HR4213/1099s/Proposition 16

So it appears that the extender bill HR4213 filed in the House was defeated.

The Senate was expected to take this up today but clearly with no bill it appears nothing is going to happen until after recess. HR 4213 would have extended the waiver of SBA fees on SBA loans and the 90% guarantee. So that means the SBA will run out of money for the waiver and guarantee and a queue is being set up.

Keep in mind this bill was not defeated because of the SBA provisions but as usual small business gets caught in the cross fire between Democrats and Republicans over whether stimulus money should be going back to pay off the debt or if any spending can be provided without off setting revenue.

The bill had a cost of $134 billion of which our SBA funding was about $500 million. For those of you in SF this means there is no funding to continue Jobs Now.

Small Business California has been trying to get repealed the requirement that businesses file 1099s for all companies they pay $600 or more. House member Dan Lungren has introduced HR 5141 to do this. He will be holding a press conference June 2 and SB Cal will there. If you are in his district and interested in attending let me know.

We have 70 cosigners on the bill all Republicans.

SBA Administrator Mills in a letter to small business said that the IRS is working on eliminating reporting for providers of goods and services that are paid by credit card. This is a start but clearly not enough.

Proposition 16 will be on the June ballot. This would require a two thirds vote to set up public power. What are your thoughts on this - Support? Oppose? Undecided?



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

SBA Loans

See below article on SBA loans.

I mentioned yesterday that there is an extender bill HR 4213 which would extend the waiver of SBA fees and 90% guarantee through the end of the year. I heard from some of you that you called to ask this get passed. Thank you.

It is expected that this bill will come up in the House tonight and the Senate tomorrow. The SBA portion of this bill is very small. The cost of the bill has been reduced from $200 billion to $144 bill making it much more likely to get passed.

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



Money runs out for SBA small business loan breaks

Catherine Clifford, staff reporter, On Thursday May 27, 2010, 9:07 am EDT

In the middle of the federal government's National Small Business Week, two of the most successful Small Business Administration programs are about to run out of money -- again.

The SBA announced Wednesday that it is opening up its Recovery Loan Queue for the fourth time.

For more than a year, the SBA has used money first allocated in last year's Recovery Act to temporarily reduce fees for borrowers and increase the guarantees banks receive on loans made through the agency's lending programs. The SBA's loan volume has picked up sharply in that time, a turnaround agency officials attribute to the stimulus incentives.

But the funding for them ran out in November. Since then, the agency has relied on a series of temporary extensions to keep the loan sweeteners in place. Every time the money runs out, the SBA opens up its Recovery Loan Queue to track applicants hoping to collect the last few remaining dollars.

The latest authorization for some of the loan incentives expires at the end of this month, and the money for them is likely to be exhausted even sooner.

President Obama and many in Congress say they want the loan incentives extended for at least the rest of this fiscal year, which runs through September. But the two chambers of Congress haven't yet agreed on legislation to do that. Result: A series of emergency bills that so far have kept the funds flowing, but only after several brief expirations.

"The stopping-and-starting is problematic," said SBA spokesman Jonathan Swain. "It is a complicating factor for our lenders and our borrowers."

When the funding pool starts to go dry, lenders scramble. Seacoast Commerce Bank, a community bank in Chula Vista, Calif., had pushed five SBA-backed loans through by midday Wednesday.

"It certainly puts a lot of strain on the whole process," said David Bartram, an executive vice president in the bank's SBA division.

It also throws borrowers into limbo. Losing the SBA's fee waiver can make a loan thousands of dollars more expensive for the borrower -- and there are some loans banks are only willing to make if they can get the higher SBA guarantee. Without it, those loans become too risky.

"There are some customers that we are not going to be able to help," Bartram said.

Members of both the House of Representatives and the Senate are pushing for another extension, but it's unclear whether legislation can make it through before the Memorial Day break.

"Nothing gets through Congress easily these days, even bipartisan legislation," said Lynn Ozer, executive vice president of government lending at Susquehanna Bank.

SBA lending is one of the few bright spots in an otherwise barren credit landscape, but it's still a small part. A recent government report estimated that SBA programs account for just 4% of all small business lending.

President Obama this week renewed his push for a new, $30 billion loan fund to seed small banks with capital to boost their local business lending. In a report issued Tuesday, the Congressional Budget Office estimated that the measure would cost the government $3.3 billion over the next five years.

Copyright © 2010 Cable News Network and Time Inc. and their affiliated companies. All Rights Reserved.

Calls to U.S. House Needed Today

Please see request of Trent.

He is the head of Health and Human Services in SF.This is important to all of you in SF that are receiving Jobs Now money.

It is also important to small businesses around the country because it will provide until the end of the year the stimulus money for the waiver of SB fee and the 90% guarantee. The money for this is scheduled to run out the end of May.

Take a moment and make the call

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


From: Trent Rhorer [mailto:Trent.Rhorer@sfgov.org] Sent: Wednesday, May 26, 2010 10:07 AMTo: Scott HaugeSubject:

Hi Scott.This is the bill to extend JobsNow. Can you send it out to your members? Maybe they can make a call in support. Thanks.

Trent

Dear Director:

A quick phone call from you today to your U.S. Representative (see list below) is critical.
As soon as today, the House may vote on H.R. 4213
Calls are needed TODAY (Wednesday) 1-888-245-0215 (toll-free to Capitol Switchboard).

Cardoza - Fresno (part), Madera (part), Merced, San Joaquin (part), Stanislaus (part)

Costa - Fresno (part), Kern (part), Kings

Susan Davis - San Diego (part)

Eshoo - San Mateo (part), Santa Clara (part), Santa Cruz (part)

Filner - Imperial, San Diego (part)

Harman - Los Angeles (part)

Honda - Santa Clara (part)

Lofgren - Santa Clara (part)

McNerney - Alameda (part), Contra Costa (part), San Joaquin (part), Santa Clara (part)

Schiff - Los Angeles (part)

Speier - San Francisco (part), San Mateo (part)

SBA Loans/OSHA/Red Flag Rules

As reported in prior emails the stimulus money for the waiver of fees and the 90% guarantee on SBA loans will run out the end of May. It is hoped that $505 million will be approved to provide funding for the rest of the year. It was expected that this would be passed yesterday but it did not happen. Again we are in a last minute situation and the banks will be rushing to get their packages to the SBA so I guess it is possible they could run out of money before the end of the month.

I just learned yesterday from one of our members that OSHA requires businesses to notify OSHA within 8 hours of a death of an employee at their business. This is required even if the death is from natural causes. Our member was fined $5000 for not reporting within 8 hours.

I hope all of you are aware of whether you are subject to the Red Flag rules put forth by the FTC. If you are considered a financial institution or arrange credit you are required to have a program in effect and enforcement will start June 1. Fines will be assessed if you are not complying. You also need to have this approved by your board if you are a corporation or a committee appointed by the board.


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

Small Business California continues to do amazing things for small businesses around the state -

We are responsible for bringing On Bill Financing to California. Last week I found out that PG&E in their filings has agreed to do On Bill Financing in their area effective July 1 2010. San Diego Gas has been doing this for years and has lent millions to small businesses. Southern California Edison will be implementing On Bill Financing in the next few months.

For those of you that are not aware of what On Bill Financing is it is a way to provide capital to small businesses at 0% financing for energy retrofits.

Access to capital is a major issue for small businesses and Small Business California is making capital available for energy retrofits. Kudos to Hank Ryan our executive director for making this happen.

Small business is seen by many as an obstacle to solving the uninsured problem in this country and California. We do have problems with the recently passed health bill but Small Business California also wants to be proactive.

As such Small Business California strongly supports Volunteers In Medicine. This program takes volunteer heath professionals that serve the working uninsured. We now have 78 clinics in 25 states. I am working on setting up a Volunteers In Medicine Clinic in SF. Many of you have contributed to this effort and I thank you. We are now looking at opening this clinic in SF around September. It will be called Clinic by the Bay. This is my dream for 11 years but more importantly it is something small businesses can be proud of in trying to find solutions to helping the uninsured.

I don’t usually ask for your help but I am going to do so now. We need you to join Small Business California. For those of you that have done so thank you. For those of you that haven’t I ask what organization provides you more information about what is going on in Sacramento and Washington than SB Cal? What organization has been more effective representing small business than SB Cal ?

