Current through Register 2022 Notice Reg. No. 14, April 8, 2022
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
(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
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;
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.
In comparing proposed
regulatory alternatives with an established baseline, an agency
should consider including the following in its analysis:
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
evaluation of the legal and statutory constraints that limit the
selection of regulatory alternatives.
Whenever possible, at least two
alternatives should be compared to the proposed major regulation,
(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
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
(B) Whenever possible, final rather
than intermediate outcomes should be used as measures of
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.
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.
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
(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
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.
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
(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.