Regulations: small business impact.

Existing law, the Administrative Procedure Act, governs the procedure 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. The act declares that it is the intent of the Legislature that neither the Office of Administrative Law nor the court should substitute its judgment for that of the rulemaking agency as expressed in the substantive content of adopted regulations. This bill would, instead, declare that it is the intent of the Legislature that only the court not substitute its judgment for that of the rulemaking agency. The act defines "small business" in a manner that does not include certain business activities that exceed prescribed thresholds for annual gross receipts. This bill would increase the prescribed thresholds for these business activities and would add computer programming, data processing, and systems design to the list of business activities that are not small businesses if they exceed $25,000,000 in annual gross receipts. The act requires an agency to submit an initial statement of reasons for proposing a regulation to the office with specified information, including, among other things, a description of reasonable alternatives to the regulation. This bill would, instead, require an agency to document why no alternatives were developed and list any alternatives that were submitted and determined to be unreasonable. The act requires an agency, as part of the regulatory adoption process, to assess the potential for adverse economic impact on California business enterprises and individuals, as specified. This bill would require that the assessment be based on sound economic theory and practice that is generally accepted within the related professional fields. The bill would require the assessment to include a determination whether there is a similar or related regulation that has been adopted by any other regulatory agency and information come from reasonably current existing state publications. The bill would require the agency, as part of the assessment to seek assistance from relevant persons or organizations to identify and develop alternatives to the regulation for consideration by the agency. The bill would require an agency, if it ultimately adopts the regulation, to perform the business assessment again, 5 years after the adoption of the regulation, as specified. The act requires that an agency submit a final statement of reasons to the office that includes specified information, including, among other things, a determination that no alternative considered by the agency would be more effective in carrying out the purpose for which the regulation was proposed. This bill would, instead, require a determination that no alternative would be equally or more effective in carrying out the purpose for which the regulation was proposed. The bill would also require the final statement of reasons to include a determination whether opportunities for cooperation exist with another state or federal agency that is implementing a similar regulation in order to reduce the cumulative negative impact of the regulation on small businesses.