Legislature(2023 - 2024)BARNES 124
02/05/2024 03:15 PM House LABOR & COMMERCE
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| Audio | Topic |
|---|---|
| Start | |
| Executive Order 135 - Eliminating the Alaska Safety Advisory Council | |
| HB251 | |
| HB237 | |
| HB289 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| + | TELECONFERENCED | ||
| *+ | HB 289 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 251 | TELECONFERENCED | |
| *+ | HB 237 | TELECONFERENCED | |
HB 289-BUSINESS LICENSE FEES
3:47:45 PM
CHAIR SUMNER announced that the final order of business would be
HOUSE BILL NO. 289, "An Act relating to business license fees;
and providing for an effective date."
3:48:36 PM
JULIE SANDE, Commissioner, Department of Commerce, Community,
and Economic Development (DCCED), began the PowerPoint
presentation, titled "Business License Fees" [hardcopy included
in committee packet], on slide 1. She explained that the bill
proposes to return business license fees to the amount they were
in 2008. She shared that she serves on the Alaska Tourism
Industry Board as well as the Alaska Seafood Marketing Institute
(ASMI) Board, and she highlighted the marketing work that both
organizations do. She shared that the governor has an interest
in reaching out to business owners to learn more about what they
need in order to conduct business in Alaska. She said that the
needs included workforce, housing, childcare, and energy costs;
the prevailing need is determining how to "tell our story
better." She said she is not interested in building government
just to build government; therefore, effort was made to fund
costs within the department.
3:53:13 PM
SYLVAN ROBB, Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community, and
Economic Development, moved to and read slide 2 of the
presentation, which read as follows [original punctuation
provided]:
What Does HB 289 Do?
Increases regular business license fees from $50 to
$100 per year
Increases business license fees for sole
proprietorships owned by a disabled veteran or
individual who is 65 years of age or older from $25 to
$50 per year
Increases tobacco endorsement fees from $100 to $200
per renewal
MS. ROBB transitioned to and summarized slide 3, which read as
follows [original punctuation provided]:
Why Increase These Fees?
All funds received each fiscal year in excess of
what's required to run the business licensing program
are deposited into UGF
Increasing business licensing fees is a way to
generate additional revenue for the State of Alaska
without heavily impacting one profession or industry
over another
3:55:04 PM
MS. ROBB moved to slide 4 and summarized the slide, which read
as follows [original punctuation provided]:
When is a Business License or Tobacco Endorsement
Required?
A business license is required for the privilege of
engaging in a business in the State of Alaska (AS
43.70.020(a))
"Business" means a for-profit or non-profit entity
engaging or offering to engage in a trade, a service,
a profession, or an activity with the goal of
receiving a financial benefit in exchange for the
provision of services, or goods, or other property.
(AS 43.70.110(1))
A person who sells cigarettes, cigars, products
containing tobacco, electronic smoking products, or
products containing nicotine as a retailer must have a
business license and a [tobacco] endorsement. (AS
43.70.105(b))
MS. ROBB advanced to and read slide 4, which read as follows
[original punctuation provided]:
When is a Business License Not Required?
Business license exemptions (AS 43.70.105):
Fisheries business
Sale of liquor under a license issued under AS 04.11
Insurance business
Mining business
Supplying services as an employee
Furnishing goods or services by a person who does not
represent to be regularly engaged in furnishing goods
or services
Activities of an investment club as defined in AS
43.70.105(7)
Bank organized under AS 06.05 or the laws of another
state
National bank chartered by the U.S.
Credit union organized under AS 06.45 or the laws of
another state
Credit union regulated by the National Credit Union
Administration
Mutual savings bank chartered under AS 06.15 or
organized under the laws of another state
3:56:53 PM
MS. ROBB moved to slide 6 to present a graph depicting the
number of business licenses and pointed out that the licenses
continued to increase. She advised that the 2023 figure of
22,623 business licenses is the number of people who purchased a
business license that, not the total number of licenses in
Alaska, which is 100,000. She moved to slide 7 to show a graph
of the number of businesses. She advanced to slide 8 to present
a graph that shows the number of businesses licenses that hold
endorsements. Ms. Robb transitioned to slide 9 to showcase a
graph of business license revenue. She concluded on slide 10
with the resources used in the PowerPoint.
3:59:46 PM
REPRESENTATIVE FIELDS asked, if all $2.7 million were put toward
additional staff, how many staff that would support and whether
it would speed up current backlogs.
