Legislature(2023 - 2024)BELTZ 105 (TSBldg)
03/25/2024 01:30 PM Senate LABOR & COMMERCE
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Audio | Topic |
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Start | |
SB203 | |
SB200 | |
SB153 | |
Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
*+ | SB 203 | TELECONFERENCED | |
*+ | SB 200 | TELECONFERENCED | |
*+ | SB 153 | TELECONFERENCED | |
SB 203-BUSINESS LICENSE FEES 1:33:16 PM CHAIR BJORKMAN announced the consideration of SENATE BILL NO. 203, "An Act relating to business license fees; and providing for an effective date." 1:33:40 PM MICAELA FOWLER, Deputy Commissioner, Department of Commerce, Community and Economic Development (DCCED), Juneau, Alaska, introduced SB 203 on behalf of the administration. She said that over the past year and a half, the department has had discussions with the business community about interest in the ways the state can do more to promote industries that do not have a promotional entity (e.g. the Alaska Seafood Marketing Institute (ASMI) and Alaska Travel Industry Association (ATIA)). She said that in 2023, the legislature provided $5 million in the capital budget to start doing some of this work. The Division recognizes that requesting an Unrestricted General Funds (UGF) appropriation on an ongoing basis is difficult in the present economy. The Division has been seeking a small fee increase (impacting the population that would benefit from that activity). 1:35:18 PM MS. FOWLER explained that the business license fees have been set at $50 per year since 2008. Prior to this, the fees were $100 per year. SB 203 proposes returning to the $100 licensing fee. The intention is that the funds could be appropriated to support business marketing should the legislature choose to do so. She gave a brief overview of the $5 million received in 2023. She expressed gratitude for the funds and said that the Department has a contract with the Alaska Chamber to determine where Alaskans would like to see that money invested. This would also offer information on where appropriate market research can be done and allow the division to offer appropriate support to thriving or emerging industries. Prior administrations saw promotional activities around peonies - which helped grow this industry. She noted that additional promotional activities occurred around that time - this is providing data on where the greatest interest is going forward. 1:37:28 PM SYLVAN ROBB, Director, Division of Corporations, Business and Professional Licensing, Department of Commerce, Community and Economic Development, Juneau, Alaska, offered a presentation on SB 203 and advanced to slide 2: [Original punctuation provided.] What Does SB 203 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 1:38:22 PM MS. ROBB advanced to slide 3: [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 MS. ROBB noted that the impact for a single business would be a $50 increase. She stated that the estimated revenue from this increase is $2.7 million. She added that Alaska would remain in- line with other states' business license fees, which range from $20 to $500. She stated that the intention behind the increase is to use the funds to promote the businesses that are requesting promotional assistance. 1:39:14 PM MS. ROBB advanced to slide 4: [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)) 1:39:49 PM MS. ROBB advanced to slide 5: [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 1:40:37 PM SENATOR DUNBAR asked why insurance businesses and financial businesses are exempt from this requirement and if they have separate fees to pay. MS. ROBB answered that this is correct. She explained that insurance businesses are licensed through the Division of Insurance and alcohol businesses are licensed through Alcohol & Marijuana Control Office (AMCO), both of which are in the Department of Commerce, Community and Economic Development (DCCED). SENATOR DUNBAR asked about financial institutions. MS. ROBB replied that these are licensed through Banking and Securities in DCCED. SENATOR DUNBAR surmised that these licenses are not free. MS. ROBB answered no. 1:41:36 PM CHAIR BJORKMAN commented that oftentimes, banks require business licenses before they will open a business banking account - including those listed as exempt from licensing. He asked if there is a short cut by which businesses that are not required to obtain a business license can provide other supporting documents to open an account. MS. ROBB stated she could not speak in depth to this question. She commented that some exempt businesses choose to get a business license for various reasons. 1:42:53 PM MS. ROBB advanced to slide 6, displaying a graph of the scope of new business licenses and endorsements from 2014 through 2023. She pointed out that these numbers reached a high point during the COVID-19 pandemic. She noted that this includes the number of endorsements for tobacco and related products. In addition, there are around 100 thousand licensed businesses. 1:43:38 PM SENATOR DUNBAR asked what caused the spike in business licenses during the COVID-19 pandemic. MS. ROBB replied that from April 3, 2020 to February 1, 2023 there was no charge for business licenses. She surmised that this may have been a factor. She speculated that during the pandemic, work was disrupted, and people may have taken that opportunity to open businesses; however, the division does not keep data on the reasons for obtaining business licenses. 1:44:42 PM MS. ROBB advanced to slide 7, displaying a graph of FY2014 through FY2023 business licenses - new, renewed, and current. She explained that "current business license" applies to those who have purchased a two-year business license. (This does not include a monetary discount but saves the business owner from reapplying each year.) She noted that this brings the total to roughly $100 thousand. 1:45:20 PM MS. ROBB advanced to slide 8, displaying a graph of FY2014 through FY2023 business licenses with endorsements. She said that this shows the number of businesses that have a tobacco endorsement - along with the number of actual endorsements. A business may have a number of endorsements, as each location selling nicotine products needs its own endorsement. 1:45:45 PM MS. ROBB moved to slide 9 displaying a graph of business license revenue deposited into the general fund for FY2017 through FY2023. She explained that, currently, the money generated through business license fees exceeds the cost of operating the program. The excess funds flow into the general fund. The graph shows the amount generated through business licenses as well as the amount that has lapsed into the general fund in the past. 1:46:22 PM MS. ROBB moved to slide 10, which listed business license and endorsement reports and resources. She offered to present the sectional analysis if it was the will of the committee. 1:46:46 PM CHAIR BJORKMAN stated that the committee understood the concept and would forego the sectional analysis. 1:47:04 PM CHAIR BJORKMAN held SB 203 in committee.
Document Name | Date/Time | Subjects |
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SSSB200 ver S.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 200 |
SSSB 200 Sponsor Statement ver S.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 200 |
SSSB 200 Sectional Analysis ver S.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 200 |
SB203 ver A.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
SB203 Transmittal Letter 1.22.24.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
SB203 Sectional Analysis ver A.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
SB203 Fiscal Note-DCCED-CBPL-01.18.24.pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
SB203 Presentation for SL&C (Version A).pdf |
SL&C 3/11/2024 1:30:00 PM SL&C 3/25/2024 1:30:00 PM |
SB 203 |
SB153 ver A.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 153 |
SB153 Sponsor Statement Version A.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 153 |
SB153 Sectional Analysis Version A.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 153 |
SB153 Fiscal Note-DOLWD-WH-05.15.23.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 153 |
SB200 Presentation to SLAC 03.25.24.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 200 |
SB153 Fiscal Note-DOLWD-WH 03.22.24.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 153 |
SB153 Presentation to SLAC 03.25.24.pdf |
SL&C 3/25/2024 1:30:00 PM |
SB 153 |