Here’s a trivia question: What’s a fictitious business name?
It sounds like a scam, but a fictitious business—or trade—name is the name under which a company or person operates professionally. Entrepreneurs are required to file fictitious business name statements with their county governments prior to doing business. The statements are then published in official community newspapers.
For hundreds of years, newspapers have been the sole publishers of fictitious business names and other legal and public notices. Printing these notices equates to big business for adjudicated papers; the revenue the practice brings in for daily newspapers, alone, is in the millions of dollars annually in California, and creates some much-needed cash flow for an industry struggling to survive.
However, a new bill recently introduced in the California State Assembly could change all of that.
Authored by freshman Assemblyman Anthony Rendon (D-Bell), AB642 would allow news websites to qualify as “newspapers of general circulation,” provided they meet certain criteria.
Rendon agreed to carry the bill at the request of online conglomerate AOL/Patch. Rendon’s chief of staff, Bill Wong, said AOL/Patch argued to the assemblyman that online entities should be able to publish public and legal notices because more readers are now getting their news and information online.
The assemblyman gets most of his information on the Web, Wong said, so he wanted to find a way to expand online access to public and legal notices.
“Patch believes that new legislation that will open the door for a more open, fair bidding process, and the potential for important legal notices to reach the maximum number of residents through a variety of media, is inherently good for both governments and citizens,” said a Patch spokesperson. “To that end, we support efforts to update this process and provide choice where none exist today.”
Many newspaper professionals argue that AB642 would impede the dissemination of accurate information because it would allow any fly-by-night business or hobbyist with a laptop to publish the notices.
“Since the 1800s, the law has allowed only official newspapers in the community [to publish notices] because they have staying power; they’re imbedded in the community they’re serving,” said Tom Newton, general counsel for the California Newspaper Publishers Association (CNPA).
Newton said allowing any news website to publish legal notices would harm the way information gets out to the public because “no one would know where to go.”
“Most newspapers have already put notices on their website, so it’s the best of both worlds—print and online,” he added. “The industry is doing a great job of circulating notices in printed, unhackable form and on the web.”
Existing law requires that an adjudicated newspaper be published and have a substantial distribution to paid subscribers in the city in which it’s seeking adjudication. Among other things, it must also have a brick-and-mortar office and staff of employees working in the city in which it’s seeking adjudication.
Under AB642, a website would qualify as a “newspaper of general circulation” if it:
• provides local, national, or international news.
• has been established in the community for at least one year and is updated in at least weekly intervals, and has a substantial regular readership.
• maintains editorial or reporting staff within the city in which it’s seeking adjudication.
• has maintained a minimum coverage of local, national, or international news on at least 25 percent of its homepage.
• provides search engine capabilities and links to public notices published in the newspaper.
In early March, CNPA leaders sent a letter to Rendon’s office in opposition of AB642:
“While AB642 is patterned after and cleverly incorporates small pieces of existing laws that allow for the adjudication of printed newspapers, the elements used are simply window dressing to provide the appearance of authenticity,” the letter said.
CNPA argues that the language of the bill is vague and would allow websites to simply “aggregate news content from anywhere, created by anyone, or by creating a community forum for people to endlessly post their own ‘news’ and chatter, gossip, and comment.”
Additionally, the letter said, “AB642 has no requirement for any brick-and-mortar presence in the community and would allow a website to be run from someone’s bedroom, garage, or car, or New York, or India.”
Wong, Rendon’s chief of staff, said the assemblyman is “respectful of the role newspapers play in the community” and continues to be “open to discussion” about tweaking the language of the bill.
But he said allowing websites to publish public notices is just a sign of the wired times.
“It’s not really a matter of if it will happen, but when it will happen and how it will happen,” Wong said, adding that the assemblyman wants to make sure the bill is done in the way that’s most beneficial to the public.
As of press time, AB642 had been sent to the Assembly Judiciary Committee, but a hearing date had yet to be announced.
CNPA’s Newton said his organization will “work very hard” to convince the committee the bill should be defeated.
Contact Managing Editor Amy Asman at aasman@santamariasun.com.
This article appears in Apr 11-18, 2013.