Senate Passes Senator Wiener’s Bill To Strengthen California’s Ability to Protect Consumers, Patients, First Responders, the Environment, and Workers
SB 1123 streamlines the enactment of regulations that have a significant public benefit, empowering California to set standards that protect the public from climate change, protect consumers from unfair business practices, set healthcare coverage standards, and rein in wealthy corporations.
SAN FRANCISCO – The Senate voted 26-8 to pass Senator Scott Wiener’s (D-San Francisco) Senate Bill (SB) 1123, legislation to streamline the process of adopting regulations — including regulations that implement new laws — that have significant public benefits. As the Trump Administration continues its rampage eliminating important protections for the public, California’s ability to set standards that protect the public is more important than ever. The bill heads next to the Assembly.
“As the federal government takes a chainsaw to one critical protection after another, California needs to shape up our own ability to protect the public,” said Senator Wiener. “Right now it takes too long and costs too much for the government to respond to challenges facing the public. I’ve seen firsthand how urgent issues facing California can slam into the bureaucratic reality of process, forcing millions of people to wait years for affordable healthcare, clean air and water, and protections from scams. I’m proud my colleagues stood with me today to restore California’s ability to set the rules of the road, and I look forward to advancing this bill through the Assembly.”
The current process California uses to enact major regulations — such as those that protect Californians from asthma-inducing pollutants or scams against seniors — requires a lengthy assessment of the regulation’s potential impact on the economy, especially industry. Completing the “Standardized regulatory impact assessment” (SRIA) can take an average of 590 days and cost taxpayers $1.2 million. SB 1123 ensures that the process that triggers such an assessment includes benefits to the public, helping critical public safeguards avoid costly delays.
SB 1123 could help bypass this expensive delay for major regulations with a significant public benefit by shifting to a system where agencies must account for any offsetting benefits for the proposed regulation when determining whether a proposed regulation would result in an economic impact greater than $50 million.
In 2011, Senate Bill 617 (Calderon) was signed into law establishing additional regulatory impact assessment standards for major regulations with a projected regulatory impact on business and residents of over $50 million. Then in 2013, The Department of Finance (DOF) adopted regulations for state agencies to follow when conducting a Standardized Regulatory Impact Assessment (SRIA) which takes into account quantitative, monetary, and nonmonetized impacts.
However, as a result of DOF’s regulations, when the economic impact of a regulation is being assessed, an agency must take into account the absolute value of all benefits and costs of the proposed regulatory action, instead of the net benefits.
This means that if the proposed rulemaking action is anticipated to produce $26 million in benefits and $25 million in costs, per the current department’s calculations, it would result in an economic impact of $51 million, triggering a major regulation and delaying the process. SB 1123 would require an agency to account for any offsetting benefits from the proposed regulation when determining whether a proposed regulation would result in an economic impact greater than $50 million.
A bill intended to require agencies to assess the costs of a proposed rulemaking has resulted in a process that is now frequently leveraged to impede the implementation of any legislative victory. This process frequently offers the state’s wealthiest corporations a unique path to delay, frustrate, and raise the cost of implementing legislatively intended oversight and implementation, even when such oversight would self-evidently save the state money.
Completing a SRIA is a lengthy, expensive process for agencies. Agencies that anticipate promulgating a major regulation must submit a list of all their anticipated major regulations no later than February 1st or no later than 60 days prior to filing a notice of proposed action with OAL. Once an agency, like CARB, has completed the SRIA, the SRIA must submit the completed assessment to the Department of Finance who then has 30 days to review the completed assessment.
In order to develop the assessment itself, the agency must engage in significant stakeholder engagement and expert consultation. This is true even if the regulation would result in a benefit to the public that vastly exceeds the projected costs of a regulation. The resulting SRIAs range from 50 to over 150 pages long and can delay the adoption of regulations for a few months or several years. DOF may also comment on agency SRIAs, further delaying the adoption of regulations as the regulating agency must revise their assessment.
Over 300 regulations were subject to the major regulations process between 2014 to 2026. This includes agencies such as the: Governor’s Office of Business and Economic Development, Department of Insurance, California Department of Resources Recycling and Recovery, California Health Benefit Exchange, Department of Conservation, Franchise Tax Board, Department of Industrial Relations, State Water Resources Control Board, CalCannabis, Managed Health Care, California Secure Choice Retirement Savings Investment Board, CalEPA, Board of Forestry and Fire Protection, California Highway Patrol, California Department of Alcoholic Beverage Control, Department of Justice, Department of Public Health, Department of Tax and Fee, Department of Transportation, Department of Fish and Wildlife, Department of Food and Agriculture, Department of Pesticide Regulation, California Privacy Protection Agency, CalSavers Retirement Savings Board, California Air Resources Board, California Energy Commission, and California Department of Public Health.
SB 1123 is sponsored by the Consumer Federation of California, and supported by a broad coalition of support, including the California Professional Firefighters, California Federation of Labor Unions, California Association of Realtors, and other consumer, environmental, and labor groups.
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