BILL ANALYSIS Ó AB 19 Page 1 Date of Hearing: May 20, 2015 ASSEMBLY COMMITTEE ON APPROPRIATIONS Jimmy Gomez, Chair AB 19 (Chang) - As Amended May 6, 2015 ----------------------------------------------------------------- |Policy |Jobs, Economic Development, |Vote:|8 - 0 | |Committee: |and the Economy | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | |-------------+-------------------------------+-----+-------------| | | | | | | | | | | | | | | | ----------------------------------------------------------------- Urgency: No State Mandated Local Program: NoReimbursable: No SUMMARY: This bill requires the Governor's Office of Business and Economic Development (GO-Biz), in consultation with the Office of the Small Business Advocate, to establish a process for the ongoing review of existing regulations adopted prior to January AB 19 Page 2 1, 2016, primarily those affecting small businesses, to determine whether the regulations could be less administratively burdensome or costly to affected sectors. Sunsets the provisions of the bill January 1, 2021. Specifically, this bill: 1)Requires GO-Biz to establish a process and timeline for review of regulations, including a process for public input. Following a public comment period, requires GO-Biz to determine whether the regulation could be implemented through an alternative method or methods, and requires GO-Biz to provide recommendations to the affected agency and post the same information on its Internet Web site. 2)Requires GO-Biz to report to the Legislature and the Governor, prior to January 1, 2021, a listing of all regulations reviewed, the results of each review including the alternative implementation method or methods the office proposed, and a description of the actions taken by the responsible agency. FISCAL EFFECT: Ongoing annual General Fund administrative costs to GO-Biz of approximately $214,000, through January 1, 2021, for two positions to determine the scope of the review, develop and produce materials for at least two annual public meetings, review public input, compile and report data and post information online. COMMENTS: 1)Purpose. According to the author, this bill is an effort to bring relief to the small business owners of California. GO-Biz has already made efforts to aid small businesses with the regulatory process. This legislation is intended to build AB 19 Page 3 on that effort. 2)Opposition. Several labor advocates, including the Teamsters, oppose this bill stating concerns that the resources to undertake a review of a majority of regulations adopted before January 1, 2016, would be significant and that these resources could be better spent elsewhere. Another issue of concern is GO-Biz' ability to review highly technical regulation and determine whether there is a workable alternative. 3)Related legislation. a) AB 1286 (Mayes), pending in this committee, establishes the California Regulatory Reform Council (Council) for the purpose of analyzing the holistic impact of all levels of state and local regulations on specific industries operating within the state. b) AB 2723 (Medina) of 2014 proposed a review of costs associated with regulations on the small business be considered when state agencies undertake their economic impact assessment for major regulations. The Governor's veto message of this bill is as follows: This bill would require the economic analysis for major regulations to include a separate assessment of the impact on sole proprietorships and small businesses. I signed legislation in 2011 to require a comprehensive economic analysis of proposed major regulations. The analysis must assess whether, and to what extent, the proposed regulations will affect all California jobs and businesses. Agencies must also identify alternatives that would lessen any adverse impact on small businesses. I am not convinced that an additional layer of specificity based solely on the legal structure of a business would add value to the comprehensive economic analysis already required. AB 19 Page 4 c) SB 617 (Calderon), Chapter 496, Statutes of 2011, revises the state Administrative Procedure Act to require each state agency adopting a major regulation to prepare an economic impact analysis, and requires state agencies to implement ongoing monitoring of internal auditing and financial controls and other best practices in financial accounting. Analysis Prepared by:Misty Feusahrens / APPR. / (916) 319-2081