BILL ANALYSIS
Senate Appropriations Committee Fiscal Summary
Senator Christine Kehoe, Chair
980 (Huff)
Hearing Date: 5/10/2010 Amended: 3/23/2010
Consultant: Bob Franzoia Policy Vote: BP&ED 8-0
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BILL SUMMARY: SB 980 would create the Business Master License
Center (BMLC) within the State and Consumer Services Agency.
The BMLC would develop and administer a computerized one stop
master license system capable of storing, retrieving, and
exchanging license information as well as issuing and renewing
master licenses. This bill would permit the Governor to appoint
a 3rd party facilitator from the business community to provide
oversight over the creation of the center and the development of
its master license system. This bill would charge license
applicants, in addition to any other fees or deposits required
to obtain a particular license, a master license administrative
fee in specified amounts, to be deposited into the Business
Master License Fund, which this bill would create. This bill
would require that the moneys in the fund, upon appropriation by
the Legislature, be used only to administer the BMLC.
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Fiscal Impact (in thousands)
Major Provisions 2010-11 2011-12 2012-13 Fund
Business Master LicenseUnknown, major startup costs for
two-General/
Center three years, or more; costs would be
loans Special* from appropriate
funds
Unknown, major costs annually, all
costsGeneral/
potentially offset by license fee
revenueSpecial*
* Various special funds; all funds deposited into the Business
Master License Fund
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STAFF COMMENTS: This bill meets the criteria for referral to the
Suspense File.
Several departments and agencies have identified major costs and
implementation concerns related to the BMLC. Representative of
those costs are those identified by the Secretary of State, as
follows:
- The Business Programs Division (BPD) estimated the need for 16
personnel years to implement the provisions of this bill, which
would cost an estimated $1.4 million annually and approximately
$100,000 on a one time basis.
- Unknown costs for increases in printing, mailing, and overtime
staff costs for current BPD employees.
- The Information Technology Division (ITD) estimates one time
costs of $3,500,000 for a contracted development team of six
developers, one database analyst, and one project manager to
interface the existing Secretary of State office applications
with the proposed central business master license application.
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SB 980 (Huff)
- ITD also estimates one time costs of $100,000 for additional
servers and SAN storage to handle the increased database size.
- ITD anticipates ongoing costs of approximately $300,000 for
three new positions for maintenance on the database.
The 3rd party facilitator from the business community appointed
by the Governor shall report directly to, and serve at the
pleasure of, the Governor. The facilitator shall provide
oversight over the creation of the center and the development of
the center's master license system.
Staff recommends this bill be amended to require the State and
Consumer Services Agency to establish the fee in an amount
sufficient to cover the cost of the service. Absent this
amendment, and to the extent the cost to issue a master license
exceeds $15 for a new license and $9 for a renewal, this bill
creates General Fund cost pressure. Savings, if any, from this
process would likely not occur for several years.
Given the initial costs and past difficulties state agencies
have encountered bring large new databases on line, implementing
a BMLC on a statewide basis would generate substantial General
and special funds costs and risks. To limit these costs and
risks, and to increase the potential of getting a BMLC
implemented, staff recommends this bill be amended to be phased
in, starting with a small, special fund agency.
This bill is similar to AB 2507 (Speier) 1994, which was vetoed
by Governor Wilson with the following message:
This bill would establish the California Business Registry Task
Force to prepare to implementation plan by June 30, 1995 to
develop a statewide fictitious business name statement process
within the Secretary of State's office that would include an
automated statewide data base, a registration form for
businesses and a unified business identifier.
Although the intent of this measure is to simply the
registration procedures for businesses, I am concerned that it
would eventually require registrants to provide large sums to
meet the substantial costs incurred by state agencies associated
with revamping large databases needed to accommodate this
uniform business identifier.
There is no requirement in state law now that just any business
"register" with the state. Employers must pay payroll taxes,
certain manufacturers must obtain environmental permits, many
businesses must obtain local fictitious name registrations. But
there is no single repository of all companies or individuals
doing "business" in the state. Nor has the author demonstrated
a compelling need for such a data base.
I am skeptical that such a centralized registry would do more
than duplicate what the State's tax, regulatory, and licensing
agencies already do. More important is to continue this
Administration's commitment to reduce paperwork and bureaucracy
within these regulatory and licensing agencies, rather than
setting up a super-registration agency.