Thursday, December 30, 2010

You're Invited - Overcoming Obstacles to Small Business Lending Forum (Thursday, January 13, 2011)

I just received this and as you know access to capital and small business lending is a big issue for small business.

I will be following this and getting notes after the forum.

If any of you attend please let me know your thoughts on the event.

If you have any questions and would like Small Business California to submit please send your questions to me.

Small Business California is working on getting the new Governor to hold a lenders conference with SBA Administrator Karen Mills. What comes out of this forum could be a good base for discussion if we can put this together.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

1099 repeal/ responses to business attitudes

Yesterday I received an email from Congressman Lungren’s office advising that the Congressman would be introducing legislation in the next session repealing the requirement of filing 1099s on all business transactions over $600.

This clearly has a good chance of passage in the House with Republicans taking over the majority. Small Business California will be tracking this closely as we must get this repealed in 2011 as it is scheduled to take effect in 2012.

Thank you to all that responded to my email asking about small business attitudes about the future. I received well over 100 responses and the majority felt optimistic to cautiously optimistic.

About 30% planned to hire someone in 2011.

Most of the responses indicated that over the last couple of years you have been forced to do layoffs and depending on the industry revenues were down 10% to 50%.

Unfortunately one person said they would be going out of business in 2011.

We will be sending out our annual survey mid January.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Small Business Attitudes

I have been getting some calls from the media regarding small business attitudes going into the New Year. If you could take a moment and let me know how you are viewing 2011.

Are you optimistic about 2011?

How much are your sales down during the recession or have revenues stayed about the same. Have they increased?

Do you plan to hire new employees?

Have you released employees or kept them about the same during the recession. Have you hired additional employees?

What industry are you in?

Other Comments

Thank you for taking the time to help me out on this.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Wednesday, December 22, 2010

Extension of authority to approve Small Business Jobs Act Loans/ SBIRs

Well since I sent you the email about SBA guarantees and waiver of SBA fees a new development has occurred.

It was expected that only $9 billion of the $14 billion was going to be used up at the end of the year so this continuance was important. It now appears that loan demand went through the roof and there will be no money left.

This is truly incredible. In California the most the SBA has ever loaned is $4 billion in a year. I do not know the exact numbers for California but for the last quarter there have been over $1 billion in loans.

For those out there that say there is no credit problem for small businesses there is a demand problem and small businesses aren’t looking for loans this should dispel that myth. See below.

I have written about the authorization of the Small Business Innovative Research program. This program has been operating on Continuing Resolution for years. A compromise was worked out between the Bios and Venture capital people. This morning the Senate approved the bill that put forth the compromise. Unfortunately in the last hour the House did not pass it before adjourning. It therefore is dead this session. Funding will run out at the end of January.

Hopefully we can get reauthorization and get the program on a basis that small business can depend on in the future. Otherwise we will go through fighting again and again every time a Continuing Resolution runs out.

The committee of SBIR’s that Small Business California has put together has been making calls all day. We were at the forefront of this fight and will continue to be in the future.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116


TO: All SBA Employees (Control No.: 5000-1190)

SUBJECT: Extension of authority to approve Small Business Jobs Act Loans

EFFECTIVE: 12/22/10

As stated in SBA Information Notice 5000-1173 (effective date September 29, 2010), the Small Business Jobs Act of 2010 (the “Small Business Jobs Act”) (Pub. L. 111-240) extended SBA’s authority and provided additional funds to provide fee relief for new 7(a) and 504 loans and a higher guaranty on eligible 7(a) loans. This authority was scheduled to expire on December 31, 2010.

The purpose of this notice is to announce the further extension of this authority through March 4, 2011, as part of HR 3082, the Continuing Appropriations Act, 2011, and to provide related information.

In SBA Information Notice 5000-1188 (effective date December 9, 2010), SBA announced deadlines for submitting Small Business Jobs Act loan applications of December 15, 2010 (for loans submitted under non-delegated authority) and December 31, 2010 (for loans submitted under delegated authority). These deadlines were set assuming that SBA’s authority to make Small Business Jobs Act loans would expire, as scheduled, on December 31, 2010.

Since that announcement, SBA has seen an unprecedented increase in loan applications and approvals. During the week of December 12, SBA approved almost $1.5 billion in Small Business Jobs Act loans—the highest weekly volume since the agency began tracking weekly loan data, representing more loans approved in a single week than in an average month under the previously implemented Recovery Act loan enhancements.

As a result, we now anticipate that funding appropriated in the Small Business Jobs Act will be exhausted on or before December 31, 2010. SBA does not anticipate, nor has it requested, additional appropriations for the loan enhancements authorized under the Small Business Jobs Act.

Because the funding for Small Business Jobs Act loans will soon be exhausted, SBA is not extending the deadlines for submitting Small Business Jobs Act loan applications.

As is typically the case, however, SBA expects that some approved Small Business Jobs Act loans will later be cancelled by the lender or the borrower for various reasons and the funds will not have been disbursed. The extension of authority provided in the Continuing Appropriations Act, 2011, will allow SBA to utilize funds from cancelled loans to process new Small Business Jobs Act loan applications and loan increases until March 4, 2011, thus ensuring that we are able to put every dollar possible in the hands of small businesses, as the Small Business Jobs Act intended. To do so, SBA will stand up a loan application queue once funds have been exhausted to allow lenders and borrowers to choose whether they would like to wait for possible Small Business Jobs Act loans. While we do not anticipate high volumes of cancelled loans, we want to make every effort to direct any undisbursed funds that result from cancellations to new loans for small businesses. We will issue further guidance after the funds have been exhausted.

Lenders and CDCs should promptly cancel any previously-approved Small Business Jobs Act loans that will not be disbursed and notify SBA as soon as possible to help ensure those funds may be used toward additional Small Business Jobs Act loans and loan increases.

Further Information

SBA Field Offices will advise 7(a) lenders and CDCs of this Notice. Questions concerning this Notice should be directed to the lender relations specialist in the local SBA field office. The local SBA field office may be found at
Grady B. Hedgespeth
Director, Office of Financial Assistance

Short Term Spending Bill/ 504 Loans

The Senate & House passed a short-term spending measure to keep the federal government running through March 4, 2011 yesterday evening. The extension of SBA lending incentives including SBA fee waivers and higher guaranty for 7a loans is included - through March 4, 2011 or until funding is expended - whichever occurs first.

We expected this but it is now finalized. Had this not occurred SBA lending would have fallen off the cliff in January.

Part of the Small Business Jobs bill also included the ability to refinance 504 loans.

Unfortunately the regulations haven't been written and we have lost three months. Indications are they will be written in January but I know of a number of small businesses who has their loans being held up.

All the best to all of you during the Holidays and Small Business California and I look forward to a productive year in 2011.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, December 17, 2010

Small Business California - Some Accomplishments for 2010

Please see below some of the accomplishments of Small Business California for 2010. This is a partial list.

I think Small Business California has become a significant player for small businesses in Sacramento and Washington. If you are not a member please consider joining today.

The emails you receive from me I think keep you up to the minute on what is going on. Do any other organizations you belong to do this?

You can join by going to

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116


• Educating California small businesses regarding legislation that impacts businesses in California. Educate government leaders regarding the quality of state services to small businesses. Educate state officials regarding the potential impact of legislation on small businesses. Create a forum for dialogue between state government and small business. Educate and assist small business in creating and complying with public policy and related matters.

• Small Business California has presented at numerous forums information on the Patient Protection and Affordable Care Act (PPACA) and how it impacts small businesses. These were for the Sacramento Journal, Rotary Clubs, Women’s League of Voters, and other community groups. Small Business California continues to be a frequent source for the media.

• Small Business California participated in a conference put on by the U.S. Treasury and the Small Business Administration on small business lending.

• Small Business California played a major role in the passage of the Small Business Jobs bill and was recognized by Speaker Pelosi for their efforts.

• Small Business California and President Scott Hauge was given the Distinguished Service Award for 2010 by the National Association of Government Guaranteed Lenders.

• Small Business California completed its annual survey with over 2700 responses from small businesses around the state. As in the past, this survey had responses from every county in the state. The survey is used to set Small Business California’s agenda and received media coverage around the state.

• Small Business California played a major role in the passage of the Health Exchange bills in California. Member Janet Hildreth spoke at the Governor’s signing ceremony.

• Small Business California has become a major source of information to the California Endowment on Small Business Attitudes towards the PPACA.

• Small Business California served on the Advisory Board of the Insure the Uninsured Project (ITUP). ITUP is a non-partisan organization that works with state government, community and business organizations and employers to increase healthcare coverage of California’s estimated 6.6 million uninsured.

• Board Member Laura Harris represented Small Business California on the Department of General Services Advisory Board.

• Small Business California is a member of the National Small Business Association.

