N.C. Secretary of State Elaine Marshall asked state legislators this week to approve fee increases that would generate $2.68 million in new revenue.
Marshall says her department needs 12 new positions, many of which would be financial investigators. She said the investigators will be needed when the state passes crowdfunding legislation to enable startups to solicit investments from the public, including pitches over the Internet.
Marshall told legislators that her staff plays an essential role in ensuring investors involved in crowdfunding don’t get ripped off.
“One of these things blows up big time, and that’s going to be the end of crowdfunding for a lot of folks,” she said. “If we’re not there to do these kinds of things, the private sector is stuck in the mud.”
Marshall’s proposal calls for raising the fee to incorporate a limited liability corporation from $125 to $150. The fee to register as a securities salesman would increase from $125 to $135. Both fees haven’t been raised in more than a decade.
Deputy Secretary of State Rodney Maddox called the change a “modest increase” that wouldn’t be “wildly out of proportion” with what other states charge.
But the additional employees and equipment would only cost $1 million – far less than the fee would generate. The proposal would direct the other $1.68 million in new revenue to the state’s general fund budget, which legislators could choose how to spend. Marshall suggests it could be used toward “economic development investment.”
But some legislators said the fee hikes should be smaller. Sen. Jim Davis, a Franklin Republican, said he’d prefer “to leave that money in the private sector and not overcharge the licensees for more money than you need.”
Two Democrats also asked Marshall to provide an alternative plan that generates only the $1 million needed to fund the department’s needs.