BILL ANALYSIS �
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|Hearing Date:June 24, 2013 |Bill No:AB |
| |393 |
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SENATE COMMITTEE ON BUSINESS, PROFESSIONS
AND ECONOMIC DEVELOPMENT
Senator Ted W. Lieu, Chair
Bill No: AB 393Author:Cooley
As Amended:May 24, 2013 Fiscal: Yes
SUBJECT: Office of Business and Economic Development: Internet Web
site.
SUMMARY: Requires the Director of GO-Biz to ensure that the office's
Internet Web site contains information on the fee requirements and fee
schedules of state agencies.
Existing law:
1)Establishes GO-Biz within the Governor's Office for the purpose of
serving as the lead state entity for economic strategy and marketing
of California on issues relating to business development, private
sector investment and economic growth. GO-Biz also serves as the
administrative oversight for the California Business Investment
Service and the Office of the Small Business Advocate. (Government
Code (GC) �� 12096 - 12098.5)
2)Provides that the Governor shall ensure the GO-Biz Web site is user
friendly and provides accurate, updated information. Requires each
state agency the Governor determines has licensing authority to
provide accurate updated information about its licensing
requirements. States that a state agency shall not use the GO-Biz
Web site as the exclusive source of information for the public to
access licensing requirements for that agency. Authorizes the
Governor or his or her designee to impose a reasonable fee, not to
exceed the actual cost to provide the service, as a condition of
accessing information on the GO-Biz Web site. Requires the Director
of GO-Biz to ensure that the office's Internet Web site contains
information on the licensing, permitting, and registration
requirements of state agencies, and requires the Web site to
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include, but not be limited to, information that: (GC � 12019.5)
a) Assists individuals with identifying the type of applications,
forms, or other similar documents an applicant may need.
b) Provides a digital copy of all state licensing, permitting,
and registration applications, forms, or other similar documents
where made available for download. States that if a direct link
to a digital copy cannot be provided, the digital copy shall be
posted and made easily accessible for download on the Web site.
c) Instructs individuals on how and where to submit applications,
forms, or other similar documents.
1)Authorizes GO-Biz as the lead entity for economic strategy and the
marketing of California on issues relating to business development,
private sector investment and economic growth. Authorizes GO-Biz, in
this capacity, to coordinate the development of policies and
criteria to ensure that federal grants administered or directly
expended by state government advance statewide economic goals and
objectives. Authorizes GO-Biz to market the business and investment
opportunities available in California by working in partnership with
local, regional, federal, and other state public and private
institutions to encourage business development and investment in the
state. Authorizes GO-Biz to support small businesses by providing
information about accessing capital, complying with regulations, and
supporting state initiatives that support small business. (GC �
12096.3)
2)Finds and declares that it is in the public interest to aid,
counsel, assist, and protect the interests of small business
concerns in order to preserve free competitive enterprise and
maintain a healthy state economy. Establishes the Office of Small
Business Advocate (OSBA) within GO-Biz in order to advocate the
causes of small business and to provide small businesses with the
information they need to survive in the marketplace. (GC � 12098)
3)Requires OSBA to prepare and submit a written annual report to the
Governor and to the Legislature that describes the activities and
recommendations of OSBA, including an evaluation of the efforts of
state agencies and, where appropriate, specific departments, that
significantly regulate small businesses to assist minority and other
small business enterprises, and making recommendations that may be
appropriate to assist the development and strengthening of minority
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and other small business enterprises. (GC � 12098.4 (b))
This bill:
1) Makes technical and clarifying changes.
2) States findings and declarations that:
a) Small business is a cornerstone of California's economy.
b) There are approximately 3.5 million small businesses in
California and they account for
99 percent of the state's employers.
c) Nationwide, approximately one-half of all new small businesses
survive five years or more and only one-third survive longer than
10 years.
