Bill Text: CA SB1228 | 2015-2016 | Regular Session | Amended
Bill Title: Small business: California Small Business Regulatory
Spectrum: Partisan Bill (Republican 3-0)
Status: (Failed) 2016-11-30 - From committee without further action. [SB1228 Detail]
Download: California-2015-SB1228-Amended.html
BILL NUMBER: SB 1228 AMENDED
BILL TEXT
AMENDED IN SENATE APRIL 20, 2016
INTRODUCED BY Senator Runner
( Coauthors: Senators Bates
and Berryhill )
FEBRUARY 18, 2016
An act to add Chapter 4 (commencing with Section 550) to
Title 7 of Part 2 of the Code of Civil Procedure, and 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
SB 1228, as amended, Runner. Small business: California Small
Business Regulatory Fairness Act.
Existing law generally requires that all administrative remedies
are exhausted before a court may inquire into the validity of any
final administrative order or decision and authorizes the court to
inquire whether the agency proceeded without, or in excess of, the
agency's jurisdiction, whether there was a fair hearing, and whether
the was any prejudicial abuse of discretion, as specified.
This bill would authorize a court, after administrative remedies
are exhausted, to grant equitable relief in the interest of justice
to a small business, as defined, and requires the court to consider
mitigating factors when granting the equitable relief including, but
not limited to, that the small business engaged in subsequent action
to correct the violation. The bill would, notwithstanding any other
law, authorize a small business, before exhausting all administrative
remedies, to seek judicial review and the stay of an order issued by
a state agency if the small business would suffer irreparable harm
in the absence of the court granting a stay of the state agency's
order or the state agency issuing the order has not complied with a
specified section of law. The bill would, if the court grants the
stay of the order, deem the small business to have exhausted all
administrative remedies and would require the court to hear the case
sitting without a jury. The bill would require the court to review
the evidence and facts de novo and make its own independent judgment
on the merits of the case. The bill would exempt any order from the
Franchise Tax Board or the State Board of Equalization from these
provisions.
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 on
to support the agency's determination that the proposed
action will not have a significant adverse 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 require a state agency to assist a small business,
as defined, in complying with all statutes and regulations
administered by the state agency, agency and
in any enforcement action by the state agency, and in
participating in the rulemaking process under the Administrative
Procedure Act, as specified. The bill would require a state agency to
include certain information on any notice of regulatory violation,
penalty assessment, or other punitive action sent to a small
business, including, among others, the contact information for the
agency's small business liaison. The bill would, notwithstanding any
other law, require a state agency, before assessing any
administrative penalties or fines on a small business, to provide no
less than 30 days actual notice to the small business and to provide
the small business with an opportunity to comply with the law or
remedy the violation if ignorance of the violation is reasonable
under the circumstances and the violation does not constitute a crime
or a basis for strict liability. agency. The
bill would, no not later than December
31, 2017, require a state agency to create a policy, as specified,
that provides for the reduction, and under certain circumstances
waiver, of civil penalties for a small business based upon
principles of equity and fairness, and requires a state agency to
consider mitigating factors when adopting the
policy, including, but not limited to, that the violation
by the small business was committed inadvertently or without
knowledge of the requirements for compliance with the law.
did not pose an imminent health, safety, or environmental
threat.
Vote: majority. Appropriation: no. Fiscal committee: yes.
State-mandated 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 4 (commencing with Section 550)
is added to Title 7 of Part 2 of the Code of Civil Procedure, to
read:
CHAPTER 4. CALIFORNIA SMALL BUSINESS REGULATORY FAIRNESS ACT
550. (a) A court may, after administrative remedies are
exhausted, grant equitable relief to a small business from a final
order of a state agency in the interest of justice.
(b) When granting equitable relief under this section, the court
shall consider mitigating factors including, but not limited to:
(1) The small business has not been subject to previous
enforcement actions by the state agency.
(2) The violation by the small business did not involve willful or
criminal conduct.
(3) The violation by the small business did not pose an imminent
health, safety, or environmental threat.
(4) The violation by the small business was committed
inadvertently or without knowledge of the requirements for compliance
with the law.
(5) The small business is unable to pay the penalty or the penalty
would impair the ability of the small business to conduct business
or compete effectively.
(6) 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.
(7) The small business cooperated during any investigation by the
state agency.
