BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                            



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                                    THIRD READING


          Bill No:  AB 113
          Author:   Assembly Budget Committee
          Amended:  4/22/13 in Senate
          Vote:     21

           
           SENATE BUDGET & FISCAL REVIEW COMMITTEE  :  10-1, 4/18/13
          AYES:  Leno, Beall, Block, DeSaulnier, Hancock, Jackson,  
            Monning, Price, Roth, Wright
          NOES:  Anderson
          NO VOTE RECORDED:  Emmerson, Berryhill, Nielsen, Wolk, Wyland

           ASSEMBLY FLOOR  :  71-1, 3/18/13 - See last page for vote


           SUBJECT  :    Budget Act of 2012

           SOURCE  :     Author


           DIGEST  :    This bill appropriates $1.6 million in Business Fees  
          Funds to reduce processing times of business related filings and  
          to address the backlog of over 122,000 business related filings  
          currently pending at the Secretary of State's office.

           ANALYSIS  :    Existing law authorizes the Secretary of State to  
          utilize the Business Fees Fund to perform business-related  
          functions for the state.  The Secretary of State is responsible  
          for the management of over 150 different types of filings of  
          business entities and receives over one million filings  
          annually.  The majority of the filings submitted to the  
          Secretary of State are recorded on index cards.  The Business  
          Programs Division, which is responsible for the management of  
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          the filings, is comprised of three sections:  the Business  
          Entities Section, Notary Public/Special Filings Section, and the  
          Uniform Commercial Code/Statement of Information section. 

          This bill:

          1. Appropriates $1.6 million to the Secretary of State in order  
             to address the backlog associated with the processing of  
             business filings.

          2. Requires the Secretary of State report to the Joint  
             Legislative Budget Committee on the 30th day of each month  
             regarding the Secretary of State's progress on reducing the  
             processing time for business filings.
           
          Comments

           Currently, the Secretary of State utilizes an antiquated filing  
          process that is paper and labor intensive.  The Secretary of  
          State estimates that the processing time for Business Entities  
          and Statements of Information ranges from 55 to 53 days, and, as  
          of March 2013, the total number of documents backlogged is  
          123,501.  The Secretary of State estimates that, if the funds  
          are appropriated, the business filings processing times will be  
          reduced to an average of 5-10 days by the end of November 2013. 
           
           According to the spending plan submitted by the Secretary of  
          State, the Business Programs Division will begin hiring  
          immediately upon receipt of the funds and will identify overtime  
          opportunities for staff to begin working on the backlog. 

          On March 14, 2013, the Assembly amended the 2012 Budget Act to  
          appropriate an additional $2 million to the Secretary of State  
          in order to address the backlog of business filings.  However,  
          the spending plan submitted by the Secretary of State  
          acknowledged that, due to time constraints, only $1.6 million  
          was needed in the short term to reduce the backlog.  

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

          According to the Senate Budget and Fiscal Review Committee, this  
          bill appropriates $1.6 million from the Business Fees Fund,  
          which supports the Business Programs Division within the  







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          Secretary of State's Office.  According to the Secretary of  
          State's Office, the cost of processing additional filings will  
          be offset by the additional revenue received from the fees paid  
          with the filings.  In accordance with Government Code Section  
          12176, unspent fees in excess of $1.0 million are transferred to  
          the General Fund.

           SUPPORT  :   (Verified  4/23/13)

          California Business Roundtable
          California Manufacturers & Technology Association
          Orange County Business Council
          Personal Insurance Federation of California



           ASSEMBLY FLOOR  :  71-1, 3/18/13
          AYES:  Achadjian, Alejo, Allen, Ammiano, Atkins, Bigelow, Bloom,  
            Blumenfield, Bocanegra, Bonilla, Bradford, Brown, Buchanan,  
            Ian Calderon, Campos, Chau, Chesbro, Conway, Cooley, Dahle,  
            Daly, Donnelly, Eggman, Fong, Fox, Frazier, Beth Gaines,  
            Garcia, Gatto, Gomez, Gordon, Gorell, Gray, Grove, Hagman,  
            Hall, Harkey, Roger Hernández, Holden, Hueso, Jones,  
            Jones-Sawyer, Levine, Logue, Maienschein, Mansoor, Medina,  
            Melendez, Mitchell, Morrell, Mullin, Muratsuchi, Nazarian,  
            Olsen, Pan, Patterson, Perea, V. Manuel Pérez, Quirk,  
            Quirk-Silva, Rendon, Salas, Stone, Torres, Wagner, Weber,  
            Wieckowski, Wilk, Williams, Yamada, John A. Pérez
          NOES:  Chávez
          NO VOTE RECORDED:  Bonta, Dickinson, Linder, Lowenthal,  
            Nestande, Skinner, Ting, Waldron


          JJA:d  4/23/13   Senate Floor Analyses 

                           SUPPORT/OPPOSITION:  SEE ABOVE

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