2)Requires the GO-Biz Web site to provide a direct link of all state
licensing, permitting, and registration applications, forms, or
other similar documents where made available for download, rather
than a digital copy of the information as provided for under current
law.
3)Adds "permitting" or "registration" authority to the criteria by
which a state agency is determined to be required to post
information on the GO-Biz Web site.
FISCAL EFFECT: This bill is keyed "fiscal" by Legislative Counsel.
According to the Assembly Committee on Appropriations analysis dated
May 8, 2013, this bill will result in one-time costs of approximately
$200,000 in General Fund monies for the workload associated with the
required changes to the website and on-going costs of approximately
$100,000 in General Fund monies to update and maintain the
information.
COMMENTS:
1. Purpose. This bill is sponsored by the California Small Business
Association . According to the Author, "Small business is a
cornerstone of California's diverse and vibrant economy, accounting
for over 99% of the state's employers and roughly 50% of
California's private-sector employment. Because small businesses
often operate under limited time and resources, removing
unnecessary obstacles from their path to success is essential."
The Author adds, that while GO-Biz recently streamlined the
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application process for starting a business in California by making
the permits, licenses and registration requirements easily
accessible online, small businesses that are responsible for paying
a variety of fees to numerous agencies throughout the year may be
at a disadvantage because there is no centralized location
providing them information about fees. The Author believes that
this creates an extra burden to small businesses and hinders their
ability to focus on revenue growth and job creation.
2. Small Businesses in California. California small businesses
comprised 96% of the state's 60,000 exporters in 2009, which
accounted for over 44% of total exports in the state. Nationally,
small businesses represented only 31.9% of total exports. These
numbers include the export of only goods and not services.
Business owners, with no employees, make up the single largest
component of businesses in California; 2.8 million out of an
estimated 3.5 million firms in 2010. As these businesses grow,
they continue to serve as an important component of California's
dynamic $1.9 trillion economy. Microenterprises, meaning
businesses with less than five employees represent approximately
93% of all businesses in the state, or approximately 3.2 million of
all businesses. Businesses with 99 or less employees comprise
nearly 98% of all businesses and employee approximately 38% of all
workers. These non-employer and small employer firms create jobs,
generate taxes, and revitalize communities.
In hard economic times, smaller size businesses often function as
economic engines. In this most recent recession the trend
continued, with the number of nonemployer firms increasing from 2.6
million firms ($137 billion in revenues) for 2008, to 2.8 million
firms ($138 billion in revenues) for 2010. In the post-recession
economy, small businesses are expected to become increasingly
important due to their ability to be more flexible and better
suited to meet niche market needs.
Their small size, however, also results in certain challenges in
meeting regulatory requirements, accessing capital, and marketing
their goods and services. According to information provided by the
Author, small businesses are responsible for paying a variety of
fees to numerous state agencies throughout the year, depending on
the nature of their business and navigating these fees, in addition
to the state's regulatory system in general, may prove challenging
to these businesses with limited resources.
3. Governor's Office of Business and Economic Development (GO-Biz).
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In February 2010, the Little Hoover Commission undertook a review
of the state's economic and workforce development programs. In its
final report, Making up for Lost Ground: Creating a Governor's
Office of Economic Development, it analyzed the status and
effectiveness of current programs since the 2003 demise of the
Technology, Trade and Commerce Agency and recommended the creation
of a new governmental entity to fill the void left by the
dismantled agency.
The report called for a single entity that would promote greater
economic development, foster job creation, serve as a policy
advisor and deliver specific services (i.e., permitting, tax,
regulatory, and other information) directly to the California
business community. In April 2010, Governor Schwarzenegger issued
Executive Order S-05-10 as a means to operationalize the report
recommendations including the creation of the Governor's Office of
Economic Development (GOED).
In October 2011, the Governor signed AB 29 (cited and described
below), which effectively codified GOED and changed its name to
GO-Biz, effective January 1, 2012. Since its inception, the office
has served over 3,000 businesses, 95% of which are small. The most
frequent types of assistance include help with permit streamlining,
starting a businesses, relocation and expansion of businesses, and
regulatory challenges.
