The California rulemaking process, Part I

We’ve all heard the expression “The rules are the rules.” But when it comes to making rules in the state of California, the process has its own labyrinth of, well, rules to guide the process. This is Part I. Part II will follow next Friday. 

Which executive branch entity oversees the California rulemaking process to ensure state agencies and departments follow the Administrative Procedure Act (APA)? The Office of Administrative Law (OLA), which is housed in the Government Operations Agency.

Does a regulation have to be called a “regulation” in order for the APA to apply? No state agency is allowed to issue, utilize, enforce, or attempt to enforce any guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule, which is a regulation, unless it has been adopted as a regulation.

Can OAL make a determination whether an agency guideline, criterion, bulletin, manual, instruction, order, standard of general application, or other rule that has not been adopted as a regulation? Yes. OAL must file its determination upon issuance with the Secretary of State, as well as make its determination known to the agency, the Governor, and the Legislature. It also publishes that determination in the California Regulatory Notice Register within 15 days of the date of issuance.

Can an interested person petition a state agency requesting the adoption, amendment, or repeal of a regulation? Yes. This petition must state specified information in a clear and concise manner.

What does a state agency have to do with the petition to adopt, amend, or repeal a regulation? The state agency must notify the petitioner in writing within 30 days if the agency denies the petition indicating why the agency has reached its decision on the merits of the petition.

Does the APA apply equally to all three branches of government? No, it does not apply to an agency in the judicial or legislative branches of state government.

Does the APA apply to all documents prepared by an agency? No, it does not apply to a legal ruling of counsel issued by the Franchise Tax Board or State Board of Equalization, nor to forms or instructions, nor to the internal management of an agency; nor for criteria or guidelines of internal operations.

What is the statutorily-defined purpose of a regulation under the APA? Regulations are to implement, interpret, make specific or otherwise carry out the provisions of the statute.

Does a state agency have to estimate the costs of a proposed regulation? Yes, and the “cost impact” means the amount of a reasonable range of direct costs, or a description of the type and extent of direct costs, that a representative private person or business necessarily incurs in reasonable compliance with the proposed action.

What is the difference between a regular and emergency rulemaking? All regulations are regular, unless they meet the definition of an “emergency,” which means a situation that calls for immediate action to avoid serious harm to the public peace, health, safety, or general welfare.

What does it mean if a state agency has a rulemaking for a “major regulation”? It is a regulation that will have an economic impact on California business enterprises and individuals in an amount exceeding $50 million, as estimated by the agency.

Are state agencies required to file any rulemaking documents with the Secretary of State? Yes. Every state agency must send to the SOS a certified copy of every regulation adopted or amended by it except one that is a building standard. Agencies must also send to the SOS a certified copy of every order of repeal of a regulation.

When do adopted regulations take effect? A regulation or an order of repeal required to be filed with the Secretary of State becomes effective on a quarterly basis (January 1, April 1, July 1, and October 1).

What is the California Code of Regulations? The CCR is the official compilation of all regulations.

What is the California Code of Regulations Supplement? The CCRS is the official publication of weekly updates of the CCR.

What is the California Regulatory Notice Register? The CRNR is the official publication of notices of proposed actions by state agencies, summary of all regulations filed with the SOS in the previous week, summaries of all regulatory decisions for disapproval of regulations, and other materials and determinations.

Is a presumption of a regulation’s validity created by its publication? The publication of a regulation in the California Code of Regulations or California Code of Regulations Supplement raises a rebuttable presumption that the text of the regulation as published is the text of the regulation adopted.

Are the courts required to take judicial notice of regulations? The courts must take judicial notice of the contents of each regulation which is printed or which is incorporated by appropriate reference into the California Code of Regulations as compiled by the OAL.

What is the main stated purpose of the APA? It is the purpose to establish basic minimum procedural requirements for the adoption, amendment, or repeal of administrative regulations.

Does the APA require a state agency to consult with interested parties? No, but a state agency that is considering adopting, amending, or repealing a regulation may consult with interested persons before initiating regulatory action.

Does a state agency need to provide notice of an emergency regulation being proposed? At least five working days before submitting an emergency regulation to the OAL, the adopting agency is generally required to send a notice of the proposed emergency action, including certain information, to every person who has filed a request for notice of regulatory action with the agency.

How may a regulation be adopted as an emergency regulation? If a state agency makes a finding that the adoption of a regulation or order of repeal is necessary to address an emergency, the regulation or order of repeal may be adopted as an emergency regulation or order of repeal.

