Rulemaking Protocol

The Program Department or Legal Division identifies the need for a new regulation/amendment based on new legislation, court decisions or changes in interpretation of existing law which have general taxpayer impact. The Department then drafts the regulation and meets with industry/interested parties to identify and resolve issues and language. The Department prepares an issue paper, which includes revenue and cost estimates, sends the issue paper through the approval process and then to the Board Committee for consideration. The issue paper identifies either in the body or by attachment the "consent" amendments as well as proposed amendments over which the staff and the industry group may still have a dispute. Following the Committee meeting, the Committee makes a recommendation for Board action. The Board approves the Committee report and decides whether to authorize publication.

After Board authorization to publish, the Regulations Coordinator in the Board Proceedings Division submits the Notice of Proposed Regulatory Action to the Office of Administrative Law for publication in the California Regulatory Notice Register, mails the notice to interested parties, and distributes it to Board staff. The Regulations Coordinator also sends the revenue estimate to the Department of Finance and to legislative committees.

The proposed regulation must be noticed in the California Regulatory Notice Register at least 45 days prior to the public hearing and close of the public comment period.

Public Hearing

No sooner than 45 days after the date of publication, the Board holds public hearings on the proposed regulatory action. The Board considers written and oral testimony and ultimately adopts, amends, or repeals the regulation.

At the hearing, the Assistant Chief Counsel for the department proposing the regulation describes the proposed regulatory action and recommends that the Board adopt the proposal.

The Chair calls interested parties to testify. The Board may also ask staff to respond to the testimony and answer any questions raised by the member of the affected public.

The Board may continue a public hearing by announcing the continuance at the scheduled public hearing or by posting a notice at the entrance to the Board Room on the originally scheduled date. The Board Proceedings Division notifies the Office of Administrative Law and interested parties of the new public hearing date.

Adoption

After the Board adopts the regulation, as published, or with only non-substantial changes, the regulation is forwarded to the Office of Administrative Law for approval and filing with the Secretary of State.

If the Board adopts the regulation with changes that are sufficiently related to the original version, the full text, with the changes clearly indicated, is made available to the public for at least 15 days before the agency adopts the proposed regulation. The Regulations Coordinator in the Board Proceedings Division sends the changed version to interested parties who commented orally or in writing. At the next Board meeting following 15 days from the date the changed version is made available to the public, the Chief Counsel recommends that the Board adopt the changed version for filing with the Office of Administrative Law.

If the Board makes changes to the proposed regulation that are not sufficiently related, the entire process begins again.

A Final Statement of Reasons must accompany regulations submitted to the Office of Administrative Law for approval. The Final Statement of Reasons must include a response to every public comment submitted either orally or in writing regarding the proposed regulation.

Office of Administrative Law

The Office of Administrative Law is charged with the review of regulations as provided in the Administrative Procedure Act (Government Code Sections 11340 and following).

The Office of Administrative Law has 30 working days to review the regulation. If approved, the Office of Administrative Law sends the regulation to the Secretary of State for filing. If the regulation is disapproved, the Office of Administrative Law returns it to the Board Proceedings Division for amendment and resubmission within 120 days.

Effective Date

Beginning January 1, 2013, unless an exemption applies, Government Code section 11343.4 states the effective date of an approved regulation is determined by the date the regulation is filed with the Secretary of State as follows:

  1. January 1 if the regulation or order of repeal is filed on September 1 to November 30, inclusive.
  2. April 1 if the regulation or order of repeal is filed on December 1 to February 29, inclusive.
  3. July 1 if the regulation or order of repeal is filed on March 1 to May 31, inclusive.
  4. October 1 if the regulation or order of repeal is filed on June 1 to August 31, inclusive.

Exceptions to this rule are regulations adopted pursuant to a statute requiring a specific date, in which case the regulation is effective on the date prescribed by the statute, or a request by the Board for an earlier or later effective date. The Board must show good cause for an earlier effective date.

Emergency Regulations

When the Board makes a finding that the adoption or amendment of a regulation or order of repeal is necessary for the immediate preservation of the public peace, health and safety or general welfare, the Board may adopt, amend or repeal a regulation on an emergency basis as provided in Government Code Section 11346.1. The emergency regulation is only effective for 120 days unless it is adopted through the formal regulatory process.

Request From Public to Adopt, Amend, or Repeal a Regulation

Except as otherwise provided by statute, any person may petition the board to adopt, amend or repeal a regulation. The Board must act on such petitions within 30 days of receipt. However, this time may be extended upon agreement of the petitioner. This procedure is set out in Government Code Sections 11340.6 and 11340.7.

The Chief Counsel will present the petition and the staff recommendation to the Board. The Board may either grant the petition and set the regulation for public hearing or deny the petition.

Any interested party may request reconsideration of the Board's action on a petition to amend, adopt, or repeal within 60 days of the Board's action.