BILL ANALYSIS                                                                                                                                                                                                    

                                                                AB 113
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        AB 113 (Budget Committee)
        As Amended  April 22, 2013
        Majority vote.  Budget Bill Appropriation Takes Effect Immediately 
        |ASSEMBLY:  |71-1 |(March 18,      |SENATE: |25-10|(April 25,     |
        |           |     |2013)           |        |     |2013)          |
         Original Committee Reference:    BUDGET  

         SUMMARY  :  Amends the Budget Act of 2012 to increase the appropriation  
        for the Secretary of State by $1.6 million to address the business  
        filing backlog.  Specifically,  this bill  :

        1)Appropriates $1.6 million of business filing fees to the Secretary  
          of State to be used only 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. 

        3)Contains an appropriation allowing this bill to take effect  
          immediately upon enactment.

         The Senate amendments  reduce the $2 million appropriation and instead  
        appropriate $1.6 million to the Secretary of State to address the  
        business filing backlog. 

         FISCAL EFFECT  :  $1.6 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. 


                                                                AB 113
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        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 No. 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 $1.6 million to the Secretary of State to begin  
        addressing 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.

         Analysis Prepared by  :    Zoe Adler / BUDGET / (916) 319-2099FN: