SENATE BILL REPORT

SB 6664

BYSenators 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)

                February 5, 1990

AS REPORTED BY COMMITTEE ON ECONOMIC DEVELOPMENT & LABOR, FEBRUARY 1, 1990

BACKGROUND:

Beginning in fiscal year l989, 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 Director of Licensing is given the authority to adopt any fees that may be necessary to carry out the operations of the Business License Center.

A handling fee is imposed on all individuals applying for initial master licenses or renewal of existing licenses, through the master license system.  The fee charged will not exceed 32 percent of the cost to operate the master license system.  In fiscal year l991 only, a surcharge will be imposed, in addition to the handling fee, to generate adequate resources to cover the $2 million deficit experienced in the l989-l991 biennium.  This surcharge will expire on June 30, 1991.

EFFECT OF PROPOSED SUBSTITUTE:

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 proposed surcharge is deleted from the act.

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