Tuesday, January 17, 2012

2011 Accomplishments/ SBA

Small Business California Current Issue:

2011 was a very successful year for Small Business California. Please see below for our accomplishments. I hope those of you that are not members will consider joining Small Business California. You can do so by going to www.smallbusinesscalifornia.org

Last week, I sent an email indicating that the President elevated the SBA to a Cabinet level position. The president is looking to merge the SBA with the Department of Commerce, Office of the US Trade Representative, the Export Import Bank, the Overseas Private Investment Corporation and the Trade and Development Agency. A concern we have with this is will small business get swallowed up in this merger? What will happen to the Office of Advocacy? We are watching this closely and will keep you posted on new developments. Looking forward to hearing your thoughts.

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


Education Programs and Projects

  • Small Business California completed its annual survey with over 1400 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. The survey was delivered to every legislator in the state and the governor
  • 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 sent letter with 14 associations to SBA Administrator asking SBA to assign Elizabeth Echols as point person for SBA compliance with 2007 energy bill. SBA has made the assignment.
  • Scott Hauge represented Small Business California on the Board of Pacific Group on Health.
  • Small Business California provides its membership with education and the latest information on all issues affecting small businesses at the state and federal levels through its website regular email updates, presentations to business groups, local Chambers of Commerce and industry trade associations.
  • Small Business California represents its membership by actively participating as small business advisors to Assembly Jobs, Economic Development and the Economy Small Business Roundtable, Assembly Insurance Committee, Senate Labor and Industrial Relations, Governor’s Office of Economic Development (GO ED), Department of General Services Small Business Advisory Council, Commission on Health & Safety & Workers’ Compensation Employers’ Advisory Group, Business ROAR (Regulatory Oversight And Review).
  • Met with Assembly of Jobs Committees staff in prioritizing key issues for small businesses.
  • Met with Governors Economic Policy Advisor, Mike Rossi, on issues effecting small businesses and will be working with him to support Small Business California (next development meeting will be Jan 19, 2012).
  • Met with Cal Osha chief, Ellen Weidess and her staff to clarify employers responsibilities of providing an emergency preparedness program.

Legislative Accomplishments

  • Worked with Senator Price to allow general solicitation for an offering up to $1,000,000 a year provided that only accredited investors be permitted to invest, that each investor’s investment be limited to 10% of his liquid new worth (excluding equity in one’s principal residence), that the issuer obtain a suitability questionnaire from each prospective investor indicating his time horizon, how risk averse he is, the types of investments he prefers and other criteria indicating whether his investment is suitable for each investor.

SB Cal provided informational materials that assisted with legislative matter which were signed into law by Governor Brown and will become effective on January 1, 2012:

  • AB 29 (J. Perez) – Creates the Governor’s Office of Economic Development
  • AB 155 (C. Calderon) – Known as the E-Fairness bill, AB 155 will coordinate the enactment of federal law giving states the authority to require out-of-state internet retailers to collect state sales taxes and enable California small businesses to compete on a level playing field with on-line retailers.
  • AB 335 (Solorio) – Enables the Department of Industrial Relations Division of Workers’ Compensation to produce an informational pamphlet and create a web accessible site that explains the workers’ compensation system and notices of benefits to employees.
  • AB 361 (Huffman) – Establishes the formation of a new form of corporate entity known as benefit corporations and eases the requirements for a small business corporation to amend its articles of incorporation to take advantage of this option.
  • AB 1426 (Solorio) – Reduces costs and increases transparency by eliminating an unnecessary layer of state government in removing the duplicative function of the court administrator position and distributing the duties to the Workers’ Compensation Appeals Board and the Division of Workers’ Compensation Administrative Director.
  • SB 32 (Leno) – Would enable local restaurants and bars to infuse alcoholic beverages with herbs and flavorings by revising an outdated statute that prevents them from doing so.
  • SB 826 (Leno) – Currently, the state is experiencing a shortage of workers’ compensation data that is used among other things in accurately assessing employer’s workers’ compensation premiums. This data is already required by law to be reported by the insurance carrier’s claims administrators; however, there was no penalty for non-compliance. SB 826 establishes a minor penalty on the claims administrator for the failure to report this data. The bill was fashioned in a way that will not pass on any additional costs to the employer, but to ensure a more accurate calculation of premium.

