SB 863 letter

Please see my response to Chronicle Editorial this morning opposing passage of workers compensation reform bill.

The attachment is the support Small Business California has gathered from small business associations and small businesses around the state. We were able to get 24 associations and 124 small businesses sign on to the letter. (letter is below)



Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2109


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


From: Scott Hauge

Sent: Friday, August 31, 2012 6:24 AM

To: 'Diaz, John'

Subject: FW: SB 863 letter



John, Please see attached small business associations and small business owners who are supporting SB843. We respectfully disagree with the Chronicle Editorial saying that we should wait to pass a workers compensation reform bill.

Small businesses can’t wait. We are hearing rates are going up over 12% if this does not pass. Small businesses are struggling right now given the state of the economy and these additional cost could potentially put small businesses out of business or force them to cut employees.

The other part of the equation is that our employees can’t wait for an increase in their benefits. In 2004 they saw their benefits cut drastically and SB863 will help solve this problem.

We know this legislation is not perfect but we believe the old adage of “don’t let the perfect be the enemy of the good “applies here.



Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2109



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

TO: Members of the California State Senate and Assembly


FROM: California Small Businesses in Support of Workers’ Comp Bill



DATE: August 29, 2012



RE: SB 863 (De Leon) - Workers’ Compensation Fair & Balanced Reform – SUPPORT



We, the undersign California Small Businesses write to STRONGLY SUPPORT SB 863 (de Leon), that will ensure a fair and balanced approach to correcting our costly and inefficient workers’ compensation system.

We support SB 863 that will correct the inefficiencies of our state’s workers’ compensation system. This legislation accurately identifies key problem areas as identified in the numerous reports produced by the California Commission on Health and Safety and Workers’ Compensation. SB 863 will provide the corrective measures to reduce costs to small businesses, and based on the savings achieved, will provide a reasonable benefit increase to injured workers.

Enactment of Senate Bill 863 is necessary now before projected rate increases hit an all- time high. California employers paid $16.2 billion for workers' compensation in 2011, and the cost continues to rise. The Workers' Compensation Insurance Rating Bureau (WCIRB) recently approved an 18% rate increase on California businesses, while industry analysts also predict even greater hikes next year. SB 863 will prevent these increases on small businesses, while also fixing the systemic problems identified by the stakeholders.

Senate Bill 863 will redirect benefits to increase payments to disabled workers, while taking the corrective steps to reduce unnecessary disputes and litigation. These steps include better oversight of the Medical Provider Networks, the establishment of fee schedules that would keep fees paid at a consistent level, and significantly reduce lien claims by providers who treat injured workers and who are not in the employers’ network.



Projected savings of up to $1.3 billion can be saved by reducing expenses for liens, out-of-network treatment disputes and other unnecessary expenses that keep small businesses’ premiums on the rise. Injured workers would receive approximately $700 million in additional compensation benefits and California employers would save up to $800 million.

California’s Small Businesses who strongly support SB 863 (Lieu) urge the Legislature to approve this bill before the 20111-12 session adjourns. Small Businesses simply cannot afford another 18% increase in their workers’ compensation premiums next year. We are confident that the provisions included in SB 863 will significantly reduce the wasteful spending of our premium dollars so that injured workers can receive the reasonable benefit increases that they deserve.

If you have any questions, please contact me directly at 415.680.2109 or shauge@smallbusinesscalifornia.org. Or, you may contact our Governmental Advocate in Sacramento, Lori Kammerer, Kammerer & Company, at 916.441.5674 or at LCK@midtown.net.

cc: David Lanier, Legislative Policy Unit, Office of the Governor

The Hon. Marty Morgenstern, Secretary, Labor and Workforce Development Agency

Ms. Christine Baker, Director, Department of Industrial Relations

Kevin De Leon, Senator,(D-Los Angeles)

The Honorable John A. Perez, Speaker of the CA State Assembly

Mary Kaems, Special Asst, Speaker of the Assembly on Small Business and Jobs Development



CALIFORNIA ASSOCIATIONS IN STRONG SUPPORT OF SB 863:



1. Brand Source Pacific Rim Region

2. California Association of Competitive Telecommunications Companies

3. California Employers Association

4. California Fence Contractors’ Association

5. California Chapter of the American Fence Association

6. California Independent Oil Marketers Association

7. California Metals Association

8. Coalition of Small and Disable Veteran Businesses

9. Engineering Contractors' Association

10. Flasher Barricade Association

11. Independent Maintenance Contractors Association

12. Licensed Contractors of California

13. Oakland Metropolitan Chamber of Commerce

14. Northern California Independent Booksellers Association (NCIBA)

15. Marin Builders ‘Association

16. Monterey County Business Council

17. Pacific Automotive Recyclers and Machining Association

18. Plumbing Heating and Cooling Contractors of California

19. San Francisco Builders Exchange

20. San Francisco Council of District Merchants Associations

21. San Francisco Chamber of Commerce

22. San Francisco Small Business Network

23. Small Business California

24. The Coalition for Quality Affordable Health Care



CALIFORNIA SMALL BUSINESSES IN STRONG SUPPORT OF SB 863:

