Friday, October 28, 2011

Withholding on Government Contracts/Receivables/ Issues

Yesterday, the House voted 405 to 16 to repeal legislation (passed in 2005) to impose a 3% withholding tax on government contracts. The original bill has been delay until 2012 and has not been implemented.This is great news for small businesses! Small Business California has been very vocal in supporting the repeal. It appears that this has bipartisan support so we are hopeful it will be passed in the Senate. We will let you know when it goes to the Senate.

Yesterday, I received a call from a reporter asking about collection of receivables for small businesses, given the downturn in the economy. He told me two surveys have been done one saying time for collection is 23 days and another being 36 days.

What has been your experience? Have you seen an increase in the time to collect receivables? Are you writing off receivables? Is the delay in collecting receivables creating cash flow problems for you?

I am always looking for issues affecting small business. If you have an issue that is broad based and affects small businesses that have not been brought up in a previous email from me I would like to know. Please make the subject of the issue state based as I cannot deal with local issues.

I hope you find these emails beneficial and if you are not a member, I hope you will consider joining Small Business California. You can do so by going to our website

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116
License #0A32315

Wednesday, October 26, 2011

AARP/On Bill Financing

AARP is one of the most powerful lobbying groups in Washington and to a lesser degree Sacramento. There are about 3.2 million members in California alone. Traditionally, small business organizations have not worked with AARP but my question to you is should Small Business California reach out to AARP?

You may not be aware that many of the start up businesses being created are by people 50 and over. It also seems like small businesses would be interested in tapping into a work force of people 50 and over where many of which need or want to work after retiring. What are your thoughts? Are there other issues we can work together on? Are you a member of AARP?

On Oct 13th, Senator Bernie Sander [Vermont] chaired a hearing on how utilities can help customers use savings on their monthly energy bills to finance energy efficiency improvements at homes and businesses. If this sounds familiar, it is exactly what Small Business California has brought to California with its On Bill Financing program.

Senator Sanders was quoted as saying “When you have a program that cuts energy bills and makes small businesses more competitive, creates jobs and slashes greenhouse gas emissions, that is a win-win-win, and Congress should support these efforts”

Small Business California has asked Mike Rossi, the Energy Czar for the Governor to help us expand On Bill financing in California. Small Business California and 14 other small business associations in California have written a letter to SBA Administrator asking the SBA to assist in these efforts. The SBA is required to do this under the 2007 Energy Bill passed by Congress and signed by the President. In California, San Diego Gas & Electric has done a great job in implementing On Bill Financing. PG&E and Southern California Edison quite frankly have dragged their feet.

On Oct 25th, Victor Parker was sworn in to be the SBA District Director of LA, Ventura and Santa Barbara Counties. Mark Quinn, District Director in SF, has been shuttling between SF and LA filling in as acting District Director for the last few months. Does anyone know Victor? Small Business California looks forward to working with him.

Wednesday, October 19, 2011

SBIR Insider Update 10-19-11

The email below is about the Small Business Innovative Research Program. Small Business California and the National Small Business Association have been strong supporters. I know most of you are not involved in SBIR, but I think the email from Rick Shindell (SBIR Gateway)gives you a good understanding of the politics in Washington and politics in general, in respect to small business.

The SBIR has been a very successful program and has shown support on both sides of the aisle and yet, it has been operating on continuing resolutions for years because of partisan bickering. I hesitated sending such a long email, but I think small businesses need to know political realities.

I am pleased to say we have over 100 people confirmed for the Travelers/Small Business California Symposia Oct 20th. I look forward to seeing all those that are attending. I also want to thank all of you that completed the survey. If you would like a copy of the results please let me know.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116
License #0A32315


by: Rick Shindell
SBIR Gateway

SBIR Insider Newsletter Update
October 19, 2011

In order to tell you what is going on with SBIR reauthorization, we must discuss the politics, this time, not for political junkies only. If you can suffer through the political portion, you'll have an increased understanding of the SBIR reauthorization problems, and how we can deal with them.

SBIR reauthorization is NOT a partisan issue, both parties tend to like the program, BUT they like (and need) money more. The excesses of campaign and party finances have brought about the degradation of our political system thereby diminishing the "well being" of our country and its citizens. Amongst other things, this has lead to the lowest approval rating of Congress in our history. It's possible now they will be more amenable to listening to you rather than dollars.