Please visit our website a www.smallbusinesscalifornia.org to find out more about our effort and join on line.


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

State Fund Announces Rate Cut/ Northern California Independent Booksellers Award/ Dodd Regulation bill

Last week State Fund filed for a 3.2% reduction in their workers compensation rates for July 2010. They also have filed to eliminate their loss free credit for policies between $25000 and $59999 but extended their merit credit to these policies which should make them more competitive on those accounts.

State Fund is in a unique position for insurance carriers. Their combined loss ratio [claims and expenses] was 161.5% yet because of their huge surpluses they made $143 million for 2009 up from about $75 million in 2008. I assure you other insurance carriers could not do this and eventually workers compensation rates are going to go up significantly.

I am pleased to announce that our affiliate member the Northern California Independent Booksellers Associations is being presented an award from The Bay Guardian as the Chain Alternative. Congratulations Hut Landon the Executive Director of the Association and Mike Tucker owner of Books Inc.

I’m sure you are all following the debate in Washington over financial regulations and trying to prevent future melt downs of our financial institutions. Yesterday they dropped the $50 billion bailout money and it appears Senator Dodd’s bill is getting closer to passage. As a small business person what do you think about this? Should the size of the huge financial institutions like Goldman Sachs be reduced? NSBA has consistently opposed the repeal of Glass Steagal.

What do you think about this?


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

I have the names of all of you that said you would send letters supporting HR 5141 but have decided to send the sample letter to everyone and hope you will take a couple of minutes to send the following.

Honorable Dan Lungren
US House of Representatives
Washington DC 20515

Dear Congressman Lungren:

I am a small business owner and am writing in support of your bill HR 5141 the Small Business Paperwork Mandate Elimination Act . HR 5141 will repeal section 9006 of the recently passed Patient Protection and Affordable Care Act PPAFC. PPAFC places a major burden on small business by requiring us to send 1099s for virtually all businesses we do business with.

The PPAFC requires me to send 1099s for anyone that provides goods and services to me with a value of $600 or more. This includes corporations and businesses that provide materials to me. I do not currently have to do this.

I currently send 1099s for [ fill in the number] businesses. If PPAFC goes into effect I will have to send [ fill in the number]. Not only will this create a serious paperwork problem to send these but it will create a problem for me to get all the tax ID numbers.

I also think it would create a serious problem for the government processing the millions of additional 1099s they will be receiving.

Thank you for introducing HR 5141 and we will be urging the House Member in our district to support this legislation also.

Signed

Be sure and include your name, company name and address.


Feel free to change this anyway you would like. If you are a sole proprietor you might add that your tax id number is your social security number and that you are concerned about identity theft.

Also if you think the number of additional 1099s is too small just say you support the bill.

Copy me and Kevin Holsclaw in Congressman Lungren's office (Kevin.Holsclaw@mail.house.gov) on the letter.

I will also send a copy of your letter to your House member and copy you on this.

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

New 1099 Requirements

It seems as though the US Chamber is stepping into this discussion. See below.

Thank you to everyone that said they would send a letter of support for HR 5141. I will have a letter to you by Monday.

I talked to Congressman Lungrens office yesterday and they said what will be important in any letters sent will be the affect on your business. For example my company does 25 1099s. The new requirements will force me to do 700. Give some thought as to how it will impact you.

Thank you also to all the association that agreed to sign a joint letter. I will get the letter to you Monday.

If any other associations on this email want to sign on please let me know. I will be sending to every House member in California.

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


Letter supporting H.R. 5141, the "Small Business Paperwork Mandate Elimination Act"

April 29, 2010

The Honorable Dan Lungren
U.S. House of Representatives
Washington, DC 20515

Dear Representative Lungren:

The U.S. Chamber of Commerce, the world’s largest business federation representing the interests of more than three million businesses and organizations of every size, sector, and region, strongly supports H.R. 5141, the “Small Business Paperwork Mandate Elimination Act,” which if passed into law, would repeal the onerous paperwork burdens imposed on business by the ill-conceived expanded information reporting mandate contained in Section 9006 of the “Patient Protection and Affordable Care Act” (PPACA). This provision was used as an unrelated “pay for” in the PPACA and it should be rescinded based on the merits of the provision alone.

Unless this section is repealed, businesses across the nation will be subjected to the folly of data collection and information filing on virtually all business-to-business transactions they make aggregating $600 or more in a year at a time in which many can least afford it. When the United States is depending on the small business community to generate jobs and grow the economy, lawmakers are diverting their precious time and resources to collecting volumes of information and filling out mounds of new paperwork for the government.

If allowed to be implemented, Section 9006 of the PPACA will also have a chilling effect on new business relationships, most of which will be small businesses and startups. Many businesses in an attempt to reduce data collection and paperwork burdens will simply reduce vendors and refuse to entertain new business dealings. This will have a disproportional impact on small businesses and entrepreneurs attempting to get a foot in the door.

The ultimate irony of these new burdens is that the IRS neither has the resources nor the ability to use the new information to reconstruct an accurate picture of a company’s revenues since a large volume of business-to-consumer transactions are not reported. While the vast majority of compliant taxpayers will bear the cost of implementing this law, it will have only minimal benefit as a government tool in reducing non-compliance.

Moreover, the U.S. tax system is only as strong as the willingness of its participants to voluntarily comply. Imposing vast new data collection and reporting requirements may be viewed by many small business owners as unreasonable and overreaching. In the end, this could serve to undermine confidence in the government and further frustrate tax collection efforts.

Ninety-six percent of the Chamber’s members are small businesses with fewer than one
hundred employees. On behalf of its members, the Chamber thanks you for introducing this important bill and looks forward to working with you on its passage.


Sincerely,
R. Bruce Josten

1099 Requirements and Small Business

Small business traditionally has not been involved in the legislative process. This drives me crazy but when I ask why, you tell me you are to busy and the issue doesn’t affect you.

While I think this is wrong and we get hurt by legislation consistently, we now have an issue that effects almost every small business in this country.

I have sent out emails telling you about 1099 requirements under the new health care bill. These take affect in 2012 . If you think it doesn’t impact you you are wrong.

For my business, I currently send out 25 1099s. The new requirement will have me send out about 700.

I send out a challenge to you.. This email goes to 4000 small businesses. I don’t think there is a single one of you that won’t be impacted by this provision in the health bill.

If you think you re not impacted let me know. I will personally pay you $100 and let all on the email know how many of you have shown I am wrong. My only caveat to this is if you feel this may reduce competition from the underground economy this is not quantifiable and will not be considered.

However feel free to send this to anyone you want and my offer stands to them.

I am grandstanding I know but this is serious. I am being told we can’t win this battle and that is probably right.

Do you want Small Business California to fight the fight and will you join us?

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

1099s/ Worker Compensation/ Arizona Boycott

Yesterday I told you about the requirement that was slipped into the health bill that businesses would have to file 1099s on all providers of goods and services over $600 to their business. This will now include corporations so you will have to do so for companies like PG&E, IBM as well as smaller corporations.

I had one of the people on the email list that said his business will now have to file about 3000 new 1099s at a cost he estimates at about $1300. He pointed out something I hadn’t thought about and that is he will also have to get the Federal ID number for all of these businesses.

I have verified that this requirement will take effect 2012 and it is estimated that it will raise $17 billion over a 10 year period.

Dan Lungren from California has introduced HR 5141 to repeal this onerous provision. Small Business California has been in contact with his office and we strongly suggest you write a letter supporting this legislation. If you want to do so send me a return email and I will send you a suggested letter. If you are in the Congressman district [ Sacramento/ Parts of the Mother Lode] let me know that also.

I have been trying to find rate filings for increases in workers compensation. It seems that most of the major players have not done so yet but what I do have is Everest will be filing a 5% increase, First Comp 13.5% Hanover 7.1% and Benchmark 12.34. There are other filings but they are really small carriers. As I have said before I don’t expect major increases in July except for a few carriers but watch out for January.

Yesterday I was interviewed on a local television channel on boycotting Arizona over their new immigration law. SF is not the only City looking at this and I believe the state is also considering something. In SF there is discussion of not allowing City contracts to businesses doing business in Arizona. My personal opinion is that I think it is a horrible law and I hope it gets struck down by the courts but I don’t think there should be a boycott. What do you think.

