Amended in Senate September 10, 2013

Amended in Senate July 9, 2013

Amended in Assembly May 1, 2013

Amended in Assembly March 21, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 1098

Introduced by Assembly Member begin delete Quirk-Silva end delete begin insert Gray end insert

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(Coauthors: Assembly Members Fox and Medina)

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February 22, 2013

An act to add Section begin delete 12098.7 end delete begin insert 6126.10 end insert to the begin delete Government end delete begin insert Business and Professions end insert Code, relating to begin delete small business. end delete begin insert attorneys. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1098, as amended, begin delete Quirk-Silva end delete   begin insert Gray end insert . begin delete Office of Small Business Advocate: regulations: report. end delete begin insert Attorneys: practice of law. end insert

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Existing law prohibits a person from practicing law in California, or from advertising or holding himself or herself out as practicing law, unless the person is an active member of the State Bar, or otherwise authorized, as specified, to practice law in this state. A violation of these provisions is a crime. Existing law, with specified exceptions, generally defines a legal document assistant as a person who, among other things, provides or assists in providing, for compensation, any self-help service to a member of the public representing himself or herself in a legal matter. Existing law regulates the activities of legal document assistants and requires them to register, as specified. A violation of these provisions is a crime.

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This bill would provide that it is not the practice of law, is not a violation of those provisions prohibiting the unlawful practice of law, does not constitute the activities of a legal document assistant, and does not require registration as a legal document assistant for a person to design, create, publish, assemble, complete, distribute, display, or sell legal products, by means of an Internet Web site or mobile application, if the Internet Web site or mobile application includes a statement that it is not a substitute for an attorney.

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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 affect small businesses.

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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 one or more stakeholder meetings to provide advice on the study. The bill would require that the study, upon completion and including recommendations, be posted on the advocate’s Internet Web site. This bill would require the advocate to notify the Department of Finance, at least 30 days prior to commissioning the study, that sufficient funds are available from a non-General Fund source.

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

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

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begin insert SECTION 1. end insert   

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begin insert Section 6126.10 is added to the end insert begin insert Business and
Professions Code end insert begin insert , to read: end insert

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begin insert 6126.10. end insert   

(a) It is not the practice of law, is not a violation of
this article, does not constitute the activities of a legal document
assistant pursuant to Chapter 5.5 (commencing with Section 6400),
and does not require registration as a legal document assistant
pursuant to Section 6402 for a person to design, create, publish,
assemble, complete, distribute, display, or sell, by means of an
Internet Web site or mobile application, legal products, including,
but not limited to, written material, books, documents, forms, and
computer software.

(b) This section shall apply only if the Internet Web site or
mobile application includes a statement that it is not a substitute
for an attorney.

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SECTION 1.  

The Legislature hereby finds and declares:

(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.

(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.

(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.

(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.

SEC. 2.  

Section 12098.7 is added to the Government Code, to
read:

12098.7.  

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 one or more stakeholder meetings to provide advice
on the study required pursuant to subdivision (a). The stakeholders
shall include, but not be limited to, representatives from small
business associations representing a cross section of the small
business community.

(c) No later than January 1, 2015, and every five years thereafter,
post the completed study required pursuant to subdivision (a),
including recommendations on the advocate’s Internet Web site
and the advocate shall provide notice 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 Business, Professions and Economic Development
that information is publicly available. The study shall remain
available on the Internet Web site at least until the next study is
posted.

(d) For the purposes of the study, information shall be provided
based on nonemployer businesses, businesses with five or fewer
employees, businesses with 99 or fewer employees, businesses
with 499 or fewer employees, and businesses with more than 500
employees.

(e) Prior to commissioning the study, the advocate shall
determine that sufficient funds to conduct the study are available
from a non-General Fund source. At least 30 days prior to
commissioning the study, the advocate shall notify the Department
of Finance that the advocate has determined that sufficient funding
is available and that the advocate will commission the study.

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