Small Business California Activities

Small Business California has been busy this week. Please see status of bills. See letter from Lori who is our lobbyist. We are representing you aggressively in Sacramento and in many of these committees were the only business to testify.A big thanks to Lori Kammerer for all her hard work on our behalf.

I hope if you have not done so already you will join Small Business California.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188


“Congratulations to Small Business California on the passage of SB Cal’s AB 2081 (Allen) – CA Accredited Investor Exemption – CA Jobs Act 2012!

Many Thanks to SB Cal President Scott Hauge, SB Cal Board Member Lee Petillon, Assemblymember Michael Allen and his Legislative Director David Miller for ensuring passage of AB 2081! We cleared several hurdles placed before us by the Assembly Banking and Finance Committee as they claimed that AB 2081 was unnecessary, due to the enactment of the Federal Jobs Act.

The Committee’s recommendation was to hold the bill in Committee, effectively killing it, until the federal regulations are crafted and implemented. SB Cal’s arguments that AB 2081 was the enabling statute necessary to provide better protections and higher standards than what could potentially come out in the federal regulations, along with the potential delays in implementation, proved to be the winning argument.

Scott and Lee delivered thorough and effective testimony when the bill was heard on Monday, 4/23 and we had secured 10 out of 12 votes in favor of AB 2081. However, during the last week of policy committee deadlines, the roll call closed before most of the members had a chance to voice their vote in support. Thanks to our author who is the Assistant Majority Leader of the Assembly and Asm Chuck Calderon, the Assembly Majority Leader, both were able to secure the necessary rule waivers from the Speaker in order to allow for another hearing off the Assembly Floor so that members could cast their vote on this bill. The final vote was 7-1, despite missing several Aye votes from Assembly Members who were presenting their own bills in several other hearings in order to meet the Thursday, April 26th legislative deadline for bills to pass from their policy committee on Thursday, 4/26.

 We have successfully cleared our first hurdle and from here, we move to the Assembly Appropriations Committee. We will have to work just as hard, if not as aggressive in this fiscal committee. SB Cal has presented some very strong arguments and we will have to address the Asm Banking and Committee’s questions on the necessity of this bill in the Assembly Appropriations Committee. By enacting AB 2081 now, rather than waiting for federal regulations to be adopted (months or years from now), small businesses will have the ability to access capital from Accredited Investors and use this funding to jump start their businesses. >From the Assembly Appropriations Committee, AB 2081 will move to the Assembly Floor.”

Below is the status of the actions taken on the bills that SB Cal is tracking and the updated Legislative Tracking Report. This was an incredibly productive week for SB Cal as all bills that are fiscal had to clear their policy committees by Thurs 4/26.

Mon 4/23

SB 969 (Vargas) Pet Groomers – Oppose Letter on Record Mon 4/23 1:00 p.m. Sen Business, Professions and ED Rm 3191 (Passed 5-3) to Approps

SB 1099 (Wright) Scheduled Regs – Co-Sponsor Support Letter on Record Mon 4/23 1:30 p.m. Sen Environmental Quality Rm 112 (Passed 7-0) Approps

AB 2081 (Allen) CAIE CA Jobs Act 2012 – Sponsor Support Letter on Record Mon 4/23 4:00 p.m. Asm Banking & Finance Rm 444 (Reconsidered)

AB 2523 (Hueso) Infrastructure & Economic Development Bank – Mon 4/23 4:00 p.m. Asm Banking & Finance Rm 444 (Passed 8-3) Approps


Tues 4/24

AB 1504 (Morrell) Regulations – Support Letter on Record Tues 4/24 9:00 a.m. Asm Bus Professions & Consumer Protection Rm 447 (Failed 3-5)

AB 2305 (Huffman) Franchisees – Support Letter on Record Tues 4/24 9:00 a.m. Asm Bus Professions & Consumer Protection Rm 447 (Failed 4-3)