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

Small Business and 1099s

It has just come to my attention that the Health bill recently passed had a provision slipped into it that will require all businesses to file 1099s to any provider of goods and services over $600 in a year.

It appears this will start in 2012 but I am verifying this. For a $14 trillion dollars US economy that is a lot of 1099s.

House member Dan Lungren is introducing legislation to repeal this.

Scott Hauge
President
Small Business California'
2311 Taraval Street
San Francisco, CA 94116
415-680-2811
shauge@cal-insure.com

Red Flag

AB 1771 passed the Assembly Public Safety Committee yesterday on a 4 to 0 vote. Voting in support was Jerry Hill from South SF, Curt Hagman from Diamond Bar, Danny Hill from Hanford and Jim Beall from San Jose. This is the Small Business California bill that would allow small businesses to bid on small contracts with state agencies. Currently they can only be done by prisoners.

The Red Flag rules which have been postponed for about a year will be enforced effective June1. These rules put in place by the Federal Trade Commission. The rule was designed to fight identity theft by requiring creditors with certain kinds of accounts to implement compliance programs to detect and prevent identity theft. Take a look at the website below to see if you are impacted by this. There is a $2500 fine for noncompliance.

Here is the website:

http://www.ftc.gov/bcp/edu/pubs/business/alerts/alt050.shtm

Small Business California sponsored bill SB1373 will be going before the Revenue and Taxation Committee on April 28. This bill levels the playing field for small businesses on paving work. It will require vertically integrated manufacturers[ businesses that manufacturer asphalt and cement and install the materials] to pay the same sales tax as the contractors that only do the work.

We are running into to strong opposition by vertically integrated manufacturers as it could effect as much as $10 billion of work. Thank you to all the associations and individuals that sent letters and a big thank to Betty Yee Chair of the Board of Equalization and Senator Mark Leno for authoring the bill

For those of you in San Francisco be sure and get your paperwork into the City for the Health Care Ordinance. It is due April 30.


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

SB 900/AB 1771 and Governor's Conference for Small Business

I just found out that Senator Alquist has introduced legislation to create a Health Insurance Exchange. This would be housed in the California Health and Human Services Agency. The Exchange will be governed by a board with gubernatorial and legislative appointments and would meet at least once every two months. We are tracking this legislation closely.

It is critical that small business have representatives on this board. Small Business California will be pushing hard to make this happen.

The bill number is SB 900 and you can get more information by going to www.leginfo.ca.gov

We are getting close to the Governor's Conference for small business. Please see below information. If you have not done so already please register for this event.

There has been added a session on the new health bill from Washington. I will be speaking at this event on this issue.

Assemblyman Tony Mendoza has introduced AB 1771 which would allow small businesses to bid on goods and services for state agencies currently provided by prisoners. The sale of prison goods and services is a $230 million dollar industry.

Small Business California has been quoted in numerous media outlets supporting this legislation.
Even though the Prison Industry Authority has considerable advantages such as lower labor cost and lower overhead we are only asking that small businesses be given the opportunity to bid on these contracts and the low bidder should be awarded the contract.

In these difficult economic times where small businesses are struggling to survive this does not seem unreasonable. Also the state may be able to save some money.

It is interesting to note that 30% of the prisoners or about 2000 are lifers.

What do you think?

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

Workers Compensation Results/SBS Funding Extended/Webinar/ Employer Lawsuits

The Workers Compensation Insurance Rating Bureau released April 14th the summary of Insurer Experience for 2009. The total written premium was $8.9 billion down from $10.7 billion for 2008. The average rate per $100 of payroll was down slightly from $2.37 to $2.35. This is down 63% from 2003. The accident year loss ratio was 75% up 6% from 2008. The combined loss ratio was not reported but in 2008 it was 108% and the estimate is that it will be around 120%.

So you are asking what does this mean. The pressure is on to increase rates and at some point they will go up double digits but I do not see it happening this year but look out for January. There will most likely be some increase in pricing but I do not see any dramatic increases this year. The caveat here is that some companies may increase premiums by double digit amounts but most won’t. State Fund is one of those companies you will see double digit increases

The Senate passed an extension of several of the American Recovery and Reinvestment Act provisions that were set to expire April 30th. These provisions include the higher guarantees for SBA 7a loans and fee waivers for 7a[ working capital and some real estate] and 504 loans[ real estate] The extension provides $80 million to extend these provisions until May 31 2010.
While this is clearly good news what we need is passage of S2869 which will extend these provisions to the end of the year and increase the loan size to $5 million and allow refinancing of 504 loans.

Some of you were on the webinar Wednesday on the impacts of the health bill on small and medium size businesses. We received great reviews of the webinar and we had about 115 people participate. What would you think of us doing another one of these in about three months? If you would like a copy of all the questions that were asked and the answers to these questions please let me know by return email.

The other day I was talking to a labor attorney and asked him what he was seeing in the way of litigation against businesses. His answer was that there has been an explosion of lawsuits for wage and hour violations. I strongly recommend you talk to your insurance broker about coverage for Employment Practices liability. This coverage also provides for wrongful termination, sexual harassment and discrimination along with some third party liability like ADA. Be sure to ask your broker about wage and hour and ADA as some Employment Practices policies do not automatically cover this


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

Health Bill Small Business Tax Credits

All of you are probably aware that the recently passed health bill provided for small business tax credits. Some of the details of those tax credits are:

Tax credits are available to small businesses in two phases:

Phase One -if you are a business with 25 employees or less and average wages of $50000 or less and pay at least 50% of the total premium for your employees coverage you can receive a credit up to 35% of the premium cost between 2010 and 2013.

Phase Two begins 2014 and if you meet the criteria you can receive a tax credit up to 50% of your health insurance cost. The full tax credit is available in both phases to employers with 10 employees or less who have an average wage of $25000 . The credit phases out for employers with between 10 to 25 employees with average wages between $25000 and $50000. The credit ends 2016.

The tax credits can be captured by a deduction on your federal income tax liability and can be carried back 1 year and forward 20 years.

Are you eligible for these tax credits?

If you are not providing insurance will this incentive be enough to get you to provide health insurance to your employees?

Would you be willing to talk to the media? If so send me your contact information and the number of employees you have.

If you want to learn more about this and other provisions of the health bill please join the webinar April 13 at 9AM. You must register and can do so by calling 800-399-5331.

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

Health Care Webinar/CA Office of Economic Development

There is still room for more participants on the Webinar PrimePay, California Employers and CAL Insurance is doing April 13th from 9AM to 10. The topic is the impact of the recently passed health bill on small and medium sized businesses.

Our presenter Lucian Wulsin from the Insure the Uninsured Project will be presenting. Lucian is recognized as a health policy expert. There will be time for your questions. It is free but you must register.

To do so call 800-399-5331.

See below announcement of the opening of the Governors Office of Economic Development.

Scott Hauge
President Small Business California
2311 Taraval Street
San Francisco, CA 94116
415-680-2188


Small Business CaliforniaGovernor Schwarzenegger Establishes Office of Economic Development

Signs Executive Order, Appoints Director, Launches Web Site to Improve Communication between Businesses and State

Governor Arnold Schwarzenegger today signed an executive order establishing the Governor’s Office of Economic Development (GoED), a one-stop shop to help businesses acquire the direction, information and resources they need to invest, succeed and expand in California. The Governor appointed Joel Ayala, former president and chief executive officer of the California Hispanic Chambers of Commerce, as director of the new office.

“California is the best place in the world to do business, and by cutting red tape and streamlining functions, my Office of Economic Development will make the state an even better partner to the economy,” said Governor Schwarzenegger. “This office is exactly what businesses need to navigate through state requirements and take advantage of state resources, and Joel Ayala is exactly the person to head it up. He knows what it takes to create jobs and bring businesses to our state, and I am looking forward to working with him to boost California’s economy.”

Those who want to do business in California must interact with the state in many ways, such as establishing, registering and maintaining their businesses, obtaining permits and licenses, reporting required information and paying taxes. The state also has more than 100 individual economic development programs and services available to businesses. At GoED, experienced staff will guide businesses through the various state requirements and help them access state resources.

