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<ns0:Id>20250SB__116199INT</ns0:Id>
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<ns0:Action>
<ns0:ActionText>INTRODUCED</ns0:ActionText>
<ns0:ActionDate>2026-02-18</ns0:ActionDate>
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<ns0:SessionYear>2025</ns0:SessionYear>
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<ns0:MeasureType>SB</ns0:MeasureType>
<ns0:MeasureNum>1161</ns0:MeasureNum>
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<ns0:AuthorText authorType="LEAD_AUTHOR">Introduced by Senator Valladares</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_ORIGINATING">(Coauthors: Senators Choi and Ochoa Bogh)</ns0:AuthorText>
<ns0:AuthorText authorType="COAUTHOR_OPPOSITE">(Coauthors: Assembly Members Alanis, Alvarez, Ávila Farías, Davies, Ellis, Jeff Gonzalez, Hoover, Macedo, and Wallis)</ns0:AuthorText>
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<ns0:Legislator>
<ns0:Contribution>LEAD_AUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Valladares</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Choi</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>SENATE</ns0:House>
<ns0:Name>Ochoa Bogh</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Alanis</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Alvarez</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Ávila Farías</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Davies</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Ellis</ns0:Name>
</ns0:Legislator>
<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Jeff Gonzalez</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Hoover</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Macedo</ns0:Name>
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<ns0:Legislator>
<ns0:Contribution>COAUTHOR</ns0:Contribution>
<ns0:House>ASSEMBLY</ns0:House>
<ns0:Name>Wallis</ns0:Name>
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<ns0:Title> An act to amend Section 11346.3 of the Government Code, relating to state government. </ns0:Title>
<ns0:RelatingClause>state government</ns0:RelatingClause>
<ns0:GeneralSubject>
<ns0:Subject>Administrative regulations: economic impact analysis: State Air Resources Board.</ns0:Subject>
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<ns0:DigestText>
<html:p>Existing law designates the State Air Resources Board as the state agency responsible for the preparation of the state implementation plan required by the federal Clean Air Act, and requires the state board to adopt standards, rules, and regulations that are consistent with the state goal of providing a decent home and suitable living environment for every Californian.</html:p>
<html:p>Existing law, the Administrative Procedure Act, governs, among other things, the procedures for the adoption, amendment, or repeal of regulations by state agencies. Existing law requires a state agency proposing to adopt, amend, or repeal administrative regulations to assess the potential for adverse economic impact on California business enterprises and individuals, as provided. Existing law provides that a regulation or an order of repeal of a regulation becomes effective on a
quarterly basis, as prescribed, except in specified instances.</html:p>
<html:p>This bill would require the State Air Resources Board proposing to adopt, amend, or repeal a regulation to prepare an economic impact assessment that assesses whether and to what extent it will affect low- and middle-income California households and disadvantage communities, as specified. The bill would require the State Air Resources Board, at least 6 months before the adoption, amendment, or repeal of the regulation goes into effect, to transmit to the Legislature this economic impact assessment. The bill would require the appropriate policy committees of the Legislature to hold a joint public hearing on the adoption, amendment, or repeal of a regulation, upon receiving the economic impact assessment, if the adoption, amendment, or repeal of the regulation would raise costs, as specified, and provide that the adoption, amendment, or repeal of the regulation does not go into effect until the joint
public hearing is held.</html:p>
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<ns0:VoteRequired>MAJORITY</ns0:VoteRequired>
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<ns0:FiscalCommittee>YES</ns0:FiscalCommittee>
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<ns0:Election>NO</ns0:Election>
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<ns0:BudgetBill>NO</ns0:BudgetBill>
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<ns0:Preamble>The people of the State of California do enact as follows:</ns0:Preamble>
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<ns0:Num>SECTION 1.</ns0:Num>
<ns0:Content>
<html:p>The Legislature finds and declares all of the following:</html:p>
<html:p>
(a)
<html:span class="EnSpace"/>
The State Air Resources Board is currently required to conduct an economic impact assessment on regulations which affect the economy. This assessment does not evaluate the impacts on California households.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
The State Air Resources Board’s regulations are projected to raise the cost of essential commodities, including, but not limited to, gasoline, diesel, vehicles, services, necessary household consumables, and energy.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
The State Air Resources Board’s regulations impose costs that can disproportionately affect lower income households,
workers, and small businesses.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
While environmental benefits are critical, this act ensures that lawmakers and the public have a clearer understanding of how these new regulations may affect those in these communities.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
This act would not limit the State Air Resources Board’s authority, rather it would establish a straightforward reporting requirement that allows the Legislature to better understand the impacts these regulations have on California families and lower income communities.
