BILL ANALYSIS
AB 2659
Page 1
Date of Hearing: April 20, 2010
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 2659 (Tran) - As Introduced: February 19, 2010
SUBJECT : Business licensing: Business Master License Center.
SUMMARY : Creates a one-stop system for businesses to acquire
and maintain the necessary state licenses. Specifically, this
bill :
1)Creates a Business Master License Center (BMLC) within the
State and Consumer Services Agency (SCSA).
2)Establishes BMLC's duties as, but not limited to:
a) Developing and administering a computerized one-stop
master license system (MLS) capable of storing, retrieving,
and exchanging license information, as well as issuing and
renewing master licenses in an efficient manner;
b) Developing and administering a uniform business
identification number for each participating business
recognized by each participating agency;
c) Providing a license information service detailing
requirements to establish or engage in business in this
state;
d) Providing for staggered master license renewal;
e) Identifying types of licenses appropriate for inclusion
in the MLS;
f) Recommending in reports to the Governor and the
Legislature the elimination, consolidation, or other
modification of duplicative, ineffective, or inefficient
licensing or inspection requirements;
g) Incorporating licenses into the MLS; and,
h) Working with other regulatory agencies to develop a
system that permits participating agencies to share
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information generated from the MLS.
3)Permits SCSA to adopt necessary regulations to effectuate the
purposes of this bill.
4)Requires BMLC to compile information regarding the regulatory
programs associated with each of the licenses under the MLS
that includes, at a minimum, a listing of the statutes and
administrative regulations related to the licensure.
5)Requires BMLC to provide information to any person who
requests.
6)Requires the following agencies to participate fully in the
BMLC:
a) California Environmental Protection Agency (Cal EPA);
b) Department of Alcoholic Beverage Control;
c) Department of Consumer Affairs (DCA);
d) Department of Corporations;
e) Department of Fair Employment and Housing;
f) Department of Fish and Game;
g) Department of Food and Agriculture;
h) Department of Industrial Relations;
i) Department of Motor Vehicles;
j) Department of Parks and Recreation;
aa) Department of Pesticide Regulation;
bb) Department of Toxic Substances Control;
cc) Department of Transportation;
dd) Employment Development Department;
ee) Franchise Tax Board;
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ff) Secretary of State (SoS);
gg) State Board of Equalization;
hh) State Department of Health Care Services; and,
ii) Any other agency that SCSA determines has licensing
authority consistent with the purposes of this bill.
7)Requires a license applicant to submit a master application to
the BMLC requesting a license. The master application form
shall contain, in consolidated form, the information necessary
for licensure.
8)Requires the applicant to submit with the application the sum
of all fees and deposits required for each requested license
and the master license administrative fee, as specified.
9)Retains an agency's authority for approving licenses requiring
investigation, inspection, testing, or any discretionary
judgmental review. Permits BMLC to issue licenses when proper
fee payment and completed application forms have been received
unless otherwise specified.
10)Requires BMLC to immediately notify the regulatory agency
upon receipt of an application and proper fee payment.
Requires each regulatory agency to, within a reasonable time
after notification, advise BMLC of one of the following:
a) That the agency approves the issuance of the requested
license and will advise the applicant of any specific
conditions required licensure;
b) That the agency denies the issuance of the license and
will provide the applicant reasons for the denial; or,
c) That the application is pending with the agency.
11)Requires BMLC to issue a master license endorsed for all the
approved licenses to the applicant and advise the applicant of
the status of other requested licenses. It is the
responsibility of the applicant to contest a decision
regarding conditions imposed or licenses denied through the
normal process established by statute or by the regulatory
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agency.
12)Requires regulatory agencies to receive information from the
master application for their licensing and regulatory
functions.
13)Creates the Master License Fund (Fund) in the State Treasury
for receipt of administrative fees and, upon appropriation by
the Legislature, use only to administer BMLC.
14)Requires BMLC to collect a master license administrative fee
of $15 for each master application and a master license
administrative fee of $9 for each master renewal application.
The entire master license administrative fee shall be
deposited in the Fund.
15)Requires any license fee collected under MLS, except for the
master license administrative fee imposed by the regulatory
agency, to be deposited with the Treasurer and allocated to
the appropriate regulatory agency.
16)Requires BMLC to assign an expiration date for each master
license and renewable license. License fees shall be prorated
to accommodate the staggering of expiration dates.
17)Requires all renewable licenses endorsed on a master license
to be renewed by BMLC under conditions originally imposed
unless a regulatory agency advises BMLC of conditions or
denials to be imposed before the endorsement is renewed.
18)Prohibits BMLC from issuing or renewing a master license to a
person if any of the following occur:
a) The person does not have a valid tax registration, if
required;
b) The person is a corporation delinquent in fees or
penalties owed to SoS;
c) The person is not validly registered under any statute
giving corporate or business licensing responsibilities to
SoS; or,
d) The person has not submitted the sum of all fees and
deposits required for the requested individual license
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endorsements and the master license administrative fee.
19)Permits the Governor to appoint a third-party facilitator
from the business community who shall report directly to, and
serve at the pleasure of, the Governor. The facilitator shall
provide oversight over the creation of BMLC and the
development of its MLS.
20)States that it is only necessary to register a valid license
already in effect prior to the effective date of this bill
under MLS upon the renewal or expiration date of that license.
21)States that nothing in this bill shall be construed to
eliminate or reduce the authority of a regulatory agency
legally authorized to issue a license from determining if a
requested license shall be issued.
