03/30/1998 01:45 PM Senate JUD

           SB 329 - INVESTMENT CLUB LICENSE EXEMPTION                          
                                                                               
Number 167                                                                     
                                                                               
MR. FLOYD DAMRON, Co-President of the Alaska Council of the                    
National Association of Investors Corporation, testified via                   
teleconference from Anchorage. MR. DAMRON stated that SB 329 allows            
investment clubs to be exempt from getting a business licence. He              
said there are 36,000 investment clubs around the United States.               
MR. DAMRON said these clubs are not a business and their general               
purpose is to provide education about investing in the U.S. Stock              
Market. MR. DAMRON noted that the financial impact of this bill is             
zero.                                                                          
                                                                               
Number 200                                                                     
                                                                               
Ms. Annette Kreitzer, Staff to the Senate Labor and Commerce                   
Committee, said the proposed committee substitute includes a clean             
up of language that was not included in the bill that passed out of            
the Labor and Commerce committee. Ms. KREITZER said the bill also              
includes a simplified definition of business.                                  
                                                                               
SENATOR PARNELL asked why the bill takes out the Commissioner of               
Commerce and Economic Development (CED). MS. KREITZER replied that             
the CED does issue some fisheries business licences to some fishing            
related businesses. Also, the drafter thought it was important to              
include, but the sponsor has no feeling on it.                                 
                                                                               
SENATOR ELLIS assumed the fiscal impact of the bill was negligible,            
and asked if any public protection was lost to consumers under this            
bill. MS. KREITZER said the fiscal note was zero and, as she                   
understood it, there was no protection lost under the bill. MR.                
KREITZER added that no other state requires business licences for              
investment clubs.                                                              
                                                                               
SENATOR ELLIS asked if the registration of investment clubs was a              
useful tool for other reasons.                                                 
                                                                               
SENATOR PARNELL asked if the intent was to immunize or limit                   
liability of investment clubs and Ms. KREITZER replied the intent              
was only to exempt them from the requirement of purchasing a                   
business licence.                                                              
                                                                               
Number 269                                                                     
                                                                               
MS. CATHERINE REARDON, Director of the Division of Occupational                
Licencing under the Department of Commerce and Economic                        
Development, testified that business licencing is essentially a tax            
and provides no public protection. Business are not investigated,              
and the division has no basis on which to deny a business licence.             
Ms. REARDON said there are currently 72,000 business licences held             
in Alaska, and the tighter definition will help her division by                
reducing the confusion of people calling and visiting their office.            
MS. REARDON said her division has no position on section one, added            
by the legislative drafter. She said section two gives the division            
regulation writing authority which she appreciates. She noted the              
zero fiscal note and commented that, actually, the state may lose              
approximately $250, but her office will work to offset this loss.              
                                                                               
SENATOR PARNELL asked if any investment clubs currently pay taxes,             
other than the cost of their business licences. MR. FLOYD DAMRON               
replied that investment clubs are formed as partnerships, in which             
each partner pays his or her taxes directly to the federal                     
government.                                                                    
                                                                               
SENATOR MILLER moved the adoption of the committee substitute,                 
version "B." Without objection, it was so ordered.                             
                                                                               
CHAIRMAN TAYLOR announced he may have a potential conflict of                  
interest, as his wife is in an investment club in Wrangell.                    
                                                                               
SENATOR PARNELL moved CSSB 329 out of committee with individual                
recommendations. Without objection, it was so ordered.