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AB-1545 Civil penalty reduction policy.(2019-2020)

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Date Published: 04/08/2019 02:00 PM
AB1545:v97#DOCUMENT

Amended  IN  Assembly  April 08, 2019
Amended  IN  Assembly  March 26, 2019

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION

Assembly Bill
No. 1545

Introduced by Assembly Member Obernolte

February 22, 2019

An act to add Chapter 3.7 (commencing with Section 11367) to Part 1 of Division 3 of Title 2 of the Government Code, relating to small business.


LEGISLATIVE COUNSEL'S DIGEST


AB 1545, as amended, Obernolte. Civil penalty reduction policy.
Existing law, the Administrative Procedure Act, governs the procedures for the adoption, amendment, or repeal of regulations by state agencies and requires, among other things, that a state agency make available to the public facts, evidence, documents, testimony, or other evidence on which the state agency relies to support the agency’s determination that the proposed action will not have a significant adverse economic impact on business.
Existing law establishes the Office of Small Business Advocate, within the Governor’s Office of Business and Economic Development, and establishes the duties and functions of the Director of the Office of Small Business Advocate including, among other duties, representing the views and interests of small businesses before other state agencies whose policies and activities may affect small businesses. Existing law requires each state agency that significantly regulates small business or that significantly impacts small business to designate at least one person who is required to serve as a small business liaison.
This bill would, with certain exceptions, require a state agency to assist a small business, as defined, in complying with all statutes and regulations administered by the state agency and in any enforcement action by the state agency. The bill would require a state agency to establish a policy, by December 31, 2020, that provides for the reduction of civil penalties for violations of regulatory or statutory requirements by a small business under appropriate circumstances. The bill would authorize the state agency to update the policy to reflect current issues and conditions affecting small businesses and the state agency.
This bill would require the state agency to post a current copy of the policy on the state agency’s internet website and, until June 30, 2024, to annually post specified information about enforcement actions and penalty reductions (annual report). The bill would require a state agency to notify the Office of Small Business Advocate of certain events relating to its policy and annual report.
Vote: MAJORITY   Appropriation: NO   Fiscal Committee: YES   Local Program: NO  

The people of the State of California do enact as follows:


SECTION 1.

 This act shall be known, and may be cited, as the California Small Business Regulatory Fairness Act.

SEC. 2.

 Chapter 3.7 (commencing with Section 11367) is added to Part 1 of Division 3 of Title 2 of the Government Code, to read:
CHAPTER  3.7. California Small Business Regulatory Fairness Act

11367.
 The following terms shall have the following meanings for purposes of this chapter:
(a) “Small business” means a business that is all of the following:
(1) Independently owned and operated.
(2) Not dominant in its field of operation.
(3) Has fewer than 100 employees.
(4) Has average annual gross receipts of ten fifteen million dollars ($10,000,000) ($15,000,000) or less over the previous three years.
(b) “State agency” means any state agency, department, board, or commission that has significant rulemaking authority over small businesses, except the Franchise Tax Board, the California Department of Tax and Fee Administration, or the State Board of Equalization.

11367.1.
 (a) A state agency shall do all of the following:
(1) Assist a small business in achieving compliance with statutes and regulations administered by the state agency. This requirement may be met through the implementation of the requirements in Section 11148.5.
(2) Assist a small business during an enforcement action by the state agency.
(3) (A) By December 31, 2020, establish a policy to provide for the reduction of civil penalties for violations of regulatory or statutory requirements by a small business under appropriate circumstances.
(B) The policy shall exclusively be applied to small businesses that meet all of the following criteria:
(i) The violation by the small business did not involve willful or criminal conduct.
(ii) The violation by the small business did not pose an imminent health, safety, or environmental threat.
(iii) The small business has a low degree of culpability when its conduct is judged in light of its size, length of operation, and the sophistication of its owners or managers.
(C) The policy shall include the factors that shall be considered when the agency determines if, and to what extent, the fine shall be reduced. The policy shall be designed to result in a range of reductions, based upon the following factors, which include, but are not limited to:
(i) The degree to which the small business cooperated during any investigation by the state agency.
(ii) The degree to which the small business engaged in subsequent action to correct the violation, as appropriate.
(iii) The prior history of the small business in meeting regulatory requirements of the agency.
(iv) The degree to which the level of the penalty would impede the small business from continuing to conduct business.
(b) The state agency may update the policy from time to time to reflect current issues and conditions affecting small businesses and the state agency.
(c) (1) The state agency shall post a current copy of the policy on the state agency’s internet website within 30 days of adoption or amendment of the policy.
(2) The state agency shall annually post information on the state agency’s internet website as to the aggregate number and category of enforcement actions that were reviewed pursuant to this section, the total number of small businesses and actions that qualified for civil penalty reductions in the report period, and the total dollar amount of reductions issued. The requirement for annual reporting imposed by this paragraph shall become inoperative on June 30, 2024.
(d) The notice shall include a link to where the policy and annual utilization report pursuant to paragraph (2) of subdivision (c) is posted on the state agency’s internet website. The state agency shall notify the Office of Small Business Advocate within 15 working days of the following situations occurring:
(1) The policy is adopted or amended.
(2) The annual utilization report is posted.
(3) The policy or the annual utilization report is relocated from the state agency’s internet website. The notice shall include a link to the new internet website location.
(4) The policy or the annual utilization report is removed from the state agency’s internet website. The notice shall include an explanation as to why the information was removed.