to facilitate the appeals process for both the department of labor standards as well as for the appellant. the procedures are also recommended to clarify the appeals process, and, hopefully, we will expedite the appeals process and also will encourage settlement and agreement of us sitting issues when there is opportunity to agree. and, therefore, i would just like to walk you very quickly through some of the changes. there are not a lot of them, but we do hope they will expedite the appeals process. nearly all of the changes that you have in the legislation in front of you are located between pages 8 and 12 of the legislation, so the wording that is undermined or crossed out represents the amendment to the legislation, in starting on

page 8, the certification pictures shall be made upon investigation. the word "audit" was there. once they do their investigation, they do audit the amounts that were paid to determine whether or not the contractor, the subcontractor, had paid the appropriate amount to their importing ease. it also includes the edification of the grounds that will be appended to the certificate of forfeiture, so, in other words, not just a copy of the investigation but the grounds that the office found to be appended. on page nine, note -- page 9, there is a formal process. we have had procedures in

writing for the last number of years, but this requires that we maintain those procedures and that the procedures be in writing and also requires copies to be provided to the office of labor standards and, obviously, to the appellant. the amendment also requires that the office of enforcement of for the appellant an opportunity to meet and confer with in the first 30 days of asking for an appeal, and so we are hoping that that will help expedite an agreement between the appellant and the department so there would not be any need to hire a hearing officer to go through a very laborious, linthicum and sometimes expensive hearing process. -- linthicum and sometimes expensive hearing process -- lengthy.

should there not be any agreement, and then the comptroller would have the responsibility to appoint a hearing officer. which we currently do. the amendment also gives us a little bit more latitude for appointing the hearing officer and allows the hearing officer to be either someone or an attorney with experience in construction law. we pay the rent board for that work. and then, finally, it establishes guidelines for the hearing officer process come on and the hearing officer must conduct a fair and impartial hearing and establishes that it is the appellant's

responsibility by proving with a preponderance of evidence that it is incorrect, so, again, this is the process they have used. however, it is no specified in the ordinance that is before you, and then, finally, it establishes a requirement that they have procedures for unclaimed funds. so once in awhile, when there is a forfeiture that has been imposed on a contractor, and the contractor no longer knows the whereabouts of the employees, and there is no way to provide, then the comptroller would determine how these moneys would be deposited, so it does happen once in awhile, not often, but in the event that it does, we have procedures, so that summarizes the procedures. again, we are recommending this change to you and the board of supervisors to allow the

department, and of the city to be able to meet and confer before an appeals process occurs and specified that an administrative law judge or an attorney can assist the appeals officer and then, it also assures that everything is in writing. this is to make sure that everyone adheres to a strict schedule, and we are hoping that that will allow us to go through the appeals process more expeditiously. and i will be happy to answer any questions. donna levitt is here. president o'brien: any questions? i do, but i wanted to open the floor first. no? ok. the employee in question, what happens to that money today?

>> one of the options that is available is that the office of labor standards enforcement can use those funds for its outreach activities to go to educate the various contractors and subcontractors about the labor enforcement rules and prevailing wages and so forth. perhaps ms. levitt can also address that. >> the changes, after searching for any employees that are due money, if we cannot find them after two years, that money goes to the city for the enforcement of the prevailing wage, and this change changes it from two years to three years, consistent with state law. president o'brien: ok, thank

you. no further questions? sorry. commissioner riley? commissioner yee riley: this streamlines the process and also gives the comptroller more flexibility. the administrative law judge and the attorney. but what was it before, before the change? who was the hearing officer? what was the requirement? >> it would depend on the type of case that it was, but an administrative law judge can only be appointed if they had specific experience in the human-resources areas, so this gives us a low but more capability to appoint an administrative law judge if that law judge has construction experience, as well. commissioner yee riley: thank

you. president o'brien: commissioner o'conner? commissioner o'conner: what about the money that theoretically has been soundproof -- ben soundproof -- been found? >> we have close to about $100,000. we have never reverted money to the general fund actually, but that is in 10 years or nine years of enforcement. commissioner o'conner: so in nine years -- >> last time i did a run, it was like $25,000, so that was for a few years. commissioner o'conner: so you are saying that that money should be cycled back through

the department? >> it already is. president o'brien: commissioner kasselman? commissioner kasselman: i just had a few questions. how many cases, and how long before it goes to a judge could >> our office probably has findings, i will say in a ballpark, 30 different contracts, public works contracts, with violations in a fiscal year, and of that, maybe two or three go to hearings. and, you know, what we have found, sometimes the department is ready to close out a contract, and we have to rush the process and get our certification of forfeiture out in order to withhold contract

