The 1st meeting of the Interim Joint Committee on Licensing and Occupations was held on Friday, September 20, 2002, at 10:00 AM, in Room 129 of the Capitol Annex. Senator Brett Guthrie, Chair, called the meeting to order, and the secretary called the roll.
Present were:
Members: Senator Brett Guthrie, Co-Chair; Representative Denver Butler, Co-Chair; Senators Charlie Borders, David Boswell, Tom Buford, Marshall Long, Virgil Moore, Richard Roeding, Tim Shaughnessy, and Jack Westwood; Representatives Tom Burch, Ron Crimm, Dennis Horlander, Joni Jenkins, Reginald Meeks, Ruth Ann Palumbo, Jon David Reinhardt, and Jim Stewart.
Guests: Jim Hogge, Director, Idaho Small Business Development Center, Boise State University Program; John Y. Brown III, Secretary of State; and Rick Johnstone, Commissioner, Department of Alcohol Beverage Control.
LRC Staff: Vida Murray, Jack Jones, Ann Seppenfield, Cyndi Galvin, and Susan Cunningham.
With a motion from Senator Buford and a second from Senator Boswell the minutes from the last meeting were approved by voice vote.
Jim Hogge, State Director of the Idaho Small Business Development Center, Boise State University gave a PowerPoint presentation on Idaho’s business licensing website. Mr. Hogge said in order to have an effective program the center needed to address problems small businesses were having in finding information, such as common business language and a method to guide business owners in contacting the appropriate agency. A primary goal was to consolidate information, regulations and license requirements for the number of different agencies involved in the process. In 1996, a data base was started with the idea of having an 800 number so business owners could call a central location for information. However, as the data base was being compiled internet access increased. The center decided that business owners could use a website with a search engine containing a topic index and a glossary of terms to match government language to find required regulations and descriptions of services. By going on-line, information on state and federal regulations would be available 24 hours a day in all communities. Also, state agencies would be able to see what other agencies were doing.
A group of midlevel managers from state agencies formed an informal group called Reducing Items Bureaucracy (RIB), and the University of Idaho was selected as a neutral location to develop the website. A Program Steering Committee comprised of the heads of all the state agencies decided what information would be most useful on the website. Teams interviewed business owners to see what their needs were and held focus groups for retail and small manufacturing. Businesses tax issues and employer issues determined the needs of business in rural areas. With this information the website designer created a Business Resource Wizard on the site to give a check list of what is needed to start a particular business. The Wizard answers would-be business owners’ questions about licenses, permits and special regulations and provides a list with links to take businesses directly to forms needed for that business. The number of items on the check list will vary depending on the business. If a city or county government is on the check list and does not have a hotlink a phone number is provided. Each agency is responsible for keeping its information current on the website. The website won an award from the Council of State Governments for website innovation and receives funding for maintenance from the Idaho legislature. Mr. Hogge said Idaho has a maintenance contract, at a cost of approximately $15,000 annually, to keep the site working and updated.
Representative Burch asked how many individuals used the website to start a new business. Mr. Hogge said the site is not designed to track the names of the businesses but there are approximately 120,000 hits per month.
Representative Palumbo asked if all the regulations were put on the website and what was used to keep up with local government’s changes in regulations. Mr. Hogge said since agencies can see another agency’s regulations and can give specific information, such as tax regulations, they can tell the customer whether they need to contact the Department of Labor or another agency. He said regarding local municipalities the website provided phone numbers of county clerks. Representative Palumbo also asked if there was an 800 number in use now and how it was operated and how the website was promoted. Mr. Hogge said the 800 number was never put into operation. Currently if businesses call a specific agency they are referred to the website. Regarding publicity, the Governor had a press conference when the site was first launched followed by public service announcements and mail outs to public accountants and economic development agencies.
Representative Meeks asked how information on the website was communicated with small businesses that were not able to use the website. Mr. Hogge said in the initial survey in 1994 only 20% of business owners had Internet access; however, when all public libraries had computers with Internet access the decision was made to use a website.
Representative Butler asked if the hits to the website were broken down by business category. Mr. Hogge said the only information the web log gives is where the hit came from.
Senator Westwood remarked that the list of regulations could be intimidating causing some businesses to be discouraged. He suggested that area development districts have a uniform code that was interchangeable in counties. Mr. Hogge said the vision was to bring together all the regulations so that the business owners and the agencies could see everything in one location.
John Y. Brown III, Secretary of State, gave a PowerPoint presentation on Kentucky’s One Stop Business Licensing Program. He said fundamentally Kentucky and Idaho were trying to achieve the same goal; however, there were some differences in the programs. Kentucky’s program is run through the Secretary of State’s office in conjunction with Empower Kentucky and the Cabinet for Economic Development. In 1997, the Long Term Policy Research Center conducted a survey on the status of small business in Kentucky and found business owners felt over burdened by paperwork. Our licensing program offers assistance only with state government licenses and permits. The program is available on the Internet which is more effective and efficient than an 800 number would be. Like Idaho, the website provides links to forms as well as contact names and phone numbers.
The Business Licensing Task Force developed in 1996 made recommendations in 1997 to improve the process for licensing businesses. The Secretary of State’s office wrote a computer program. The office also compiled a list using information from state license coordinators to define which licenses and permits were for different business types. This allowed for a process to update licensing information that had been previously kept by the Business Information Clearing House in the Cabinet for Economic Development.
