BILL ANALYSIS �
AB 113
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Date of Hearing: March 18, 2013
ASSEMBLY COMMITTEE ON BUDGET
Bob Blumenfield, Chair
AB 113 ( Budget Committee) - As Amended: March 14, 2013
SUBJECT : Budget Act: Secretary of State Business Entity Filings
SUMMARY : Amends the Budget Act of 2012 to increase the appropriation
for the Secretary of State by $2 million to address the business
filing backlog. Specifically, this bill :
1)Appropriates $2 million of business filing fees to the Secretary of
State only to be used for overtime pay and temporary staffing to
reduce business filing processing times by amending the 2012-13
Budget Act.
2)Requires the Secretary of State to report monthly to the Joint
Legislative Budget Committee to ensure progress is being made to
decrease business filing return times.
FISCAL EFFECT : $2 million appropriation from fee revenues. To the
extent additional filings are processed, additional fees will be
collected potentially offsetting all, if not more, of this cost.
(According to the Secretary of State's Office, an earlier effort to
accelerate the business filings process time frame resulted in $5
collected for every $1 spent). Unspent fee revenues ultimately are
transferred to the General Fund.
COMMENTS : California businesses are unnecessarily delayed by the
Secretary of State's business filings processing time. Historically,
the Secretary of State took 20 days to process business filings. Last
year, budget cuts and insufficient staff pushed processing times to an
all-time high of 85 days.
Currently, there is a backlog of 122,000 documents and a 65 calendar
day wait time for Business Entity Documents to be processed. As a
result, businesses cannot hire employees, begin paying entity taxes,
or officially open their doors for two months. This is detrimental to
business owners, workers, and the California economy.
On March 12, 2013, Assembly Budget Subcommittee #4 took action to
immediately begin reducing the time for processing business filings
and to ultimately bring the processing time frame to within five days.
This bill implements the current year component of that action by
appropriating $2 million to the Secretary of State to begin addressing
AB 113
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the business filing backlog through overtime and temporary staffing.
This bill compliments measures that will be included in the 2013-14
Budget Act package, including establishing a statutory five day
standard for document processing, strong reporting requirements, and
ongoing resources necessary to permanently reduce the time frame to
five days by November 2013.
REGISTERED SUPPORT / OPPOSITION :
Support
California Business Roundtable
Orange County Business Council
Personal Insurance Federation of California
Opposition
None on file.
Analysis Prepared by : Zoe Adler / BUDGET / (916) 319-2099