Provides for the detailing of the benefits and costs of proposed rules in the regulatory impact statements

Title of bill

An act to amend the state administrative procedure act, in relation to detailing the benefits and costs of proposed rules in regulatory impact statements

Purpose or general idea of bill

This bill will improve the rule-making process by providing for expanded information on the costs and benefits associated with an agency proposal.

Summary of provisions

Bill §1 sets forth legislative findings that state agency rules should be adopted through a process which provides for open and reasoned consideration of the potential costs and benefits of regulatory action, and that the law should ensure that agency assessments of the costs and the benefits of proposed rules are reasonably accurate and comprehensive.

Bill §§2 and 3 amend subdivisions 4-a and 5 of §202 of the State Administrative Procedure Act (SAPA). The amendments ensure that the assessment of public comments prepared for a revised rule making will take into account estimates of the cost impact of rules which differ significantly from the agency's estimates, as is currently required for assessments prepared for final rule adoptions. The amendments also enhance oversight of agency assessments by providing that comments from regulated parties and the public which assert significant differences in cost estimates must be provided to executive and legislative officers which oversee rule-making.

Bill §4 amends §202-a of SAPA to provide for expanded information in the regulatory impact statement (RIS) accompanying a proposed rule on the benefits and costs associated with the rule. Information on costs would have to relate to both monetary costs and other costs, such as opportunity costs (Le. the value of foregone alternative actions), and address both positive and adverse cost impacts. This section is also amended to provide that the RIS section which addresses paperwork shall specifically cite any implications of the rule for electronic reporting of data.

Effects of present law which this bill would alter

At present, only assessments of public comment prepared for the final adoption of a rule must address cost estimates which differ significantly from the agency's estimates. Currently, the statutory language on the identification of costs and benefits of a proposed rule in the RIS has not been consistently interpreted by agencies to require that the full range of costs and benefits must be addressed.

Justification

The requirement of SAPA §202-a for "regulatory impact statements" has improved the quality of rules by requiring agencies to make explicit their assumptions about the benefits which would result from a particular regulatory proposal, and the costs which would be imposed on regulated parties and others. However, in many cases agencies do not fully address the issues of who would benefit from adoption of a regulation and who would bear the costs.

As a result, agency analysis of the impact of rules is often superficial. Better analysis of the full range of expected costs and benefits of proposed agency actions can ensure that the final version of rules can provide the maximum benefits of regulation at minimum cost to all sectors of society.

Prior legislative history

1997: A.6084 Passed Assembly/3rd reading in Senate. 1998: A.6084-A Passed Assembly/3rd reading in Senate. 1999: A.1447 Passed Assembly/Referred to Senate Commerce Committee. 2000: A.1447 passed Assembly/Referred to Senate Commerce Committee. 2001: A.4133 Passed Assembly/Referred to Senate Commerce Committee. 2002: A.4133 Passed Assembly/Referred to Senate Commerce Committee. 2006: A.6331 Referred to Governmental Operations

Fiscal implications for state and local governments

None.

Effective date

The first of September next succeeding enactment.