The idea of creating a one-stop shop to cater to California businesses needs was originally suggested as a part of the Governor’s 2004 California Performance Review <http://cpr.ca.gov/> and again in a February 2010 Little Hoover Commission <http://www.lhc.ca.gov/studies/200/report200.html> report. The office will have three defined functions: to promote California as a place to do business; to support businesses interested in starting, growing, financing, expanding or relocating in California; and to help those businesses facing challenges to operating in California.

GoED will be open for business beginning today and can be contacted toll free at 877-345-GoED (877-345-4633) or at http://www.business.ca.gov/ <http://www.business.ca.gov/> .GoED is being established, staffed and housed using existing state resources. The Administration is currently in the process of drafting legislation that will make GoED a permanent entity in state government.

Joel Ayala has been appointed to lead GoED as the director. Since 2007, he has been president and chief executive officer of the California Hispanic Chambers of Commerce. Previously, Ayala served as president and chief executive officer for the Orange County Chamber of Commerce from 2001 to 2007 and school director for adult education and corporate training at the Career Management Institute from 1994 to 2001. He was deputy probation counselor for the Orange County Probation Department from 1985 to 1993. Ayala is a member of the Orange County Presidents Council and a previous member of the Santa Ana Workforce Investment Board, Anaheim Workforce Investment Board, University of California, Irvine Alumni Association Board of Directors and the California Task Force for Small Business Department of General Services.

Ayala, 44, of Anaheim, earned two Bachelor of Arts degrees in political science and social ecology from the University of California, Irvine.This position does not require Senate confirmation and the compensation is $138,000. “I’m looking forward to working with the Governor, businesses and the people of California to improve the economy and get people back to work,” said Joel Ayala. “The development and growth of businesses is more important now than ever due to the economic hardships so many communities face. Improving California’s business climate will attract new businesses and allow greater prosperity for businesses that are already here.”

The full text of the Governor's executive order is below:

EXECUTIVE ORDER S-05-10

WHEREAS job creation and retention are critical to California’s economic well-being and quality of life; and

WHEREAS in 2009, the United States confronted the most severe economic downturn since the Great Depression; and

WHEREAS California was especially hard hit by the global financial crisis, and while the recovery has begun, economic growth remains modest and high unemployment persists; and

WHEREAS unemployment in the State stood at 12.5 percent as of February 2010; and

WHEREAS it will take aggressive action on the part of government and the private sector to ensure that California leads the recovery; and

WHEREAS good jobs enable Californians to achieve their potential and contribute to the economic performance of the State; and

WHEREAS California has led the world in innovation as the high-technology capital of the world, the biotechnology capital of the world, the agriculture capital of the world, the entertainment capital of the world, the aerospace capital of the world, and now the green-technology capital of the world; and

WHEREAS in 2009, venture capital investment in California led all other states, with approximately $8.9 billion of the $50 billion invested nationwide; and

WHEREAS in my State of the State Address this year, I announced a job creation package that will create or retain at least 100,000 jobs, and additional efforts are necessary to eliminate barriers in further creating jobs; and

WHEREAS I have just signed two important parts of this jobs package: a homebuyer tax credit and a sales tax exemption for companies purchasing green-technology manufacturing equipment; and

WHEREAS people who want to do business in California must interact with the State to establish and maintain their businesses, by obtaining permits and licenses, registering their businesses, reporting required information, and paying taxes; and

WHEREAS California has at least 100 individual programs and services across 28 separate state government entities that support economic development; and

WHEREAS the American Recovery and Reinvestment Act of 2009 will provide approximately $85 billion in cash and tax benefits to Californians; and

WHEREAS state-level services and resources for California businesses are disjointed, with an uneven geographical distribution of services, no centralized entity with broad expertise, no mechanism to focus efforts and measure results, and a lack of effective coordination with other government and private sector resources; and

WHEREAS some of these services and resources reside under the authority of other constitutional officers, including the Lieutenant Governor, the Treasurer, and the Secretary of State; and

WHEREAS from a business owner’s perspective, state government is not a collection of independent agencies, but rather one “state government” and therefore, business owners expect seamless services from the State; and

WHEREAS some who want to start a business in California do not know where to begin, and even some established business owners find it difficult to navigate the state bureaucracy; and

WHEREAS the State should simplify the path to the state-level resources and services that businesses need to grow and succeed in California; and

WHEREAS the California Performance Review and the Little Hoover Commission have also recognized this need for a central economic development entity, and action is needed. NOW,

THEREFORE, I, ARNOLD SCHWARZENEGGER, Governor of the State of California, by virtue of the power vested in me by the Constitution and statutes of the State of California, do hereby order effective immediately:

1. The Governor’s Office of Economic Development is hereby created. Its purpose is to promote California as a place to do business, to support those interested in starting, growing, financing, expanding or relocating a business in California, and to help, to the extent possible, those businesses facing challenges to operating in California. The Office of Economic Development shall exist within the Governor’s Office, and shall be headed by a director designated by the Governor.

2. The Office of Economic Development shall be the state’s lead entity for economic development coordination with all public and private entities and shall perform the following functions:

a) Leading the State’s business-oriented outreach and marketing efforts and promoting California as a place for business investment and job creation, working with private-sector, nonprofit and other government entities;

b) Creating a Web portal that will provide one-stop access to state-level information and resources for businesses;

c) Serving employers, corporate real estate executives and site location consultants who are considering California for business investment and expansion;

d) Communicating the business advantages of California locations for new business investment and expansion;

e) Providing site, workforce training and infrastructure availability and cost information;

f) Providing permit and regulatory assistance;

g) Facilitating participation in state capital financing, grants, loans, tax credits, and other incentives;

h) Supporting the State’s small businesses by providing information about accessing capital, regulatory compliance, state procurement and state initiatives that support small businesses;

i) Encouraging collaboration among research institutions, start-up companies, local governments, venture capitalists and economic development organizations to promote innovation;

j) Working with the federal government to leverage economic development programs and to foster relationships with international counterparts to help address barriers to trade, find business partners and promote California’s strengths; and

k) Conducting ongoing research about how California can remain on the leading edge of innovation and emerging sectors.

3. The Office of Economic Development shall be created with existing resources and shall be staffed with personnel from agencies and departments whose functions relate to economic development, including small business promotion. These agencies shall include, but not be limited to, the Labor and Workforce Development Agency, the Business, Transportation and Housing Agency, the Environmental Protection Agency, the Natural Resources Agency, the State and Consumer Services Agency, the Department of Food and Agriculture, the Office of the Chief Information Officer, and the Office of Planning and Research.

4. Each member of the Cabinet shall identify a senior manager within his or her agency to coordinate business support activities with the Office of Economic Development.

5. The Office of Economic Development shall operate a Web portal, as described above in paragraph 2(b), and shall be prepared to respond appropriately and promptly to all requests for information and assistance from businesses that need help interacting with California state government.

a) The Web portal shall provide assistance with: establishing or registering a business; license, permitting and registration requirements; tax requirements; and building codes and zoning.

b) The Office of Economic Development shall ensure all state Web sites focused on economic development and business support are user-friendly and provide accurate, updated resources.

6. The Director shall seek advice and input from local government officials, economic development agency officials, and industry leaders.

IT IS FURTHER ORDERED that the agencies and departments under my executive authority shall cooperate in the implementation of this Order. Other entities of state government not under my direct authority are requested to assist in its implementation. This Order does not and is not intended to create any rights or benefits, substantive or procedural, enforceable at law or in equity, against the State of California, its agencies, departments, entities, officers, employees or any other person.

I FURTHER DIRECT that as soon as hereafter possible, this Order shall be filed with the Office of the Secretary of State and that widespread publicity and notice be given to this Order.

IN WITNESS WHEREOF I have hereunto set my hand and caused the Great Seal of the State of California to be affixed this 8th day of April 2010.

ARNOLD SCHWARZENEGGER
Governor of California

ATTEST:
Debra Bowen

New for 2010: Tax Credit Helps Small Employers Provide Health Insurance Coverage

Mark Herbert from Speakers Pelosi’s office sent me information that outlines the tax credits available to small businesses under the health bill. Note they are available now.

Please see below

The money given the SBA to continue the 90% guarantee of 7a and 504 loans and the waiver of fees is expected to run out in the next couple of weeks. It was expected that the $40 million of interim money would last until the end of April but it appears this will not be the case. If the money does run out it will be the third time in the last 6 months. What small business needs is a permanent solution. We need the passage of S2869 which both Senator Feinstein and Boxer have signed onto.

