California Loan Programs

In previous emails I said I would send information on California small business loan programs. Please find below information from Toni Symonds Chief Consultant for the Assembly Committee on Jobs,Economic Development and the Economy and Kurt Chilcott President and CEO of the Greater San Diego CDC Small Business Finance. Thank you both.

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

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From: Symonds, Toni [mailto:Toni.Symonds@asm.ca.gov]
Subject: RE: EDD Tax Branch News #156 (California Business Owners)

There are several state and federal loan assistance programs. The California Capital Access program is a loss reserve program, which is designed to help businesses that are very close to being credit worthy. Each bank has its own reserve account. When a loan is enrolled in the account, the bank, the business and the state each put is a fee. The lender has access to the full reserve account for any defaults. The state generally puts in double the fee of the lender and the business. Prior to the most recent federal injection of $78+ million, the program only had $4 million new dollars each year. The Treasurer’s Office, who administers the program has been working with the JEDE Small Business Roundtable members to get more banks to participate in the program. Caled and others have been helping to encourage banks to sign-up.

The state also administers a 90% guarantee program, which is backed by a $30 million state managed account. This program also received $78+ million from the feds and is in the process of gearing up. This program best serves businesses that are credit worthy but do not necessarily fit the bank’s optimum profile for such things as years in business. Attached is a joint marketing flyer the Roundtable put together. We also have a very cool chart that talks about each of these programs and types of businesses they target. It has been used in cross training of public and private lenders by the SBDCs this past year. We should probable think about how to use it more broadly. I think it would be good to have a large lender list.

The link to the California Small Business Credit Initiative (pdf) can be found here:

http://www.smallbusinesscalifornia.org/Small%20Business%20Credit%20Initiative%20Flyer.pdf

The state’s programs have been very limited. Given the state’s financial situation, the state’s core programs have suffered through annual budget reductions. The federal Small Business Jobs Act, however, have given new life to the two state programs. So they may be worth a second look. I fully agree that there needs to be a secondary market for the state’s guarantee program and we have been talking about how to create more conformity among the loan products. The federal dollars may give us the incentive to jump start this work


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From: Kurt Chilcott [mailto:kchilcott@cdcloans.com]
Subject: FW: Small Business Lending

Small Banks and Alternative Mission Drive Lenders Providing Greater Access to Capital
California small businesses should be aware that there are capital resources available to them beyond the large bank and even community bank infrastructures. In fact a recent survey by Biz2Credit found that mission driven lender credit unions, microlenders and other non-profits are providing an increasingly large share of the smaller loans to small businesses. Due to declining sales and profitability, many banks are reducing or eliminating line of credit financing to small businesses. This cots off a vital source of working capital for many small businesses. Both small businesses and banks should be aware of and seek out alternative financing available through a range of alternative lenders. Many new programs have been established to meet these needs. Examples include:

1. SBA has implemented the 504 Debt Refi program available to small businesses who want to refinance the debt on their facilities at terms and maturities typically not available elsewhere: http://www.sba.gov/content/504-loan-refinancing-program

2. SBA has established a new program Community Advantage delivered by non-profit lenders for loans $250,000 and under. http://www.sba.gov/content/advantage-loan-initiatives

3. California has increased the reach of its State Loan Guarantee Program by increasing loan sizes to $1 million. http://buildworksource.com/california-loan-guarantee/

4. California has provided funding for the California Capital Access Program that provides a reserve fund for higher risk loans made by a range of financial institutions – banks and non-profits. http://www.treasurer.ca.gov/cpcfa/calcap.asp

Meeting Request of the Governor/SBA Administrator Comments

Yesterday, Small Business California sent out a press release asking the Governor to hold a meeting with SBA Administrator Karen Mills, the Office of the Comptroller, the FDIC, the Federal Reserve, the California Department of Financial Institutions and bank representatives. See below. Our request has been made through Mike Rossi the Governors Economic Development Czar.

The second piece below from The Hill has SBA Administrator Karen Mills saying that Washington regulations are being interpreted more tightly at the Regional level which is why Small Business California has requested the Governor hold this meeting.


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

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links can be found by going here:

http://news.google.com/news/story?ncl=http://thehill.com/blogs/congress-blog/labor/195943-still-a-long-way-to-go&hl=en&geo=us


Small Business California Calls on Governor Brown to Convene a Special Meeting ...
MarketWatch (press release)

Nationwide, banks have pared their small business loan portfolios by more than $47 billion since the pre-recession peak in 2007. Loans to small businesses are important because small firms play a vital role in the US economy. Firms with fewer than 500 ...
See all stories on this topic »

Still a long way to go
The Hill (blog)

Even SBA Administrator Karen Mills said in congressional testimony last month that the guidance coming out of Washington has been interpreted more tightly at the regional level by regulators, thereby slowing small business loans. ...
See all stories on this topic »

"32 Examples of Businesses Reducing & Eliminating Gasoline Use As They Drive Toward A Better Bottom Line"

I would like to pass down this booklet from Hank Ryan at Efficiency Data & Development, which can be a very informative resource. The booklet is called, "32 Examples of Businesses Reducing & Eliminating Gasoline Use As They Drive Toward A Better Bottom Line" and it can be found by going to our website or clicking/copying & pasting this link:

http://www.smallbusinesscalifornia.org/Bottom%20Line-%20Updated.pdf

The publication has two objectives. First, it shows examples where businesses have invested in long term improvements that offer a rate of return which increases profit for the business over the long haul. Even a 10 percent rate of return on these improvements is often double or triple what the business returns as a net profit.

Second, these examples and the suggestions from the business owners you’ll read about are meant to show how other businesses can learn from and improve on these smart business improvements. These are not “one off” demonstration projects.

Finally, the focus for these examples is on smaller firms, mainly those with 100 employees or less. While larger companies demonstrate many valuable innovations and their buying power can serve to help develop economies of scale, our focus is on inspiring the millions of smaller firms to use the examples in this publication along with the ingenuity they must bring forward every day to increase their profits. In this way, America’s small businesses will form the foundation of a stronger and more secure economy for everyone.

If you have any questions, please feel free to contact Hank below:

Hank Ryan
Efficiency Data & Development
Also representing:
SB California (www.smallbusinesscalifornia.org)
The Wash. D.C. based Center for Small Business and the Environment
750 47th Ave. #56 Capitola, CA 95010
T: 510-459-9683 F: 831-476-1248

EDD Tax Branch News #156 (California Business Owners)

I received an email from SB Cal board member, Stephen Cornell, regarding changes in California Unemployment tax. Please note the decrease in tax credit from 5.4% to 5.1%. See below for link to article.

Are any of you aware of the lending programs available to California small from the state? In a future email I will talk in more detail about what is available but at this point I am I am trying to judge awareness. Has your banker ever talked to you about these? Suffice it to say there are programs including a loan guarantee which may be helpful to you.

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

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This is a follow up to the question of how California will pay its outstanding $2 plus billion in outstanding federal loans for the Unemployment Insurance fund. The federal government has said to California, you haven't paid your loans back, so we will reduce the amount of credit each employer can take in calculating its obligation for Federal Unemployment Insurance payments (Form 940).

http://edd.ca.gov/Payroll_Taxes/Federal_Unemployment_Tax_Act_Credit_Reduction.htm

The new rates go into effect on January 1, 2012.

Small Business Lending/ Small Business Saturday

I hope you all had a great Thanksgiving! On November 8th, Biz2Credit released their Small Business Lending Index. They did an analysis of loan approvals for 1,000 loan applications in October and found that small banks approved 46.3% , big banks[institutions with $10 billion plus in assets] 9.2% and alternative lenders[credit unions ,Community Development Financial Institutions, micro lenders and others] 61.5%.

The Index identified the Top 5 reasons why small business borrowers have not been received funding.

1.More than 68% of small businesses reported declining sales in the first 8 months of 2011

2. Profitability has declined at more than 86% of small businesses over the last 2 years.

3.Bank underwriting criteria is stricter now than in 2010 when stimulus money was flowing.

4.Uncertainty among big banks is leading to increased dissatisfaction among small business owners.

5. Avoidance: small business owners believe they are unlikely to get loans and that the process takes too long.

I hope all of you are promoting Small Business Saturday. I hope you are able to use this to promote your business. Please see email from SBA below.

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

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Make a Big Difference on Small Business Saturday®

SBA says shopping at small businesses can have a huge impact on local economy

WASHINGTON – As a proud supporter of Small Business Saturday®, a day dedicated to supporting small businesses on one of the busiest shopping weekends of the year, the U.S. Small Business Administration is encouraging every American to support small businesses by doing some of their holiday shopping on the Saturday after Thanksgiving at small businesses.

This year’s Small Business Saturday® is Nov. 26, 2011.

“Small businesses are the foundation of our economy – half of America’s workers either own or work for a small business,” said SBA Administrator Karen Mills. “Small Business Saturday® is an opportunity to show our support for our friends and neighbors who throughout the year are growing our local economy, as well as supporting many local initiative and organizations.”

Nov. 26 marks the second annual Small Business Saturday®, a day to support the local small businesses that create jobs, boost the economy and preserve neighborhoods around the country. First there was Black Friday, and then Cyber Monday, and now Small Business Saturday® will help drive shoppers to America’s job creators. Small businesses have generated two out of every three net new jobs over the past 15 years and employ over half of all private sector employees.

