BILL ANALYSIS �
AB 2723
Page 1
GOVERNOR'S VETO
AB 2723 (Medina)
As Amended August 21, 2014
2/3 vote
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|ASSEMBLY: |73-0 |(May 23, 2014) |SENATE: |34-0 |(August 25, |
| | | | | |2014) |
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ASSEMBLY: 79-0 (August 26, 2014)
Original Committee Reference: A. & A.R.
SUMMARY : Makes clarifying changes to the Administrative
Procedure Act to include "sole proprietorships" and "small
business" in the required standardized regulatory impact
analysis when a state agency proposes to adopt, amend, or repeal
a major regulation.
The Senate amendments :
1)Delete the provisions that require the inclusion of "sole
proprietorships" and "small business" in the standardized
regulatory impact analysis when a state agency proposes to
adopt, amend, or repeal a non-major regulation.
2)Add double-jointing language to address chaptering out issues.
EXISTING LAW :
1)Finds and declares that it is in the public interest to aid,
counsel, assist, and protect the interests of small business
concerns in order to maintain a healthy state economy.
2)Finds and declares that there has been an unprecedented growth
in the number of administrative regulations in recent years
and that correcting the problems requires the direct
involvement of the Legislature, as well as that of the
executive branch of the state government. Further, statute
AB 2723
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finds and declares that the complexity and lack of clarity in
many regulations put small businesses, which do not have the
resources to hire experts to assist them, at a distinct
disadvantage.
3)Establishes basic minimum procedural requirements for the
adoption, amendment, or repeal of administrative regulations,
including assessing the potential adverse impact of an action
on California businesses and individuals with the purpose of
avoiding the imposition of unreasonable and unnecessary
regulations, reporting, recordkeeping, or compliance
requirements. Among other requirements, an agency is required
to:
a) Base decisions on adequate information.
b) Consider the impact of a proposed rule on an industry's
ability to compete with businesses in other states.
c) Assess its impact on the creation or elimination of jobs
and new and expanding businesses.
4)Requires the Department of Finance (DOF) to adopt, and
rulemaking agencies to follow, a specific set of regulations
for undertaking an economic impact analysis for regulations
that are anticipated to have an impact on businesses in excess
of $50 million.
FISCAL EFFECT : According to the Senate Appropriations
Committee:
1)Unknown, potentially significant impacts on state agencies
proposing major regulatory changes that impact businesses.
Specifically, some state agencies would incur increased costs
to conduct a more rigorous assessment of a major regulation's
economic impact to specifically determine the impacts on small
businesses and sole proprietorships.
2)Minor one-time costs to the DOF, likely in the range of
$20,000 to $30,000, to update regulations related to the
preparation of economic impact assessments.
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3)The Office of Administrative Law indicates that it could
absorb the bill's new requirements into its current review of
notices and initial statements.
GOVERNOR'S VETO MESSAGE :
"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."
Analysis Prepared by : William Herms / A. & A.R. / (916)
319-3600
FN: 0005637