(8) The small business engaged in subsequent action to correct the
violation.
(c) The court may take into consideration any other mitigating
factors the court finds relevant. The court shall not be required to
weigh the mitigating factors equally.
(d) The court shall review all evidence and facts de novo and make
its own independent decision on the merits when granting relief
under this section.
551. (a) Notwithstanding any other law, a small business may seek
judicial review and a stay of an order of a state agency without
exhausting administrative remedies if either of the following apply:
(1) The small business would suffer irreparable harm in the
absence of the court granting a stay on the order of the state
agency.
(2) The state agency issuing the order that is before the court
has not established the policy required by Section 11367.4 of the
Government Code.
(b) If a court grants relief to a small business under this
section, the small business shall be deemed to have exhausted all
administrative remedies and the case shall be heard by the court
sitting without a jury.
(c) The court shall review all evidence and facts de novo and make
its own independent decision on the merits.
(d) The decision of the court to decline review or deny relief
under this section shall not be appealable.
552. (a) For purposes of this chapter, "small business" has the
same meaning as set forth in Section 14837 of the Government Code.
(b) For purposes of this chapter, "state agency" shall not include
the Franchise Tax Board or the State Board of Equalization.
SEC. 3. 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" shall have the same meaning as set forth in
Section 14837 of the Government Code.
(b) "State agency" means any state agency except the Franchise Tax
Board 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.
(2) Assist a small business during an enforcement action by the
state agency.
(3) Assist a small businesses with participating in the rulemaking
process required by the Administrative Procedure Act (Chapter 3.5
(commencing with Section 11340) of Part 1 of Division 3 of Title 2 of
the Government Code). A state agency shall provide a small business
with information on how to participate in the rulemaking process and
shall provide the contact information of any ombudsman or small
business liaison that can assist the small business, including, but
not limited to, the Office of Small Business Advocate.
(b) A state agency shall include all of the following information
on any notice of regulatory violation, penalty assessment, or other
punitive action sent to a small business:
(1) How the small business can comply with the law or remedy the
violation, pursuant to Section 11367.2.
(2) All administrative and judicial remedies available to the
small business.
(3) The Internet Web site, if available, and contact information
for all of the following:
(A) The Office of Small Business Advocate.
(B) Any applicable ombudsman that may assist the small business.
(C) The small business liaison for the state agency.
11367.2. (a) Notwithstanding any other law, before imposing any
civil penalties or administrative fines on a small business, a state
agency shall provide no less than 30 days actual notice to a small
business and shall provide the small business with an opportunity to
comply with the law or remedy the violation of the law if ignorance
of the violation is reasonable under the circumstances and the
violation does not constitute a crime or a basis for strict
liability.
(b) All other notices of regulatory violation, which result in
penalty assessment or other punitive action, sent to a small business
shall be delivered as expeditiously as possible to allow the small
business to comply with the law and mitigate any losses.
(c) Notices required under this section shall be delivered to the
small business in person by an authorized agent of the state agency
or by certified mail.
11367.4. (a) No
(3) Not later than December 31,
2017, a state agency shall establish a policy to
provide for reduction, and under certain circumstances waiver, of
civil penalties for a small business based upon principles
of equity and fairness. mitigating factors including,
but not limited to:
(b) Mitigating factors that shall be considered by a state agency
when adopting the policy in subdivision (a) include, but are not
limited to:
(1)
(A) The small business has not been subject to previous
enforcement actions by the agency.
(2)
(B) The violation by the small business did not involve
willful or criminal conduct.
(3)
(C) The violation by the small business did not pose an
imminent health, safety, or environmental threat.
(4) The violation by the small business was committed
inadvertently or without knowledge of the requirements for compliance
with the law.
(5)
(D) The small business is unable to pay the penalty or
the penalty would impair the ability of the small business to conduct
business or compete effectively.
(6)
(E) 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.
(7)
(F) The small business cooperated during any
investigation by the state agency.
(8)
(G) The small business engaged in subsequent action to
correct the violation.
(c)
(b) A small business shall not be required to meet all
of the mitigating factors adopted by a state agency to receive relief
under the policy. A state agency shall not require the mitigating
factors to be weighed equally when granting relief to a small
business under the policy.
(d) A court may independently weigh, de novo, all relevant
mitigating factors when reviewing a decision by a state agency to
grant relief to a small business under the policy.
