Analysis Can Help Select Preferred Regulatory Approach. The Legislature passes laws that direct agencies to implement policies, but the laws often do not identify all of the details of how those policies should be implemented. As a result, agencies evaluate different options for implementing the law and develop regulations to clarify the details. When developing regulations, agencies are required to analyze the potential effects of proposed rules—including anticipated benefits and adverse economic effects. The goal of this analysis is to help regulators evaluate trade‑offs between different options and select the approach that achieves the Legislature’s policy goal in the most cost‑effective manner.
Senate Bill 617 Established New Requirements for Major Regulations. Chapter 496 of 2011 (SB 617, Calderon) established a new process for analyzing regulations having an estimated economic impact of greater than $50 million—known as major regulations. It required agencies to develop a more extensive regulatory analysis before major regulations are proposed. In addition, SB 617 required the Department of Finance (DOF) to (1) provide guidance on the methods that agencies should use when analyzing major regulations and (2) review and comment on the analysis before a rule is proposed.