• Small Business California worked together with CPUC and CA IOUs to continue to develop and improve On Bill Financing (OBF).

• Small Business California developed “Business Miles Financing” working with the Bay Area Quality Management District & Ecology Action to develop incentives for accelerating battery vehicle purchases by California businesses.

• Small Business California developed a weekly E-newsletter aimed at all California local Chambers of Commerce to help improve their ability to develop and participate in the CA clean economy.

• Small Business California has advocated for a fair, long-term reauthorization to the Small Business Innovation Research (SBIR/STTR) programs to advance the role of genuine small businesses in high-tech research. California is the leading recipient of SBIR awards. Currently, the SBIR program allocates 2.5% of the Federal extramural R&D budget to small technology businesses, accounting for over $2 billion a year in research dollars awarded to small companies. These dollars have been enormously productive in promoting technology innovation. For example, as of 2005, the SBIR program has generate over 87,000 patents, more than the entire university system, and with 1/20th of the research dollars. Fully 25% of R&D 100 Awards, given to recognize the 100 most important technology innovations each year, go to SBIR firms.

• Small Business California has strongly supported compromise legislation for SBIR
reauthorization passed in the Senate (S. 1233 SBIR/STTR Reauthorization Act of 2009 (Senators Landrieu and Snowe). The Senate bill proposes to extend the SBIR program until 2023 with a gradual, 0.1% per year increase in the SBIR allocation from 2.5% currently to 3.5% in 2020 (excluding the NIH program). The Senate bill offers a compromise on the contentious issue of the participation of large venture capital controlled companies in the SBIR program, allowing 18% of venture controlled large companies to participate in the NIH component of SBIR, and 8% of venture controlled large companies to participate in the SBIR programs of the remaining agencies. S. 1233 also makes a moderate increase to the standard award levels to $150,000 in Phase 1 and $1,000,000 in Phase 2.

• The House version of SBIR reauthorization has proposed to change the definition of a small business to include the subsidiaries of large venture capital firms, which may have hundreds of millions, if not billions of dollars under management (H.R. 2965 SBIR/STTR Reauthorization Act of 2009 (Rep. Altmire). Small Business California strongly opposes this takeover of a successful small business program by a narrow special interest.

• The SBIR program has been highly successful in fueling innovation genuine small businesses over the last 25 years, using the traditional definition of a small business as a company with fewer than 500 employees owned by individual in the United States. This definition includes the subsidiaries of investment companies where the total assets controlled by the parent add up to fewer than 500 employees. The SBIR program has never excluded investments by venture capital companies or major corporations in small high-tech firms, provided these large interests do not control the company.

Thursday, December 16, 2010

Press Release: Snowe, Kerry Urge SBA to Fully Implement Critical 2007 Energy Independence Legislation

You all know about the SBA Jobs bill.

I am pleased to report that since September 27 to date the SBA has loaned $6.5 to 7 billion and they expect to be in the $9 billion range by the end of the year when the program will run out. This is $5 billion less than could have been loaned but by all accounts it has been a great success.

Please see below email I received from Senator Snowe's office. Small Business California had been pushing the SBA to meet the requirements of the 2007 energy bill. Actually it is worse than this in that they were also required to meet most of the 2007 provisions in the 2005 energy bill.
Thank you Senators Snowe and Kerry and keep pushing.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

CONTACT: John Gentzel (Snowe) 202.224.1304
Whitney Smith (Kerry) 202.224.4159

December 13, 2010

Snowe, Kerry Urge SBA to Fully Implement Critical 2007 Energy Independence Legislation

WASHINGTON, D.C. – U.S. Senate Committee on Small Business and Entrepreneurship Ranking Member Olympia J. Snowe (R-Maine) and former Chair John F. Kerry (D-Mass.) today sent a letter to Small Business Administration (SBA) Administrator Karen Mills requesting a response regarding the Agency’s progress in addressing 12 energy efficiency initiatives contained in P.L. 110-140, the Energy Independence and Security Act of 2007.

Signed into law in December 2007, the legislation contains a number of incentives to encourage small businesses to become more energy efficient, such as a venture capital program addressing the equity investment needs of small businesses, on-bill financing, the availability of energy efficiency audits, government-wide education programs, and additional technical assistance.

In their letter, Senators Snowe and Kerry urged the SBA to discuss program implementation, as well as describe obstacles the agency has encountered to fully implementing these measures. “It is frankly outrageous that the SBA has yet to fully implement the Energy Independence Act in the three years since it was signed into law,” said Senator Snowe.

“According to the SBA’s Office of Advocacy, small entrepreneurs are charged approximately 35 percent more per unit for their electricity than the sector average. Combined with the disproportionate tax and regulatory burden shouldered by small business and the lingering economic recession, the SBA’s delay in implementing these vital provisions puts our nation’s entrepreneurs at further disadvantage.

The SBA must utilize every resource to help foster an economic environment in which small businesses can simultaneously reduce energy cost and consumption while creating jobs and expanding operations.”“Small businesses are the backbone of our economy and they’re on the cutting edge of innovation in the energy sector,” said Senator Kerry. “There are countless more reasons we need to ensure that small businesses have the tools and incentives today to ensure their competitiveness tomorrow.”

Monday, December 13, 2010

SBA Lending/ Governor's Transition Team

I do not send attachments on this email so if you would like to have the 2008-2009 bank lending report prepared by the SBA Advocate please advise by return email.

The 2009 to 2010 report will be completed in January.

Small Business California is trying to work with the Governors transition team to outline the needs of small business. What in your mind can the new Governor do?

Here are some things we have identified.

Appoint as soon as possible the Small Business Advocate and empower that person to be an important part of economic development policy for the state.

Call for a lenders conference bringing the Governor , SBA Administrator Karen Mills and lenders together to determine how small business loans can be increased.

Incorporate On Bill Financing into the states energy policy.

Set up a hotline for people to call turning in people that are part of the underground economy.

We may get some media calls on this so if you would be willing to talk to the media please let me know.

Scott Hauge
Small Business California
2133 Taraval Street
San Franicisco, CA 94116

Friday, December 10, 2010

Employer request/ Graves Named as Chair of House Small Business Committee/ Annual Survey

Please see request of Netsy Firestein regarding State’s Paid Family Leave Program.

Small Business California prides itself on representing the voice of grass roots California small businesses. We consistently ask that policymakers contact us when they are developing policy.

What are you doing in the area of flexible work hours?

Are you familiar with EDD’s Paid Family Sick Leave? Have your employees used it? Do you support it?

TWO REQUESTS: DOL Forum in LA on Workplace Flexibility

The US Department of Labor Women’s Bureau is interested in documenting employer best practices in the area of workplace flexibility, and is looking for employers to speak about their programs at a national conference in Los Angeles, CA in mid-February.

This conference is a follow up to the White House Forum on Workplace Flexibility held last March in Washington, DC. At that forum the White House Council of Economic Advisors released a report entitled Work-Life Balance and the Economics of Workplace Flexibility. The report highlights changes in American society over the past half century, including the increased number of women entering the labor force, the prevalence of families where all adults work, increasing eldercare responsibilities, and the rising importance of continuing education.

The DOL Conference in LA will bring together a diverse, accomplished group from academia, labor, government, media, non-profits, and business to focus on this issue and its implementation at all levels. The first forum took place in Dallas on October 20th, and the second forum will be in Los Angeles. The forum in Los Angeles will focus on the issue of flexibility for hourly wage workers, particularly those in the lower paying occupations.

The invitation-only event will take place in mid February 2011. The audience will comprise 300 work-life advocates and representatives from businesses, academia, associations, government agencies, unions and nonprofits that work with women and girls.

Here’s a link to the Women’s Bureau’s homepage with some more background info about the event:

If you have a best practice you’d like to share with the Department of Labor, or, if you’d like an invitation to the event to learn more respond to

SECOND REQUEST: State’s Paid Family Leave Program

We are looking for employers who have had a good experience with EDD’s Paid Family Leave program and who may be willing to talk to press or others about this. The Paid Family Leave program provides wage replacement through the State Disability Insurance (SDI) program to employees when they take time to bond with a new child or to care for a seriously ill family member. It is entirely employee paid through SDI. Do you support this and have you had good experience with it.

Netsy Firestein
Labor Project for Working Families
2521 Channing Way #5555
Berkeley, CA 94720
Fax: 510-642-6432

Republican Sam Graves was named as the Chair of the House Small Business Committee. Mr Graves is from Missouri and currently serves as ranking Republican in the Small Business Committee. He will be replacing Democrat Nydia Valazquez. .

Small Business California will be sending out our annual survey next month. This year we had over 2700 small business people respond. The survey has gotten good media coverage in the past and hope to do even better next year. Please let me know if you would be willing to distribute our survey. As this email goes to over 100 associations I am particularly interested in your distributing but anyone with an email distribution list would be helpful.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Wednesday, December 08, 2010

New Jobs Tax Credit/ AB 11

For those of you that have hired new employees you may not be aware of a state tax credit of up to $3000.