For more information on how to support Small Business Saturday® in your area, or to get great Small Business Saturday® marketing tips and resources, check out www.sba.gov/saturday or visit Facebook.com/smallbusinesssaturday and follow us on Twitter @SBAgov, #SmallBizSat.

###


Best,

Chris Chan
Special Advisor for Public Engagement
Office of Communication and Public Liaison
Small Business Administration (SBA)

UPDATE! letter from OSHA- Ellen Widess

Today, I just recieved a letter from Ellen Widess at OSHA. Please click the link below (or copy and paste) and let me know what you think.

http://www.smallbusinesscalifornia.org/OSHA%20letter%20from%20Ellen%20Widess.pdf

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

Small Business Line of Credit/ Senate Select Committee on Restoring the Middle Class

Yesterday, I was contacted by a Financial Staff Writer at the LA Times. He indicated that he had been contacted by some small business owners indicating that one major bank was imposing maturity dates on longstanding lines of credit that had never had them before. He indicated that they did have high balances on the LOCs, but had never missed a payment and the demands for full repayment had created some real problems for these businesses.
Interestingly enough, I have also been contacted by small business owners on this same issue and the same bank.
Have any of you had problems like this with your bank? Who is the bank?

On November 30th, I will be testifying before the Senate Select Committee on Restoring the Middle Class. I would be interested in your thoughts on what role small business plays on this issue given that we employ almost half of the people in the private sector.

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

Governor Conference/ Walgreens

Small Business California is working on having the Governor call a meeting with Karen Mills, the SBA Administrator, the FDIC, the Federal Reserve and State bank regulators. The purpose of the meeting would be to have the regulators in the same room with the Governor and Ms. Mills to discuss small business lending. When we talk to bankers they tell us they are caught in the middle. They are being told to give loans to small businesses and then when they do, they get slapped on the wrist by the regulators. Yesterday, I talked to a reporter interested in this and he told me that he had discussed the concept with a bankers association and they were very supportive of this. We also have a request made to Mike Rossi, the Economic Development Czar for the Governor.

Recently, it was announced that Walgreens and Anthem were severing their relationship. For those of you with health insurance through Anthem [Blue Cross] how will this affect you and your employees?

Rick Schindel advised that the SBIR program has been extended to December 16th. As an aside in his newsletter, he alluded to a comment by Erskine Bowles. The comment has nothing to do with SBIRs but you may find it amusing. Mr. Bowles says:

“What we are doing doesn’t make common sense. We have a treaty with Taiwan; we’ll protect Taiwan if they are invaded by the Chinese. There’s only one problem with that, we got to borrow the money from the Chinese to do it. It’s crazy”

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

Chief Counsel Praises the Repeal of Three Percent Withholding Requirement on Contractors/ Volunteers In Medicine

Please see below statement by Winslow Sargeant on 3% withholding. Note it is being repealed. Thank you Winslow and Advocacy's help on this.

I will be going to Santa Monica this week to meet with the CEO of the Entertainment Industry Foundation along with Amy Hamlin, the ED of Volunteers in Medicine. The Entertainment Foundation has been the fastest growing Foundation over the last couple of years growing over 400%. You may have seen their work in the Stand Up2 Cancer campaign where they raised $100 million.

We are looking to get funding from them and see if we can get a National spokesperson. We have put together some numbers for Volunteers In Medicine which are truly amazing.Over the last 12 years we have spent $3.5 million and developed 85 clinics that have raised $175 million. That is an ROI of $50 to $1. In 2010 our clinics spent $25 million and had 350,000 patient visits. That is less than $80 per patient visit. Compare that to the cost of an emergency room visit. We estimate that our clinics have saved $62 million for community hospitals. Our goal is to develop 250 clinics by 2016

Scott Hauge
President
Small Business California
415-680-2188

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For Release: November 10, 2011
Contact: Patrick Morris (202) 205-6941
patrick.morris@sba.gov
SBA Number: 11-32 ADV

Chief Counsel Praises the Repeal of Three Percent Withholding Requirement on Contractors

Washington, D.C. – Today Chief Counsel for Advocacy Dr. Winslow Sargeant praised Congress’ repeal of the three percent contractor withholding requirement. The requirement would have required federal, state and local governments to withhold three percent of nearly all payments made to contractors, placing a burden on numerous small businesses. By a vote of 95 to 0, the Senate passed the Government Contractor Withholding Repeal Act. The House has already passed a similar piece of legislation. The Office of Advocacy has consistently worked with small businesses for the elimination of this unfair burden. The Chief Counsel called for its elimination in May of this year.

“The repeal of the three percent withholding requirement is a victory for small business,” said Dr. Sargeant. “For small businesses to thrive in government contracting they need an environment that is clear, transparent and predictable.”

The three percent withholding requirement would have adversely affected the accounts all small businesses that provide services to government entities. Most of the small businesses would have had to increase their debt level in order to ensure sufficient cash flows and thus pass these additional expenses on to their government customers. If small firms were unable to secure additional debt, the three percent withholding requirement might force them out of the Federal contracting market.

The three percent provision was included in the Tax Increase Prevention and Reconciliation Act of 2005 in an effort to ensure that individuals and companies that receive new payments from the federal government did not accrue tax debt. The law mandated that federal state and local governments with expenditures of more than $100 million withhold three percent of payments for products and services worth more than $10,000. The requirement was scheduled to take effect on January 1, 2013.

The Office of Advocacy of the U.S. Small Business Administration (SBA) is an independent voice for small business within the federal government. The presidentially appointed Chief Counsel for Advocacy advances the views, concerns, and interests of small business before Congress, the White House, federal agencies, federal courts, and state policymakers. Regional advocates and an office in Washington, D.C., support the Chief Counsel’s efforts. For more information, visit http://www.sba.gov/advocacy, or call (202) 205-6533.

Health Law to Supreme Court/ SBIR/ Fred Patterson

Please see below for the announcement that President Obama’s health care law will be heard by the Supreme Court with a ruling in July. As you know, this has been going through the lower courts with mixed decisions.

The Small Business Innovative Research program will be running out of money November 18, 2011.It appears that the program will be part of a Continuing Resolution to keep much of the government open until Dec 16, 2011. It also appears that there might be a breakthrough in finding a compromise between the House and the Senate in getting an appropriation beyond the Dec 16th timeline.

I just got word that Fred Patterson[aka The SBIR Coach] has recently been diagnosed with Stage IV-a “locally advance oropharyngeal cancer.” Fred indicates he has been told the survival rate on this cancer is 37%. Most of you don’t know Fred, but he has been a tireless advocate for the SBIR program. All our prayers are with him. You can reach Fred at fredsjourney@gmail.com

Please drop him a note and tell him the small business community around the country is there for him.

Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
License #0A32315

AARP - Personal automobile insurance and homeowners insurance

Some of you may not be aware that CAL Insurance provides personal automobile insurance and homeowners insurance. In fact, we currently have more than 2,000 automobile and homeowner clients. We are always looking for opportunities to provide the best coverage at the lowest price and I am very excited to tell you that we are now an authorized agent of Hartford to offer AARP automobile insurance through the AARP Auto Insurance Program.

Until now, this insurance was only available by dealing directly with Hartford. If you are a member of AARP, we think that you can reap huge benefits in having CAL represent you. We can explain the coverage and help you in the event of a claim like we do on your commercial insurance. We can also compare AARP prices and coverage with other insurance companies that we represent.

If you are a member of AARP, give Eddie Sandoval a call.
You can reach by phone at (415) 680-2112 or by email at esandoval@cal-insure.com

CAL Insurance is there for you for all your insurance needs. You can also get more information by going on our website at: http://www.cal-insure.com/#

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
"Always looking out for you"

Health Insurance Regulations

As I think most of you know, the California legislators considered a bill to allow for rate regulation by the Insurance Commissioner and the Department of Managed Care[ AB51]. Small Business California did not take a position on this and it has not passed.

In Maine, which allows the state to regulate rates Anthem, is suing the state for rejecting their rate filings. The state said that the insurance company could make a profit of 0% in 2009,.5% in 2010 and 1% this year. Anthem is basing their lawsuit on the theory that the state cannot regulate to the point of not allowing a company to make a fair rate of return on their investment.

What do you think about this? It should be noted that states can regulate rates in 26 states and there has been legislation to allow state regulation in 7 other states including California.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
License #0A32315

Conference Call with SBA Administrator Mills and the White House – Tomorrow!

This may be of interest to some of you. Note time is (EDT)

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Friends:

On Thursday, November 3rd at 5:00 p.m. EDT, please join Administrator Mills from the Small business Administration and Jon Carson, Director of the Office of Public Engagement, for a conference call about the American Jobs Act and its benefits for small businesses in your communities.

We ask that you share this invitation with your networks and affiliates.

Please RSVP here


Thank you,

The White House Office of Public Engagement
WHAT: White House American Jobs Act Call with Administrator Mills
WHEN: Thursday, November 3rd
Start Time: 5:00 p.m. EDT
Dial In: (800) 288-8968
Passcode Title: White House Call with Administrator Mills and Jon Carson

This call is off the record and not for press purposes.