According to GO-Biz, the Office of Small Business Advocate (OSBA)
advocates the causes of small business and provides small business
owners with the information needed to succeed in the California
marketplace. OSBA staff provides assistance to the state's small
business community on issues ranging from regulations to
procurement. Depending on the issue, staff can refer small
businesses to appropriate contacts in State government, business,
and service organizations. OSBA staff also serves on various State
interagency working groups and task forces to represent small
business interests in state legislation, policy, and procedures.
In March 2012, the Governor initiated a reorganization process to
realign the state's administrative structure. Key changes include
dismantling of the Business, Transportation and Housing Agency
(BTH) and the shifting of a number of key programs and services to
GO-Biz including the Small Business Loan Guarantee Program, the
California Travel and Tourism Commission, the California Film
Commission, the Film California First Program and the
Infrastructure and Economic Development Bank (I-Bank).
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4. Related Legislation This Session. AB 53 (John A. P�rez) requires
GO-Biz to lead the preparation of the California Economic
Development Strategic Plan, as specified. Requires a copy of the
Worker Adjustment and Retraining Notification Act (WARN) notice be
provided to GO-Biz and that it be posted on the Employment
Development Department (EDD) Web site. ( Status: This bill is
scheduled for a hearing before this Committee on July 1, 2013.)
AB 250 (Holden) codifies and expands the California Innovation Hub
(iHub) Program at
GO-Biz for the purpose of stimulating economic development and job
creation through the coordination of federal, state and local
innovation-supporting resources.
( Status: This bill is scheduled for a hearing before this
Committee on June 24, 2013.)
AB 837 (Campos) requires annual reporting to the Governor's Office
of Business and Economic Development (GO-Biz) by the California
Small Business Development Center Leadership Council on its
activities in any year that the state contributes funds to the
program and also specifies the contents of the report. ( Status:
This bill passed out of this Committee on June 17, 2013 with a 10-0
vote and was re-referred to Senate Appropriations Committee.)
5. Prior Related Legislation. SB 1327 (Canella, Chapter 763, Statutes
of 2012) required GO-Biz to use its Web site to assist individuals
with licensing, permitting, and registration requirements necessary
to start a business.
AB 32 (Lara) of 2012 would have required OSBA to establish a
program that supports entrepreneurship as a form of economic
development and job creation in communities throughout this state.
( Status: The bill was never heard in its first policy committee.)
SB 1327 (Canella, Chapter 763, Statutes of 2012) required GO-Biz to
use its Web site to assist individuals with licensing, permitting,
and registration requirements necessary to start a business.
AB 29 (John A. P�rez, Chapter 475, Statutes of 2011) established
GO-Biz within the Governor's Office for the purpose of serving as
the lead entity for economic strategy and marketing of California
on issues relating to business development, private sector
investment and economic growth.
AB 1632 (Blumenfield, Chapter 731, Statutes of 2010) included
transfers of $32.4 million from the General Fund to support
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small-business and jobs programs.
AB 2287 (Bass) of 2010, would have established the Office of
Economic Development, which includes the California Business
Investment Services Program, within the then-Governor's Economic
Development Office. ( Status: This bill was held in the Assembly
Committee on Jobs, Economic Development and the Economy.)
AB 2734 (John A. Perez) of 2010 created the Office of Economic
Development, which included the California Business Investment
Services Program, within the Governor's Office. Requires the
Office to serve the Governor as the lead entity for economic
strategy and marketing of California and make recommendations to
the Governor and Legislature regarding polices, programs, and
actions to advance statewide economic goals.
( Status : This measure was vetoed by the Governor in 2010. In his
veto message, the Governor indicated that he was "disappointed at
the insistence of the State Senate to make the director of this
office subject to confirmation, which inappropriately infringes on
the rights and powers of my office.")