Perhaps we should look at ourselves as part of the cause. The simple fact is that the candidate with the most money in their election coffers, win 94% of the time. Sure we hear about the 6% because it is remarkable but all too rare.

Due to this 94% fact, both parties require their candidates to raise money not just for themselves, but for their party, so the party can put more financial support into candidates in tougher races, thereby trying to achieve a majority in congress.
Small businesses get a lot of "chin music" from congress, but at the core, (and behind closed doors) small businesses are not considered a good fund raising resource, so more attention goes to the larger, better funded concerns. This is especially true in the House with its 435 members.

Jurisdiction for legislation is related to a committee's mission, i.e., Armed Services, Small Business, Finance, Science, etc. The power is in the hands of the committee chairs and ranking members. More often than not, committee members fall into line with what their chair/ranking member wants. Then when the bill is brought out of committee to the whole House, the parties usually follow the lead of the their committee chair or ranking member.
Rock & Roll: That's what was so remarkable when the House democrats rolled (voted against) their ranking member of the Small Business Committee, Nydia Velazquez (D-NY) last May to pass the SBIR continuing resolution (CR) to keep the program going through September 30, 2011. That didn't happen by accident, it was the flood of calls that many representatives received from their constituents (you) urging them to pass the CR.

Exception to the Rule: The House Small Business Committee had it's chairs and ranking members in the back pocket of BIO and NVCA ever since former chair Donald Manzullo (R-IL) left in late 2006. On several occasions (including in the Congressional Record) Manzullo discussed the heavy lobbying and pressure tactics of those groups, (wanting to allow a small business to be majority owned and controlled by non-small business). Manzullo wouldn't cave to their pressure, and throughout his tenure as chair of the committee, Inc magazine rated him as one of the best friends to small business (for a variety of excellent reasons).
The total opposite is true for both Sam Graves (R-MO) the current chair, and Nydia Velazquez the ranking member and former chair. Both Graves and Velazquez have been fighting to give BIO, NVCA and some others, everything they want, and more. That's been the biggest sticking point in SBIR reauthorization.

If we look at the 2010 lobbying dollars for BIO and NVCA (as reported by The Center for Responsive Politics) we see the following lobbying contributions:
Biotechnology Industry Organization: $8,440,000
National Venture Capital Association: $2,567,515

You're not going to see those kinds of dollars coming from the small business community.
For his personal election efforts, Mr. Graves hasn't had a serious election challenge since 2000. In 2010 he raised over $1M (73% from PACs) and his opponent could raise only $16K. Graves got 69% of the vote!

Velazquez also raises a lot of money but runs virtually unopposed every time. Why does she need the extra money? According to numbers provided in Marian Currinder’s book "Money in the House", a democrat who receives a leadership position on a lower level committee (such as small biz) must contribute $150,000 in dues to the Democratic Congressional Campaign Committee (DCCC) and raise an additional $100,000.

The republicans aren't much different, so Graves must contribute a lot of money to his brethren as well. Neither Graves nor Velazquez can get the money they need from small businesses, but it's a piece of cake for the big boys, just give them what they want.
The Senate: The Senate Committee on Small Business & Entrepreneurship (SBE) led by Mary Landrieu (D-LA) chair, and Olympia Snowe (R-ME) ranking member, worked tirelessly with their staff, small businesses, industry trade groups, state & local governments, and other stakeholders to strike a reasonable compromise bill that could be supported by the SBIR stakeholders. They accomplished this in their bill S.493 The SBIR/STTR Reauthorization Act of 2011. This bill also included many of the provisions (or compromises thereto) that were championed by the House Small Business Committee, including a generous amount for VCs.
The SBE's compromises were so carefully worked out in S.493, that it led to letters of enthusiastic support for passage of the bill by the Biotech Industry Organization (BIO), National Venture Capital Association (NVCA), Small Business Technology Council, and many others.

In a March 7, 2011 letter of support to Senators Landrieu and Snowe, BIO president and CEO James Greenwood stated:

"On behalf of the Biotechnology Industry Organization (BIO) and our more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations, I am writing in support of S. 493, legislation to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Program (STTR) programs. This bill represents a balanced approach to ensure that America’s most innovative small businesses can access existing incentives to grow jobs by commercializing new discoveries."

