(March 27, 2006) California Chamber of Commerce-supported legislation that orders an in-depth study of the effects of regulatory red tape on California small business, and makes recommendations on how to mitigate red-tape burdens in the future is set to be heard by the Assembly Jobs, Economic Development and the Economy Committee.

AB 2330 (Arambula; D-Fresno) requires the Office of the Small Business Advocate to commission a study of the cost impact of state regulations on California small businesses.

The Chamber believes AB 2330’s provisions are vitally important to California small business owners because the burden of “one-size-fits-all” regulations almost always falls most heavily on them. California small businesses contend with the most stringent, complex and costly tangle of laws in the nation.

The Chamber believes that ill-advised or unnecessary laws and regulations can easily damage the economic vitality that small businesses add to the state’s economy. Laws and regulations have consequences, sometimes directly at odds with the intentions of the policymakers. Worse, an overly burdensome regulatory environment can quash the entrepreneurial spirit that motivates many small business owners in California.

Big Burden on Job Generators

The U.S. Small Business Administration’s most recent figures show that small business creates 65 percent or more of net new U.S. jobs and creates more than 50 percent of the U.S. non-farm private gross domestic product (GDP).

Despite the economic importance of small firms, however, four major studies have shown that regulatory mandates and costs have a disproportionate impact on small businesses. Other research has shown that the disproportionate cost impact of regulations on small business is far higher at the state level.

Action Needed

The Chamber believes AB 2330 provides a positive process to ensure state regulatory agencies know the true impact their rules or regulations have on California small businesses and protects the ability of small businesses to maintain and create jobs.

The Chamber is urging employers to write letters in support of AB 2330 to Assembly Jobs, Economic Development and the Economy.

Staff Contact: Julianne Broyles