BILL ANALYSIS Ó
SENATE COMMITTEE ON BUDGET AND FISCAL REVIEW
Mark Leno, Chair
Bill No: AB 113
Author: Blumenfield
As Amended: March 14, 2013
Consultant: Brady Van Engelen
Fiscal: Yes
Hearing Date: April 18, 2013
Subject: Budget Act of 2012: business filings.
Summary: Appropriates $1.6 million in Business Fees Funds
to reduce processing times of business related filings and
to address the backlog of over 122,000 business related
filings currently pending at the Secretary of State's
office.
Proposed Amendments: Reduces appropriation by $400,000 to
reflect expenditure plan submitted by the Secretary of
State.
Background: Existing law authorizes the Secretary of State
to utilize the Business Fees Fund to perform
business-related functions for the state. The Secretary of
State is responsible for the management of over 150
different types of filings of business entities and
receives over one million filings annually. The majority
of the filings submitted to the Secretary of State are
recorded on index cards. The Business Programs Division,
which is responsible for the management of the filings, is
comprised of three sections: the Business Entities Section,
Notary Public/Special Filings Section, and the Uniform
Commercial Code/Statement of Information section.
Proposed Law: This measure, as proposed to be amended,
would appropriate $1.6 million to the Secretary of State in
order to address the backlog associated with the processing
of business filings.
This measure includes a reporting requirement that the
Secretary of State shall report to the Joint Legislative
Budget Committee on the 30th day of each month regarding
the Secretary of State's progress on reducing the
processing time for business filings.
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Fiscal Effect: This measure appropriates $1.6 million from
the Business Fees Fund, which supports the Business
Programs Division within the Secretary of State's Office.
According to the Secretary of State's Office, the cost of
processing additional filings will be offset by the
additional revenue received from the fees paid with the
filings. In accordance with Government Code Section 12176,
unspent fees in excess of $1.0 million are transferred to
the General Fund.
Comments: Currently, the Secretary of State utilizes an
antiquated filing process that is paper and labor
intensive. The Secretary of State estimates that the
processing time for Business Entities and Statements of
Information ranges from 55 to 53 days, and, as of March
2013, the total number of documents backlogged is 123,501.
The Secretary of State estimates that, if the funds are
appropriated, the business filings processing times will be
reduced to an average of 5-10 days by the end of November
2013.
According to the spending plan submitted by the Secretary
of State, the Business Programs Division will begin hiring
immediately upon receipt of the funds and will identify
overtime opportunities for staff to begin working on the
backlog.
On March 14, 2013, the Assembly amended the 2012 Budget Act
to appropriate an additional $2 million to the Secretary of
State in order to address the backlog of business filings.
However, the spending plan submitted by the Secretary of
State acknowledged that, due to time constraints, only $1.6
million was needed in the short term to reduce the backlog.
The suggested amendment is in line with the spending plan
submitted by the Secretary of State.
Support:
The Personal Insurance Federation of California
California Business Roundtable
Orange County Business Council
The California Manufacturers & Technology Association
National Federation of Independent Business
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Opposition:
None on file.
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