Wed 4/25
SB 1234 (De Leon) Retirement Savings Plans – Oppose Letter on Record Wed 4/25 9:30 a.m. Sen Labor & Industrial Relations Rm 2040 (Pass 4-1) Approps

SB 1431 De Leon) Stop Loss Insurance – Concern – Wed 4/25 1:30 p.m. Sen Health Rm 4203 (Pass 5-3) Approps

Thurs 4/26

AB 2081 (Allen) CAIE CA Jobs Act 2012 – Sponsor Support Letter on Record Mon 4/23 4:00 p.m. Asm Banking & Finance Rm 126 (Passed 7-1) Approps


(Note: On Wed, SB Cal Supported SB 1196 (Hernandez) - Claims Data Disclosure in Sen Health Rm 4203 (Passed 9-0) Approps)

Cyber Attacks- 12 Tips

Please see 12 tips below to protect yourself from security breech. This is a serious matter for small businesses. The article was put together by the Federal Emergency Management Agency (FEMA) within the Department of Homeland Security.

If you want to reference the article: http://www.ready.gov/document/common-sense-guide-cyber-security-small-businesses

Specific Practices and the Dirty Dozen Examples of Actual Small Businesses Hurt by Cyber Attacks

1. Use Strong Passwords and Change Them Regularly
Case One: Ex-Employee at Building Contractor Uses Old E-Mail Access to Spy for Competitive Attack

2. Look Out for E-mail Attachments and Internet Download Modules
Case Two: My Doom Worm Hits Thousands of Small Businesses Hard

3. Install, Maintain, and Apply Anti-Virus Programs
Case Three: Consultant Fails to Keep Software Updated, Winds up Infecting and Losing His Customers

4. Install and Use a Firewall
Case Four: Hotels and Wireless Internet Connections Need Firewalls

5. Remove Unused Software and User Accounts; Cleanout Everything on Replaced Equipment
Case Five: Small Telecom Firm Loses Business When Security Breach Is Made Known to Prospective Clients

6. Establish Physical Access Controls for all Computer Equipment
Case Six: Accounting Firm Has Backups Threatened by Fire

7. Create Backups for Important Files, Folders, and Software
Case Seven: Small Manufacturer Loses Major Government Work Due to Software “Time Bomb”

8. Keep Current with Software Updates
Case Eight: Diners Have Supply Chain Interrupted; Inn Loses Reservation System when Software Not Updated

9. Implement Network Security with Access Control
Case Nine: Cyber Blackmail Goes Mainstream

10. Limit Access to Sensitive and Confidential Data
Case Ten: Credit Union Employee Uses Personal Information for Financial Gain

11. Establish and Follow a Security Financial Risk Management Plan; Maintain Adequate Insurance Coverage
Case Eleven: On-Line Retailer Misunderstands Insurance Coverage, Gets Wiped Out by Attack

12. Get Technical Expertise and Outside Help When You Need It
Case Twelve: Venture Capitol Firm, Law Firm Try to Get by Without Tech Assistance -- Regret Decision

SF Business Tax

Yesterday there was a meeting with about 50 business leaders in SF with the Mayor, Treasurer, City Attorney, Supervisor Chiu ,Ben Rosenfield and Ted Egan regarding changes in the SF business tax and fees. The City Attorney has indicated he wants to have initial language May1 for legislation he will draft to put on the ballot in November. Once he has drafted language it will go to the Board of Supervisors for their vote.


In the meeting there were many divergent views but it seems pretty clear at this point the payroll tax will be changed to s gross receipts tax. It will affect thousands of small businesses who are currently paying $25 and increase the business registration to $150. For those businesses with $100000 of gross receipts and over they will now have to pay a gross receipts tax.

Most small businesses that are currently paying the payroll tax will see their taxes reduced but there are notable exceptions.

The larger companies in the room expressed concerns however with the gross receipts rates. Especially hard hit are the headquartered companies like Mc Kasson , the GAP and the Shorenstein Company. Also hit hard are property owners with BOMA saying it would more than double many of their members cost. Property managers and financial institution will also see an increases.