Small Business California is working with the National Association of Government Guaranteed Lenders and the National Small Business Association to get this done. One of our members Jim Baird of Bay Area Development is working with the Association of 504 lenders also in this effort.

You all know that Small Business California is headquartered in San Francisco. You also know that San Francisco has some quirky politics [I am being nice here]. The Board of Supervisors recently passed a resolution to make Monday a meatless day in SF. A number of years ago the Wall Street Journal wrote an article entitled “Who needs Oprah when you have the Board of San Francisco Supervisors”.


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



WASHINGTON ― Many small businesses and tax-exempt organizations that provide health insurance coverage to their employees now qualify for a special tax credit, according to the Internal Revenue Service.

Included in the health care reform legislation, the Patient Protection and Affordable Care Act, approved by Congress and signed by President Obama on March 23, the credit is designed to encourage small employers to offer health insurance coverage for the first time or maintain coverage they already have. In general, the credit is available to small employers that pay at least half the cost of single coverage for their employees.

“This credit provides a real boost to eligible small businesses by helping them afford health coverage for their employees,” said IRS Commissioner Doug Shulman. “We urge small businesses and tax-exempt employers to look closely at this important tax break - which is already effective - to see if they qualify.”

The maximum credit is 35 percent of premiums paid in 2010 by eligible small business employers and 25 percent of premiums paid by eligible employers that are tax-exempt organizations. In 2014, this maximum credit increases to 50 percent of premiums paid by eligible small business employers and 35 percent of premiums paid by eligible employers that are tax-exempt organizations.

The credit is specifically targeted to help small businesses and tax-exempt organizations that primarily employ low and moderate income workers. It is generally available to employers that have fewer than 25 full-time equivalent (FTE) employees paying wages averaging less than $50,000 per employee per year. Because the eligibility formula is based in part on the number of FTEs, not the number of employees, many businesses will qualify even if they employ more than 25 individual workers.

The maximum credit goes to smaller employers – those with 10 or fewer FTEs – paying annual average wages of $25,000 or less.

Eligible small businesses can claim the credit as part of the general business credit starting with the 2010 income tax return they file in 2011. For tax-exempt employers, the IRS will provide further information on how to claim the credit.

The IRS will use postcards to reach out to millions of small businesses that may qualify for the credit. The postcards will encourage small business owners to take advantage of the credit if they qualify.

More information about the credit, including tax tips, guides and answers to frequently asked questions, is now available on the IRS Web site, IRS.gov.

Internal Revenue Service
Governmental Liaison for California & Nevada

David versus Goliath Support SB1373

Yesterday we got great news that Betty Yee the Chair of the Board of Equalization will be sending a letter of support for SB1373.

This is Small Business California’s bill that would require vertically integrated manufacturers[these are manufacturers that make asphalt and concrete and then bid on the construction project] to pay the same sales tax as small contractors when they only do the construction work. Right now these vertically integrated manufacturers have a competitive advantage of between 6% and 7% and this bill will level the playing field.

We now need your help.

You might be saying to yourself this doesn’t affect me. Why should I send an email? The reason is that small business is only going to be effective when we work together. This clearly is a case of inequity for small contractors. It is the big guys versus the little guys. I think you would hope that when an issue effects your industry that you would get the support of other small businesses not impacted.

Please send an email to Bob Hartnagel in Senator Leno’s office. His email is:

Bob.Hartnagel@sen.ca.gov

The letter very simply is -

Dear Senator Leno,

As a small business I strongly support SB1373 that will correct an inequity in the Tax Code and level the playing field for small business when competing against big companies. We appreciate your leadership on this.

Sincerely

Your name
Your company

Cc Revenue and Tax Committee

Please send a copy to me and I will make sure the Revenue and Tax Committee gets a copy of your email. I think this is doable in less than 5 minutes and it will make a difference.


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

HIRE Act/ Workers Compensation/ Health Webinar

Please see information from Rich Gunn, of Burr Pilger Mayer, regarding tax credits available to business. Thanks Rich for sending.

Yesterday a committee of the Workers Compensation Insurance Rating Bureau decided not to do a midyear recommendation on workers compensation rates. It is expected the full Board will follow next week.

This does not mean companies will not make new filings July 1.

At some point rates are going to go up dramatically. Rates have gone up for most classes of business but they have not been dramatic except for construction and State Fund. With a projected combined loss ratio of 125% to 130% for 2009 the pressure is there but no one knows when.

Cal Insurance, the California Association of Employers and PrimePay will be holding a webinar April 13th at 9AM discussing the recently passed health legislation. The Presenter will be Lucian Wulsin the head of the Insure the Uninsured Project and partner of Small Business California. Lucian is a recognized expert on this and he will answer your question about how the health legislation will affect your business. If you are interested in participating let me know. It is free but we can only accommodate 200 callers.

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




President Signs HIRE Act into Law Creates New Tax Incentives

On March 18, President Obama signed into law the Hiring Incentives to Restore Employment (HIRE) Act (H.R. 2847). The Act includes provisions designed to spur job growth and help business owners.

The effective date for many of its provisions is March 18, 2010. This means that provisions like the up-to-$1,000 credit for "retained workers" (under Act Sec. 102) apply for any tax year ending after March 18, 2010.

Below we have highlighted key business and offshore provisions.

Business Tax Changes in the 2010 HIRE Act:

Extension of enhanced small business expensing (Section 179) retaining the $250,000 expensing election

Payroll tax holiday eliminating the current 6.2 percent employer Social Security tax for eligible new hires

Up-to-$1,000 business tax credit for keeping eligible employees for at least 52 consecutive weeks

Note: The HIRE Act does not extend the "bonus depreciation" tax break that was also available for business equipment purchases in 2009

Offshore Anti-abuse Provisions in the 2010 HIRE Act

Increased disclosure of beneficial owners

Foreign financial asset reporting

New reporting rule for PFICs

IRS will be authorized to require a financial institution to electronically file returns with respect to any taxes withheld by the financial institution even though the financial institution files less than 250 returns during the year

Provisions related to foreign trusts and imposition of a minimum penalty of $10,000 on any such failure to file

To review each provision in-depth please go to this link:

http://tinyurl.com/yh7wrkv

For further information contact Rich Gunn at rgunn@bpmcpa.com

Health Bill and Corporate Write Off

Many of you I am sure have seen that a number of large companies are taking charges in the current quarter for reforms that came out of the health care bill. 300 large corporations have urged the President to repeal a provision that allows them to receive a subsidy on drug coverage and then take a tax deduction for the expense. The companies have said this would deal a significant blow to corporate profits and discourage companies from hiring more workers.

I don’t understand the large companies on this one as it seems to me that if I receive a subsidy I shouldn’t be allowed to then take a deduction. Seems like double dipping but maybe some of you can explain this to me.

Yesterday I received an inquiry from a reporter indicating that businesses are going to be allowed to reduce their prepayment on payroll taxes due to the economy. I have not heard of this. Are any of you familiar with this provision and if so will it help you?

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

Waiver of fees and 90% guarantees extended/ IRS Scam/ On Bill Financing/ LA Times

I just received word from Tony Wilkinson of the National Association of Government Lenders that legislation has been passed by the House and the Senate to extend the 90% guarantees on SBA 7a and 504 loans through the end of April. It is expected the President will sign. While this is good it is another stop gap measure and what is really needed is the passage of HR4312 which would extend funding through the end of the year.

Yesterday I received an official looking email which appeared to be from the IRS. It appeared that they were checking information. Have any of you received this? If so it is a scam. My accountant told me the IRS does not send things through email.

Southern California Edison just filed with the California Public Utilities Commission[CPUC] their intention to do On Bill Financing as is being done by San Diego Gas. This would mean 0% financing for small businesses who do energy retrofits. The loans would be $5,000 to $100000. Unfortunately it is not clear when the program will start for small businesses. San Diego Gas has loaned over $6 million on the program and numerous small contractors are getting work they would not have received without the program. The amazing thing is that the default rate on these loans is around 1%.Small Business California and our Executive Director Hank Ryan is responsible for bringing On Bill Financing to California and has spent numerous hours testifying before the CPUC.

