Why do agencies adopt regulations?
All regulations are prompted by the identification of a “problem” that needs to be addressed by the agency through the adoption, amendment, or repeal of regulations in order to enforce or administer a statute. For example, when the Legislature enacts a new program or changes statutes governing existing programs, the Legislature often leaves it up to the agency administering the program to implement the statutory changes. In order to do so, the agency must usually adopt, amend, or repeal regulations in order to avoid use of prohibited “underground regulations.”
Are agencies required to involve the public in preliminary rulemaking activities?
Once a state agency decides to conduct a regular rulemaking action, it engages in preliminary rulemaking activities wherein the agency typically researches and gathers materials and information necessary to develop the documents required to conduct a formal APA rulemaking proceeding. Generally, the rulemaking agency has discretion whether to include the public during this stage of the rulemaking process. If a proposed rulemaking action involves complex proposals or a large number of proposals that cannot easily be reviewed during the comment period, the agency shall involve parties who would be subject to the proposed regulations. This requirement, however, is not subject to OAL or judicial review. (Government Code section 11346.45.)
What documents are needed to start the formal rulemaking process?
An agency uses the materials and information gathered during the preliminary rulemaking stage to develop at least four documents that are needed to initiate the formal rulemaking process. These include:
Express Terms: The text of the proposed regulation will clearly identify any changes to the California Code of Regulations. Proposed additions to regulatory text will appear as underlined and proposed deletions will be appear in strike-through format. The Authority and Reference citations that follow the text of each regulation section identify the statutes on which the section is based.
Notice of Proposed Action: The notice of proposed action contains a variety of information about the nature of the proposed regulatory changes including various findings, determinations, statutory authority and the law(s) being implemented. The notice of proposed action also contains procedural information, such as deadlines for submitting comments, scheduling of hearings (if any), and where copies of the express terms, initial statement of reasons, and any other supporting information can be obtained.
Initial Statement of Reasons: The initial statement of reasons is a document that explains the reasons why the agency is making the proposed regulatory changes. This includes an explanation of the problem being addressed, the purpose of and necessity for, and benefits of the proposed changes. The initial statement of reasons also identifies the factual material upon which the agency relies in proposing the regulations. The initial statement of reasons includes a number of the required determinations, findings and analyses including either the economic impact assessment (for non-major regulations) or standardized regulatory impact analysis (for “major regulations”).
Economic and Fiscal Impact Statement (Form STD. 399): The Form STD. 399 is a Department of Finance form that an agency is required to complete and have signed by the rulemaking agency’s highest ranking official or that official’s delegate. The Form STD. 399 includes information on the estimated economic (private) and fiscal (governmental) monetary impacts of the proposed regulation. Rules governing the Form STD. 399 can be found in the State Administrative Manual, sections 6600 through 6615.
When does the formal rulemaking process begin?
To initiate a formal rulemaking action, an agency publishes a notice of proposed action in the California Regulatory Notice Register. The agency must also mail the notice of proposed action to those persons who have requested notice of regulatory actions, and post the notice of proposed action, express terms, and initial statement of reasons on the agency’s website. (Government Code section 11346.5.) Once the notice of proposed action is published in the California Regulatory Notice Register, the APA rulemaking process is officially started and the agency has one year within which to complete the rulemaking process and submit the completed rulemaking file to OAL.
How may the public comment on a proposed regular rulemaking action?
The APA requires a minimum 45-day period for the public to comment to the agency in writing on the proposed regulation. The notice of proposed action specifies the rulemaking agency name, contact person and address where the comments must be directed and the date the written comment period closes. Members of the public should not submit written comments on regular rulemaking actions to OAL.
Under the APA, a rulemaking agency has the option whether to hold a public hearing on a proposed rulemaking action. If an agency does not schedule a public hearing, any interested person can submit a written request for a hearing to be held. The written request for a hearing must be submitted at least 15 days prior to the close of the written public comment period. If timely requested, the agency must hold a public hearing. (Government Code section 11346.8.) If a public hearing is held, the hearing must be schedule for a date at least 45 days after the notice of proposed action was published. At the public hearing, both written and oral comments must be accepted.
What if the agency makes changes to the originally proposed text?
After the initial public comment period, a rulemaking agency will often decide to change its initial proposal either in response to public comments or on its own. The agency must then decide whether a change is nonsubstantial, substantial and sufficiently related, or substantial and not sufficiently related.
Nonsubstantial changes do not alter the regulatory effect of the proposed provisions; therefore, no further notice is required.
Substantial changes alter the meaning of the regulatory provisions and require further notice to the public. Substantial changes that are sufficiently related (i.e., reasonably foreseeable based on the notice of proposed action) must be made available for public comment for at least 15 days. Therefore, before a rulemaking agency adopts such a change, it must mail a notice of opportunity to comment on proposed changes along with a copy of the text of the proposed changes to each person who has submitted written comments on the proposal, testified at the public hearing, or asked to receive any notices of proposed modification. The agency must also post this notice on its website. No public hearing is required. The public may comment only on the proposed modifications in writing. The agency must then consider any comments received during the 15-day comment period that are directed at the proposed changes. An agency may conduct more than one 15-day opportunity to comment before the final version is adopted.
If a change is substantial, but not sufficiently related to the original proposal (i.e. not reasonably foreseeable based on the notice of proposed action), the agency must then publish another 45-day notice in the California Regulatory Notice Register similar to the original notice of proposed action. These changes are uncommon.
What if the agency adds documents to the rulemaking record?
A rulemaking agency must specifically identify any material the agency is relying upon for the proposed rulemaking in the initial statement of reasons. If during a rulemaking proceeding an agency decides to rely on material that the agency did not identify in the initial statement of reasons, the agency must make the document available for comment for 15 days. This notice and comment process is similar to the 15-day notice for substantial, sufficiently related changes to the regulation text.
What does the rulemaking agency do with public comments?
A rulemaking agency must summarize and respond to timely comments that are directed at the proposal or at the procedures followed by the agency during the rulemaking action. For each comment, the agency must include either an explanation of how the proposed action has been changed to accommodate the comment or state the reasons for rejecting the comment. In summarizing and responding to public comments, the agency must demonstrate that it understood and considered the comment. The summary and response to comments is included as part of the rulemaking file in a document called a Final Statement of Reasons. (Government Code section 11346.9.)
What does OAL do in reviewing a regular rulemaking action?
A rulemaking agency must transmit a rulemaking action to OAL for review within one year from the date that the notice was published in the California Regulatory Notice Register. Once submitted, OAL has 30 working days to conduct a review of the rulemaking record to ensure that the agency satisfied the requirements of the APA and OAL’s regulations. OAL will then either approve the rulemaking action and file the proposed regulation with the Secretary of State or disapprove the rulemaking action.
When does an approved regulation become effective?
Generally, regulations become effective on one of four quarterly dates based on when the final regulations are filed with the Secretary of State: January 1, if filed between September 1 and November 30; April 1, if filed between December 1 and February 29; July 1, if filed between March 1 and May 31; and October 1, if filed between June 1 and August 31. Effective dates may vary, however, if a different effective date is provided for in statute or other law, if the adopting agency requests a later effective date, or if the agency demonstrates good cause for an earlier effective date.