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North Bay Business Journal

Monday, November 29, 2010, 2:30 am

Laws that impact businesses

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    (Selected federal and state legislation affecting business this year and next)

    FEDERAL LAWS

    HR 4173 – Dodd-Frank Wall Street Reform and Consumer Protection Act. Effective July 21, 2010, this is intended to provide financial regulatory reform to protect consumers and investors, to enhance federal understanding of insurance issues, to regulate the over-the-counter derivatives markets and for other purposes.

    It directs the Comptroller General to audit and report to Congress within two years after enactment of this act on all actions taken by the Board of Governors of the Federal Reserve System and the Federal Reserve banks during the current economic crisis.

    It establishes the Financial Services Oversight Council, consisting of the heads of specified federal financial regulatory bodies and chaired by the Secretary of the Treasury.

    The council is also required to monitor the financial services marketplace to identify potential threats to the stability of the U.S. financial system, to subject financial companies and activities to stricter prudential standards, to recommend that a member council agency adopt stricter prudential standards for the firms it regulates in order to mitigate systemic risk and to resolve, upon request, a jurisdictional dispute between member council agencies.

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    HR 4213 Unemployment Compensation Extension Act of 2010. This act, which was made law July 22, amends the Supplemental Appropriations Act of 2008 with respect to the state-established individual emergency unemployment compensation account.

    It extends the final date for entering a federal-state agreement under the Emergency Unemployment Compensation program through Nov. 30, 2010, and postpones the termination of the program until April 30, 2011.

    It amends the Assistance for Unemployed Workers and Struggling Families Act to extend until Dec. 1, 2010, requiring that federal payments to states cover 100 percent of emergency compensation.

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    HR 5297 – Small Business Jobs and Credit Act of 2010. Passed Sept. 27 of this year, H.R.5297 creates in the Treasury, the Small Business Lending Fund, administered by the Secretary of the Treasury to cover purchases of preferred stock and other financial instruments from eligible institutions.

    According to the House of Representatives, the purpose of this act was to address the ongoing effects of the financial crisis on small businesses by providing temporary authority to the Secretary of the Treasury to make capital investments in eligible institutions in order to increase the availability of credit for small businesses.

    It created a $30 billion small business lending fund and provides $12 billion in tax breaks to help small businesses.

    The bill extends the fee reductions for SBA 7(a) and 504 loans and increases the guarantee to 90 percent through Dec. 31, or until $505 million in appropriations has been contracted.

    There will be a permanent increase to the size of the loans, $5 million for both 7(a) and 504, and a temporary increase of $1 million for express loans.

    The bill also includes an alternative size standard for businesses, which establishes a standard of maximum tangible net worth of $15 million and 2-year average net income after federal income tax of $5 million. This applies to both 7(a) and 504 loans.

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    HR 2847 – HIRE Act. The HIRE Act was made law March 18, 2010. It amends the Internal Revenue Code to exempt for-profit and nonprofit employers, including public institutions of higher education, from social security and railroad retirement taxes in 2010 for new employees who are hired after Feb. 3, 2010, and before Jan. 1, 2011, and who certify that they have not worked more than 40 hours during the last 60 days.

    It also allows an increase in the general business tax credit for the retention of such employees for at least one year at specified wage levels and prohibits any carryback of unused business tax credit amounts.

    This act also appropriates to the Federal Old-Age and Survivors Insurance Trust Fund and the Federal Disability Insurance Trust Fund under title II of the Social Security Act amounts necessary to cover any reduction in revenues resulting from the tax exemptions provided by this act.

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    CALIFORNIA LAWS

    AB 1873 – Property Assessed Clean Energy. Signed Oct. 12, 2010, AB 1873 authorizes the Air Resources Board to use AB 32 fee revenues to purchase bonds issued to finance the installation of distributed generation renewable-energy sources or energy- or water-efficiency improvements through local property assessed clean energy programs, upon appropriation, and makes related findings.