MS. ROBB explained that current professional licensing statutes
are separate from business license revenue. She said the
division is required to charge an amount for the professional
licensing fees that is about equal to the cost to run the
program. She noted that the legislature granted the division 12
additional positions.
REPRESENTATIVE FIELDS asked if the bill could be tweaked to
provide more help and augment the fees.
4:01:19 PM
CHAIR SUMNER commented that Representative Fields is describing
a fee, whereas this is a tax.
4:01:28 PM
REPRESENTATIVE SADDLER asked about Commissioner Sande's comment
that the bill would restore business license fees to pre-COVID
levels.
COMMISSIONER SANDE reiterated that the bill would restore the
fees to 2008 levels.
REPRESENTATIVE SADDLER sought clarification that the fee went
from $100 to $50 in 2008 and is now being proposed to be
returned to $100. He further asked if a higher fee was
considered to account for inflation.
COMMISSIONER SANDE responded that, as a business owner, the
change from $50 to $100 isn't going to cause her to decide not
to go into business. She said the division is comfortable with
$100 and may consider $150 in the future.
REPRESENTATIVE SADDLER pointed out that the fiscal note assumes
no growth in the number of licenses.
4:04:09 PM
MS. ROBB explained that fiscal notes do not account for
inflation. She said it would be challenging to project the
increase in business licensing that the division anticipates in
the future. In response to a follow-up question, she explained
that business license fees were waived during the COVID
pandemic; that may have artificially influenced the number of
businesses licenses that were given out. She said there has
been an increase in business licenses over the past few years.
CHAIR SUMNER advised members that Mr. Gunther was present to
explain the difference between a tax and a fee.
4:06:50 PM
CONRAN GUNTHER, Attorney, Legislative Legal Services,
Legislative Affairs Agency, said he is not aware of any Alaska
cases that distinguish between a fee and a tax. He explained
that a tax is a levy of funds to raise revenue for general
government purposes, while a fee is a voluntarily incurred
change to obtain a government benefit with fees that relate to
the cost of the benefit.
CHAIR SUMNER asked, if a proposal were made to double the fee
with all the additional revenue going to the general fund,
whether that would be a tax.
MR. GUNTHER explained that under Article IX, Section 7, of the
Constitution of the State of Alaska, any proceeds of a state tax
or license can be dedicated and go to the general fund. He
shared that there may be other examples around whether a fee is
excessive.
4:08:50 PM
REPRESENTATIVE PRAX asked if the licensing fee is like the
driver's license fee.
MS. ROBB explained that the fees are referred to as business
license fees since that is how they are outlined in statute.
She added that the legislature spoke to the fact that the money
collected by the department under AS 43.70.080 should be
deposited into the general fund; this indicates that additional
funds would be generated beyond the costs required to run the
program.
4:10:12 PM
REPRESENTATIVE RUFFRIDGE asked about the fee increase not having
a detrimental affect on the number of licenses issued. He
commented that the fee waving during COVID might have caused
more licenses to be issued. He asked what licensing fee figure
would discourage someone from starting a business.
MS. ROBB answered that the fee increase does not impact one
industry.
4:11:52 PM
REPRESENTATIVE SADDLER pointed to and read slide 3, regarding
the increase of business licensing fees as a source of revenue.
He asked for an explanation of how the licensing fee is a fee
and not a tax.
MS. ROBB answered that the department has referred to business
licensing as a fee, as does state statute. She highlighted
again that there is statute directing that excess funds
generated return to the general fund.
4:13:51 PM
CHAIR SUMNER announced that HB 289 was held over.
| Document Name | Date/Time | Subjects |
|---|---|---|
| HB 289 Transmittal Letter 1.22.24.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
| HB 289 Presentation for HL&C (Version A).pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
| HB 289 ver A.PDF |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
| HB 289 Sectional Analysis ver A.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |
| HB 251 Sponsor Statement.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 251 |
| HB 251 Sectional Analysis.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 251 |
| HB0251A.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 251 |
| HB 237 Sponsor Statement.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
| HB 237 Version B.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
| HB 237 Dawn Hughes Letter of Support.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
| HB 237 Fscl Nt - DCC&ED.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 237 |
| Fiscal Note HB0289-1-2-012424-CED-Y.pdf |
HL&C 2/5/2024 3:15:00 PM |
HB 289 |