BILL ANALYSIS �
AB 2221
Page 1
ASSEMBLY THIRD READING
AB 2221 (Campos)
As Amended March 28, 2014
Majority vote
ADMINISTRATIVE REVIEW 13-0 APPROPRIATIONS 17-0
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|Ayes:|Frazier, Achadjian, |Ayes:|Gatto, Bigelow, |
| |Buchanan, | |Bocanegra, Bradford, Ian |
| | Ian Calderon, Cooley, | |Calderon, Campos, |
| |Gorell, Hagman, | |Donnelly, Eggman, Gomez, |
| |Lowenthal, Medina, Olsen, | |Holden, Jones, Linder, |
| |Quirk-Silva, Salas, | |Pan, Quirk, |
| |Wagner | |Ridley-Thomas, Wagner, |
| | | |Weber |
|-----+--------------------------+-----+--------------------------|
| | | | |
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SUMMARY : Establishes the Business Filing Coordination Council
(BFCC) within the Secretary of State's (SOS) office.
Specifically, this bill :
1)Sets the composition of the BFCC.
2)Directs the BFCC to support, maintain and improve the
efficiency of business filings and provide businesses with
additional points of contact to express concerns or share
ideas about business filings.
3)Requires the BFCC to issue annual reports about its work, and
to distribute them to the Governor, Legislature, and public.
4)Makes various legislative declarations about the importance of
timely business filings.
EXISTING LAW requires business entities to file various
documents with SOS when they form, have major changes, or
dissolve.
FISCAL EFFECT : According to the Assembly Appropriations
Committee, this bill would have ongoing costs of around $50,000
for the SOS to establish and provide staff support to the
council.
AB 2221
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COMMENTS : The SOS processes more than 2 million business
filings each year. Processing these documents relies largely on
paper files and historically backlogs have occurred. The
Assembly Budget Subcommittee No. 4 on State Administration (Sub
4) has held hearings about the long wait to process business
filings.
As of the middle of March 2013, SOS reported a business filing
processing time of 55 days. This far exceeded some other
states' business filings process times of less than a week.
Long waits to file documents could delay businesses from
opening, hiring employees, and paying taxes.
In response to these concerns, Sub 4 set a goal at its March 18,
2013, hearing for SOS to process business filings within five
business days. After the hearing, the Legislature passed AB 113
(Budget Committee), Chapter 3, Statutes of 2013, which provided
SOS with $1.6 million to begin hiring staff to address the
business filing backlog. Later, the Legislature adopted the
proposal in the Governor's May Revision for the 2013-14 Budget
to allocate $5.7 million and 56 3-year limited-term positions to
bring the filing time in line with Sub 4's goal. According to
SOS, this goal has been achieved.
While the funding of limited-term positions has addressed
immediate concerns about processing times, SOS is working to
automate the business filing system through the California
Business Connect Project (Business Connect). This project will
allow businesses to submit business filings, make payments, and
request information online. Business Connect is scheduled to be
completed in 2016.
This bill establishes the seven-member BFCC within SOS. It
would be composed of one appointee each by the Governor, Senate
Rules Committee, and Speaker of the Assembly as well as
specified state executives or their designees, including the
Commissioner of Business Oversight, Director of Consumer
Affairs, Secretary of State, and Director of Technology.
The BFCC would be required to review and collect data concerning
the needs of businesses required to file documents with SOS and
act as an additional contact for businesses to share concerns or
offer innovations to improve the state business climate through
AB 2221
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streamlined business filings. The BFCC would be required to
submit an annual report to the Governor and Legislature on or
before December 31 and post the report on the SOS' Web site.
According to the author, this bill is designed to provide
greater scrutiny of SOS' business filing processes. While the
extent of the usefulness and role of the BFCC is unknown, this
bill could provide additional oversight for an issue that has
been problematic in the past.
Analysis Prepared by : Scott Herbstman / A. & A.R. / (916)
319-3600
FN: 0003677