It’s no secret that the Legislature has been AWOL on pro-growth
and job-creating

Some Senate Republicans proposed tying economic development legislation
to tax extensions for the state budget earlier this year. That effort died on
the vine, but the seeds were planted for limited reform of the state’s
regulatory system.

A tender shoot emerged this week with the announcement by Senate Pro Tem
Darrell Steinberg of legislation to add a beefed-up economic impact analysis
requirement for new state regulations.

The measure is not as sweeping, mandatory or enforceable as, say, legislation proposed by
Senator Anthony Cannella
, but it has one potential attribute that the latter
bill manifestly did not have. It can pass.

The legislation, as proposed anyway, is a small step in the right direction.
If signed and implemented by the Governor, the measure would:

  1. Require the Department of Finance to develop
    rigorous methodologies for economic impact analyses on new regulations
    proposed by state agencies.
  2. Require state agencies proposing new major
    regulations (an economic impact greater than $50 million) to prepare a
    comprehensive economic analysis, including a cost-effectiveness analysis.
  3. Require the Department of Finance to review
    the analysis to ensure it adheres to the methodological criteria.
  4. Require regulating agencies to use the
    analysis to determine the most cost-effective regulatory alternative,
    which is used as the default regulatory option.
  5. If the agency adopts anything other than the
    most cost-effective option, it must state on the record why and justify
    using something other than the most cost-effective alternative.

Should it pass the Legislature, the measure – SB
by Senators Ron Calderon and Fran Pavley – will need to be implemented
by Governor Brown. No matter how comprehensive or mandatory the legislation,
only a Governor can ensure truly improved regulatory transparency and
accountability. Since regulation is an executive branch function, a commitment
to regulatory reform must be made by the Administration, and carried forward to
each succeeding Administration.

No matter the outcome of this legislation, the debate will continue,
with the Little Hoover Commission preparing to release soon its year-long
of the state’s regulatory process.

Follow Loren on Twitter: @KayeLoren