State eliminates step in business license process

Having to send renewal form to Seattle irks Funny River business owner

Posted: Wednesday, December 18, 2002

"How can we say 'buy Alaska' when you can't even get a business license in Alaska?"

This is the question Funny River small business owner Claudia Knickerbocker raised when she opened her license renewal packet and saw a Seattle address on the return envelope.

"Has Seattle become so all-powerful that they no longer even consider it necessary to rent a post office box in Alaska?" she asked. "I refuse to send money to Seattle."

For people using snail mail, this is the only option for obtaining or renewing a state business license, as required by Alaska law 43.70. The law says in order to engage in business in the state, sole proprietorships, partnerships, corporations and other types of businesses, whether for profit or nonprofit, must have a license. And companies operating under more than one business line -- type of business, as outlined by the state -- require as many licenses.

An online option exists for business owners who wish to obtain or renew a license via the Internet. The Web site, /occ/buslic.htm, allows applicants to pay by credit card and either print out the license themselves or have it printed and mailed to them.

A business license costs $50 (plus an additional $100 for those needing a tobacco endorsement) and is valid for two years. This time consists of the remainder of the year in which the license was granted plus all of the following calendar year, expiring Dec. 31.

Knickerbocker, who makes and wholesales ceramic gifts statewide to gift shops and vendors from her Alaska Originals by Claudia, said she has to decide.

"I seem to have two (other) choices," she said. "Go out of business or break the law."

Jennifer Strickler, the administrative manager for the state Division of Occupational Licensing, said about two years ago applications went through an Anchorage post office box, but the division discontinued that address to cut out a step in the process. She said the P.O. Box 84847, Seattle, WA 98124-6147 mailing address belongs to Retail Lock Box Inc.

The company is a subcontractor of KeyBank of Alaska, who contracts with the state to receive renewal forms, process checks, send backup paperwork to the state and post an electronic file of all payments deposited to the state Treasury Division.

Strickler's division also deals with other state-required professional licensing, including real estate, nursing, midwifery and dentistry, to name a few. That means quite a bit of paperwork and money moves into and out of her office. She said the use of the outside contractor helps speed up processing time for business licensing.

"If the money comes into the division here, (we) get backlogged," she said. "If we have to handle the checks, it takes quite a bit longer for us to process.

"The benefit to the individual is that they'll get their renewals quicker. We print licenses every Tuesday and Thursday with a turnaround of about a week.

"Before we went to the lock box, turnaround was anywhere from four to six weeks because those renewals were in competition with other professional licensing."

The current contract the state holds with KeyBank was issued from May 1, 1999, to April 30, 2004, according to Treasury Division Assistant Cash Manager Bruce Smith. He said the state began using lock box services before 1994 to expedite processing procedures that were costing time and money.

"The reason we went to the lock box was because of the significant delays," Smith said. "It was taking in excess of 10 weeks to get checks cleared. It also called for significant overtime, because the process took lots of hours."

He said the current service is able to clear checks the same day they are received.

Smith said the state pays $42,000 a year for KeyBank's lock box services to process business licensing and to collect on student loans for the Commission on Post-Secondary Education. He said approximately $4,000 of that goes for Division of Occupational Licensing uses.

Knickerbocker said she appreciates the state's efforts to streamline bureaucracy, but the concept goes against the principle of promoting the Alaska economy.

"I understand it is a contract," she said. "But emotionally, it just seems wrong. It's like calling New York to get phone service."

Smith said the state is not out to undo its own encouragement to keep Alaska money in Alaska.

"We certainly support Alaska businesses," he said. "We had one responsive bid, so that certainly limited the field. We hope we will have a firm or Alaska business that will be bidding on this contract next time around."

As for Knickerbocker, she said she wrote a letter to Gov. Frank Murkowski regarding her concerns and is awaiting a response. In the meantime, she said she resolved to try the Internet option, unsuccessfully.

"They don't take American Express," she said. "They leave me no choice. I have to send my money to Seattle."

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