Current through Register 2024 Notice Reg. No. 12, March 22, 2024
(a) In
conducting the SRIA required by Section
11346.3(c) of the
code, an agency shall use an economic impact method and approach that has all
of the following capabilities:
(1) Can
estimate the total economic effects of changes due to regulatory policies over
a multi-year time period.
(2) Can
generate California economic variable estimates such as personal income,
employment by economic sector, exports and imports, and gross state product,
based on inter-industry relationships that are equivalent in structure to the
Regional Industry Modeling System published by the Bureau of Economic
Analysis.
(3) Can produce (to the
extent possible) quantitative estimates of economic variables that address or
facilitate the quantitative or qualitative estimation of the following:
(A) The creation or elimination of jobs
within the state;
(B) The creation
of new businesses or the elimination of existing businesses within the
state;
(C) The competitive
advantages or disadvantages for businesses currently doing business within the
state;
(D) The increase or decrease
of investment in the state;
(E) The
incentives for innovation in products, materials, or processes; and
(F) 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.
(b) The department's most current
publicly available economic and demographic projections, which may be found on
the department's website, shall be used unless the department approves the
agency's written request to use a different projection for a specific proposed
major regulation. Such approval shall be made on a case-by-case basis. An
agency that anticipates that it will take more than one year to develop a major
regulation is encouraged to work with the department in determining the most
appropriate projections to use.
(c)
Costs and benefits shall be separately identified for different groups of
agencies, businesses and individuals if the impact of the regulation will
differ significantly among identifiable groups.
(d) The agency shall compare regulatory
alternatives with a baseline that reflects the anticipated behavior of
individuals and businesses in the absence of the proposed major regulation and
shall identify the baseline it used.
(e) In comparing proposed regulatory
alternatives with an established baseline, an agency should consider including
the following in its analysis:
(1) A
description of feasible alternatives to the proposed major regulation and the
rationale for choosing the proposed major regulation over the other
alternatives considered. This description should also include:
(A) An explanation of how the need for the
proposed major regulation affects the selection of regulatory
alternatives;
(B) An evaluation of
the legal and statutory constraints that limit the selection of regulatory
alternatives.
(2)
Whenever possible, at least two alternatives should be compared to the proposed
major regulation, including:
(A) An
alternative that could achieve additional benefits beyond those associated with
the proposed major regulation; and
(B) A next-best alternative that would not
yield the same level of benefits associated with the proposed major regulation,
or is less likely to yield the same level of benefits.
(3) A comparison of the cost-effectiveness of
different alternatives.
(A) Both total and
incremental benefits and costs should be estimated. Incremental benefits and
costs are the differences between the estimates associated with the
alternatives considered.
(B)
Whenever possible, final rather than intermediate outcomes should be used as
measures of effectiveness.
(C) In
cases where the proposed major regulation addresses more than one measure of
effectiveness, weights should be applied to different categories of
effects.
(D) The uncertainties
associated with the estimates should be discussed.
(4) If there are significant differences
between the incidence or timing of costs and benefits of a regulation,
distributional effects should be addressed, including how the effects of the
regulation are distributed, for example, by industry, income, race, sex, or
geography, and how the effects are distributed over time.
(5) The assumptions, analytical methods, and
data used in the analysis should be documented.
(A) To the extent possible, the analysis
should rely on peer-reviewed literature.
(B) The source for all original information
should be documented.
(f) An analysis of estimated changes in
behavior by businesses and/or individuals in response to the proposed major
regulation shall be conducted and, if feasible, an estimate made of the extent
to which costs or benefits are retained within the business and/or by
individuals or passed on to others, including customers, employees, suppliers
and owners.
(g) For each assessment
of the value of benefits of the proposed major regulation required by section
11346.3(c)(1)(F)
of the code, the agency shall describe the applied analytical methods and data
sources used and the results of that analysis.
(1) The agency's assessment may rely on
current and (if applicable) projected market transaction data where a market
exists that can directly reveal the quantity or monetary value of a projected
benefit of the proposed major regulation.
(2) The agency may use an indirect approach
(e.g., use values derived from related markets) in cases where the value of the
benefits can be inferred from actual choices made by individuals in related
markets. The assessment should rely on current and (if applicable) projected
market transaction data.
(3) The
agency may use a direct approach (e.g. use values from surveys), estimating the
value of the benefits based on hypothetical choices made by individuals
responding to a survey.
(4) The
agency may estimate the value of the benefits based upon an existing study of
another regulatory policy with similar subject or physical characteristics.
This estimate should describe how the agency took into account the differences
in the characteristics (such as time span, specific benefits to value,
population, and other socio-economic factors) between the study and the
proposed major regulation.
(h) In assessing the effects of a regulatory
proposal on the General Fund and special funds of the state and affected local
government agencies attributable to the proposed major regulation, including
the cost of enforcement and compliance to the agency, an agency shall follow
the Department of Finance instructions in the State Administrative Manual
sections 6601,
6602, and
6604 through
6616.
1. New section
filed 10-29-2013; operative 11-1-2013 pursuant to Government Code section
11343.4(b)(3)
(Register 2013, No. 44).
Note: Authority cited: Section
11346.36,
Government Code. Reference: Sections
11342.548,
11346.3
and
11346.36,
Government Code.
