of Regulations and the California Regulatory Notice Register.

Rulemaking Process. OAL is responsible for ensuring that California state agencies comply with the rulemaking procedures and standards set forth in the APA. 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. When adopting regulations, every department, division, office, officer, bureau, board or commission in the executive branch of California state government must follow the rulemaking procedures in the APA (Government Code section 11340 et seq.) and regulations adopted by the OAL, unless expressly exempted by statute from some or all of these requirements.

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.

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, and opportunities for public participation, OAL’s review, and effective dates for the regulations.

The Legislature Enacts Statutes. The People of the State may also enact statutes and constitutional provisions. Administrative agencies adopt, amend, and repeal regulations under the authority granted to them by either constitutional provisions or legislative statute. Unless the Legislature has created an exemption, agencies must follow the procedures in the APA when adopting, amending or repealing regulations.

Generally, OAL has 30 working days to approve or disapprove a regulation after it has been submitted to OAL for review (Government Code section 11349.3). Weekends and state holidays are excluded from counting this 30 working day time period. OAL only has 10 calendar days to approve or disapprove an emergency regulation after it has been submitted to OAL for review (Government Code section 11349.6).

California Regulatory Notice Register. The California Regulatory Notice Register contains notices of proposed regulatory actions by state regulatory agencies to adopt, amend, or repeal regulations contained in the California Code of Regulations. A state agency must complete its rulemaking and submit the rulemaking file to OAL within one year of the date of publication of a Notice of Proposed Action (“Notice”) in the Notice Register (Government Code Section 11346.4(b)). OAL provides online access to current and past issues of the California Regulatory Notice Register online.

The Notice of Proposed Action contains a variety of information about the nature of the proposed regulatory changes including various findings, determinations, statutory authority and the law(s) being implemented. The Notice of Proposed Action also contains procedural information, such as deadlines for submitting comments, scheduling of hearings, and where copies of the Express Terms, Initial Statement of Reasons, and any other supporting information can be obtained. For non-major regulations, the results of the Economic Impact Assessment will be included in the Notice of Proposed Action. If the rulemaking is a major regulation, any comments provided by the Department of Finance (DOF), along with the agency’s responses, will be included in the Notice of Proposed Action.

OAL publishes the Notice Register every Friday. To be published, a Notice must be received by OAL no later than 10 calendar days before the publication date. Section 5, Title 1, California Code of Regulations describes what an agency must submit with its Notice. The Notice for a rulemaking must be published at least 45 calendar days before the close of the public comment period and public hearing, if a hearing is scheduled (Government Code section 11346.4(a)).

Office of Regulatory Counsel. This bill proposes to establish the ORC, within the Governor’s office, and under the direction and control of an executive officer, 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 OAL for publication in the California Regulatory Notice Register. This bill includes a repeal date of January 1, 2035, for the ORC.

The author’s office argues that, OAL “rejects many proposed regulations because of a lack of clarity. This is largely due to the fact that most of the staff of state agencies are generally not trained in drafting regulations. Drafting clear regulations is no easy task for staff who are untrained to do so, especially considering that there are 600-700 proposed regulations annually. While some larger state agencies have attorneys on staff, most state agencies do not, leaving no centralized body to ensure clarity and consistency in the drafting of proposed regulations.”

Back to the Future. This bill is substantially similar to SB 1104 (Niello, 2024) of last year, which would have established the ORC, as specified. That bill was unanimously approved by this committee – however – it was held in the Senate Appropriations Committee Suspense File.

Prior/Related Legislation

SB 1104 (Niello, 2024) would have established the ORC, within 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 OAL for publication in the California Regulatory Notice Register. (Held in the Senate Appropriations Committee Suspense File)

SB 1910 (Johannessen, Chapter 501, Statutes of 1996) required the OAL to make the California Code of Regulations available on the Internet, free of charge, as specified.

SB 726 (Hill, Chapter 870, Statutes of 1993) requires a state agency, when proposing to adopt or amend a regulation that affects small business, to adopt a plain English policy statement overview regarding each proposed regulation containing specified information, to draft the regulations in plain English, as defined, and to make available to the public a noncontrolling plain English summary of a regulation, if the regulation is technical in nature.

FISCAL EFFECT: Appropriation: Fiscal Com.: Local:

SUPPORT:

Acclamation Insurance Management Services

Allied Managed Care and Acclamation Insurance Management Services

California Association of Sheet Metal & Air Conditioning Contractors National Association

California Association of Winegrape Growers

California Attractions and Parks Association

California Builders Alliance

California Business Properties Association

California League of Food Processors

California Retailers Association

California Taxpayers Association

California Trucking Association

Coalition for Small and Disabled Veteran Businesses

Family Business Association of California

Housing Contractors of California

Los Angeles Chamber of Commerce

Orange County Taxpayers Association

Sacramento Regional Builders Exchange (SRBX)

United Chamber Advocacy Network Ucan

OPPOSITION:

None received

ARGUMENTS IN SUPPORT: In support of the bill, the Family Business Association of California writes that, “[t]he number one reason why the Office of Administrative Law rejects proposed regulations is because of a lack of clarity. This is largely due to the fact that most of the staff of state agencies are generally not trained in drafting regulations. Drafting clear regulations is no easy task for staff who are untrained to do so, especially considering that there are 600-700 proposed regulations annually. While some of the larger state agencies do have attorneys on staff, there is no centralized body to ensure clarity and consistency in the drafting of proposed regulations. There are numerous benefits of improving upon this process to ensure clear and concise regulations.”