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Minutes for SB251 - Committee on Commerce

Short Title

Allow businesses to elect to file certain business reports with the secretary of state annually, biennially or triennially.

Minutes Content for Tue, Feb 4, 2020

Chairperson Lynn opened the hearing on SB 251 and requested Assistant Revisor Charles Reimer to provide an overview of the bill.

Senator Rucker requested Mr. Reimer to review the fiscal note for the bill.  There was discussion concerning information in the fiscal note regarding filing fees and the projected increase in staff required for the implementation of the bill.  Chairperson Lynn recognized Jennifer Cook, Deputy Assistant Secretary of State, Business Services, Secretary of State's Office, who also addressed items listed in the fiscal note.  Ms. Cook noted further clarification is needed concerning the filing fee assessment.

Chairperson Lynn recognized Senator Rob Olson who presented testimony in support of the bill. Currently businesses are required to file corporate reports every year.  Passage of the bill would allow any business to file annually, biennially or triennially.  At the beginning of the one-year, two-year, or three-year period (at the option of the business), the business would pay the same amount for each of the one, two or three years in advance.  (Attachment 1)  Passage of the bill would:

 - Allow businesses to file up to three years at a time.

 - Require prepayment for all three years, saving both the business and Secretary of State's Office time and effort.

 - Be revenue neutral to the State General Fund.

 - Be more efficient for the Secretary of State's Office, who would need to spend less energy to collect fees that will be collected sooner.

 - Encourage more businesses to domicile in Kansas.

 - Collect fees in three buckets - one for each calendar year.

 - Apply to all business entities including the following:  Corporations (both for-profit and not-for-profit); Limited Liability Companies; Partnerships; Limited Partnerships; Limited Liability Partnerships; Business Trusts and Cooperatives (not included are charitable organizations that solicit donations and labor organizations).

 - Make Kansas the 14th state to enact business friendly reporting. 

Senator Holland indicated his support of the bill, but noted clarification concerning the filing fees needs to be addressed.

Chairperson Lynn recognized Ms. Cook who, in response to questions from the Committee,  spoke about the implementation of a new business filing system to replace the existing AS 400, the number of annual reports filed each year, and the staffing requirements to accommodate the new business system and the filing options in the bill.

Chairperson Lynn recognized Eric Stafford, Kansas Chamber of Commerce, who provided testimony in support of the bill.  He offered a suggestion to allow for a discount if selecting a two or three-year option.  (Attachment 2)

Chairperson Lynn recognized Dan Murray, National Federation of Independent Business (NFIB), who provided testimony in support of the bill.  In NFIB's most recent survey, unreasonable government regulations was found to be the 2nd ranked problem for small business owners and state/local paperwork to be the 11th highest issue facing small business.  SB 251 would alleviate regulation and paperwork for small business owners.  (Attachment 3)

There was no testimony in opposition to the bill.

Written only testimony neutral to the bill was submitted by:

 - Jennifer Cook, Deputy Assistant Secretary of State, Kansas Secretary of State's Office  (Attachment 4)

Chairperson Lynn closed the hearing on SB 251.

Chairperson Lynn acknowledged receipt of the Kansas Department of Labor Annual Misclassification Report.  (Attachment 5)

The meeting adjourned at 9:16 a.m.  The next meeting is scheduled for February 6, 2020.