Legislature(2013 - 2014)SENATE FINANCE 532
04/13/2014 01:30 PM Senate FINANCE
| Audio | Topic |
|---|---|
| Start | |
| HB32 | |
| HCR15 | |
| Adjourn |
* first hearing in first committee of referral
+ teleconferenced
= bill was previously heard/scheduled
+ teleconferenced
= bill was previously heard/scheduled
| += | SB 209 | TELECONFERENCED | |
| += | SB 220 | TELECONFERENCED | |
| + | TELECONFERENCED | ||
| += | HB 32 | TELECONFERENCED | |
| += | HCR 15 | TELECONFERENCED | |
SENATE FINANCE COMMITTEE
April 13, 2014
1:43 p.m.
1:43:14 PM
CALL TO ORDER
Co-Chair Meyer called the Senate Finance Committee meeting
to order at 1:43 p.m.
MEMBERS PRESENT
Senator Pete Kelly, Co-Chair
Senator Kevin Meyer, Co-Chair
Senator Anna Fairclough, Vice-Chair
Senator Click Bishop
Senator Mike Dunleavy
Senator Lyman Hoffman
Senator Donny Olson
MEMBERS ABSENT
None
ALSO PRESENT
Representative Mia Costello, Sponsor; Charles Guinchard,
Staff, Representative Mia Costello; Sara Chambers,
Director, Division of Corporations, Business and
Professional Licensing, Department of Commerce, Community
and Economic Development; Representative Shelley Hughes,
Sponsor; Ginger Blaisdell, Staff, Representative Shelly
Hughes.
PRESENT VIA TELECONFERENCE
Peggy-Ann McConnochie, National Federation of Independent
Business, Juneau.
SUMMARY
CSHB 32(FIN)
LINES OF BUSINESS ON BUSINESS LICENSE
CSHB 32(FIN) was HEARD and HELD in committee for
further consideration.
CSHCR 15(FIN)
TASK FORCE ON UNMANNED AIRCRAFT SYSTEMS
HCR 15 was HEARD and HELD in committee for
further consideration.
CS FOR HOUSE BILL NO. 32(FIN)
"An Act providing for the issuance of one business
license for multiple lines of business; and providing
for reissuance of a business license to make a change
on the license."
1:43:56 PM
REPRESENTATIVE MIA COSTELLO, SPONSOR, introduced the
legislation. She explained that the bill would allow
individuals operating multiple businesses who apply for a
business license to list several lines under one license.
She believed that HB 32 reduced "burdensome government
involvement in the licensing process." She supported the
issuance of licenses by the Department of Commerce,
Community and Economic Development (DCCED) but felt that
paying for multiple business licenses was onerous. The
legislation allowed for multiple business activities under
one license if licensed under the same name.
1:46:05 PM
CHARLES GUINCHARD, STAFF, REPRESENTATIVE MIA COSTELLO,
provided sectional information. He explained that Section 1
beginning on page 1, line 4 amended existing statute to
require one business license for multiple lines of
business. He cited page 1, line 12 that authorized the
primary and secondary business listings on the license. He
referenced Section 2, page 2 that inserted new language
which specified that one business license covered multiple
lines of business. He noted that Section 3 allowed for two
types of changes to a business license. On change permitted
an individual to make changes to a business license within
the thirty days of issuance. The second type of change
allowed any clerical error corrections at any time the
license was valid. Lastly, Section 3 specified that if any
changes were made to the license the expiration date
remained unchanged. He reported that Section 4 added a new
definition to statute for "line of business." The existing
definition of "business" would work in concert with the
definition of "line of business" with the definition of
"line of business" meaning a singular activity that a
business was engaged in. He cited Section 5, line 18 and
offered that the provision referred to transition language
and required DCCED to advance measures to implement the
legislation.
Co-Chair Meyer pointed to the letters of support in the
bill packet (copies on file). He asked whether there was
any opposition to the bill.
Mr. Guinchard replied that when the bill was first
introduced any number of lines of business could be listed
on a single business license. The provision carried a
significantly higher fiscal note and would create problems
for DCCED with data base recording. The current version of
the bill was amended to record the primary and secondary
lines of business, which greatly reduced the fiscal cost.