On March 8, 2011, NVCA president Mark Heesen also wrote a letter of support to Landrieu and Snowe:

"On behalf of the National Venture Capital Association (NVCA) and its members, I am writing in support of Senate passage of S. 493, the SBIR/STTR Reauthorization Act of 2011, which reauthorizes the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This legislation represents a fair compromise to ensure that America's most innovative small businesses can once again have access to existing government incentives to grow jobs by commercializing new discoveries."

Unfortunately the Senate was not able to invoke cloture on S.493, largely because it was brought to the Senate under an open rule which allowed about 200 amendments to be offered to the bill, almost all of which were not related to SBIR. So the bill just sits idle in the Senate, but its language is available for future use.

In the House:, Two committees have oversight of the SBIR program, the House Committee on Science Space & Technology (HSS&T) and the House Committee on Small Business (HSB). The HSB generally takes the lead unless there is an issue dealing with the universities (we'll discuss later).

H.R. 1425, Creating Jobs Through Small Business Innovation Act of 2011, was reported out of the HSS&T and HSB in mid-May of 2011. It has yet to reach the House floor.
Seeing the Senate's compromise on the VC issue (supported by BIO and NVCA), the HSB decided to double the amounts for the VCs, and add Hedge Funds and Private Equity Investment Organizations to the list of entities that could have majority ownership of a small business and still compete for SBIR funding. This added support from their Wall Street benefactors. Of course, BIO and NVCA were more than happy to support the House bill that gave them more than they dreamed of!

Disingenuous Dear Colleague ???: HSB Chair Sam Graves sent a "Dear Colleague" to House members on September 15, 2011 that at best could be termed "misleading." Let's examine:
Mr. Graves states: "First, let us say that it is our full intention as the Chairmen of the House Small Business and Science, Space, and Technology Committees to negotiate a long-term reauthorization of the SBIR program."

Challenge: Graves mentions "long-term reauthorization". SBIR has always been reauthorized in 8 year chunks. Last year Graves supported only a 2 year reauthorization, this year he proposes 3 years. The Senate is supporting the customary 8 years, but Grave's sticks to 3. Is that "long term?" It should be noted that work on SBIR reauthorization began in 2005 in anticipation of a 2008 expiration.

Mr. Graves states: "We have been diligently working with members on both sides of the aisle and on both sides of the Capitol to put together a long-term reauthorization that improves and modernizes the SBIR program and provides certainty to the thousands of small businesses that utilize the program."

Challenge: "Both sides of the Capitol?" Nonsense. Check with the Senate Committee on Small Business & Entrepreneurship (SBE) on this. HSB posture has been their way or the highway.
Mr. Graves states: "We remain committed to reaching a deal on a SBIR reauthorization and will continue our discussions with the Senate to reach a deal."

Challenge: This gives House members the impression that details are being worked out when in fact, they aren't. Grave's worry is that you may try to do to him as you did to Ms. Velazquez, getting the party to "roll" (vote against) their ranking member or chairman . This saved the SBIR program back in May.

The main thing that saved the SBIR program in the last CR back in May, was your involvement, speaking up, working with your congressmen, telling them what was reasonable and proper, and what you expected from them. Many of you did this independently, or working with groups such as SBTC, SBBC, and/or some state organizations formed by small high tech businesses.
The Heroes Step Forward: Remember our previous statement concerning committee jurisdiction. In keeping with that, on October 11, 2011 Congressman Edward Markey (D-MA) along with 24 other representatives sent a letter to HBC chair Sam Graves & ranking member Nydia Velazquez about SBIR reauthorization issues.

They voice concern about the VC language in H.R.1425 and suggest borrowing from the Senate's S.493 language: "…therefore urge you to include language on VC participation similar to that of S. 493, which is supported by both the small business and venture capital communities. Also, integral to a limited increase in VC access is an increase in the total allocation for the SBIR program from its current 2.5 percent level to 3.5 percent, which also has support from a broad coalition of business groups, including the Small Business Technology Council, the U.S. Chamber, and National Federation of Independent Businesses."

"Second, we are concerned about section 505 of H.R. 1425, which would limit the number of SBIR awards and dollars individual companies can receive, and in doing so would seriously undermine the merit-based principles that make the SBIR program so successful."