1. Scott Hauge, President, CAL Insurance & Associates Inc, - San Francisco

2. Scott Hauge, Vice President, Clayscott Insurance Agency- San Francisco

3. Edward Kaplan, President, Kaplan Architects- San Francisco

4. Kay Reynolds, Partner, Tools for Business Success – Pine Grove

5. Sarosh Kumana, Owner, Pacific Investments – San Francisco

6. Barry Bochner, CEO, Biolog, Inc. – Hayward

7. Cathy Murphy, CEO, Home Instead Senior Care

8. Ron Purcell, Founder, RelQual Associates – Oxnard

9. Thea Selby, Principal, Next Steps Marketing – San Francisco

10. James Roten, CEO, Raven Office Centers – San Francisco

11. Syndi Seid, Founder, Advanced Etiquette- San Anselmo

12. Patty Schmucker, President, DoshaCare- Torrance

13. Elizabeth Fazzio, Vice President, Blue Heron Catering – Oakland

14. Sharon Ascencio, Principal, Ascencio Accounting & Business Services- Oakland

15. Elizabeth Parker, Tulsa Rib Company Restaurant and Catering- Orange

16. John Swan, Vice President, CompPartners – Irvine

17. Norman Garcia, President, Name-Finders Lists, Inc.- Oakland

18. Steve Paoli, President, Mission Bay Food Company – San Francisco

19. Edwin Caba, Owner, Creo La Bistro- San Carlos

20. Ruthie Norton, Sen. Vice President, CCI – San Francisco

21. James Stewart, President,Bayside Heating & Air Conditioning – Redwood City

22. Steve Diddams, President, Diddams Party & Toy- Mountain View

23. Richard Boehl, President, QTE North America Inc.- Rancho Cucamonga

24. Peter Abowd, Manager, Clock Four – San Rafael

25. Vicky Martinez, Owner, Bay Area Re-Roofing– Belmont

26. Bernard Poggetti, Owner, Capitol Electric – San Francisco

27. Thomas Wong, Marathon Packing – San Leandro

28. Mark Klaiman, Owner, Pet Camp- San Francisco

29. Stephen Cornell, Owner, Brownie’s Hardware – San Francisco

30. Meskerem Tadesse, Founder, The Optimize Group – Marina Del Rey

31. Timothy Moran, CFO, Conradshades- San Francisco

32. Tom Cebollero, Owner, Metric Motors – San Francisco

33. Alexandra McIntyre, CEO, RPM/Courier – Alameda

34. Michael Wan, Owner, Ebj Wholesale- Oakland

35. Jim Franzi, Owner, Elmack Cabinetry – Mill Valley

36. Linda Hannawalt, The Shop Around the Corner

37. Mitchell Bearg, Owner, Petline- San Carlos

38. Keola Caindec, North 37 Partners – Larkspur

39. Liz Palacios, Owner, Liz Palacios Designs – San Francisco

40. Elaine Kirk, Banker, Marks & Kirk – Oakland

41. Angelo Pucci, President, G.Pucci & Sons – Brisbane

42. Arnie Lerner, Principal, Lerner & Associates Architects – San Francisco

43. Eric Steckel, Vice President, Bars & Tone – San Francisco

44. Keith Ensminger, Principal, Kramer Translation- Merced

45. Stephen L. Dobrow, President, Primark Benefits- Burlingame

46. Norman P. Ishimoto, President, KI Associates- San Francisco

47. Henry Karnilowicz, Owner, Occidental Express- San Francisco

48. Dan Cerf, Owner, SF Party – San Francisco

49. Elliot Wagner, Manager, Dimitra’s SkinCare & MediSpa – San Francisco

50. Chris Goodwin, Owner, Plumbworks – San Francisco

51. Joanne Gomez, Owner, West Bay Plastics Inc- San Francisco

52. Jim Ross, President Jim Ross Consulting- San Francisco

53. Erin Casey, Manager, KC Glass – San Francisco

54. Renny Marin, President, California Bingo Service

55. Lee R. Petillon, President, Petillon Hiraide & Loomis LLP- Torrance

56. Greg Spry, President, Spryscapes Construction – San Francisco

57. Steven L. Isler, General Counsel & Tax Director, TaxCenters, Inc. – San Francisco

58. Kevyn Higgs, President, The Slanted Door Group – San Francisco

59. Luci Li-Akana, President, Akana Designs – Richmond

60. Spender Chan, Manager, Value Fire Protection – San Francisco

61. John O’Neill, Vice President, Cohn-Reid-O’Neill Insurance Services – San Mateo

62. Bruce O. Huff, Partner, The Kimber Companies – San Francisco

63. Constance M. John, President, MandalMed – San Francisco

64. Jeff Leopold, Partner, Standard 5 &10 Ace – San Francisco

65. Nancy Perata, CFO, Novani – San Francisco

66. Robert Mack, CEO, Biscotti – Oakland

67. Denise Collins, Owner, Aunt Ann's In House Staffing- San Francisco

68. Joe Mackey, CEO, XL Staffing & Security – El Cajon

69. Frank Barnes, CEO, Special Events Staffing- Pasadena

70. Shirley Patrick, Account Rep, Alpha Staffing Services, Rancho Cucamonga

71. Jackie Lance, Owner, Black Diamond Bags – Martinez

72. Mike Sterling, Owner, Sterling and Company – San Anselmo

73. Micheal Bennett, Owner, Bennett Tile Company

74. Angela Sisneroz, CEO, Medelect – Lincoln

75. Steve Fee, Partner, FME Architecture & Design – San Francisco

76. Judi Stiles, Owner, Stiles in Travel- Fair Oaks

77. Sharon Richardson, Principal, Ferrari Florist & Gifts- Santa Cruz

78. John Scott, CFO, The Little Giraffe – Van Nuys

79. Ben Stiegler, CEO, SYNERTEL Managed IT & Converged Communications Solutions- San Francisco

80. Steve Lang, Owner, Lang Roofing – Bell Gardens

81. John Miller, Owner, Regent Apparel – South San Francisco

82. Violeta Galang, Manager, The Futon Shop – San Francisco

83. Jann Fitzgerald, President, RapidRenu- San Francisco

84. Melissa Rich, President, InterSchola- San Francisco

85. Chrissy Dodds, Partner, Adaptive Technology Service – San Francisco

86. Gary Smith, President, Brandywine Communications – Tustin

87. Roanna Biedenweg, Owner, Sterling Tax Services- San Francisco

88. Jean Marie Lescohier, Corporate Secretary, Clipper Construction, Inc. – San Francisco

89. Brent Madsen, Owner, Anette’s Chocolate Factory – Napa

90. Mike Moller, Owner, Moller Realty Group – Corning

91. Vince McDonald, President, McDonald Plumbing Heating & Air – Sacramento

92. Valorie Green, Officer, Solana Investments – Mission Viejo

93. Helga Grayson, CFO, Thinknicity- San Francisco

94. Huy Dang, Owner, VanVy LLC, Laguna Hills

95. Patrick Shreffler, Owner, Emergency Management Consultants- Posey

96. Paula Tejeda, Founder, DBA Chile Lindo – San Francisco

97. Helen Medina, Owner, Parsons Lumber & Hardware – Boyes Hot Springs

98. Alice Thompson, President, Sage Cheshire Aerospace- Lancaster

99. Steve Lemmon, Owner, Great Clips – Walnut Creek

100. James Baird, CEO, Bay Area Development Company – Oakland

101. Moe Abbassi, CFO, Rdi Resource Design Interiors – San Francisco

102. Dave Chapman, President, Chapman Coast – Fullerton

103. John Cosmides, Founder, Barustors- San Francisco

104. Tim Hallen, Manager, Golden Gate Tank Removal- San Francisco

105. Jeff Yamaoka, Owner, Advance Cleaning Systems- San Francisco

106. Keith Goldstein, President, Everest Waterproofing & Restoration- San Francisco

107. John Withers, President Kesson Co- Rohnert Park

108. Randy Soso, President, Metal Building Company –Oakland

109. Sergio Raddavero, President, WCBS – San Carlos

110. Drumm McNaughton, President, The Change Leader – Fallbrook

111. Christine Richardson, President, O’Connell Jetting Systems – Benicia

112. Dennis Albrecht, Owner, Electric Laboratories – Fresno

113. Tom Lacey, President, Mission Business Center – San Francisco

114. Kevin Gray, President, Cornely Company – San Francisco

115. George Taddie, Owner, Tadco Supply – San Jose

116. James Hooper, President, Hooper’s Contract Management Services - San Martin

117. Vanessa Eckerman, Gutter Glove- Rocklin

118. Leonard Strickland, Owner, River Pointe Insurance Agency – West Sacramento

119. Laura Losquadro, CFO, Daisy I.T Supplies, Sales & Services- Rancho Cucamonga

120. Grace Santana, Owner, Santana Plumbing – San Francisco

121. Sarah Dvorak, Owner, Mission Cheese- San Francisco

122. Cliff Ishii, President, Ishii Engineering – San Francisco

123. George Salet, Owner, George Salet Plumbing- Brisbane

124. Janet Sahagun, Manager, Sahagun & Beebe- San Francisco

SB863 Urgent Action Needed Now/ SB 969/SB1234

I have sent emails to you regarding a major workers compensation reform bill SB863[De Leon]/. This bill will increase benefits which have been too low since the passage of 899 in 2004 and it will be more than paid for by cost saving in the system.


Small Business California and 19 other associations have sent a support letter.

In a letter from State Fund yesterday they said if the legislation passes they will recommend a 5% to 7% decrease in their rates. While numbers vary on the savings and cost State Fund has said after the benefit increase there will be a $543 million cost savings.

I am writing to ask all of you to sign onto a letter of support for SB 863. All you need to do is agree to this by return email and send me your company name and location. You will get a copy of the letter after we have all the names. This is your chance to make a difference.



In other legislation

SB 323. Small Business California has successfully gotten an amendment to this bill which would have previously required all existing LLCs to refile based on the new LLC rules in the bill. I encourage you to look at the bill to determine whether you would like to take advantage of the new rules but I suspect most of you will not want the additional cost. I estimate conservatively this will save over $1 billion for the business community.



SB969. This is the Pet Bill legislation that would have set up a state bureaucracy and provided an avenue for lawsuits against Pet Groomers. While animal abuse should never be tolerated there have been relatively few in the state and in our opinion is a solution looking for a problem. This bill is dead.



SB 1234- This is a bill that would have required all businesses with 5 employees to set up a retirement plan. This bill is dead.



SB2408- This bill would repeal the Net Operating Carry Back. Small Business California and 34 associations signed a letter opposing this. There were also 101 of you that signed a joint individual business letter. While this is not officially dead it does not appear to have the two thirds votes it needs



Please agree to sign the letter supporting SB 863





Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

interview request on Your Call, KALW in SF

I have told you that there is workers compensation reform bill SB 863 that would make savings cuts in the workers compensation system and would increase benefits to employees. Today the Workers Compensation Insurance Workers Compensation Insurance Bureau came out with the savings and additional cost. The savings were $.4 billion and the cost $320 million.



I will be doing a call in show tomorrow. See below. Please give me your thoughts on topics.

From: Malihe Razazan [mailto:malihe@yourcallradio.org]

Sent: Monday, August 27, 2012 11:25 AM

To: shauge@smallbusinesscalifornia.org

Subject: re:\interview request on Your Call, KALW in SF



Hi,

I am Malihe Razazan with Your Call on KALW in San Francisco. We are doing a show about small business sector and how they are fairing in this economic environment as well as with all the rhetoric coming from presidential candidates and state politicians, who is really actually giving support to small business sector in the state?



Your Call is a daily public affairs program and it airs from 10 to 11 am

would you be able to join us?

thanks

m





Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

UPDATE: Workers Compensation/Injury and Illness Prevention Program

As I have said in previous emails workers compensation has become a troubled line of business for insurance companies. The combined loss ratio for the industry for this year is around 130%. I just received word that the Workers Compensation Insurance Rating Bureau has now recommended an 18% rate increase for January. This now needs to go to the Insurance Commissioner for his recommendation and I would expect he will recommend a lower increase. Once that is done insurance companies are not bound by the Insurance Commissioners recommendation but we are seeing insurance companies taking increases and reducing their credits.




The Bureau recommended a 10% increase July 1. I had a couple of representatives from the Bureau in last week. They indicated they wanted to do more for businesses and want to become more visible. If you have a question on what classifications your employees should be put into you can call them at 415-777-0777. If you have an experience modification you should get a copy of the Bureaus worksheet. Your broker should be able to provide this.

One bit of information that might be useful for those of you that will be getting your first experience modification is that you will be audited by the Bureau when you receive your new modification. If you already have a modification this is not necessarily the case.

How many of you have ever heard of the WCIRB?



I have written in previous emails that all businesses that have employees need to have a written Injury and Illness Prevention Program. This has been the case since 1991 and I still find that most small businesses don’t have one. You can do this yourself by going to http://www.dir.ca.gov/DOSH/etools/09-031/index.htm or I have made arrangements with a consultant who will do this in most cases for $150 to $200. Contact me if you are interested.

Note you need to do more than write the plan and put it on a shelf. You need to talk about it with your employees. You need to have it available to all employees. This is the most prevalent fine OSHA gives.





Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

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

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

BOE Update/SB323/Workers Compensation/ATT

Please see below news release from BOE indicating that this month 13,160 letter are being sent to retailers. Note that since 2008 BOE have visited 324000 businesses to verify that retailers and businesses are registered with a sellers permit..



I have written about our efforts to get a grandfather provision on SB 323. This bill as written would require all LLCs that have been filed since 1994 to refile under new provisions in the bill. There are 10s of thousands of these . I have talked to an accountant and attorney to see what the cost will be for these LLCs. At the very low end it will cost each LLC $6500. This assumes 20 hours of attorney time at $250 per hour. This is really low. This of course does not include the many hours a business owner will have to spend.

The resistance to this is coming from the Secretary of State who takes the position that this will create problems for them because they will have to keep two sets of records. So businesses may have to spend millions of dollars because of this bill.

