05/10/2003 10:07 AM House RLS

HB 162-FEES: BUSINESS LICENSE & RECORDING                                                                                     
                                                                                                                                
CHAIR ROKEBERG  announced that the  next order of  business would                                                               
be HOUSE  BILL NO. 162,  "An Act increasing  the fee for  a state                                                               
business license; and providing for an effective date."                                                                         
                                                                                                                                
Number 358                                                                                                                      
                                                                                                                                
REPRESENTATIVE KOTT  moved that the committee  adopt Amendment 1,                                                               
which reads as follows:                                                                                                         
                                                                                                                                
     Page 2, lines 7-14:                                                                                                        
          Delete all material and insert:                                                                                       
            "(a) The [LICENSE] fee for each business                                                                            
     license is $100 [$25] per year, except that the fee is                                                         
     $50 if                                                                                                                 
            (1)    the    business   is    a    sole                                                                        
     proprietorship; and                                                                                                    
                    (2) the sole proprietor is 65 years of                                                                  
     age or older  when the sole proprietor  applies for the                                                                
     license  or will  reach 64  years  of age  at any  time                                                                
     during the year for which the license is issued.                                                                       
                                                                                                                                
REPRESENTATIVE KOTT  explained that  Amendment 1 would  lower the                                                               
proposed fee  for a business license  from $300 a year  to $100 a                                                               
year.    Therefore,  this increase  would  be  equitable  because                                                               
business  license   fees  would   be  increased  for   both  sole                                                               
proprietors  and  any  other partnerships  or  corporations  that                                                               
would  be licensed  under the  chapter.   Furthermore, increasing                                                               
the business license from the existing  $25 to $300 a year is too                                                               
much of an increase.  Amendment  1 also provides a provision that                                                               
those 65  years of age  or older would  pay $50 for  the business                                                               
license.                                                                                                                        
                                                                                                                                
Number 338                                                                                                                      
                                                                                                                                
REPRESENTATIVE McGUIRE inquired as  to the difference Amendment 1                                                               
will make regarding the revenues captured.                                                                                      
                                                                                                                                
REPRESENTATIVE  KOTT  acknowledged  that   under  Amendment  1  a                                                               
smaller  amount of  revenue  would be  generated  than under  the                                                               
current legislation.   He indicated that a  document, included in                                                               
the committee packet,  specified the difference in  the amount of                                                               
revenue generated  by a $100  business license fee versus  a $300                                                               
fee.                                                                                                                            
                                                                                                                                
REPRESENTATIVE  McGUIRE remarked  that  she  believes the  senior                                                               
business owner provision  is a good idea.   However, she inquired                                                               
as to why there isn't an exemption for younger business owners.                                                                 
                                                                                                                                
REPRESENTATIVE  KOTT   remarked  that  such  an   idea  could  be                                                               
entertained.    He explained  that  he  had included  the  senior                                                               
business  owner  exemption  due   to  the  possible  disadvantage                                                               
seniors face  in various areas.   He related his belief  that the                                                               
younger business owners would have  a greater earning opportunity                                                               
than those 65 or over.                                                                                                          
                                                                                                                                
REPRESENTATIVE McGUIRE  said she  didn't disagree.   However, she                                                               
said she believes  the current $25 business  license, albeit low,                                                               
has encouraged people to take risks.                                                                                            
                                                                                                                                
CHAIR ROKEBERG clarified  that Amendment 1 would  change the $300                                                               
business license fee  in HB 162 to $100 for  everyone and provide                                                               
seniors with an  additional break in that  their business license                                                               
fee would  be $50.  Chair  Rokeberg noted that he  will request a                                                               
new fiscal note if Amendment 1 passes.                                                                                          
                                                                                                                                
Number 288                                                                                                                      
                                                                                                                                
RICK  URION,   Director,  Division  of   Occupational  Licensing,                                                               
Department of Community &  Economic Development (DCED), explained                                                               
that a new  fiscal note from the division would  show a change in                                                               
revenue  of about  $4.2  million.   He  clarified  that the  $4.2                                                               
million includes a  drop-out rate.  A $100  business license fee,                                                               
with no  drop-outs would result in  a change in revenue  of about                                                               
$5.2 million.                                                                                                                   
                                                                                                                                
REPRESENTATIVE  KOTT  related  his understanding  then  that  Mr.                                                               
Urion's  original analysis  for a  business license  fee of  $300                                                               
considered drop-outs.                                                                                                           
                                                                                                                                
MR.  URION  answered   that  a  25  percent   drop-out  rate  was                                                               
considered at the $100 level for sole proprietorships.                                                                          
                                                                                                                                
REPRESENTATIVE  BERKOWITZ  inquired  as  to  the  fees  in  other                                                               
states.                                                                                                                         
                                                                                                                                
MR.  URION responded  that most  business license  fees in  other                                                               
states are higher than Alaska.                                                                                                  
                                                                                                                                
Number 267                                                                                                                      
                                                                                                                                
REPRESENTATIVES  KOTT,  BERKOWITZ,  and   ROKEBERG  all  noted  a                                                               
conflict of interest due to owning various types of businesses.                                                                 
                                                                                                                                
CHAIR ROKEBERG  reminded the committee  that the motion  to adopt                                                               
Amendment 1 was  before the committee. There  being no objection,                                                               
Amendment 1 was adopted.                                                                                                        
                                                                                                                                
Number 253                                                                                                                      
                                                                                                                                
REPRESENTATIVE COGHILL  moved to report CSHB  162(FIN) as amended                                                               
out  of   committee  with  individual  recommendations   and  the                                                               
accompanying and forthcoming fiscal notes.                                                                                      
                                                                                                                                
REPRESENTATIVE BERKOWITZ objected.                                                                                              
                                                                                                                                
A  roll call  vote  was taken.    Representatives Kott,  Coghill,                                                               
McGuire, Morgan,  and Rokeberg voted  in favor of  reporting CSHB
(RLS) from committee.   Representative Berkowitz voted against                                                               
it.   Therefore,  CSHB 162(RLS)  was  reported out  of the  House                                                               
Rules Standing Committee by a vote of 5-1.