They also voice concern and opposition to "direct to Phase II" (bypassing phase I) and they urge a long term reauthorization, as has been the case for almost 28 years. A complete copy of the letter can be seen at:

The hero's who signed the letter are:
Edward Markey (D-MA); Niki Tsongas (D-MA); Peter Welch (D-VT); David B. McKinley (R-WV); Rosa L. DeLauro (D-CT) ; Donald Manzullo (R-IL); Lois Capps (D-CA); Laura Richardson (D-CA); Joe Courtney (D-CT); Jackie Speir (D-CA); Jared Polis (D-CO); John Tierney (D-MA); William Keating (D-MA); Paul Tonko (D-NY); Sam Farr (D-CA); Bill Posey (R-FL); Jim Langevin (D-RI); Maxine Waters (D-CA); Chris Murphy (D-CT); David Cicilline (D-RI); Pete Stark (D-CA); Marcia Fudge (D-OH); Martin Heinrich (D-NM); Raul Grijalva (D-AZ); Ruben Hinojosa (D-TX)

Another "Potential" Hero? In a written response to one of his small business SBIR constituents who voiced concern over the VC issue in House bill, Speaker of the House John Boehner (R-OH) stated: "I am concerned that the bill goes too far in relaxing constraints on venture capital ownership of firms receiving SBIR and STTR funds which could lead to the subsidization of venture capitalist firms with taxpayer dollars. Rest assured, I will keep your thoughts in mind as H.R. 1425 moves through the legislative process."

Speaker Boehner may well remember that a former speaker of the House, Tom Foley was voted out of office by his Washington State constituents, many of which thought he gave more attention to his lobbyist backers than his constituents. Also, Boehner saw his good friend and neighbor Steve Chabot (R-OH) get voted out of the house in 2008 for similar reasons (Chabot is now back in as of the 2010 election).

The University Backlash: The university groups historically disliked and often tried to reject/abolish the SBIR program. In fact, it was the university community along with the NIH that were able to remove/exempt SBIR (in the dead of night) from any inclusion in recovery act (ARRA) funding.

The HSS&T totally rejected the Senate's idea of increasing the SBIR allocation from 2.5% to 3.5% over 10 years. Any SBIR increase was historically fought against by the university community), and the HSB was more than happy to accommodate them. This put the universities solid support in the corner of the House's H.R. 1425 SBIR bill, which made no increase in the SBIR allocation, but removed significant portions of SBIR dollars from small businesses to channel those dollars to Wall Street and university programs.

Most people don't realize the enormity of university lobbying. Just as we discussed the power of organizations such as BIO and NVCA, we must include the university sector and non-profits in the group of power brokers, such as:

Federation of American Societies of Experimental Biology (FASEB): $331,384
Association of American Universities (AAU): $77,442
Battelle Memorial Institute (non-profit): $700,000

Of course the prim and proper atmosphere of the universities made them the ideal group to disparage the success of the SBIR program (even though they were often a beneficiary of SBIR/STTR success). It wasn't personal, but they believe that the agencies' extramural R&D budgets (especially NIH) belonged to them, and any deviation of those funds would result in cures and treatments not being funded or discovered. It is like small R&D businesses are merely chopped liver trying to suck blood money out of critical university research.

In fact, some in the university sector delighted in citing SBIR "waste, fraud & abuse" (WFA) as an example of a poor government investment. Indeed there is some and it should, and will be dealt with. However, it has yet to be demonstrated that SBIR has as much or more WFA than other government programs and participants, including universities!

Excuse me, I've been told that universities don't have WFA, but merely an occasional wayward professor. Other times it is simply a matter of "Research Misconduct."

I suppose it was a simple case of research misconduct when EPA reported (in their publication "When Good Money Goes Bad"): A university in New England agreed to pay $2.5 million in damages and penalties to settle civil allegations that the university submitted false claims on approximately 500 federal grants awarded to them. Let's be honest, intentional WFA is a product of the dark side of the human animal, and it's present in all environments. We should work together to minimize it, as well as reduce unintentional occurrences of WFA.

Support the National SBIR Fall 2011 Conference, Nov 6-9, 2011 * New Orleans, LA
Most of the National SBIR conferences are there to support you in your SBIR/STTR ventures, and this is also true of the New Orleans conference. However, this is also an excellent chance for us to show our support for the program.

