Schwarzenegger halts pending regulations, orders review

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The San Francisco Chronicle

SACRAMENTO (AP) — Gov. Arnold Schwarzenegger halted all pending state regulations Monday while he reviews the new rules’ impact on California’s business climate.

In the second executive order of his brand-new administration, Schwarzenegger said “it is time to reassess the system of state government that is perceived to work against businesses and inhibit growth and economic prosperity.”

The governor’s order says that a recent increase in state regulations drives up the cost of doing business in California and diminishes “competition in the national and global marketplaces for the state’s good and services.”

Aides to Schwarzenegger said they didn’t know how many regulations would be affected, but consumer advocates called the move a victory for business interests.

“The effect of this is to basically undo legislation from the last two years that protects the environment, consumers and public safety,” said Jamie Court, executive director of the Foundation for Taxpayer and Consumer Rights.

Not all laws passed by the Legislature need new regulations to make them work. For those that do require rules, the state department overseeing that industry creates the regulations, which are then reviewed by the Office of Administrative Law to ensure they comply with the legislation.

Approximately 85 regulation packages are pending at the Office of Administrative Law, aides to Schwarzenegger said, but they didn’t know which proposed regulations were halted and phone messages seeking more details were not immediately returned.

The Office of Administrative Law didn’t have an estimate of how many regulations were pending, but it reviews hundreds of regulations each year.

It can take years to craft complicated regulations, said Court, citing the recently approved nurse-to-patient staffing ratios as an example. The ratios were approved by the Legislature in 1999, but the detailed rules for hospitals weren’t finalized until this year.

Because it was already approved, the nurse-staffing regulations won’t be put on hold, said Lea Brooks, spokeswoman for the Department of Health Services.

But it will be reviewed as part of Schwarzenegger’s mandate that orders departments to report on the regulations approved, altered or repealed during Gov. Gray Davis‘ administration. The new governor wants to know what effect these regulations had on California businesses.

Court said Schwarzenegger’s order will duplicate work that is already done when new regulations are being finalized.

Lobbyists for California homebuilders applauded the governor’s order Monday.

“The ones he asked to have reviewed are the ones that may be affecting the performance of business in California, and affecting the health and strength of the California economy,” said Tim Coyle, vice president for governmental affairs for the California Building Industry Association.

“It’s the pebbles, not the boulder,” added Coyle, attributing California’s “hostile business climate” to a steady buildup of small state regulations.

Coyle declined comment on which regulations homebuilders want dropped. But the industry, which aims to build 187,000 homes and apartments in California this year, often expresses dissatisfaction with environmental rules.

Court, the consumer advocate, said the new governor was weighing the rules against “a litmus test of whether it’s good for business.”

“He can’t stop regulation altogether, but he could create weaker or impractical regulations that make it harder to enforce the laws,” Court said.

The order could delay vital rules, Court said, about how emergency rooms bill patients, how the state Medical Board tells the public about legal settlements against doctors, or changes to the state’s drinking water standards.

The executive order will probably not affect on a bill passed last year to reduce carbon dioxide emissions in cars and trucks starting in 2009, said a representative of Assemblywoman Fran Pavley, D-Agoura Hills. Pavley’s legislation, signed by Davis, requires the California Air Resources Board to write regulations by 2005 to “achieve the maximum feasible reduction of greenhouse gases.”

Pavley aide Anne Baker said the first regulations required by the bill are a year away. She also said Schwarzenegger favors the bill’s approach.

“He couldn’t have been stronger in his support for the bill,” she said.

It could slow more than a dozen regulations pending in the state Department of Education, said Eileen Gray, with the legal division. The department produces as many as 25 regulation packages each year, she said.

“To the extent that there are some in-house, they will be stopped,” she said.

But, new teacher quality regulations required under the federal No Child Left Behind act won’t be affected, education officials said, because those are federal mandates.
Associated Press writer Jim Wasserman contributed to this report.
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