The following bills were strongly supported by Small Business California and may be taken up again in January (two-year bills), unless vetoed by the Governor as noted.

  • AB 150 (Perea) – Mandates the goal of the state to do business with small businesses
  • AB 541 (Morrell) – Proposes a study and assessment on the impacts of regulations on California small businesses
  • AB 894 (V.M. Perez) – Assembly Jobs, the Economy and Economic Development’s 2-Year Legislative Jobs Package
  • AB 1379 (Bradford) – Pertaining to Emerging Domestic Markets, this bill would ensure that large pension funds invest in small businesses. (Vetoed)
  • SB 67 (Price) – Same as AB 150, this bill will mandate the goal of the state to do business with small businesses
  • SB 469 (Vargas) – The Protect Small and Neighborhood Business Act would have required that an economic impact analysis be completed before a superstore could be approved with the focus on the impact to local small businesses. (Vetoed)
  • SB 823 (Corbett) – This bill will establish a “Made in California” label that will assist in the marketing of California-made products. This bill will also establish an advisory group of small businesses representatives who will advise the Governor’s Office of Economic Development (GO ED) on the requirements and the criteria for carrying the Made in California label. (Vetoed)

SB Cal provided information and education in support of the following bills which may be taken up again in January (two-year bills), unless vetoed by the Governor as noted.

  • SB 823 (Corbett) – Sponsored- This bill will establish a “Made in California” label that will assist in the marketing of California-made products. This bill will also establish an advisory group of small businesses representatives who will advise the Governor’s Office of Economic Development (GO ED) on the requirements and the criteria for carrying the Made in California label. (Vetoed)
  • AB 150 (Perea) – Mandates the goal of the state to do business with small businesses
  • AB 541 (Morrell) – Proposes a study and assessment on the impacts of regulations on California small businesses
  • SB 469 (Vargas) – The Protect Small and Neighborhood Business Act would have required that an economic impact analysis be completed before a superstore could be approved with the focus on the impact to local small businesses. (Vetoed)

Federal Legislation:

  • HR 4 (Lungren) – Eliminates the 1099 Reporting that was included in the President’s Health Care Bill
  • HR 1603 (Murphy) – Also known as the SMART Act (The Strengthening Medicare and Repaying Taxpayers), this bill would streamline the efficiency of the Medicare Secondary Payer System by establishing a system that would settle claims quicker and with less confusion.

Energy Project- Accomplishments

  • Developed publication, "California Chambers Leading the Clean Economy" published in print and PDF editions and distributed to local chamber throughout the state.
  • Researched clean vehicle developments and opportunities with an eye towards a similar publication aimed at small businesses saving fuel costs on sales, service and delivery using alternative fuels and transportation.
  • Filed Comments / Motion to the CPUC regarding expansion of On Bill Financing support, enhanced measurement of energy savings and "deep retrofits" in California.
  • Completed Research Grant funded by the SF based Bay Area Air Quality Management District aimed at accelerating business investments in clean fuel vehicles for delivery, sales and service. Final report requested assistance in providing for EV rentals for businesses that would carry company logos during lease periods, support for developing business based solar carport charging installations and for recognition support of the value of “business miles” where lower fuels costs can add to supporting clean vehicle lease or loan payments.
  • Met with the Edison Electric Institute in Washington D.C. to encourage development of guides for the safety, reliability and off peak charging aspects of battery vehicles to help businesses to faster invest in clean fuel vehicles that are not affected by spiking gas prices.