Karen Mills Letter

We just received a response to our letter to Administrator Karen Mills at the SBA (click image below to enlarge). There were 14 California Small Business Associations that signed on to this letter, along with Small Business California. The good news is that Regional Administrator Elizabeth Echols has been designated as the point person for SBA. She will lead the efforts to help small businesses in California to find ways to reduce their energy use and reduce their energy cost.

You will see in the letter that we will be working on getting out more information about the President’s Better Building Initiative, promoting On Bill Financing with PG&E and Southern California Edison, and expanding On Bill Financing with San Diego Gas. We will also try to find ways to work with public utilities.

Do you have any ideas of additional things Small Business California and SBA can do to help small businesses in this area?

Withholding on Government Contracts/Receivables/ Issues

Yesterday, the House voted 405 to 16 to repeal legislation (passed in 2005) to impose a 3% withholding tax on government contracts. The original bill has been delay until 2012 and has not been implemented.This is great news for small businesses! Small Business California has been very vocal in supporting the repeal. It appears that this has bipartisan support so we are hopeful it will be passed in the Senate. We will let you know when it goes to the Senate.

Yesterday, I received a call from a reporter asking about collection of receivables for small businesses, given the downturn in the economy. He told me two surveys have been done one saying time for collection is 23 days and another being 36 days.

What has been your experience? Have you seen an increase in the time to collect receivables? Are you writing off receivables? Is the delay in collecting receivables creating cash flow problems for you?

I am always looking for issues affecting small business. If you have an issue that is broad based and affects small businesses that have not been brought up in a previous email from me I would like to know. Please make the subject of the issue state based as I cannot deal with local issues.

I hope you find these emails beneficial and if you are not a member, I hope you will consider joining Small Business California. You can do so by going to our website www.smallbusinesscalifornia.org


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
License #0A32315

AARP/On Bill Financing

AARP is one of the most powerful lobbying groups in Washington and to a lesser degree Sacramento. There are about 3.2 million members in California alone. Traditionally, small business organizations have not worked with AARP but my question to you is should Small Business California reach out to AARP?

You may not be aware that many of the start up businesses being created are by people 50 and over. It also seems like small businesses would be interested in tapping into a work force of people 50 and over where many of which need or want to work after retiring. What are your thoughts? Are there other issues we can work together on? Are you a member of AARP?

On Oct 13th, Senator Bernie Sander [Vermont] chaired a hearing on how utilities can help customers use savings on their monthly energy bills to finance energy efficiency improvements at homes and businesses. If this sounds familiar, it is exactly what Small Business California has brought to California with its On Bill Financing program.

Senator Sanders was quoted as saying “When you have a program that cuts energy bills and makes small businesses more competitive, creates jobs and slashes greenhouse gas emissions, that is a win-win-win, and Congress should support these efforts”

Small Business California has asked Mike Rossi, the Energy Czar for the Governor to help us expand On Bill financing in California. Small Business California and 14 other small business associations in California have written a letter to SBA Administrator asking the SBA to assist in these efforts. The SBA is required to do this under the 2007 Energy Bill passed by Congress and signed by the President. In California, San Diego Gas & Electric has done a great job in implementing On Bill Financing. PG&E and Southern California Edison quite frankly have dragged their feet.

On Oct 25th, Victor Parker was sworn in to be the SBA District Director of LA, Ventura and Santa Barbara Counties. Mark Quinn, District Director in SF, has been shuttling between SF and LA filling in as acting District Director for the last few months. Does anyone know Victor? Small Business California looks forward to working with him.

SBIR Insider Update 10-19-11

The email below is about the Small Business Innovative Research Program. Small Business California and the National Small Business Association have been strong supporters. I know most of you are not involved in SBIR, but I think the email from Rick Shindell (SBIR Gateway)gives you a good understanding of the politics in Washington and politics in general, in respect to small business.

The SBIR has been a very successful program and has shown support on both sides of the aisle and yet, it has been operating on continuing resolutions for years because of partisan bickering. I hesitated sending such a long email, but I think small businesses need to know political realities.

I am pleased to say we have over 100 people confirmed for the Travelers/Small Business California Symposia Oct 20th. I look forward to seeing all those that are attending. I also want to thank all of you that completed the survey. If you would like a copy of the results please let me know.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
License #0A32315

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by: Rick Shindell
SBIR Gateway

SBIR Insider Newsletter Update
October 19, 2011

In order to tell you what is going on with SBIR reauthorization, we must discuss the politics, this time, not for political junkies only. If you can suffer through the political portion, you'll have an increased understanding of the SBIR reauthorization problems, and how we can deal with them.

SBIR reauthorization is NOT a partisan issue, both parties tend to like the program, BUT they like (and need) money more. The excesses of campaign and party finances have brought about the degradation of our political system thereby diminishing the "well being" of our country and its citizens. Amongst other things, this has lead to the lowest approval rating of Congress in our history. It's possible now they will be more amenable to listening to you rather than dollars.

Perhaps we should look at ourselves as part of the cause. The simple fact is that the candidate with the most money in their election coffers, win 94% of the time. Sure we hear about the 6% because it is remarkable but all too rare.

Due to this 94% fact, both parties require their candidates to raise money not just for themselves, but for their party, so the party can put more financial support into candidates in tougher races, thereby trying to achieve a majority in congress.
Small businesses get a lot of "chin music" from congress, but at the core, (and behind closed doors) small businesses are not considered a good fund raising resource, so more attention goes to the larger, better funded concerns. This is especially true in the House with its 435 members.

Jurisdiction for legislation is related to a committee's mission, i.e., Armed Services, Small Business, Finance, Science, etc. The power is in the hands of the committee chairs and ranking members. More often than not, committee members fall into line with what their chair/ranking member wants. Then when the bill is brought out of committee to the whole House, the parties usually follow the lead of the their committee chair or ranking member.
Rock & Roll: That's what was so remarkable when the House democrats rolled (voted against) their ranking member of the Small Business Committee, Nydia Velazquez (D-NY) last May to pass the SBIR continuing resolution (CR) to keep the program going through September 30, 2011. That didn't happen by accident, it was the flood of calls that many representatives received from their constituents (you) urging them to pass the CR.

Exception to the Rule: The House Small Business Committee had it's chairs and ranking members in the back pocket of BIO and NVCA ever since former chair Donald Manzullo (R-IL) left in late 2006. On several occasions (including in the Congressional Record) Manzullo discussed the heavy lobbying and pressure tactics of those groups, (wanting to allow a small business to be majority owned and controlled by non-small business). Manzullo wouldn't cave to their pressure, and throughout his tenure as chair of the committee, Inc magazine rated him as one of the best friends to small business (for a variety of excellent reasons).
The total opposite is true for both Sam Graves (R-MO) the current chair, and Nydia Velazquez the ranking member and former chair. Both Graves and Velazquez have been fighting to give BIO, NVCA and some others, everything they want, and more. That's been the biggest sticking point in SBIR reauthorization.

If we look at the 2010 lobbying dollars for BIO and NVCA (as reported by The Center for Responsive Politics) we see the following lobbying contributions:
Biotechnology Industry Organization: $8,440,000
National Venture Capital Association: $2,567,515

You're not going to see those kinds of dollars coming from the small business community.
For his personal election efforts, Mr. Graves hasn't had a serious election challenge since 2000. In 2010 he raised over $1M (73% from PACs) and his opponent could raise only $16K. Graves got 69% of the vote!

Velazquez also raises a lot of money but runs virtually unopposed every time. Why does she need the extra money? According to numbers provided in Marian Currinder’s book "Money in the House", a democrat who receives a leadership position on a lower level committee (such as small biz) must contribute $150,000 in dues to the Democratic Congressional Campaign Committee (DCCC) and raise an additional $100,000.

The republicans aren't much different, so Graves must contribute a lot of money to his brethren as well. Neither Graves nor Velazquez can get the money they need from small businesses, but it's a piece of cake for the big boys, just give them what they want.
The Senate: The Senate Committee on Small Business & Entrepreneurship (SBE) led by Mary Landrieu (D-LA) chair, and Olympia Snowe (R-ME) ranking member, worked tirelessly with their staff, small businesses, industry trade groups, state & local governments, and other stakeholders to strike a reasonable compromise bill that could be supported by the SBIR stakeholders. They accomplished this in their bill S.493 The SBIR/STTR Reauthorization Act of 2011. This bill also included many of the provisions (or compromises thereto) that were championed by the House Small Business Committee, including a generous amount for VCs.
The SBE's compromises were so carefully worked out in S.493, that it led to letters of enthusiastic support for passage of the bill by the Biotech Industry Organization (BIO), National Venture Capital Association (NVCA), Small Business Technology Council, and many others.

In a March 7, 2011 letter of support to Senators Landrieu and Snowe, BIO president and CEO James Greenwood stated:

"On behalf of the Biotechnology Industry Organization (BIO) and our more than 1,100 biotechnology companies, academic institutions, state biotechnology centers and related organizations, I am writing in support of S. 493, legislation to reauthorize the Small Business Innovation Research (SBIR) and Small Business Technology Transfer Program (STTR) programs. This bill represents a balanced approach to ensure that America’s most innovative small businesses can access existing incentives to grow jobs by commercializing new discoveries."

