Lawmakers moved Tuesday to whittle down a six-week backlog of business filings at Secretary of State Debra Bowen's office, pushing a plan to require a five-day standard for processing documents and promising to quickly pump $2 million into the effort.
But after grilling her for an hour about the state's paper-based business filing system - which includes relying on 3-inch by 5-inch index cards for some record-keeping - the Assembly budget subcommittee tabled a proposal to give Bowen another $8.9 million next year. The secretary estimates that's how much money she needs to hire enough workers to start turning around documents by November.
"I suggest that we handle that at our next meeting," said subcommittee chairman Tom Daly, D-Anaheim, to give Gov. Jerry Brown's administration time to weigh in on the idea.
Currently, Bowen's 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 Tuesday 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 staffers have recommended that lawmakers allocate $8.9 million in the 2013-14 budget to fund 68 positions dedicated to working on the backed-up filings. 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.
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 originally budgeted for the current fiscal year.