02/12/2007 03:00 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB83 | |
| HB111 | |
| Adjourn |
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 83 | TELECONFERENCED | |
| += | HB 111 | TELECONFERENCED | |
ALASKA STATE LEGISLATURE
HOUSE LABOR AND COMMERCE STANDING COMMITTEE
February 12, 2007
3:06 p.m.
MEMBERS PRESENT
Representative Mark Neuman, Vice Chair
Representative Carl Gatto
Representative Gabrielle LeDoux
Representative Jay Ramras
Representative Robert L. "Bob" Buch
Representative Berta Gardner
MEMBERS ABSENT
Representative Kurt Olson, Chair
COMMITTEE CALENDAR
HOUSE BILL NO. 83
"An Act relating to the amount and payment of the state business
license fee and to a civil fine for not having a current
business license; and providing for an effective date."
- HEARD AND HELD
HOUSE BILL NO. 111
"An Act decreasing the fee for a business license; and providing
for an effective date."
- MOVED CSHB 111(L&C) OUT OF COMMITTEE
PREVIOUS COMMITTEE ACTION
BILL: HB 83
SHORT TITLE: BUSINESS LICENSE FEE
SPONSOR(s): REPRESENTATIVE(s) RAMRAS, STOLTZE, DAHLSTROM, NEUMAN
01/16/07 (H) PREFILE RELEASED 1/5/07
01/16/07 (H) READ THE FIRST TIME - REFERRALS
01/16/07 (H) L&C, FIN
02/12/07 (H) L&C AT 3:00 PM CAPITOL 17
BILL: HB 111
SHORT TITLE: BUSINESS LICENSE FEE
SPONSOR(s): RULES BY REQUEST OF THE GOVERNOR
01/30/07 (H) READ THE FIRST TIME - REFERRALS
01/30/07 (H) L&C, FIN
02/05/07 (H) L&C AT 3:00 PM CAPITOL 17
02/05/07 (H) -- Meeting Canceled --
02/12/07 (H) L&C AT 3:00 PM CAPITOL 17
WITNESS REGISTER
EMILY STANCLIFF, Staff
to Representative Jay Ramras
Alaska State Legislature
Juneau, Alaska
POSITION STATEMENT: Presented HB 83 on behalf of Representative
Ramras, joint prime sponsor of HB 83.
REPRESENTATIVE BILL STOLTZE
Alaska State Legislature
Juneau, AK
POSITION STATEMENT: Testified as a joint prime sponsor of HB
83.
RICK URION, Director
Division of Corporations, Business, and Professional Licensing
Juneau Office
Department of Community & Economic Development
Juneau, Alaska
POSITION STATEMENT: Answered questions during the hearing on HB
83 and during the hearing on HB 111.
JOHN BITNEY, Legislative Liaison
Governor's Legislative Office
Office of the Governor
Juneau, Alaska
POSITION STATEMENT: Presented HB 111 on behalf of the Governor.
ACTION NARRATIVE
VICE-CHAIR MARK NEUMAN called the House Labor and Commerce
Standing Committee meeting to order at 3:06:50 PM.
Representatives Gatto, Ramras, Buch, Gardner, and Neuman were
present at the call to order. Representative LeDoux arrived as
the meeting was in progress.
HB 83-BUSINESS LICENSE FEE
[Contains discussion of HB 111]
VICE-CHAIR NEUMAN announced that the first order of business
would be HOUSE BILL NO. 83, "An Act relating to the amount and
payment of the state business license fee and to a civil fine
for not having a current business license; and providing for an
effective date."
3:08:11 PM
REPRESENTATIVE RAMRAS moved to adopt CSHB 83, Version 25-
LS0371\C, Bannister, 1/18/07, as the working document. There
being no objection, Version C was before the committee.
