BILL ANALYSIS �
AB 991
Page 1
Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 991 (Olsen) - As Amended: April 13, 2011
SUBJECT : State government: licenses: California Licensing and
Permit Center.
SUMMARY : Requires the Governor to establish an Internet Web
site to assist the public with licensing, permitting, and
registration requirements of state agencies. Specifically, this
bill :
1)Requires the Governor, or his or her designee, in cooperation
with the California Technology Agency (CTA), to establish the
California Licensing and Permit Center (CLPC) and
corresponding Web site to assist the public with licensing,
permitting, and registration requirements, accessible from the
Governor's Web site.
2)Requires the Web site to contain information on the licensing,
permitting, and registration requirements of state agencies,
including the following information:
a) Assisting potential applicants with identifying the type
of applications, forms, or other similar documents an
applicant may need;
b) Providing a digital copy of all state applications,
forms, or other similar documents; and,
c) Instructing potential applicants where to transmit
applications, forms, or other similar documents.
3)Requires the Governor, or his or her designee, to operate, via
both electronic mail and telephone methods, a help center that
will assist applicants with licensing, permitting, and
registration requirements.
4)Requires the Governor, in cooperation with CTA, to ensure that
the Web site is user friendly and provides accurate, updated
resources.
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5)Requires each state agency determined by the Governor to have
licensing authority to participate fully with this program by
providing accurate updated information about its licensing
requirements.
6)Establishes the California License and Permit Fund (Fund) in
the State Treasury.
7)Requires each state agency required to participate in the CLPC
to reallocate funds annually from its operating budget to the
Fund in the amount necessary to pay for the agency's
proportionate share of establishing and operating the CLPC.
8)Provides that all moneys in the Fund shall, upon appropriation
by the Legislature, be used by the Governor only for the
purposes of this bill.
9)Specifies that the CLPC shall be provided to the public free
of charge.
EXISTING LAW requires members of the public to obtain licenses,
permits, or to register with state agencies prior to undertaking
certain types of tasks.
FISCAL EFFECT : Unknown
COMMENTS : According to the author's office, "California's
business climate is one of the worst in the nation due to the
state's complex and onerous regulatory environment. California
has the fourth worst tax structure for jobs in the country and
second worst tax climate for small business. California also
has the second highest unemployment rate in the country.
"New regulations requiring more permitting and licensing have
put California's employers at a disadvantage compared to the
rest of the nation.
"Our complex permitting and licensing system will cost
California jobs if entrepreneurs decide it costs too much time
and money to open and operate a business in the state.
Additionally, California has seen many businesses of all sizes
closing their doors and/or relocating out of state.
Background . This bill is based on Executive Order S-05-10 (EO),
which established Governor's Office of Economic Development
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(GoED) as the state's lead entity for economic development
coordination with all public and private entities. GoED was
tasked with the following functions:
Leading the State's business-oriented outreach and marketing
efforts and promoting California as a place for business
investment and job creation, working with private-sector,
nonprofit and other government entities;
Creating a Web portal that will provide one-stop access to
state-level information and resources for businesses;
Serving employers, corporate real estate executives and site
location consultants who are considering California for
business investment and expansion;
Communicating the business advantages of California locations
for new business investment and expansion;
Providing site, workforce training and infrastructure
availability and cost information;
Providing permit and regulatory assistance;
Facilitating participation in state capital financing, grants,
loans, tax credits, and other incentives;
Supporting the State's small businesses by providing
information about accessing capital, regulatory compliance,
state procurement and state initiatives that support small
businesses;
Encouraging collaboration among research institutions,
start-up companies, local governments, venture capitalists and
economic development organizations to promote innovation;
Working with the federal government to leverage economic
development programs and to foster relationships with
international counterparts to help address barriers to trade,
find business partners and promote California's strengths; and
Conducting ongoing research about how California can remain on
the leading edge of innovation and emerging sectors.