A deal seems to be in the making in Sacramento on workers compensation. Labor unions and large employers have been meeting since April to put together legislation that according to Mark Lifsher in the LA Times “ would cut administrative, legal and medical cost enough to fund a significant boost in benefits paid to workers who suffer permanent disabilities from job related injuries or illness”

Rates for workers compensation according to Lifsher have gone down 60% since the reforms of 2004 but it is pretty much a consensus that permanent disability benefits need to be increased. The key for employers is obviously that the cuts will offset the increases.

What I am hearing is that a deal is imminent.



In a prior email I provided an email about a small business that was having problems with their contract from ATT. He was being charged for services he did not request and increases that were incorrect. He pointed out that ATT needed to make the contracts more understandable.

As a result I got a call from the CPUC asking if a meeting could be set up with Small Business California and a representative of ATT. I would like to her your stories not only about ATT and other utilities.

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

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

Cynthia Bridges
Executive Director
www.boe.ca.gov

State Board of Equalization
News Release




FOR IMMEDIATE RELEASE
NR# 81-12-S
Date: August 9, 2012
Contact: Jaime Garza
Phone: 916-327-8988
BOE Newsroom



BOE Visits Retailers Statewide to Check Business Permits
Retailers and Businesses Notified of SCOP Team Visits


Sacramento – Retailers and businesses in 17 California zip code areas can expect to receive letters from the Board of Equalization (BOE) notifying them about visits from Statewide Compliance and Outreach Program (SCOP) teams. The visits are intended to educate retailers and business owners on sales and use tax reporting responsibilities, increase tax compliance, and help make the state’s tax system fair and equal for all Californians.



This month, 13,160 letters were sent to retailers and businesses in the following zip codes: Bell Gardens (90201), Walnut (91789), Valley Center (92082), Calimesa (92320), Sun City (92585 and 92586), Newport Beach (92660, 92661, and 92662), San Diego (92107), Morro Bay (93442), Nipomo (93444), San Francisco (94109 and 94133), Sunnyvale (94087), Crescent City (95531), and Smith River (95567).



Since 2008, the BOE SCOP teams have visited more than 324,000 businesses statewide to verify that retailers and businesses are registered and to make sure that noncompliant businesses do not have an unfair advantage over registered businesses that are reporting their sales and use taxes and/or fees to BOE.



Seven SCOP teams located statewide (Oakland, Sacramento, San Jose, Van Nuys, Norwalk, Irvine and Riverside) conduct door-to-door in-person visits based on zip code. They check seller’s permits at stores and other known retail and business locations. They ask only business-related questions and do not inquire about personal financial information. SCOP teams check that registered retailers, as well as service industry businesses, have appropriate permits and licenses. Businesses found to be out of compliance are given instructions on how to register with the BOE and given information about other necessary licenses.



BOE has found that only about 2 percent of businesses operating in California do so without permits or licenses that allow for collection of sales and use taxes and other taxes and fees. However, noncompliance is a contributor to the more than $2 billion sales and use “tax gap” – the difference between the amount of taxes owed and the amount of paid.



If business owners have questions, they may contact their local BOE SCOP Team in Oakland, Sacramento, San Jose, Van Nuys, Norwalk, Irvine or Riverside, or visit the SCOP website.



* * * * *



The five-member California State Board of Equalization is a publicly elected tax board. The BOE collects more than $50 billion annually in taxes and fees supporting state and local government services. It hears business tax appeals, acts as the appellate body for franchise and personal income tax appeals, and serves a significant role in the assessment and administration of property taxes. For more information on other taxes and fees in California, visit www.taxes.ca.gov.



###

AB2081/SB1234

Yesterday Lori Kammerer Small Business California government affairs person, Lee Petillon Board member Small Business California and I testified on Small Business California sponsored bill AB 2081 before the Senate Banking and Finance committee[Allen]. This bill would authorize the solicitation of accredited investors. It is similar to the JOBS bill passed in Washington but would give investors 10 or 11 protections that probably will not be in the SEC regulations which are expected August 22. The bill passed 4 to 2 with one abstention. It now goes forward to Senate Judiciary. Opposing the bill is AARP and the Public Investors Arbitration Bar Association. It is their belief that the bill does not provide enough protection for investors especially seniors.


It is an interesting position as the JOBS bill will most likely provide little or no protection and California investors will be left with only that option.


It is expected that SB 1234[DeLeon] will be coming before Senate Appropriations today. This bill would mandate that all businesses with 5 or more employees would be required to set up a retirement plan for their employees. It does not require an employer contribution and allows employees to Op Out. Small Business California opposes this because of the mandate and the cost to the state which is estimated to be somewhere between $100 million and $600 million.

The lobbying on this has been extensive supported by unions and opposed by Small Business California , California Chamber, the Financial Industry and other business groups. Should it pass Appropriations and the Senate it will go to the Governor. It is not clear if the Governor will veto the bill.

Scott Hauge

President
Small Business California

Bank of America/Mike Garcia Meeting

Numerous articles have been written about the liabilities of small business for theft by third parties from business bank accounts. Please see response below from Bank of America. I strongly recommend you contact your bank as to what their policy is.

I applaud Bank Of America and Dave Legnitto for clarifying. See below.

We will be sending the letter to legislators opposing the repeal of the Net Operating Loss Carry Back. We had 34 associations opposing this and 101 individual businesses opposing. Thank you to all that responded. We are going to stop this legislation.

I received an email from a reporter in Sacramento asking about how small business feels about the Affordable Care Act. She is looking for responses from businesses in the Sacramento area. Do you support the ACA?Do you plan to move your health insurance to the Exchange? Will you drop your insurance? Will you continue to offer insurance outside the Exchange?
For those of you in SF I have put together a meeting with Supervisor candidate in District 7 with Mike Garcia at my office at 2311 Taraval at 8AM August 8.. Are you interested in attending

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

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

This Information was found in Bank of America’s Online service agreement which is located on bank of america’s website: www.bankofamerica.com

If your information is compromised due to malware and an unauthorized transaction occurs: The business client has zero liability as long as the transaction is reported to us within 60 days at the latest, we want immediate notification but do allow this window, from when the transaction is seen on your bank statement.

If your passcode is stolen by being hacked into: The business client also has zero liability but must follow the above reporting guidelines. There is one nuance to this and it is as follows:

Bank of America will have no liability to you for any unauthorized payment or transfer made using your passcode that occurs before you have notified us of a possible unauthorized use and we have had a reasonable opportunity to act on that notice. We may suspend or cancel your passcode even without receiving such notice from you, if we suspect your passcode is being used in an unauthorized or fraudulent manner.
An example of this would be if a fraudulent transfer or unauthorized payment $5,000 occurred on august 1st and the business owner did multiple transactions after this point and another fraudulent transaction occurred on august 30th , it would be reasonable to assume the client could have checked into his balance and notified the bank, thus allowing the bank to take action from allowing future fraud. In this case the business owner would be potentially liable for the losses incurred.



Dave Legnitto
Vice President
Bank of America Small Business Banker
345 Montgomery St.
San Francisco Ca, 94104
Tel. 415.816.8693
Fax 415.844.2735
david.legnitto@bankofamerica.com

UPDATE: Please Help Us Help You /Net Loss Carry Back

A huge thank you to all of you that have agreed to sign onto letter. If you have not done so already please send me an email agreeing to sign letter. Be sure and give me your address.

We now have 35 associations around the state signing the letter below and my goal is to get over 100 businesses to sign onto the letter. Please feel free to forward to all your business colleagues. I don’t think there is an association in California that could have done this.


Just so you know this is not all we are working on. SB 323 has been introduced which would require all LLCs to refile with the state by 2016. This is going to cost businesses considerable legal fees and create great confusion. We are in contact with the authors office asking that they include a grandfather clause for businesses that have filed since 1994. I will let you know what happens.

There is no other association in California that is working on this.


I hope you can see the value of Small Business California and our efforts to represent you. If you are not a member already please consider joining. You can do so by going to www.smallbusinesscalifornia.org





Scott Hauge

President

Please Help Us Help You /Net Loss Carry Back

Please see below letter we are sending with 28 associations around California signing. We expect to have a couple more before we send.

Now I need your help. We want to send a letter with individual businesses. My request the other day did not get much response. Can we add your business to a similar letter. I think this is pretty noncontroversial and we need to show the legislators individual businesses agree with these associations.

To sign all you need to do is tell me it is okay and send me your address. We need to complete this by Monday.



Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188



****DRAFT******

July 17, 2012



The Honorable Christine Kehoe
Chair, Senate Committee on Appropriations
California State Capitol
Sacramento, CA 95814

RE: AB 2408 (Skinner) – OPPOSE - Elimination of Net Operating Loss Carry Back

Dear Senator Kehoe:


The associations listed below, who represent the 3.2 million small businesses in this state are Strongly Opposed to AB 2408 that would entirely eliminate small businesses’ ability to carry back their Net Operating Loss, resulting in significant impacts on small businesses and start-up companies.

Small Business is the engine that drives California's economy. Our state’s small businesses create most of the net new jobs at significant financial and personal risk. Many small businesses, as well as new businesses, nearly all of which are small by definition, must endure several years of losses before profitability can be achieved. This is particularly true in a down economy. Therefore, AB 2408 comes at an especially bad time for small businesses that are trying to get through these difficult times.

Although this proposal has been characterized as a measure that will close a loophole for large corporations, in fact, it will impact 6-7 small businesses for every large business affected. This would be particularly harmful to small businesses in cyclical industries, small businesses that have been affected by the downturn in the economy and small businesses who want to invest in their company to create more jobs for the people in California.


AB 2408 would suspend the ability of a small business to carry back losses and prevent them from growing or investing in their business.


Even without AB 2408, federal tax law and the laws of most other states already treat net operating loss carry backs significantly more favorably than existing California law. We believe that suspending the NOL is bad for the economy in California, but is especially harmful to small companies.