The technology representatives and representatives of the retail ,manufacturing and restaurant industry supported the gross receipts tax but I think it is fair to say that everyone wants a tax that is fair to all. Steve Sarver of SF Soup Company eloquently pointed out that while the gross receipts tax will lower his cost he is also concerned that those businesses in the hardest hit areas may leave SF taking away potential customers from his business.

I am attaching the proposal and ask you focus on the gross receipts proposal.

I would like to hear from all of you but am particularly interested in those of you that will see your registration fee go up and those that will have to pay the new gross receipts tax. I would like to get your thoughts about increasing the registration fee to $250.

Scott Hauge


President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

SB1431 Small Business Self Insurance/ SB1099 Regulations

On Monday I testified along with the National Federation before committee on SB1431[ Wright]. Small Business California was a cosponsor of this bill along with other business organizations including the National Federation of Business who also sponsored the legislation. This is simple bill that requires the state to put on the website regulations that have been put into effect.

Currently there is no central place for a businesses to find out new California regulations. Last year over 400 regulations were put in place. Testifying against the bill was labor and the Sierra Club. The bill passed unanimously.

SB 1431 has been introduced by Assemblyman De Leon at the request of the Insurance Commissioner. This bill would raise the attachment point for small businesses in setting up self insurance. The attachment point is basically the amount a small business would have to pay before an insurance company steps in.

The current attachment point is $20000 and the bill would raise this to $95000.

Small Business California was quoted in the LA Times Saturday as saying we had no position. Most business organizations in the state oppose this. I have been questioned about our position

Basically we are supportive of any measure that reduces the cost of health insurance for their employees. This bill clearly would discourage many small businesses from self insuring because of the $95000 attachment point.

That said the Insurance Commissioner and the author argue that healthier small business groups currently can self insure and the insured businesses pay higher premiums because of adverse selection. Quite frankly I find this argument weak but what I see as significant is that self insured companies do not have to provide the same benefits as insured businesses. For example they would not have to provide maternity coverage and autism. It therefore is not a level playing field.
A very tough issue which I can understand both sides. What do you think?

SB 1234 Opposition

Small Business California rarely opposes legislation. We want to be known for what we support not what we oppose. But sometimes we just have to say no. SB1234 is one of those situations. Please see below  our letter to Senators Steinberg and DeLeon opposing SB1234.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA  94116
shauge@cal-insure.com
415-680-2188

 ==========================================================================

 April 19, 2012

The Honorable Kevin DeLeon
The Honorable Darrell Steinberg
California State Senate
State Capitol
Sacramento, CA  95814

RE:  SB 1234 (DeLeon-Steinberg), as Amended April 17, 2012 – California Retirement Savings Plan – OPPOSE

Dear Senators DeLeon and Steinberg:

On behalf of Small Business California and its network of more than 5,000 employers who represent 3.2 million small businesses in this state, we must regrettably OPPOSE Your SB 1234 that would establish the Golden State Retirement Savings Trust administered by the Golden State Retirement Savings Investment Board under the State Treasurer’s Office.

Senate Bill 1234 would also authorize the California Public Employees Retirement System (Cal PERS) to manage and administer funds in the program. SB 1234 would require businesses with 5 or more employees to set up and enroll in a pension plan of their own or through Cal PERS.  SB 1234 would also establish a $1000 fine per employee for employers who do not set up a plan. Historically, the business community and especially small employers oppose any legislative or regulatory effort by government to mandate a specific course of action where there is no proven need.

Small Businesses already have access to 401(k) and IRA plans, so we believe that the establishment of the Golden State Retirement Savings Trust is a duplicative, complex and bureaucratic plan that places an administrative and costly burden on small businesses. Historically also, small business has been against any legislative or regulatory attempt by government to compete with private industry. The proposed legislation does not present any evidence that private sector businesses who are in the business of providing benefit plans for the small business community needs government competition.   For these reasons, Small Business California must oppose SB 1234.