</html:p>
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<ns0:BillSection id="id_B1CB760E-B458-401A-9A31-89ACBB11DCA5">
<ns0:Num>SEC. 2.</ns0:Num>
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Section 11346.3 of the
<ns0:DocName>Government Code</ns0:DocName>
is amended to read:
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<ns0:Num>11346.3.</ns0:Num>
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<html:p>
(a)
<html:span class="EnSpace"/>
A state agency proposing to adopt, amend, or repeal any administrative regulation shall 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. For purposes of this subdivision, assessing the potential for adverse economic impact shall require agencies, when proposing to adopt, amend, or repeal a regulation, to adhere to the following requirements, to the extent that these requirements do not conflict with other state or federal laws:
</html:p>
<html:p>
(1)
<html:span class="EnSpace"/>
The proposed adoption, amendment, or repeal of a regulation shall be based on adequate information concerning the need for, and consequences of, proposed
governmental action.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The state agency, before submitting a proposal to adopt, amend, or repeal a regulation to the office, shall consider the proposal’s impact on business, with consideration of industries affected including the ability of California businesses to compete with businesses in other states. For purposes of evaluating the impact on the ability of California businesses to compete with businesses in other states, an agency shall consider, but not be limited to, information supplied by interested parties.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
An economic impact assessment prepared pursuant to this subdivision for a proposed regulation that is not a major regulation or that is a major regulation proposed before November 1, 2013, shall be prepared in accordance with subdivision (b), and shall be included in the initial statement of reasons as required by Section 11346.2. An economic assessment prepared
pursuant to this subdivision for a major regulation proposed on or after November 1, 2013, shall be prepared in accordance with subdivision (c), and shall be included in the initial statement of reasons as required by Section 11346.2.
</html:p>
<html:p>
(b)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
A state agency proposing to adopt, amend, or repeal a regulation that is not a major regulation or that is a major regulation proposed before November 1, 2013, shall prepare an economic impact assessment that assesses whether and to what extent it will affect the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The creation or elimination of jobs within the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The creation of new businesses or the elimination of existing businesses within the state.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The expansion of businesses currently doing business within the
state.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The benefits of the regulation to the health and welfare of California residents, worker safety, and the state’s environment.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
This subdivision does not apply to the University of California, the college named in Section 92200 of the Education Code, or the Fair Political Practices Commission.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Information required from a state agency for the purpose of completing the assessment may come from existing state publications.
</html:p>
<html:p>
(4)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
For purposes of conducting the economic impact assessment pursuant to this subdivision, a state agency may use the consolidated definition of small business in subparagraph (B) in order to determine the number of small businesses within the economy, a specific industry sector, or geographic
region. The state agency shall clearly identify the use of the consolidated small business definition in its rulemaking package.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
For the exclusive purpose of undertaking the economic impact assessment, a “small business” means a business that is all of the following:
</html:p>
<html:p>
(i)
<html:span class="EnSpace"/>
Independently owned and operated.
</html:p>
<html:p>
(ii)
<html:span class="EnSpace"/>
Not dominant in its field of operation.
</html:p>
<html:p>
(iii)
<html:span class="EnSpace"/>
Has fewer than 100 employees.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Subparagraph (A) shall not apply to a regulation adopted by the Department of Insurance that applies to an insurance company.