    PACE gives cities and counties the authority to enter into voluntary contractual assessments with local property owners to finance renewable-energy installations, energy-efficiency and/or water-efficiency improvements on their properties, which are then paid back over time on the property owner’s property tax bill.

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    AB 1846 – Environmental Quality Act

    This was passed Aug. 31, 2010.

    It streamlines the California Environmental Quality Act approval process for certain projects by allowing industries subject to compliance with greenhouse gas regulations under AB 32 to go through an expedited environmental review through a focused environmental impact report.

    California is working to meet its environmental goals set forth by AB 32, the California Global Warming Solutions Act of 2006. As regulations are being adopted to reduce California’s greenhouse gas emission levels, companies subject to compliance with these regulations must make significant modifications to existing facilities in order to reduce emissions in compliance with the law.

    By law, greenhouse gas regulations must be adopted by Jan. 1, 2011, so companies have a short timeframe to become AB 32 compliant. In order to make infrastructure changes, these companies must go through the necessary CEQA permitting process before construction of significant project modifications/upgrades can begin.

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    AB 1693 – Building Code Adoption Cycle. Signed into law Aug. 17, 2010, and taking effect Jan. 1, 2011.

    Assembly Bill 1693 seeks to reduce the state’s administrative costs of adopting building codes and raise compliance levels by increasing to 18 months the amount of time available for education and training of new building standards. In addition to allowing additional time for agencies to complete their technical work, the elongated timeframe will allow for greater public participation and comment.

    For almost 20 years, California’s Health and Safety Code has required the Building Standards Commission and numerous other state agencies to develop, adopt and publish updated building standards in an annual, 12-month administrative cycle. AB 1693 increases this time period by six months by establishing a new, 18-month code adoption cycle.

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    AB 2772 – Wage Claim Appeal. Effective Jan. 1, 2011. According to AB 2772, an employer filing an unpaid wage claim appeal must post a bond with the court in the amount of the judgment rendered in the administrative hearing. Employers must also provide written notification to the other parties and the Labor Commissioner of the bond posting, according to labor code sec. 98.2(b).

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    Organ and Bone Marrow Donor Leave. Already in effect. California employers with 15 or more employees must now provide the following paid leaves to employees who choose to donate organ or bone marrow.

    Organ donors – must be provided a 30-day leave of absence in any one-year period.

    Bone marrow donors – must be provided a leave of absence up to five workdays in any one-year period.

    The statute says that such leave does not run concurrently with the Family and Medical Leave Act (FMLA). However, state law cannot override federal law. Therefore, leave for the purpose of donating bone marrow or an organ may run concurrently with FMLA if the employer is a covered employer and the employee is eligible for FMLA.

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    AB 2305 – Workers’ Compensation for Roofing Contractors. Effective Jan. 1, 2011. This bill extends the requirement that contractors with a C-39 roofing classification obtain and maintain workers’ compensation insurance, even if they have no employees. This requirement was set to expire on Jan. 1, 2011, and is now extended until Jan. 1, 2013.

    Additionally, after Jan. 1, 2011, any active license will be suspended if the C-39 roofing classification was removed and the licensee is found to have employees and lack a valid certificate of workers’ compensation insurance. AB 2305 amends Business and Professions Code section 7125 and section 11665 of the Insurance Code.

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    SB 1254 – Workers’ Compensation Stop Orders. Already in effect. SB 1254 authorizes the registrar of contractors to issue a stop order to any contractor who failed to secure workers’ compensation coverage for his/her employees. Additionally, employees affected by the work stoppage must be paid by the employer for lost time, up to 10 days, while the employer seeks to comply with the law. This bill amends section 7127 of the California Business and Professions Code.

    Failure to observe the stop order is punishable by a misdemeanor and/or a fine of up to $10,000. The legislation also implements a means by which the employer may protest the stop order and request a hearing on the matter.

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    For more information on laws that are coming into effect, visit calchamber.com or calbizcentral.com.

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