California has not had a comprehensive, streamlined effort to
coordinate and promote economic development since the disbanding
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of the Technology, Trade and Commerce Agency (TTCA) in 2003.
TTCA was created in 1992 and served as the primary economic
development entity for promoting the establishment, retention,
and expansion of business, employment, infrastructure, and
international trade in California. Instead of a centralized
entity, currently all of California's efforts and programs
related to economic development are dispersed in more than 10
advisory panels, boards, commissions, allocation committees and
financing authorities which are all housed under various
agencies or offices. Currently, California has a fragmented
approach to economic development which some argue hinders the
state's ability to facilitate economic growth in the most
effective manner.
California Performance Review (CPR) . In 2004, Governor Arnold
Schwarzenegger formed the CPR Commission, an independent and
bi-partisan group consisting of volunteers from the public,
private, and non-profit sectors, as part of his process to
decide what recommendations to pursue in reforming state
government. The ultimate goal of the CPR was to restructure,
reorganize and reform state government to make it more
responsive to the needs of its citizens and business community.
The Commission report titled, The Public Perspective, made
numerous recommendations to reform state government, including
recommendations regarding "General Government and Statewide
Operations." General Government recommendation 22 (GG22)
specifically focused on improving California's business climate.
According to GG22, people who want to start a business in
California do not know where to begin. Even established
business owners find it difficult to navigate the state
bureaucracy. GG22 further asserts that people who want to do
business in California must interact with the state in multiple
ways in order to establish and maintain their businesses. They
must obtain necessary permits and licenses, register their
businesses, report information and pay taxes. For instance, a
business in California is required to register with the state
for purposes of reporting sales taxes, income taxes, employee
wages and insurance. In addition, business owners are required
to obtain a variety of licenses and permits to carry out certain
activities, such as selling alcohol or collecting debts. These
are just a few of the requirements. A business owner could be
required to contact nine or more state departments and agencies
for a single business.
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GG22 also asserts that from a business owner's perspective,
state government is not a collection of independent agencies,
but rather one "state government." As a result, business owners
expect seamless services from the State. Findings also showed
that business owners desire online services from the State,
equivalent to those offered in the private sector. They want a
customer-centered approach that provides timely, useful and
accurate information.
Ultimately, the report recommended to the Governor to create a
master licenses' services similar to that of the state of
Washington.
Washington State's Master License Service (MLS) . In an effort
to improve services to small businesses and create a
consolidated state business license and permit process,
Washington created their MLS, in 1980. The MLS' aim was to
provide a convenient, accessible and timely one-stop system for
business licenses and permits. The MLS developed one master
application for the most commonly acquired business licenses and
permits. The Washington MLS estimates that its master
application is used to issue all required licenses and permits
for about 80 to 85% of businesses in the state.
Washington's MLS is comprised of an intake unit, a call center
and a business liaison section. The intake unit processes
initial applications and renewals, maintains records and
collects associated fees. The call center handles all
telephone, email and Internet inquiries and disseminates forms,
informational booklets and brochures. The business liaison
section provides technical assistance and is responsible for
tracking changes in licensing and permit laws at the state and
local level, as well as any changes in fees.
The Washington MLS enables state agencies to electronically
store, retrieve and exchange license information in one
location. The system is accessible to the public 24 hours a day
and business owners can use it to obtain or update their
information electronically. An additional benefit to the MLS is
that it allows the state to use a single business identification
number for each business. The business identification number is
recognized by all state licensing and regulatory agencies.
The system also allows the state to issue one "master license"
to each business. The master license lists the individual
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licenses and permits approved for the business through the
master application. In addition, when licenses and permits are
issued, the MLS electronically registers the business with
appropriate regulatory agencies such as the state's central tax
collection and employment departments. The electronic
registration has reduced paperwork and increased compliance with
business regulations, ultimately resulting in additional revenue
to the state. The MLS also helped to identify and eliminate the
state's obsolete and duplicative licensing requirements.