On March 8, 2011, NVCA president Mark Heesen also wrote a letter of support to Landrieu and Snowe:

"On behalf of the National Venture Capital Association (NVCA) and its members, I am writing in support of Senate passage of S. 493, the SBIR/STTR Reauthorization Act of 2011, which reauthorizes the Small Business Innovation Research (SBIR) and Small Business Technology Transfer (STTR) programs. This legislation represents a fair compromise to ensure that America's most innovative small businesses can once again have access to existing government incentives to grow jobs by commercializing new discoveries."

Unfortunately the Senate was not able to invoke cloture on S.493, largely because it was brought to the Senate under an open rule which allowed about 200 amendments to be offered to the bill, almost all of which were not related to SBIR. So the bill just sits idle in the Senate, but its language is available for future use.

In the House:, Two committees have oversight of the SBIR program, the House Committee on Science Space & Technology (HSS&T) and the House Committee on Small Business (HSB). The HSB generally takes the lead unless there is an issue dealing with the universities (we'll discuss later).

H.R. 1425, Creating Jobs Through Small Business Innovation Act of 2011, was reported out of the HSS&T and HSB in mid-May of 2011. It has yet to reach the House floor.
Seeing the Senate's compromise on the VC issue (supported by BIO and NVCA), the HSB decided to double the amounts for the VCs, and add Hedge Funds and Private Equity Investment Organizations to the list of entities that could have majority ownership of a small business and still compete for SBIR funding. This added support from their Wall Street benefactors. Of course, BIO and NVCA were more than happy to support the House bill that gave them more than they dreamed of!

Disingenuous Dear Colleague ???: HSB Chair Sam Graves sent a "Dear Colleague" to House members on September 15, 2011 that at best could be termed "misleading." Let's examine:
Mr. Graves states: "First, let us say that it is our full intention as the Chairmen of the House Small Business and Science, Space, and Technology Committees to negotiate a long-term reauthorization of the SBIR program."

Challenge: Graves mentions "long-term reauthorization". SBIR has always been reauthorized in 8 year chunks. Last year Graves supported only a 2 year reauthorization, this year he proposes 3 years. The Senate is supporting the customary 8 years, but Grave's sticks to 3. Is that "long term?" It should be noted that work on SBIR reauthorization began in 2005 in anticipation of a 2008 expiration.

Mr. Graves states: "We have been diligently working with members on both sides of the aisle and on both sides of the Capitol to put together a long-term reauthorization that improves and modernizes the SBIR program and provides certainty to the thousands of small businesses that utilize the program."

Challenge: "Both sides of the Capitol?" Nonsense. Check with the Senate Committee on Small Business & Entrepreneurship (SBE) on this. HSB posture has been their way or the highway.
Mr. Graves states: "We remain committed to reaching a deal on a SBIR reauthorization and will continue our discussions with the Senate to reach a deal."

Challenge: This gives House members the impression that details are being worked out when in fact, they aren't. Grave's worry is that you may try to do to him as you did to Ms. Velazquez, getting the party to "roll" (vote against) their ranking member or chairman . This saved the SBIR program back in May.

The main thing that saved the SBIR program in the last CR back in May, was your involvement, speaking up, working with your congressmen, telling them what was reasonable and proper, and what you expected from them. Many of you did this independently, or working with groups such as SBTC, SBBC, and/or some state organizations formed by small high tech businesses.
The Heroes Step Forward: Remember our previous statement concerning committee jurisdiction. In keeping with that, on October 11, 2011 Congressman Edward Markey (D-MA) along with 24 other representatives sent a letter to HBC chair Sam Graves & ranking member Nydia Velazquez about SBIR reauthorization issues.

They voice concern about the VC language in H.R.1425 and suggest borrowing from the Senate's S.493 language: "…therefore urge you to include language on VC participation similar to that of S. 493, which is supported by both the small business and venture capital communities. Also, integral to a limited increase in VC access is an increase in the total allocation for the SBIR program from its current 2.5 percent level to 3.5 percent, which also has support from a broad coalition of business groups, including the Small Business Technology Council, the U.S. Chamber, and National Federation of Independent Businesses."

"Second, we are concerned about section 505 of H.R. 1425, which would limit the number of SBIR awards and dollars individual companies can receive, and in doing so would seriously undermine the merit-based principles that make the SBIR program so successful."

They also voice concern and opposition to "direct to Phase II" (bypassing phase I) and they urge a long term reauthorization, as has been the case for almost 28 years. A complete copy of the letter can be seen at: www.zyn.com/sbir/insider/markey2.pdf

The hero's who signed the letter are:
Edward Markey (D-MA); Niki Tsongas (D-MA); Peter Welch (D-VT); David B. McKinley (R-WV); Rosa L. DeLauro (D-CT) ; Donald Manzullo (R-IL); Lois Capps (D-CA); Laura Richardson (D-CA); Joe Courtney (D-CT); Jackie Speir (D-CA); Jared Polis (D-CO); John Tierney (D-MA); William Keating (D-MA); Paul Tonko (D-NY); Sam Farr (D-CA); Bill Posey (R-FL); Jim Langevin (D-RI); Maxine Waters (D-CA); Chris Murphy (D-CT); David Cicilline (D-RI); Pete Stark (D-CA); Marcia Fudge (D-OH); Martin Heinrich (D-NM); Raul Grijalva (D-AZ); Ruben Hinojosa (D-TX)

Another "Potential" Hero? In a written response to one of his small business SBIR constituents who voiced concern over the VC issue in House bill, Speaker of the House John Boehner (R-OH) stated: "I am concerned that the bill goes too far in relaxing constraints on venture capital ownership of firms receiving SBIR and STTR funds which could lead to the subsidization of venture capitalist firms with taxpayer dollars. Rest assured, I will keep your thoughts in mind as H.R. 1425 moves through the legislative process."

Speaker Boehner may well remember that a former speaker of the House, Tom Foley was voted out of office by his Washington State constituents, many of which thought he gave more attention to his lobbyist backers than his constituents. Also, Boehner saw his good friend and neighbor Steve Chabot (R-OH) get voted out of the house in 2008 for similar reasons (Chabot is now back in as of the 2010 election).

The University Backlash: The university groups historically disliked and often tried to reject/abolish the SBIR program. In fact, it was the university community along with the NIH that were able to remove/exempt SBIR (in the dead of night) from any inclusion in recovery act (ARRA) funding.

The HSS&T totally rejected the Senate's idea of increasing the SBIR allocation from 2.5% to 3.5% over 10 years. Any SBIR increase was historically fought against by the university community), and the HSB was more than happy to accommodate them. This put the universities solid support in the corner of the House's H.R. 1425 SBIR bill, which made no increase in the SBIR allocation, but removed significant portions of SBIR dollars from small businesses to channel those dollars to Wall Street and university programs.

Most people don't realize the enormity of university lobbying. Just as we discussed the power of organizations such as BIO and NVCA, we must include the university sector and non-profits in the group of power brokers, such as:

Federation of American Societies of Experimental Biology (FASEB): $331,384
Association of American Universities (AAU): $77,442
Battelle Memorial Institute (non-profit): $700,000

Of course the prim and proper atmosphere of the universities made them the ideal group to disparage the success of the SBIR program (even though they were often a beneficiary of SBIR/STTR success). It wasn't personal, but they believe that the agencies' extramural R&D budgets (especially NIH) belonged to them, and any deviation of those funds would result in cures and treatments not being funded or discovered. It is like small R&D businesses are merely chopped liver trying to suck blood money out of critical university research.

In fact, some in the university sector delighted in citing SBIR "waste, fraud & abuse" (WFA) as an example of a poor government investment. Indeed there is some and it should, and will be dealt with. However, it has yet to be demonstrated that SBIR has as much or more WFA than other government programs and participants, including universities!

Excuse me, I've been told that universities don't have WFA, but merely an occasional wayward professor. Other times it is simply a matter of "Research Misconduct."

I suppose it was a simple case of research misconduct when EPA reported (in their publication "When Good Money Goes Bad"): A university in New England agreed to pay $2.5 million in damages and penalties to settle civil allegations that the university submitted false claims on approximately 500 federal grants awarded to them. Let's be honest, intentional WFA is a product of the dark side of the human animal, and it's present in all environments. We should work together to minimize it, as well as reduce unintentional occurrences of WFA.

Support the National SBIR Fall 2011 Conference, Nov 6-9, 2011 * New Orleans, LA
Most of the National SBIR conferences are there to support you in your SBIR/STTR ventures, and this is also true of the New Orleans conference. However, this is also an excellent chance for us to show our support for the program.

There are some very good sessions planned, and the agenda is now posted on their web site at www.sbirla.org Early registration discounts are available through October 26, and special hotel per diem rates may still be available, but on a limited basis, so lock in your room quickly.

Complete information about the conference is available on their web site at www.sbirla.org
I hope to see you there.

Independent Contractors Legislative Ideas/AB361

What is an Independent Contractor?

This has been a big issue for small businesses, not only in California, but around the United States.During a White House Conference in 1995, this issue rose to the top and put forth to the President by small businesses around the country. Misclassification can mean thousands of dollars in fines and penalties by the IRS and EDD. IRS and EDD are stepping up their audits of small businesses looking for these misclassifications. The problem is IRS and EDD have somewhat different definitions. The IRS has a 20 point test, but does not tell businesses how many of the points in the test you must comply with.