Friday, January 13, 2012

News Clips: Obama to Elevate SBA Chief

Small Businesses have been trying to elevate the SBA to cabinet level since at least 1985. I have spent a lot of time over the years on this issue. I certainly don’t know all the details on this and it is certainly not a done deal, but I love the discussion. Please see the article posted below. I would appreciate your comments.

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


WALL STREET JOURNAL – Obama to Elevate SBA Chief
JANUARY 13, 2012, 9:13 A.M. ET

President Barack Obama is expected to announce Friday that he will exercise his executive authority to elevate the head of the U.S. Small Business Administration to a cabinet-level position, according to two senior administration officials.

The announcement will come along with a broader proposal from Mr. Obama to combine the Small Business Administration with five other government offices that would become a single, streamlined agency. It was unclear if the SBA would retain cabinet-level status if the consolidation went through.

One reason for the move might be to counter any perception that small business was being slighted in the broader reorganization. The White House didn't provide details concerning whether the SBA's current administrator, Karen Mills, would be granted a higher authority or additional responsibilities as a result of her elevated position.

The senior administration officials said the decision speaks to her accomplishments at the agency, such as reducing lender paperwork for SBA-backed loans, enforcing stricter oversight of government contracting and rolling out several laws that facilitated more lending to small businesses.

The move also follows accusations by some Republicans that Mr. Obama hasn't done enough to help small businesses. The National Federation of Independent Business, the small-business lobbying group in Washington, is fighting Mr. Obama's health-care law in a lawsuit that is now before the Supreme Court.

Notable small-business advocates, including Senator Olympia Snowe (R., Maine), the ranking member of the Senate Small Business and Entrepreneurship Committee, have urged Mr. Obama to restore the SBA to cabinet level, as it was under the Clinton administration.
Previous administrations have elevate people to cabinet-level status, which is mostly a symbolic way of saying they and their subject areas are considered important.

"On every small-business issue from day one, Karen has had the president's ear," said Gene Sperling, director of the White House's National Economic Council. "She is a tenacious, tireless and effective advocate for small business."

Because banks tend to be reluctant to extend credit to risky small businesses, the SBA operates a program that makes such loans more enticing to lenders by guaranteeing a portion of each loan against default. A record $30.5 billion in these loans were extended to more than 60,000 businesses in the government's 2011 fiscal year, ending September 30.

Wednesday, January 11, 2012

Payroll Tax/ Reaching Small Business

Most of you I am sure have heard that the Mayor and Board of Supervisors will be looking for a way to change the payroll tax. Suggestions have been going to a gross receipts tax or some kind of hybrid with a payroll tax and gross receipts tax.

It seems quite clear that the City cannot lose revenues by this change and some are saying a change should bring in additional revenues.

What are your thoughts keeping in mind that less than 10% of businesses in SF pay the payroll tax? Do you think the tax should be made broader bringing in more businesses. Should there be any exemptions?

Tomorrow I am part of a panel that will be discussing the Exchange that is being developed in California. As you know the Exchange is being set up to respond to the Health legislation passed in Washington. It will be made available to small businesses in 2014.

The Exchange is basically a purchasing pool for small businesses with less than 50 employees and individuals. The tax credits available to small businesses will only be made available to small businesses and individuals that purchase coverage through the Exchange.

My question to you is what is the best way to reach small businesses with information about the Exchange?

List of WC bills that the Gov Signed/Vetoed

Please see report below by our Government Relations person, Lori Kammerer on workers compensation bills signed and vetoed by the Governor.

There has been a lot of media attention to the article in the LA Times about Bank of America terminating lines of credit. Some of you indicated you had this happen to you. We worked closely with the reporter. Yesterday, I was interviewed by CBS radio in LA and NPR and I will do a FOX interview today.

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


Legislative Activity

There is much excitement among the employer and provider stakeholders in the workers’ compensation community as Governor Brown vetoed several onerous bills that would have increased employers’ costs, while signing legislation that will provide technical improvements to the system.

