SB 1228: Small business: California Small Business Regulatory Fairness Act.

Session Year: 2015-2016
House: Senate

Version:

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 agencys 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 agencys 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 agencys 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 Governors 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 agencys 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.

Discussed in Hearing