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Minutes for SB424 - Committee on Commerce
Short Title
Amending certain provisions regarding business entities and business filings with the secretary of state, including business name, certain addresses, making revisions to certain statutory citations and extending the effective date of certain provisions pertaining to series of a limited liability company.
Minutes Content for Thu, Feb 20, 2020
Vice Chairperson Alley opened the hearing on SB 424 and requested Assistant Revisor Reimer to provide an overview of the bill.
Vice Chairperson Alley recognized Katie Koupal, Kansas Secretary of State's Office, who presented testimony in support of the bill. The Secretary of State's Office reviewed over 1,000 statutes and found many needed updated, clarified or eliminated. (Attachment 1)
The bill clarifies the definition of street address used in business filings. The bill aligns state statute regarding the abbreviation of professional associations and allows for electronic signatures for certain business filings received by the Office of Secretary of State. It also repeals three laws dating back to 1939 regarding blanket music licenses.
Blanket music licenses, most commonly, allow businesses to pay a set fee to a national organization and then play the background music in locations such as restaurants or retail stores. Kansas is the only state that still requires these national organizations to annually file copies of every license issued to a state business. Neither the national organizations nor the businesses who pay for the licenses could articulate the reason for still filing these licenses. The paper licenses filed with the Secretary of State's office are about 12 inches high and no one could recall anyone asking to see any of the filed licenses in over a decade.
The bill provides a delayed effective date for certain Series LLC (Limited Liability Corporations) provisions enacted last year as part of HB 2039 - Updating laws concerning limited liability companies; exempting animal shelters from registration requirements as charitable organizations. The LLC provisions of the bill that took effect in 2019 were implemented, however, the bill set a July 1, 2020 implementation date for several Series LLC provisions. Under SB 424, a request is being made to delay the effective date to implement the Series LLC provisions to July 1, 2022, when the Secretary of State's Office will no longer be using the existing AS400 system and will be onto the new business filing system.
In addition, Ms. Koupal requested consideration be given to the addition of an amendment to allow Kansas corporate entities to file fictitious or "DBA" (doing business as) names to prevent other companies from using those aliases. Several other states have similar provisions in their state statutes.
Senator Rucker asked about the fiscal note for the bill. Jennifer Cook, Kansas Secretary of State's Office, responded enactment of the bill would have no effect on agency expenditures. It would reduce revenue anticipated to be collected in FY 2021 under the Series LLC provision in current law as that revenue would not be collected until FY 2023. The agency is unable to estimate what that reduction might amount to.
No other testimony was submitted for the bill.
Chairperson Lynn closed the hearing on SB 424.