The department had one concern that it would not have the
records of businesses running three or more lines of
business under one license. He noted that currently 85
businesses would fall under the category. The issue could
be addressed through regulations.
1:50:05 PM
Senator Olson asked what type of businesses the 85
businesses were and how that would impact revenue.
Representative Costello replied that currently over 700
businesses would be affected by the legislation and tended
to be small businesses. The 85 businesses with more than
three lines of business required professional licenses.
Co-Chair Meyer OPENED public testimony.
PEGGY-ANN MCCONNOCHIE, NATIONAL FEDERATION OF INDEPENDENT
BUSINESS, JUNEAU (via teleconference), spoke in support of
the legislation. She thanked Representative Costello for
introducing the bill. She related that she was a real
estate broker and owner of a consulting business and the
legislation affected her negatively as a small business
owner. She was required to have a real estate license and
another license for teaching real estate classes. She
relayed that the National Federation of Independent
Business was in strong support of the legislation and she
urged the committee to pass the bill. She believed that HB
32 would benefit all small businesses in the state.
1:53:09 PM
Co-Chair Meyer CLOSED public testimony.
Vice-Chair Fairclough requested to hear from the
department. She supported the legislation.
SARA CHAMBERS, DIRECTOR, DIVISION OF CORPORATIONS, BUSINESS
AND PROFESSIONAL LICENSING, DEPARTMENT OF COMMERCE,
COMMUNITY AND ECONOMIC DEVELOPMENT, conveyed that the bill
streamlined business practices to create a business
friendly environment. She expressed concern that the
current database captured only two lines of business. The
department's data base did not have the capability to track
multiple business lines and additional funding via a fiscal
note was necessary to address the issue. An individual
could have more than two lines of business under the new
business license but the state would be unaware of the
other businesses, which carried two important impacts for
the state. She related that one concern was the inability
for the department to track more than two lines of
business. The department would not be able to track the
professional license of an individual with either three
professional licenses or one professional license not
claimed as the primary or secondary line of business. She
hypothesized a scenario where a person wanted to open a
hair stylist and manicure salon and was unaware that
professional licenses were required for both activities,
the department could not ensure that the professional
license was acquired if it could not determine all of the
lines of business, which threatened public safety. The
department worked to educate the public on the needs for
professional licensing but the database acted as an
additional failsafe to identify people who believe that a
business license was all they needed to do business in the
state. She pointed to another concern related to research
into the department's licensing database. The department
regularly received requests for information from the
database to quantify numbers of people engaged in various
business activities throughout the state. The information
was helpful to the Department of Labor and Workforce
Development (DOL) and any industry research. The department
would not be able to respond to requests for information
because the information would not be accurate. Ms. Chambers
proposed that a limited solution could be addressed in
regulation. The department could require an individual to
list a professional license as primary or secondary. The
solution did not address an individual with multiple
businesses and professional licenses and the department
lost the ability to capture the information.
1:58:07 PM
Vice-Chair Fairclough wondered why the department had not
devised a solution to the problem. She asked whether the
department was confined by hardware issues that would
prevent reporting multiple licenses. She queried why DCCED
could not "link" multiple business licenses together and
issue the others without a fee to the business owner.
Ms. Chambers answered that the issue was related to
technological capacity. The business licensing database had
not been updated for many years. The original fiscal note
estimate was approximately $94,000 from the department's
information technology (IT) staff in order to capture or
link the data. She shared that the department had no
philosophical concerns with the bill. The problem was the
aging database that prevented DCCED to adequately meet the
requirements of the law.
Vice-Chair Fairclough relayed that she would be working
with Ms. Chambers during the summer addressing licensing
issue on the Legislative Budget and Audit Committee (LBA).
She supported providing $94,000 to fix the database issue.
She shared other problems with the licensing division
related to auto leasing companies and tax issues due to
inappropriate business licensing. She asked for an example
of a line of business.