Finally, the MLS allows the state to consolidate all license and
permit fees in one place so business owners can issue a single
payment covering multiple fees.
In order to facilitate a smooth transition to an MLS,
Washington's Governor appointed a third-party facilitator or
"business advocate" who reported directly to the Governor and
provided oversight for the project. The business advocate
worked with the affected agencies and was a critical component
of the project.
The data system Washington uses for its MLS is a licensing
information intranet system. The system contains information
relevant to eleven state agencies responsible for regulating
businesses. Information from the master application is entered
into the MLS licensing information intranet system. The
majority of information collected is used for license and permit
purposes. About 100 state licenses can be obtained by using the
master application.
According to Washington's experience, MLS requires relatively
few resources. It has 39 employees and a budget supported by
application and renewal fees. The one-time fee for filing a
master application in Washington is $15 and about 10% of
licenses and permits are renewed annually for a $9 renewal fee.
Fee amounts were established based on a study the state
conducted to determine appropriate application fees. Although
the master application and renewal fees are in addition to fees
previously charged for individual licenses and permits, they are
reasonable in light of the resulting streamlined state processes
and improved customer service. The Washington MLS took
approximately two years to implement.
Support . The National Federation of Independent Business writes
in support, "AB 991 streamlines the permitting and licensing for
individuals as well as business owners and provides information
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to support applicants through the permitting and licensing
process. In 2010, Governor Arnold Schwarzenegger signed an EO
to create the GoED. The EO created a web portal to provide
one-stop access to state-level information and resources for
businesses. The web portal created by the EO can become a
one-stop-shop for all state permits and licenses. AB 991
utilizes an existing state web portal to streamline state
resources and to provide information to support our state's
small businesses. AB 991 will help businesses navigate the
system and cut through red tape, and encourages business to grow
and create new jobs in California."
Opposition . The California Board of Accountancy (CBA) writes in
opposition, "The CBA already hosts its licensing information on
its Web site, and it is already duplicated on the Department of
Consumer Affairs (DCA) Web site. To have it all available in a
third location would only serve to confuse the very consumers
this bill purports to serve. In addition, the CBA has made
great strides to inform consumers of its purpose and that
assistance can be found on its Web site. For the CBA to be
required to pay to drive that same traffic to a different
location does not make sense."
Related legislation . AB 29 (John A. Perez) of 2011, establishes
the GoED, as specified. This bill is currently pending in the
Assembly Jobs, Economic Development and the Economy Committee.
AB 569 (Bill Berryhill) of 2011, establishes the Business Master
Licensing Center (BMLC) to develop and administer a computerized
one-stop master license system as well as issue and review
master licenses, as specified.
Previous legislation . SB 959 (Ducheny) of 2010, recreates the
Office of Permit Assistance under the Governor's Office of
Planning and Research (OPR) in order to help facilitate state
and local level review of commercial and industrial development
projects. This bill was vetoed.
SB 980 (Huff) of 2010, establishes the BMLC within the State and
Consumer Services Agency (SCSC), as specified. This bill was
held in the Senate Appropriations Committee.
AB 978 (V. Manuel Perez) of 2009, requires the State Chief
Information Officer to collaborate with DCA to acquire a new,
integrated, enterprise wide enforcement and licensing system to
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replace the current system used by DCA. This bill was held in
the Senate Appropriations Committee.
AB 485 (Arambula) of 2005, requires SCSA to conduct a
feasibility study on the creation of a Master Business License
Center, as specified. This bill was amended to address an
unrelated subject.
AB 505 (Wright) Chapter 1059, Statutes of 2000, modifies
provisions relating to the Office of Administrative Law
and the adoption of regulations, moves the Office of Small
Business Advocate from the TTCA to OPR in the Governor's office,
and creates the Governor's Small Business Reform Task Force.
REGISTERED SUPPORT / OPPOSITION :
Support
National Federation of Independent Business
Opposition
California Board of Accountancy
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301