There was $400 million made available and as of Nov 27th only 39.5 million has been claimed. This is available to businesses with 20 or less employees. There are some limitations to this credit so you should contact your accountant for details.

I am curious how many of you know about this. Please let me know by return email.

Because so few have claimed this there is a bill that has been introduced AB 11[Portantino] that would allow businesses with 20 or less employees and $1 million or less receipts to receive a 20% tax credit on their workers compensation premium. $200 million would be allocated to this reducing the new jobs tax credit to $200 million.

If you meet this criteria it is not dependent on your increasing employees. You could however get both credits if you meet both criteria. If passed the workers compensation credit would take effect immediately. It does require a two thirds vote. It was introduced Dec 6.

What do you think?

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Tuesday, December 07, 2010

CRC Small Business Report Released

Please see information on Small Business lending. I’ll let the numbers speak for themselves but the bottom line is a reduction of 1.5 million loans and $21 billion in California from 2007 to 2009.

As you know Small Business California has asked for a report on small business lending around the country and we have asked the Governor to convene a lenders conference with the Governor and SBA Administrator Karen Mills to develop ways to get lenders to increase their loans to small business.

Thank you Jim Baird of the Bay Area Development Company for sending.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Bank Lending to California Small Businesses has dropped dramatically since 2007, new report shows

December 6, 2010-- A report released today by the California Reinvestment Coalition reveals that small business lending decreased by almost 1.5 million loans and $21 billion in California from 2007 to 2009. Small businesses create more jobs than any other segment of the economy, but without access to bank credit, they are shedding jobs and shutting down. Lending to minority-owned businesses has dropped even more dramatically in this time period—leading to serious implications to the economic well-being of these communities.

“I’ve been in business for thirty years, and when the economy went downhill, my sales slowed down. Without access to a bank loan, I had to lay off thirty people earlier this year. That was half of my workforce!” said Leslie Starus, President & Founder of Foodology, a Sun Valley, California business. “I’ve since received funds from Valley Economic Development Center [a nonprofit lender] and I’m on track to rehire all of those employees.”

The report, “Small Business Access to Credit: The Little Engine that Could” shows a 75 percent drop in small business lending in six California counties: Alameda, Fresno, Los Angeles, Sacramento, San Diego, and Santa Clara. This drop in lending has been even more severe for California’s hardest hit communities.

“Taxpayers bailed out the banks to the tune of $700 billion and were promised that banks would increase lending to small businesses,” said Alan Fisher, Executive Director of the California Reinvestment Coalition. “These small businesses employ half of all Americans, but instead of saving these jobs, banks turned their backs on small businesses and neighborhoods across the state.”

Key findings of the report include:

· Bank of America, CitiBank, and Wells Fargo have decreased small business lending in California by two-thirds between 2007 and 2009—leading to 500,000 less loans for California’s small businesses.

· In California, Small Business Administration (SBA) lending by all banks dropped by 71 percent from 2007 to 2009—representing a loss of $1.2 billion in funding for small businesses. African American-owned businesses experienced an 81 percent drop in access to SBA loans, and Latino-owned businesses experienced an 84 percent drop.

· Bank of America, Wells Fargo, US Bank, Union Bank, and Citibank dropped their SBA lending by 77 percent from 2007 to 2009, but their SBA lending to Latino-owned, African American-owned, and Asian- owned businesses dropped much more dramatically– at 89 percent, 86 percent, and 88 percent, respectively.

· In each of the six counties examined, conventional small business lending dropped by 68-75% percent, and small business lending in low income communities dropped by 70-79%. Bank of America and Citibank decreased their conventional small business lending by more than 80 percent in the six counties. Only US Bank increased their loan volume during the time period.

· In Alameda, San Diego, and Santa Clara, small businesses in low-income communities were hit the hardest; lending in these neighborhoods decreased by 20 percentage points more than the average lending activity in the county.

· There were 25 percent fewer businesses in the City of Los Angeles in 2009 than in 2007; this represents a loss of 150,951 jobs.

Recommendations include:

· Congress must hold oversight hearings to scrutinize lenders and the regulators who are responsible for overseeing them.

· Banks must improve their marketing and lending to small businesses, particularly those in lower income neighborhoods and those owned by people of color.

· Nonprofit lenders and Community Development Financial Institutions should be authorized to participate in SBA programs and should be allocated funding by Congress and banks.

· Regulators need to ensure banks provide appropriate access to credit for small businesses. This means at least doubling their 2009 lending by 2011.

Friday, December 03, 2010

Mileage Rate Increase 2011

Bob just sent this to me.

It clearly is not a big change but you should be aware of this if you have an employee that uses their vehicle while working for you.

If you would like the Bulletin please let me know but I don’t send attachments with these emails.

For all of you that sent comments on my email advising of the death of Steven Glick thank you. I have been in contact with his wife Sue and she was truly touched by your comments.

Toni Symonds in the Assembly is going to ask members to close a session in his name and have it mentioned in the Assembly Journal. I am hopeful San Francisco will also honor him.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

From: Young, Bob [mailto:byoung@CWCI.ORG]
Sent: Friday, December 03, 2010 3:46 PM
To: Scott Hauge
Subject: New WC medical mileage rate

Hi Mr. Hauge:

Just a heads up… the IRS just issued it’s mileage rates for 2011 this afternoon. The rate for business travel will increase from 50 cents per mile to 51 cents per mile effective 1/1/11.

I’ve prepared a CWCI Bulletin and news release which are attached. Let me know if you have questions.

Thx – Bob Young, CWCI Communications Director

Thursday, December 02, 2010

Administration Releases New Information On Affordable Care Act's Small Business Health Care Tax Credit

This was just released and gives some good information on small business tax credit.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116


U.S. Treasury Department Office of Public Affairs

CONTACT: Treasury Public Affairs (202) 622-2960

Administration Releases New Information on Affordable Care Act’s Small Business Health Care Tax Credit

New Guidance Gives Small Employers Full Set of Tools to Claim Credit for 2010;
Credit Covers Up To 35 Percent of Small Employers’ Health Care Contributions

Today, many small businesses across America struggle to provide health benefits to their employees. On average, small businesses pay about 18 percent more than large businesses for the same health insurance policy. The Affordable Care Act helps level the playing field by lowering costs for small businesses and increasing their bargaining power. At the same time, small business owners will have the flexibility to make choices they believe are right for their business and their employees. Starting in 2014, firms with up to 100 workers can pool their buying power and reduce administrative costs by purchasing insurance through a health insurance exchange. And the Congressional Budget Office predicts that, thanks to the Affordable Care Act, premiums in the small group insurance market will decrease 1 to 4 percent by 2016.

To make health insurance more affordable for small businesses, the new law also includes tax credits for many small businesses that offer coverage to their workers. Starting in 2010, small businesses that have fewer than 25 employees, pay average annual wages below $50,000, and pay for most of their employees’ health coverage may qualify for a tax credit of up to 35 percent of health expenses. The Congressional Budget Office estimates that the tax credit will save small businesses $40 billion by 2019. Both for-profit and nonprofit organizations may qualify for the tax credit.

The tax credit is already having a substantial impact. Insurance companies have used the tax credit to encourage more businesses to provide benefits. Blue Cross and Blue Shield of Kansas City has promoted the tax credit and enrolled more than 9,000 new members covered by 400 new employers; 38 percent of those new employers did not previously offer insurance.

Today, the Obama Administration is releasing new guidance that will make it easier for small businesses to claim this tax credit.
Key Facts about the New Guidance:

Addresses small business questions about which firms qualify by clarifying that a broad range of employers meet the eligibility requirements, including:

Employers that pay for a portion of their employees’ health care costs through a broad range of contribution arrangements.

Religious institutions that provide coverage through denominational organizations;

Certain small employers that cover their workers through multiemployer health and welfare plans; and

Includes the one-page form (Form 8941) and instructions used to claim the credit for tax year 2010 – both are now available at

Facts About the New Guidance:

· Gives Small Employers Full Set of Tools to Claim Credit for 2010. The new guidance includes all the tools small businesses need to claim the credit when they file their 2010 taxes, including the one-page form (Form 8941) and instructions used to claim the credit for tax year 2010, as well as the remaining guidance for 2010. All of this information is now available at

· Clarifies that Religious Institutions Qualify. Due to their special status under other law, religious institutions that obtain coverage through a denominational organization that self-insures the coverage can qualify for the credit, even though the coverage is not fully insured – a requirement for most employers. The guidance makes clear that this rule applies solely for purposes of eligibility for the small business tax credit.