For more information on On Bill Financing go to www.smallbusinesscalifornia.org

I received a call the other day from a reporter at the LA Times. It seems they will be running stories about the impact of the health bill on small businesses. If you are in the LA area please let me know if you would be willing to speak to her.

For those of you in the Bay Area I will have my comments in the SF Chronicle Sunday. My comments were based on your responses to me.

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

Governor's Conference on Small Business & Entrepreneurship II

I have been asked by a reporter how the health bill will affect small business both directly and indirectly. Please provide me your comments today.

Please see below information on the Governors Small Business Conference May 6. Click on the image and zoom in to enlarge it.


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

Health Bill Passes

I know many of you were opposed to the health bill but it now has passed. It is now time to move forward as there are many details to be worked out. Small Business California plans to be involved in those discussions.

The biggest issue I think for California small businesses is the development of an Exchange. Small Business California wants to be part of its development.

Do you want more information about what an Exchange is? Do you want to be part of this discussion?

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

SBIR/IRS collects 4 cents and $202.31 in penalties/SBA Stimulus Funding

I have been asked why Small Business California should get involved in the Small Business Innovation Research[SBIR] debate.

I start with Ms Velazquez statement “Without the participation of venture -backed companies, the SBIR program has become little more than corporate welfare for marginal companies who are unable to secure external market based funding”.

Ms Velazquez is the Chair of the House Small Business Committee and in fairness to her she retracted her statement but still believes VCs should be allowed into the program.

The statement in my mind is an attack on the small businesses around the country and the SBA. Does she also mean that small businesses that get SBA 7a and 504 loans, which are not "external market based programs", are taking corporate welfare and marginal small businesses.

Will these programs only be legitimized if VC’s are allowed to use the program? It should be noted that VC’s that have less than 500 employees can use the SBIR or if they do not control the management of the small business those small businesses can use the SBIR program.

For background information there are 4000 companies getting venture capital in the US and there are 25 million small businesses in the US.

You might find the article by Bob Shallit interesting. It was in the Sacramento Bee. It is a story about a car wash owner who had two IRS agents show up at his business to collect 4 cents the IRS says was due. The penalties on this were $202.31

Click here: Bob Shallit: IRS visits Sacramento carwash in pursuit of 4 cents - Sacramento Business, Housing Market News Sacr

Last week I sent an email regarding HR 4213 which would provide $560 million stimulus funding to continue the 90% guarantees on 7a and 504 SBA loans and waive the fees on those loans.

It should be noted it does not include increasing the size of those loans from $2 million to $5 million. That would be done by passage of HR 4302 which Small Business California has strongly supported.

The provisions of HR4302 are in the Senate jobs bill which Senators Feinstein and Boxer have coauthored. We have been working on getting House members from California to coauthor HR 4302 and to date the Congress people that have signed on are Baca, Speier, Costa, Cardoza, Richardson, Davis and Woolsey.

Please ask your congressman to support HR 4302. If you want a sample letter please let me know. Please also tell me where you are located so we can set the letter up to the person in your district.


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

SBIR

I have written about the battle in Washington between small business and the large venture –backed companies. Basically venture backed capital companies want to redefine the SBA’s criteria of small business.

On March 4 a document passed by the House contained the following statement put forth by Chair of the House Small Business Committee Nydia Velazquez:

“Without the participation of venture-backed companies, the SBIR program has become little more than corporate welfare for marginal companies who are unable to secure external market based funding."

The passage of the document was with the proviso that the document could be changed to make punctuation and technical changes.

For some background information, if you go to the www.sbir.gov website, you will see The US Small Business Administration[SBA] Office of Technology administers the Small Business Innovation Research[SBIR] Program and the Small Business Technology Transfer{STTR] Program. Through these two competitive programs, SBA ensures that the nation’s small,_high-tech innovative businesses are a significant part of the federal governments research and development efforts.

Eleven federal departments participate in the SBIR program; five departments participate in the STTR program awarding $2 billion to small high-tech businesses.

It should be noted that the SBIR program does not prohibit venture-backed companies from participating in the SBIR program just those that do not meet the definition of small business put forth by the SBA.

There was a firestorm around the country about Ms. Velazquez' comments. As a result Ms.Velazquez revised her statement to say:

“In addition, SBA should permit venture capital-backed small businesses to be able to fully participate in the Small Business Innovation Research program. Such participation is essential for high- growth small firms seeking capital, particularly during this period of economic weakness”

Seems to me this is a bit more than punctuation and technical changes but the bottom line is that Ms Velazquez has become a real problem for small business. Not only on the SBIR issue but she prevented an amendment to include small businesses from being included on the credit card reform bill passed by the legislature and signed by the government and voted against the $125 million included in the Defense bill which extended stimulus funding for SBA loans

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

ALERT Senate Votes, Extend SBA Recovery Act to 12/31

Please see below for the National Association of Government Guaranteed Lenders information to members. As you all know Small Business California and the National Small Business Association have been working closely with NAGGL to get this funding.

We now ask Speaker Pelosi and all members of the California House delegation to support passage quickly of HR 4213.

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



Senate Passes HR 4213, Includes NAGGL-Originated Amendment to Extend & Fund SBA Recovery Act Provisions through CALENDAR Year


March 10, 2010

Dear Members,

Just moments ago the Senate passed HR 4213, To amend the Internal Revenue Code of 1986 to extend certain expiring provisions, and for other purposes -- more commonly called the 'Tax Extenders Bill' to extend jobless benefits, tax breaks... and small business programs.

The bill includes an amendment sought by NAGGL that increases the amount of funding to further extend the SBA Recovery Act provisions. NAGGL argued that the additional $354 million proposed in earlier legislation would likely not support SBA lending stimulus provisions through even the end of the fiscal year.

Senators Mary Landrieu (D-LA) and Snowe (R-ME) (the Chair and Ranking Member of the Senate Committee on Small Business & Entrepreneurship) concurred with NAGGL. As part of a technical amendment, the Senate has increased the funding to $560 miliion (in addition to the $60 million for March). The $620 million total should be sufficient to get the SBA lending industry through the end of the CALENDAR year. The bill also includes an extension of the authorization of the SBA Recovery Act provisions through 12/31/2010.

What's next? HR 4213 now goes to the House for consideration. NAGGL is hopeful that all congressional work will be completed and the bill signed into law by the March 28 expiration of the recently extended stimulus provisions.



Thank you for your continued support. We'll keep you updated on naggl.org and through email alerts.


Anthony R. Wilkinson
& Your NAGGL Team


NAGGL
215 East 9th Avenue
Stillwater, Oklahoma 74074

Proposition 16 June Ballot

PG&E will be putting on the ballot Proposition 16. This measure will require a two-thirds voter approval before local governments provide electricity service to new customers or establish a community choice electricity program using public funds or bonds.

Questions: Were you aware this would be on the June ballot? Do you support or oppose this initiative?

Last week I heard from Tony Wilkinson of the National Association of Government Guaranteed Lenders that the Senate has put forth an amendment that would provide $560 million for the SBA to provide 7a and 504 loans with a 90% guarantee and waives the fees on these loans for the calendar year. This is on top of the $60 million that is now in place with the extender legislation that was passed a couple of weeks ago. Small Business California has been at the for front of this effort along with our partners at the National Small Business Association.

Small Business California has delivered the results of our survey to every House member from California and the Governor’s office. We will be sending the surevey results this week to every member of the California legislature.

For the results for 2010 and the results of 2009 please visit our website at http://www.smallbusinesscalifornia.org/


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

Workers Compensation/ AB 32 Global Warming

On Tuesday I spoke at the Department of Workers Compensation conference. Dave Belluschi from the Workers Compensation Insurance Rating Board also was a speaker and he reported that he expects that combined loss ratio for workers compensation for 2009 was going to be around 125%. The combined loss ratio for 2008 was 111%. As I have said before at some point there is going to be double digit increases for small businesses for their comp insurance.

You all may know that there is a movement afoot to put a measure on the ballot to suspend implementation of AB 32.The measure will delay implementation until California’s unemployment drops to 5.5% for a year. Currently the unemployment rate is just over 12%.

Yesterday Valero Energy Corp and Tesoro Corp Texas based refiners have pledged $2 million to get signatures to put this on the ballot. What are your thoughts on this?



