An act to amend Sections 11346.3, 11346.5, 11349, 11349.1, and 11349.3 of, and to add Section 11346.37 to, the Government Code, relating to state government.
AB 2366 would expand California’s Administrative Procedure Act rulemaking requirements to require state agencies to evaluate the cost-of-living effects of proposed regulations on residents, in addition to existing economic impacts on businesses and individuals. For nonmajor regulations, agencies would have to assess cost-of-living impacts in their economic impact assessments; for major regulations, those impacts would have to be addressed in the standardized regulatory impact analysis. The bill defines cost-of-living impacts to include changes in the costs of essentials and consumer staples such as housing, transportation, food, taxes, and health care.
The bill also creates new oversight and review steps. The Legislative Analyst’s Office would be required to develop a standardized cost-of-living methodology, independently analyze major regulations for adequacy and cost-of-living effects, and identify ways to reduce costs if impacts are significant. The Department of Finance would be required to maintain an annual regulatory economic burden tracker showing cumulative regulatory costs by sector. In addition, notices of proposed regulations would need to include a more detailed statement of economic impact results and agency responses to Legislative Analyst’s Office comments.
AB 2366 would further change Office of Administrative Law review standards by adding cost-of-living impacts as an explicit criterion for approval or disapproval of regulations. For major regulations, the office would have 60 working days instead of 30 to act, and it would have to hold a public hearing within 30 working days. If a regulation is disapproved in part because of a significant cost-of-living impact, the agency would be required to pursue a less costly alternative or explain why that is infeasible. The bill also requires the office to use the Legislative Analyst’s Office methodology when reviewing cost-of-living impacts.
The bill’s overall impact would be to make state rulemaking more cost-sensitive and more transparent, while adding new analytical and procedural obligations for agencies, the Department of Finance, the Legislative Analyst’s Office, and the Office of Administrative Law. It would not directly change substantive program laws, but it would change how regulations are evaluated, noticed, reviewed, and potentially rejected under the Government Code provisions governing rulemaking.
The available legislative history suggests the bill has received favorable committee support, with unanimous do-pass votes in committee and no recorded opposition in the provided vote history. The general sentiment appears to be supportive of stronger oversight of regulatory costs and greater attention to affordability, though the bill’s added workload, longer review timelines for major regulations, and expanded analytical requirements could be points of concern for agencies and regulators.
AB 2366 would amend the Administrative Procedure Act provisions in the Government Code governing rulemaking by state agencies and review by the Office of Administrative Law. It adds cost-of-living impacts as a required factor in economic impact assessments and standardized regulatory impact analyses, requires a new statewide methodology from the Legislative Analyst’s Office, and creates a regulatory economic burden tracker within the Department of Finance. It also expands notice requirements, adds a new review standard for the Office of Administrative Law, and lengthens the review period for major regulations to 60 working days with a required public hearing. The bill would affect state agencies that adopt regulations, the Office of Administrative Law, the Legislative Analyst’s Office, and the Department of Finance, while leaving the underlying substantive statutes being implemented unchanged.
The bill appears to have generally positive momentum based on the committee votes provided, which were unanimous and advanced the measure through committee stages. The framing of the bill suggests a policy goal of improving affordability and ensuring regulations are evaluated for their effects on residents’ everyday costs, which is likely to appeal to members concerned about the cost of living. No transcript excerpts were provided, so there is no recorded debate to indicate formal opposition or amendments, but the structure of the bill suggests it is intended as a regulatory oversight measure rather than a controversial policy reversal.
The main likely points of contention are procedural burden and regulatory delay. Agencies may object to the added analytical requirements, the need to submit analyses to the Legislative Analyst’s Office, and the Department of Finance’s role in selecting outside contractors. The Office of Administrative Law may also face a heavier workload and longer deadlines for major regulations, which could slow implementation of new rules. Supporters are likely to emphasize affordability, transparency, and cumulative burden tracking, while critics may argue that the bill adds complexity, duplicates existing economic review, or could make it harder to adopt timely regulations even when they serve health, safety, environmental, or other public purposes.