Therefore, the Associations listed are in Strong Opposition to AB 2408 and respectfully request you vote NO on this measure.


Thank you for your consideration and we look forward to answering any questions that you may have. Please contact Scott Hauge, President of Small Business California at 415.680.2109 or Lori Kammerer, Kammerer & Company, SB Cal’s Governmental Relations Advocate at 916.441.5674.


SMALL BUSINESS ASSOCIATIONS IN STRONG OPPOSITION TO AB 2408:



Associated Builders and Contractors of California
Building Owners and Managers Association of San Francisco
California Association of Competitive Telecommunications Companies (CALTEL)
California Association for Micro Enterprise Opportunity (CAMEO)
California Chapter of the American Contractors’ Association
California Employers Association
California Fence Contractors’ Association
California Metals Association
Engineering Contractors' Association
Flasher/Barricade Association
Golden Gate Restaurant Association
Insurance Brokers & Agents of the West
Los Angeles National Association of Women Business Owners
Marin Builders’ Association
Napa Chamber of Commerce
Oakland Metropolitan Chamber of Commerce
Plumbing Heating and Cooling Contractors of California
San Diego Regional Chamber of Commerce
San Francisco Builders Exchange
San Francisco Chamber of Commerce
San Francisco Council of District Merchants Associations
San Francisco Hispanic Chamber of Commerce
San Francisco National Association of Women Business Owners
San Francisco Small Business Advocates
San Francisco Small Business Network
Small Business California
Small Business Majority
Small Manufacturers Association of California

Net Operating Loss Carry back/ Liability from theft of your Bank Account/ IT Vendor

I have written previously about AB 2408 which would repeal the Net Operating Loss carry back. This is an awful bill and will hurt small businesses as they will be prohibited from carrying back losses for two years. As an example say in 2010 and 2011 you made a profit and in 2012 you suffer a loss. The repeal of the carry back provision would not allow you to carry back the losses into the two profitable years You may however carry these losses forward.

This runs counter to federal tax law and will have a negative impact on small businesses investing in their business and will be bad for the economy of California.

Small Business California has put together a letter of opposition and we have about 15 associations around the state signatory to the letter. We will be putting together a letter for individual business and if you have not already agreed to sign onto the letter p[lease let me know if you would sign. I will send a copy of the letter to you when we have all the company names/.

For more information on this bill go to www.leginfo.ca.gov



Businesses can be held responsible for theft from their bank account if their password is obtained by a third party. This may occur because of malware and a Trojan horse that gets into their computer or if their computer is breached. I suggest you contact your bank to see what protections you have. Ask them what happens if you computer is breeched by malware or if your computer is breached.



Do you outsource your IT functions to vendors and entrust sensitive data to these third parties? If so take a look at your contract with them. There are usually four types of contracts.

1.The contract has a full indemnity clause protecting you from a loss. This is the ideal contract

2.The contract has a cap on losses. Take a look at the cap and determine if this is enough to cover a loss

3. The contract has a limitation of liability. Usually this will be amount you have paid the vendor for services. This most likely will not cover your loss.

4.A disclaimer of consequential damages like business interruption. This should be rejected.

I think you will be surprised when you look at your contract. If any of you have a full indemnity provision please let me know.





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

Contacts

I have received numerous emails on the question of contracts raised by Susan. Here are a few of the comments I received with some advise that may be helpful. If you have a problem that you think effects a lot of small businesses around the state let me know.

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

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

Hi scott,

Stuck in a similar situation, I wrote a letter outlining how they had not met their contractual service obligations, and notified them I wd stop pmt, and asked for refund.

They stopped service.



Also, you can threaten class action suit for unfair business practices CAL. BPC. CODE § 17200 : California Code - Section 17200. After this step, I got very quick personal call from head counsel for Xerox, and they stopped charges the contract retroactively.



“unfair competition” shall mean and include any unlawful, unfair or fraudulent business act or practice and unfair, deceptive, untrue or misleading advertising and any act prohibited by Chapter 1 (commencing with Section 17500) of Part 3 of Division 7 of the Business and Professions Code.



Pl pass on, and feel free to publish to other small biz owners.



SK


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


Scott,

Regarding the situation posed by Susan Frey. Yes, the “evergreen” contracts are a problem. My advice is to set a calendar schedule for the renewal of these contracts and begin review and negotiation within the timeframes set out by the agreement. Even if negotiations are under-way, it is in your best interest to serve a notice of intent to terminate within the timeframes. If you don’t, the negotiations will not proceed in a favorable manner because the company knows they can delay the process until you are stuck for another year.



Karen

Karen Preisser

Phone: 530-949-4439

Fax: 530-247-1840


Susan brings up an ongoing problem with us as well --- it is in regards to our telephone service in our stores where we use AT & T. They are now mirroring the cellphone industry contract provisions with their landline telephone service. For example in order to have affordable telephone service our business is required to purchase minutes plans, calling area plans, long distance plans, 800 number minutes plans, etc. and all of these plans have contract periods that we are required to adhere to;and to top it off, if we cancel any of these plans, there is an early termination fee. Now, I have an MBA in business and I am not able to figure out many of their plans and I find that their customer service people are not very well trained in the differences between plans, so it is a "crap" shoot and hope for the best. And if you do not call the AT & T outsourced telemarketing company to discuss your telephone service before the end of your contracts, if the same plan is still offered, you are automatically renewed and if the plan is not offered AT & T picks a plan for you. All of this infuriates me as I have other things to do than sit on hold with AT & T to discuss telephone plans. Just this week we received a booklet in the mail from AT & T indicating that we ordered new telephone service;we did not order any new service. Apparently they "slammed" our Oakland store on July 20th and called the Oakland store and asked our Store Manager if he wanted faster DSL and he said yes;they never told him that he was requesting a $30.00 more a month DSL service, or an additional $360.00 per year. Yesterday I tried to have this extra $30.00 per month charge removed and work this out with the customer service people at AT & T and basically I was told that I am stuck .... Thus, I made a call to the President of AT & T's office for help. First of all, the records at AT & T clearly state that I am the only authorized person to make any changes in telephone service, and they have to contact me in our San Francisco location. Secondly, I learned this AM that the "slamming" techniques that the outsourced AT & T telemarketing firm used on us is illegal. Scott, I am convinced as the economy continues to worsen, many companies will be doing the same thing to small business as small business has always been a preying ground for the "big gorillas" !



Best regards and have a wonderful weekend,



Michael
Michael A. Gardner
Great American Mercantile Co., Inc.
Siegel's Clothing Superstore & Tuxedos
Siegel's Tuxedo Shops
dba Zootsuitstore.com
Swingtunes.com
StacyAdamsOnline.com
Awesometux.com
2366 Mission Street
San Francisco, California 94110-1814
Tel: (415) 824-7729 Ext. 15 Fax: (415) 824-7256
E-mail: mgardner@siegelsclothing.com
Web: www.siegelsclothing.com

Health Cost in US/ Question

I read an interesting piece in the Stanford Social Innovation Review about the US health care system.


Did you know:

1. The Us spent $2.6 trillion in health care in 2011 and according to US Health and Human Services will be spending 25% of GDP by 2025

2. Half of all personal bankruptcies are at least partially due to medical expenses

3. Despite such spending US health indicators are among the worst of high income countries in the world. Since 1960 the US dropped from 12th to 46th in infant mortality[below Cuba and Slovenia] and 16th to 36th in life expectancy[ below Cypress and Chile]. In ceratin neighborhoods Baltimore Chicago, and LA life expectancy for subsets of population is lower than Bangladesh

4. In 1960 half of doctors in the US worked in primary care. Today barely 30% and it is getting worse

5. From 2000 to 2005 the percentage of US medical school graduates who chose to enter primary care dropped from 14% to8%

Clearly we have a serious problem. For the entire article go to http://www.ssireview.org/articles/entry/realigning_health_with_care


I received a question from a small business owner. See below. Are any of you experiencing this problem.

Scott Hauge
President
================================================================

Today we had an age old problem rear its ugly head again and I wondered if other businesses have the same problem. That being long contracts with uniform companies, alarm companies, copier companies and for us most recently phone companies that have such stringent rules and short windows to cancel before an “automatic” renewal takes place and you get stuck for more time and more money.



This one put us over the edge. Three year Telepacific contract expired at the end of June, we began negotiating with them in March and now we are told it’s too late to give notice. They needed 60 day written notice within a 30 day window of 60 days before 6/27 but not more than 90 day before, we are stuck for another year. Although I am not done fighting this particular situation, I continue to wonder why there are so many notifications required of business, however these companies do not have to notify their clients of upcoming automatic renewals and one’s options for not renewing in advance of the dates after such long contracts.



That’s all, just wondering if our misery has been experienced by other small business having to use services of big business.

Thank you,

Susan Frey

Bill’s Ace Hardware,
Martinez, CA
925 228 6150 x106

Injury and Illness Prevention Program

Small Business California is working with the California Department of Industrial Relations and State Compensation Insurance Fund on a new initiative to help small businesses develop and implement effective injury and illness prevention programs[IIPP] in their workplaces. These programs help reduce the costs associated with work-related injuries; create safe, positive, and productive work environments; and help businesses meet the legal requirements of the Cal/OSHA IIPP standard. We want your input so that the needs and concerns of small business owners will be met. Please answer the following 3 questions and email it Your responses will be kept completely confidential and CAL OSHA will not see the responses except in the aggregate Thank you for your help!


Scott Hauge
President



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

1) Have you ever heard of Cal/OSHA’s Injury and Illness Prevention Program (IIPP) requirement?

