It’s springtime in California, and that means things are heating up under the Capitol dome. A “feelgood” bill to require state agencies to establish policies to waive or reduce civil penalties and fines for small businesses is moving steadily through the California legislature.

Fresno Republican Senator Andreas Borgeas is the author of Senate Bill 430. Borgeas, a former county supervisor, knows how deeply the state’s overreach on Covid-19 restrictions damaged thousands of small businesses, with hundreds shuttered in his Central Valley district.

“Small businesses and their employees are an essential part of our economy,” said Senator Borgeas on March 22, after the Senate Business and Professions Committee unanimously approved the proposed law.

“The state of California must do everything in its power to help them recover as they struggle to survive from this pandemic-induced recession,” Borgeas added. “Waiving and reducing fines for small businesses is a significant step on the pathway to economic recovery.”

SB 430 sailed through two Senate committees with unanimous approval in March. It is headed for Senate Appropriations Committee approval this month, and if approved in the Senate, it will go through the Assembly committee structure and a floor vote. 

‘Good News’ Two Years Away

The bill requires state agencies to establish a policy by January 1, 2023, that reduces or waivers civil penalties for violation of a regulatory or statutory requirement by a small business. It defines a “small business” that is all of the following:

  • Independently owned and operated.
  • Not dominant in its field of operation. 
  • Has fewer than 100 employees.
  • Has average annual gross receipts of fifteen million dollars ($15,000,000) or less over the previous three years.

That definition would cover a lot of our construction companies. But, there’s a kicker in the bill – “if the violation did not involve willful or criminal conduct and did not pose a serious health, safety, or environmental threat.”

So this is where the “feel-good” appellation comes in, at least for contractors. Both California’s Occupational Safety and Health Agency (Cal/OSHA) and the Air Resources Board (CARB) fervently contend their regulations deal with “serious health, safety, or environmental threats” and thus their rules should be immune to the provisions of SB 430

The bill would require the policy to include various factors the state agency would consider when deciding whether to reduce or waive the civil penalty. The bill would authorize the state agency to update the policy to reflect current issues and conditions affecting small businesses and the state agency

By Garrett Francis, ECA President Email: [email protected]