BILL ANALYSIS �
AB 569
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Date of Hearing: April 26, 2011
ASSEMBLY COMMITTEE ON BUSINESS, PROFESSIONS AND CONSUMER
PROTECTION
Mary Hayashi, Chair
AB 569 (Bill Berryhill) - As Introduced: February 16, 2011
SUBJECT : Business licensing: Business Master License Center.
SUMMARY : Establishes the Business Master Licensing Center
(BMLC) to develop and administer a computerized one-stop master
license system as well as issue and review master licenses, as
specified. Specifically, this bill :
1)Establishes the Business Master Licensing System Act (Act).
2)Creates the BMLC within the State and Consumer Services Agency
(SCSA).
3)Provides that the BMLC duties include:
a) 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 in an efficient manner;
b) Developing and administering, as part of the master
license system, a uniform business identification number
for each participating business recognizable 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 master license system;
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;
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g) Incorporating licenses into the master license system;
and,
h) Working with other regulatory agencies to develop a
system that permits participating agencies to share
information generated from the master license system.
4)Authorizes the Secretary of SCSA to adopt regulations as
necessary to effectuate the purposes of this bill.
5)Requires BMLC to compile information regarding the regulatory
programs associated with each of the licenses obtainable under
the master license system including a listing of the statutes
and administrative regulations requiring the licenses and
pertaining to the regulatory programs that are directly
related to licensure.
6)Requires BMLC to provide any information required by this bill
to any person requesting it and to indicate on any BMLC-issued
materials that the information is available upon request.
7)Requires the following agencies to participate fully in the
implementation of this bill:
a) California Environmental Protection Agency;
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;
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bb) Department of Toxic Substances Control;
cc) Department of Transportation;
dd) Employment Development Department;
ee) Franchise Tax Board;
ff) Secretary of State (SOS);
gg) State Board of Equalization;
hh) State Department of Health Care Services; and,
ii) Any other agency that the Secretary of SCSA determines
has licensing authority consistent with the purposes of
this bill.
8)Requires a person requiring a license that has been
incorporated into the system to submit a master application to
the BMLC requesting the issuance of the required licenses, as
specified.
9)Provides that the applicant include with the application the
sum of all fees and deposits required for each requested
license and the master license administrative fee, as
specified.
10)Provides that regardless of any authority delegated to the
SCSA to implement this bill, the authority for approving
issuance and renewal of a requested license that requires a
prelicensing or renewal investigation, inspection, testing, or
any discretionary judgmental review by the regulatory agency
otherwise legally authorized to issue the license, remains
with that agency.
11)Authorizes the BMLC to issue licenses for which proper fee
payment and a completed application form have been received
and for which no prelicensing or renewal approval action is
required by the regulatory agency.
12)Provides that upon receipt of the application and proper fee
payment for any license for which issuance is subject to
regulatory agency action, the BMLC is required to immediately
notify the regulatory agency with authority to approve
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issuance or renewal of the license requested by the applicant.
13)Requires each regulatory agency, within a reasonable time
after receiving the notice, to advise the 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 for issuing the license;
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.
14)Requires the 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.
15)Provides that 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 agency with the authority for approving issuance of the
license.
16)Provides that regulatory agencies be provided information
from the master application for their licensing and regulatory
functions.
17)Creates the Master License Fund (Fund) in the State Treasury
and provides that administrative fees collected pursuant to
this bill be deposited into the Fund and, upon appropriation
by the Legislature, be used only to administer the BMLC.
18)Authorizes the BMLC to collect a master license
administrative fee of $15 on each master application and a
master license administrative fee of $9 on each master renewal
application.
19)Provides that any license fee collected under the master
license system, except for the master license administrative
fee, and imposed by the authorizing agency that approves the
license, be deposited with the Treasurer.
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20)Requires the Treasurer, upon issuance or renewal of the
master license, to allocate the fees to the appropriate
accounts, pursuant to the applicable statutes, for those
agencies' licenses.
21)Requires the BMLC to assign an expiration date for each
master license, as specified.
