BILL ANALYSIS �
AB 1675
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ASSEMBLY THIRD READING
AB 1675 (Ian Calderon)
As Amended May 1, 2014
Majority vote
ECONOMIC DEVELOPMENT 7-0 APPROPRIATIONS 13-4
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|Ayes:|Medina, Mansoor, Campos, |Ayes:|Gatto, Bocanegra, |
| |Daly, Fong, Fox, V. | |Bradford, |
| |Manuel P�rez | |Ian Calderon, Campos, |
| | | |Eggman, Gomez, Holden, |
| | | |Linder, Pan, Quirk, |
| | | |Ridley-Thomas, Weber |
| | | | |
|-----+--------------------------+-----+--------------------------|
| | |Nays:|Bigelow, Donnelly, Jones, |
| | | |Wagner |
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SUMMARY : Establishes the entrepreneur-in-residence program (EIR
Program) within the Governor's Office of Business and Economic
Development (GO-Biz) for the purpose of improving outreach and
strengthening coordination with the entrepreneur and small
business community. Specifically, this bill :
1)Establishes the EIR Program within GO-Biz, which includes the
annual appointment by the Director of GO-Biz of up to 10
entrepreneurs within state agencies, departments, and
commissions. The entrepreneurs are required to serve as
volunteers.
2)Specifies the purpose of the program is to provide better
outreach and strengthen the coordination and interaction
between the state and private sector on issues relevant to
entrepreneurs and small businesses. The program is also
designed to make state programs simpler, easier to access,
more efficient, and more responsive to the needs and concerns
of small businesses and entrepreneurs.
3)Requires the Director of GO-Biz to establish an informal
working group of EIR participants to discuss best practices,
experiences, obstacles, opportunities, and recommendations.
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4)Requires an annual report on program activities.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, implementation of this measure will require two new
staff positions and result in administrative costs of between
$250,000 and $300,000. There will also be costs associated with
the preparation of the annual report.
COMMENTS : This bill establishes a process for imbedding
entrepreneurs within state agencies so they can help facilitate
change from within the government organization. It is a process
that has been used by the private sector to create leaner
administrative processes and is more recently being adopted by
local, state, and federal governments.
Cost of Regulations on Business
Small businesses form the core of California's $2 trillion
economy. Research shows that net new job creation is strongest
among businesses with less than 20 employees, that they have
historically led the state's local and regional economies out of
recessions, and that small businesses are essential to the
state's global competitiveness by meeting niche industry needs.
There are two major sources of data on the cost of regulatory
compliance on businesses, the federal Small Business
Administration (SBA) and the Office of the Small Business
Advocate (OSBA). For the last 10 years, the federal SBA has
conducted a peer reviewed study that analyzes the cost of
federal government regulations on different size businesses.
This research shows that small businesses continue to bear a
disproportionate share of the federal regulatory burden. On a
per employee basis, it costs about $2,400, or 45%, more for
small firms to comply with federal regulations than their larger
counterparts.
The first study on the impact of California regulations on small
businesses was released by the OSBA in 2009. This first
in-the-nation study found that the total cost of regulations to
small businesses averaged about $134,000 per business in 2007.
Of course, no one would advocate that there should be no
regulations in the state. The report, however, importantly
identifies that the cost of regulations can provide a
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significant cost to the everyday operations of California small
businesses.
Regulatory costs are driven by a number of factors including
multiple definitions of small business in state and federal law,
the lack of e-commerce solutions to address outdated paperwork
requirements, procurement requirements that favor larger size
bidders, and lack of the technical assistance to alleviate these
obstacles that inhibit small business success. This bill would
place entrepreneurs within state agencies in order to assist
them in creating leaner and more effective policies and
procedures.
Existing EIR Programs
EIR Programs are not necessarily a new idea and have been used
in the investment and business world for decades. According to
Dell, a supporter of the bill, the high tech sector began using
the EIR model in the 1980's in order to bring experienced
professionals into the startup process.
The use of EIR Programs to help government agencies is more
recently gaining traction. As an example, in 2012, the Federal
Drug Administration (FDA) established an EIR Program to attract
seasoned entrepreneurs in the medical industry that had
successfully navigated the FDA's regulatory process. The six to
seven month program was designed to help the FDA and small
businesses work together to introduce new products in the
marketplace both quickly and safely.
In March 2014, Virginia enacted an EIR Program (HB 32, Chapter
63, Statutes of 2014) and several other states are reported to
also be considering EIR Programs, including Texas. This bill is
patterned after the Texas and Virginia legislation.
Analysis Prepared by : Toni Symonds / J., E.D. & E. / (916)
319-2090
FN: 0003682
AB 1675
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