Secretary of state wants to simplify business registration

~ One business official said the measures would help but don't address the biggest issues facing small-business owners.

JEFFERSON CITY, Mo. -- Secretary of State Robin Carnahan on Wednesday urged lawmakers to help small businesses by simplifying state registration requirements and to increase penalties for investor fraud.

Carnahan, a Democrat, said small businesses account for 97 percent of all the companies in Missouri, and making things easier for them would boost employment.

"Encouraging the growth of small businesses is the best thing we can do to actually help the businesses create jobs and support Missouri's overall economic growth," she said.

Most of her eight proposals, which she and a group of Democratic lawmakers announced at a news conference, have been filed by at least one Democrat in the House or Senate and have at least one Republican co-sponsor.

The provisions include requiring small businesses to file with the state only every two years, strengthening the state trademark and intellectual property laws, and allowing businesses to join a list that would prohibit mail solicitations stemming from the registration of that business with the state.

Carnahan said cutting down on the paperwork would make small businesses more efficient. She also said the state's trademark laws are too confusing and don't offer as much protection as the federal government.

"Logos, names and brands are almost as valuable as their tangible assets," she said.

Brad Jones, the state director of the National Federation of Independent Business, said that while he supports reducing the complexity and amount of the paperwork, the two biggest issues facing small-business owners are health-care costs and the use of eminent domain.

"It sounds like what she's proposing would certainly be helpful for existing businesses," he said. "But whether or not it would be so far reaching that they would be an important part of an economic development package you could offer to outside companies or outside small businesses to come into the state, I don't know."

Carnahan also called for increasing the minimum penalties for investment fraud involving seniors and the disabled to a $50,000 fine and five years in prison, and for legislation giving the securities and exchange division in the secretary of state's office authority to regulate variable annuities.

Although the securities and exchange division is responsible for protecting investors, state law is not clear whether variable annuities -- which are part life insurance and part investment -- fall within the division's purview.

Carnahan said the annuities are often complicated and designed to be used for long-term investing, making them inappropriate for seniors. They bring high commissions, however, which she said makes seniors particularly vulnerable to being taken advantage of.

Missouri and several other states in 2005 agreed to an $11 million settlement with a Kansas-based investment firm over how it marketed variable annuities to seniors.

In 2004, House Speaker Catherine Hanaway steered a similar bill through the House that would have given the secretary of state the authority to oversee variable annuities. The bill passed through the House with 25 dissenters -- all but two of whom were Democrats -- but never came to a vote in the Senate.

House Minority Leader Jeff Harris, of Columbia, voted against the bill in 2004 as the minority whip because he said he "didn't have a lot of faith in the sponsor of that bill."

Carnahan blamed the failure to pass the bill in 2004 on "special interests."

"I hope this year the General Assembly and the governor will see fit to pass this important protection for Missouri consumers," she said.