Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1098

Introduced by Assembly Member Quirk-Silva

February 22, 2013

An act to begin delete amend Section 16000 of the Business and Professions Code, relating to business licenses. end delete begin insert add Section 12098.7 to the Government end insert begin insert Code, relating to small business. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1098, as amended, Quirk-Silva. begin delete Business licenses: city licensure. end delete begin insert Office of Small Business Advocate: regulations: report. end insert

begin insert

Existing law creates the Office of Small Business Advocate within the Governor’s Office of Business and Economic Development. Existing law establishes the duties and functions of the advocate, which include advisory participation in the consideration of all legislation and administrative regulations that effect small businesses.

end insert begin insert

This bill would require the advocate to commission a study, to be conducted every five years, of the costs of state regulations on small businesses, as specified, and to convene a small business advisory committee, representing a cross section of the small business community, to provide advice on the study. The bill would require that the study, upon completion and including recommendations, be submitted to the Department of Finance, the Speaker of the Assembly, the Senate President pro Tempore, and specified legislative committees.

end insert begin delete

Existing law authorizes the legislative body of an incorporated city to license businesses within the limits of its jurisdiction, as specified. Existing law requires any legislative body that fixes the rate of license fees upon a business operating both within and outside the legislative body’s taxing jurisdiction to levy the license fee so that the measure of the fee fairly reflects that proportion of the activity actually carried on within the taxing jurisdiction.

end delete begin delete

This bill would make a nonsubstantive change to that provision.

end delete

Vote: majority. Appropriation: no. Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert

begin insert The Legislature hereby finds and declares: end insert

begin insert

(a) Small business remains the backbone of the state’s economy.
Regulatory burdens and costs continue to be one of the major
complaints of small businesses.

end insert begin insert

(b) The federal Small Business Administration began analyzing
the cost and burdens of federal regulations on small businesses
in 1995. A recent report found that the annual cost of federal
regulations in the United States totaled $1.75 trillion. It also found
the costs of federal regulations on firms with fewer than 20
employees was $10,585 in 2010. For small businesses, the
regulatory and paperwork costs were found to be more burdensome
for the small firms than larger firms.

end insert begin insert

(c) Small businesses significantly impact California’s economy.
They represent 99.2 percent of all employers and employ 50.4
percent of the private-sector labor force. Small businesses are
crucial to the fiscal condition of the state and numbered 3.5 million
in 2010.

end insert begin insert

(d) The state does not have a current analysis on state regulatory
costs similar to that created for federal regulatory costs.
Understanding the financial effect of state regulations would help
policymakers reduce or design more cost-effective regulatory
approaches that achieve desired policy objectives while placing
the least burden on the regulated industries.

end insert

begin insert

begin insert SEC. 2 end insert begin insert . end insert   

end insert

begin insert Section 12098.7 is added to the end insert begin insert Government Code end insert begin insert , to
read: end insert

begin insert

begin insert 12098.7. end insert   

The advocate shall do all of the following:

(a) Commission a study, to be conducted every five years, of
the costs of state regulations on small businesses, which shall,
among other things, do all of the following:

(1) Parallel, to the extent feasible and practical, the scope and
study on the impact of regulatory costs on small firms conducted
by the federal Small Business Administration.

(2) Examine successful models from other states on identifying
regulatory costs and developing potential alternative approaches
that meet the same regulatory objectives, but are less burdensome
on small businesses.

(b) Convene a small business advisory committee to provide
advice on the study required pursuant to subdivision (a). The
committee shall include, but not be limited to, representatives from
small business associations representing a cross section of the
small business community.

(c) (1) No later than January 1, 2015, and every five years
thereafter, submit the completed study required pursuant to
subdivision (a), including recommendations, to the Department
of Finance, the Speaker of the Assembly, the Senate President pro
Tempore, the chair of the Assembly Committee on Jobs, Economic
Development, and the Economy and the chair of the Senate
Committee on Government Modernization, Efficiency and
Accountability.

(2) The report to be provided pursuant to paragraph (1) shall
be submitted in compliance with Section 9795 of the Government
Code.

end insert

begin delete

SECTION 1.  

Section 16000 of the Business and Professions
Code is amended to read:

16000.  

(a) The legislative body of an incorporated city may,
in the exercise of its police power, and for the purpose of
regulation, as herein provided, and not otherwise, license any kind
of business not prohibited by law transacted and carried on within
the limits of its jurisdiction, including all shows, exhibitions and
lawful games, and may fix the rates of the license fee and provide
for its collection by suit or otherwise. A legislative body, including
the legislative body of a charter city, that fixes the rate of license
fees pursuant to this subdivision upon a business operating both
within and outside the legislative body’s taxing jurisdiction shall
levy the license fee so that the measure of the fee fairly reflects
that proportion of the activity actually carried on within the taxing
jurisdiction.

(b) No license fee levied pursuant to subdivision (a) that is
measured by the licensee’s income or gross receipts, whether levied
by a charter or general law city, shall apply to any nonprofit
organization that is exempted from taxes by Chapter 4
(commencing with Section 23701) of Part 11 of Division 2 of the
Revenue and Taxation Code or Subchapter F (commencing with
Section 501) of Chapter 1 of Subtitle A of the Internal Revenue
Code of 1986, or the successor of either, or to any minister,
clergyman, Christian Science practitioner, rabbi, or priest of any
religious organization that has been granted an exemption from
federal income tax by the United States Commissioner of Internal
Revenue as an organization described in Section 501(c)(3) of the
Internal Revenue Code or a successor to that section.

(c) Before a city, including a charter city, issues a business
license to a person to conduct business as a contractor, as defined
in Section 7026, the city shall verify that the person is licensed by
the Contractors’ State License Board.

end delete