3:08:36 PM
EMILY STANCLIFF, Staff to Representative Jay Ramras, Alaska
State Legislature, joint prime sponsor of HB 83, explained that
[Version C] lowers the current business license fee from $100 to
$25 per year. According to the Department of Commerce,
Community, & Economic Development, there are approximately
74,000 business licenses statewide. Current statute requires
that all persons engaging in business activity in Alaska hold a
current business license. She stated that lowering the business
license fee would help promote growth and development of small
businesses across the state. In addition, [Version C] allows
for a civil fine of up to $100, to be imposed on those who
"knowingly engage in business without a license."
3:10:16 PM
REPRESENTATIVE BILL STOLTZE, Alaska State Legislature, joint
prime sponsor of HB 83, explained that HB 83 is "unfinished
business" from the previous legislative session. He expressed
appreciation of the changes made in Version C, noting that these
are a reflection of changes requested by the Governor.
3:11:33 PM
REPRESENTATIVE RAMRAS, speaking as a joint prime sponsor of HB
83, said:
We thought it was remarkable that we were offering up
to $1 billion worth of concessions to the oil company,
to get them to promote business within the ... very
profitable and robust oil and gas industry, and that
we wouldn't offer the same concessions to ... small
and medium sized businesses across the state.
VICE-CHAIR NEUMAN, speaking as a joint prime sponsor of HB 83,
pointed out that the original version of HB 83 contains a
business license fee of $50, which Version C lowers to $25. In
response to a question from Representative Buch, he explained
that HB 83 allows for a civil fine of up to $100, while HB 111
does not. He offered his understanding that there would be an
amendment to add this language to HB 111.
3:14:46 PM
REPRESENTATIVE GATTO inquired as to whether the $100 fine is the
current statutory requirement.
3:15:29 PM
RICK URION, Director, Division of Corporations, Business, and
Professional Licensing, Juneau Office, Department of Community &
Economic Development (DCED), explained that currently, there is
a maximum fine of $2000, in addition to a two month jail
sentence. He agreed that this is classified as a criminal
offense. In response to additional questions, he offered his
understanding that the aforementioned language would be replaced
by the language contained in Version C, thus reducing the
penalties for operating without a license.
3:17:01 PM
REPRESENTATIVE GARDNER inquired as to how often the current fine
has been collected.
MR. URION replied that [the current fine has never been
collected]. In response to an additional question, he stated
that a $100 fine would be more enforceable.
VICE-CHAIR NEUMAN opined that a penalty that is more likely to
be enforced is more appropriate, adding that lack of enforcement
is unfair to those businesses operating with a license.
3:19:57 PM
REPRESENTATIVE LEDOUX asked how the Division is made aware of
businesses which are operating without a license.
MR. URION replied that the Division has an investigator who
focuses on business licenses. In the past two years, there have
been 581 cases, 93 of which were filed the previous week. He
explained that the investigator may read through the yellow
pages, or receive specific complaints regarding businesses
operating without a license. In response to additional
questions, he stated that the Division receives complaints
often. If the business in question does not have a current
business license, a formal letter is sent, suggesting that a
license be obtained.
3:21:11 PM
REPRESENTATIVE GARDNER offered her understanding that a current
business license must be shown for insurance coverage and
business loans.
VICE-CHAIR NEUMAN inquired as to whether the proposed civil fine
would be a "good tool" for enforcement.
MR. URION replied that oftentimes, businesses practicing without
a license do not take the Division investigator seriously, as
they are aware that no penalty will be imposed. He opined that
a civil fine would provide the investigator with a better law
enforcement tool.
REPRESENTATIVE LEDOUX inquired as to the maximum amount allowed
for a civil fine.
MR. URION replied that he does not have this information. He
stated that the intent of the Division is not to impose a large
fine, but to encourage compliance with the law while allowing
businesses to remain open. However, if businesses refuse to
comply, the Division would be able to impose the aforementioned
civil fine. In response to a question from Vice-Chair Neuman,
he explained that the state business license was implemented in
1949, and was intended to produce revenue. He gave a brief
history of business licenses in Alaska, along with information
regarding municipality concerns. It is helpful to be aware of
the various types of businesses, as well as the number of
businesses across the state.
REPRESENTATIVE GATTO pointed out that a new fiscal note is
needed for Version C.
