05/19/2003 08:46 AM Senate FIN

                                                                                                                                
     CS FOR HOUSE BILL NO. 162(RLS) am                                                                                          
     "An Act relating to fees adopted by the Department of Natural                                                              
     Resources under AS 44.37.025 or 44.37.027 and to business                                                                  
     license fees; and providing for an effective date."                                                                        
                                                                                                                                
                                                                                                                                
This  was the first  hearing  for this  bill in  the Senate  Finance                                                            
Committee.                                                                                                                      
                                                                                                                                
Co-Chair  Wilken explained  that the  House Rules  Committee at  the                                                            
request of the Governor  presents this bill. He stated that the bill                                                            
would  establish  a  $100  annual  license   fee  for  all  business                                                            
categories  and a $50  annual license  fee for  business whose  sole                                                            
proprietor  is 65  years of  age or  older  within one  year of  the                                                            
license  application. In  addition,  he stated that  the bill  would                                                            
allow the Recorder's  Office in the Department of  Natural Resources                                                            
to charge fees in excess of the average cost of operation.                                                                      
                                                                                                                                
RICK   URION,  Director,   Division   of   Occupational   Licensing,                                                            
Department  of  Community  and  Economic  Development  informed  the                                                            
Committee that  the annual business  license fee has been  $25 since                                                            
1949. He communicated  that the Administration  has determined  that                                                            
this legislation is a legitimate  means of raising State revenue and                                                            
would be  easier to administer  than basing  a fee on the number  of                                                            
employees or  the type of business.  He noted that consideration  is                                                            
provided for  sole proprietor businesses  owned by senior  citizens,                                                            
aged 65 or  older. He stated that  the bill is "reasonable,"  and he                                                            
urged passage of the legislation.                                                                                               
                                                                                                                                
Senator Bunde  asked for further information  regarding language  in                                                            
Section  1 pertaining  to the Recorders  fees in  the Department  of                                                            
Natural Resources.                                                                                                              
                                                                                                                                
NICO  BUS, Administrative   Services Manager,  Division  of  Support                                                            
Services, Department  of Natural Resources communicated  that during                                                            
the past  several years,  the Recorder's  Office has experienced  an                                                            
increase  in the number of  documents being  received as well  as an                                                            
increase in  the size of documents  being requested. He shared  that                                                            
this  has  resulted  in  a  "significant"  increase   in  Department                                                            
expenses. He  stated that this proposal  would allow the  Department                                                            
to  apply  fees in  excess  of  the cost,  and  thereby  enable  the                                                            
Department  to study the situation  and further align fees  with the                                                            
cost of the  service as well as establishing  a fee structure  would                                                            
encourage entities to address document size.                                                                                    
                                                                                                                                
Senator  Bunde  pointed  out  that   the  Senate  Labor  &  Commerce                                                            
Committee version  of the bill would  have generated more  money for                                                            
the State.  In addition,  he questioned  the  provision that  allows                                                            
senior  citizens  to  pay  a  lower  business  license  fee,  as  he                                                            
understands  that there are a lot  of "wealthy" Alaskan seniors  who                                                            
buy business licenses.                                                                                                          
                                                                                                                                
Senator  Taylor  moved  to  report  the  bill  from  Committee  with                                                            
individual recommendations and accompanying fiscal notes.                                                                       
                                                                                                                                
There  being no  objection,  CS HB  162(RLS)  am was  REPORTED  from                                                            
Committee with  zero fiscal note #2  from the Department  of Natural                                                            
Resources  and fiscal  note #4 in  the amount  of $193,400 from  the                                                            
Department of Community and Economic Development.