Yes ___

No ___



If Yes, what challenges have you faced in developing or implementing your IIPP?
________________________________________________________________________________________________



2) All businesses are required by law to have an IIPP. Would you attend a free half day training program where you learned how to develop an effective IIPP?

Yes ___

No ___



If Yes, who would you send to the workshop?

Yourself (owner) ___

Your manager/supervisor ___

Your payroll manager ___

Other: (who?) __________________________________________________________________________________



If No, why not and is there anything that would make you want to attend?
_______________________________________________________________________________________________



3) What resources would help you create an effective health and safety program in your workplace?

Technical assistance on health and safety issues ___

Written materials on specific health and safety issues ___

More extensive health and safety training ___

Other: _________________________________________________________________________________________

SB323/ Not Operating Loss carry back

SB 323 (Vargas) is a bill working its way through the California Legislature and will be taken up when the Legislature reconvenes in August. It would enact a new limited liability company (LLC) law effective January 1, 2013 and repeal the present LLC law effective January 1, 2015, so that all LLCs formed since 1994 (the effective date of the present LLC law) would be invalidated unless converted to the new law.

This would require every LLC to revise its charter and operating agreement to conform to the new law, or become defunct. This could cause considerable confusion and possible litigation.


It is believed that many startup companies and other California small businesses would be affected by this law. There is no grandfather option in this legislation.

Is your company an LLC? Is this something Small Business California should weigh in on?

In a past email I indicated there is legislation to eliminate Net Operating Loss carry backs. We have confirmed the legislation does not eliminate Net Operating Loss carry forwards. Many of you have indicated you would send a letter of opposition to this. Small Business California is awaiting a report from the Franchise Tax Board but plan on sending a letter of opposition in the next week.. For those of you that indicated you would also send a letter of opposition we will be getting back to you . If you did not respond and want to oppose please let me know.

Information Every Small Business Should know about Affordable Care Act/ Burdensome Regulations

Thank you to all that were on the webinar Wednesday. Also a big thanks to Kim Parker at the California Employers Association and Sherly Carlson who Co Hosted. Please see what we have put together with the highlights of the webinar.


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

Small Business tax credits

Until 2014 there is a 35% tax credit for businesses up to 25 full time employees with employees’ average wages of less than $50000. Owner and their families are not included in the calculation. The credit is on a sliding scale. If you have 10 employees or fewer and the average salary is $25000 or less you will receive the full credit. Starting in 2014, the credit increases to 50% for two years and can be carried forward for up to twenty years.


Please see link for more information on tax credit from the IRS: http://www.irs.gov/newsroom/article/0,,id=223666,00.html



W2s

If you issue more than 250 W-2s, you will have to report the cost of health insurance benefits for the 2012 tax year. Businesses with less than 250 employees will retain exemption until the IRS comes up with additional guidelines. The amounts spent for employee health benefits by an employer are not taxable income to an employee.

Exchanges


Small Businesses with 50 employees or less will be able to purchase health insurance through the new Small Business Health Options Program (SHOP) Exchange in 2014, the size increases to 100 employees in 2016. Small businesses under 50 can also have their workers purchase subsidized coverage through the individual exchange without paying a penalty (though they would lose the tax benefit of paying for insurance.) The Exchange will negotiate rates with insurance companies. The Exchange will also provide a portal which is tasked to provide easy to understand information about cost, quality and coverage options. A small business can continue to use its broker. Navigators will be provided by the Exchange to explain the program and assist individuals and small employers with enrollment. A small business or self-employed individual may purchase directly from the Exchange through on-line electronic enrollment in addition to traditional paper-based enrollment avenues.


Mandates


In 2014 an individual will be required to purchase or enroll in coverage or pay a tax penalty of $95 or 1% of taxable income, whichever is higher; this will increase on a phased-in basis to $695 or 2.5% of taxable income in 2016. There is no employer mandate unless you have 50 or more full time equivalent employees. Those with 50 or more employees can either purchase insurance or pay a tax/penalty of $2000 per full time employee. In calculating this tax, you count your total full time equivalent employees then deduct 30 employees. For purposes of determining if you meet the 50 full time equivalent employee threshold, part time employees , those under 30 hours, will be added together to determine full time equivalents. If you offer coverage, however, you are not required to cover part time employees.


September 23, 2012


In your Open enrollment period on or after this date, your plan’s participants must receive a more standardized and comprehensible Summary of Benefits and Coverage during the enrollment period.



Have you seen a federal regulations that make no sense. Here’s your opportunity to identify burdensome regulations and do something about it.


White House Asks Businesses to Identify Burdensome Regulations



On July 18, 2012, The White House opened up its regulatory reform effort to the public, launching a website for tips on how the government can streamline or eliminate regulations. In 2011 the President directed all executive agencies to undertake an unprecedented government-wide review of regulations on the books, in order to figure out what is working and what is not, and where appropriate, to streamline or eliminate ineffective, overly burdensome, and outdated rules. Over two dozen agencies responded with regulatory reform plans, listing more than 800 initiatives. The Administration is now asking for businesses to send them comments identifying burdensome regulations.



• Submit comments to the White House here

• Advocacy contact: Charles Maresca, 202.205.6978



For more information on Regulatory Alerts see http://www.sba.gov/advocacy/815



Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

SB 969

Last month Small Business California was one of the first business groups to oppose SB 969. Since then a number of other business groups have joined SB-Cal in opposing SB 969. On its face, SB 969 (which regulates dog groomers) would seem to impact only a very small universe of small businesses in California and in some ways that is correct. But in many ways SB 969 and bills similar to it, impact all of our small businesses. SB 969, if passed into law, would:


• create a new board to regulate small businesses;

• would only have large businesses, regulatory entities and not for profits on the board (yes, small businesses would not have a voice);

• require small businesses to submit their employee training to this board for approval (that’s right you would need to share your internal training manual with a public entity dominated by your competitors);

• and would disregard years of practical experience performing your craft unless you received the blessings of this board.

These are issues and concerns application to all small businesses not just dog groomers. In our survey regulations were the 5th most important issue for small businesses in California. These are the kinds of issues that Small Business California continues to pay attention to for all of California’s small businesses.



I am reminded of the quote by Pastor Martin Niemollor

First they came to for the communist and I did not speak out because I was not a communist

Then they came for the trade unionist and I did not speak out because I wasn’t as trade unionist

Then they came for the Jews and I did not speak out because I was not a Jew.

Then they came for me and there was no one left to speak out for me.

I hope you will consider joining Small Business California so we can speak for you.





Scott Hauge

President

Small Business California

UPDATE: AB 2804

From: Scott Hauge


Sent: Tuesday, July 17, 2012 4:23 PM

To: Small Business California

Subject: AB2804


I heard all of you loud and clear that you want to oppose AB2804 and many of you have asked how you can help.

I sent an email out to our board and we will oppose. We will also start a letter writing campaign to get as many of you as possible to also send letters

When I sent this out this morning I said that it was going to repeal the carryback provision. Lori our government affairs person said she is hearing from some

attorneys that it may apply to carry forward.

When we get all the details straightened out I will get back.



Scott Hauge

President

AB 2408

A bill is working its way through the legislature which would repeal the ability of businesses to take Net Operating Loss deductions. This could be significant to many small businesses and start ups. The bill number is AB2408 by Assemblywoman Skinner. It passed Senate Governance and Finance July 2 on a 5 to 3 vote with one abstention

What this means is that a loss in a year could not be carried back to profitable years. Currently in California and US a business can carry forward a loss and carry back losses.

It seems to me that in these difficult times for small business this is not a time to be adding taxes to employers. What do you think.


Just a reminder to those of you that signed up for the webinar on the Affordable Care Act that it will be Wednesday from 12 to 1. We have 135 signed up for this so there a few openings still available. If interested contact me.

Scott Hauge
President, SBC

Business Tax

I assume you have been following this discussion. Let me give you some updates.


The final legislation will be decided at least as of now July31. You all know that the Mayor/ Supervisor Chiu has one proposal on the table that will raise about $13 million. Supervisor Avalos has another proposal that will raise $40 million. Both increase revenues by raising fees .Supervisor Avalos has lower fees for small business and basically gets the additional money from larger companies.

The business communities mantra has been basically to support the change from payroll to gross receipts but it be revenue neutral. There does seem to be support for the $13 million increase if it is for the Housing fund. The real estate industry would support this as long as the money is not collected in the form of the transfer tax. The Mayor and Supervisor Chius proposal does not include a transfer tax.

There are now rumors that the increases that may be put forth as an alternative proposal to Supervisor Avalos proposal could raise revenue as much as $30 million.

My questions to you are:

1. Do you support the Avalos proposal? Assume for the moment that you would see no tax or fee increase with this.

2. Would you support an increase in fees with larger companies picking up about half of the increase?

3. Do you think there should be no tax or fee increase except for maybe the $13 million for the Housing Fund

4. I work with a number of small business leaders. What should we be advocating for?

It is really important that I hear from you.

Scott Hauge
President
CAL Insurance and Associates, Inc.
2311 Taraval Street
San Francisco, CA 94116
http://www.cal-insure.com/
Phone: (415) 680-2109
Fax: (415) 680-2137
License #0A32315

Exchange

 The Exchange will be important to small businesses. I thought you might be interested in seeing the subsidies that will be available to individuals.

I have provided below the subsidies for a family of 4 which I think are quite dramatic. (Please see below. Click to enlarge)

Keep in mind that when the health law goes into effect no one can be turned down for health reasons. This is certainly good news to some of the 2.5 million sole proprietors in the state.