3:24:37 PM
REPRESENTATIVE GARDNER questioned whether a $100 fine is
adequate.
MR. URION replied that this is a "step in the right direction."
In response to additional questions, he reiterated that the
intent is compliance, rather than punishment.
REPRESENTATIVE GARDNER inquired as to whether municipalities use
the business license database for municipal business tax
purposes.
MR. URION replied yes.
REPRESENTATIVE LEDOUX questioned whether the $25 fee is a
revenue measure.
MR. URION replied that the licensing fee would simply cover the
administrative costs, and does not generate any excess revenue.
He explained that by legislative mandate, the Division charges
each profession the cost of regulating it. In response to an
additional question, he commented that the legislature has the
authority to completely remove the business license fee.
3:29:52 PM
REPRESENTATIVE RAMRAS commented that the $25 fee is "what the
Governor wishes." He expressed agreement with maintaining a fee
which is not "an exorbitant sum," in addition to the state's
ability to keep track of businesses. He commented that
individuals who maintain multiple business licenses would be
positively affected by lowering the business license fee. In
response to a comment from Representative Gatto regarding the
effective date, he explained that the intent is to allow current
licenses to "run through their durable life."
3:32:28 PM
REPRESENTATIVE GARDNER pointed out the difference in fiscal
notes [for HB 83 and HB 111], and surmised that this may be due
to different effective dates.
[HB 83 was held over.]
HB 111-BUSINESS LICENSE FEE
[Contains discussion of HB 83]
VICE-CHAIR NEUMAN announced that the final order of business
would be HOUSE BILL NO. 111, "An Act decreasing the fee for a
business license; and providing for an effective date."
3:34:28 PM
JOHN BITNEY, Legislative Liaison, Governor's Legislative Office,
Office of the Governor, explained that HB 111 returns the
business license fee to its original rate of $25. In regard to
the effective date, he stated that the intent is to allow the
current cycle of business licenses "run their course." He
stated that language "stair-stepping" the fee to $25 has been
considered as a way to avoid requiring a rebate on licenses
purchased prior to the October 1, 2008 effective date. He
commented that the enforcement provisions [included in HB 83]
are "good provisions."
3:38:27 PM
REPRESENTATIVE RAMRAS made a motion to adopt Amendment 1, as
follows [original punctuation provided]:
Section 2. AS 43.70.020 is amended by adding a new
subsection to read:
(e) If a person knowingly engages in a business
in the state without having a current license
issued under (a) of this section, the department
may impose a civil fine of up to $100. In this
subsection, "knowingly" has the meaning given in
AS 11.81.900.
Renumber section accordingly.
REPRESENTATIVE GARDNER objected for discussion purposes. She
then stated that it may be necessary to clarify that this
language would replace that which is currently in statute.
MR. BITNEY agreed that the intent of the amendment is to replace
language in existing statute, adding that clarifying language
may be necessary.
REPRESENTATIVE GARDNER commented that it may be easier to remove
the "criminal intent" language from current statute, as it
applies to the business license fee.
REPRESENTATIVE GARDNER removed her objection. There being no
further objection, Amendment 1 was adopted.
3:40:44 PM
REPRESENTATIVE RAMRAS inquired as to whether this bill is
important to the Governor.
MR. BITNEY replied that HB 111 is "very important" for the
Governor.
VICE-CHAIR NEUMAN inquired as to whether the fees for other
professional licenses will increase as a result of decreasing
the business license fee.
MR. URION reiterated that the fees charged by the Division are
based solely on the cost of managing the program, and HB 111
will have no affect on other types of licenses.
3:44:08 PM
REPRESENTATIVE GARDNER moved to report HB 111, as amended, out
of committee with individual recommendations and the
accompanying fiscal notes. There being no objection,
CSHB 111(L&C) was reported from the House Labor and Commerce
Standing Committee.
The committee took a brief at ease.
ADJOURNMENT
There being no further business before the committee, the House
Labor and Commerce Standing Committee meeting was adjourned at
3:45 PM.
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