· Explains “Qualifying Arrangement” – Wide Range of Employers Qualify. Following up on previous guidance issued by the Treasury Department that provided transition relief to help businesses claim the credit for 2010, the new guidance clarifies that a broad range of common arrangements used by employers to subsidize insurance coverage for their workers will qualify for the credit for tax years 2010 to 2013. For example, firms that pay more to help older workers cover the higher premiums and firms that allow employees a choice of coverage, may both qualify for the credit. For tax year 2010, small employers have the flexibility to use the transition relief set forth in the earlier guidance or to take advantage of the rules in the new guidance.

· Clarifies that Certain Employers Contributing to Multiemployer Health and Welfare Plans Qualify. The guidance provides that a small employer that makes contributions to a multiemployer plan that are used to pay premiums for employee health insurance coverage may qualify for the credit, so long as 100 percent of the cost of coverage for all employees covered by the multiemployer plan is paid from employer contributions and not by employees.

Getting the Word Out to Small Businesses:

To ensure that small businesses know about the credit and how to claim it, the Administration has undertaken a nationwide educational campaign to reach small employers and their tax preparers.

Web Features. WhiteHouse.Gov, HealthCare.Gov , and IRS.Gov all feature special sections on the credit, including tax tips, detailed frequently asked questions and a worksheet to help small business owners determine whether they qualify.

Millions of Postcards to Small Businesses: The IRS has sent out over 4 million postcards to employers that may qualify for the credit.

Over 1,000 Tax Workshops and Small Business Forums. Every year, tens of thousands of small businesses and tax professionals around the country attend Small Business Forums and Tax Workshops to learn about new developments in tax law. This year, IRS outreach has had a special focus on the small business credit, featuring it at over 1,000 events.

Email Blasts to Thousands of Tax Professionals and Small Businesses. IRS is getting the word out through its IRS e-News for Tax Professionals and e-News for Small Businesses. Each newsletter reaches over 175,000 tax professionals and small business owners.

Facts About the Small Business Health Care Tax Credit:

Available Immediately. Enacted as part of the Affordable Care Act, the credit was effective January 1, 2010. As a result, small businesses currently providing health care for their workers receive immediate help with their premium costs.

Broad Eligibility. The Council of Economic Advisors estimates that 4 million small businesses are eligible for the credit if they provide health care to their workers.

Substantial Benefit. The credit is worth up to 35 percent of a small business’s premium costs in 2010 and in each of 2011, 2012, and 2013. In 2014, this rate increases to 50 percent.

Firms Can Claim Credit for Up to 6 Years. Firms can claim the credit for 2010 through 2013 and for any two years after that.

Non-Profits Eligible. Tax-exempt organizations are eligible for a 25 percent tax credit in 2010 and in each of 2011, 2012, and 2013. In 2014, this rate increases to 35 percent.[1][1]

Gradual Phase-Outs. The credit phases out gradually for firms with average wages between $25,000 and $50,000 and for firms with the equivalent of between 10 and 25 full-time workers.

Premium Cost Eligibility. To avoid an incentive to choose a high-cost plan, an employer’s eligible contribution is limited to the average cost of health insurance for small businesses in that state.

No Reduction Due to State Credits. The credit is not reduced if an employer also receives a state health care tax credit or subsidy (except in limited circumstances to prevent abuse of the credit). In particular, an employer that receives such a state tax credit or subsidy also receives the full federal credit based on its entire contribution so long as the federal credit does not exceed the employer’s net contribution. According to lists compiled by the National Conference of State Legislatures, about 20 states offer these benefits.[2][2]

· Dental and Vision Coverage Qualify. Small businesses can receive the credit not only for traditional health insurance coverage but also for add-on dental, vision, and other limited-scope coverage.

· Employers Can Choose the Most Favorable Method of Determining Hours Worked. Because the tax credit’s matching rate is highest for employers with 10 or fewer full-time equivalent employees (FTEs), the number of hours worked is an important factor in calculating the credit. Employers can choose among three different methods of determining hours to minimize their bookkeeping duties while receiving the maximum tax credit for which they are eligible. Employers can look at actual hours of service, or can use simple rules of convenience to estimate hours based on total days or weeks of service.

The Small Business Health Care Tax Credit: Four Cases

Example 1: Auto Repair Shop with 10 Employees Gets $24,500 Credit for 2010

Main Street Mechanic:
· Employees: 10
· Wages: $250,000 total, or $25,000 per worker
· Employer Health Care Costs: $70,000

2010 Tax Credit: $24,500 (35% credit)
2014 Tax Credit: $35,000 (50% credit)

Example 2: Restaurant with 40 Part-Time Employees Gets $28,000 Credit for 2010

Downtown Diner:
· Employees: 40 half-time employees (the equivalent of 20 full-time workers)
· Wages: $500,000 total, or $25,000 per full-time equivalent worker
· Employer Health Care Costs: $240,000

2010 Tax Credit: $28,000 (35% credit with phase-out)
2014 Tax Credit: $40,000 (50% credit with phase-out)

Example 3: Foster Care Non-Profit with 9 Employees Gets $18,000 Credit for 2010

First Street Family
· Employees: 9
· Wages: $198,000 total, or $22,000 per worker
· Employer Health Care Costs: $72,000

2010 Tax Credit: $18,000 (25% credit)
2014 Tax Credit: $25,200 (35% credit)

Example 4: Manufacturing Company with 12 Employees Gets $14,700 Credit for 2010

Acme Air Conditioning, LLC:
· Employees: 12
· Wages: $420,000 total, or $35,000 per worker
· Employer Health Care Costs: $90,000

2010 Tax Credit: $14,700 (35% credit with phase-out)
2014 Tax Credit: $21,000 (50% credit with phase-out)

[1][1] The credit rates are lower for non-profits to ensure that the value of the credit is approximately equal to that provided to for-profit firms that cannot claim a tax deduction for the amount of the credit claimed.

[2][2] See and

Wednesday, December 01, 2010

The California Clean Energy Economy -- As Close As Your Local Chamber of Commerce

This afternoon we have a guest blogger - Hank Ryan. Hank has been at the center of end user energy efficiency with over thirty years of experience in energy efficient lighting and energy auditing. He currently serves as the Executive Director of Small Business California and travels all over the state to meet with the different Chambers of Commerce to discuss clean energy use by small businesses in California

"The California Clean Energy Economy -- As Close As Your Local Chamber of Commerce"

By Hank Ryan, Small Business California

"Green Jobs” is a term that seems to get used by policy wonks and politicians almost as much as “Small Business” is thrown out to crowds in order to gain favor.

What are these new jobs? Is it just hype? Is the “clean energy economy” we hear about so dependent on government handouts that it will collapse when that support ebbs?

I’ve been working in the energy efficiency field for almost three decades and I found myself asking the same questions. I know this: even a paperboy knows not to throw his change into a sack with holes in it. Energy efficiency is no different. For instance, a California business that still has old style “fat bulb” fluorescent lighting is sending twice as much money for electricity to their local utility company than needed. Most California businesses have already switched to “T8” or thin bulb lamps using electronic ballasts and so that financial “hole in the sack” is plugged allowing more money for operations, salaries and profits.

In fact, America uses twice the energy per unit of GDP as do both Europe and Japan where the standard of living is on par with America. So there is a lot of profit recovery to be gained with buildings and manufacturing processes and even transportation. We’re looking at some seriously good returns on investment as we choose this path and no Jimmy Carter sweater is needed.
Thinking about the broader definition for green jobs and clean energy, what does that really mean?

I decided to visit California Chambers of Commerce hoping that might be one way to find out. Now after visiting over 135 local California chamber offices in over the last year and researching clean energy stories in the news, a more complete picture is starting to develop. One observation I found interesting is that for every story I collected where California companies belonging to local chambers were successfully seeding, growing and harvesting their own version of the clean economy, another four California companies had great clean energy success stories but did not belong to a local chamber of commerce. (Note to membership directors: Opportunity!)

Throughout this process, I’ve produced one page stories to document what I’ve found and here are some examples:

In Carpenteria, a company called Clipper Windpower designs and builds very large wind turbines for export to other states. They are in good company. According to a report released by the American Wind Energy Association, wind energy jobs increased 70 percent to 85,000 in 2008, 4,000 more workers than are employed in coal mining.

The Santa Clara Chamber boasts a company, Applied Materials, with 13,000 employees. They make the technology that helps companies increase manufacturing productivity. This lowering of production costs is how solar and LED applications will become affordable. As these less costly renewable and energy efficient technologies enter into the mainstream of our economy, so does the savings to Californians in both energy costs and emissions reduction which help to grow the economy and our tax base too.

Ecotourism: Charise Hale McHugh,, CEO of the Half Moon Bay Chamber of Commerce has developed a smart path forward that guides CA chambers toward building business based on nature, history and local culture.