Have you been audited by IRS or EDD? Do you know what some of the rules are to establish Independent Contractor status? Small Business California is considering introducing legislation next session to clarify what the Independent Contractor rules are in California. What are your thoughts on this? If you would like to see the IRS 20 point test, please see the link below:

http://www.comptroller.ilstu.edu/downloads/20-factor-test-for-independent-contractors.pdf

Speaking of legislation Small Business California is looking at putting together its package of bills for next year. We have legislators that have come to us asking for ideas on small business legislation they can carry. Do you have any ideas?

On Sunday the Governor signed Assembly Bill 361 [Huffman]. Small Business California was a strong supporter of this bill and worked closely with Assemblyman Huffman’s office in getting this passed and signed by the Governor. The bill creates a new, fully voluntary class of corporation called a benefit corporation. This allows businesses to pursue a material positive impact on the environment and community in addition to maximizing profits. Assemblyman Huffman says “we have a law that send a strong message to entrepreneurs that California is open for this emerging form of business.

Under AB361 businesses can choose to incorporate as benefit corporations and enjoy the following:
1. Greater access to social impact and venture capital investments
2. Legal protection for directors and officers in the more broadly defined fiduciary roles of maximizing profits as well as ensuring social and environmental considerations
3. Marketing opportunities because of their social responsibility.


Scott Hauge
President
Small Business California
2311 Taraval Street
San Francisco, CA 94116
shauge@cal-insure.com
415-680-2188
License #0A32315

Kaiser rolls back rates for some firms

Kaiser rolls back rates for some firms
Health care giant responds to newly empowered regulators
Date: Friday, October 7, 2011, 3:00am PDT
Business Journal- Sacramento

By: Kathy Robertson

In an unusual twist, “payback” is the buzzword this fall as millions of Californians prepare to make health plan choices for 2012. Kaiser Permanente is rolling back rates by 1.2 percent for small employers with contracts up for renewal between July and December 2011 — and is giving premium credits totaling $13.7 million to those who already started paying higher rates that took effect July 1. The first credits will show up on November bills.

The move is a response to pressure from state regulators with new authority to examine rate hikes more thoroughly than they have in the past. Blue Shield of California is passing out premium credits, too, but for a different reason. The health plan announced in June intentions to give back $167 million to employers, part of a move to reduce profits for 2010 to 2 percent. Most affected customers will see a credit on their October bill. How the changes will affect employee health benefit choices is unclear, but brokers like carrying a positive message for a change.

“It’s better than having (employers) swear at you,” said Jo-D Parisi, a longtime local health insurance broker. “Now, it’s ‘Guess what? Your rates are going down.”

While some employers renew coverage at other times of the year, many hold annual “open enrollment” in the fall, including the giant California Public Employees Retirement System . Open enrollment for CalPERS members is Oct. 10 through Nov. 4. The two plans say it’s a coincidence that the paybacks are playing out now, and they have no relation to open enrollment.But it’s not bad to look good at this time of year. Open enrollment is so competitive that plans crank up advertising to strut their stuff to the public. Done for different reasons, the net effect of these actions by Kaiser and Blue Shield is a little break for some small employers.

“It’s a credit on premium or you get to pay less money going forward,” said Vinny Catalano, area vice president at Arthur J. Gallagher & Co.

The bottom line for small businesses who want to provide health insurance is they are being priced out of the market,” said Scott Hauge, president of Small Business California and owner of an agency called Cal Insurance. Hauge’s company is getting a premium credit from Kaiser.

“What this is, is a credit on the increase,” Hauge said. “Only in insurance!”

Rollback at Kaiser

Almost 12,900 local Kaiser subscribers and an unknown number of their dependents will be affected by the rollback. Kaiser began notifying them of the change in mid-September. The company didn’t reach agreement with the California Department of Managed Health Care on the rates until August.Roughly 190,000 subscribers to health maintenance organizations and 240 point-of-service subscribers and an unknown number of dependents will be affected statewide.

The approximate value of the rate cut is $13.3 million for the HMO; it’s $40,800 for the other plan. HMO subscribers will get about $70 each and POS subscribers, $170 each, according to Kaiser spokesman John Nelson. The rollback saga began in April, when Kaiser filed a proposal to hike HMO rates for small employers by 10.7 percent, effective July 1. The POS rate hike was 12 percent, effective the same day.

A new law — Senate Bill 1163, approved last year and enacted Jan. 1 — requires health plans to file specific information with state regulators at least 60 days before they take effect.The problem for Kaiser is the law requires a rate evaluation by categories that include inpatient, outpatient, physician and other expenses. An integrated health system and health plan, Kaiser doesn’t track data like that.

DMHC officials asked for more information, which Kaiser supplied in June. Regulators balked at what appeared to be a 7.2 percent projected margin for Kaiser on the HMO business. Kaiser says the number falls to 0.6 percent when they subtract money spent on community benefits and the cost shift from un-reimbursed services provided under Medicare.

“That raised a lot of questions back and forth. It was clear we needed to do more to help the department understand our rate system and how and why we are different,” Nelson said.

That took time. Meanwhile, the proposed rates took effect July 1. In recognition that it’s going to take more time to resolve the issue, Kaiser agreed to a one-time rate cut of 1.2 percent, to an average of 9.5 percent for the HMO subscribers and an average of 10.8 percent for the POS subscribers. Employers who already began paying higher rates will get premium credits. The first will appear on November bills, but some won’t show up until December, Nelson said.

“What’s driving this is a new regulatory process and our commitment to work with the department,” Nelson said. “It’s a reduction in the rate increase — but there is still a rate increase.”

DMHC was able to get Kaiser to roll back rates using existing law, department spokeswoman Lynne Randolph said.

“DMHC requested Kaiser reduce its rates after reviewing the lack of data they provided to support its trends and Kaiser agreed,” she said in a prepared statement. “As a result, thousands of small businesses will benefit. In this economy, we must do all we can to help save money for these employers, many of whom are struggling to maintain health coverage for their workers.”

Profit return at Blue Shield

Blue Shield is passing out credits, not reducing rates, but the net effect is a little more money in employer and employee pockets. The plan’s decision is a voluntary move to make health care more affordable; it does not come in response to action by state regulators. The health plan is returning a total of $6.9 million to 2,049 businesses in the Sacramento region in a form of premium credits this month. The average amount is $3,300. Another $1.3 million will go to individual health plan members in the region, with an average premium credit of $90.

The payback is part of a pledge by Blue Shield to cap its profit margin at 2 percent of revenue and return any additional income to customers, health care providers and nonprofit organizations that provide health care to low-income Californians. The amount is based on premiums in May 2011; October bills reflect the credit, which is about 30 percent of one month’s premium. People who have dropped Blue Shield coverage lose out, however. The money is only paid out as a credit, company spokesman Steve Shivinsky said.

“We were very careful not to call it a rebate, but a credit, so people won’t think it’s cash,” he said. “Imagine logistically, if we sent checks.”

Owen Arnoff, whose company merged with Incompass Tax, Estate & Business Solutions in North Highlands and switched coverage to a new health plan, is miffed.

“I don’t understand why that would be, if I paid the annual premium like everybody else,” he said. “It’s like you have to stay with us in order to get whatever they call it. Are they really giving back? Not across the board.”

It’s not an inducement to renew, Shivinsky said. The credits were announced in June and the process took a while. Arnoff is not the only person who dropped the policy over the summer and won’t get a credit, though.

“It’s thousands and thousands of credits worth millions and millions of dollars,” Shivinsky said. “It’s not easy to give back money.”

Governor Brown Legislation/ Oct 20th event

On Friday, Governor Brown signed Small Business California sponsored legislation SB 826[Leno]. This would place minimal fines on claims administrators who fail to report or provide inaccurate information to the Workers Compensation Information System. This is important because workers compensation policy is developed by information provided the WCIS. Initially, this bill was opposed by the California Chamber, California Manufacturers, the Joint Underwriting Association and the Coalition of Workers Compensation. We were able to eliminate their opposition, except for the Joint Powers Association. But, we were able to get the support of claims administrators.

Yesterday was the last day for the Governor to sign or veto bills. We are waiting to find out what happened on Sunday but we do know that SB 459[Corbett] was signed by the Governor. This bill will increase fines on employers who willfully and knowingly misclassify independent contractors. Small Business California applauds going after the underground economy because this is a big issue for small business, but we would like to see the state clarify the definition of independent contractors. EDD and IRS do not have the same definition and we think this should be clarified.

As you all know, the IRS established a 20 points list which helps to define an independent contractor (link below), but they do not say how many points must be followed to establish independent contractor status.

http://www.comptroller.ilstu.edu/downloads/20-factor-test-for-independent-contractors.pdf

Another supported bill we are watching closely is SB 469 [Vargus]. This bill will require super-stores over 90,000 square feet to do an economic study of the impacts to the community, including small businesses. We should hear the Governors position today.
October 20th is quickly approaching and if you haven’t done so already, please take the survey (link below).

http://travelers.qualtrics.com/SE/?SID=SV_eFkQd5KoG1Udv3S

Also, if you are in the Bay Area I hope you will attend the symposia at the Julia Morgan Ballroom in SF. (registration link below):

http://www.travelers.com/iwcm/Distribution/2011/09_September/Travelers_Institute_Invite/San%20Francisco%20Invite/invite4.htm

This event is being co-hosted by Travelers and Small Business California. We have added a section talking about big business working with small business and are pleased to have John Legnitto, from Recology, talking about what they are doing to help small businesses. Please take the survey and register now for this free event. We will also validate parking.

