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Mayor may veto council repeal of business license

(Published June 16, 2003)

By ERIN HENK

Staff Writer

The cityís controversial master business license is not dead yet, despite a recent close vote by the D.C. City Council to repeal it.

The repeal is scheduled for a second vote before the council on July 8. Proponents of the repeal need to hold onto their slim 7-6 majority. Even so, there apparently is some possibility that Mayor Anthony A. Williams may attempt to block the repeal.

"There is a such thing as a veto," mayoral spokesman Tony Bullock told The Common Denominator. Overriding a veto would require the support of at least nine council members, a feat which repeal advocates acknowledge would be difficult.

Gregory McCarthy, the mayorís top policy adviser, was hesitant to discuss a possible veto.

"The mayor is disappointed in the way this came out. He is consulting with many members of the business community who also share his disappointment and is considering what his options are," McCarthy said.

If the mayor vetoed the repeal, the original master business license law would take effect, unless proposed revisions receive council approval. Repealing the master license law would return the District to its previous licensing system, which had been in effect with some minor revisions since 1908.

Meanwhile, emergency legislation to postpone for 90 days the June 30 deadline for purchasing a master business license is currently in the mayorís hands. The mayor is expected to make a decision by June 24 on further extending the deadline for enforcing the law, which originally was to take effect last fall.

Bullock said the situation is far from resolved. He said a compromise needs to be made to "salvage and modify" the program, rather than "throw it out the window." The law originally was intended to streamline the licensing process for businesses but has been criticized for being difficult Ė and sometimes expensive Ė to comply with.

All businesses that have annual income of at least $2,000 Ė including nonprofit organizations and many home-based businesses that never before were required to be licensed Ė are required to obtain a $35 master business license. A proposed revision of the law, which has prompted hundreds of angry complaints, would rename the "license" as a "registration" and increase the income threshold for compliance to $20,000.

Councilman Jack Evans, the leading proponent of repealing the law, noted during council debate on June 3 that the proposed revision also would exempt 45 percent of businesses operating in the District from complying with the law.

"The goals of this program have long ago lost direction," Evans said. "Itís around as a revenue raiser, itís around as a nuisance. A lot of people have said they put a lot of time into this [revision] Ė this is not a reason to keep a law."

If Evansí repeal legislation is eventually approved, it does not require the government to refund money already collected for master business license fees. An aide to Councilman Harold Brazil, who was the leading proponent of the master business licenseís creation, said Brazil expects to hear complaints if the money is not refunded.

"People do want their money back instead of it going into a general fund," said Shana Heilbron, Brazilís communicationís director.

An aide to Evans said thereís another side to the issue of non-refunded fees.

"Many people said they would forfeit the one-time fee as long as they didnít have to go through it again," said John Ralls, Evansí executive assistant.

An estimated $6.8 million has been collected from 49,000 business owners since the city began issuing master business licenses on Oct. 1, 2001. However, Evansí staff said that $4 million of that sum was accrued from businesses such as restaurants and grocery stores, which needed to purchase their required standard licenses anyway.

"Itís not possible to collect $6.8 million from places who pay a $35 fee," said Schannett Grant, Evansí legislative assistant and deputy chief of staff. The repeal is expected to cost the city approximately $500,000, which Evans is proposing be covered by the Department of Consumer and Regulatory Affairs (DCRA), which issues business licenses.

DCRA officials recently announced that the department is continuing to issue master business licenses, despite the councilís initial vote to repeal the law.

Copyright 2003, The Common Denominator