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

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

CA Microloan Intermediary link/ LA Times Reporter Request/ Ballot Measure Increasing taxes

Please see link to California Microloan Intermediaries. These microloans are usually in an amount less than $50,000. You also might want to talk to a Small Business Development Center in your area. You can access them by going to http://www.smallbusinesscalifornia.org/

and clicking on Resources. Scroll down and you will see Small Business Development Centers. Choose the Center closest to you.
California Microloan Intermediary direct link:
http://www.smallbusinesscalifornia.org/CAL-MicroLenders.pdf

Please see below a request from Ryan Faughnder from the LA Times. Ideally he would like businesses in the LA area but if you are a small business owner in California he would like to hear from you.

Please respond today.

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

Hi Scott,
Thanks for taking the call. I’m working on a story about the continuing struggles of RIM. I’m looking to talk to California businesses that use Blackberry devices to see how closely they’re following the continuing troubles of the company and whether they’re developing any contingency plans in the event that the company goes out of business and Blackberry products become unavailable.

Thanks for your time.

Ryan Faughnder

Business Reporter

Los Angeles Times

Office: (213)237-7169

Cell: (858)472-1721

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

I am sure you are all aware that the Governor has placed on the November ballot a measure that would raise the state sales tax and raise income taxes on households making over $250000 a year. It is projected this will raise about $8.5 billion dollars a year. The tax is temporary increase.

The Governor argues that he has made as many cuts as possible and this is necessary to prevent draconian cuts to education. The people opposing this argue this is just another tax and spend proposal that will invoke a sales tax that is regressive and tax small businesses who create jobs in California.

Do you support or oppose this?


Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

JOBS Bill

Access to capital is a major issue for small business. In a survey Small Business California did in February two thirds of the businesses seeking capital were unable to get it. We know that banks are not the total solution as small businesses especially start ups need equity capital.

The passage of the JOBS bill many see as the solution. There is a lot of confusion on what the JOBS bill does. There are two provisions which we are waiting to see how the SEC interprets. The SEC was supposed to put forth their guidelines within 90 days of passage which would have been early July. To date they have not put these forth and have not put forth a statement when they will be doing so.

According to Lee Petillon board member and SEC attorney the two provision are Section 201 and sections 301-305. Both of these will allow general solicitation but are quite different.

According to Lee:



Section 201 has no investor protections other than it is limited to accredited investors and is unlimited in dollar amount.

Sections 301-305 (the crowfunding provisions) have many investor protections since the offering can be made to non- accredited investors. Some of the investor protections are:

- Issuer is limited to $1 million per year

- Investors can’t invest more than:

- Greater than $2,000 or 5% of the investor’s net worth or income, if his annual income or net worth is less than $100,000; or

10% of the investor’s net worth or income (Congress failed to state whether it is the greater or lesser of), not to exceed a maximum investment of $100,000, if his annual net income or net worth is $100,000 or more.

- The crowdfunding offering must be conducted through an intermediary (a registered broker-dealer or “funding portal” which must be registered with the SEC and an SRO, which is charged with insuring that investors have reviewed educational material about investing risk, and understand such risks;

- Issuers must file with the SEC their business plan, financial statements, disclosure concerning the risks of the investment, and other disclosures established by SEC rulemaking;

- Issuers must file annual reports with the SEC and make annual reports available to shareholders.

- Investors have a private right of action against the issuer for any material misstatements or omissions.



It is not clear what the SEC will do in their rulings. Until that happens we will not know how these investment vehicles will be set up. I am sure there will be both.

I am curious if any of you have any interest in investing money into something like this? For your information an accredited investor is people with a net worth of $1 million[ excluding your primary residents]or individual annual income of $200000 or household income of $300000.

Will any of you be seeking capital once these vehicles are established?



In the passage of the health bill the public option was taken off the table. Do you think now that it should have been included? Do you support single payer which goes beyond the public option?

In our survey a couple of years ago the majority of people were opposed to single payer but there was surprisingly about 40% of the survey respondents supporting it.





Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188

SB 1186-ADA Lawsuits/ Volunteers in Medicine

Americans with Disability Lawsuits have been a problem for many small businesses around the state. Senator Feinstein has sent a letter to Speaker Pro Tem Daryl Steinberg asking him to address this.


In response Senator Steinberg has introduced SB 1186. There is a lot of misinformation out there on this. Many believe that this prevents litigation giving the business owner time to correct the problem. This provision has been deleted from the legislation.

What it does do is prohibit an attorney from issuing a demand for money to a building owner or tenant. It also requires a commercial property owner to state on the lease or rental agreement if the property being leased has been inspected is CASp inspected. For more information go to www.leginfo.ca.gov

FYI on Tuesday I was appointed to the California Commission on Disability Access. See below.



I think you all know that I am Vice Chair of Volunteers In Medicine www.volunteersinmedicine.org

and Cofounder of Clinic by the Bay www.clinicbythebay.org

in SF. Volunteers in Medicine has surveyed its 84 eligible clinics about the impact they are having in their community. 74 responded and the results were that VIM provides free health care to 95391 patients with 362758 patient visits in 2011. A total of 11,193 people volunteer at the clinics. These are all free clinics and take no government money



Hope you had a great 4th.



Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188









Steinberg Announces Rules Appointments





(Sacramento) – State Senate President pro Tempore Darrell Steinberg is announcing the following appointments made by the Senate Rules Committee:



Scott G. Hauge, a Democrat from San Rafael, has been appointed as a member from the business community to the California Commission on Disability Access. Hauge is a president of CAL Insurance and Associates. He is also founder and president of Small Business California, co-founder and vice-president of Clinic by the Bay, and a member of the boards of Volunteers in Medicine and the Pacific Business Group on Health. His term on the commission ends January 1, 2014.



The purpose of the commission is to publish a biennial report on the state of disability access compliance by the public and private sectors, and study and make reports to the Legislature on the following: (1) issues regarding compliance with state laws and regulations that are raised by persons with disabilities or businesses; (2) determine if public and private inspection programs are meeting the needs of both the business and the disability community; (3) determine if existing training and continuing education requirements are working to provide sufficient knowledge of the state and federal disability access laws and regulations; and (4) determine if training and continuing education requirements should be enacted for landscape architects, professional engineers and contractors.

from the fund; review plans for new and expanded vehicle recreation areas that have applied for grant funds; review and comment on the strategic plan developed the division pursuant to Section 5090.32; and to prepare a report on the program every three years.







###

City Contacting/ Business Tax

I received a copy of a letter from the Coalition For Economic Equity to the Mayor regarding contracting with SF. The letter calls for the transfer of oversight from the Human Rights Commission to the CAO, a 20% goal for SF with Locally owned businesses and oversight of Departments to meet goals. This is something many of us have been working on for years.


Hopefully the Mayor and the Board of Supervisors will move forward with these changes. If you are interested in this issue please let me know.

Please see attached letter to the Board of Supervisors copied to the Mayor regarding the Business tax. Thank you to all who added your name and business to the letter. As you can see we have four associations and 48 businesses sign on the letter. I will also be sending this to the Small Business Commission and Commissioners.


I will be following this issue closely


===========
 
 
July 2, 2012




Board of Supervisors

City Hall

1 Dr. Carlton B. Goodlett Place

San Francisco, CA 94102-4689



Dear Board of Supervisors:



As a diverse coalition of San Francisco small businesses and organizations, we write to express our strong support for reforming San Francisco’s business tax system towards one based on taxing revenues, not jobs.



San Francisco is currently the only city in California to levy a “payroll expense tax” on businesses, directly raising the cost of labor and creating a disincentive for companies to add jobs in our City. Moving towards a “gross receipts tax” – which taxes a business based on overall revenues and is used by a majority of other large cities in California – will end San Francisco’s direct tax on jobs, provide more stable and growing revenue for City services and incentivize job creation in diverse industries and businesses large and small.



Earlier this month, Mayor Ed Lee and Board of Supervisors President David Chiu introduced a comprehensive business tax reform measure for the November 2012 ballot that phases in a gross receipts tax over a five-year period beginning in 2014. This measure is the product of extensive outreach to diverse business sectors and business owners over the last six months conducted by the Mayor’s office, the Board President’s office and the Office of the Controller. We greatly appreciate this transparent and inclusive effort to engage the business community and understand our concerns and the potential impacts of business tax reform on our industries and on the City’s overall economy.



As a result of this extensive stakeholder outreach and approach, we strongly believe that the measure proposed by Mayor Lee and Board President David Chiu is the appropriate starting point for the legislative discussion and debate that will occur at the Board of Supervisors in July.



Significantly, the Mayor and Board President’s proposed measure includes a small business exemption for gross receipts of less than $1 million. This will provide our local micro and small businesses a needed boost. It also preserves existing payroll tax exclusions until their expiration for Central Market, biotech and clean-tech industries and local enterprise zone areas. It is important that the City continue to honor commitments it has made to businesses that made long-term investment and other decisions based on these exemptions. We all believe that tax reform must be broad based, equitable and fair and not create undo winners and losers. In addition to protecting the smallest businesses, we must protect our largest employers who have been paying a significant share of taxes for many years.



There is still plenty of work to be done to further refine and finalize the legislation before it is heard at the Board of Supervisors next month and considered for placement on the November 2012 ballot. As business tax reform moves to consideration at the Board of Supervisors in July, we hope that the business community and diverse business owners will continue to be consulted and considered throughout the legislative process. A topic this complex and this important impacts every San Francisco business and resident in some manner, and will require building the widest consensus possible to succeed in November.

With more than 30,000 San Franciscans still out of work, 2012 is the year to reform our business tax system. We strongly urge the Mayor and the members of the Board of Supervisors to work together to place ONE consensus business tax reform measure on the ballot this November that will end San Francisco’s direct tax on jobs for most businesses and build a strong and stable economic foundation for our City’s future. Please see the list of signatures below who are in support of this letter.