There are some very good sessions planned, and the agenda is now posted on their web site at Early registration discounts are available through October 26, and special hotel per diem rates may still be available, but on a limited basis, so lock in your room quickly.

Complete information about the conference is available on their web site at
I hope to see you there.

Friday, October 14, 2011

Independent Contractors Legislative Ideas/AB361

What is an Independent Contractor?

This has been a big issue for small businesses, not only in California, but around the United States.During a White House Conference in 1995, this issue rose to the top and put forth to the President by small businesses around the country. Misclassification can mean thousands of dollars in fines and penalties by the IRS and EDD. IRS and EDD are stepping up their audits of small businesses looking for these misclassifications. The problem is IRS and EDD have somewhat different definitions. The IRS has a 20 point test, but does not tell businesses how many of the points in the test you must comply with.

Have you been audited by IRS or EDD? Do you know what some of the rules are to establish Independent Contractor status? Small Business California is considering introducing legislation next session to clarify what the Independent Contractor rules are in California. What are your thoughts on this? If you would like to see the IRS 20 point test, please see the link below:

Speaking of legislation Small Business California is looking at putting together its package of bills for next year. We have legislators that have come to us asking for ideas on small business legislation they can carry. Do you have any ideas?

On Sunday the Governor signed Assembly Bill 361 [Huffman]. Small Business California was a strong supporter of this bill and worked closely with Assemblyman Huffman’s office in getting this passed and signed by the Governor. The bill creates a new, fully voluntary class of corporation called a benefit corporation. This allows businesses to pursue a material positive impact on the environment and community in addition to maximizing profits. Assemblyman Huffman says “we have a law that send a strong message to entrepreneurs that California is open for this emerging form of business.

Under AB361 businesses can choose to incorporate as benefit corporations and enjoy the following:
1. Greater access to social impact and venture capital investments
2. Legal protection for directors and officers in the more broadly defined fiduciary roles of maximizing profits as well as ensuring social and environmental considerations
3. Marketing opportunities because of their social responsibility.

Scott Hauge
Small Business California
2311 Taraval Street
San Francisco, CA 94116
License #0A32315

Wednesday, October 12, 2011

Kaiser rolls back rates for some firms

Kaiser rolls back rates for some firms
Health care giant responds to newly empowered regulators
Date: Friday, October 7, 2011, 3:00am PDT
Business Journal- Sacramento

By: Kathy Robertson

In an unusual twist, “payback” is the buzzword this fall as millions of Californians prepare to make health plan choices for 2012. Kaiser Permanente is rolling back rates by 1.2 percent for small employers with contracts up for renewal between July and December 2011 — and is giving premium credits totaling $13.7 million to those who already started paying higher rates that took effect July 1. The first credits will show up on November bills.

The move is a response to pressure from state regulators with new authority to examine rate hikes more thoroughly than they have in the past. Blue Shield of California is passing out premium credits, too, but for a different reason. The health plan announced in June intentions to give back $167 million to employers, part of a move to reduce profits for 2010 to 2 percent. Most affected customers will see a credit on their October bill. How the changes will affect employee health benefit choices is unclear, but brokers like carrying a positive message for a change.

“It’s better than having (employers) swear at you,” said Jo-D Parisi, a longtime local health insurance broker. “Now, it’s ‘Guess what? Your rates are going down.”

While some employers renew coverage at other times of the year, many hold annual “open enrollment” in the fall, including the giant California Public Employees Retirement System . Open enrollment for CalPERS members is Oct. 10 through Nov. 4. The two plans say it’s a coincidence that the paybacks are playing out now, and they have no relation to open enrollment.But it’s not bad to look good at this time of year. Open enrollment is so competitive that plans crank up advertising to strut their stuff to the public. Done for different reasons, the net effect of these actions by Kaiser and Blue Shield is a little break for some small employers.

“It’s a credit on premium or you get to pay less money going forward,” said Vinny Catalano, area vice president at Arthur J. Gallagher & Co.

The bottom line for small businesses who want to provide health insurance is they are being priced out of the market,” said Scott Hauge, president of Small Business California and owner of an agency called Cal Insurance. Hauge’s company is getting a premium credit from Kaiser.

“What this is, is a credit on the increase,” Hauge said. “Only in insurance!”

