SENATE BILL REPORT

SSB 6664

BYSenate Committee on Economic Development & Labor (originally sponsored by Senators McDonald, Gaspard, Warnke and Rasmussen; by request of Department of Licensing)

Amending the business license center act.

Senate Committee on Economic Development & Labor

Senate Hearing Date(s):January 29, 1990; February 1, 1990

Majority Report:     That Substitute Senate Bill No. 6664 be substituted therefor, and the substitute bill do pass.

     Signed by Senators Lee, Chairman; Anderson, Vice Chairman; McDonald, McMullen, Matson, Murray, Saling, Smitherman, West, Williams.

Senate Staff:Traci Anderson (786-7452)

                March 2, 1990

House Committe on Trade & Economic Development

Rereferred House Committee on Appropriations

AS PASSED SENATE, FEBRUARY 10, 1990

BACKGROUND:

Beginning in fiscal year 1989, the Department of Licensing which is funded by the general fund and transportation fund experienced a significant reduction in the dollars received from the transportation fund.  Additional dollars from the general fund were not allocated to account for the deficit experienced by the department.  As a result, the Department of Licensing has tried to establish alternate sources of funding in order to continue the operation of its existing programs.  The master license system, operated under the Business License Center, is one such program operated by the Department of Licensing.  It provides a one-stop licensing service to businesses across the state which are often required to obtain multiple licenses from numerous state agencies.  The master license program issues over 71 different licenses for approximately ten state agencies.  Fees are not charged to businesses or state agencies for this service.  Due to the recent reductions in agency funding, the program will experience a 32 percent, or $2 million shortfall in program funding for the biennium.  In order to continue to operate, the master license system must generate resources to replace those which have been cut.

SUMMARY:

The Business License Center is given the authority to collect the fee charged to corporations for the filing of annual reports.

The Business License Center is given the authority to impose a handling fee for each original master license issued by the master licensing program.  A fee will not be charged for the annual renewal of master licenses.  The fee level will be set so that the revenue generated from this fee and the fee charged for the annual reports of corporations will not exceed 32 percent of the biennial operating appropriation made to the Business License Center.

The Legislative Budget Committee is requested to do a performance audit on the master licensing program to determine program effectiveness and efficiency.

Appropriation:  none

Revenue:   none

Fiscal Note:    available

Senate Committee - Testified:   Mary Faulk, Director, Department of Licensing; Ralph Munro, Secretary of State; Clif Finch, Association of Washington Business; Gary Smith, Independent Business Association

HOUSE AMENDMENTS:

The Business License Center is stripped of the authority to collect the $10 fee charged for the filing of corporate annual reports.  The Secretary of State will continue to be responsible for the collection of this fee.

A handling fee will now be charged for all licenses issued through the master licensing program.

The handling fees to be collected by the department for the issuance of licenses through the master licensing program are established as follows:  (1) a $10 fee will be charged for the issuance of an original master license, (2) a $5 fee will be charged for the annual renewal of a master license.