As reported back in January of this year, Kammerer & Company forecasted that this would not be a major reform year. We also took a politically educated guess to note publically that the new administration would not increase taxes or impose additional regulations on employers this year. This was obvious as the Governor’s campaign platform clearly outlined his priorities for his first year in office – to balance the state’s $46 billion dollar revenue shortfall. Furthermore, through our discussions with the Governor’s transition team (now members of his Cabinet), this Governor would not be interested in among other things, offering up benefit increases, changing discrimination laws related to apportionment, or extending the 2-year cap on temporary disability.

Instead, this Governor stuck to his plan and focused almost entirely on resolving, at least for the most part, the state’s over-spend and under-reserve mode that has plagued California over the course of the past decade.

The following are key bills signed and vetoed by the Governor, along with the Legislative Tracking Report attached to this update.

• AB 335 by Assemblymember Jose Solorio (D-Santa Ana) – Workers' compensation: notices.
· Requires AD with CHSWC to revise some DWC forms. Removes reference to Vocational Rehabilitation & substitutes Supplemental Job Displacement Voucher references. Eliminates need to send Supplemental Job Displacement Voucher NOPE by certified mail at end of TD.

• AB 378 by Assemblymember Jose Solorio (D-Santa Ana) – Workers' compensation: pharmacy products.
· Provides imposition caps on Compound drugs @83% of generic for lowest price generic equivalent until AD adopts fee schedule.

• AB 397 by Assemblymember William W. Monning (D-Santa Cruz) – Workers' compensation insurance: contractors.
· Requires contractors to prove they are either exempt from coverage or have workers’ compensation coverage when renewing contractors’ licenses.

• AB 585 by Assemblymember Paul Fong (D-Mountain View) – Workers' compensation: cancer presumption.
· Extends existing cancer presumption in Labor Code § 3212.1 to Firefighters working at government installation.

• AB 1168 by Assemblymember Richard Pan (D-Sacramento) – Workers' compensation: vocational expert fee schedule.
· Requires the AD to adopt a fee schedule for Vocational Rehabilitation expert testimony by January 1, 2013

• AB 1426 by Assemblymember Jose Solorio (D-Santa Ana) – Workers' compensation: court administrator.
· Eliminates position of Court Administrator. This position is currently empty and the statutory provisions conflicted with the authority of the Administrative Director. The functions of the Court Administrator will be handled primarily through the AD’s office.

• SB 457 by Senator Ronald Calderon (D-Montebello) –Workers' compensation: liens.
· Provides where an employee obtains medical treatment pursuant a medical plan provided by a self-insured employee welfare benefit plan reimbursement shall be determined notwithstanding the official medical fee schedule adopted pursuant to Section 5307.1. Such liens shall be paid pursuant to the terms of the self-insured benefit plan not according to fee schedule.

• SB 684 by Senator Ellen Corbett (D-San Leandro) – Workers' compensation insurance: dispute resolution: arbitration clauses.
· Would allow California employers to arbitrate disputes under insurance policies that arise in California using California law even where the policy may have been written in a different state and provides for arbitration of disputes using another states law.

• SB 826 by Senator Mark Leno (D-San Francisco) –Workers' compensation: data reporting requirement: administrative penalties.
· Provides for imposition of administrative penalties where a claims administrator violates reporting requirements regulations.

Bills vetoed by Governor Brown:

• AB 211 by Assemblymember Gil Cedillo (D-Los Angeles) – Workers' compensation: permanent disability benefits. A veto message can be found here.
· This bill would have modified the provisions for providing the Supplemental Job Displacement Voucher from after the PD award till the end of TD. It would also have change the voucher amount to a flat $6000 rather than a structured amount based on the level of PD

• AB 584 by Assemblymember Paul Fong (D-Mountain View) – Workers' compensation: utilization review. A veto message can be found here.
· This bill would have required physicians performing UR services be licensed to practice medicine in CA. The bill would have created different standards for WC UR than the same services in Group health. The Governor was aware of the effort to impose this unique requirement in WC and did not consider a need to have different approaches in WC than from the rest of the health care industry.