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

NLRB Posters/ AB29/Regulations

The National Labor Relations Board has postponed the requirement for a posting of workers’ rights to unionize. Originally scheduled for Nov 14th, it has been delayed to January 31,2012. As the January date comes closer Small Business California will send you the information on where to get the required poster.

Yesterday, the Governor signed AB 29 setting up the Governor’s Office of Business and Economic Development. Small Business California was a strong supporter of this legislation as we believe the world’s eighth largest economy must have an office focused on bringing business and jobs to California. The Office of Business and Economic Development will replace in statute the current Governor Office of Economic Development, which was created by Executive Order. It appears that Joel Ayala will continue to be the Director.

As you know, regulations are a problem for California Small Business. Legislators and the Governor have committed to deal with this problem. Are you seeing any change in attitudes from regulators? Do you see enforcement increasing, decreasing or staying about the same? Have you been audited by a state agency and what were the results of that audit. I am particularly interested in whether you have seen a crack down on classification of independent contractors.


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

The White House Business Council / Social Security

In mid-October, The White House will re-launch the jobs and economy section of the website. This section of the website will include an interactive map of the U.S. that will profile success stories and illustrate how they will directly benefit from the American Jobs Act. We are profiling two success stories from each state, and we need help in identifying candidates for the state of California.

They are always looking to highlight businesses that are expanding, investing in new ideas and investing in their communities by adding jobs and growing capacity. The best candidates are companies who are investing in their workers, hiring back those they had to lay off, using tax credits to offer health insurance and expanding opportunities through job training and education. The business must be under 500 employees and must be hiring on more people in the foreseeable future.

These stories may be highlighted on government websites (WhiteHouse.gov), in speeches by senior Administration officials and in reports to national leaders or the media.

Requirements

1) Company Name:

2) CEO Name:

3) Contact information (Phone number and email address):

4) Company Location:

5) Company Category (Manufacturing, Retail, Clean Energy, Start-up/Entrepreneur, Small business, Exporting, Jobs of the future, Rural, Veteran-owned: [Please feel free to pick more than one category]

6) Number of employees:

7) Projected number of jobs created over the next year:

8) Quote from CEO on why he/she is investing in their company/betting on their continued growth and success:

9) Company Story: 200 to 250 word short story. These stories should be embedded in the success of the CEO. We want individuals across the country to relate to business owners like yourself, but also understand why you are being highlighted over other businesses:

10) 2 High Resolution photos (CEO picture and 1 “in-action” picture):

Please let me know if you are interested and meet the requirements. On Friday, I spoke to a group of people on small business attitudes on retirement benefits. I indicated the problems, but they asked me an interesting question about how small business felt about Social Security. Please let me know your thoughts.

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

Media Release: CA Ranked in 'Top 10 Best States To Do Business'/ Alternate Energy

We always hear talk about California being a bad place to do business. Well in one survey, California was ranked around 50th out of 50 states, which is just one ahead of Washington DC (who ranked 51st). Then, I see another report (below) that ranked California as being the top 10 states to do business. I don’t believe this just as much as I don’t believe we are 50th.

Ultimately, you need to look closely at the questions being asked.

If the questions revolve around regulations, taxes and cost of housing, California is going to end up on the bottom. If the questions revolve around climate, quality of life, entrepreneurism and R&D and our university system, California will come up at the top. I point this out so you are cautious when you hear the results of surveys ranking California’s business climate.

I also want to send a thank you all of you that responded to my question on alternate energy and solar. Naturally, the responses varied from strong support to “let the market decide”. However, the most common response was that we need to find ways to get off our dependency on oil and develop a long term strategy, which takes into account all alternate energy sources (including solar). Most of you said that the Solyndra situation was tragic, but it is just one loan. Many of you also pointed out that gasoline has been subsidized for years.

---------------------------------------------------------------------------------------
FOR IMMEDIATE RELEASE CONTACT: Brook Taylor
Wednesday, September 28, 2011 (916) 322-0667


Governor’s Office of Economic Development Announces California Ranked in ‘Top 10 Best States to Do Business’

Sacramento Calif. – Governor’s Office of Economic Development Director Joel Ayala today said that Area Development magazine has ranked California as one of the top 10 best states to do business. The rankings are based on a nationwide survey of highly respected business location consultants.

“Despite all the negative rhetoric, the fact remains California is still the nationwide leader in high-tech, biotech, green, venture capital and agricultural job creation,” said Director Ayala. “California is also being recognized for its robust international trade activities which account for billions of dollars in revenue and contribute millions of jobs to the state.”

Area Development magazine noted that despite California being hit hard by the recession, California remains a global leader in international trade and access to global markets. In addition to California’s international trade advantages, Area Development noted that California is finding success through the state Innovation Hub (iHub) initiative which is administered by the California Governor’s Office of Economic Development (GoED).

The iHub initiative includes 12 state designated Innovation Hubs from Redding to San Diego which leverage assets such as research parks, technology incubators, universities, and federal laboratories to provide an innovation platform for startup companies, economic development organizations, business groups, and venture capitalists.

“The California iHub initiative is the largest state innovation program of its kind,” said GoED Deputy Director for Innovation and Emerging Technology, Louis Stewart. “The initiative began in 2010 with a small group and has since grown to an expansive statewide network of public and private partners focused on the commercialization of new products.”

The Governor’s Office of Economic Development (GoED) is the state’s the One-Stop-Shop for business retention and job creation. They offer a wide range of services that are targeted to business owners including: site selection, business incentives, permit streamlining, clearing regulatory hurdles, small business assistance, and more.

To learn more about GoED and the Innovation Hub Initiative: http://www.business.ca.gov/

For the complete Area Development Magazine rankings, http://www.areadevelopment.com/

Alternative Energy/ Small Business Survey/ Invitation to Luncheon Oct 20

With the Solyndra debacle fresh in our minds and the solar industry coming under fire, I am curious how the small business community views the industry. Do you think it has been hyped as a job creator and the energy savings from solar have been overstated? Or do you think the alternative energy industry (specifically solar) is a necessity for US economy?
Again, I ask all of you to please complete the small business survey for the event Small Business California is doing with the Travelers Institute on October 20th. (Survey link is below)

http://travelers.qualtrics.com/SE/?SID=SV_eFkQd5KoG1Udv3S

It takes about five minutes. I will also be sending the results to Mike Rossi, the economic development Czar for the Governor. Thank you to all that have already taken the survey. We really appreciate your time and opinions.
I know that this email goes around the state but anyone interested in attending the luncheon Oct 20th is welcome to attend. I think we will reach capacity so I encourage you to register now. (Link to register is below)

http://www.travelers.com/iwcm/Distribution/2011/09_September/Travelers_Institute_Invite/San%20Francisco%20Invite/invite4.htm

There is no cost to attending this event and the panel for the event will include myself and:

- Marc Schmittlein, President and CEO of Travelers Select Accounts
- Christine Baker, Acting Director of the Department of Industrial Relations
- Elizabeth Echols, Regional Administrator SBA
- Regina Dick Endrizzi Director, SF Office of Small Business

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

Health Insurance

Some amazing things are happening in the world of health insurance! Yesterday, I found out that my company, Cal Insurance, is getting a refund of 1.2% because Kaiser has put forth a policy of reducing rates 1.2% on policies that have renewed on or after July 1. I have also been told that Blue Shield is doing refunds as well. Policies with a lot of carriers are seeing single digit increases for the first time in years.

I am not sure the reason for this except that it may be the health legislation passed in March of 2010 that provided more oversight of health insurance carriers and it could also be that health insurance companies are taking a more active role in cost management. Have you seen these reductions?

As you know Small Business California surveys small businesses around the state to determine what are their most important issue. The cost of health insurance and availability of health insurance to sole proprietors has been the top issue for seven years running.

To see our survey go to www.smallbusinesscalifornia.org


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

Small Business Survey

On October 20, Travelers Institute and Small Business California will be hosting a symposia to identify challenges facing small business. It will be at the Julia Morgan Ballroom in SF from 11:30 to 1:30pm. The panel for the event will include myself and the following:

- Marc Schmittlein, President and CEO of Travelers Select Accounts
- Christine Baker, Acting Director of the Department of Industrial Relations
- Elizabeth Echols, Regional Administrator SBA
- Regina Dick Endrizzi Director SF Office of Small Business

In preparation for the meeting could you take a few minutes and complete a Small Business Survey. See link below.

http://travelers.qualtrics.com/SE/?SID=SV_eFkQd5KoG1Udv3S

If you would like to attend the event please let me know by return email and I will send you invitation.

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

Senator Landrieu Comments on Appropriations Bill Funding for Small Business Administration/ Mike Rossi/ SB Cal

Please see below press release from the US Senate Committee on Small Business and Entrepreneurship indicating that the Committee approved a bill giving the SBA $955 million in FY 2012. See details below.

Last Friday Lori and I met with Mike Rossi the Economic Development Czar for Governor Brown. It was an extraordinary meeting and I left with the expectation that we have a real good friend who is a straight shooter and very interested in helping California Small businesses. I think I can safely say he is a no nonsense person and is looking for concrete ideas that are doable. He wants to help us with On Bill Financing and was interested in learning more about our proposal to permit unrestricted general solicitation for offerings up to $1 million annually as long as all of the
investors are accredited investors. This is sanctioned by the SEC under Rule 504 which requires a state enabling statute.