Farmers and officials at Westlands Water District, a public agency and Hanford Chamber member that supplies water to farms in the valley, have agreed to provide soil depleted and otherwise unusable land for what would be one of the world's largest solar energy complexes, to be built on 30,000 acres. At peak output, the proposed Westlands Solar Park would generate as much electricity as several big nuclear power plants.

The Greater Stockton Chamber of Commerce "Green Team" is offering leadership as a California Chamber administering a Recycling Market Development Zone (RMDZ), offering low interest loans to companies using recycled content feedstock.

There are lots more of these stories available in an SB-Cal booklet just published called, “32 Examples of Chambers of Commerce & Chamber Members in California LEADING THE CLEAN ENERGY ECONOMY.” (

Together, they paint a picture of the broad spectrum that makes up the California clean economy. This looks like a sound basis for knowing green jobs are growing and more are on the way.

Hank Ryan

Great Friend of Small Business

It is with deep regret that I let you know that Stephen Glick, who was the head of the SF Downtown Community College Business Program in SF, died over the Thanksgiving week end. I worked with Stephen and he more than anyone else made the Small Business Development Center program available to SF small business. He was a great friend to small business.

For those of you in SF you probably knew him but I am sending this email to business people around the state because I think others know people like Stephen who are great friends to small business Please let them know how much they are appreciated.

Small Business California will also send them a letter thanking them. Please, let me know who they are and what they do for small business. Include their contact information.

It really hurts when a friend like Stephen dies. He really loved working with small business and cared about us. Unfortunately he got very little recognition from the small business community.

Scott Hauge
Smsall Business California
2311 Taraval Street
San Francisco, CA 94116

Tuesday, November 30, 2010

1099 Repeal Vote Fails

It appears that the 1099 issue will not be resolved in the lame duck session.

Last night both the Johanns and Baucus amendments repealing the requirement of 1099s for all business transaction over $600 was voted down. The vote on the Johann amendment failed on a 61-35 vote and the Baucus amendment failed 44-53. The amendments required a two thirds vote because it was a waiving of Senate rules.

The Johanns amendment paid for the repeal with unused stimulus money, while the Baucus amendment had no offsets.

Small Business California and the National Small Business Association will continue to fight this in the next session of Congress. As you are all aware the requirement does not take effect until 2012.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Monday, November 22, 2010

FYI. Small Business California appreciates Administrator Mills support of repeal. We however want a total repeal not just businesses under 25 employees as Senator Nelson's bill indicated.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

News Release

PRESS OFFICE - November 22, 2010 Contact: Haley Meadven (202) 205-6948

Number: 10-67

Internet Address:

SBA Backs Repeal of ‘Burdensome’1099 Reporting Requirements on Small Business Transactions

WASHINGTON – In an open letter to small business owners, SBA Administrator Karen Mills described requirements that small businesses report all transactions greater than $600 as “burdensome,” and called for their repeal. Mills said the reporting requirements in the Affordable Care Act, which were to have begun in 2012, add up to “too much paperwork, too much filing.”

The text of the letter, which is posted on the SBA Website at, follows:

Dear Small Business Owner,

I’m writing to update you on the progress that we have made regarding concerns stemming from the expanded 1099 reporting requirement in the Affordable Care Act, which could affect small businesses starting with 2012 purchases and 2013 filings.

The SBA and the Administration support the Small Business Paperwork Relief Act (introduced by Senator Baucus) which would repeal this provision.

As President Obama said on Nov. 3: “… the 1099 provision in the health care bill appears to be too burdensome for small businesses. It just involves too much paperwork, too much filing. It’s probably counterproductive.” Our support for the Small Business Paperwork Relief Act also follows the Administration’s support in September for Senate Amendment 4595 (offered by Senator Bill Nelson), which would have relaxed the reporting requirement.

All businesses that pay another individual or business $600 or more for goods or services starting in 2012 will be required to issue 1099s. The unintended consequence of a potential paperwork burden resulting from this provision quickly came to light, and we immediately began working across the Administration to reduce the burden of these potential future reporting requirements, as I noted in a letter to small businesses in May.

We gathered feedback and comments from the small business community through roundtables, forums, and other feedback mechanisms involving outreach from the SBA, the Treasury Department, the I.R.S. and others.

Importantly, the repeal of this provision through the Small Business Paperwork Relief Act will not adversely affect the Affordable Care Act, which provides important health care benefits to millions of Americans. Small businesses are already taking advantage of the new tax credits for providing health insurance to employees this year, and future benefits such as the insurance exchanges in 2013 will provide small businesses with more negotiating power and reduced administrative costs.

Thank you for the input and feedback that many of you have provided on the impact that the expanded 1099 reporting requirement could have on your business. Overall, with your help, we will continue to ensure that America’s entrepreneurs and small business owners operate in an environment not burdened by excessive regulation, allowing you to continue doing what you do best: grow businesses, create jobs and lead America’s economic recovery.

Karen Mills
SBA Administrator

Helping small businesses prosper

Small Business California has been contacted by Assemblymember Mike Feuer’s office for things his office can do to help small businesses in California. Please give me your thoughts.

See below email I received.


Assemblymember Feuer is very interested in the views of your member business owners regarding what the Legislature can do to help small businesses grow and prosper. We believe the success of small businesses is essential to California's economic recovery and want to identify burdensome rules, regulations, and/or paperwork that create challenges for small businesses but that provide little or no value in terms of broader societal benefits. The more specific your members' ideas, the better.

Obviously, we are committed to maintaining laws that provide strong consumer, worker, and environmental protections. But not every rule or regulation serves such a significant purpose. It is important to contrast what is merely bureaucratic with what is essential during these challenging economic times.

It would also be helpful to get the views of your members on what they think the state can do to provide greater affirmative assistance to small businesses. For example, Mr. Feuer was very displeased to read a news account of the plight of a California business which needed, but couldn't get, help navigating processes to compete for federal funding made available to combat the recession.

Clearly the state has very little, if any, funding for any new program, but we could potentially consider reallocating money from existing services. In any event, it would be good to know your views on what programs or services best meet the needs of California small businesses. We look forward to your feedback.
Thank you.

David Stammerjohan
Legislative Director
Office of Assemblymember Mike Feuer
Ph: (916) 319-2042
Fax (916) 319-2142

The 1099 issue will be coming up in the Senate Nov 29th at 6:30.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, November 19, 2010

FLASH: POIZNER: No Pure Premium Rate Increase For 2011

This just in.

The Insurance Commissioner has denied any workers compensation pure loss rate increase. The insurance companies don’t have to accept this and many of the companies have filed their rates for January 1. Most are relatively small with State Fund asking for a little over 5%. See below.

The 1099 issue continues to percolate in Washington. It appears there will have to be an offset of the $17 to $19 billion and this is where the legislation to repeal could come into trouble.

There should be more details next week.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, November 19, 2010



California Insurance Commissioner Steve Poizner has abjectly denied any increase in the workers' comp pure premium rate. This is despite a request for a 27.7% increase from the privately owned Workers' Compensation Insurance Rating Bureau of California.
Saying that workers' comp is like a tax on employers and that the 2004 reforms have not been fully implemented Poizner also acknowledged medical cost inflation and other cost drivers but says carriers have not done enough to control costs.

Poizner also said that he has asked WCIRB to provide more data as to the profitability of carriers and that this should be part of any increase rate consideration. Compline filed a report showing that the industry was profitable in 2009 despite the $1.5B estimated underwriting loss the WCIRB provided, of which State Fund was nearly half. State Fund also represented over 1/3 of the profits carriers had in the line for 2009.

Workers' Comp Executive will have a broader news and analysis story on Monday.

Tuesday, November 16, 2010

Baucus proposal is full repeal

Good news. I have just received a copy of S3946 the Small Business Paperwork Relief Act.

This is the Senator Baucus bill that repeals the requirement of filing 1099s on all transactions over $600. I am pleased to tell you this is a full repeal and does not include any additional offsets to make up for the projected $17 billion revenues the Congressional Budget Office said the filings would generate.

In a conversation this morning with Senator Feinstein’s office I was told the Senator has been very clear she supports a repeal of the 1099 provision but he had not talked to her about the specifics of the Baucus bill. Senator Boxer has also told me she supports repeal but I have not talked to her office about the specifics of the Baucus bill.

Small Business California is pushing hard for this to get passed in the lame duck session.

See bill below.

See legislative text here:

Another bit of good news a new amendment was put forth Monday that allows small businesses to switch carriers and retain their Grandfathered status. Previously under the health bill this change of carriers would mean the loss of grandfathered status.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Monday, November 15, 2010

1099 repeal/ Dr Winslow Sargeant

On Firday, Senator Max Baucus introduced legislation to repeal the filing of 1099s on transactions over $600. It is not clear the details but it appears to be a full repeal. Small Business California and the National Small Business Association will be closely watching this and supporting full repeal.