• AB 947 by Assemblymember Jose Solorio (D-Santa Ana) – Workers' compensation: temporary disability payments. A veto message can be found here.
· This bill would have extended the time for payment of TTD beyond the 104 limit in Labor Code § 4656 where the employee underwent surgery and the period of TD extended beyond the 104 weeks. This bill was amended near the end of the session to limit it to post-surgical cases in an effort to limit the potential expense attached to the changes to Labor Code § 4656. As originally drafted it would have effectively eliminated the 104 limitation on TTD. The recent amendments provided significant limitation on the extension of TTD but the Governor appeared concerned the amendments such as this should be part of an overall effort to modify the system and rather than piecemeal changes.
• AB 1155 by Assemblymember Luis Alejo (D-Salinas) – Workers' compensation. A veto message can be found here.
· This bill would have interposed additional language in Labor Code § 4663 ostensibly to prevent discrimination on the basis of “immutable characteristics” such as race, gender, sexual orientation etc. The Governor’s message indicated the law already recognized similar protections and this provision would have potentially generated additional unnecessary litigation increasing employer costs with little corresponding additional protection to employees.

Lori C. Kammerer
Kammerer & Company
1215 K Street, 17th Floor
Sacramento, CA 95814
Office: (916) 441-5674
Cell: (916) 716-5674

AB 469/Wage Theft Protection Act

Tom Martin, a Board Member of Small Business California provided information about a new law in a recent newsletter he wrote for the Small Manufacturers Association of California. Employers effective January 1, 2012 are going to be required to provide this information to all new employees that are nonexempt. Please see below his piece along with the link to DIR and the template for you to provide the new employees. Hope you are enjoying the Holidays and Small Business California looks forward to a successful year for California small businesses in 2012.

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


AB 469 requires employers to provide nonexempt employees, at the time of hire, a notice that specifies:

-The rate of pay and the basis, whether hourly, salary, piece commission or otherwise, including any overtime rate
-Allowances, if any, claimed as part of the minimum wage, including meal and lodging allowances
-The regular pay day designated by the employer as required under the Labor Code
-The name of the employer, including any “doing business as” names in the letter not on the letterhead.
-The physical address of the employer’s main office or principal place of business and any mailing address, if different
-The telephone number of the employer
-The name, address and telephone number of the employer’s workers’ compensation carrier

The law also requires notice of any other information the Labor Commissioner deems material and necessary. The Labor Commissioner is to provide a template. If there is any change to the information in the notice, the employer must notify each employee, in writing, within seven calendar days of the changes, unless such changes are elsewhere reflected on a timely wage statement or other writing required by law. The new law only applies to nonexempt employees, which again highlights the need for properly classifying employees at the time of hire. This legislation also increases penalties for wage violations and makes further changes regarding collection of such penalties, including an increase in the statute of limitations.

The law specifies new hires, but it also says that any changes must be reported in writing to all employees within seven days. You can delay providing the information to current employees but eventually the employer will have to notify them as well, as changes are made. There is a lot of potential litigation in this.
Link below: Governor signs Wage Theft Protection Act of 2011


Cal OSHA IIPP/Emergency Action Plan

I hope you all are having a wonderful Holiday Season.

Last week, Lori Kammerer and I talked to Cal OSHA Director, Ellen Widess and three members of her staff to discuss how Small Business California can work more closely with her agency. We were impressed with her desire to reach out to small business and find ways that they can assist small business in navigating the regulations of the agency. I came away with the belief she wants to be helpful and a resource to us.

