Small Business Wish List 2015

Date: January 21, 2015

Christmas may be over, but it appears that the Grinch is
alive and well in Sacramento and throughout the State of California – and he
brings with him a bagful of regulations and mandates for small business owners.

I hear consistent reports from the small business
community, both in San Diego and around the state, that the regulatory climate
here is a major deterrent to growth and success.  And yet the legislative bodies and the
numerous agencies continue to promulgate new layers of regulations and
fees.  There seems to be no interest in
improving the state’s business climate, and we see almost daily the departure
of businesses of all sizes. 

For several years now I’ve set out a wish list of
legislative changes that would benefit not only the small-business community,
but the entire population of California. 
These are by no means the only ideas, but they are the ideas that keep
coming to mind when I am asked what I would hope to see happening in
Sacramento.

Reform of
Proposition 65

The Safe Drinking Water and Toxic Enforcement Act of
1986, better known by its original name of Proposition 65, requires the State
to publish a list of chemicals known to cause cancer or birth defects or other
reproductive harm. This list has grown to include approximately 800 chemicals
since it was first published in 1987.

Reflecting the law of unintended consequences, Prop 65
requirements have spawned an avalanche of predatory lawsuits and increased the
cost of doing business throughout the state. 
The Prop 65 warning signs are, at this point, nearly meaningless to
small business owners and customers alike – not the intent of the law,
either.  We all agree that the
legislation needs to be reformed, but the proposals of recent years would only
make the situation even worse than it is now. 
For example, when you purchase a new car today, you will find a Prop 65
warning plastered on the window of the driver’s door.  I doubt that anyone buying a new car is going
to be in any way deterred by this sign, yet it certainly adds to the cost of
the vehicle.  While the individual sign
may cost only pennies, the overall requirement is certainly not small and the
final cost will certainly be passed on to the consumer.

California
vs. The Rest of the Country

California has regulations in place that are
substantially identical to federal regulations but that require totally
different paperwork, beyond what is required elsewhere.  For example, the
200-mile off-shore area requiring low-sulfur fuel for shipping is valid
throughout U.S. waters, but in California affected vessels are required to
submit additional paperwork or face penalties.  This makes no sense,
except for the agencies that collect the penalties.  What about requiring
that any proposed legislation that requires unique permitting and fees in an
area already covered by federal rules be required to prove that there is some
compelling reason or significant difference from the federal regulations and
permits required?

Fines vs.
Fees

In recent years, I’ve seen agencies stall the permit
process and then turn around and fine the applicants for not getting permits
for various reasons, including conflicting requirements from other
agencies.  I have two wishes in this
situation.

First, implement a requirement that any new legislation
be fully studied to identify and resolve conflicts with other existing or
proposed legislation or staff-generated regulations.  This should include
conflicts with federal regulations as well as state regulations.

Second, implement a rule that agencies with the power to
impose fines for whatever reason must pass those fines on to the General
Fund.  If they can generate more revenue from legitimate fees than from
fines, they are more likely to actually get their jobs done in a timely
manner.  This benefits the entire business community by ensuring their
permit applications get handled properly, and potentially benefits the General
Fund when fines are issued.

Overlapping
Jurisdictions

If local agencies or federal agencies are already in
place to either provide services or to protect something (consumers, the
environment, etc.), require that any proposed new — or even an existing —
agency be required to show why it differs in its objectives and methods. 
If there is no substantial difference, then the existing agency would be
dissolved, and the proposed new agency would not be created.  This is particularly relevant in San Diego
where at one time I counted at least a dozen different agencies, at all levels
of government, claiming jurisdiction over San Diego Bay, with numerous cases
where one agency’s requirements were in direct opposition to those of another.

I know there are many other ways to tame the regulatory
tiger and create a more favorable business climate in California.  These are a few of particular interest to me,
but the over-arching question is, “When can we start the process?” Then perhaps
someday small business owners won’t feel like the Whos in Whoville, full of
uncertainty and fear, and that the government Grinch will, at last, find its
heart and do good for the people.

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