i approve of supervisor mirkarimi and applaud him for his recent amendments. the only way going forward is that we quickly follow up with legislation that applies to both public and private companies. i have no problem waiting on my legislation until our chief economist report comes out so everyone can feel very comfortable with anything going forward on the general fund. the purpose here is to create a long-term economic solution and protect the public from what is today. it is not to create half- measures. which is why i believe in this is so strongly. supervisor chu: i love you did provide a presentation to us last time you came before us.

he did not, i believe, have a study completed, correct? >> he introduced his last round of substantial amendments on may 2, it would be within 30 days of june 2. >> is there anything you'd add to the analysis from last week? >> i believe the amendments that he outlined addressed all of the recommendations. in terms of the original legislation, i have no more comments. i will speak about supervisor ferrell -- farrell's legislation. supervisor chu: is there anything new that you had at from that meeting to this one? >> members of the committee,

office of the budget and legislative analyst. consider items 3 and 4 to be policy for the board of supervisors. we are available if you have any formal questions. supervisor chu: i have a question that can perhaps good of the office of economic analysis. this simply have think about the impact of the general fund on the legislation. there is not yet complete study, but how would we think about these? >> these are among those of the largest businesses in the city.

we believe that many if not most of them have offered stock based compensation that will fall under the exclusion that has been proposed here. what i don't have is a dollar value attached to that cost. in terms of just thinking about it, it would result in a reduction in the payroll expense of these companies and consequently, some reduction in the labor costs. and in that sense, the legislation is essentially the form of a payroll tax cut that is relatively broadly based. we have done a number of economic analyses before. in general, they have a cost to the general fund. when you can talk about how the legislation in terms of a dollar cost per job. i hope what i have completed my work, we have a sense of what the dollar cost per job is.

and what it will be during a typical year of this legislation. >> and with regards to the item number three, given that we don't have good information about what the compensation is, how would we think about what the potential hit will be to the general fund we would contemplate having a cow at 750,000. do we have a sense of what companies pay in excess of 750? >> we don't have that information definitively. we don't have it definitively at all. in my report, i looked at the experience of 14 companies that have gone public, and where that number came from is that it is in excess of what, according to our best estimates, in a company has paid in the last 13 years.

that if this legislation had been in place for the last 13 years, head of the companies would of been eligible for the exclusion at all. i think the advantage of the legislation designed in that way is that it is deliberately constraining the number of companies that could potentially benefit from it while creating a backstop against the extremely valuable technology company that goes public in san francisco and would allow us multiple millions of dollars. supervisor mirkarimi: since this has never been done before, would you recommend an approach so that we would be able to understand what those impacts are for those companies that would qualify for this particular exemption? >> i think it is sensible when

you are making fiscal policy on an issue where there is hard data to proceed in such a way that you have an opportunity to take stock after a few years, it does seem sensible to me ha. >> a stock option that the policies providing a tangible benefit to a few successful companies, reducing their incentive while leaving the majority of taxpayers unaffected. but then you just stated that there is probably of few hundred, 250 corporations that are public that what qualified under the legislation. there would perhaps be of benefit of an exemption in eternity reverses our legislation which is simply a very discreet population for a

very narrow time unless the spot the telex to renew that legislation. >> i would agree with that characterization, yes. >> just to clarify, in terms of the analysis that has been done so far, he doesn't take into account the potential negative effect of the overall business climate when we pass legislation benefiting one class of co. but not benefiting another? does it take into account the business environment here in san francisco? >> bill with i will analyze the impact would be to suggest that something that improves the business tax from one point of view and does not make it worse

is a net benefit. it may very well send a signal to someone that they got a tax break and i didn't and i am upset. my feeling about san francisco is worse, but that is not a dollars and cents feeling. >> yours is dollars and cents, you do an amazing job. again, it doesn't take the broader picture into account. you have the broader economic general environment in our city. >> that is correct. supervisor chu: thank you, supervisor farrell. i will open these items up for public comment. other members of the public that would like to speak?

