Key Bills Would Reform Bad Regulations

APRIL 13, 2011

By KATY GRIMES

With more than 28,000 pages of regulations in California, several legislators are insisting that a few tweaks to regulatory reform can bring businesses and jobs back to the state.

There are several new bills addressing regulatory reform, including reviewing or sunsetting regulations after five years. While they are proceeding through the committee process, the bills’ authors are facing push back from labor unions and those who receive union support.

Said Bakersfield Republican Senator Jean Fuller recently:

SB 401 and SB 553 by are two reforms to our regulatory system that would provide a check on the regulatory actions of agencies such as CARB. Together, these reforms would simply allow for a five-year review of all new regulations and a longer enactment period for major regulations.  If cap and trade is allowed to move forward, these two reform bills would allow businesses and individuals sufficient time to review and prepare for the new rules before they took effect, and they would also allow an opportunity to review five years from the inception of a regulation to determine if the new regulations are having the desired effect and not causing undo economic harm.

In the Senate Governmental Organization Committee on Tuesday, Fuller presented one reform proposal. She dropped SB 553 from the committee agenda, and instead agreed to co-author a similar regulatory reform bill with Democratic Sen. Rod Wright of Inglewood, according to Fuller’s staff.

Fuller said it is important to examine how effective a regulation has been during the previous  five years, to hear public comment and to bring to light problems that could be resolved by new regulations or legislation.

Committee analysis reports that SB 410 requires that every regulation proposed by an agency after January 1, 2012 must:

* Include a provision repealing the regulation in five years;

* Prohibit the Office of Administrative Law from approving a proposed regulation unless it contains repeal provisions;

* Authorize an agency, in the year prior to a regulation’s scheduled repeal, to amend the regulation to extend the repeal date after complying with certain public-hearing requirements.

Manufacturers’ Support

Together with several other business associations, a representative from the California Manufacturers Association said they “wholeheartedly” support SB 401. “It’s very important to get more public scrutiny.”

Opposing testimony got interesting with Bill Magavern, chief lobbyist for the Sierra Club.  He said that, while there were areas of agreement with the bill, particularly on the need for job creation, the Sierra Club was opposing Fuller’s bill because it would impose an across-the-board sunset mandate. Chairman Wright then challenged him.

Magavern argued that the current recession was caused by rampant greed, not by stiff regulations. He said that removing regulations would threaten public safety, as well as the state’s natural resources.

“Agencies could extend a regulation that is working,” Wright explained to Magavern. “The repeal date would  force agencies to look at the regulation.”

Agencies can extend the regulations if a review process by the agency determines that the regulations are working.

Wright argued that bad regulations are currently allowed to continue indefinitely without review, and asked, “What if there is a bad regulation?”

Magavern argued that much of what happened in the housing crisis and energy crisis was because regulations were not enforced, or had been lessened.

“Regulations save lives,” a representative from the California Labor Federation said.

“The current regulatory process works well,” said a representative of the longshore and warehouse union.

Review Needed

But Fuller argued that taxpayers want a review of regulations, and a chance to be heard about the effects of regulations.

“We tried to keep it simple and straightforward,” said Todd Moffitt, Fuller’s legislative director. “And the hearing process allows members of the public to come forward and tell about the impact of regulations.”

A companion bill is SB 396, authored by Sen. Bob Huff, R-Diamond Bar. It calls for a system-wide review of more than 17,000 pages of state business regulations.

SB 396 requires all state departments to review regulations created before 1990, and to provide the information to the Legislature for analysis.  Huff’s bill would also formulate a process for reviewing regulations every five years.

“We must never forget that business is the job-engine creator in California,” said Huff in a recent press statement. “Small business is California’s largest employer and it should be the state Legislature’s common interest to review and get rid of needless and senseless mandates that are crushing economic development. With more than two million Californians out of work, it’s time to shine a light on all regulations to see if they are helping or hurting.”

Fuller’s bill will remain in the committee on a technicality and was granted reconsideration. Wright apparently closed the vote before all Senators could vote on it. Huff’s bill made it out of the committee and will be heard next in the Rules Committee.

Consumer groups, growers, builders and contracting associations also supported the bill.

Most of the opposition to the reform bill came from labor unions including the teamsters, the California Labor Federation, the United Food and Commercial Workers, the California Nurses Association and the Service Employees International union.