Does the agency need to make a finding? Yes, any finding of an emergency must include a written statement that contains specified information, as well as a description of the specific facts demonstrating the existence of an emergency and the need for immediate action, and demonstrating, by substantial evidence, the need for the proposed regulation to effectuate the statute.

What does the APA deem to not require an emergency finding? A finding of emergency based only upon expediency, convenience, best interest, general public need, or speculation, is not adequate to demonstrate the existence of an emergency.

How long does an emergency regulatory action remain in effect? No more than 180 days, but the OAL may approve not more than two readoptions, each for a period not to exceed 90 days. However, readoption is only to be permitted if the agency has made substantial progress and proceeded with diligence to comply with specified requirements.

What must every agency make available to the public upon request? A copy of the express terms of the proposed regulation; an initial statement of reasons for proposing the adoption, amendment, or repeal of a regulation; the economic impact assessment required; identification of each technical, theoretical, and empirical study, report, or similar document upon which the agency relied; a description of reasonable alternatives to the regulation and the agency’s reason for rejecting those alternatives; facts, evidence, documents, testimony, or other evidence on which the agency relied.

What is required to be included in the statement of reasons? Among other items, it must contain a statement of the specific purpose of each adoption, amendment, or repeal, the problem the agency intends to address, and the rationale for the determination by the agency that each adoption, amendment, or repeal is reasonably necessary to carry out the purpose and address the problem for which it is proposed.

What “adverse economic impact” must be assessed by a state agency in a rulemaking? A state agency is required 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.

What is the economic impact assessment that must be done for a non-major regulation? A state agency proposing to adopt, amend, or repeal a regulation that is not a major regulation must prepare an economic impact assessment that assesses whether and to what extent it will affect the following: The creation or elimination of jobs within the state; the creation of new businesses or the elimination of existing businesses within the state; the expansion of businesses currently doing business within the state; and, the benefits of the regulation to the health and welfare of California residents, worker safety, and the state’s environment.

What is the economic impact assessment that must be done for a major regulation? Each state agency proposing to adopt, amend, or repeal a major regulation must prepare a standardized regulatory impact analysis, including the creation or elimination of jobs within the state; the creation of new businesses or the elimination of existing businesses within the state; the competitive advantages or disadvantages for businesses currently doing business within the state; the increase or decrease of investment in the state; the incentives for innovation in products, materials, or processes; and, the benefits of the regulations, including, but not limited to, benefits to the health, safety, and welfare of California residents, worker safety, and the state’s environment and quality of life, among any other benefits identified by the agency.

What is the purpose of the regulatory impact analyses? It is to inform the agencies and the public of the economic consequences of regulatory choices, not reassess statutory policy.

What is the baseline for this regulatory impact analysis? The baseline for the regulatory analysis is the most cost-effective set of regulatory measures that are equally effective in achieving the purpose of the regulation in a manner that ensures full compliance with the authorizing statute or other law being implemented or made specific by the proposed regulation.

Is there any review of a standardized regulatory impact analysis for major regulations? Yes, the state agency that has prepared a standardized regulatory impact analysis must submit that analysis to the Department of Finance upon completion.

What is the minimum amount of time required to be provided for a regular rulemaking project? At least 45 days.

To whom does an agency have to mail a notice of regulatory action? Every person who has filed a request to receive such a notice; a representative number of small business enterprises or their representatives that are likely to be affected by the proposed action.

Are there other, required recipients of proposed regulatory actions? They must be published in the California Regulatory Notice Register and be posted on the state agency’s website if the agency has a website.

For how long a period is a notice of proposed regulatory action effective? It cannot exceed one year from the date of the notice. Otherwise, a new notice of proposed action must again be issued, which starts the formal process anew.

How are state agencies required to increase public participation and improve the quality of regulations? They are required to involve parties who would be subject to the proposed regulations in public discussions regarding those proposed regulations, when the proposed regulations involve complex proposals or a large number of proposals that cannot easily be reviewed during the comment period.

What is the notice of proposed regulatory action required to include? A statement of the time, place, and nature of proceedings for adoption, amendment, or repeal of the regulation; reference to the authority under which the regulation is proposed and a reference to the particular code sections or other provisions of law that are being implemented, interpreted, or made specific; an informative digest drafted in plain English in a format similar to the Legislative Counsel’s Digest.