BILL ANALYSIS Ó ----------------------------------------------------------------- |SENATE RULES COMMITTEE | AB 113| |Office of Senate Floor Analyses | | |1020 N Street, Suite 524 | | |(916) 651-1520 Fax: (916) | | |327-4478 | | ----------------------------------------------------------------- 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 CONTINUED AB 113 Page 2 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 AB 113 Page 3 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 **** END ****