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

Survey Results/CARB Workshop

Please see link to the results of Small Business California’s 6th annual survey.

The top concerns for Small business are:

1. The Economy-88% Top or High Priority

2. Cost of Healthcare-79% -Top or High Priority

3. Quality of Public Education-74%

4. Repair of Infrastructure-66%

5. Access to Capital- 64%

6. Awarding state contracts to small business-61%

7. Regulations-60%

8. State Taxes-58%

9. Energy- 48%

We had over 2700 hundred responding. Thank you.

English results:
http://www.zoomerang.com/Shared/SharedResultsSurveyResultsPage.aspx?ID=L247A8TNDLL3


The California Air Resources Board has developed, and is hosting, a FREE workshop entitled “Taking Advantage of the Growing Green Economy – Real People. Real Solutions. Real Opportunities!” in conjunction with the Green California Summit on Tuesday, March 16, 2010, from 9:30AM to 4:00PM, at the Sacramento Convention Center. Please help us promote this workshop by distributing the attached agenda and flyer to your networks, colleagues, customers and clients.

The focus of this workshop is "Real California Small Businesses" learning from other "Real California Small Businesses" about what is working, what didn't work, how their respective businesses have benefited from the actions they've taken to “Green” their businesses by reducing energy and fuel use, becoming more efficient, accessing local assistance programs, and selling green products and services.

This is a fresh approach and the response thus far has been quite excellent. Our confirmed attendance figures to date have already exceeded our original attendance goals within the first three days of marketing, but we want to be even MORE successful with your assistance! We've expanded the room that was originally reserved for us so we still have capacity to accommodate additional small businesses who want to learn and GROW during this very challenging economy.

Thank you for your support and we hope to see you AT the workshop on March 16!

Jerry Hart
Air Pollution Specialist
CA Air Resources Board
ghart@arb.ca.gov
916-324-5941

The energy challenge facing California is real. Every Californian needs to take immediate action to reduce energy consumption. For a list of simple ways you can reduce demand and cut your energy cost, see our web site at http://www.arb.ca.gov/


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

SB California Survey/Withholding

Last call for Small Business California survey. We will be closing Monday. To date we have over 2600 responses. Please see below links for survey in English and Spanish. Thank you to all that have completed the survey and if you haven’t please do so.

You may be interested to know that people in New York and Rhode Island are working with us to develop a similar survey. Also on Monday I hand delivered in Washington preliminary results of our survey to Senator Boxers office, Senator Snowes office, Speaker Pelosi’s office and Congresswoman Speiers office. I also gave the survey to SBA Administrator Karen Mills and a staff person from the Senate Small Business Committee.

When the survey is complete it will be sent to every State Senator, Assemblyperson and the Governor. We will also be sending to Senator Feinstein and every California member of the House of Representatives

2010 Small Business California Survey in English:

http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD



2010 Small Business California Survey in Spanish:

http://www.zoomerang.com/Survey/?p=WEB22A9FR7KRDV


Thank you to all of you that sent letters opposing the 3% withholding for sole proprietors and Partnerships. Due to a tremendous response from the business community this has been put on a back burner. There , however, are no guarantees it won’t raise its ugly head in the coming months as the budget gets put together.

Small Business California is closely watching this and will let you know if it comes back into play.


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

Internet Sales Tax

The Northern California Retail Booksellers Association is an affiliate member of Small Business California. I received a call from Assemblywoman Nancy Skinners office asking us to support legislation supporting brick and mortar stores to level the playing field on the sales tax. I asked Hut Landon the ED of the Booksellers Associationto give me his organizations position. Please note there are many small businesss impacted by this and not just booksellers.

The argument against this is that Amazon and Overstock will eliminate their affiliates in California.. Please note this provision has been passed in I believe 5 states and Amazon has eliminated affiliates in most states however they were very small states except New York. New York, I think has more sales than all the other states combined.

I will get back to Assemblywoman Skinners office with your comments.

The issue is should sales tax be charged on internet sales?

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-288



There are several reasons to support legislative efforts to compel Amazon.com, Overstock.com and other large out-of-state retailers to collect sales tax on sales made to California customers.

1. Let's start with the law. Consumers are legally obligated to pay sales tax on taxable items they purchase, whether from an independent business, a chain store, or Amazon. If you don't pay it at the time of purchase, you're still obligated to do so. It's called use tax. Look at your state tax form -- there's a place to record the amount you owe. No one does it, of course, but the tax is still owed. So this is not a new tax; we're only talking about how it's collected.

2. The law, part two. The California state tax code states that retailers with "nexus" in the state must collect sales tax. Nexus is most commonly defined as physical presence, so if you buy a pair of shoes on Macys.com, sales tax will be collected because Macy's has a physical presence in the state.

But the tax code also says that out-of-state sellers without a physical presence in the state have nexus if they have affiliates, or sales agents, operating on their behalf. In Amazon's case, they have literally thousands of affiliates driving traffic to its site in exchange for a commission on any sales that occur. For many such sales agents, Amazon provides weekly specials that can be emailed out as a further inducement to shop.

3. The consequences. Let's take any retail business and tell them that they now have a major competitor with deep pockets and an aggressive discount pricing model. That competitor also enjoys a nearly 10% price advantage because it does not collect sales tax. Unfortunately, this is not a hypothetical example. Amazon and Overstock alone are selling electronics, appliances, clothing, shoes, furniture, sporting goods, hardware, groceries, toys, auto parts, garden supplies, books, music, etc. If you or any business you know is selling anything on this list, they are up against competitors who have a huge competitive edge right out of the gate.

Now, if you don't care about small business and what they add to a neighborhood or a community, or the jobs they provide and create, you can stop reading. But small business are closing right and left because they can't compete with these out-of-state behemoths, especially in tough economic times. And the ones that are still around are having to cut back on the number of employees and benefits they provide, which only adds to the state's economic woes.

4. Fairness. These small merchants aren't asking for a handout or for special treatment, and many of them have successfully competed against chain stores for years. But it's tough to compete when they're at a 10% disadvantage for every single sale. Hardly a level playing field.

5. Why you should care. In addition to collecting sales tax for the state, these local businesses support local causes and charities, and are integral to vibrant, diverse shopping neighborhoods. And if that doesn't move you, consider this: the state Board of Equalization has stated that sales tax revenue lost to out-of-state e-tailers amounts to over $150 million annually. That's money that could be used to help schools, hire more police, retain essential health services, keep state parks open...you get the idea.

Hut Landon
Northern California Independent Booksellers Association (NCIBA)
Presidio National Park
1007 General Kennedy Avenue
PO Box 29169
San Francisco, CA 94129

415-561-7686, 415-561-7685 (fax)
www.nciba.com

2010 Small Business California Survey in Spanish

Here is the link to the Small Business California Survey in Spanish. Please forward it on to any of your colleagues and associates.

We have over 2500 responses to the survey as of last night and it would be helpful to get some input from the Hispanic small business owners in the state.

http://www.zoomerang.com/Survey/?p=WEB22A9FR7KRDV


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

SBA Loan Funds/ Washington Meetings

It looks like the stimulus money for 7a and 504 will run out Monday. The SBA will go back to the queue system. Expect a big drop off in loans starting next week.

I will be going to Washington on Sunday and meeting on Monday with Speaker Pelosi’s staff, Congresswoman Speier’s staff, Senator Boxers staff and Senator Snowes staff on this issue.

On Wednesday Assemblyman Mark Leno agreed to carry Small Business California’s bill to have sales tax charged to manufactures of asphalt and concrete who compete with contractors on road work. This means they have a 6% plus bid preference when they bid on this work. Small contractors have been fighting this for about 20 years and went nowhere without Small Business California’s help. Thanks to all of you that sent letters to Senator Leno’s office in August.

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

Gavin Newsome/Survey in Sapnish

Mayor Gavin Newsom is considering a run for Lt Governor. He has until March 12 to file the papers but he has until 5PM today submit a ballot statement for the voter guide. I am curious how small business around the state feels about Mayor Newsom. Would you support him?

I am particularly interested in how SF small businesses feel about this. If he should run and win he would have to resign as Mayor and the Board of Supervisors would select the new Mayor.

Many people don’t realize that the Board can select anyone they want with 6 votes. It does not have to be a current member of the Board raising possibilities of Aaron Peskin past President of the Board of Supervisors being selected as Mayor.