As this email goes to Senator Feinstein and Senator Boxers office we ask whether the Senators will support this bill. I will let all of you know their responses.

Friday I met with Dr Winslow Sargeant head of SBA Office of Advocacy. We talked about the study of bank lending and he assured me this is in process. Dr Sargeant is going to take a lot of heat on this and therefore he will need the support of small businesses and associations representing small business from around the country.

We also talked about the 1099 issue and he clearly understands the problem.

Please see below article written by a past Small Business Advocate Tom Sullivan. Dr Sargeant has only been in his position a few months but he has already been in the forefront getting the voice of small business out. His regulatory study showing that small businesses pay significantly more than larger companies to comply with regulations will be extremely helpful when we talk to our legislators.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Small Business, Their Watchdog, and a New Congress

By Tom Sullivan

Small business is a hot topic in Washington. In September, Congress created a $30 billion small business lending program intended to jump-start business expansion. Republicans and Democrats then left Washington and campaigned on how their respective approaches would help small business. Finally, 80% of the pro small business candidates endorsed by the National Federation of Independent Business (NFIB) won their elections.

While candidates were telling voters how they would fight for small business, the Chief Counsel for Advocacy at the U.S. Small Business Administration (SBA) was already engaged in battle. Dr. Winslow Sargeant’s first 3-months as the federal government’s small business watchdog tells a story that the new Congress will certainly want to hear.

The Chief Counsel for Advocacy is responsible for advocating for small business, even when the beliefs of the small business community are at odds with the White House. The power to independently represent the views of entrepreneurs is manifested through the Office of Advocacy’s research papers and through public comments submitted to agencies on how regulations can be tailored to minimize costs on small firms while maximizing their regulatory intentions.

The day Dr. Winslow Sargeant was sworn in, he sent a letter to the U.S. Environmental Protection Agency (EPA) critical of how the agency is using the Clean Air Act to regulate small business. A few weeks later, Dr. Sargeant hosted an all-day conference on how agencies must carefully consider their impacts on small business before imposing federal mandates. President Obama’s top regulatory official, Cass Sunstein, reinforced the value of Dr. Sargeant’s work during his luncheon talk at the event.

On the same day as the Office of Advocacy’s conference, Dr. Sargeant released a report showing the disproportionate cost of regulation on small business. The research, conducted by Nicole Crain and W. Mark Crain, documents the shocking reality of our regulatory system. The total cost of complying with federal regulations is over $1.75 trillion. With small business shouldering costs 36% more than their larger business competitors, the burden amounts to $15,586 per household. That is more than the one and a half times what households pay for medical treatments. Most alarming, is the fact that in the four years studied, the cost of complying with federal regulations rose faster than the per-household cost of medical care.

The study on how federal mandates impact small business is impressive in itself. Since September, Dr. Sargeant’s research team issued three other reports, ranging from a summary of small business factoids, to a historical sketch of small business and economic development dating back to 1953. The study on how federal mandates impact small firms is the highlight of Dr. Sargeant’s short tenure. Not only did the Office of Advocacy release a report that shows, in stark terms, the depth of the regulatory problem, his team is doing something about it.

In his first 63 days as Chief Counsel, Dr. Sargeant signed 7 public comment letters that hold federal agencies accountable for their impact on small business. The letters, sent to EPA, the Department of Health and Human Services, the Occupational Safety and Health Administration, the Department of Education, and the Department of Labor amplify the concerns of small businesses that are struggling to keep up with rules and regulations flowing out of Washington.

Dr. Sargeant’s efforts show how his office is listening to small business and the elections last week served as a wake-up call to politicians who may not have heeded the same advice. Congressional committees will likely echo that wake-up call and demand that agencies search for ways to improve workplace safety, environmental protection, and access to credit without burying entrepreneurs under mountains of paperwork and regulatory costs. Those are the same demands coming from Dr. Winslow Sargeant and SBA’s Office of Advocacy.

The call for agencies to lighten the burden of federal mandates on small business is the consistent plea from SBA’s Office of Advocacy. That message becomes even more powerful when amplified by Congress. Dr. Winslow Sargeant’s first few months as Chief Counsel for Advocacy provide him with a track record that tells the new Congress they have a friend inside the federal government when it comes to helping small business.

Tom Sullivan is an attorney with the law firm of Nelson Mullins Riley & Scarborough where he runs the Small Business Coalition for Regulatory Relief. He served as Chief Counsel for Advocacy from 2002-2008.

Tuesday, November 09, 2010

1099s/Meeting with Director of Advocacy at SBA/ Clinic by the Bay

Small Business California continues to work on repeal of the 1099 requirement that was incorporated in the Health bill passed in March. This as you recall will requires businesses to file 1099s on transactions over $600.

We were particularly pleased to see President Obama say last week that he would like to work with Republicans on changing this provision.

Small Business California sent an email today to Michael Bernich to deliver to the Governor elects people requesting that the Governor focus on getting access to capital to small business. There is a unique opportunity for Jerry Brown with the passage of the Small Business Jobs bill and the trailer bill passed by the legislature and signed by Governor Schwarzenegger to help small businesses in this area. We requested that the Governor convene a meeting with lenders and Karen Mills the SBA Administrator to discuss strategies on how this money can best be used.

We also requested that the Governor work closely with the Small Business Development Centers around the state to outreach to lenders and small business borrowers letting them know about the availability of this money.

On Friday I will be meeting with Winslow Sargeant the Director of the SBA Office of Advocacy. As I have mentioned before Small Business California has requested that he do a report on how banks especially big banks like Bank of America are lending to small businesses. He has assured me that he is in the process of doing this.

Small Business California has also asked that he look into why the SBA has not designated a person to meet the requirements required under the energy bills of 2005 and 2007. These bills required the SBA to work with government agencies in developing energy policies that will help small business. One policy mentioned in the energy bill of 2007 was assistance in developing On Bill Financing around the country. As you all know Small Business California brought On Bill Financing to California.

Saving the best for last today is the formal grand opening of Clinic by the Bay. We will be doing our celebration at 10:30 this morning. Our guest will be Senator Feinstein and Congresswoman Jackie Speier. We will be joined by a couple of friends and neighbors[patients] who have used our services.

See link to article that was on the front page of the Chronicle this morning.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Monday, November 01, 2010

On Bill Financing/ Governors Race

Small businesses need access to capital in all Investor Owned Utilities service territories. On Bill Financing which Small Business California has brought to California is one way IOU’s can get capital to small businesses for energy retrofits.

This program allows small businesses to retrofit their businesses to reduce energy use and cost and it is paid for by a 0% loan from the utility.

According to Hank Ryan our Executive Director the results to date for the three IOU’s are:

San Diego Gas has over 450 OBF loans with only 3 defaults. Southern California Edison has since July1 booked over $1.5 in small business OBF projects. As of now according to the CPUC PG&E has 10 OBF loans in the hopper but none to small business.

PG&E clearly needs to do better and kudos to San Diego Gas.

On Tuesday after the election I will be talking to some reporters who want to know what small business thinks of the results of the Governors race.

Please give me your thoughts if Jerry Brown wins and conversely if Meg Whitman wins.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, October 29, 2010

Small Business California Recognize by NAGGL/ 2005/2007 Energy Bill

On Wednesday Small Business California and I were honored to receive the 2010 Distinguished Service award at the annual convention of the National Association of Government Guaranteed Lenders. The recognition was for our work in getting the Small Business Jobs bill passed.

Small Business California is proud to be a partner with NAGGL and they are also to be thanked for their efforts in getting the bill passed.

Small businesses around the country owe them a debt of gratitude for their tireless efforts on our behalf. A special thank you is extended to Tony Wilkinson the Executive Director of NAGGL and Tom Cator NAGGL’s lobbyist in Washington.

In previous emails I have mentioned that the SBA has not met its obligations required under the energy bills of 2005 and 2007.

See below what the bills required. Small Business California has requested Dr Winslow Sargeant the director of the Office of Advocacy to look into this matter. Small businesses around the country deserve better and we will continue to push for the SBA to obey the law.

EISA 2007

• Required the U.S. Small Business Administration (SBA) to implement a government-wide program, built on the ENERGY STAR Small Business program, to help small businesses (a) become more energy efficient, (b) understand the potential cost savings from improved energy efficiency, and (c) identify financing options for energy-efficiency upgrades.