Associations:

• Sarah De Young, Executive Director, California Association of Competitive Telecommunications Companies (CALTEL)

• Hut Landon, Executive Director, San Francisco Locally Owned Business Alliance (SFLOMA)

• Kim Parker, Executive Vice President, California Employers Association (CEA)

• Stephen Cornell, Chairperson, Small Business Advocates (SBA)

• Robert T Roddick, President, Noe Valley Merchants and Professional Association (NVMPA)





Small Business Owners:

• Scott Hauge, President, CAL Insurance & Associates, Inc

• Robert Legallet, Owner, Bayview Industrial Park

• Richard Parker, Principal 450 Architects, Inc.

• Jerry Becerra, President, Barbary Insurance Brokerage

• Kevin Wallace, President, Wallace Remodeling, Inc.

• William Brugger, Partner, Kuschel & Company, LLC

• Denise Collins, CEO, Aunt Ann's Home Care

• Steve Sarver, Founder, SF Soup Co.

• Will Wenham, President, Cut Loose

• Norman Ishimoto, Owner, KI Associates

• Sam Mogannam, Owner, Bi-Rite Market

• Stephen Cornell, Owner, Brownie’s Hardware

• Scott Rodrick, President, Rodrick Foods

• Scott Rodrick, Owner, Guy Enterprises

• Benjamin Horne, President, DBA Horne Services & Sales

• Henry Karnilowicz, Owner, Occidental Express

• Ruthie Norton , Senior Vice President, CCI Financial and Insurance Solutions

• Deborah Taylor, Principal, DesignTree Studio

• Steve Mayer, CEO, Burr Pilger & Mayer

• Joanne Gomez, Owner, West Bay Counters , Inc

• Cathy Murphy, Owner, Home Instead Senior Care

• Lori Shannon, Owner, See Jane Run

• Sharon Gadberry, Director, Gadberry and Associates

• Grace Santana, Owner, Grace Santana Plumbing Contractor

• Lesley Leonhardt, Owner, Images of the North

• Steve Lombardi, Owner, Lombardi Sports

• Irwin A. Phillips, Past President: Council of District Merchants Assoc., P.P. Noriega Merch. Assoc. P.P., Clement Merch. Assoc.

• Scott S. Nelson, Founder, Tax Incentives Group

• Paul Bonini, Owner, Harrison & Bonini Inc

• Jean Eddy, President, The People Connection, Inc.

• Suzanne Tucker, Owner, Marking Solutions/One Stop Graphics

• Janet Hildreth, Owner, Tree Lovers Floors, Inc.

• Ben Stiegler, CEO, SynerTel

• Philip De Andrade, OwnerGoat Hill Pizza

• Jerome D Cizek, CFO, Morling & Co.

• Todd Parent, CEO, Extreme Pizza

• David Sahagun, Owner, Pacific Heights Chevron

• Alice Ray, CEO, Ripple Effects

• Bob McLennan, Planet Fitness San Francisco

• Joanne Ireland, President, Ireland Presentations, Inc.

• Arnie Lerner, Principal, Lerner & Associates Architects

• Joseph Ruiz, Founder, Rhapsody Painting & Environmental Services

• Rick Karp, President, Cole Hardware

• Matt Rogers, Owner, Papenhausen Hardware

• Jim Carter, Partner, Suhr Risk Services of California

• Eric L Steckel, Vice President, Bars+ Tone

• Calvin Y. Louie, CPA, CYL

• Stephen Cornell, Owner, Brownies Hardware

• Robert T Roddick, President, Noe Valley Law Office

• Michael Bernick, Attorney and Former EDD Director, Sedgwick, LLP













cc: Mayor, Ed Lee

Health Bill

I try to return all emails I receive and was just overwhelmed yesterday on my email on the Supreme Court decision.


First let me say that about 60% of the respondents agreed with the decision with 40% opposing.

Many of you asked why I agreed. I can’t respond individually to all of you so I will give you my thoughts in this email.

First I agree with those of you that made the point that this is not a perfect bill. In my opinion it did not have enough cost containment measures and at the end of the day the effectiveness of the bill will be judged on how it controls and reduces cost.

The reason I supported the bill is that clearly and I think almost everyone will agree our health system is broken. The US spends 50% more on health care cost than any other industrial nation. I is now about 18% of our gross domestic product.

This bill has the potential to bend the cost curve of health care cost and get more people insured. The guaranteed issue portion of the law could only be done with the individual mandate. It has been estimated that there could be a 3% to 9% reduction in cost by the people that will be obtaining health insurance.

But more importantly there is the potential that we now have in place the mechanism to reduce cost. The Exchanges could be a game changer. In California the Exchange will not only negotiate rates but can demand efficiencies from providers and insurance companies

If we put in place pay for performance guidelines[ currently we are a pay for procedures], evidence based medicine, an integrated delivery system, disease management , implementation of electronic medical, records and reduced administrative cost just to name a few reforms we can truly impact health cost in this country.

But we must do more than just reduce cost. We must increase the quality of our health care. Right now we are near the bottom the pact in the areas such as infant mortality and longevity of life.

The only thing we lead the world in is life expectancy once you reach 80. The problem is you have to reach 80 first

This will not be easy as we are talking about $2.8 trillion dollars and there is a lot of special interest. We as small business owners and citizens must better understand the health bill and demand that our health system be more efficient.

I welcome your comments.



Scott Hauge

President

Healthcare Alert Webinar 7/18 @ noon

Many of you have asked if Small Business California was going to do a webinar now the Supreme Court has made their decision. We will be doing so July 18 from 12 to 1 working with California Employers Association, CAL Insurance and Vista Point Insurance. You can register by clicking on the link below. Scroll to the bottom of the linked in page.

You will note our speaker is Lucian Wulsen who did the webinar for us when the law was first passed. We will be answering questions during the webinar





Scott Hauge

President



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




Healthcare Alert Webinar

Date: Wednesday, July 18, 2012 At 12:00 PM

Duration: 1 Hour

Cost: FREE

Register link: http://www.employers.org/calendar-of-events/2012-07-18/healthcare-update?utm_source=MagnetMail&utm_medium=email&utm_term=Message%20Subject



On Thursday, June 28th, the Supreme Court upheld the 2010 federal health care law requirement that individuals get insurance. The decision will have sweeping ramifications for consumers, state officials, employers and health care providers.

While some of the key features don't kick in until 2014, the law has already altered the health care industry and established a number of consumer benefits.

Join CEA, CAL Insurance and Vista Point Insurance on Wednesday, July 18th for a lunch and learn live webinar to hear about some of the law's provisions that are already in effect and major features of what's to come. Our esteemed Guest Speaker, Lucien Wulsin, JD, Center Associate, UCLA Center for Health Policy Research Director, Insure the Uninsured Project (ITUP) will spend an hour with us, including time for questions.

Issues To Be Discussed Include:

• I don't have health insurance. Under the law, will I have to buy it?

• I get my health coverage at work and I'd like to keep my current plan. Will I be able to do that? How will my plan be affected by the health law?

• What parts of the law are now in place?

• What if employees want health insurance but can’t afford it?

• I own a small business. Will I have to buy health insurance for my workers?

About the Speaker: Lucien Wulsin is an attorney specializing in health law and health policy; he is director of the Insure the Uninsured Project (ITUP).

While some of the key features don't kick in until 2014, the law has already altered the health care industry and established a number of consumer benefits.

Heath Bill/2081/SF Gross Receipts Tax

Last week I sent an email indicating that I think the Affordable Care Act while not perfect and short on cost controls had potential to drive down

cost, reduce the number of uninsureds and provide better quality health care. Please see below a comment from Les Bowne a friend in Massachusetts

Scott:



I agree with you 100%. In Massachusetts, as you know, it has been a few years since we implemented something similar. It took about 3 years for the cost savings to start being realized and the catalyst was the state’s imposed limits on healthcare insurance rate increases, which forced everyone to start finding ways to cut costs, especially the hospitals. My company’s increases over the past three years have been at about the general rate of inflation. It is amazing how different the costs are at different hospitals for the same procedures. When this became known and widely publicized, the “rogue” providers with the highest costs stuck out like sore thumbs. Incentives were provided for patients to go elsewhere. Now everyone is looking to find ways to cut costs while remaining competitive in terms of patient satisfaction.



When the easiest cost reductions have been made, we will have to look beyond this to more politically sensitive ones, like tort reform. Better that the money gets spend on providing healthcare than paying lawyer.

Les



Last week was a difficult week for Small Business California. We were the sponsor of SB 2081 which would allow solicitation of accredited investors. Now you may be saying the JOBS bill passed in Washington already did that. Well the rules have not been written by the SEC but it is expected they will allow this.



What makes our bill different is that we put in place protections for Accredited Investors that most likely will not exist under the JOBS bill.

For example our bill requires a suitability study and would limit investments to 10% of an investors net worth[excluding the investors equity in their principal residence]

It further requires the issuer to have a reasonable belief after reasonable inquiry that each investor is an accredited investor.



This bill passed the Assembly on a 66 to 2 vote. It was being heard at the Senate Banking and Finance Committee. While we received a positive vote from Chairman Juan Vargus and Senator Noreen Evans we had opposition from Senator Christine Kehoe and surprisingly Republican Sam Blakeslee. I say surprisingly because the Republican Caucus recommended a do pass.

We also had a recommendation of do pass from the staff of the Committee.

We had the support of Alex Padilla but he did not get to Committee in time to vote.



The big surprise was Lois Wolk who supported our bill. She is currently the target of a very negative piece by the Sacramento Bee. She therefore recused herself.



