Legislature(2013 - 2014)SENATE FINANCE 532
04/13/2014 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB32 | |
| HCR15 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 209 | TELECONFERENCED | |
| += | SB 220 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 32 | TELECONFERENCED | |
| += | HCR 15 | TELECONFERENCED | |
CS FOR HOUSE BILL NO. 32(FIN)
"An Act providing for the issuance of one business
license for multiple lines of business; and providing
for reissuance of a business license to make a change
on the license."
1:43:56 PM
REPRESENTATIVE MIA COSTELLO, SPONSOR, introduced the
legislation. She explained that the bill would allow
individuals operating multiple businesses who apply for a
business license to list several lines under one license.
She believed that HB 32 reduced "burdensome government
involvement in the licensing process." She supported the
issuance of licenses by the Department of Commerce,
Community and Economic Development (DCCED) but felt that
paying for multiple business licenses was onerous. The
legislation allowed for multiple business activities under
one license if licensed under the same name.
1:46:05 PM
CHARLES GUINCHARD, STAFF, REPRESENTATIVE MIA COSTELLO,
provided sectional information. He explained that Section 1
beginning on page 1, line 4 amended existing statute to
require one business license for multiple lines of
business. He cited page 1, line 12 that authorized the
primary and secondary business listings on the license. He
referenced Section 2, page 2 that inserted new language
which specified that one business license covered multiple
lines of business. He noted that Section 3 allowed for two
types of changes to a business license. On change permitted
an individual to make changes to a business license within
the thirty days of issuance. The second type of change
allowed any clerical error corrections at any time the
license was valid. Lastly, Section 3 specified that if any
changes were made to the license the expiration date
remained unchanged. He reported that Section 4 added a new
definition to statute for "line of business." The existing
definition of "business" would work in concert with the
definition of "line of business" with the definition of
"line of business" meaning a singular activity that a
business was engaged in. He cited Section 5, line 18 and
offered that the provision referred to transition language
and required DCCED to advance measures to implement the
legislation.
Co-Chair Meyer pointed to the letters of support in the
bill packet (copies on file). He asked whether there was
any opposition to the bill.
Mr. Guinchard replied that when the bill was first
introduced any number of lines of business could be listed
on a single business license. The provision carried a
significantly higher fiscal note and would create problems
for DCCED with data base recording. The current version of
the bill was amended to record the primary and secondary
lines of business, which greatly reduced the fiscal cost.
The department had one concern that it would not have the
records of businesses running three or more lines of
business under one license. He noted that currently 85
businesses would fall under the category. The issue could
be addressed through regulations.
1:50:05 PM
Senator Olson asked what type of businesses the 85
businesses were and how that would impact revenue.
Representative Costello replied that currently over 700
businesses would be affected by the legislation and tended
to be small businesses. The 85 businesses with more than
three lines of business required professional licenses.
Co-Chair Meyer OPENED public testimony.
PEGGY-ANN MCCONNOCHIE, NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, JUNEAU (via teleconference), spoke in support of
the legislation. She thanked Representative Costello for
introducing the bill. She related that she was a real
estate broker and owner of a consulting business and the
legislation affected her negatively as a small business
owner. She was required to have a real estate license and
another license for teaching real estate classes. She
relayed that the National Federation of Independent
Business was in strong support of the legislation and she
urged the committee to pass the bill. She believed that HB
32 would benefit all small businesses in the state.
1:53:09 PM
Co-Chair Meyer CLOSED public testimony.
Vice-Chair Fairclough requested to hear from the
department. She supported the legislation.
SARA CHAMBERS, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, conveyed that the bill
streamlined business practices to create a business
friendly environment. She expressed concern that the
current database captured only two lines of business. The
department's data base did not have the capability to track
multiple business lines and additional funding via a fiscal
note was necessary to address the issue. An individual
could have more than two lines of business under the new
business license but the state would be unaware of the
other businesses, which carried two important impacts for
the state. She related that one concern was the inability
for the department to track more than two lines of
business. The department would not be able to track the
professional license of an individual with either three
professional licenses or one professional license not
claimed as the primary or secondary line of business. She
hypothesized a scenario where a person wanted to open a
hair stylist and manicure salon and was unaware that
professional licenses were required for both activities,
the department could not ensure that the professional
license was acquired if it could not determine all of the
lines of business, which threatened public safety. The
department worked to educate the public on the needs for
professional licensing but the database acted as an
additional failsafe to identify people who believe that a
business license was all they needed to do business in the
state. She pointed to another concern related to research
into the department's licensing database. The department
regularly received requests for information from the
database to quantify numbers of people engaged in various
business activities throughout the state. The information
was helpful to the Department of Labor and Workforce
Development (DOL) and any industry research. The department
would not be able to respond to requests for information
because the information would not be accurate. Ms. Chambers
proposed that a limited solution could be addressed in
regulation. The department could require an individual to
list a professional license as primary or secondary. The
solution did not address an individual with multiple
businesses and professional licenses and the department
lost the ability to capture the information.