We are going to be keeping our survey open one more week. To date we have 2365 respondents.

We expect today or tomorrow to have the survey in Spanish. If any of you can distribute the survey to Spanish speaking small business people let me know. Currently we have only 5% of the respondents identifying themselves as Hispanic and we would really like to see that number increase.

If you haven’t completed the survey please do so and for all of you please forward to others. I don’t know if it is doable but it would be great to have over 3000 respondents. Last year we had about 630.

http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD



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

Breaking News SBA Funding Stripped from Baucus/Grassley Jobs Bill

In a real shock yesterday Senator Harry Reid stripped the Baucus/ Grassley bill of the $354 million for extending money for the 7a and 504 increase guarantees and the waiver of fees.

This after the White House applauded Senators Baucus and Grassley for working out a bipartisan jobs bill.

As I understand it the Senate will be in recess next week and the funding will run out at the latest February 28. I say at the latest February 28th because it is very possible there will be a rush to get loans approved before February 28 and I am hearing that it is more likely that funding will run out earlier.

I will get back to you with a strategy on what you might be able to do but if you have a pending loan push your Bank hard to get this funded immediately.

Small Business California will be sending a letter to Senators Feinstein and Boxer to ask them to do everything they can to get funding extended. They have been very supportive of this and both coauthored S2869 which provided the funding and an increase in SBA loan size from $2 million to $5 million.

Our survey received over 500 responses yesterday bringing the total responses to over 2000.

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

Independent Contractor Letter

Please see letter below being sent to every state Assembly Person and State Senator. We need to have as many of you as possible send a letter of opposition to your Assembly Person and State Senator. The situation is that the 3% withholding could be included in a budget bill to be sent to the Governor in the next week or so as part of the 8th Special Legislative Special Session.

Please click on www.leginfo.ca.gov to identify your legislators and to contact them. I sent a sample letter earlier in the week but don’t worry about the eloquence of your letter just that you oppose this and how it impacts you.

The California Chamber of Commerce has also sent out an alert on this issue.

I am pleased to tell you our annual survey just went over 1300 respondents. We are going to be keeping it open a couple more weeks as next week we will have it in Spanish also.

If you would like me to send the survey to you in Spanish so that you can distribute please let me know. I especially would like to hear from the Hispanic Associations that are on this email.

You all know that Small Business California has been working on the stimulus funding for SBA 7a and 504 loans to keep the 90% guarantees in place, waive the fees on these loans and increase the size of the loans from $2 million to $5 million. We are hearing that the Republicans seem to be okay with the allocation of this money to the 7a and 504 loans but are struggling with the increase to 5 million. The current money allocated for the guarantees and waiver of fees will run out the end of February.

As you can see Small Business California is extremely busy representing your interest. I hope you will consider joining Small Business California if you haven’t done so already. The cost is $150 for businesses with sales of less than $1 million and $300 for businesses over 1 million. You can join by going to our website at www.smallbusinessclifornia.org or we can send you an application and invoice you if you ask us to do so by return email.


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

Insurance Industry IK Withholding Letter

Thank you to all that responded saying you would send a letter of opposition to the 3% withholding for independent contractors. Please see sample letter below.

I think the easiest way for you to send is to go to http://www.leginfo.ca.gov/.
Click on legislator and put in your zip code. Go to your Senator and Assemblypersons site. Click on legislators contact site. It will ask you for personal information but in the comments say you are a small business owner and give the name of your company and why you oppose. Feel free to change the letter below anyway that works for you.

If you are a business group and would like to sign an opposition letter please let me know. I have 12 associations so far that will be signing letter


Dear Assembly Member / Senator _____:

I am a small business owner in your district. My company, _____, employs ____ persons. We have been in business in ______ since ____.

I am writing to oppose the independent contractor withholding proposal. This is another budget gimmick that does not generate more revenue to the State of California. Instead, it merely accelerates monies that will already be paid to the State and imposes an onerous burden upon small businesses like my company.

Under this proposal, businesses in this state would be required to collect taxes from other businesses and we would serve as a collection agent for the State. The new expense of withholding and remitting these monies to the Franchise Tax Board would be a cost borne by small businesses like my company. Moreover, small businesses would effectively be providing interest-free loans to the state. Even if an independent contractor owes no state taxes, 3% will still be withheld, affecting our cash flow and impacting our business.

I believe this proposal is unreasonable and should be rejected by the Legislature. I would appreciate hearing from you at your earliest convenience whether you will oppose this harmful idea.

Sincerely,


We now have 956 people responding to our survey. If you haven’t completed please do so within the next week. As always forward to others and if you are an association please send to members. It would really be great even if you have sent to send one more time.
Thanks

http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD


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

3% Withholding for Independent Contractors/Survey

I am sorry for all the emails but something came up yesterday that could have a serious negative impact to small business. As you all know Small Business California wants to be known as a proactive organization but sometimes we just have to say no.

There is a movement afoot in Sacramento to impose a 3% withholding for independent contractors. So if you hire a sole proprietor or I think a company that is a partnership or LLP you would have to withhold 3% and send it to the state. The money will be held by the state and if there is a return it will be without interest.

Not only will this be a hardship for low margin businesses but another bookkeeping burden placed upon small business.

We need to make our voices heard to our legislators that this is a bad idea.

Please let me know if you would be willing to send a letter to your Assembly person or state Senator. Tell me where you are located.

On a more positive note we had as of 9AM this morning 730 responses to our survey, We got about 400 yesterday. If you haven’t done so already please take a few moments to complete. We will be closing the survey earlier this year due to the overwhelming response we have gotten in the last 5 days


http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD


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

Survey/Health Cost/$5000 Tax Credit/ Senate Jobs Bill 2869

We are getting close to 300 responses to our survey. Thank you to all that have completed the survey and the associations that have sent this to their members. I also want to thank those of you that have forwarded to your colleagues.

If you haven’t completed please do so and forward.

http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD

You may have seen in the paper this morning that health care cost for 2009 have increased to 17.3% of GNP and this represents an increase over previous years. I can’t think of a stronger argument that we need meaningful health reform in Washington and it is critical that we end partisan bickering between the Democrats and Republicans and get something meaningful done not just for small business but the future of our country.

I have mentioned that the President has recommended a $5000 tax credit for businesses with a net increase in employment. Many of you have indicated to me that you didn’t understand how this works. Briefly you will get your credit on a quarterly basis by reducing what you pay in FICA taxes. It is not subtracted from profits. Please note that you take the credit on a quarterly basis after you have paid an employee $7000.

If you would like a more complete description of the credits please let me know.

Small Business California is working hard to get additional funding for the SBA 7a and 504 loans to continue the increased guarantees, the waiver of SBA fees on those loans and the increase to $5 million of loans the SBA can make. Time is running short as the current funding will run out the end of this month.

What I am hearing is that Senator Reid is talking about doing a number of Jobs bills starting with the provisions that have the best chance of passing. We are very hopeful that we can get S2869 into the initial bill and get it passed before the end of the month but quite frankly this appears like it will be very difficult and the SBA will run out of money.

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

Small Business California Survey

We have had 127 responses to our survey. We expect to get over 600 and I hope you will take a few minutes to complete.

Thank you to all that have completed the survey and all that have forwarded to their colleagues. For those of you that haven’t done so please take a few moments to complete

See link below

http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD


One of the most surprising results so far is that 23% of the respondents did not see themselves in business in three years. If you are one of those people I would be interested to know why and if you would be willing to talk to the media.

On Saturday Small Business California received the Business of the Year award from the Pacific Conservation League. We are proud of the work we are doing to assist small businesses in reducing their energy use and Hank Ryan our executive director is viewed not only in California but around the country as a small business energy expert.


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

Annual Small Business Survey

Its that time of year that Small Business California sends out its an survey. This is the sixth annual survey and it will set Small Business California’s agenda for the year. As always the results of the survey will be sent to every state legislator and the Governor.

Last year we had over 600 responses and a response from every county in the state.

The survey will take between 10 an 15 minutes.

Please also forward to other small businesses or your association members.All of you will also receive the results.

I would like to thank Jim Ross of Jim Ross Consulting for making this survey possible.


http://www.zoomerang.com/Survey/?p=WEB22A6JHNSTRD


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
415-680-2109