>> welcome back to the july 23rd, 2012 small business commission. the business -- the meeting is being reconvened.

mr. president, would you like to call items 4 and 5? >> yes, let's call them together. >> it possible recommendation to the board of supervisors on the initiative ordinance and business tax regulation code to proceed with the payroll tax. item number five, initiative ordinance business and tax regulations code. we have mr. tony whitaker from the payroll -- from the tax office. >> i apologize. thank you for waiting. we were downstairs with the mayor and supervisor avalos. mr. president, i think you know that for afternoon we reached agreement on business agreements

with president chiu and the mayor. that is with conclusion and input over these five many months from the members of the business community. it is only with the support of the business community that the mayor and the board president and supervisor avalos came to this agreement. i want to thank the commission for its longtime advocacy of ending -- ending the payroll tax. and your work in the last few months in particular as we have worked to develop these proposals. none of this would be possible without mr. davis's work and the controller's work. he can go into the rate patrik -- great package that we hope will be before the board of supervisors mar. a couple of key features for the business community, i know you have been following this. the consensus measure does preserve the $100 million for

small business. you'll be exempt from the tax. there is an increase in a small license fee for small businesses that will be consistent with what you have seen before, going from the current $25 at the lowest end to $75 for the lowest end for retailers. $95 if you are a non-retailer. two other significant pieces on the small business side of the extension of the agreement, small businesses do not grow out of their exemption just because the economy is growing. we are adding a cost-of-living index increased to the cpi so that's the economy will grow with the cpi in the future years. there is also on the fee side, a cpi that it's consistent with most of our fees. we also did some changes to their rates, many of which will

help small businesses who are above the $1 million exemption. we made some changes to what you would see previously to the retail schedules to what is called scheduled to, which is manufacturing, restaurants, technologies and a lot of the smaller businesses. and then we made adjustments to some of the schedules to reflect industry concerns. the rate package is still revenue neutral. in the discussion, as you know, has been on a business license fee side, which had not been updated in many years. that was a suggestion that actually came to eis from many in the business community. -- came to us from many in the business community. $25 million in its first year and significant agreement to that. it is important what the money goes to as well, which the

supervisors agreed to. what the mayor intends to do when the voters approve this in a member is to create jobs with the economic development council, develop recommendations for how to spend, how to invest the business license fee money on an annual basis as part of the budget process, so that the money goes to infrastructure, small business office support, critical economic community development initiatives. and again, things like infrastructure. whether it is muni, housing, street paving, that is what the mayor intends to appropriate the new budget for as part of the budget process. we're happy to answer any questions. >> thank you for all of your work on this. you heard from everyone. >> thank you, commissioner.

we did try to do an extensive outreach process with respect to businesses. i am happy to report that we seem to have taken the this agreement which rates and detail on other legislation. i will just put up the final rates here. if we can just show them on the screen. none of these is a row to one rates have changed. there's been a slight reduction to the hotel right. slight increases to the schedule rate.

i believe schedule 3 and schedule for and schedule 5 have been unchanged. there has been a slight increase to the financial services and professional services rate and some slight reductions to the real-estate rate. we have also in this final version created two tiers of business license fees. this is the rate. and i'm showing license fees. we had gotten feedback from the businesses in the wholesale retail sectors that while the rates themselves are sensitive to the fact that the economics are retailing, for example, and professional services are different, a license fees have not been. $25 million in gross receipts a fee of whether you did that in

manufacturing or service activity. what we have done is a particularly -- to be mindful of what is happening in retail and wholesaling is to be mindful of the fact that they are generally lower margin businesses. that their rates began lower. but generally, any given level of gross receipts, there fee is less than it is for all of the other schedules. we also think is particularly creates a problem for those above -- or eliminates a problem for those above the $25 million fee. they were paying high gross receipt seats -- receipts. that is where we see it generating $28.5 million on top of the existing license fees. >> this is great news.

in one of the general meetings that we had we had a couple of business representatives that were suggesting that some companies, especially some large ones, that would be harshly impacted by this change. what, if anything, has been done to a change -- to address that? we do not want anyone to receive harsh treatment or a windfall. >> we've heard more about a harsh treatment and the windfalls. >> [laughter] sure. >> we have tried to act in ways that were not one-drop solutions. but is there a reasonable way that would affect the policy side rather than just affecting one business? i think we have done that in almost every case that i know about. essentially, we have a car out of the gross tax administrative offices. the administrative offices would

be businesses in the city where most of the payroll would be engaged in administering other offices outside of san francisco. they have to have 50% of their payroll engage in administrative work. they have to be over $1 billion in gross receipts, and a half drive over 1000 employees in the u.s. -- and they have to have over 1000 employees in the u.s. that took a way -- took away situation where there were some who were paying multiple gross receipts and some only paying a fraction of what they were paying before. and as allow us to manage the risk. we're not talking more than 15 or so. >> it sounds like that addresses their global structure. >> it should. it should not result in a significant tax. >> that was one of the sticking

