BILL ANALYSIS �
Bill No: AB
2221
SENATE COMMITTEE ON GOVERNMENTAL ORGANIZATION
Senator Lou Correa, Chair
2013-2014 Regular Session
Staff Analysis
AB 2221 Author: Campos
As Amended: March 28, 2014
Hearing Date: June 24, 2014
Consultant: Paul Donahue
SUBJECT
Business Filing Coordination Council
DESCRIPTION
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 issues 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.
BACKGROUND
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)
AB 2221 (Campos) continued
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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.
The Legislature passed a trailer bill<1> that provided SOS
with $1.6 million to begin hiring staff to address the
business filing backlog. Later, the Legislature adopted a
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 Committee on Rules, 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 the SOS and act as an additional contact for
businesses to share concerns or offer innovations to
improve the state business climate through 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' website.
According to the author, this bill is designed to provide
greater scrutiny of SOS' business filing processes. While
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<1> AB 113 (Committee on Budget) Chapter 3, Statutes of
2013
AB 2221 (Campos) continued
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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.
SUPPORT:
California Manufacturers & Technology Association
California Chamber of Commerce
California Asian Pacific Chamber of Commerce
California Business Roundtable
National Federation of Independent Business
OPPOSE:
None on file
FISCAL COMMITTEE: Senate Appropriations Committee
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