BILL ANALYSIS Ó
AB 113
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CONCURRENCE IN SENATE AMENDMENTS
AB 113 (Budget Committee)
As Amended April 22, 2013
Majority vote. Budget Bill Appropriation Takes Effect Immediately
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|ASSEMBLY: |71-1 |(March 18, |SENATE: |25-10|(April 25, |
| | |2013) | | |2013) |
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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:
0000257