22)Provides that all renewable licenses endorsed on a master
license be renewed by BMLC under conditions originally imposed
unless a regulatory agency advises the BMLC of conditions or
denials to be imposed before the endorsement is renewed.
23)Prohibits the BMLC 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 owing to the SOS;
c) The person is not validly registered under any statute
giving corporate or business licensing responsibilities to
the SOS; or
d) The person has not submitted the sum of all fees and
deposits required for the requested individual license
endorsements and the master license administrative fee
imposed, as specified.
24)Requires 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 master license system.
25)States that a valid license already in effect prior to the
effective date of the Act need not be registered under the
master license system until the renewal or expiration date of
that license.
26)Provides that nothing in the Act is to be construed to
eliminate or reduce the authority of an agency that is legally
authorized to issue a license from determining if a requested
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license shall be issued.
27)Defines the following terms:
a) "BMLC" and "center" mean the business registration and
licensing center established by this part and located in
and under the administrative control of the 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 the BMLC which certifies state
agency license approval and which incorporates the
endorsements for individual licenses included in the master
license system, 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;
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.
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28)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
designating a small business liaison, to assist small
businesses achieve compliance with statutory and regulatory
requirements.
FISCAL EFFECT : Unknown
COMMENTS : According to the author's office, "In California,
depending on the type of business, several state agencies would
have to be contacted in order for an owner to maintain its
licensing requirements. For example, according to the
California Performance Review (CPR), a person wanting to open a
beauty salon in Sacramento must register or obtain permits and
licenses from eight different state entities and someone wanting
to open a gasoline service station must register or obtain
permits and licenses from nine state entities. Because small
businesses represent 98% of the companies in the State of
California, an act to streamline such processes would have a
significant impact on California's business climate.
"The Small Business Regulatory Reform Act of 2000 demonstrated
an understanding of this problem. It required each state agency
to designate at least one person to serve as a small business
liaison, working to close the gap between the agency and the
business owner. However, it did not reach out far enough to
offer support to such a valuable component of our society: the
small business owner.
"Since 1980, Washington State has done much in the way of
providing a self-sustaining customer service to small business
owners. Its Master License Service (MLS) requires just one
master application which, according to the CPR, is used to issue
all required licenses and permits for about 80 to 85% of
businesses in the state. The system provides a user-friendly
customer support system with the use of only 39 employees. The
nominal fees, paid for at the time of application submission,
are used to maintain the service center's cost of operation. In
Florida, the Department of Business and Professional regulation
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realized $10 million in savings annually when it implemented a
system similar to Washington's.
"California's complex and burdensome regulatory system has
created a difficult maze for businesses to navigate. Starting
up a business can be a tough road, let alone keeping up year in
and year out. Condensing and centralizing the licenses and
permits businesses need will go a long way to fostering a
healthy environment for job growth."
Governor's Performance Review . In 2004, Governor Arnold
Schwarzenegger formed the CPR Commission, an independent and
bi-partisan group consisting of volunteers from the public,
private, and non-profit sectors, as part of his process to
decide what recommendations to pursue in reforming state
government. The ultimate goal of the CPR was to restructure,
reorganize and reform state government to make it more
responsive to the needs of its citizens and business community.
The CPR Commission report titled, The Public Perspective, made
numerous recommendations to reform state government, including
recommendations regarding "General Government and Statewide
Operations." General Government recommendation 22 (GG22)
specifically focused on improving California's business climate.
According to GG22, people who want to start a business in
California do not know where to begin. Even established
business owners find it difficult to navigate the state
bureaucracy. GG22 further asserts that people who want to do
business in California must interact with the state in multiple
ways in order to establish and maintain their businesses. They
must obtain necessary permits and licenses, register their
businesses, report information and pay taxes. For instance, a
business in California is required to register with the state
for purposes of reporting sales taxes, income taxes, employee
wages and insurance. In addition, business owners are required
to obtain a variety of licenses and permits to carry out certain
activities, such as selling alcohol or collecting debts. These
are just a few of the requirements. A business owner could be
required to contact nine or more state departments and agencies
for a single business.
