Legislature(2013 - 2014)BARNES 124
02/18/2013 03:15 PM House LABOR & COMMERCE
| Audio | Topic |
|---|---|
| Start | |
| HB32 | |
| HB71 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| *+ | HB 32 | TELECONFERENCED | |
| *+ | HB 71 | TELECONFERENCED | |
HB 32-LINES OF BUSINESS ON BUSINESS LICENSE
3:22:01 PM
CHAIR OLSON announced that the first order of business would be
HOUSE BILL NO. 32, "An Act providing for the issuance of one
business license for multiple lines of business; and providing
for reissuance of a business license to correct a mistake on the
license."
3:22:27 PM
REPRESENTATIVE MIA COSTELLO, Alaska State Legislature, Juneau,
Alaska, stated Alaska can do a better job of creating a business
friendly environment. Small business represents one of the
fastest ways to grow Alaska's economy.
REPRESENTATIVE SADDLER moved to adopt the proposed committee
substitute (CS) for HB 32, labeled 28-LS0192\O, Martin, 2/16/13,
as the working document. There being no objection, Version O
was before the committee.
3:23:51 PM
REPRESENTATIVE COSTELLO stated that HB 32 will do two things.
First, it would allow people who apply for business licenses to
include multiple lines of business in the license. Second, it
would allow a business license holder to add a new line to their
current license. She said she introduced the bill when a
constituent made a change to her business and was required to
reapply for a business license.
3:24:20 PM
MARY SCHLOSSER, Staff, Representative Mia Costello, Alaska State
Legislature, stated that under current law a separate business
license is required for each line of business or business
activity. First, this bill would allow a business to obtain a
license to cover all lines of business. It would establish an
application process to allow for multiple lines of business on a
single license application with one fee charged. Second, HB 32
would make the process more consumer friendly by smoothing the
process for changing the business licenses. She related this
bill would also require the division to correct any errors at no
charge while the business license is active. Additionally, if
the consumer needs to make a change the consumer can do so
without incurring fees within 90 days of the business license
application. Finally, this bill provides for a transition
between one type of licensing system and the new one. She
related that after working with the Division of Corporations,
Business, and Professional Licensing (DCBPL), the joint prime
sponsors are requesting some minor modifications, included in
Version O.
3:25:34 PM
MS. SCHLOSSER related the first change [on page 1, line 8] would
emphasize that the bill pertains to multiple lines of business
and not just a single line. The second change in Section 3,
[page 2, lines 8-11] would clarify the correction of errors
process and that the change process is limited to a 90-day grace
period. The third change would require an altered bill title to
reflect that the changes to the business license can also be
permitted due to mistakes or for other reasons. She concluded
that Representative Costello's goal in introducing HB 32 is to
make it possible to license a business, rather than the lines of
business, which could help make the state consumer friendly. In
closing, she mentioned that Alaska is ranked 49th by [MSNBC] and
42nd by Forbes in terms of business-friendly practices.
3:26:38 PM
REPRESENTATIVE SHELLEY HUGHES, Alaska State Legislature,
remarked on the importance of anything that can be done to move
Alaska up in the ranking. She said she wants Alaska to be
business friendly and small businesses are the heart and soul of
the folks in Alaska. She concluded that HB 32 is an important
bill. She urged members to move the bill out of committee.
3:27:04 PM
REPRESENTATIVE SADDLER referred to page 2, line 10 of Version O.
She asked for the type of change a person may wish to make on a
license.
REPRESENTATIVE COSTELLO answered a constituent made a mistake on
the type of business and realized it after she had submitted the
application. In response to a question, she said she was unsure
of the time that had transpired.
3:28:26 PM
REPRESENTATIVE HERRON asked whether any known opposition.
MS. SCHLOSSER answered no.
3:28:43 PM
REPRESENTATIVE HERRON understood that this bill would allow a
single license if the business consists of several lines of
business with the same owners to have a single license.
MS. SCHLOSSER answered that is correct as long as the owners and
name of the business is the same.
3:29:13 PM
REPRESENTATIVE JOSEPHSON remarked he plans to cosponsor the
bill, but has some questions for the Department [of Commerce,
Community & Economic Development.]
3:29:30 PM
DON HABEGER, Director, Division of Corporations, Business, and
Professional Licensing (DCBPL), Department of Commerce,
Community, & Economic Development (DCCED), introduced himself.
CHAIR OLSON asked if department has any position on the bill.
MR. HABEGER answered the department does not have a position on
the bill. He said that certainly anything to streamline
business friendliness is a good goal.
3:30:17 PM
REPRESENTATIVE JOSEPHSON asked whether the department has any
idea of revenue loss it would sustain with passage of HB 32.
MR. HABEGER related he just found out the sponsor intends the
owner and business name must be the same. Thus, the department
was not sure how to define the number. He clarified that the
some business owners have the same last name with multiple lines
of business, with different licenses. He was unsure if those
business owners were included; however, he just heard
clarification from testimony that those businesses would not be
included. He was unsure of the number of businesses affected,
but he offered to provide the data to the committee.
3:31:36 PM
CHAIR OLSON asked for clarification on the fiscal note.
MR. HABEGER answered that the fiscal note refers to a prior
version of the bill, although he wasn't sure which bill version.
Currently, the department would require a business applicant to
name a primary and secondary line of business or the North
American Industries code. The division's database is built
around that code, he said. He suggested that if the business
opens up any new lines of business it may require some
modifications to the division's database since the division
would need to track more moving pieces.