point originally. >> assuming that this will all go through in november, do you have any idea what the time line will be for forming this group and allocating funds? how quickly will we be moving along on that? >> i assume you are referring to the jobs council that the mayor -- >> yes. >> it is something that he and supervisor avalos and president chiu committed to as part of the consensus. assuming voters passed this in november, he would convene soon thereafter, december or january, and the process starts early in the year. the we would want to make this an error the part of the budget process. one of the reasons why -- frankly, even if we were doing this is still a good idea, is because it creates an annual

budget licensed to create revenue with business and labour together, with small business, with the representatives of the business community to talk about what economic development priorities we should have in the budget. we think it will be a useful conversation, a useful framework for folks who do not always agree. later this year. >> commissioner dwight. >> i want to say this is a fabulous accomplishment and has the potential to be equally as important as a legacy for this administration. once we start going forward toward election time, i hope he will let us know how we can support. we have one more hurdle, and that is, to get the voters to approve it. thanks for your work so far. >> thanks for yours. >> i would like to concur with commissioner dwight, great job. ted, you are awesome.

what you have done in those meetings, we have sat in those meetings and you heard from everybody, granddad. but that is what he wanted -- good and bad. but that is what you wanted. thank you everyone for your accomplishments here. do we want to have a motion? emotion to night that two of them? -- a motion to knight that two of them? [laughter] >> just to note, a quick look at the sheet. the wholesale and retail went from $75 to $95. you may want to make a note that it has changed by having a

hybrid and the numbers did go up and at least one situation. you may want to consider adding that to your motion. and if there are any points that you would like to reiterate to staff so we can include that in the letter we are submitting to the board of supervisors in the morning, if there any specific points that he would fight to include, staff can include that. -- that you would like to include, staff can include that. >> i think it is very clear that we met the primary objective, and that is, to get the consensus. that is absolutely fantastic. and also, while we hoped for some kind of an appropriation, i think it is totally reasonable that there be some sort of setting up a group of people to decide how the incremental funding is deployed. i think there needs to be an understanding that there is some money that is needed to go directly to the board of small

business office and their efforts. and some of the new technology efforts that are afoot to make it easier for companies to interact with city hall, the modern-day technologies like the internet and the world wide web, as it is known. and i think other projects, which would normally, perhaps, be regarded as beneficial to business, but clearly, infrastructure improvements, we all benefit from those, and small business certainly. in general, i think just a motion that supports the consensus platform that is being put forward, and that we commit our support to helping get past. i so move. >> second. >> roll call. >> commissioners, i have a

motion to support the consensus measure. that would include supporting the new rate structure and that would include, i heard, your support for the creation of the jobs economic council. >> correct. >> commissioners, that motion was made by commissioner dwight, seconded by commissioner dooley. commissioner adams? commissioner dooley. commissioner white. commissioner yee riley. that motion passes 6-0. >> thank you, tony, and for your leadership and hard work on the spirit -- on this. next item. >> item 9 is the director's report. the director, as you know, had a conflict with the disability access hearing. there will be no report. a lower price -- we will provide a report at the next commission meeting. item 10, president report. >> i have nothing to report

today. >> item 11, vice president's report. >> the vice president is not here. >> item 12, commission reports. >> do i have any commissioner reports? next item. >> general public comment. >> anybody year from the general public who would like to comment? -- comment on an item on the agenda? >> new business. >> no new business. item 15. item 15 is adjournment. is there a motion to adjourn? >> i moved. greg second. >> all in favor? >> commissioners, the meeting is adjourned. it is 3:55 p.m.

>> will dampen this is it's very special day. -- welcome, everyone. this is a very special day, our day tuesday thank you. it is wonderful that we get this opportunity to thank and i want to give some special acknowledgements to some of our guests today we're joined by the

honorable mayor, ed lee. commissioner leslie katz. public works director mohammed nuru. stafano. general manager of turner for construction. i want to thank all of you for being part of our program. we're also joined by the ceo of the america's cup event authority. i cannot find him that i know he is here somewhere. the ceo of the america's cup organizing committee. the board of the directors of the committee. our very own naomi kelly, city administrator. [applause] the commissioner of the golden gate bridge district. i saw him a minute ago. there you are. our city engineer. mike galt and adam, project managers of america's cup. our architects.

our city project team, kim and cindy, ed, edgar, and oscar. all the employees of turner construction and the 32 sub- contracting firms. our cruise terminal volunteers to meet the guests in the coming in. our port community advisory committee members. i saw several of you here today. our state regulator partners. members of city planning, the board of supervisors, our maritime commu the international longshore and warehouse union members. thank you all for being part of this momentous occasion. [applause] this is a very special day, and i know many of you who follow the mayor of around have been to a lot of