Obviously we were disappointed because unless we get this passed at some point investors will have very little protections in the JOBS bill.

We are concerned that if the JOBS Bill goes into effect there may be scandals and we may see the bill overturned down the road.



For those of you in SF we will be sending a letter to the Board of Supervisors today supporting the gross receipts tax and asking that the Mayor’s proposal be the basis of doing this. If you would like to sign onto the letter please let me know by 4 today. If you need another copy of the letter please let me know. I don’t need you to do anything except giving me authorization to do this.





Scott Hauge

President

Supreme Court Ruling/ LA Business Journal

By now you have all heard about the Supreme Court decision upholding the individual mandate which now has been renamed a tax. I know many of you will disagree with me but I think it was a good decision and will help small businesses in the future. This will allow the Exchange to move forward to reduce the cost of health insurance for small business and increase the options for small business. It will also be a great benefit for sole proprietors who now have to go through medical underwriting to get coverage.

What do you think?

Some of the people that said they would talk to the media have been contacted and one of them is being interviewed by CNN. Thank you to all that said you would speak to the media.



I received a call from LA Business Journal looking for someone who would talk to him about SB1234. This is the mandate that would require all businesses with 5 or more employees to provide a retirement plan. Is anyone in the LA area who would be willing to talk to him. He is looking for someone with 5 or more employees who does not provide any kind of retirement plan. Small Business California opposed this





Scott Hauge

President

IIPP Reqs/25 most freq. cited T8 CCR Standards in CY 2011

Yesterday I was at a meeting with Ellen Widess the head of Cal OSHA. Pease see some material she passed out.

The first piece is the 25 most common citations by OSHA. Note not having an Injury and Illness Protection Plan [IIPP]is far and away number one. The fines can be up to $5000.

The second piece is what is required to be in a IIPP. Please note all busine3sses are required to have an IIPP. If you have over 10 employees it must be in writing. If you have less than 10 it can be verbal but honestly that doesn’t make a lot of sense to me. If you do decide not to do this in writing make sure you have documentation that you have met the requirements and told your employees.

If you want more information about how to do an IIPP please let me know.

updated: Supervisor's Tax Letter

The attached letter has been signed by the SF Chamber, Small Business Network,JOBS, SF Made and sf.citi. The only change in the letter is that I changed it from associations to small business


I am asking you if you would be willing to sign the letter attached as your business. I would really appreciate it. I think I have heard from you in the past that most of you agree with this.

If you are okay with this send me your company name and address



Scott Hauge

President

CAL Insurance and Associates, Inc.

2311 Taraval Street

San Francisco, CA 94116

www.cal-insure.com

Phone: (415) 680-2109

Fax: (415) 680-2137

License #0A32315

"Always looking out for you"


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

July 2, 2012




Board of Supervisors

City Hall

1 Dr. Carlton B. Goodlett Place

San Francisco, CA 94102-4689



Dear Board of Supervisors:



As a diverse coalition of San Francisco small businesses and organizations, we write to express our strong support for reforming San Francisco’s business tax system towards one based on taxing revenues, not jobs.



San Francisco is currently the only city in California to levy a “payroll expense tax” on businesses, directly raising the cost of labor and creating a disincentive for companies to add jobs in our City. Moving towards a “gross receipts tax” – which taxes a business based on overall revenues and is used by a majority of other large cities in California – will end San Francisco’s direct tax on jobs, provide more stable and growing revenue for City services and incentivize job creation in diverse industries and businesses large and small.



Earlier this month, Mayor Ed Lee and Board of Supervisors President David Chiu introduced a comprehensive business tax reform measure for the November 2012 ballot that phases in a gross receipts tax over a five-year period beginning in 2014. This measure is the product of extensive outreach to diverse business sectors and business owners over the last six months conducted by the Mayor’s office, the Board President’s office and the Office of the Controller. We greatly appreciate this transparent and inclusive effort to engage the business community and understand our concerns and the potential impacts of business tax reform on our industries and on the City’s overall economy.



As a result of this extensive stakeholder outreach and approach, we strongly believe that the measure proposed by Mayor Lee and Board President David Chiu is the appropriate starting point for the legislative discussion and debate that will occur at the Board of Supervisors in July.



Significantly, the Mayor and Board President’s proposed measure includes a small business exemption for gross receipts of less than $1 million. This will provide our local micro and small businesses a needed boost. It also preserves existing payroll tax exclusions until their expiration for Central Market, biotech and clean-tech industries and local enterprise zone areas. It is important that the City continue to honor commitments it has made to businesses that made long-term investment and other decisions based on these exemptions. We all believe that tax reform must be broad based, equitable and fair and not create undo winners and losers. In addition to protecting the smallest businesses, we must protect our largest employers who have been paying a significant share of taxes for many years.



There is still plenty of work to be done to further refine and finalize the legislation before it is heard at the Board of Supervisors next month and considered for placement on the November 2012 ballot. As business tax reform moves to consideration at the Board of Supervisors in July, we hope that the business community and diverse business owners will continue to be consulted and considered throughout the legislative process. A topic this complex and this important impacts every San Francisco business and resident in some manner, and will require building the widest consensus possible to succeed in November.

With more than 30,000 San Franciscans still out of work, 2012 is the year to reform our business tax system. We strongly urge the Mayor and the members of the Board of Supervisors to work together to place ONE consensus business tax reform measure on the ballot this November that will end San Francisco’s direct tax on jobs for most businesses and build a strong and stable economic foundation for our City’s future. Please see the list of signatures below who are in support of this letter.



Associations:

• Sarah De Young, Executive Director, California Association of Competitive Telecommunications Companies (CALTEL)

• Hut Landon, Executive Director, San Francisco Locally Owned Business Alliance (SFLOMA)

• Kim Parker, Executive Vice President, California Employers Association (CEA)

• Stephen Cornell, Chairperson, Small Business Advocates (SBA)

• Robert T Roddick, President, Noe Valley Merchants and Professional Association (NVMPA)





Small Business Owners:

• Scott Hauge, President, CAL Insurance & Associates, Inc

• Robert Legallet, Owner, Bayview Industrial Park

• Richard Parker, Principal 450 Architects, Inc.

• Jerry Becerra, President, Barbary Insurance Brokerage

• Kevin Wallace, President, Wallace Remodeling, Inc.

• William Brugger, Partner, Kuschel & Company, LLC

• Denise Collins, CEO, Aunt Ann's Home Care

• Steve Sarver, Founder, SF Soup Co.

• Will Wenham, President, Cut Loose

• Norman Ishimoto, Owner, KI Associates

• Sam Mogannam, Owner, Bi-Rite Market

• Stephen Cornell, Owner, Brownie’s Hardware

• Scott Rodrick, President, Rodrick Foods

• Scott Rodrick, Owner, Guy Enterprises

• Benjamin Horne, President, DBA Horne Services & Sales

• Henry Karnilowicz, Owner, Occidental Express

• Ruthie Norton , Senior Vice President, CCI Financial and Insurance Solutions

• Deborah Taylor, Principal, DesignTree Studio

• Steve Mayer, CEO, Burr Pilger & Mayer

• Joanne Gomez, Owner, West Bay Counters , Inc

• Cathy Murphy, Owner, Home Instead Senior Care

• Lori Shannon, Owner, See Jane Run

• Sharon Gadberry, Director, Gadberry and Associates

• Grace Santana, Owner, Grace Santana Plumbing Contractor

• Lesley Leonhardt, Owner, Images of the North

• Steve Lombardi, Owner, Lombardi Sports

• Irwin A. Phillips, Past President: Council of District Merchants Assoc., P.P. Noriega Merch. Assoc. P.P., Clement Merch. Assoc.

• Scott S. Nelson, Founder, Tax Incentives Group

• Paul Bonini, Owner, Harrison & Bonini Inc

• Jean Eddy, President, The People Connection, Inc.

• Suzanne Tucker, Owner, Marking Solutions/One Stop Graphics

• Janet Hildreth, Owner, Tree Lovers Floors, Inc.

• Ben Stiegler, CEO, SynerTel

• Philip De Andrade, OwnerGoat Hill Pizza

• Jerome D Cizek, CFO, Morling & Co.

• Todd Parent, CEO, Extreme Pizza

• David Sahagun, Owner, Pacific Heights Chevron

• Alice Ray, CEO, Ripple Effects

• Bob McLennan, Planet Fitness San Francisco

• Joanne Ireland, President, Ireland Presentations, Inc.

• Arnie Lerner, Principal, Lerner & Associates Architects

• Joseph Ruiz, Founder, Rhapsody Painting & Environmental Services

• Rick Karp, President, Cole Hardware

• Matt Rogers, Owner, Papenhausen Hardware

• Jim Carter, Partner, Suhr Risk Services of California

• Eric L Steckel, Vice President, Bars+ Tone

• Calvin Y. Louie, CPA, CYL

• Stephen Cornell, Owner, Brownies Hardware

• Robert T Roddick, President, Noe Valley Law Office

• Michael Bernick, Attorney and Former EDD Director, Sedgwick, LLP













cc: Mayor, Ed Lee

Exchange Health Plan

One of the options an employer may have in the Health Exchange health plan is to enable employers to make a defined contribution and allow each of their employees to choose their own health insurance company. The Exchange would handle enrollment and provide employers with a single billing.


Would this be attractive to you?

I say may because the Board has not set the guidelines.



I expect to receive calls from the media once the Supreme Court comes down with a decision. Would you be willing to talk to the media?

If so please provide your contact information. If you feel you need some talking points please let me know and I will provide them after the decision. You of course can say whatever you want.



Scott Hauge

President

Small Business California

2311 Taraval Street

San Francisco, CA 94116

shauge@cal-insure.com

415-680-2188