3:32:29 PM
REPRESENTATIVE JOSEPHSON asked whether monies received from
business licenses fees is deposited to the general fund.
MR. HABEGER agreed business license revenue is deposited to the
general fund.
3:32:50 PM
REPRESENTATIVE SADDLER said he went to the online business
license database and noticed the primary and secondary business
lines are listed. He asked whether a business license is
currently limited to two lines of businesses.
MR. HABEGER answered no, that a business must choose a primary
line of business. Currently, he said the state offers 19 lines
of business. A business may further choose a specialty, for
example, a primary line of business may be agriculture, but the
business may declare potato growing as a specialty. The
division uses the North American Industry Classification System
(NAICS) codes to track this information. The NAICS code listing
that the DCCED has adopted for Alaska is approximately 16 pages
in length and help a business refine the type of services it is
offering.
REPRESENTATIVE SADDLER asked whether it would be primary,
followed by a more explicit detail about the primary business.
MR. HABEGER answered yes, that is correct. In further response
to a question, he answered yes the explicit detail could be
considered a secondary business line.
3:34:20 PM
REPRESENTATIVE SADDLER asked how many people who have licenses
have multiple business licenses. He said he is trying to
determine the number of businesses that could collapse into one
business to help determine the potential revenue loss.
MR. HABEGER, based on the department's current understanding of
the intent in Version O, estimated that about 700 businesses may
fall under this category and hold a single business license. In
further response to a question, he clarified that the database
covers name, address, line of business. The division records
the date the business license is issued, the expiration date,
and the business name. He related 700 businesses have the same
business name but hold different licenses. In further response
to Chair Olson, he answered that currently about 60,000 business
licenses have been issued.
3:36:22 PM
CATHIE ROEMMICH, Chief Executive Director (CEO), Juneau Chamber
of Commerce (JCC), offered to read a letter she wrote to
Representative Costello, sponsor of HB 32. The Juneau of
Chamber of Commerce (JCC), representing over 400 Alaskan
businesses, would like to add its support for the passage of HB
32. As a chamber of commerce, the JCC sees firsthand the
frustrations and red tape that the very small businesses must go
through in order to survive, to stay in business, and to feed
their families. Only one in five small businesses survive, as
it is, and these hard working Alaskans know the value of the
dollar and are not asking for a handout, but just a fair shake.
MS. ROEMMICH understood that a business license is necessary for
every line of business operated by a business, even though
essentially it could be one business doing various seasonal jobs
to support their family as many Alaskans do. These extra fees
can be a huge burden and may in fact be one of the reasons so
many businesses fail.
MS. ROEMMICH said the proposed bill, HB 32, will require one fee
to be paid and allow a business to register all its lines of
business on one license and also allow for a business license to
be corrected or changed once, without charge. She stated this
is good for businesses in Alaska and supports their success.
She concluded that the Juneau Chamber of Commerce supports HB 32
and will encourage others to do so as well.
3:38:53 PM
PEGGY ANN MCCONNOCHIE, Owner, ACH Consulting; Real Estate
Broker, stated she is a working realtor. She said she is a real
estate broker and the owner of a company, ACH Consulting. Her
business performs both real estate consulting and real estate
education, but she holds two separate business licenses, in
addition to her professional broker's license. She reported she
holds one business license for her company and one for teaching
real estate courses. She also said the State of Alaska requires
her to hold two separate business licenses as the state views
her as having two separate lines of business. She viewed this
requirement to be burdensome and unreasonable. She emphasized
that her consulting and teaching are both centered in real
estate. For the state to require two separate licenses for what
she views as one line of business is onerous, she said. She
stated that small businesses have a tough enough time without
being made to pay unnecessary fees. She urged members to pass
HB 32.
3:40:16 PM
SHERRILEE BULLER, Owner, Upstream Mobile, stated that she opened
her business one and a half years ago doing trade shows and
conventions on behalf of Alaska Communications. She said she
also is an authorized agent for another business, the Satellite
Guy. She explained that her overhead for trade shows was very
little, but she unexpectedly had an opportunity to open a retail
store. She had mailed off her business license renewal to
continue her business license for two years, but one week later
she discovered her retail store opportunity. However, she had
decided she was no longer considered a sole proprietor, but
should be a single member limited liability corporation (LLC).
Unfortunately, the department could not make the change to the
LLC, even though the business license renewal period had not yet
begun. She said she contacted Representative Costello, who
introduced HB 32.
3:42:49 PM
MS. BULLER, speaking as a small business owner, said she finds
she must run multiple lines of business. While she works for
herself, she also represents the two aforementioned companies.
She expressed concern about how a new national
telecommunications provider moving into Alaska might affect her
business. She offered her belief that the national company will
likely hurt her major income earned through representing Alaska
Communications. She said this bill would be a help to her
establish a new line of business. She referred to statistics
she received from the U.S. Small Business Administration [Alaska
District Office] in February 2012. She said that 64 percent of
net new jobs come from small firms and 43 percent of all high-
tech employment is created by small businesses. On the flip
side, she learned from classes with the Alaska Small Business
Development Center (SBDC) that one in five new businesses have a
chance of surviving as entrepreneurs. She said, "I'm going to
be one of the ones. I'm gonna be it. I will be her." She
concluded by stating the more that the state partners together
with small businesses, the more it helps small businesses to
succeed.
CHAIR OLSON held public testimony open on HB 32.
[HB 32 was held over.]
3:45:36 PM
The committee took an at-ease from 3:45 p.m. to 3:49 p.m.