funds, and in those situations, it is our practice to meet with contractors anyway and try to resolve any disputes, even before any certification of forfeiture. sometimes, when we have to rush the process and are not able to do that, a hearing officer gets appointed, and then we mediate the process, and what this amendment will let us do is not have that hearing officer appointed right away and make sure that we have a chance to mediate a and save the city the cost of appointing a hearing officer only to then delay and say no, we need more time. president o'brien: you kind of

at the tiller and answered the question i was going to ask. -- you kind of at the end answered the question. at first light, it seems that it is a way to resolve issues and try to clear backlogs that are there because the system as it stands right now, the procedure is too cumbersome. i presume that is the real impetus could >> yes, after a number of years. because there are not a lot of appeals in a given year, we're looking to determine whether or >> we found that we were tripping up a bit in the appointment of the hearing officer into entering into a contract with a hearing officer

and then having the matter be resolved between the two parties. we were hoping that if we allowed the opportunity for that to occur before the clock starts ticking that would increase the chances of settlement. i do want to note in the vast majority of cases there is a settlement. >> is the employee of the construction company as a typical example, are they one of the parties in the case? they both go after the contractor or is it the city that goes after the contractor because they underpaid an employee? >> once the city is aware there is a discrepancy that could be because an employee complained or it could be because we noticed something unusual in the payments or the reports that come in. then the staff does an investigation and the investigation is of the

contractor to determine whether the contractor has paid the appropriate wages to the employees based on the work they performed. >> when there is a case that goes the full way, the parties to that case are the contractor and the city or the contractor and the employee? >> city. >> so, would the standard contract a contractor would have with the city, most contracts today have clauses in there that say both parties agree that if there is a dispute or whatever that they will go to a hearing settlement or case. if that fails to resolve it they will go to binding arbitration before they say i will see you in court. >> prevailing wage violations the procedure is outlined in chapter 6 of the administrative

code. that is a different procedure than any other typical contractual dispute. >> all right. that answered my question. thanks. anybody else have any questions? ok. this is an actionable item director. before we do that we need to go to public comment. do we have any public comment? ok. seeing none public comment is closed. commissioners. >> you know approve and recommend? >> ok. we have a motion to approve. do we have a second? >> i second. >> is it approved without objection? ok. approved without objection. thank you.

next item please. >> item 7, presentation by yvonne lee, small business office of advocacy region ix. >> good evening commissioners. my name is yvonne lee. i wanted to thank commissioner riley for offering me this opportunity to share with you what is the office of advocacy who we are and what we do. we were established in 1976 by congress to represent the interests of small business. we have 10 appointed regional

advocates. i am responsible for region nine. besides we as a regional advocate serve as the eyes and the ears of the small business and represent their voice in washington. in our washington headquarters we have a team of attorneys. their job is to monitor and work on regulations. and work with agency regulators on regulatory concerns. we also have a team of researchers. they regularly produce data and research and report to inform the public of the contribution and the status of small business. one of the reports is a yearly report to the president. this is the 2010 report on the small business economy. we also produce an annual state

small business profile. i am sure that many reviewed this. this has all of the 50 states. in addition to that we have a lot more other reports. we are the independent voice for the small business within the federal government. our responsibility is to help insure environment that enables the small business to sustain and grow their business. as you may know the smallest businesses which are 20 employees or less, they pay about an average of $10,585 per year just to meet the federal regulation requirements. this is 36% higher than the larger counterparts. one example small manufacturors

have to spend about $22,000 a year to meet e.p.a. regulatory requirements. this compares to $5,000 that the large manufacturing firms pay per employee. this is a staggering competitive disadvantage that small business have to face. for the past fiscal year advocacy saved over $15 billion in regulatory costs that small businesses would have to pay if we did not get involved. how can we achieve this? we work by listening to and speaking for small businesses on the economic burden that federal regulations will have on their businesses. a recent example is the 1099 form. all of you are aware of that. when the i.r.s. proposed businesses to file 1099 forms

with any vendors that they do business with over $600 we heard from the small businesses who told us that this was a bookkeeping nightmare and economic stress on the business. they would have to hire additional bookkeepers just to meet the paperwork and the additional financial cost they would have to occur would not even increase the bottom line in increasing their business. we convene at a roundtable bringing together small business representatives and stakeholders to solicit their comments on how to deal with the concerns they have. we met with the i.r.s. commissioner and other stakeholders. as you know today the 1099 reporting requirement is

