AB 767

This bill makes the following changes to the membership of the Small Business

Regulatory Review Board (board), the considerations to be made for small businesses

by agencies engaging in administrative rule making, the responsibilities of small

business regulatory coordinators in each agency, and the structure and functions of

the small business ombudsman clearinghouse in the Department of Commerce

(Commerce):

Small Business Regulatory Review Board

Currently, the membership of the board in Commerce consists of six

representatives of small businesses, the chairpersons of the senate and assembly

committees concerned with small businesses, and one representative each from the

departments of Administration; Agriculture, Trade and Consumer Protection;

Children and Families; Commerce; Health Services; Natural Resources; Regulation

and Licensing; Revenue; and Workforce Development. Current law defines "small

business" as a business entity, including its affiliates, which is independently owned

and operated and not dominant in its field, and which employs 25 or fewer full-time

employees or which has gross annual sales of less than $5,000,000.

The board serves small businesses by reviewing administrative rules proposed

by and emergency rules promulgated by agencies to determine the fiscal effect of the

rules on small businesses. The board also reviews whether an agency has prepared

an analysis for each proposed rule and emergency rule, sufficiently considered the

effect of a proposed rule on small businesses, and complied with certain other

procedural and substantive requirements as it prepared the proposed rule or

emergency rule.

This bill eliminates from the board the representatives of all departments and

increases the number of representatives of small businesses on the board to seven.

Rule making: considerations for small businesses

Under current law, each state agency must submit proposed administrative

rules to the Legislative Council for review, prepare an analysis of the proposed rule,

and, with certain exceptions, provide notice of and a public hearing regarding the

proposed rule. If an agency determines that a proposed administrative rule may

have a significant economic impact on small businesses, the agency must forward a

copy of the proposed rule to the board.

Under current law, for each proposed rule that will have an effect on small

businesses, an agency must prepare a final regulatory flexibility analysis that

includes certain information, including a summary of issues raised by small

businesses and any changes made to the proposed rule as a result of information and

provided by small businesses. A final regulatory flexibility analysis is not required

if the agency determines that the rule will not have a significant economic impact on

a substantial number of small businesses.

Under certain circumstances, an agency may promulgate an emergency rule