The first topic we discussed is the crazy ruling that businesses are not required to have an emergency action plan [disaster plan] and a fire prevention plan but if they do it must conform with Cal OSHA guidelines or the business will be subject to fines. Ms. Widess assured us that auditors are not fining businesses for this unless they have serious health hazards.
I agreed to obtain a few disaster plans from small businesses around the state so that her people could review them. I would appreciate your sending me a copy of your plan that I can forward to her. Please be advised I will not send the name of your company or your name.

The next step will be the establishment of a task force of small business people and Cal OSHA people to develop a simple prototype for small businesses of an emergency action plan and fire prevention plan. I think you all will agree that this makes sense for any business but it must be simple and easy to explain to our employees. If you are interested in participating on this task force please let me know. I will send out the final draft when completed.

The next issue we discussed was a new etool to assist small businesses in developing an Injury and Illness Prevention plan. I am always amazed that small businesses are not aware that this is required of all employers. I would guess over half of the people receiving this email either do not know this or have not developed a plan. This is the number one citation that Cal OSHA imposes when they do an audit and can mean a fine of as much as $5000.
Please take a look at the etool at http://www.dir.ca.gov/dosh/etools/09-031/index.htm
Ms. Widess would be interested to know your thoughts on this link. Please advise.

Lastly, I would like to know of problems you have had with Cal OSHA or regulations that are put on your business that you feel do not make sense or could be streamlined. Small Business California looks forward to working with Ms. Weidess and Cal OSHA and all of you now have a resource to express your thoughts about the agency.

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

B Corporations

Small Business California was a strong supporter of the legislation creating Benefit (B) Corporations. Please see outline below about them. For those of you in the SF area, we are thinking of doing a seminar to provide small businesses the possible benefits of becoming a B Corporation. Is there any interest in doing so and would you attend?


About B Corporations

Certified B Corporations are a new type of company which use the power of business to solve social and environmental problems. These companies have passed a comprehensive assessment measuring their impact on society, the environment and their employees. B Corporations embed stakeholder considerations into the DNA of their company, adjusting their governing documents to consider people, planet, and profit.

1. Community Building: B Corporations

B Impact Assessment: (http://b-lab.force.com/GIIRS/BCorpRegistration) It’s free and open to all, use it as a benchmarking tool and track your company’s social and environmental impact, or as a framework for building the sustainable business you want to run. Our road map for new businesses will help guide new companies looking to certify as B Corporations. (http://www.bcorporation.net/newbusiness)

B Resources:

Making good easy is hard work. Our open source B Resource Guides (http://www.bcorporation.net/services/resources) were created through the Colombia

Business School’s Research Initiative and Social Entrepreneurship RISE program (http://www.riseproject.org/)Use the B Resources Guide to access advice on anything ranging from writing an Employee Handbook to a Local Purchasing Policy

B Corporation Directory: With over 500 Certified B Corporations, the B Corporation Directory is a powerful source for collaborative advantage and mindful sourcing. Use the directory to find good companies with quality products & services across industry, geography, impact area, and more. (http://www.bcorporation.net/community/search)

2. Driving Capital to Impact: GIIRS

GIIRS simplifies driving capital to impact investment opportunities providing a comprehensive standard that measures social and environmental performance and enables comparability between investment opportunities. GIIRS rated companies are given exposure, can highlight what they are seeking (GIIRS Directory), and provided with access to various socially minded exchange platforms. (http://giirs.org/)
By certifying as a B Corporation, companies receive a free GIIRS rating.

3. A New Corporate Form: The Benefit Corporation

Bill AB361, the Benefit Corporation bill passed in California October 10, 2011, becoming the 7th US state to recognize Benefit Corporations as a legitimate corporate form. The bill takes effect January 1st, 2012.

Benefit Corporations are similar to existing California corporations, with the exception that they: 1) have a corporate purpose to create a material positive impact on society and the environment; 2) are accountable to redefine fiduciary duty to require consideration of the interests of employees, community and the environment when making decision; and 3) are transparent by publicly reporting annually on its overall social and environmental performance using a comprehensive, credible, independent, and transparent third party standard.

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