EPACT 2005

• Required the U.S. Small Business Administration (SBA), in consultation with the DOE and EPA, to implement a government-wide program, built on the ENERGY STAR Small Business program, to help small businesses: (a) become more energy efficient, (b) understand the potential cost savings from improved energy efficiency, and (c) identify financing options for energy-efficiency upgrades;

• Required the DOE to convene an organizational conference for the purpose of establishing an ongoing, self-sustaining national public energy and energy-efficiency education program, examining the interrelationship between energy and its role in the economy and on the environment; and

• Required the SBA to establish a Small Business Energy Efficiency Program through select Small Business Development Centers (SBDC)—through this provision, an SBDC would have been eligible, consistent with State public utility regulations, to act as a “facilitator” for on-bill financing agreements between small businesses, electric utilities, lenders, and the Administration;

• Rendered plant projects that reduce the borrower’s energy consumption by at least 10 percent or that generate renewable energy or renewable fuels, such as ethanol, eligible for 504 loans and increased the maximum debenture to $4 million;

• Expanded the list of permissible uses for Express Loans to include renewable energy and energy efficiency improvements;

• Established a pilot program for reduced 7(a) fees for the purchase of energy-efficient technologies;

• Created a telecommuting pilot program at the SBA aimed at education and outreach;

• Created a priority status within the Small Business Innovation Research and Small Business Technology Transfer programs for small-business concerns participating in energy efficiency or renewable energy research and development projects; and

• Authorized Small Business Investment Companies to issue a new class of debentures, called Energy Saving debentures, for small businesses primarily engaged in the researching, manufacturing, developing, or providing products, goods, or services that reduce the use or consumption of non-renewable energy resources.

• Required the DOE to carry out a national public information program on energy efficiency focused on: (a) the need to reduce energy consumption, (b) the benefits of reduced consumption, (c) the benefits of lower energy costs to economic growth and job creation, and (d) ways to reduce consumption through increased efficiency.

EPACT 2005

• Mandated that the U.S. Department of Energy (DOE), in cooperation with the Environmental Protection Agency (EPA), create a consumer education program focused on the energy savings available from properly conducted maintenance of air conditioning, heating, and ventilating (HVAC) systems;

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Tuesday, October 26, 2010

Small Business California

Yesterday I sent you the link to Small Business California press release requesting Dr Winslow Sargeant head of Office of Advocacy at the SBA to do research on what banks are doing as respects lending to small business.

I am pleased to tell you that Dr Sargaent called me yesterday and let me know that they were in the process of getting this done and it should be done in two to three weeks.

He said the report will be for 2009 and they will also be doing a report for 2010 early next year.

When the report is done I will send to you.

While I had Dr Sargaent on the phone I also requested that he look into why the SBA has not designated a person to meet the requirements required under the energy bills of 2007 and 2005.

These bills required the SBA to work with government agencies in developing energy policies that will help small business. One policy mentioned in the energy bill was assistance in developing On Bill Financing around the country which Small Business California has brought to California.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Monday, October 25, 2010

Small Business Press Release/ Clinic by the Bay

Small Business California issued a press release yesterday urging Dr. Winslow Sargeant the United States Small Business Association Chief of Advocacy to do a report on what Banks are doing with small businesses. Based on your responses there is a major problem with banks reducing and in some cases eliminating lines of credit, calling in loans, reducing credit card limits and increasing credit card interest.

There is a precedent for this in that Jere Glover while head of Advocacy under the Clinton Administration put forth a report which illustrated many of the problems at that time. This report is important because we have to have something that goes beyond anecdotal evidence.

Please see below link to press release.

I have been invited to attend a conference on Tuesday and Wednesday that the National Association of Government Guaranteed Lenders is putting on in Anaheim. It is expected there will be over 600 in attendance.

On November 27th 1998 I was watching Chris Mathews Hardball. Chris had as his guest John Kasich who had written a book called Courage is Contagious. The book tells about 15 people who had done extraordinary things in their community.

One of the guests was Dr Jack McConnell who founded Volunteers In Medicine in Hilton Head. He told about an amazing free clinic he had established there taking volunteer retired Doctors, Nurses, Dentist and lay Volunteers who provided health services to the working uninsured. He also mentioned that they took no government money.

It was then my dream began to establish a Volunteer in Medicine program in SF.

On November 9 the Volunteer in Medicine Clinic called Clinic by the Bay will have its grand opening. Senator Dianne Feinstein we think will be attending as will Congresswoman Jackie Speier.

That evening Small Business California and Board members Stephen Cornell, Mark Klaiman and I will be hosting a fund raiser for the Clinic from 6 to 7:30 The cost is $1000 for host, $500 for co-host, $250 for sponsors and $100 for individuals.

For those of you in the SF area I hope you can attend. For those of you outside the area I hope you will consider making contribution. I will match any contribution you make. Please make checks payable to Clinic by the Bay and mail to me at address below or contribute on line by going to If you contribute on line please let me know amount so I can match.

Our Credo
“May we have eyes to see those who are rendered invisible and excluded,
Open arms and hearts to reach out and include them,
Healing hands to touch their lives with love,
And in the process heal ourselves”

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Wednesday, October 20, 2010

AB 1632 the Small Business Bill is signed by the Governor- Letter To Advocate for Research on Bank Lending

In previous emails I said that a trailer bill was part of the budget package. I indicated that it needed to be signed by the Governor.

See email from Toni Symonds indicating the Governor has signed the bill. Besides providing lending for almost $250 million it will provide $6 million for SBDCs. Tony worked hard on this bill and I think you should take a few seconds and send an email and thank Tony and the JEDE Committee members.

SB Cal will have a representative at the Oct 26 meeting.


Dear JEDE Friends:

According to the Governor's legislative staff, the Governor has signed AB 1632 the Small Business Act that includes $33 million for small business finance and technical assistance. We don't have a chapter number yet, but JEDE was emailed that the bill was signed.

All Members of the JEDE Committee voted in support of this bill. As you may recall, this bill was a recommendation from the Speaker's Economic Recovery and Jobs Task Force that was lead by Assemblymen V. Manuel Perez and Mike Feuer. In developing the recommendation, the Task Force met with small business leaders, the SBA and the Treasurer's Office. JEDE's work on business issues was also used as a foundation to the discussions and recommendations. The Speaker, in considering the recommendations from the Task Force convened a Small Business Roundtable in August 2010.

It is expect this $33 million will leverage millions of federal dollars and assistance for our small businesses. Attached is more information about the programs funded in the bill.

Thank you for all your efforts. See you on October 26, 2010 to discuss implementation.

Toni and Mercedes
Toni E. Symonds
Chief Consultant
California State Assembly Committee on Jobs,
Economic Development, and the Economy
California State Capitol
Sacramento, California 95814
(916) 319-2090


Yesterday I sent a letter to Winslow Sargeant SBA Office of Advocacy along with 15 sample emails from you of the problems you are having with banks. I wrote supporting the SBA Office of the Advocate do research on what banks are doing to small businesses. We need this so we will not be talking anecdotally. The study would be similar to what Jere Glover a past Advocate did a number of years ago.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Tuesday, October 19, 2010

Emails About Big Banks

I have really been blown away by the responses I have received to my emails about big banks in general and Bank of America specifically.

In the last two days I have received well over 100 emails. The horror stories of banks pulling lines of credit, calling in loans, 30% interest on credit cards and banks cashing larger checks so they can increase the amount of fees they can charge on smaller checks are just a few of the things you have told me.

I welcome further comments including those of you that are being treated well by your bank.

The reason for this email is however to let you know that Small Business California is going to be sending a letter today to the SBA Office of Advocacy supporting their doing research into the actions of banks and their treatment of small businesses. Jere Glover the Advocate under the Clinton administration did this and it had an impact in the way banks dealt with their small business customers.

I will cite examples that you have provided me.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Monday, October 18, 2010

Big Banks

The story about Bank of America hiring 1000 people but they had no plans to get back in the 7a and Express lending business seemed to have hit a nerve.

I am sending this follow up email to see how many of you have had problems with big banks not just in lending but in service and fees being charged. Include credit cards in the mix.

Could you please get back to me outlining those problems and what banks are creating these problems.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

W2s/ Bank Lending/ Bof A Hires 1000 employees to serve small business

Last week I sent to you information on how to call into a White House briefing about the W2 requirements under the health care bill.

As you know the bill required employers to include medical insurance cost in the W2s they were filing for their employers starting in 2011.

Announced at the briefing was that the inclusion of medical cost on W2s would be delayed until 2012.Please note that these health cost are not taxable for employees.

That is the same date that employers will be required to file 1099s for all businesses they pay over $600. Small Business California and the National Small Business Association continues to oppose this and are aggressively telling lawmakers small business wants a full repeal of the 1099 requirement.

On Thursday I talked to Senator Feinstein about the problems small businesses are having getting loans and credit from banks. She indicated that she was going to contact Ben Bernanke on this and I await hearing from her office.

What I would like to know from you is - are you seeing any loosening of credit now that the Small Business Jobs bill has passed?

