BILL NUMBER: AB 1033 CHAPTERED
BILL TEXT
CHAPTER 346
FILED WITH SECRETARY OF STATE SEPTEMBER 14, 2016
APPROVED BY GOVERNOR SEPTEMBER 14, 2016
PASSED THE SENATE JUNE 30, 2016
PASSED THE ASSEMBLY AUGUST 22, 2016
AMENDED IN SENATE MAY 2, 2016
AMENDED IN SENATE FEBRUARY 8, 2016
AMENDED IN ASSEMBLY JANUARY 4, 2016
INTRODUCED BY Assembly Member Eduardo Garcia
FEBRUARY 26, 2015
An act to amend Section 11346.3 of the Government Code, relating
to state agency regulations.
LEGISLATIVE COUNSEL'S DIGEST
AB 1033, 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 bill would, with certain exceptions, 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.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 11346.3 of the Government Code is amended to
read:
11346.3. (a) A state agency proposing to adopt, amend, or repeal
any administrative regulation shall assess the potential for adverse
economic impact on California business enterprises and individuals,
avoiding the imposition of unnecessary or unreasonable regulations or
reporting, recordkeeping, or compliance requirements. For purposes
of this subdivision, assessing the potential for adverse economic
impact shall require agencies, when proposing to adopt, amend, or
repeal a regulation, to adhere to the following requirements, to the
extent that these requirements do not conflict with other state or
federal laws:
(1) The proposed adoption, amendment, or repeal of a regulation
shall be based on adequate information concerning the need for, and
consequences of, proposed governmental action.
(2) The state agency, prior to submitting a proposal to adopt,
amend, or repeal a regulation to the office, shall consider the
proposal's impact on business, with consideration of industries
affected including the ability of California businesses to compete
with businesses in other states. For purposes of evaluating the
impact on the ability of California businesses to compete with
businesses in other states, an agency shall consider, but not be
limited to, information supplied by interested parties.
(3) An economic impact assessment prepared pursuant to this
subdivision for a proposed regulation that is not a major regulation
or that is a major regulation proposed prior to November 1, 2013,
shall be prepared in accordance with subdivision (b), and shall be
included in the initial statement of reasons as required by Section
11346.2. An economic assessment prepared pursuant to this subdivision
for a major regulation proposed on or after November 1, 2013, shall
be prepared in accordance with subdivision (c), and shall be included
in the initial statement of reasons as required by Section 11346.2.
(b) (1) A state agency proposing to adopt, amend, or repeal a
regulation that is not a major regulation or that is a major
regulation proposed prior to November 1, 2013, shall prepare an
economic impact assessment that assesses whether and to what extent
it will affect the following:
(A) The creation or elimination of jobs within the state.
(B) The creation of new businesses or the elimination of existing
businesses within the state.
(C) The expansion of businesses currently doing business within
the state.
(D) The benefits of the regulation to the health and welfare of
California residents, worker safety, and the state's environment.
(2) This subdivision does not apply to the University of
California, the Hastings College of the Law, or the Fair Political
Practices Commission.
(3) Information required from a state agency for the purpose of
completing the assessment may come from existing state publications.
(4) (A) For purposes of conducting the economic impact assessment
pursuant to this subdivision, a state agency may use the consolidated
definition of small business in subparagraph (B) in order to
determine the number of small businesses within the economy, a
specific industry sector, or geographic region. The state agency
shall clearly identify the use of the consolidated small business
definition in its rulemaking package.
(B) For the exclusive purpose of undertaking the economic impact
assessment, a "small business" means a business that is all of the
following:
(i) Independently owned and operated.
(ii) Not dominant in its field of operation.
(iii) Has fewer than 100 employees.
(C) Subparagraph (A) shall not apply to a regulation adopted by
the Department of Insurance that applies to an insurance company.
(c) (1) Each state agency proposing to adopt, amend, or repeal a
major regulation on or after November 1, 2013, shall prepare a
standardized regulatory impact analysis in the manner prescribed by
the Department of Finance pursuant to Section 11346.36. The
standardized regulatory impact analysis shall address all of the
following:
(A) The creation or elimination of jobs within the state.
(B) The creation of new businesses or the elimination of existing
businesses within the state.
(C) The competitive advantages or disadvantages for businesses
currently doing business within the state.
(D) The increase or decrease of investment in the state.
(E) The incentives for innovation in products, materials, or
processes.
(F) The benefits of the regulations, including, but not limited
to, benefits to the health, safety, and welfare of California
residents, worker safety, and the state's environment and quality of
life, among any other benefits identified by the agency.
(2) This subdivision shall not apply to the University of
California, the Hastings College of the Law, or the Fair Political
Practices Commission.
(3) Information required from state agencies for the purpose of
completing the analysis may be derived from existing state, federal,
or academic publications.
(d) Any administrative regulation adopted on or after January 1,
1993, that requires a report shall not apply to businesses, unless
the state agency adopting the regulation makes a finding that it is
necessary for the health, safety, or welfare of the people of the
state that the regulation apply to businesses.
(e) Analyses conducted pursuant to this section are intended to
provide agencies and the public with tools to determine whether the
regulatory proposal is an efficient and effective means of
implementing the policy decisions enacted in statute or by other
provisions of law in the least burdensome manner. Regulatory impact
analyses shall inform the agencies and the public of the economic
consequences of regulatory choices, not reassess statutory policy.
The baseline for the regulatory analysis shall be the most
cost-effective set of regulatory measures that are equally effective
in achieving the purpose of the regulation in a manner that ensures
full compliance with the authorizing statute or other law being
implemented or made specific by the proposed regulation.
(f) Each state agency proposing to adopt, amend, or repeal a major
regulation on or after November 1, 2013, and that has prepared a
standardized regulatory impact analysis pursuant to subdivision (c),
shall submit that analysis to the Department of Finance upon
completion. The department shall comment, within 30 days of receiving
that analysis, on the extent to which the analysis adheres to the
regulations adopted pursuant to Section 11346.36. Upon receiving the
comments from the department, the agency may update its analysis to
reflect any comments received from the department and shall summarize
the comments and the response of the agency along with a statement
of the results of the updated analysis for the statement required by
paragraph (10) of subdivision (a) of Section 11346.5.