The Secretary of State’s office absorbed the cost of the program by having its Information Technology (IT) staff write the program, and staff continues to update information. The estimated cost of staff time is $10,000 annually, and because this is done in house, there was no additional equipment purchased. Models from North Carolina, Arizona and Washington were used when the program was designed. There are 600 licenses and permits at the state level with 1800 business types. All business forms are available on the site through the Internet. Like Idaho, Kentucky has a business form that asks key questions to give the entrepreneur a check list of current regulations including fees. The site gives the name of the particular cabinet with a contact name, address, phone number, and e-mail address. If the cabinet has a website there will be a link to its site. Kentucky also has, as part of the site, name availability, trademarks and services marks. Since most counties do not have websites, there is contact information for the county clerk provided. Federal links are also provided so businesses will be in compliance with federal regulations. The office does not provide information but provides links to information sites for the Revenue Cabinet, the Cabinet for Economic Development and Small Business Development Centers.
This site has been available since 1999. In 2000, Kentucky received an award for this site from the National Governor’s Association (NGA). The NGA recognized the site as unique and listed the One Stop Licensing Program in its best practices for assisting small businesses.
Secretary Brown concluded by saying that with all state agencies working together they are helping to alleviate the most common frustration for small business owners by simplifying the process of licensing.
Senator Roeding asked Secretary Brown to look into Kentucky’s eligibility for a federal grant from the Agriculture Department to help with the maintenance cost. He also asked what the office was doing about duplicate or outdated regulations. Secretary Brown said the 1996 task force decided that building a data base to make the process easier was the main goal. Secretary Brown agreed that identifying and eliminating those duplicated regulations would enhance the process and said the legislature could set up another task force to identify what needed to be repealed.
Senator Roeding suggested that staff work on what would be needed to set up a task force. Senator Guthrie agreed there was a need for another task force.
Commissioner Rick Johnstone gave a PowerPoint presentation to the committee showing legislative changes from the 2000 Session. Results were the 70% restaurant license, the option for a golf course license to be voted on (by precinct) to go wet, and the option for a winery to be licensed in dry counties so they could sell their own product. There have been 40 limited restaurant licenses issued and 40 are pending. There are now seven golf courses licensed and six wineries are currently licensed to sell wine from their premises in dry territory. In the 2002 Session there were no changes. SB123 (HCS) held a number of changes; however, it did not pass a House floor vote. Commissioner Johnstone said today he has not started work on the 2003 legislative package. There will be house keeping items that are important.
Commissioner Johnstone told the committee that a recent change at Alcoholic Beverage Control (ABC) was the electronic licensing system. Also, instead of issuing 41,000 licenses in June licensing was staggered over a twelve month period reducing paperwork internally. The ABC website was improved for easy access, and license applications are now on line allowing people to contact the website to ask questions. Currently there are three to 10 hits per day and a Frequently Asked Questions page is being added to the site to handle most inquiries. An Education Branch has become an important tool for giving information about the laws for tobacco and alcohol consumption to licensees, employees, local administrators and the general public. The Server Training in Alcohol Regulations (STAR) program is a 4.5 hour course with a certification of three years. The training involves keeping alcohol from minors, spotting a fake I.D., and understanding the statutes and regulations. It also gives businesses an understanding of their personal liability. ABC is also doing special event training for personnel at events such as the State Fair, the Kentucky Derby events, and picnics and festivals. There has been training with local ABC administrators, city councils and mayors, so that there is no confusion regarding their rights to issue or deny licenses. About half of the training now is with local businesses such as Kroger or a local restaurant that request an ABC trainer come to them.
Commissioner Johnstone said “Cops in Shops” is on-going. Agents will go into a business, pose as a clerk and work with the business. The ABC has issued 924 citations in 240 locations. The agency still does “Operation Zero Tolerance” where under age investigative aides attempt to purchase tobacco. In Commissioner Johnstone’s opinion, training and education regarding the sale of tobacco to minors seems to have had an impact on lowering sales. ABC performs 1300 tobacco checks at the retail level for a yearly federal study to receive money for health services. In 1996 only 40% of the retail businesses were in compliance. One year later 77% were compliant and this year, 2002, 92% of retailers are in compliance. The ABC believes this is the result of consistent checks and education and training.
Commissioner Johnstone said some of the future goals of ABC were to consolidate licenses to reduce the number of licenses issued. Also, legislative changes are needed to allow the website to process the applications or renewals and accept bank transfers and major credit cards to pay for them. Because ABC has changed laws and written approximately 90 new statutes, administrative regulations need to be reviewed and revised to make them consistent. It is also a goal to enhance training and to have certified trainers for training retailers instead of penalizing them.
Representative Meeks asked how many businesses would benefit from being able to use electronic transfers or credit card payments to get a license online. Commissioner Johnstone said most businesses had Internet access and he believes more than half of the renewals would be done on line.
Senator Guthrie asked what the penalty was for a person who purchased alcohol to give to a minor. Commissioner Johnstone said the person purchasing the alcohol would be cited for contributing to the delinquency of a minor. The penalty for the minor for a first offence is an alcohol diversion program and the second offence is a fine up to $150.
There being no further business Senator Buford made a motion, with a second from Representative Butler, to adjourn.