Rollback at Kaiser

Almost 12,900 local Kaiser subscribers and an unknown number of their dependents will be affected by the rollback. Kaiser began notifying them of the change in mid-September. The company didn’t reach agreement with the California Department of Managed Health Care on the rates until August.Roughly 190,000 subscribers to health maintenance organizations and 240 point-of-service subscribers and an unknown number of dependents will be affected statewide.

The approximate value of the rate cut is $13.3 million for the HMO; it’s $40,800 for the other plan. HMO subscribers will get about $70 each and POS subscribers, $170 each, according to Kaiser spokesman John Nelson. The rollback saga began in April, when Kaiser filed a proposal to hike HMO rates for small employers by 10.7 percent, effective July 1. The POS rate hike was 12 percent, effective the same day.

A new law — Senate Bill 1163, approved last year and enacted Jan. 1 — requires health plans to file specific information with state regulators at least 60 days before they take effect.The problem for Kaiser is the law requires a rate evaluation by categories that include inpatient, outpatient, physician and other expenses. An integrated health system and health plan, Kaiser doesn’t track data like that.

DMHC officials asked for more information, which Kaiser supplied in June. Regulators balked at what appeared to be a 7.2 percent projected margin for Kaiser on the HMO business. Kaiser says the number falls to 0.6 percent when they subtract money spent on community benefits and the cost shift from un-reimbursed services provided under Medicare.

“That raised a lot of questions back and forth. It was clear we needed to do more to help the department understand our rate system and how and why we are different,” Nelson said.

That took time. Meanwhile, the proposed rates took effect July 1. In recognition that it’s going to take more time to resolve the issue, Kaiser agreed to a one-time rate cut of 1.2 percent, to an average of 9.5 percent for the HMO subscribers and an average of 10.8 percent for the POS subscribers. Employers who already began paying higher rates will get premium credits. The first will appear on November bills, but some won’t show up until December, Nelson said.

“What’s driving this is a new regulatory process and our commitment to work with the department,” Nelson said. “It’s a reduction in the rate increase — but there is still a rate increase.”

DMHC was able to get Kaiser to roll back rates using existing law, department spokeswoman Lynne Randolph said.

“DMHC requested Kaiser reduce its rates after reviewing the lack of data they provided to support its trends and Kaiser agreed,” she said in a prepared statement. “As a result, thousands of small businesses will benefit. In this economy, we must do all we can to help save money for these employers, many of whom are struggling to maintain health coverage for their workers.”

Profit return at Blue Shield

Blue Shield is passing out credits, not reducing rates, but the net effect is a little more money in employer and employee pockets. The plan’s decision is a voluntary move to make health care more affordable; it does not come in response to action by state regulators. The health plan is returning a total of $6.9 million to 2,049 businesses in the Sacramento region in a form of premium credits this month. The average amount is $3,300. Another $1.3 million will go to individual health plan members in the region, with an average premium credit of $90.

The payback is part of a pledge by Blue Shield to cap its profit margin at 2 percent of revenue and return any additional income to customers, health care providers and nonprofit organizations that provide health care to low-income Californians. The amount is based on premiums in May 2011; October bills reflect the credit, which is about 30 percent of one month’s premium. People who have dropped Blue Shield coverage lose out, however. The money is only paid out as a credit, company spokesman Steve Shivinsky said.

“We were very careful not to call it a rebate, but a credit, so people won’t think it’s cash,” he said. “Imagine logistically, if we sent checks.”

Owen Arnoff, whose company merged with Incompass Tax, Estate & Business Solutions in North Highlands and switched coverage to a new health plan, is miffed.

“I don’t understand why that would be, if I paid the annual premium like everybody else,” he said. “It’s like you have to stay with us in order to get whatever they call it. Are they really giving back? Not across the board.”

It’s not an inducement to renew, Shivinsky said. The credits were announced in June and the process took a while. Arnoff is not the only person who dropped the policy over the summer and won’t get a credit, though.

“It’s thousands and thousands of credits worth millions and millions of dollars,” Shivinsky said. “It’s not easy to give back money.”

