SB 329 - INVESTMENT CLUB LICENSE EXEMPTION CHAIRMAN LEMAN called the Senate Labor and Commerce Committee meeting to order at 1:37 p.m. and announced SB 329 to be up for consideration. MS. ANNETTE KREITZER, Staff to the Senate Labor and Commerce Committee, said this legislation was introduced because of a discrepancy in how Alaska statutes are interpreted. Mr. Floyd Damron, Alaska Regional Council and National Association of Investors Corporation, contacted them regarding this issue saying they had been advised that they need to purchase a business license to be able to be an investment club in Alaska. That's not the case in other states. Alaska is the sole exception to that. MR. FLOYD DAMRON, Co-President, Alaska Council of the National Association of Investors Corporation, said they are a newly formed council that represents 112 investment clubs in Alaska with about 1,500 - 1,600 Alaska residents as members. Their national organization has about 36,000 clubs made up of about 600,000 people. He explained that the primary purpose of the Alaska Council and investment clubs is educational. A group of friends get together with a small amount of money, so they can learn how to invest in the U.S. stock market. The Securities and Exchange Commission does not view this type of investment club as being securities dealers or brokers. MR. DAMRON said they are uncertain as to whether or not they need to have a business license. Polls of investment clubs indicated most of them have not purchased business licenses and they, therefore, think that there is an exemption. He didn't think there would be any significant decrease in monies to the State of Alaska without licensing. MS. CATHERINE REARDON, Director, Division of Occupational Licensing, said they have no opposition to this bill. She said they have given conflicting answers to investment clubs about whether or not they need business licenses. Part of the problem has been that the definition of business is extremely difficult for staff and the public to understand. She thought it would be a good idea to clarify it in the future. There are only a couple of investment clubs that hold business licenses. Therefore, the fiscal note shows $300 in lost revenue, but it may be less because of her Division giving conflicting advice. She would feel comfortable making a $0 fiscal note, so the bill would not need an extra committee stop. CHAIRMAN LEMAN said he thought it would be helpful if she could provide a revised fiscal note. MS. REARDON said she also had a revised definition of "business" to offer "engaging or offering to engage in a trade, profession, or activity with a goal of receiving a benefit in exchange for provision of good services or property. Business does not include the following activities...(include the exemptions that exist in law)" and add to that the exemption for investment clubs and the existing exemption for giving or supplying services as an employee, and, finally, the current exemption for giving or furnishing of goods and services by a person who does not represent to be regularly engaged in those activities. CHAIRMAN LEMAN asked if that definition would make it easier to administer her Division. MS. REARDON said it would, because it would delete language like "calling or vocation." The whole world is business technically in this definition. Number 172 SENATOR HOFFMAN noted that fishermen are included as requiring a business license, but then later they are exempt. MS. REARDON explained that fishermen are one of the current exemptions. She also noted that they would want to exempt liquor sales from business, not a liquor license. SENATOR MACKIE said he wasn't opposed to a rewrite. CHAIRMAN LEMAN said they could send a proposed committee substitute to the next committee of referral with the suggestion to work with Ms. Reardon on the changes. SENATOR MACKIE moved to pass SB 329 from Committee with the accompanying fiscal note with individual recommendations. There were no objections and it was so ordered.