BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                      



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  AB 2641|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 2641
          Author:   Skinner (D)
          Amended:  5/25/12 in Assembly
          Vote:     21

           
           SENATE BUS., PROF. & ECON. DEV. COMMITTEE  :  7-0, 7/2/12
          AYES:  Price, Corbett, Correa, Hernandez, Negrete McLeod, 
            Vargas, Wyland
          NO VOTE RECORDED:  Emmerson, Strickland

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8

           ASSEMBLY FLOOR  :  51-23, 5/30/12 - See last page for vote


           SUBJECT  :    Nonprofit corporations:  Internet Web site

           SOURCE  :     Author


           DIGEST  :    This bill requires the Governors 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.

           ANALYSIS  :    Existing law, the Corporations Code:

          1. Provides for the organization and governance of 
             nonprofit public benefit corporations, nonprofit mutual 
             benefit corporations, and nonprofit religious 
                                                           CONTINUED





                                                               AB 2641
                                                                Page 
          2

             corporations.  

          2. Requires these corporations to prepare and file articles 
             of incorporation with the Secretary of State (SOS), and 
             within 90 days of that filing, and biennially 
             thereafter.  Requires these corporations to file a form 
             prescribed by the SOS stating specified information 
             regarding certain officers, office location, and agent 
             for service of process, among other information

          Existing law, the Government Code:

          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 Service and the Office of the Small Business 
             Advocate. 

          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.

          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 

                                                           CONTINUED





                                                               AB 2641
                                                                Page 
          3

             specified activities as it relates to trade and foreign 
             investment.

          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. 

          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.

             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.

          3. 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 

                                                           CONTINUED





                                                               AB 2641
                                                                Page 
          4

                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.

          4. Requires GO-Biz to ensure that the Internet Web site is 
             user friendly and provides accurate and updated 
             information. 

          5. Prohibits a state agency from using this Internet Web 
             site as the exclusive source of information that it 
             provides to the public. 

           Background
           
           Governor's Office of Business and Economic Development  .  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).


                                                           CONTINUED





                                                               AB 2641
                                                                Page 
          5

          Since its inception, GOED has served over 3,000 businesses, 
          95 percent 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.   


                                                           CONTINUED





                                                               AB 2641
                                                                Page 
          6

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes   
          Local:  No

           SUPPORT  :   (Verified  8/7/12)

          AFSCME


           ARGUMENTS IN SUPPORT  :    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


           ASSEMBLY FLOOR  :  51-23, 5/30/12
          AYES:  Alejo, Allen, Ammiano, Atkins, Beall, Block, 
            Blumenfield, Bonilla, Bradford, Brownley, Buchanan, 
            Butler, Charles Calderon, Campos, Carter, Cedillo, 
            Chesbro, Dickinson, Eng, Fong, Fuentes, Furutani, 
            Galgiani, Gatto, Gordon, Hall, Hayashi, Roger Hernández, 
            Hill, Huber, Huffman, Jeffries, Lara, Bonnie Lowenthal, 
            Ma, Mendoza, Miller, Mitchell, Monning, Pan, Perea, V. 
            Manuel Pérez, Portantino, Skinner, Solorio, Swanson, 
            Torres, Wieckowski, Williams, Yamada, John A. Pérez
          NOES:  Achadjian, Conway, Cook, Donnelly, Beth Gaines, 
            Garrick, Gorell, Grove, Hagman, Halderman, Harkey, Jones, 
            Knight, Logue, Mansoor, Morrell, Nestande, Nielsen, 
            Norby, Olsen, Silva, Smyth, Wagner

                                                           CONTINUED





                                                               AB 2641
                                                                Page 
          7

          NO VOTE RECORDED:  Bill Berryhill, Davis, Feuer, Fletcher, 
            Hueso, Valadao


          JJA:d  8/8/12   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****
          



































                                                           CONTINUED