Small Business California would greatly appreciate the opportunity to discuss our opposition with you and your staff.  The bill, in its current form, is unacceptable to the small businesses of California.  If you have any questions, please contact me directly at 415.680.2109 or email at shauge@smallbusinesscalifornia.org.  Or, you may contact our legislative advocate in Sacramento, Lori Kammerer, Kammerer & Company, at 916.441.5674 or at LCK@midtown.net.

Sincerely,

Scott Hauge, President
Small Business California

Reorganization State Banks

There are 177 banks in California operating under state Charter issued by the Department of Financial Institutions[DFI]. Based on a reorganization plan submitted by the Little Hoover Commission the Governor has put forth a reorganization plan to create a new Department of Business Oversight through a merger of the Department of Corporations[DOC] and DFI.

According to a blog by Keith Bishop former head of DOC and the Department of Savings and Loan this reorganization could be a real problem for state chartered banks and small business.. Many of these state chartered banks are small community banks which are a significant source of lending to small businesses. Mr Bishop says “the U.S Small Business administration released data in February 2011 that show since 2009 there has been a decrease in small business loans by the largest banks. At the same time lending by small banks[those with less than $500 million in assets] remained stable.”

“Small business owners whose primary institution is a regional community bank were more successful obtaining a new loan than those whose primary institution is a larger bank. Fifty-one[51%] of the former received approval and obtained their new line compared to 33percent of the latter.”

Mr Bishop goes on to point out that the as a result of the merger regulatory effectiveness will be reduced causing many of the larger state chartered banks to convert to a national charter leaving the Department of Business Oversight with smaller and perhaps weaker banks. The result will very likely be the demise of the state bank charter”

The Governor has fast tracked this and unless the Assembly or Senate adopts by majority a resolution rejecting the Governor’s plan it goes into effect 61 days after introduction to the legislature.

To those involved in small business leading that are on this email what are your thoughts?

To small businesses who are doing business with small community banks does this concern you?

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

Workers Compensation/ Massachusetts Health Care

This week the Workers Compensation Insurance Rating Board approved a 9.1% increase effective July 1.It now goes to the Insurance Commissioner. In the past the Bureau has approved sizable increases and the Insurance Commissioner has rejected them either reducing the amount or giving no increase. Insurance companies can take the Insurance Commissioners recommendations but the Commissioners recommendations are not binding.

We know the results of the last couple of years have not been good for the insurance industry in workers compensation. The cost of medical care is increasing dramatically. Insurance companies for the most part have been taking modest increase but I think it is fair to say at some point there will be more significant increases. I would be surprised however if this happens in July.

What has been your experience on your policies. Have you seen rate increases?

I was reading an article in the New England Journal of Medicine this morning and found an interesting piece on the Massachusetts experiment with their heath law. While 98% of the people of the state are covered by health insurance the cost has increased whereby in 2012 health spending will consume 54% of the state budget. This is up from 49% in 2009. This clearly illustrates why it is so important that the Affordable Care Act, assuming the Supreme Court does not overturn it, must address the cost in the health system. If it does not the sustainability of every other public service will be threatened.

Scott Hauge
President
Small Business California

Cash mobs

I received this email from a reporter at the LA Times. What he is asking about is Cash Mobs where people join together and go into small businesses and spend money enmasse.

Have any of you participated in this either a s a purchaser or seller.
Do you have something like this in your area. Apparently there are about 200 of these.
Do you think this is a good idea and would help the local economy or is this a fad.

See below
I would like to get back to Ricardo tomorrow.
Scott

=============

Hi Scott,

Thanks for speaking with me today. So here’s a link to the Cash Mobs webpage, explains what they’re doing and what they hope to accomplish:

http://cashmobs.wordpress.com/about-us/

And here’s an NPR piece on the trend:

http://www.npr.org/2012/03/29/149555396/national-trend-mobs-local-businesses-with-cash

And here’s just one more story:

http://www.reuters.com/article/2012/03/27/us-usa-ohio-cashmobs-idUSBRE82Q0IX20120327

If you google Cash Mobs, you’ll come across others.