</html:p>
<html:p>
(c)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
Each state agency proposing to adopt, amend, or repeal a major regulation on or
after November 1, 2013, shall prepare a standardized regulatory impact analysis in the manner prescribed by the Department of Finance pursuant to Section 11346.36. The standardized regulatory impact analysis shall address all of the following:
</html:p>
<html:p>
(A)
<html:span class="EnSpace"/>
The creation or elimination of jobs within the state.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
The creation of new businesses or the elimination of existing businesses within the state.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
The competitive advantages or disadvantages for businesses currently doing business within the state.
</html:p>
<html:p>
(D)
<html:span class="EnSpace"/>
The increase or decrease of investment in the state.
</html:p>
<html:p>
(E)
<html:span class="EnSpace"/>
The incentives for innovation in products, materials, or processes.
</html:p>
<html:p>
(F)
<html:span class="EnSpace"/>
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.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
This subdivision shall not apply to the University of California, the college named in Section 92200 of the Education Code, or the Fair Political Practices Commission.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
Information required from state agencies for the purpose of completing the analysis may be derived from existing state, federal, or academic publications.
</html:p>
<html:p>
(d)
<html:span class="EnSpace"/>
(1)
<html:span class="EnSpace"/>
The State Air Resources Board proposing to adopt, amend, or repeal a regulation shall prepare an economic impact
assessment that assesses whether and to what extent it will affect low- and middle-income California households and disadvantaged communities that includes direct and indirect impacts on family budgets.
</html:p>
<html:p>
(2)
<html:span class="EnSpace"/>
The economic analysis pursuant to paragraph (1) shall be brief and clear so that it could be understood by the general public on how the regulation impacts low- and middle-income households and disadvantaged communities.
</html:p>
<html:p>
(3)
<html:span class="EnSpace"/>
(A)
<html:span class="EnSpace"/>
At least six months before the adoption, amendment, or repeal of the regulation goes into effect, the State Air Resources Board shall transmit to the Legislature the economic impact assessment described in paragraph (1). The assessment to be submitted pursuant to this subdivision shall be submitted in compliance with Section 9795.
</html:p>
<html:p>
(B)
<html:span class="EnSpace"/>
Upon receiving a report from the
State Air Resources Board pursuant to subparagraph (A), if based on the report, the regulation would raise costs on low- and middle-income California households and disadvantaged communities higher than the consumer price index, the appropriate policy committees of the Legislature shall hold a joint public hearing on the regulation.
</html:p>
<html:p>
(C)
<html:span class="EnSpace"/>
Notwithstanding Section 11343.4, until the joint public hearing pursuant to subparagraph (B) is held, the adoption, amendment, or repeal of the regulation shall not go into effect.
</html:p>
<html:p>
(e)
<html:span class="EnSpace"/>
Any administrative regulation adopted on or after January 1,
1993, that requires a report shall not apply to businesses, unless the state agency adopting the regulation makes a finding that it is necessary for the health, safety, or welfare of the people of the state that the regulation apply to businesses.
</html:p>
<html:p>
(f)
<html:span class="EnSpace"/>
Analyses conducted pursuant to this section are intended to provide agencies and the public with tools to determine whether the regulatory proposal is an efficient and effective means of implementing the policy decisions enacted in statute or by other provisions of law in the least burdensome manner. Regulatory impact analyses shall inform the agencies and the public of the economic consequences of regulatory choices, not
reassess statutory policy. The baseline for the regulatory analysis shall be 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.
</html:p>
<html:p>
(g)
<html:span class="EnSpace"/>
Each state agency proposing to adopt, amend, or repeal a major regulation on or after November 1, 2013, and that has prepared a standardized regulatory impact analysis pursuant to subdivision (c), shall submit that analysis to the Department of Finance upon completion. The department shall comment, within 30 days of receiving
that analysis, on the extent to which the analysis adheres to the regulations adopted pursuant to Section 11346.36. Upon receiving the comments from the department, the agency may update its analysis to reflect any comments received from the department and shall summarize the comments and the response of the agency along with a statement of the results of the updated analysis for the statement required by paragraph (10) of subdivision (a) of Section 11346.5.
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