Bank of America indicated that it would be hiring 1000 employees to serve small business. When Sharon Bernstein of the LA Times asked if this means they will be making more loans to small business she was told they had no plans to do this. The newly hired employees would be used to forge relationships with small business and get them to use B of A for deposits, credit cards,payroll, pensions etc. At its peak B of A made 15000 loans to small businesses around the country and now makes almost no 7a and Express loans.

I don’t know about you but I don’t need another bank to take my deposits and give me overpriced credit cards and not give me a loan.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, October 15, 2010

What does small business want/ Information about CEA conference

Yesterday I got a call from a reporter asking what small business would like the next Governor of California to do to help California small businesses?

I would like to know your thoughts. I would also like to know if you would be willing to talk to the media on this.

Who are you supporting for Governor?

The California Employers Association (CEA) is having their 73rd Annual Conference and Meeting on Wednesday, November 3 in Sacramento at the Arden Hills Resort Club and Spa.

Please go to the link below to find out about the event and the speakers who will be there. Memberss of Small Business California can attend this event at the ‘Member’ price of $99. To take advantage of this opportunity, you need to call 1-800 399-5331 to register. You cannot register online.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, October 08, 2010

State to Receive over $168 million For Small Business Loans

Yesterday I learned that the state will be receiving over $168 million from the Federal government for small business loans.

This is as a result of the passage of the Small Business Jobs Bill that Small Business California and the National Small Business Association fought so hard for.

It is estimated that this will leverage $1.7 billion for loans to California small businesses.

This along with the money in the California budget[ assuming it gets passed] will mean almost $2 billion will be available to California small businesses.

I hope you find the information provided in these emails helpful. If you haven’t already joined Small Business California I hope you will consider doing so.

Small Business California is making a difference in Sacramento and Washington. We also have a lobbyist in Sacramento to represent your interest.

The cost is $150 for businesses with revenues under $1 million and $300 with revenues over $1 million.

You can join online by going to

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Thursday, October 07, 2010

Budget and Small Business

You all know that budget discussions are going on in Sacramento.

Two bills called trailer bills are being discussed and look like they have a good chance of being included in the budget. These bills are SB 872 and AB 1672. They are important in that they will provide about $32 million to small business programs.

$20 million will go to the existing Small Business Loan program at Business Transportation and Housing. This will leverage about $100 million in bank loans and/ or lines of credit and will serve it is estimated 1000 business.

$6 million will go to a program called the California Capital Access Program [Cal Cap]. This will triple the size of their current program and would leverage $135 million in loans and serve about 1000 businesses.

The real big piece however is $6 million to the Small Business Development Center program. SBDCs have been hit hard by the Community Colleges pulling back their funding. This money is matched by the SBA so it means $12 million to SBDCs.

Small Business California is watching this closely and we are being told this should get passed.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

Friday, October 01, 2010

Exchange Bills Signed By Governor

The Governor signed yesterday SB 900 and AB 1602 which will begin to set the structure for the Exchange in California. See press release below.

I will be representing Small Business California at the event with the Governor and the media call in afterward.

Small Business California member Janet Hildreth owner of Tree Lovers Floors in San Francisco will also be there.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116

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For Immediate Release:
Thursday, September 30, 2010
Contact: Aaron McLear
Rachel Arrezola

Gov. Schwarzenegger Signs Legislation Making California the National Leader on Health Care Reform

California is First State in the Nation to Create Health Benefit Exchange.

Governor Arnold Schwarzenegger today signed AB 1602 by Assembly Speaker John Pérez (D-Los Angeles) and SB 900 by Senator Elaine Alquist (D-Santa Clara) creating the California Health Benefit Exchange, an entity that will help California consumers and small businesses shop for and buy affordable health insurance starting in 2014. The Governor’s action makes California the first state in the nation to enact legislation creating a health benefit exchange under federal health care reform.

“For national reform to succeed, it will be up to the states to make it work, and California is moving forward on reforms that will provide affordable and quality health care insurance,” said Governor Schwarzenegger. “Choice and competition have the power to improve health care quality and reduce health care costs for California consumers. With the California Health Benefit Exchange, we will be able to create a competitive marketplace where consumers can choose among qualified health plans – all without relying on the state’s General Fund.”

The Governor announced earlier this year that he is taking aggressive action to implement federal health care reform in California including helping develop the structure for an exchange to foster competition and make health insurance affordable. The Governor formed a Health Care Reform Task Force to implement key reform provisions and programs under health care reform this year, including the Exchange.

The California Health Benefit Exchange will make it easier for individuals and employees of small businesses to compare plans and buy health insurance in the private market using federal tax subsidies to make health coverage more affordable. Federal health care reform makes tax credits and subsidies available in 2014 to Californians with incomes between 133 and 400 percent of the federal poverty level (approximately $29,000 to $88,000 for a family of four).

The Exchange will be governed by a five-member board appointed by the Governor and the legislature. Between now and the end of 2013, the Exchange board and staff will develop procedures and criteria to enroll Californians in the Exchange and select qualified health plans to participate. Similar to the purchasing pool proposed as part of comprehensive health reform advanced by Governor Schwarzenegger in 2007, the Exchange will enhance competition and give individuals and employees of small businesses the same advantages available to large employer groups including a more stable risk pool, greater purchasing power, more competition among insurers and detailed information regarding the price, quality and service of health coverage.

“We believe the Exchange will improve the way millions of Californians get health insurance in our state,” said California Health and Human Services Agency Secretary Kim Belshé, who chairs the Governor’s Task Force on Health Care Reform Implementation. “The Exchange will focus competition on price, quality and service – giving individuals and small business employees the same large-group purchasing advantages and more affordable options now enjoyed by those who work for large firms.”

The Exchange will work in partnership with agents and brokers, community organizations and other “navigators” to help consumers make informed decisions based on the price, quality and value. Once the Exchange opens in January 2014, California consumers will be able to use it to research their health coverage options and access federally-funded tax credits and cost-sharing subsidies. Click here to read more on the California Health Benefit Exchange.

The federal government announced today that California will receive $1 million to fund the costs of preliminary planning efforts related to the development of an Exchange. Additional federal implementation grants are expected be announced in the Spring of 2011. After 2014, the Exchange will be self-supporting from fees paid by health plans and insurers participating in the Exchange. No state General Funds are appropriated for operation of the Exchange.

In addition to taking action on the Health Benefit Exchange bills today, Governor Schwarzenegger announced he also signed the following bills to implement health care reform in California:

SB 1163 by Senator Mark Leno (D-San Francisco) - Health care coverage: denials: premium rates.

· In July, Governor Schwarzenegger announced the state’s medical insurance rate review proposal to make costs more transparent and ensure greater consumer protection. SB 1163 embodies the Governor’s proposal by requiring all premium filings be reviewed and certified by an independent actuary to ensure premium costs are accurately calculated and all proposed rate increases be posted on both department and insurer websites making costs more transparent. These consumer protections exceed what federal law requires under federal health care reform.

SB 1088 by Senator Curren Price (D-Los Angeles) – Health care coverage: dependents.

· This bill prohibits health plans and health insurers from setting the limiting age for dependent children covered by their parent’s health insurance policy at less than 26 years of age.

AB 2244 by Assemblymember Mike Feuer (D-Los Angeles) – Health care coverage.

· AB 2244 implements and phases-in provisions of federal health care reform, ensuring that children cannot be denied coverage or priced out of the market if they have pre-existing conditions. The bill prohibits insurers that sell individual market policies in California from refusing to sell or renew coverage to kids with pre-existing conditions.

AB 2345 by Assemblymember Hector De La Torre (D-South Gate) – Health care coverage: preventive services.

· Aligning state law with federal health care reform, AB 2345 requires health care service plan contracts to cover certain preventive services with no cost-sharing.

AB 2470 by Assemblymember Hector De La Torre (D-South Gate) – Health care coverage: cancellation: rescission.

· This bill prohibits a person’s health care insurance policy from cancelling insurance once the enrollee is covered unless there is a demonstration of fraud or intentional misrepresentation of material fact by the terms of contract or policy.

The Governor and his Administration have been working since federal health care reform passed to implement key elements in California before the 2014 start date. In April, the Governor announced the state will contract with the federal government to operate a temporary health insurance program for medically uninsured individuals with preexisting medical conditions. In July, the Governor’s Administration submitted the state’s proposal to the federal government to establish and operate the federal Pre-existing Condition Insurance Plan through a public-private partnership with contracted vendors, which will be overseen by the California Managed Risk Medical Insurance Board. To implement this program and expand affordable health coverage to uninsured Californians with pre-existing medical conditions, the Governor also recently signed legislation creating the Federal Temporary High Risk Health Insurance Fund to receive $761 million in federal funding: SB 227 by Senator Elaine Alquist (D-San Jose) and AB 1887 by Assemblymember Mike Villines (R-Clovis).

Governor Arnold Schwarzenegger
State Capitol Building
Sacramento, CA 95814