1:58:07 PM
Vice-Chair Fairclough wondered why the department had not
devised a solution to the problem. She asked whether the
department was confined by hardware issues that would
prevent reporting multiple licenses. She queried why DCCED
could not "link" multiple business licenses together and
issue the others without a fee to the business owner.
Ms. Chambers answered that the issue was related to
technological capacity. The business licensing database had
not been updated for many years. The original fiscal note
estimate was approximately $94,000 from the department's
information technology (IT) staff in order to capture or
link the data. She shared that the department had no
philosophical concerns with the bill. The problem was the
aging database that prevented DCCED to adequately meet the
requirements of the law.
Vice-Chair Fairclough relayed that she would be working
with Ms. Chambers during the summer addressing licensing
issue on the Legislative Budget and Audit Committee (LBA).
She supported providing $94,000 to fix the database issue.
She shared other problems with the licensing division
related to auto leasing companies and tax issues due to
inappropriate business licensing. She asked for an example
of a line of business.
2:01:35 PM
Ms. Chambers pointed to Ms. McConnochie's testimony as an
example. Additionally, another example was business
licenses issued to a sole proprietor who had a nail salon
and wished to perform manicures and hair stylist services
and were all listed under the same business name but were
three different lines of business but the department could
only capture two of the lines. She offered another example
of one media services company that included computer
services, printing services, tele production services,
legal services, and motion picture services under the same
business name. The department could only capture two
businesses in the database.
Vice-Chair Fairclough deduced that if someone opened a
business and some of the business activities were regulated
separately and qualified as separate lines of a business
that the state was piecemealing out annually in order to
charge a licensing fee and keep track of professional
licensing to protect the public.
Ms. Chambers answered that business licensing and
professional licensing were regulated separately through
statute. She detailed that business licensing employed the
NAICS [North American Industry Classification System] code
system that had over one thousand codes. The code was
utilized for business and labor statistical purposes.
Businesses in the state required a business license. A
professional licensing required a level of competency with
different gateways to become licensed for the thirty-nine
different licensing programs that was regulated by the
department and twenty licensing boards. A business person
would need to pass through the professional licensing
gateway prior to doing business in an area that required a
professional license. The failsafe mechanism of the
database was engaged when someone wanted a license that
required a professional license. The department required
proof that the person met the requirements of licensure in
the profession. She communicated that at times a person
mistakenly thought that only a business license was
required for a professional service and the department was
able to provide proper information on what the requirements
were. She noted that not all professionals required a
business license and exemplified a nurse that worked at a
hospital only required a professional license but a doctor
with an independent doctor's office would need both
licenses. The departments professional licensing and
business licensing worked together.
2:06:41 PM
Vice-Chair Fairclough asked whether the technology was
available to accomplish the mandates in the legislation and
if so, was the legislation attempting to merge professional
and business licensing.
Ms. Chambers answered that DCCED was currently upgrading
the professional licensing system. The department's goal
was for the data systems to "talk" together in the future.
The fiscal note would allow the application process and the
database that supported the application could "capture" all
of the codes in the background and gather the information.
Vice-Chair Fairclough asked for verification that the bill
did not impact professional licensing. Ms. Chambers
answered in the affirmative.
Ms. Chambers discussed the fiscal note FN2 (CED). The
department requested an additional $8,500 in order to make
regulatory changes; there was a revenue loss of $37,500 due
to lost licensing revenue.
Vice-Chair Fairclough asked how the revenue loss will be
distributed. Ms. Chambers replied that business licensing
operated separately from professional licensing; therefore
the revenue loss would only impact business licensing.
2:11:11 PM
Vice-Chair Fairclough asked whether the department "used
the costs of the department to spread indirect costs over
the other [professional licensing] division."
Ms. Chambers responded that she would like to do additional
research on the issue. She surmised that if the costs of
the 85 multiple business lines were spread between
professional and business licensing (combine 120,000
licenses) the "impacts would be minimal."
CSHB 32(FIN) was HEARD and HELD in committee for further
consideration.
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