Small Business California is looking for ways to increase revenue. For those of you that are members thank you but we need more of you to join so that we can pay our lobbyist Lori Kammerer and cover our ongoing expenses. None of our Board members including me do not receive any money from Small Business California and in fact some of us make large financial contributions. You can join by going to www.smallbusinesscalifornia.org

We are also considering charging people who are not members a fee for these emails. I hope you will agree that there are few if any organizations that provide this kind of information to small businesses. throughout the year. Do these emails have value to you. are considering $75 a year. What are your thoughts on this?

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FOR IMMEDIATE RELEASE
September 16, 2011
Contact: Elle Ourso, (202) 224-5175

SENATOR LANDRIEU COMMENTS ON
APPROPRIATIONS BILL FUNDING FOR SMALL BUSINESS ADMINISTRATION
U.S. Senate Appropriations Full Committee Mark-Up appropriates $955.3 million to the SBA for Fiscal Year 2012.

WASHINGTON – United States Senate Committee on Small Business and Entrepreneurship Chair Mary L. Landrieu, D-La., today commented on the Senate Fiscal Year 2012 appropriations approved for the Small Business Administration (SBA). The committee- approved bill will give the SBA $955.3 million for Fiscal Year 2012.

“I think the small business community should feel good about the FY2012 funding approved yesterday in the Appropriations Committee for the SBA,” Senator Landrieu said. “Members on both sides of the aisle were able to come together and find the resources to fully fund the SBA’s two largest small business loan programs. We were able to protect the funding for contracting and counseling, and also to restore necessary operating funds to the SBA’s disaster loan program. I realize everyone would have liked an increase, and I personally wanted more for the SCORE program to leverage that volunteer counseling, but this is a strong level given the environment of cuts, and I think we will be able to give entrepreneurs the necessary tools to start a business, manage an existing one, or even grow and prosper in FY2012 with this funding.”

Highlights of the Financial Services Fiscal Year Appropriations for the SBA are as follows:

- Increases funding for 7(a) and 504 loans from $80 million in 2011 to $211.6 million for 2012, leveraging about $25 billion in loans, without raising fees.
- Protects SBA’s core counseling and contracting assistance programs from cuts by providing matching 2011 levels.
- Fully funds SBA’s Disaster loan program’s administrative funds at $167 million and protects the loan dollars so that SBA has the money and staff necessary to respond quickly when disaster strikes businesses or homeowners.
- Provides $2 million for the SBIR Federal and State Technology Program to help small, high-technology firms better compete for the billions in Federal research and development projects and transition technology that might otherwise die on lab shelves or in an entrepreneurs’ garage.

President Obama

The Board of Small Business California will be meeting tomorrow and discussing President Obama’s Jobs proposal. What are your thoughts? Will it encourage you to hire a new employee or hold off releasing employees?

I assume most of you are aware that Speaker Perez bill AB 29 passed and is now on the Governor’s desk. This bill creates the Office of Business and Economic Development. I have been told the funding for the office is $800000. Seems like a very small amount for an economy that is the 8th largest in the world and compares unfavorably with Ohio’s that has a budget of over 14 million . Small Business California strongly supported this bill and testified in committee and while it appears to be underfunded we still feel it is important that California have this Office.


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

State Bank/ Legislative Session

Please see email sent to Tom Campbell on AB 750. Small Business California has not taken a position on this and will discuss at our next Board meeting this week. What are your thoughts on a state bank. Is this a good idea and will it help small business or do you see this as another intrusion by government into the private sector?

The California legislative session closed late Friday night and bills that have passed both the Assembly and Senate now go to the Governor. He has 30 days to sign or veto.
Of note AB 29 passed creating the Office of Small Business Development. Also AB155 the Amazon bill was amended to delay collection of sales taxes by On Line out of state retailers until September 2012. The goal is to get a National policy of out of state On Line companies collecting sales tax for each state which would replace the California provision.

In President Obama’s speech he talked about reforming regulations in the Capital markets which would help small businesses. Small Business California’s capital access committee is working hard on this and looking to develop a policy proposal which would establish a small and medium size business Self Regulatory Organization to meet the needs of small and medium size business not just Wall Street. The President’s speech was encouraging showing his interest in addressing this problem.

(I am also including an email below from Michael Sauvante, Executive Director of the COMMONWEALTH GROUP for reference)

Scott Huge
Small Business California
415-680-2109

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I have some news for you on a parallel front with respect to our SRO concept. It concerns a topic I was deeply involved in before I shifted focus to small business capital markets and securities regulations, as you will note at the end of this message from all the writing I did on the following topic.

In this case it concerns the idea of the state (of CA) forming its own bank (based on a North Dakota model) to address credit issues here in California. 14 or so states are now looking into this idea.

With respect to California, Assembly Bill AB 750* was introduced to authorize a group to study the idea. In spite of some original questions about it, recent momentum built unexpectedly quickly for the bill and AB750 not only came out of committee, but it has already been passed by both houses with strong bi-partisan support, and it is off to the governor for signature (who may need encouragement to sign it).

I am sending a copy of this message to Scott Hauge as well, as I believe it would be beneficial to get the SB Cal network involved and have the California small business community encourage the governor to sign it. Here is a link to do so.

The core of this bill is to authorize a blue-ribbon task force to investigate and study the pros and cons of the state of California establishing its own state owned bank, replicating the model of North Dakota. For over 80 years now, the Bank of North Dakota (BND) has served as a mini-Fed to that state and its community banks. It is noteworthy to point out that North Dakota has the healthiest economy in the country by far, and the only variable that can reasonably account for that (as compared to every state with similar economic conditions as North Dakota’s) is the presence of the state bank.

Here are two relevant articles on BND and how California might benefit from following their example.

“North Dakota’s Economic “Miracle”—It’s Not Oil” (which lays out the premise for a state owned bank and its economic benefit to the state) and “What a Public Bank Could Mean for California” (which talks about the above AB750 bill and applies the Bank of North Dakota model to California and why it would be beneficial to California and it economy).

Both of these articles were written by Ellen Brown, the nation’s chief proponent of public banking, like that demonstrated by North Dakota. She is the author of Web Of Debt and numerous articles about public banking. Ellen is also the Chairman and President of the Public Banking Institute, which is leading the effort to promote the concept of public banking here in the United States. I am on their advisory committee.

Tom, you will note in the first article that it makes reference to writings on this topic by one of your own Chapman University Law School professors, Prof. Tim Canova. Here is an article he wrote on the topic: The Public Option: The Case for Parallel Public Banking Institutions. I am sending him a copy of this message, as he may well also like to know about the SRO concept that we have discussed. If you are so inclined, perhaps he might like your thoughts on the merits of the SRO project.

It may also be of interest to you both that the PBI website contains a page that addresses a number of common misperceptions about the idea of publicly owned banks, including the common one that somehow such a bank would compete with private banks. With respect to the later assumption, the reality in North Dakota is that there “is a very strong public-private partnership that increases the profitability and stability of the local community banks”. Those common misperceptions and responses to them can be found here.

Finally, if you would like to explore more ideas on this whole concept of public banking (i.e. banks owned for public benefit by either government entities or non-profit organizations, or hybrids of both) see this section on my website entitled “An Evolution in Banking”.

As you will note from some of those writings, this idea is not limited to states. Counties might also jump on the idea and in fact, we have a group here in Santa Barbara county that is exploring the prospects of introducing that idea here in Santa Barbara County. We’re having a strategy meeting in Santa Maria this Monday to discuss it. I will keep you posted on the results.

Here are some relevant links to California’s bill. All AB750 documents and history can be found here:

http://www.leginfo.ca.gov/pub/11-12/bill/asm/ab_0701-0750/ab_750_bill_20110815_amended_sen_v93.html.

Thanks and best regards,

Michael Sauvante
Executive Director
_________________

COMMONWEALTH GROUP

650-641-1246 office
805-757-1085 cell
Skype: michael.sauvante
email: sauvante@commonwealthgroup.net
bio: www.commonwealthgroup.net/sauvante
info on securities regulations:
www.commonwealthgroup.net/regulations

Retirement Plans/IBM Computer Equipment

On September 30th, I will be part of a panel discussing small business retirement plans. There will be a discussion of the state sponsoring retirement savings plans for the private sector. I will be addressing the questions below:

“What are the barriers that make it difficult for you, as a small business, to offer a retirement plan to your employees?”

If the State of California were to sponsor a retirement savings plan for private sector workers whose employer does not offer a plan -- with no cost to taxpayers and low or no fees charged to employers -- would you be willing to participate by enrolling your employees and implementing payroll deduction? What plan features would be important to you as an employer?

I would like your comments if you are not currently providing a retirement Plan. IBM will be announcing today a program to provide $1 billion to small and medium size businesses for computer equipment. This will be in the form of loans but IBM is indicating that they will be much easier to obtain than through a bank. For more information go to:

www.allthingsd.com/author/arik/

It is interesting that in the article it says small and medium size businesses purchase $250 billion of computer equipment a year.

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
"Always looking out for you"

Obama's Speech on Economy and Job Creation & UPDATE

Thursday President Obama is going to give a major speech on the economy and job creation. I have been asked by a reporter from a syndicated columnist from the Business Journals about inputs from small business owners and experts for a preview of Obama ‘s jobs speech on Thursday.

