BILL ANALYSIS                                                                                                                                                                                                    
                                                               AB 2328
                                                                       
                      SENATE COMMITTEE ON ENVIRONMENTAL QUALITY
                        Senator S. Joseph Simitian, Chairman
                              2009-2010 Regular Session
                                           
           BILL NO:    AB 2328
           AUTHOR:     Niello
           AMENDED:    April 19, 2010
           FISCAL:     Yes               HEARING DATE:     June 14, 2010
           URGENCY:    No                CONSULTANT:       Randy Pestor
            
           SUBJECT  :    AIR RESOURCES BOARD MEMBERSHIP
            SUMMARY  :    
           
            Existing law  :
           1) Provides the California Air Resources Board (ARB) with  
              primary responsibility for control of mobile source air  
              pollution, including adoption of rules for reducing vehicle  
              emissions and the specification of vehicular fuel  
              composition.  (Health and Safety Code 39000 et seq. and  
              39500 et seq.).  ARB must coordinate efforts to attain and  
              maintain ambient air quality standards.  (39003).  The six  
              ARB members are appointed by the Governor, with Senate  
              consent, on the basis of their demonstrated interest and  
              proven ability in the air pollution field and their  
              understanding of general public needs in connection with  
              air pollution problems.  (39510).  ARB members must have  
              the following qualifications:
              a)    One member with training and experience in automotive  
                 engineering or closely related fields.
              b)    One member having training and experience in  
                 chemistry, meteorology, or related scientific fields,  
                 including agriculture or law.
              c)    One member that is a physician and surgeon or an  
                 authority on air pollution health effects.
              d)    Two members that are public members.
              e)    One member having experience under a), b) or c)  
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                 above, or having experience in the field of air  
                 pollution control.
              f)    Five members that are board members from certain air  
                 pollution control districts or air quality management  
                 districts that reflect the above qualitative  
                 requirements to the extent practicable.
           2) Requires each state agency to consolidate its existing  
              staff functions relating to contract opportunities for  
              small business into a single point of contact for small  
              businesses and designate a small business advocate as a  
              liaison to small business suppliers (Government Code  
              14846), and creates the Office of Small Business Advocate  
              within the Office of Planning and Research (OPR) with  
              various responsibilities.  (65054 et seq.).
           3) Under the Administrative Procedure Act (APA) (11340 et  
              seq.) establishes rulemaking procedures and standards for  
              state agencies.  State regulations must also be adopted in  
              compliance with regulations adopted by the Office of  
              Administrative Law (OAL).  The APA, among other things: 
              a)    Requires every agency to prepare and submit a  
                 specified notice of the proposed action and make certain  
                 information available to the public (e.g., draft  
                 regulation in "plain English;" statement of reasons for  
                 proposing the adoption, amendment, or repeal of a  
                 regulation; evidence to support a determination that the  
                 action will not have a significant adverse economic  
                 impact on business).  (11346.2).  The statement of  
                 reasons must identify each technical, theoretical, and  
                 empirical report upon which the agency relies in  
                 proposing the regulation (11346.2(b)(2)), and ARB must  
                 make this information public that is related to, but not  
                 limited to, air emissions, public health impacts, and  
                 economic impacts before the comment period for any  
                 regulation proposed for adoption by the ARB (Health and  
                 Safety Code 39601.5). 
              b)    Requires state agencies in proposing to adopt, amend,  
                 or repeal any regulation to assess the potential for  
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                 adverse economic impact on California business  
                 enterprises and individuals.  In assessing the potential  
                 for adverse economic impact, state agencies must meet  
                 certain requirements (e.g., be based on adequate  
                 information concerning the need for, and consequences  
                 of, proposed action; consider industries affected  
                 including the ability to compete with businesses in  
                 other states).  State agencies must also assess whether,  
                 and to what extent, regulations will affect certain  
                 matters (e.g., creation or elimination of jobs in the  
                 state, creation of new businesses or elimination of  
                 existing businesses in the state, expansion of  
                 businesses currently doing business in the state).   
                 (Government Code 11346.3).
              c)    Requires the notice of proposed adoption, amendment,  
                 or repeal of a regulation to include certain matters  
                 (e.g., include specified information if there may be a  
                 significant, statewide adverse economic impact;  
                 description of all cost impacts to be incurred by a  
                 private person or business; statement of the results of  
                 the economic impact assessment).  (11346.5).
            This bill  :
           1) Commencing on and after January 1, 2011, requires at least  
              one of the 11 ARB members to be a small business owner.
           2) Defines a "small business" owner with a cross-reference to  
              that term defined under the Small Business Procurement and  
              Contract Act (Government Code 14837) (e.g., independently  
              owned and operated with principal office in California, 100  
              or fewer employees, annual gross receipts of $10 million or  
              less).
            COMMENTS  :
            1) Purpose of Bill  .  According to the author, "AB 2328  
              requires that one of the members of the [ARB] be an owner  
              of a small business.  This policy change acknowledges the  
              impact that CARB regulations have on the business  
              community, and especially the small business community."
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            2) Support and opposition concerns .  According to the National  
              Federation of Independent Business (NFIB), "California  
              small businesses compose approximately 98 percent of all  
              businesses in the state.  They employ over 50 percent of  
              private sector employees and are responsible for three  
              quarters of all new jobs created.  The impact of small  
              business on California's economic success is nothing short  
              of critical."  NFIB asserts that "AB 2328 . . . strengthens  
              the voice of small business by designating that one of  
              eleven board members be a small business owner.  This bill  
              does not increase the size of ARB, nor does it increase  
              state costs during a major fiscal crisis."
           According to Sierra Club California in opposing AB 2328 and  
              noting that ARB currently has two small business owners,  
              "To set aside a seat specifically for small business owners  
              would unnecessarily restrict the Governor's ability to pick  
              the best person for the job.  Earmarking a seat for a  
              particular constituency would also invite other interests  
              to seek their own designated slots.  For example, if small  
              business owners deserve their own specified seat, then how  
              about the employees who work for those businesses?  What  
              about the community groups whose members are affected by  
              ARB decisions?  Rather than starting down this slippery  
              slope, the Legislature should avoid reserving seats for  
              particular constituencies."
            3) Clarification needed  .  If the committee believes an ARB  
              member should have small business experience, then this  
              bill should provide that this new qualification may also  
              apply to one who has been a small business owner in the  
              event that a member may not currently be a small business  
              owner - and in some cases such a member may want to avoid  
              any conflicts while serving on the ARB.  Clarification  
              would also be needed to ensure that the board member  
              meeting the small business requirement reflects the  
              additional specified qualification requirements under  
              current law.  It may also be appropriate to add a sunset  
              provision to allow for review of any potential effects of  
              this bill.
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           SOURCE  :        National Federation of Independent Business  
           SUPPORT  :       None on file  
           OPPOSITION  :    Sierra Club California