Small Business Impact Analysis Passes

A California Chamber of Commerce-supported bill to help reduce regulatory compliance costs for small businesses won bipartisan approval from a Senate policy committee last week.

SB 356 (Wright; D-Inglewood), a “job creator,” gives small businesses a greater voice in the regulatory develop­ment process by requiring regulatory agencies to more carefully assess the economic impact of new regulations on small businesses.

The bill creates more accountability in the regulatory process by requiring state agencies to involve small businesses early in the drafting process so that the small business perspective is carefully considered as regulations are developed.

Closes Loopholes
The bill also closes problematic loopholes that currently allow state agencies to declare that a proposed regulation has no significant economic impact without providing an explanation for that finding.

In addressing these loopholes, SB 356 also requires agencies to prepare and submit a small business economic impact state­­ment and to justify their conclusions as to the regulation’s effect on small business.

SB 356 also requires agencies to more carefully explore reasonable regulatory alternatives that are less burdensome to small business and to provide an explanation for not pursuing an alternative if one does exist.

The combined impact of these provisions would be more cost-effective small business compliance with government regulations, all while preserving the stated objectives of the relevant statutes being implemented.

A 2005 study by the U.S. Small Business Administration found that federal regulatory compliance cost small businesses (20 or fewer employees) 45 percent more than it did large businesses (500 or more employees).

A California-specific study mandated by 2006 legislation, AB 2330 (Arambula; D-Fresno; Chapter 232), is expected to be released soon.

Key Vote
The Senate Business, Professions and Economic Development Committee approved SB 356 on a vote of 6-2:

Ayes: Negrete McLeod (D-Chino), Wyland (R-Del Mar), Aanestad (R-Grass Valley), Correa (D-Santa Ana), Walters (R-Laguna Niguel, Yee (D-San Francisco).

Noes: Florez (D-Shafter), Romero (D-East Angeles).
Absent/abstaining/not voting: Corbett (D-San Leandro), Oropeza (D-Long Beach).

Action Needed
SB 356 will be considered next by the Senate Appropriations Committee on May 11. Please ask committee members and your Senate representative to SUPPORTt SB 356.

Source: California Chamber of Commerce
May 5, 2009

back