AB 1033, as amended, Eduardo Garcia. Economic impact assessment: small business definition.
Existing law, the Administrative Procedure Act, governs, among other things, the procedures for the adoption, amendment, or repeal of regulations by state agencies and for the review of those regulatory actions by the Office of Administrative Law. Existing law requires a state agency proposing to adopt, amend, or repeal specific administrative regulations to assess the potential for adverse economic impact on California business enterprises and individuals and to prepare an economic impact assessment, as specified, that addresses, among other things, the creation or elimination of jobs within the state.
This billbegin delete wouldend deletebegin insert would, with certain exceptions,end insert
authorize a state agency, when preparing the economic impact assessment, to use a consolidated definition of small business to determine the number of small businesses within the economy, a specific industry sector, or geographic region, and would define “small business” for that purpose as a business that is independently owned and operated, not dominant in its field of operation, and has fewer than 100 employees.
Vote: majority. Appropriation: no. Fiscal committee: no. State-mandated local program: no.
The people of the State of California do enact as follows:
Section 11346.3 of the Government Code is
2amended to read:
(a) A state agency proposing to adopt, amend, or
4repeal any administrative regulation shall assess the potential for
5adverse economic impact on California business enterprises and
6individuals, avoiding the imposition of unnecessary or unreasonable
7regulations or reporting, recordkeeping, or compliance
8requirements. For purposes of this subdivision, assessing the
9potential for adverse economic impact shall require agencies, when
10proposing to adopt, amend, or repeal a regulation, to adhere to the
11following requirements, to the extent that these requirements do
12not conflict with other state or federal laws:
13(1) The proposed adoption, amendment, or repeal of a regulation
14shall be based on
adequate information concerning the need for,
15and consequences of, proposed governmental action.
16(2) The state agency, prior to submitting a proposal to adopt,
17amend, or repeal a regulation to the office, shall consider the
18proposal’s impact on business, with consideration of industries
19affected including the ability of California businesses to compete
20with businesses in other states. For purposes of evaluating the
21impact on the ability of California businesses to compete with
22businesses in other states, an agency shall consider, but not be
23limited to, information supplied by interested parties.
24(3) An economic impact assessment prepared pursuant to this
25subdivision for a proposed regulation that is not a major regulation
26or that is a major regulation proposed prior to November 1, 2013,
27
shall be prepared in accordance with subdivision (b), and shall be
28included in the initial statement of reasons as required by Section
2911346.2. An economic assessment prepared pursuant to this
30subdivision for a major regulation proposed on or after November
311, 2013, shall be prepared in accordance with subdivision (c), and
32shall be included in the initial statement of reasons as required by
33Section 11346.2.
P3 1(b) (1) A state agency proposing to adopt, amend, or repeal a
2regulation that is not a major regulation or that is a major regulation
3proposed prior to November 1, 2013, shall prepare an economic
4impact assessment that assesses whether and to what extent it will
5affect the following:
6(A) The creation or elimination of jobs within the state.
7(B) The creation of new businesses or the elimination of existing
8businesses within the state.
9(C) The expansion of businesses currently doing business within
10the state.
11(D) The benefits of the regulation to the health and welfare of
12California residents, worker safety, and the state’s environment.
13(2) This subdivision does not apply to the University of
14California, the Hastings College of the Law, or the Fair Political
15Practices Commission.
16(3) Information required from a state agency for the purpose of
17completing the assessment may come from existing state
18publications.
19(4) (A) For purposes of conducting the economic impact
20assessment pursuant to this subdivision, a state agency
may use
21the consolidated definition of small business in subparagraph (B)
22in order to determine the number of small businesses within the
23economy, a specific industry sector, or geographic region. The
24state agency shall clearly identify the use of the consolidated small
25business definition in its rulemaking package.
26(B) For the exclusive purpose of undertaking the economic
27impact
assessment, a “small business” means a business that is all
28of the following:
29(i) Independently owned and operated.
30(ii) Not dominant in its field of operation.
31(iii) Has fewer than 100 employees.
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32
(C) Subparagraph (A) shall not apply to a regulation adopted
33by the Department of Insurance that applies to an insurance
34company.
35(c) (1) Each state agency proposing to adopt, amend, or repeal
36a major
regulation on or after November 1, 2013, shall prepare a
37standardized regulatory impact analysis in the manner prescribed
38by the Department of Finance pursuant to Section 11346.36. The
39standardized regulatory impact analysis shall address all of the
40following:
P4 1(A) The creation or elimination of jobs within the state.
2(B) The creation of new businesses or the elimination of existing
3businesses within the state.
4(C) The competitive advantages or disadvantages for businesses
5currently doing business within the state.
6(D) The increase or decrease of investment in the state.
7(E) The incentives for
innovation in products, materials, or
8processes.
9(F) The benefits of the regulations, including, but not limited
10to, benefits to the health, safety, and welfare of California residents,
11worker safety, and the state’s environment and quality of life,
12among any other benefits identified by the agency.
13(2) This subdivision shall not apply to the University of
14California, the Hastings College of the Law, or the Fair Political
15Practices Commission.
16(3) Information required from state agencies for the purpose of
17completing the analysis may be derived from existing state, federal,
18or academic publications.
19(d) Any administrative regulation adopted on or after January
201,
1993, that requires a report shall not apply to businesses, unless
21the state agency adopting the regulation makes a finding that it is
22necessary for the health, safety, or welfare of the people of the
23state that the regulation apply to businesses.
24(e) Analyses conducted pursuant to this section are intended to
25provide agencies and the public with tools to determine whether
26the regulatory proposal is an efficient and effective means of
27
implementing the policy decisions enacted in statute or by other
28provisions of law in the least burdensome manner. Regulatory
29impact analyses shall inform the agencies and the public of the
30economic consequences of regulatory choices, not reassess
31statutory policy. The baseline for the regulatory analysis shall be
32the most cost-effective set of regulatory measures that are equally
33effective in achieving the purpose of the regulation in a manner
34that ensures full compliance with the authorizing statute or other
35law being implemented or made specific by the proposed
36regulation.
37(f) Each state agency proposing to adopt, amend, or repeal a
38major regulation on or after November 1, 2013, and that has
39prepared a standardized regulatory impact analysis pursuant to
40subdivision (c), shall submit that analysis to the Department of
P5 1Finance
upon completion. The department shall comment, within
230 days of receiving that analysis, on the extent to which the
3
analysis adheres to the regulations adopted pursuant to Section
411346.36. Upon receiving the comments from the department, the
5agency may update its analysis to reflect any comments received
6from the department and shall summarize the comments and the
7response of the agency along with a statement of the results of the
8updated analysis for the statement required by paragraph (10) of
9subdivision (a) of Section 11346.5.
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