AB 2714 (V. Manuel Perez) of 2010 would have transferred the OSBA
from the Governor's Office of Planning and Research (OPR) to the
Business Transportation and Housing Agency (BTH). ( Status: The
bill was held in the Assembly Committee on Appropriations.)
AB 2734 (John A. Perez) of 2010 created the Office of Economic
Development which included the California Business Investment
Services Program within the Governor's Office. Required the Office
to serve the Governor as the lead entity for economic strategy and
marketing of California and make recommendations to the Governor
and Legislature regarding polices, programs, and actions to advance
statewide economic goals.
( Status : This measure was vetoed by the Governor in 2010. In his
veto message, the Governor indicated that he was "disappointed at
the insistence of the State Senate to make the director of this
office subject to confirmation, which inappropriately infringes on
the rights and powers of my office.")
SB 1259 (DeSaulnier) of 2010 would have created the Economic
Development and Job Creation Agency and require the new agency to
perform duties relating to economic development and job creation.
It requires the secretary to develop a reorganization plan and
propose a structure for the agency. The measure was held
AB 2206 (Price) of 2008l would have re-established the California
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Small Business Development Center Program through the auspices of
the Business, Transportation, and Housing Agency. ( Status: The
bill was held in the Assembly Committee on Appropriations in 2008.)
AB 2854 (Mendoza) of 2008 would have required, contingent upon
funding becoming available, the establishment of a one-stop web
site for small business-related announcements and funding
opportunities offered by state agencies. ( Status : This measure
was vetoed by the Governor in 2008. In his veto message, the
Governor indicated that the requirements in the bill were redundant
and unnecessary.)
SB 1436 (Figueroa, Chapter 234, Statutes of 2006) enhanced the
state's technical assistance to small businesses by improving the
state's Internet information for small businesses and required the
designation of agency-level small business liaisons.
AB 3058 (Assembly Committee on Jobs, Economic Development and the
Economy, Chapter 233, Statutes of 2006) enhanced the duties of the
OSBA to include advocacy on disaster preparedness and recovery,
including the provision of technical assistance, required the OSBA,
in cooperation with the Office of Emergency Services, to develop a
handbook for small businesses on emergency preparedness, responding
in an emergency, and recovery strategies and required the OSBA,
with the assistance of Office of Emergency Services, to hold at
least three meetings, in different locations in California, to
share best practices on disaster preparedness for small businesses.
6. Arguments in Support. The bill's Sponsor, the California Small
Business Association (CSBA) , states that providing small businesses
with an online location where they are provided with information on
fee requirements and fee schedules will help small businesses
ensure they pay state fees on time and avoid fees. CSBA also notes
that having an efficient method to research and pay state fees will
allow small businesses to focus on increasing revenue and providing
more jobs to Californians.
According to the California Taxpayers Association , this bill will
increase compliance with regulatory requirements, simplify the
compliance burden on businesses and reduce the administrative
workload of state agencies.
Various Chambers of Commerce note that this bill addresses a
current system that is tricky to businesses that have limited time
and expertise to navigate the process and may not be able to
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comply, resulting in unpaid fees and late charges. These
organizations believe that this bill provides a concise, accessible
website for businesses to understand and plan for the different
fees they are faced with.
SUPPORT AND OPPOSITION:
Support:
California Small Business Association, Sponsor
Associated Builders and Contractors of California
California Business Roundtable
California Chamber of Commerce
California League of Food Processers
California Manufacturers and Technology Association
California Restaurant Association
California Taxpayers Association
Carmichael Chamber of Commerce
Citrus Heights Chamber of Commerce
Golden State Builders Exchanges
National Federation of Independent Business
Rancho Cordova Chamber of Commerce
Small Business California
United Contractors
Opposition:
None on file as of June 18, 2013.
Consultant:Sarah Mason