2:01:35 PM
Ms. Chambers pointed to Ms. McConnochie's testimony as an
example. Additionally, another example was business
licenses issued to a sole proprietor who had a nail salon
and wished to perform manicures and hair stylist services
and were all listed under the same business name but were
three different lines of business but the department could
only capture two of the lines. She offered another example
of one media services company that included computer
services, printing services, tele production services,
legal services, and motion picture services under the same
business name. The department could only capture two
businesses in the database.
Vice-Chair Fairclough deduced that if someone opened a
business and some of the business activities were regulated
separately and qualified as separate lines of a business
that the state was piecemealing out annually in order to
charge a licensing fee and keep track of professional
licensing to protect the public.
Ms. Chambers answered that business licensing and
professional licensing were regulated separately through
statute. She detailed that business licensing employed the
NAICS [North American Industry Classification System] code
system that had over one thousand codes. The code was
utilized for business and labor statistical purposes.
Businesses in the state required a business license. A
professional licensing required a level of competency with
different gateways to become licensed for the thirty-nine
different licensing programs that was regulated by the
department and twenty licensing boards. A business person
would need to pass through the professional licensing
gateway prior to doing business in an area that required a
professional license. The failsafe mechanism of the
database was engaged when someone wanted a license that
required a professional license. The department required
proof that the person met the requirements of licensure in
the profession. She communicated that at times a person
mistakenly thought that only a business license was
required for a professional service and the department was
able to provide proper information on what the requirements
were. She noted that not all professionals required a
business license and exemplified a nurse that worked at a
hospital only required a professional license but a doctor
with an independent doctor's office would need both
licenses. The departments professional licensing and
business licensing worked together.
2:06:41 PM
Vice-Chair Fairclough asked whether the technology was
available to accomplish the mandates in the legislation and
if so, was the legislation attempting to merge professional
and business licensing.
Ms. Chambers answered that DCCED was currently upgrading
the professional licensing system. The department's goal
was for the data systems to "talk" together in the future.
The fiscal note would allow the application process and the
database that supported the application could "capture" all
of the codes in the background and gather the information.
Vice-Chair Fairclough asked for verification that the bill
did not impact professional licensing. Ms. Chambers
answered in the affirmative.
Ms. Chambers discussed the fiscal note FN2 (CED). The
department requested an additional $8,500 in order to make
regulatory changes; there was a revenue loss of $37,500 due
to lost licensing revenue.
Vice-Chair Fairclough asked how the revenue loss will be
distributed. Ms. Chambers replied that business licensing
operated separately from professional licensing; therefore
the revenue loss would only impact business licensing.
2:11:11 PM
Vice-Chair Fairclough asked whether the department "used
the costs of the department to spread indirect costs over
the other [professional licensing] division."
Ms. Chambers responded that she would like to do additional
research on the issue. She surmised that if the costs of
the 85 multiple business lines were spread between
professional and business licensing (combine 120,000
licenses) the "impacts would be minimal."
CSHB 32(FIN) was HEARD and HELD in committee for further
consideration.
CS FOR HOUSE CONCURRENT RESOLUTION NO. 15(FIN)
Relating to the Task Force on Unmanned Aircraft
Systems.
2:12:16 PM
REPRESENTATIVE SHELLEY HUGHES, SPONSOR, introduced the
legislation. She explained that the legislation extended
the length of the task force. She stated that in the United
States one in four homes owned a drone because of the
smaller size and affordability. As the use increased the
public's concerns also increased. Setting "structures" in
place with "inherent protections," reduced the impacts on
the public. She detailed that Alaska was selected by the
Federal Aviation Administration (FAA) to be a test site.
The FAA continued to address the safety conditions for the
use of drones. The role of the task force was to examine th
privacy issues and Unmanned Aircraft Systems (UAS)
applications. The task force was very concerned with
privacy issues and misuse of UAS. She remarked on the
state's vast roadless areas and noted the potential of UAS
in the state. The task force performed will in the prior
year and had issued a report to the legislature on January
14, 2014 and will issue a final report on July 1, 2014. The
task force brought forward HB 255 (Unmanned Aircraft
Systems) that set the parameters for law enforcement use.