GG22 also asserts that from a business owner's perspective,
state government is not a collection of independent agencies,
but rather one "state government." As a result, business owners
expect seamless services from the State. Findings also showed
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that business owners desire online services from the State,
equivalent to those offered in the private sector. They want a
customer-centered approach that provides timely, useful and
accurate information.
Ultimately, the report recommended to the Governor to create a
master licenses' services similar to that of the state of
Washington.
Washington State's MLS . In an effort to improve services to
small businesses and create a consolidated state business
license and permit process, Washington created their MLS, in
1980. The MLS' aim was 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. The Washington MLS
estimates that its master application is used to issue all
required licenses and permits for about 80 to 85% of businesses
in the state.
Washington's MLS is comprised of an intake unit, a call center
and a business liaison section. The intake unit processes
initial applications and renewals, maintains records and
collects associated fees. The call center handles all
telephone, email and Internet inquiries and disseminates forms,
informational booklets and brochures. The business liaison
section provides technical assistance and is responsible for
tracking changes in licensing and permit laws at the state and
local level, as well as any changes in fees.
The Washington MLS enables state agencies to electronically
store, retrieve and exchange license information in one
location. The system is accessible to the public 24 hours a day
and business owners can use it to obtain or update their
information electronically. An additional benefit to the MLS is
that it allows the state to use a single business identification
number for each business. The business identification number is
recognized by all state licensing and regulatory agencies.
The system also allows the state to issue one "master license"
to each business. The master license lists the individual
licenses and permits approved for the business through the
master application. In addition, when licenses and permits are
issued, the MLS electronically registers the business with
appropriate regulatory agencies such as the state's central tax
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collection and employment departments. The electronic
registration has reduced paperwork and increased compliance with
business regulations, ultimately resulting in additional revenue
to the state. The MLS also helped to identify and eliminate the
state's obsolete and duplicative licensing requirements.
Finally, the MLS allows the state to consolidate all license and
permit fees in one place so business owners can issue a single
payment covering multiple fees.
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.
The data system Washington uses for its MLS is a licensing
information intranet system. The system contains information
relevant to eleven state agencies responsible for regulating
businesses. Information from the master application is entered
into the MLS licensing information intranet system. The
majority of information collected is used for license and permit
purposes. About 100 state licenses can be obtained by using the
master application.
According to Washington's experience, MLS requires relatively
few resources. It has 39 employees and a budget supported by
application and renewal fees. The one-time fee for filing a
master application in Washington is $15 and about 10% of
licenses and permits are renewed annually for a $9 renewal fee.
Fee amounts were established based on a study the state
conducted to determine appropriate application fees. Although
the master application and renewal fees are in addition to fees
previously charged for individual licenses and permits, they are
reasonable in light of the resulting streamlined state processes
and improved customer service. The Washington MLS took
approximately two years to implement.
Related legislation . AB 991 (Olsen) of 2011, requires the
Governor to establish an Internet Web site to assist the public
with licensing, permitting, and registration requirements of
state agencies. This bill is pending the Assembly Business,
Professions and Economic Development Committee.
Previous legislation . SB 959 (Ducheny) of 2010, recreates the
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Office of Permit Assistance under the Governor's Office of
Planning and Research in order to help facilitate state and
local level review of commercial and industrial development
projects. This bill was vetoed.
SB 980 (Huff) of 2010, establishes the BMLC within SCSA, as
specified. This bill was held in the Senate Appropriations
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 enforcement and licensing system to
replace the current system used by DCA. This bill was held in
the Senate Appropriations Committee.
AB 485 (Arambula) of 2005, requires SCSA to conduct a
feasibility study on the creation of a Master Business License
Center, as specified. This bill was amended to address an
unrelated subject.
AB 505 (Wright) Chapter 1059, Statutes of 2000, modifies
provisions relating to the Office of Administrative Law
and the adoption of regulations, moves the Office of Small
Business Advocate from the Technology Trade, and Commerce Agency
to the Office of Planning and Research in the Governor's office,
and creates the Governor's Small Business Reform Task Force.
REGISTERED SUPPORT / OPPOSITION :
Support
None on file.
Opposition
None on file.
Analysis Prepared by : Rebecca May / B.,P. & C.P. / (916)
319-3301