22)Defines the following terms:
a) "BMLC" and "center" mean the business registration and
licensing center established by this bill and located in
and under the administrative control of SCSA;
b) "License" means the whole or part of any agency permit,
license, certificate, approval, registration, charter, or
any form or permission required by law, including agency
regulation, to engage in any business activity;
c) "Master application" means a document incorporating
pertinent data from existing applications for licenses
covered under this part;
d) "Master license" means the single document designed for
public display issued by BMLC which certifies state agency
license approval and which incorporates the endorsements
for individual licenses included in the MLS, which the
state requires for any person subject to this bill;
e) "Person" means any individual, sole proprietorship,
partnership, association, cooperative, corporation,
nonprofit organization, state or local government agency,
and any other organization required to register with the
state to do business in the state and to obtain one or more
licenses from the state or any of its agencies;
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f) "Regulatory agency" means any state agency, board,
commission, or division which regulates one or more
professions, occupations, industries, businesses, or
activities;
g) "Renewal application" means a document used to collect
pertinent data for renewal of licenses covered under this
bill; and,
h) "System" means the mechanism by which master licenses
are issued and renewed, license and regulatory information
is disseminated, and account data is exchanged by the
agencies.
23)Makes legislative findings and declarations.
EXISTING LAW :
1)Requires businesses to obtain various licenses from regulatory
agencies.
2)Requires state agencies to take specified actions, including,
but not limited to, designating a small business liaison, to
assist small businesses achieve compliance with statutory and
regulatory requirements.
FISCAL EFFECT : Unknown
COMMENTS :
Purpose of this bill . According to the author's office, "The
current economy, coupled with the numerous rules and regulations
that businesses must meet, make creating or maintaining a
business in California very difficult. Businesses are stretched
thin trying to make payroll for their employees, pay payroll
taxes, provide health benefits, and pay for licensing and
permitting at local and state levels - all leaving these
businesses struggling to be successful.
"AB 2659 establishes the BMLC to serve as a one-stop shop for
new and existing businesses to obtain and renew state licenses,
forms and applications.
"California's regulatory environment is burdensome and difficult
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to navigate. By condensing the many applications, forms, and
licenses that businesses must complete to a single location, we
hope to make establishing and growing businesses in California
more appealing. The BMLC will also serve as a clearing house of
information to assist individuals in establishing businesses in
California."
Background . According to a report issued in 2002 by the
California Small Business Reform Task Force, "Small businesses
represent 98%, or 2.5 million of the companies in the state,
employing more than 50% of the workforce and generating more
than half of the gross domestic product." According to this
task force, streamlining the business license and permit process
would, therefore, have a significant impact on California's
business climate.
California has previously implemented programs to improve state
services to small businesses. The Small Business Regulatory
Reform Act of 2000 established a Small Business Advocate (SBA)
in the Governor's Office of Planning and Research (OPR) and
required each state agency to designate at least one person to
serve as a small business liaison.
Some consolidation of California state license information
systems is already underway. DCA processes the bulk of
California's professional licenses and is working to combine all
of its independent information systems into one centralized
information system. According to DCA, additional enhancements
to accommodate a master application for licenses and permits
issued by DCA could be built into the new system with little or
no additional cost. The new system is expected to be fully
implemented in about three years.
Many master license concepts are based on the state of
Washington's MLS, which was developed in 1980 to provide a
convenient, accessible, and timely one-stop system for business
licenses and permits. The MLS developed one master application
for the most commonly acquired business licenses and permits.
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The Washington MLS estimates that its master application is used
to issue all required licenses and permits for about 80-85% of
state businesses.
In order to facilitate a smooth transition to an MLS,
Washington's governor appointed a third party facilitator or
"business advocate" who reported directly to the governor and
provided oversight for the project. The business advocate
worked with the affected agencies and was a critical component
of the project.
Creating a one-stop business licensing center has been a
recurring theme in California legislation. This has been
suggested in at least two versions of the Governor's California
Performance Review, two prior bills, and three current bills.
The primary concern has been cost issues in implementing the
revisions to current licensing laws.
Related legislation . SB 959 (Ducheny) of 2010 requires the OPR
to consult with the State Natural Resources Agency and Cal EPA
to develop a consolidated information form and a consolidated
application form for use by applicants for development projects.
This bill is currently pending in the Senate Environmental
Quality Committee.
SB 980 (Huff) of 2010 creates a BMLC with prescribed duties,
including, but not limited to, developing and administering a
computerized one-stop master license system capable of storing,
retrieving, and exchanging license information, as well as
issuing and renewing master licenses, as specified. The bill
would permit the Governor to appoint a third party facilitator
from the business community, to provide oversight over the
creation of the BMLC and the development of its MLS. This bill
is currently pending in the Senate Business, Professions, and
Economic Development Committee.
AB 978 (V. Manuel Perez) of 2009 requires the State Chief
Information Officer to collaborate with DCA to acquire a new
integrated, enterprise-wide system that will replace the current
licensing and monitoring system being used by DCA. This bill is
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currently pending in Senate Governmental Organization Committee.
Previous legislation . AB 505 (Wright) Chapter 1059, Statutes of
2000 requires that the Office of SBA be established in OPR. The
bill revised the duties of the SBA to include counseling small
businesses regarding the relationship of small business to state
government. This bill also established a Governor's Small
Business Reform Task Force chaired by the director.
AB 485 (Arambula) of 2005 creates SCSA a business license center
to develop and administer a computerized MLS to simplify the
process of engaging in business in this state. This bill was
amended to address an unrelated subject.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Sarah Weaver / B.,P. & C.P. / (916)
319-3301