But what I was trying to get for my story was someone familiar with small businesses who might be able to tell me whether they think this trend has staying power or would drum up long-term results for a business targeted by a cash mob.

Let me know if you’d like to offer your two cents once you get familiar with the topic – or if you know anyone else, feel free to forward my contact information below.

Thanks!

-Ricardo

Governor Brown Delivers Plan to Streamline and Simplify State Government to Little Hoover Commissio

Please see reorganization by the Governor. This will have an impact on small business in the future. For those of you wondering what is happening with the Governor’s appointing a Small Business Advocate I am told by Toni that this will happen after the Director of Go-Biz is appointed. Do you have any suggested names for this position. As you will recall Marty Keller was past Advocate.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188

====================================================

Dear JEDE Friends,

On Friday, the Governor submitted the reorganization plan that was outlined in his January budget to the Little Hoover Commission.

I wanted to be sure you received this information as soon as possible, so I have only done a very quick review of the language. Among other things, the proposed reorganization does the following related to economic development issues:

1. Dismantles the Business, Transportation and Housing Agency (BTH).

2. Moves the Small Business Loan Guarantee Program from BTH to the Governor’s Office of Business and Economic Development (Go-BIZ).

3. Moves the California Travel and Tourism Commission to Go-Biz and places the Director of Go-Biz as chair of the Commission.

4. Moves the California Film Commission and the Film California First Program to Go-Biz.

5. Moves the Infrastructure and Economic Development Bank (I-Bank) to Go-Biz and places the Director of Go-Biz as Chairperson. The Secretary of Transportation replaces the Secretary of State and Consumer Services on the I-Bank board.

6. Promotes the Department of Transportation to an agency that includes:

a. Department of the California Highway Patrol;

b. The California Transportation Commission;

c. The Department of Motor Vehicles;

d. The Department of Transportation;

e. The High-Speed Rail Authority; and

f. The Board of Pilot Commissioners.

7. Creates the Business and Consumer Services Agency that includes:

a. The Department of Business Oversight;

b. The Department of Fair Employment and Housing;

c. The Department of Housing and Community Development;

d. The Department of Consumer Affairs;

e. The Department of Alcohol and Beverage Control;

f. The California Horse Racing Board; and

g. The Alfred E. Alquist Seismic Safety Commission.

8. Demotes the Department of Financial Institutions and the Department of Corporations to divisions within the Department of Business Oversight.

9. Demotes the Department of Real Estate and the Office of Real Estate Appraiser to bureaus within the Department of Consumer Affairs.

10. Shifts the Department of Resources, Recycling and Recovery to the California Environmental Protection Agency.

11. Demotes the California Technology Agency to the department.

12. Creates the Government Operations Agency includes:

a. Office of Administrative Law;

b. The Public Employees’ Retirement System;

c. The State Teachers’ Retirement System;

d. The State Personnel Board;

e. The California Victim Compensation and Government Claims Board;

f. The Department of General Services;

g. The Department of Technology;

h. The Franchise Tax Board; and

i. The Department of Human Resources.

13.Provides that the Secretary of the Government Operation Agency sits on the Public Utilities Commission in place of the Secretary of State and Consumer Services.

As you know, the Assembly Speaker has introduced AB 2012 to serve as a vehicle for transitioning economic development related reorganization issues that are not otherwise addressed elsewhere. With the reorganization plan being released, we will need to check back with the Speaker’s Office for comment on their next steps.

AB 2012 is set in JEDE on April 17, 2012. Letters in support of the Speaker’s bill will need to be submitted to the JEDE Committee by COB on Wednesday, April 11^th in order to be reflected on the bill analyses. The bill analyses will be hosted by Monday, April 16, 2012 at 9:00 a.m.

TONI E. SYMONDS

Chief Consultant

California State Legislature

Assembly Committee on Jobs, Economic Development and the Economy

(916)319-2090

Toni.symonds@asm.ca.gov