Legislature(2003 - 2004)

05/05/2003 03:29 PM House FIN

Audio Topic
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
HOUSE BILL NO. 162                                                                                                            
                                                                                                                                
     "An Act increasing the fee for a state business                                                                            
     license; and providing for an effective date."                                                                             
                                                                                                                                
                                                                                                                                
Co-Chair  Harris MOVED  to  ADOPT the  Committee  Substitute,                                                                   
Work Draft 23-GH1102\S  (5/5/03).  There being  NO OBJECTION,                                                                   
the Committee Substitute was ADOPTED.                                                                                           
                                                                                                                                
RICK URION,  DIRECTOR OCCUPATIONAL  LICENSING, DEPARTMENT  OF                                                                   
COMMUNITY  AND ECONOMIC DEVELOPMENT  provided information  on                                                                   
the  changes in  the Committee  Substitute.   He referred  to                                                                   
additional language included in  Section 2, which referred to                                                                   
$100 [license fee] payment for  sole proprietors or a $50 fee                                                                   
payment for a sole proprietor 65 years of age or older.                                                                         
                                                                                                                                
Representative  Croft  asked  for clarification  on  the  new                                                                   
language  referring to  the Department  of Natural  Resources                                                                   
contained in Section 1.                                                                                                         
                                                                                                                                
SHARON   YOUNG,  STATE   RECORDER,   DEPARTMENT  OF   NATURAL                                                                   
RESOURCES testified  via teleconference.  She  explained that                                                                   
the additional language  was not intended to  raise fees from                                                                   
the  recorders  or  UCC  [Uniform   Commercial  Code]  filing                                                                   
offices, but pointed out that  the user fees were part of the                                                                   
Governor's proposal  to raise revenues.  She  noted that this                                                                   
would allow  raising the  cost of  reporting and filing  fees                                                                   
beyond the cost  of the services provided.  The  fee would be                                                                   
initiated by regulation through  the public process.  The new                                                                   
language  exempts the  Department of  Natural Resources  from                                                                   
the  statute prohibiting  fees  from  exceeding  the cost  of                                                                   
service.                                                                                                                        
                                                                                                                                
In response to a question by Representative  Croft, Ms. Young                                                                   
noted that AS 44.37.025 & .026  provide authorization for the                                                                   
recording system operation and  the UCC filing operation.  In                                                                   
response  to a question  by Representative  Croft, Ms.  Young                                                                   
confirmed that the UCC recorded land transactions.                                                                              
                                                                                                                                
Representative  Moses  expressed  his concern  over  language                                                                   
pertaining to  sole proprietorships.   He observed  that this                                                                   
bill would  consider small family  operations as  a corporate                                                                   
entity and  pay a  higher fee.   Mr.  Urion clarified  that a                                                                   
married couple would be the same as a sole proprietor.                                                                          
                                                                                                                                
Representative   Moses  noted   that  other  statutes   might                                                                   
override  that assumption.   Mr.  Urion  reiterated that  the                                                                   
intent of  this bill was to  consider married couples  at the                                                                   
lower fee level.                                                                                                                
                                                                                                                                
Representative  Foster   MOVED  to  report  HB   162  out  of                                                                   
Committee   with    individual   recommendations    and   the                                                                   
accompanying fiscal note.                                                                                                       
                                                                                                                                
Representative  Croft OBJECTED.   He indicated that  he would                                                                   
offer an amendment  on the floor suggesting that  all fees be                                                                   
for  $50 only.   He  pointed out  the steep  increase in  the                                                                   
business license  fee, rising  from $25 to  as much  as $300.                                                                   
He stated  that he runs  a small, incorporated  business with                                                                   
his wife,  and observed  that whereas  he formerly  paid $25,                                                                   
and  the  Governor's  bill  would have  him  pay  $200,  this                                                                   
version would  raise is license  fee to $300.   He maintained                                                                   
the  concern that  a  married couple  would  be considered  a                                                                   
partnership   and  not  a   sole  proprietorship   and  would                                                                   
therefore  be  required  to  pay   the  $300  fee  of  larger                                                                   
corporations.        He  also   referred  to  Section  1  and                                                                   
maintained that  fees should roughly  equal what it  costs to                                                                   
run a  Department.   He pointed  out that  the statute  would                                                                   
have recording fees  no longer be in relation to  the cost of                                                                   
running  Department  of  Natural  Resources'  land  recording                                                                   
division.  He concluded that the increase was excessive.                                                                        
                                                                                                                                
Representative  Whitaker  referred  to  the new  language  in                                                                   
Section 1.   Co-Chair  Williams pointed out  that this  was a                                                                   
change  in  the  new  Committee  Substitute.    He  asked  if                                                                   
subchapter  "s" corporations  were included  in the  statute.                                                                   
Mr.  Lawson responded  that "s  corps" were  included in  the                                                                   
category of "all others".                                                                                                       
                                                                                                                                
Representative Foster  noted that in 1949, when  the business                                                                   
license fee was first enacted  for $25, the price of gold was                                                                   
only $35  per ounce.  He  suggested that now, when  the price                                                                   
of gold was $330 an ounce, a $300 fee seemed reasonable.                                                                        
                                                                                                                                
A roll call vote was taken on the motion.                                                                                       
                                                                                                                                
IN FAVOR:  Foster,   Hawker,   Meyers,   Stoltze,   Whitaker,                                                                   
           Chenault, Williams, Harris                                                                                           
                                                                                                                                
OPPOSED: Croft; Joule; Moses                                                                                                    
                                                                                                                                
The MOTION PASSED, 8-3.                                                                                                         
                                                                                                                                
CS  HB 162  (FIN)  was REPORTED  out  of Committee  with  "no                                                                   
recommendation" and two new fiscal  notes: one zero note from                                                                   
the Department of Natural Resources  and a fiscal impact note                                                                   
from Department of Community and Economic Development.                                                                          

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