Monday, October 10, 2011

Governor Brown Legislation/ Oct 20th event

On Friday, Governor Brown signed Small Business California sponsored legislation SB 826[Leno]. This would place minimal fines on claims administrators who fail to report or provide inaccurate information to the Workers Compensation Information System. This is important because workers compensation policy is developed by information provided the WCIS. Initially, this bill was opposed by the California Chamber, California Manufacturers, the Joint Underwriting Association and the Coalition of Workers Compensation. We were able to eliminate their opposition, except for the Joint Powers Association. But, we were able to get the support of claims administrators.

Yesterday was the last day for the Governor to sign or veto bills. We are waiting to find out what happened on Sunday but we do know that SB 459[Corbett] was signed by the Governor. This bill will increase fines on employers who willfully and knowingly misclassify independent contractors. Small Business California applauds going after the underground economy because this is a big issue for small business, but we would like to see the state clarify the definition of independent contractors. EDD and IRS do not have the same definition and we think this should be clarified.

As you all know, the IRS established a 20 points list which helps to define an independent contractor (link below), but they do not say how many points must be followed to establish independent contractor status.

Another supported bill we are watching closely is SB 469 [Vargus]. This bill will require super-stores over 90,000 square feet to do an economic study of the impacts to the community, including small businesses. We should hear the Governors position today.
October 20th is quickly approaching and if you haven’t done so already, please take the survey (link below).

Also, if you are in the Bay Area I hope you will attend the symposia at the Julia Morgan Ballroom in SF. (registration link below):

This event is being co-hosted by Travelers and Small Business California. We have added a section talking about big business working with small business and are pleased to have John Legnitto, from Recology, talking about what they are doing to help small businesses. Please take the survey and register now for this free event. We will also validate parking.

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

Friday, October 07, 2011

NLRB Posters/ AB29/Regulations

The National Labor Relations Board has postponed the requirement for a posting of workers’ rights to unionize. Originally scheduled for Nov 14th, it has been delayed to January 31,2012. As the January date comes closer Small Business California will send you the information on where to get the required poster.

Yesterday, the Governor signed AB 29 setting up the Governor’s Office of Business and Economic Development. Small Business California was a strong supporter of this legislation as we believe the world’s eighth largest economy must have an office focused on bringing business and jobs to California. The Office of Business and Economic Development will replace in statute the current Governor Office of Economic Development, which was created by Executive Order. It appears that Joel Ayala will continue to be the Director.

As you know, regulations are a problem for California Small Business. Legislators and the Governor have committed to deal with this problem. Are you seeing any change in attitudes from regulators? Do you see enforcement increasing, decreasing or staying about the same? Have you been audited by a state agency and what were the results of that audit. I am particularly interested in whether you have seen a crack down on classification of independent contractors.

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

Tuesday, October 04, 2011

The White House Business Council / Social Security

In mid-October, The White House will re-launch the jobs and economy section of the website. This section of the website will include an interactive map of the U.S. that will profile success stories and illustrate how they will directly benefit from the American Jobs Act. We are profiling two success stories from each state, and we need help in identifying candidates for the state of California.

They are always looking to highlight businesses that are expanding, investing in new ideas and investing in their communities by adding jobs and growing capacity. The best candidates are companies who are investing in their workers, hiring back those they had to lay off, using tax credits to offer health insurance and expanding opportunities through job training and education. The business must be under 500 employees and must be hiring on more people in the foreseeable future.

These stories may be highlighted on government websites (, in speeches by senior Administration officials and in reports to national leaders or the media.


1) Company Name:

2) CEO Name:

3) Contact information (Phone number and email address):

4) Company Location:

5) Company Category (Manufacturing, Retail, Clean Energy, Start-up/Entrepreneur, Small business, Exporting, Jobs of the future, Rural, Veteran-owned: [Please feel free to pick more than one category]

6) Number of employees:

7) Projected number of jobs created over the next year:

8) Quote from CEO on why he/she is investing in their company/betting on their continued growth and success:

9) Company Story: 200 to 250 word short story. These stories should be embedded in the success of the CEO. We want individuals across the country to relate to business owners like yourself, but also understand why you are being highlighted over other businesses:

10) 2 High Resolution photos (CEO picture and 1 “in-action” picture):

Please let me know if you are interested and meet the requirements. On Friday, I spoke to a group of people on small business attitudes on retirement benefits. I indicated the problems, but they asked me an interesting question about how small business felt about Social Security. Please let me know your thoughts.

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