BILL ANALYSIS Ó
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|Hearing Date:July 2, 2012 |Bill No:AB |
| |2641 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Curren D. Price, Jr., Chair
Bill No: AB 2641Author:Skinner
As Amended: May 25, 2012Fiscal: Yes
SUBJECT: Nonprofit corporations: Internet Web site.
SUMMARY: Requires the Governor's Office of Business and Economic
Development (GO-Biz) to post on its Internet Web site information to
assist a person in starting a nonprofit corporation and to assist
nonprofit corporations to achieve compliance with the state's
statutory and regulatory requirements.
Existing law, the Corporations Code (CC):
1)Provides for the organization and governance of nonprofit public
benefit corporations, nonprofit mutual benefit corporations, and
nonprofit religious corporations.
(CC § 5120 et seq.).
2)Requires these corporations to prepare and file articles of
incorporation with the Secretary of State, and within 90 days of
that filing, and biennially thereafter. Requires these corporations
to file a form prescribed by the Secretary stating specified
information regarding certain officers, office location, and agent
for service of process, among other information.
(CC § 17060)
Existing law, the Government Code (GC):
1)Establishes GO-Biz within the Governor's Office for the purpose of
serving as the lead state entity for economic strategy and marketing
of California on issues relating to business development, private
sector investment and economic growth. GO-Biz also serves as the
administrative oversight for the California Business Investment
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Service and the Office of the Small Business Advocate. (GC §§ 12096
- 12098.5)
2)Provides that the Governor shall appoint the Director of GO-Biz who
shall perform all duties, exercise all powers, assume and discharge
all responsibilities, and carry out and effect all purposes vested
by law in the office, including contracting for professional or
consultant services in connection with the work of the office. (GC
§ 12096.2)
3)Establishes the Business, Transportation and Housing Agency (BTH)
for the purpose, among other things, of overseeing and coordinating
the activities of various departments, offices, and economic
development programs, with responsibility for maintaining the
strength and efficiency of California's infrastructure and financial
markets. These programs provide financial and programmatic
regulation important to the economic marketplace, community
development, the safe and efficient flow of commerce, and activities
related to international trade and investment.
4)Provides the BTH shall be the primary state agency responsible for
trade and foreign investment activities, and directs BTH, among
other things, to engage in specified activities as it relates to
trade and foreign investment: (GC §§ 13996.45)
5) Requires a charitable corporation, as defined, to file periodic
written reports with the Attorney General beginning within 4 months
and 15 days following the close of the first calendar or fiscal
year in which it initially receives property, setting forth
information as to the nature of the assets held for charitable
purposes. (GC § 12586)
This bill:
1)Requires GO-Biz to post on its Internet Web site information to
assist an individual to start a nonprofit corporation and to assist
nonprofit corporations to achieve compliance with the state's
statutory and regulatory requirements.
2) Requires specified state agencies to provide accurate and updated
information about their requirements. The Internet Web site shall
contain information on the incorporation, registration, and renewal
requirements of all of the following agencies:
a) Employment Development Department.
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b) Franchise Tax Board.
c) Internal Revenue Service.
d) Office of the Attorney General.
e) Office of the Secretary of the State.
f) State Board of Equalization.
1) Requires the Internet Web site to include, but not be limited to,
information that does all of the following:
a) Assists individuals with identifying all state forms or
documents they may need.
b) Provides direct links to an electronic copy of all state forms
and documents available for download.
c) Instructs individuals on how and where to submit all state
forms and documents.
d) Assists nonprofit corporations with identifying the state's
statutory and regulatory requirements they must comply with to
maintain their status as a nonprofit corporation in this state.
e) Informs individuals to contact local agencies regarding local
requirements.
2) Requires GO-Biz to ensure that the Internet Web site is user
friendly and provides accurate and updated information.
3) Prohibits a state agency from using this Internet Web site as the
exclusive source of information that it provides to the public.
FISCAL EFFECT: The Assembly Appropriations Committee analysis dated
May 2, 2012 indicates:
Workload costs potentially in excess of $150,000 (GF) for
GO-Biz to restructure their current website and the California
Government Online Desktop (CalGOLD) database (a catalog of
searchable information regarding business permits and licensing
requirements) and to gather all of the required information from
affected departments and agencies.
