Thursday, August 16, 2012

Workers Compensation Reform/SB323/LLCs/ Affordable Care Act/ Willie Brown

A lot has been going on in Sacramento the last few days. I have learned more about the workers compensation reform package being offered. The estimates vary on the savings but a mid range seem to be about $800 million. As I said in a previous email the saving will be used primarily to increase permanent disability benefits. Small Business California will be tracking this very closely and I would expect our board to be strongly supportive of this proposal.

If you want the highlights of the legislation please let me know.

We continue to work on SB 323 which would require that LLCs refile based on the new rules put forth in the legislation. We are pushing strongly for an exemption for existing LLCs. I have just found out that there are over 603000 of these and the cost to these LLCs would I estimate be over $1 billion.

We received word from the Secretary of State yesterday that it is their opinion existing LLC s would be exempted. The authors office agrees there should be an exemption and has drafted an amendment to do so. The problem is the language is somewhat ambiguous and we are trying to tighten it. The stakes are too high not to nail this down.

Small Business California is the lead organization fighting for this.

The Net Operating Loss Carry Back bill AB2408is still on the table. This will eliminate the ability of businesses to file for a Net Operation Carry Back. It now appears it will be coming up next week. Small Business California has sent a floor alert asking the legislators to oppose. We have two letters. One signed by 34 associations and one signed by 101 small businesses around the state. It will take a two thirds vote to pass and we expect to be successful in killing this awful bill.

An interesting and disturbing development with the Affordable Care Act. There is an interpretation that if an employer pays for the employees health insurance and not family members that the family would not be eligible for the subsidies. In my opinion this would be terrible and may force employers to drop coverage. Most small businesses if they provide coverage do not pay for family members.

Last I had the pleasure of going to lunch with Willie Brown yesterday. I brought my niece Kelly who is working on her masters in conflict management.

Mayor Brown charmed the sox off my niece and he agreed to read her thesis when it is completed.

You may not like Mayor Browns politics but he is brilliant and no one understand California politics better than him.

By the way he is an LLC and strongly agrees that he should not have to refile.

Scott Hauge


Small Business California

2311 Taraval Street

San Francisco, CA 94116


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