BILL ANALYSIS Ó
AB 582
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ASSEMBLY THIRD READING
AB
582 (Calderon)
As Amended May 4, 2015
Majority vote
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|Committee |Votes |Ayes |Noes |
| | | | |
| | | | |
|----------------+------+--------------------+--------------------|
|Jobs |8-0 |Eduardo Garcia, | |
| | |Kim, Brough, Brown, | |
| | |Chau, Chu, Gipson, | |
| | |Irwin | |
| | | | |
|----------------+------+--------------------+--------------------|
|Revenue & |9-0 |Ting, Brough, | |
|Taxation | |Dababneh, Gipson, | |
| | |Roger Hernández, | |
| | |Mullin, Patterson, | |
| | |Quirk, Wagner | |
| | | | |
|----------------+------+--------------------+--------------------|
|Appropriations |17-0 |Gomez, Bigelow, | |
| | |Bonta, Calderon, | |
| | |Chang, Daly, | |
| | |Eggman, Gallagher, | |
| | | | |
| | | | |
| | |Eduardo Garcia, | |
| | |Gordon, Holden, | |
AB 582
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| | |Jones, Quirk, | |
| | |Rendon, Wagner, | |
| | |Weber, Wood | |
| | | | |
| | | | |
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SUMMARY: Requires the Legislative Analyst and the California
State Auditor to convene a work group to determine the most
appropriate state agency to house a pilot program with the goal of
making state government more streamlined and accessible to small
businesses. The work group is required to submit a report to the
Legislature on or before December 31, 2016.
FISCAL EFFECT: According to the Assembly Appropriations
Committee, General Fund costs in the range of $75,000 to $100,000
for the State Auditor and the Legislative Analyst's Office to
convene a work group and produce a report with recommendations
related to the establishment of professionals in public service
pilot program.
COMMENTS: Although the state has a vigorous public process that
is designed to allow the rulemaking agency to fully consider the
comments, suggestions, and economic impacts of proposed
regulations on all business - especially small businesses - state
agencies often receive few specific comments and recommendations
on how to reduce the cost and complexity of the proposed
implementation method, while still maintaining the same regulatory
standard.
An intrinsic challenge to California's rulemaking process is that
those businesses that may be most affected have the least ability
to monitor the broad range of state rulemaking entities, recommend
appropriate alternative implementation methods or engage
meaningfully in the often complex and highly technical rule making
proceedings.
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Without practical experience with the limited administrative
capacity in which many small businesses operate or a realistic
method for small businesses to participate in the regulatory
process, it is difficult for state agencies to adopt rules that
are considerate of the needs of these smaller size businesses.
Given that nearly 3 million firms in California have no employees
and 90% of firms with employees have less than 20, having
implementation methods that are appropriate for small businesses
in terms of time, money, and expertise are important to the
state's economic growth.
This bill calls for the establishment of a work group to determine
the best process for implementing an entrepreneur-in residence
program (EIR) within state government. EIRs have been used
successfully by both the public and private sectors to create
leaner administrative processes and provide better customer
service.
Similar Programs: The EIR model has been used in the investment
and business world for decades. According to Dell, a supporter of
this and prior EIR legislation, the high tech sector began using
the EIR model in the 1980s as a means to bring experienced
professionals into startup businesses.
The use of EIR Programs to help government agencies has more
recently been gaining traction. As an example, in 2012, the
Federal Drug Administration (FDA) established an EIR Program to
attract seasoned entrepreneurs from the medical industry who had
prior experience in navigating the FDA's regulatory process. The
six to seven month program was designed to help the FDA and small
businesses work together to more quickly introduce safe new
products into the marketplace. Under the program, the FDA not
only improved processes, the FDA staff are reported to have also
gained a better understanding of the challenges small businesses
face and how to better network with entrepreneurs in the future.
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The goal of one of the first FDA EIR placements was described as
delivering "transformational change" by creating opportunities for
internal and external talent to collaboratively apply the
principles of lean engineering by rapidly testing, validating, and
scaling new approaches. EIR Programs were included as a key
component of President Obama's Strategy for American Innovation.
In another example, United States Citizenship and Immigration
Services (USCIS) established an EIR initiative to improve
processing times and the related administrative burden for certain
entrepreneur immigrants. The strategy of this EIR project was to
recruit a small "tactical team" of business experts to work with
USCIS staff, using the authorities and limitations in existing
law, to streamline operations and enhance pathways for future
business development by these immigrant entrepreneurs. This was a
short 90-day project, which ultimately involved other federal
agencies and was used as an example of the innovative type of
relationships that are being encouraged under the White House
Startup America initiative.
In March 2014, Virginia enacted an EIR Program (HB 321, Chapter
63, Statutes of 2014) and several other states are reported to be
considering EIR Programs in 2015. AB 1675 (Calderon), which
failed to move from the Assembly Appropriations Committee in 2014,
was patterned after the Texas and Virginia legislation. This bill
calls for the development of a strategic action plan to have
California establish its own EIR pilot program.
Analysis Prepared by:
Toni Symonds / J., E.D., & E. / (916) 319-2090
FN: 0000750
AB 582
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