The question was posed as “What do you want to hear President Obama say on Thursday night to address the nation’s persistently bad jobs picture?”

I need to get back to him Wednesday morning so if you have thoughts please respond today.

UPDATE >>>>>>>>>>>>

Thank you to all of you that responded to my question about what you would like to hear the President say in his speech. I received 175 responses. The most frequently cited comments were:
- To end the political stalemate between Republican and Democrats.
- You want the Government to get out of the way.
- A review of current lending policy which has stifled bank lending to small business
- Need hiring tax credits.
- A review of regulations at all levels of government.

There were a number of other great comments but these were the most frequently cited. Speaking of job creation, the latest ADP report showed large businesses with 500 employees or more added only 3,000 new employees, and medium-size businesses added 30,000 workers in August, while small businesses that employ fewer than 50 workers hired 58,000 new workers.

See: http://www.nasdaq.com/aspx/stock-market-news-story.aspx?storyid=201108310844dowjonesdjonline000366&title=adpaugust-us-private-sector-jobs-+91k-vs-+100k-expected

Clearly if the economy is going to get out of its doldrums, small business will lead the way.

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

Susan Hall- Beloved Employee

Last week I wrote that one of my employees died Wednesday night. Many of you asked about arrangements and where they might be able to make a contribution in her name. Please see email from her daughter. For those who knew her she was a special person and will be missed.

link: http://memorialwebsites.legacy.com/SusanHall/homepage.aspx

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

Mike Rossi & Tragic Employee Loss

On September 16th Lori Kammerer and I will be meeting with Mike Rossi, the economic development Czar for the Governor. If you were to meet with him, what would you say the state should do to stimulate the economy and create jobs? Are your receipts increasing, decreasing or staying the same? Do you plan on hiring employees, cutting employees or stayed the same?

Yesterday morning, I received a call informing me that one of my key employees had died of a heart attack the day before. This was quite a shock because she had worked all day Wednesday and seemed fine. She was a person who worked well with all of our customers and the insurance companies we represent. She was here almost 16 years and is loved by all employees at CAL Insurance. I don’t know how many of you have experienced this situation, but it raises a whole lot of questions about what do you do when something like this happens. Here are some questions I have:

- How do you deal with your employees after this occurs?
- How do you let your customers know?
- How do you let your suppliers know?
- How do you work with the family?

Also, do you have the talent within your company to replace this person or are you going to have to go outside the company? If you have to go outside the company where do you find people to replace this person? Do you need to bring in someone on a temporary basis or can the existing employees pick up the slack? These are just a few of the issues I am facing but I think it illustrates part of the planning employers must do to prepare for such an occurrence.


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

Last word on Emergency plan and Fire Prevention plan

Here is definitive word on the Emergency plan and Fire Prevention plan. All of you that have plans (that don’t comply) are subject to fines. BUT if you don’t have a plan, then you are okay. I will bet most of you who have put something together are subject to citations. However, I want to restate that Cal OSHA is not looking to get employers, but this is the law. Small Business California will be working on this as we would think it is much better to try and fall short, than have nothing. Below is more elaborated explanation of this if you are interested.

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“The Cal OSHA Appeals Board ruled in 1985 in its Educated Car Wash Decision after Reconsideration that employers are not required pursuant to T8CCR §3220 and §3221 to develop and implement written emergency action and fire plans. The Board wrote “Sections 3220 and 3221 do not have a corresponding charging or performance requirement. In other words, there is no safety order which mandates that an employer maintain an emergency action plan or a fire protection plan. However, when an employer voluntarily chooses to maintain such a plan, the standards set forth in Sections 3220 and 3221 detail the requirements of the plan and must be adhered to. Here, because Employer did not have an emergency action plan or a fire prevention plan, it cannot be cited for violating either safety order.”

That said, employers are required pursuant to §3203 “Injury and Illness Prevention Program” to identify, evaluate and control hazards in their respective workplaces. The IIPP is required to be written. Such hazards would include earthquake, fire, chemical release, for example. Cal OSHA’s “Model IIPP Program” references emergency action and fire prevention among its general safety and health practices. Enforcement of §3203 has remained fairly consistent since its inception in 1992. Predictably, questions have arisen as to just what needs to be included in an Emergency Action or Emergency Response Plan.

T8CCR §5189 (PSM) and §5192 (Hazardous Waste Operations) each require affected employers to develop and implement a written EAP and ERP. The California Fire Code requires all employers to develop emergency plans for addressing fires, to include contacting responders, evacuation procedures, assignment of responsibilities, etc. T8CCR §3203 anticipates that a reasonable employer will establish procedures for emergency situations.”

So the bottom line is as I told you on the phone, per the appeals board, you don’t have to have one, but if you do, it must comply.

Here are the two regs—you cited one of them already.

§3220. Emergency Action Plan.
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(a) Scope and Application. This section applies to all emergency action plans. The emergency action plan shall be in writing, except as provided in the last sentence of subsection (e)(3) of this section, and shall cover those designated actions employers and employees must take to ensure employee safety from fire and other emergencies.
(b) Elements. The following elements, at a minimum, shall be included in the plan:
(1) Emergency escape procedures and emergency escape route assignments;
(2) Procedures to be followed by employees who remain to operate critical plant operations before they evacuate;
(3) Procedures to account for all employees after emergency evacuation has been completed;
(4) Rescue and medical duties for those employees who are to perform them;
(5) The preferred means of reporting fires and other emergencies; and
(6) Names or regular job titles of persons or departments who can be contacted for further information or explanation of duties under the plan.
(c) Alarm System.
(1) The employer shall establish an employee alarm system which complies with Article 165.
(2) If the employee alarm system is used for alerting fire brigade members, or for other purposes, a distinctive signal for each purpose shall be used.
(d) Evacuation. The employer shall establish in the emergency action plan the types of evacuation to be used in emergency circumstances.
(e) Training.
(1) Before implementing the emergency action plan, the employer shall designate and train a sufficient number of persons to assist in the safe and orderly emergency evacuation of employees.
(2) The employer shall advise each employee of his/her responsibility under the plan at the following times:
(A) Initially when the plan is developed,
(B) Whenever the employee's responsibilities or designated actions under the plan change, and
(C) Whenever the plan is changed.
(3) The employer shall review with each employee upon initial assignment those parts of the plan which the employee must know to protect the employee in the event of an emergency. The written plan shall be kept at the workplace and made available for employee review. For those employers with 10 or fewer employees the plan may be communicated orally to employees and the employer need not maintain a written plan.
§3221. Fire Prevention Plan.
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(a) Scope and Application. This section applies to all fire prevention plans. The fire prevention plan shall be in writing, except as provided in the last sentence of subsection (d)(2) of this section.
(b) Elements. The following elements, at a minimum, shall be included in the fire prevention plan:
(1) Potential fire hazards and their proper handling and storage procedures, potential ignition sources (such as welding, smoking and others) and their control procedures, and the type of fire protection equipment or systems which can control a fire involving them;
(2) Names or regular job titles of those responsible for maintenance of equipment and systems installed to prevent or control ignitions or fires; and
(3) Names or regular job titles of those responsible for the control of accumulation of flammable or combustible waste materials.
(c) Housekeeping. The employer shall control accumulations of flammable and combustible waste materials and residues so that they do not contribute to a fire emergency. The housekeeping procedures shall be included in the written fire prevention plan.
(d) Training.
(1) The employer shall apprise employees of the fire hazards of the materials and processes to which they are exposed.
(2) The employer shall review with each employee upon initial assignment those parts of the fire prevention plan which the employee must know to protect the employee in the event of an emergency. The written plan shall be kept in the workplace and made available for employee review. For those employers with 10 or fewer employees, the plan may be communicated orally to employees and the employer need not maintain a written plan.
(e) Maintenance. The employer shall regularly and properly maintain, according to established procedures, equipment and systems installed in the workplace to prevent accidental ignition of combustible materials.

Update! Emergency Action Plan - Cal OSHA

Yesterday, in my email I mentioned that all businesses are required to have an emergency action plan. For details on what is required see link below. Failure to do so makes an employer subject to citations by Cal OSHA. However, I have verified from the Department of Industrial Relations that there is no enhanced efforts to go after employers for lack of compliance

http://www.dir.ca.gov/title8/3220.html

Speaking of Cal OSHA I am surprised how many businesses are not aware that if they have employees they are required to have an Injury and Illness Prevention Plan. This plan among other things requires you to identify a Safety Manager, put forth a statement of Safety Policy , an investigation of safety hazards and accidents. It is also required that it be effective meaning you need to make sure your employees are aware of this plan. For information on how to put a plan in place I suggest you contact your insurance broker.
This is one of the most common citations for Cal OSHA and can mean fines up to $5000.

Yesterday Small Business California’s sponsored bill SB 826[Leno] passed the Assembly on a bipartisan vote. It will now go to the Governor where it is expected he will sign it. This bill implements modest fines of claims administrators. The reason for the bill was that there was a lack of compliance by many claims administrators to the Workers Compensation Information System as required by law. The WCIS is involved in making workers compensation policy and the lack of information makes it difficult to make good policy. This was even supported by claims administrators and virtually had no opposition



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