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Virtually every department and agency in the state conducts
business with nonprofit organizations. All of those agencies
would be required to provide updated statutory and regulatory
information for GO-Biz to post on their website and perhaps in
the CalGOLD database. Costs associated with that workload would
likely exceed $100,000 (various funds).
COMMENTS:
1.Purpose. According to the Author , "there is no single government
website that lists all of the incorporation and renewal
requirements. Different websites for government agencies lists
select requirements, but there is no complete, comprehensive list
that details the requirements for both incorporation and renewal."
The Author further contends that, "larger nonprofits have the resources
to hire lawyers for the creation and renewal of the organization,
while ensuring that the organization is in compliance with state
law. Smaller nonprofits do not have equivalent resources, resulting
in many nonprofits failing to comply with state law. It is
difficult for smaller nonprofits to even know what paperwork needs
to be filed on a yearly basis."
The Author believes there needs to be a single government resource that
nonprofit organizations can utilize to attain updated and accurate
information regarding registration and renewal requirements
2.Governor's Office of Business and Economic Development (GO-Biz). In
February 2010, the Little Hoover Commission (LHC) undertook a review
of the state's economic and workforce development programs. In its
final report, Making up for Lost Ground: Creating a Governor's
Office of Economic Development, it analyzed the status and
effectiveness of current programs since the 2003 demise of the
Technology, Trade and Commerce Agency and recommended the creation
of a new governmental entity to fill the void left by the dismantled
agency.
The report called for a single entity that would promote greater
economic development, foster job creation, serve as a policy advisor
and deliver specific services (i.e., permitting, tax, regulatory,
and other information) directly to the California business
community. In April 2010, Governor Schwarzenegger issued Executive
Order S-05-10 as a means to operationalize the report
recommendations including the creation of the Governor's Office of
Economic Development (GOED).
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Since its inception, GOED has served over 3,000 businesses, 95% of
which are small. The most frequent types of assistance include help
with permit streamlining, starting a businesses, relocation and
expansion of businesses, and regulatory challenges.
Under the auspices of GOED, a number of state programs and services
are administered, including programs related to international trade,
permit assistance, the Office of the Small Business Advocate, and
innovation. There are 23 positions assigned to GOED in 2011-12
Budget, which are funded through existing state resources and
staffed by personnel loaned from state agencies and departments.
In October 2011, the Governor signed AB 29 (cited and described
below), which effectively codified GOED and changed its name to
GO-Biz, effective January 1, 2012.
Among other programs, GO-Biz administers the Innovation Hub (iHUB)
program in partnership with the statewide network of Small Business
Development Centers. There are currently 12 regional iHUBs located
throughout the state. The iHUB program is designed to improve the
state's national and global competitiveness by stimulating
partnerships, economic development, and job creation around specific
research clusters. Key assets and partners of the initiative
include technology incubators, research parks, universities, federal
laboratories, economic development organizations, business groups,
and venture capitalists.
Another key initiative of GO-Biz is the "strike teams" which can be
mobilized to help attract and/or retain specific businesses. Strike
teams are especially well suited to engage with major employers and
have been successfully activated to assist Bayer Healthcare, Jazz
Semiconductor, and Baxter Pharmaceutical to locate and/or expand in
California.
GO-Biz is also sponsoring a permit streamlining pilot project, which
will offer a One-Stop-Shop for state and local permits. The pilot,
launched in partnership with the City and County of San Francisco,
will allow a business owner to login to a single Web site (24x7) and
apply for and pay all necessary city, county and state permits.
1.Information Already Available Online. While it is true that there is
no single government Web site that provides an easy to comprehend
list of all the incorporation and renewal requirements that a
nonprofit has to follow, there are currently various Web sites that
provide that information. For example, the Nonprofit Resources
Center's Web site provides a comprehensive list of all the
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requirements that an individual has to follow in order to start a
nonprofit in the State of California. This list includes not only
links to the appropriate forms, but also links to the appropriate
federal and state laws. The same Web site also provides information
to help established nonprofits to achieve compliance with the
state's statutory and regulatory requirements.
2.Related Legislation. AB 2012 (Perez) transfers the authority for
undertaking international trade and foreign investment activities
from BTH to GO-Biz, including establishing any international trade
and investment office. The bill is set for hearing July 2, 2012 in
this Committee.
SUPPORT AND OPPOSITION:
Support: AFSCME
Opposition: None received as of June 25, 2012
Consultant:Michael Lynch