Representative Hughes related that the reason the task
force should continue its work was further address concerns
over privacy. The technology was fast growing and the
integration of UAS into national air space was expected in
late 2015. She anticipated additional issues emerging from
the integration. One of the duties of the task force would
be to continue to conduct public hearings and identify
issues on privacy and data collection, evaluate and
recommend solutions. The task force had spent much time
focusing on law enforcement use and issues in the past
year. Currently, commercial and business use was imminent.
She anticipated that the impending use of commercial UAS
would bring new challenges. The task force dealt with
Fourth Amendment rights and would begin to First Amendment
rights regarding business and media use. She believed the
task force was "timely and necessary' and stressed the
importance for Alaskans to know that the issue was being
monitored and addressed through policy. The task force was
comprised of 7 members and the legislation added a public
member, two industry members, and the commissioners of
DCCED, and Department of Transportation and Public
Facilities (DOT). The task force wanted more industry
members and the public to be more involved. She noted that
Senator Olson had been on the task force. She believed that
the task force needed to be "a central point of contact for
the public."
2:17:46 PM
Representative Hughes spoke to the desire for increased
economic development in the state. She believed the state
was a prime location for the UAS industry. Other states
took a more restrictive and hesitant approach and the UAS
industry was interested in the state. She shared that an
individual in the industry was looking forward to growing
his business to 100 people and felt the UAS industry
provided more opportunity for Alaskans. She urged the
committee to advance the legislation.
Co-Chair Meyer asked for verification that one in four
households owned a drone. Representative Hughes answered in
the affirmative.
Co-Chair Meyer pointed to the sponsor statement (copy on
file). He asked about the single point of contact noted in
the document. He inquired whether a single point of contact
was currently in place.
Representative Hughes answered that the single point of
contact was not assigned to any specific department. The
task force was the acting point of contact.
Co-Chair Meyer asked whether the task force was expanding
its membership. Representative Hughes replied in the
affirmative; by 5 additional members.
Senator Dunleavy questioned whether drones had the audio
and visual capacity that caused concerns and how a drone
was defined.
2:20:25 PM
Representative Hughes responded that a UAS with a camera
was unrelated.
GINGER BLAISDELL, STAFF, REPRESENTATIVE SHELLY HUGHES
replied that the term "drone" had been adopted by the
military for weaponized unmanned aircraft. She explained
that more professional sounding names were in use; however,
drone was easier to say. A drone was the same as an
unmanned aircraft and was not related to weapons use.
Senator Dunleavy elucidated that for many years individuals
used recreational aircraft without weaponry. He wondered if
the recreational individuals' rights were being rolled into
the larger discussion on UAS. He wondered whether a
distinction existed between model airplane enthusiast and
the commercial and visual audio use of UAS.
Ms. Blaisdell answered that one of the functions of the
task force would define "where the line was drawn."
Currently the FAA had rules stating that UAS use for
commercial purposes a certificate of authorization was
required. Most UAS operators with camera equipment were
unaware that they may be operating illegally and received
fines. Some of the fines had been dropped and some had been
pursued. She indicated that another role of the task force
was public education.
Senator Dunleavy asked if he had a model airplane and was
flying it on his property he wondered if he was violating
any new laws since UAS came into use.
Ms. Blaisdell replied in the negative. She reported that
unless the individual wanted to sell and photography from
unmanned aircraft the individual was not in violation of
any law. The Academy of Model Aeronautics worked closely
with the FAA and set out the guidelines and rules for
hobbyists. She reiterated that most users were unaware of
the rules. She believed that "mass education" was
necessary.
2:24:36 PM
Senator Olson commented that the FAA continued to revise
regulations related to model aircraft and UAS in relation
to sharing airspace with manned aircraft. He was in favor
of the legislature.
Co-Chair Meyer CLOSED public testimony.
Vice-Chair Fairclough pointed to page 3 and noted the
absence of the definition of a drone and what was
regulated. She hoped that the task force developed
recommendations concerning recreational and camera use.
Representative Hughes replied that the issue had been
discussed in the last report of the task force and
discussions would continue along with implementation of
public education.
HCR 15 was HEARD and HELD in committee for further
consideration.
ADJOURNMENT
2:27:20 PM
The meeting was adjourned at 2:27 p.m.
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