Governor Pawlenty through his Office of Enterprise Technology is proposing a one-stop online licensing system for all professional, occupational and business licenses issued by the state. The Minnesota Enterprise Electronic Licensing System would be a Web based self-service portal where all state professional licenses would be processed. The cost of creating this single system would be funded through a surcharge on all licenses issued by the site. State license holders would pay a ten percent surcharge on their license fees with a minimum of $5 and a maximum of $300. The surcharge is expected to raise $38 million over six years most of which will go to implement the system. After six years, the surcharge would be eliminated.
According to the Office of Enterprise Technology (OET), the state has 320 types of professional, occupational or business licenses and issues over 568,000 licenses each year. There are over 800 full- time employees at more than 40 state agencies or boards that deal with licenses. Under the OET proposal, most of this work will be shifted to a private vendor thereby saving state dollars. The Pawlenty Administration is quite excited about the proposal and believes it will make the state licensing system more efficient and effective. The goal is to have a quick, easy and secure 24 hour on automated system that will replace paper licenses.
Last week, I testified in opposition to the proposal in front of the Senate State Government Finance Committee. I pointed out that insurance producers and the Department of Commerce already have an established on-line licensing system. We have been working on this system for several years. It is very important to an interstate insurance licensing system that makes domestic and non-resident licenses easy and efficient. Insurance producers are different than physicians, dentists, architects and plumbers because of the need for non-resident licenses in multiple states. Our current state licensing system is part of a national effort by insurance agent associations and insurance commissioners to develop an interstate online license system that can prove to Congress that federal licensing is not necessary.
Furthermore, I informed the committee that two years ago, a license technology account was established within the Department of Commerce. This technology account is funded by a $40 surcharge on agent and real estate licensees and is used to develop and maintain the on-line license system. Adding an additional surcharge to agent licenses would be in essence double billing.
The OET proposal is now contained in the Omnibus State Government Finance bill. Since the House and Senate have differing versions of the bill, these differences will be worked out by a 10 member conference committee. The MIIAB will attempt to exempt insurance producers from the proposal. If unsuccessful, we will at least assure that agents do not double pay for the privilege of being licensed by the State of Minnesota.