repealed. and this one involves osha. they recently proposed a noise abatement regulation to protect workers and manufacturing firms from hearing damage. this rule would have required businesses to purchase new equipment or to put together very costly upgrades. from listening to the small businesses, they provide a viable solution which is earmuffs. this same problem that could have a solution that could cause a small business either $10 or millions of dollars. again, advocacy roundtable bringing together osha and small business representatives and ultimately osha decided to

withdraw this rule. small businesses, they win because they -- their concern was being addressed. osha also won because now they are working with the small business community to come up with a very flexible solution without compromising the integrity of the intent of the regulation. and this is what we do. as an independent office we don't represent the president. we do not represent the views of congress. we represent small business in this country. in doing so congress gave advocacy back in 1976 our power as a watchdog of the federal regulatory flexibility act. this act requires federal agencies to examine the effects that any proposed rules and regulations may have on a

business' economic impact and to require these agencies to look at other ways to ease any unnecessary regulatory burden that small businesses may face. we do this by convening roundtables as i mentioned earlier to enable the small business to articulate the concerns and most personal recommendations. we also submit comment letters to federal agencies just to encourage them to examine and explore other ways to meet their regulatory requirements. since august of last year we submitted 32 comment letters to 19 federal agencies. in order to be an effective advocate we have to be good listeners. that is why i very much appreciate this opportunity to address with you and to this

extent the small business community and other stakeholders of the city and county of san francisco to really share the concerns and perspectives. and as you all know small business is the cornerstone of the economy. we are at a really critical time. this is really critical for us to make sure that we can encourage small business growth by easing and reducing any unnecessary regulatory burdens. and i look forward to working with the commission and the small business office and to a larger extent the small business community in the city to see how we can work together to move the small business forward. thank you very much for this opportunity. i am open to any questions that you may have.

>> thank you very much. that's very informtive. >> thank you yvonne. diunderstand was there somebody in the appointed position prior to you or was this position vacant for a while? >> because the chief counsel has to be appointed first before we are appointed. after that, then all 10 of us were appointed this january. so, there was a two-year gap. and prior to that my predecessor was working out of arizona for eight years. so that might be the reason why that -- >> congratulations. we work closely with the district director. just one note to advocate on

behalf of our small businesses. i am sure that you may have heard about the small businesses and the a.d.a. lawsuits and the department of justice has just recently come out with new guidelines in their booklet. we have seen many small businesses where english is not their first language. and they are not going to be translating the new booklet for small businesses into spanish and into chinese. so i would really appreciate any advocacy you can communicate to the department of justice about how critical it would be to have those booklets translated into spanish and chinese. it is a key resource for us to explain the americans with disabilities act to small businesses. >> as you know the fastest

rising small business is minority-owned business. in california the number is really, really increasing. many of them are first-time immigrant business owners. they are new to how to navigate the regulatory enforcement process. and we recognize that. and since last year our office has been working with the d.o.j., department of justice on the a.d.a. compliance. and one of the suggestions that we have is that because of the vulnerability of a new set of growing small business community that we have strongly urged d.o.j. to conduct outreach and to provide

educational and informational information in different languages. we have made that request several times. in fact as late as a month ago when they released the latest proposed rules we had reminded them of the importance of providing outreach to small business community directly. because we also understand certain small business communities do not sit in front of the computer to read what are the regulations. the one to one interaction is really important. so we had made the repeated request to d.o.j. and we are very optimistic that we will be -- because we have submitted to them information about small businesses, stakeholder organizations so that when they

are ready to provide the outreach, provide the educational seminars then they would be able to reach out to the broadest small business and in particular the most vulnerable small business community that we see fit. >> commissioner riley. >> thank you very much for the presentation. and i think that it is good news that you are here. you mentioned roundtable. who do you -- how often do you have these roundtable discussion and who do you invite to your roundtable discussion? >> how we came up with the roundtable is when we hear issues, and that is why it is so fortunate partner with you. oftentimes when you ask small business owners, and by the way when people hear we are from the s.b.a. the first question they ask is do we have any

loans to grant. we say we are the independent. we have no money. but by saving them money through regulatory flexibility also save them money. and more personal it allows them to really grow and to really focus on what they do best, which is to create better opportunities for themselves. the second thing that they say is we don't want any regulations. we know regulations are here for good reasons to not only protect the consumers but the business owners. there are regulations that really harms their growth. and if it harms them, it helps other folks, too. so if we continue the dialogue we work through you and through your staff just to get a gauge at where things are.