Dems Slash Business-Saving Bills

Long before any of 800 bills passed by the Legislature reached Gov. Jerry Brown’s desk this legislative session, partisan politics took precedence over repairing the state’s economy. Apparently restoring confidence and faith in California’s residents and businesses was less important than party politics and flexing muscle.

In early 2011, Republicans introduced numerous bills, which would have gone a long way toward improving the economic outlook for California residents and business owners. Reminiscent of a psycho in a slasher film, most of the bills barely saw the light of day, unceremoniously stalked and killed by Democrats early in the legislative session.

Regulations Kill Jobs

Despite one school of thought which denies that government regulations hurt business, according to California State University-Sacramento Professor of Finance Sanjay Varshney, California’s unrelenting regulatory climate is indeed a business killer. In fact, regulations often kill businesses through compliance issues, the employee reporting time it takes, the many staff members required to comply, as well as the actual restrictions placed on the business. The overall result is that regulations prevent businesses from doing what they do well.

Republican legislators’ jobs bills this session were designed to either loosen the grip of regulations, cut regulations, sunset old regulations, or make the regulating agencies more accountable to the Legislature.

The Quick and the Dead

SB 396, by Senator Bob Huff, R-Diamond Bar, would have required all state agencies to review the 28,000 pages of state regulations currently being implemented. The bill’s intent was to just get rid of duplicative, obsolete and ineffective regulations.

The bill also would have required ongoing agency regulatory review every five years to make sure that ineffective or obsolete regulations were not kept on the law books.

But Huff’s bill received no Democratic support and was killed in the Senate Environmental Quality Committee. Democratic Senators Loni Hancock of Berkeley, Alan Lowenthal of Long Beach, Fran Pavley of Agoura Hills and Joe Simitian of Palo Alto voted in favor of the bill at one hearing. Then the same voters, joined by Sen. Christine Kehoe, D-San Diego, voted to kill it.

Republican Assemblyman Mike Morrell of Redlands, authored a similar bill, AB 535, which would have required the State Office of Administrative Law to review all state regulations after five years, and report the economic and consumer impacts.

Sen. Jean Fuller, R-Bakersfield, introduced SB 401, which would have required a built-in sunset for all new regulations unless the state agency held a public hearing process to renew the regulation. But it was also killed.

Business Impact

Another bill, SB 400, by Sen. Bob Dutton, R-Rancho Cucamonga, would have required state agencies to analyze and report the potential for adverse economic impact on California businesses for new or amended regulations. SB 400 was killed by the Senate Environmental Quality committee.

AB 273 by Republican Assemblyman David Valadao of Hanford would have required the Department of Finance to review an agency’s economic impact statement for proposed regulations, and required the finance department to present its own analysis. This good bill is stuck in the Assembly Appropriations Committee.

There were two more Assembly bills, which would have had similar impact. AB 586 by Assemblyman Martin Garrick, R-Carlsbad, would have required a state agency to hold a hearing to reveal the impacts any new regulations costing $10 million or more would have on businesses.

AB 429 by Assemblyman Steve Knight, R-Lancaster, would have required a regulatory agency to submit a copy of the rulemaking record to the appropriate legislative policy committee for any new regulation costing $15 million or more.

No Oversight

As each of the bill’s authors pointed out, state agencies are able to create and enact regulations without oversight, input or review by the Legislature, or by the businesses the regulations affect. In effect, the citizens of the state have no input, nor do their elected representatives in the Legislature.

Sen. Ted Gaines took an interesting tactic with SB 591, which would have required state agencies to reduce the total number of regulations by 33 percent by December 31, 2013. And this bill would have required the elimination of one regulation for every proposed regulation.

The 33 percent figure is no coincidence, as the Legislature pushed through and passed the environmentally restrictive Renewable Portfolio Standard, which mandates that California obtain 33 percent of all electricity from renewable resources by 2020.

But SB 591 was killed by the Senate Governmental Organization committee, as the committee did with Huff’s bill, first it voted in favor of the bill, then voted to kill it. (February 6, 2011: Senate Governmental Organization: 11-0 [PASS]; Feb. 26, 2011, Senate Governmental Organization: 5-6 [FAIL]

Ironically, the Renewable Portfolio Standard pushers refused to acknowledge that hydroelectric power substantially contributes to this goal. Unlike solar and wind power, hydroelectric power is affordable, renewable and abundant. This proved that the RPS was just another mandate supporting the unreliable solar and wind agenda.

There were bills proposed to streamline the state permitting process for new and expanding businesses, but these were also killed.

By killing these jobs bills, Democrats only prolonged California’s downward slide into the economic abyss and business and employer anxiety about financial recovery. And reining in regulations would have added accountability for state agencies currently operating with none.

Cutting regulations would have allowed some businesses in the state to begin to financially plan ahead for some growth again. Currently, every business owner I speak to says that not only are they not hiring because of the shaky economy, they are not hiring because they don’t know what crazy law California’s Legislature will come up with next, or horrible new regulations will be imposed.

A show of good faith to California’s business owners and entrepreneurs could have easily happened with a reduction of regulations. But this Legislature chose instead to stalk and kill California businesses and, consequently, employees.

Nothing contained in this blog is to be construed as necessarily reflecting the views of the Pacific Research Institute or as an attempt to thwart or aid the passage of any legislation.

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