Assembly lawmakers intend to introduce legislation and dedicate millions of dollars to reduce what is now a six-week backlog of business filings stacked up at Secretary of State Debra Bowen's office.
The new standard would give the state five business days to process business filings.
The Assembly's Budget Subcommittee No. 4, heard details this afternoon about the delays this week, which Bowen's office attributes to a seasonal end-of-year run on services and budget cutbacks. The agency has shifted staff away from other jobs to focus on breaking the logjam of documents awaiting attention.
Currently, her agency takes an average of 43 days to turn around business filings. Many of the estimated 122,000 documents in the queue include forms that must be processed for businesses to establish their legal identities. Until they clear that hurdle, they can't seek licensing or certification, hire employees or begin paying taxes.
"It could be worse, but it needs to be better.," Bowen told lawmakers at this afternoon's hearing.
Assembly Speaker John A. Pérez promised to "expeditiously" move legislation to fix the backlog. "We cannot let the bureaucracy cause businesses to fail while paperwork just piles up at the secretary of state's office," he said in a statement emailed to The Bee.
Assembly budget staff have recommended lawmakers allocate $8.9 million in the 2013-14 budget to fund 68 positions that Bowen estimates she'll need to meet the five-day processing standard. Of those, 39 would be for three-year appointments and 29 would be for two-year appointments.
Unlike Texas, which has an automated online system for business filings, California still uses a paper system. The temporary appointments in Bowen's office anticipate a new online business filing system now in the pipeline will make those positions unnecessary by 2016.
The funds to pay for those jobs would come from business fees that usually go into the state's general fund. Last year the secretary of state's revenue and special fee collections totaled roughly $75 million. The Legislature controls how much of that money, about two-thirds of it last year, goes back to Bowen for her operations. The rest feeds the general fund.
To get a jump start on the backlog before the July 1 start of the 2013-14 fiscal year, lawmakers would give Bowen the authority to spend $2 million more than first budgeted for the current fiscal year.
Editor's note, 5:10 p.m.: An earlier version of this post incorrectly stated that the Assembly this year would give $2 million from its budget to the Secretary of State.
PHOTO CREDIT: Assembly Speaker John A. Pérez in 2012. Hector Amezcua / Sacramento Bee
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