>> i appreciate the actions of supervisor farrell and supervisor mirkarimi. we urge you to eventually pass them both for signature. san francisco needs to recognize that while the city is growing, our job base is declining. that put san francisco at around 770,000 people. and about 600,000 jobs occupied by residents and non-residence. the census just released so the seventh it is with a record population of 805,000 people. we know in tracking jobs over the last 10 years, after the recession of the early 2000's, our job count went down to 510,000. probably 570,000 before this

recession, and we're probably at the 520 or 510,000 level again. natalie get back to the people that worked in this city 10 or 11 years ago? you do it by recognizing that job growth is not going to happen in the government sector any time soon in the state, federal, or local level. if you turn the deficits around, you need to grow private-sector tax paying jobs. both of these ordinances will do that. if they become law, we hope it gives us an opportunity to either continue what you have done over the years with the recent passage of the mid market tax credit exemption and the ordinance is before you today, thank you very much. supervisor chu: i have a few names here.

>> i am here to speak in support of the legislation. i just had a chance to briefly here supervisor farrell's legislation. i am confident that we'll work out the details to move forward. in addition, a also like to express my content that after all of this time, we are finally having discussions around local hiring that don't require the construction industry to absorber people. again, thank you. >> i am here to support the

proposal that is being put forward. also -- i would also like to express the fact that local hiring is an issue that is part of construction and i like to see it go to other areas of work force here in san francisco. i think the taxation of what we can actually benefit from what bring a lot more revenue here. it has been a long time coming here as far as the recognition of people living here in san francisco being able to share the economic wealth. for us to be only restricted to the construction work, i think we would be doing ourselves a disservice not being able to look at the tax areas have dealing with the local areas,

that is a part of san francisco, as well as tourism. there is a lot to be gained from this piece of legislation. i speak in support of its. thank you. >> a good afternoon, supervisors. i am a senior job developer with andrews and andrews. my background includes high-tech recruiting for silicon valley. i have worked with many young men and women of love and opportunity to get high tech jobs, and even if it is office support staff, customer service, that man. they don't have the means to get to silicon valley and they don't want to go in the construction

field and social networking, technology is right up their alley. they're always asking me, how do i get to these jobs? we need the jobs to be local, and we needed the disadvantaged young men and women in this valley to get access and trained for the positions that will be coming. thank you. >> my comments are very brief. this sounds like a good idea, this local hiring program that is coming together. this is something exciting that we feel we will like to be a

part of. a small forward with legislation today. >> other members of the public that wish to speak on either one of these items? >> i am honored to be here today representing more than 2000 employees with zynga. we are a social game company and we bring entertainment to more than 100 million users around the world. i speak for all of our employees when we say we love san francisco and we would like nothing more than to remain in the city for a long time. there is an issue which is troubling to many, and that is the payroll tax that we believe is not only unprecedented, but it doesn't reflect the balance

in the burden. it does not accomplish the goal of encouraging innovative companies not just to stay in the city but to stay for a long time. we are encouraged by the leadership shown by you in recognizing the changes to occur. that is welcome news to us. with regard to the specific provisions, the proposal before the committee today, when we are rising to support the legislation that we believe is exactly the right balance. we have always been prepared to pay our fair share of taxes. i think i can just put in an award that if the proposal passes, we're able to say with confidence that we will key the center of gravity in san francisco for many years to

come. i also want to thank, before a step down, the very forward looking engagement of the labor unions. we engaged in this debate. [chime] supervisor chu: thank you. >> thanks for the opportunity to speak. supervisor chu: next speaker, please. >> reporting back last week regarding the legislation. we had a good, productive conversation on the local hiring program. this program would be modeled on ideas from the 2007 law with other ideas presented in this committee. we'll continue to work out details with stakeholders in the board of supervisors and we can

start getting close to work. we strongly support the legislation and we believe we should move forward today instead of starting from scratch. thank you. supervisor chu: any other speakers that wish to speak on items three or four? supervisor mirkarimi: of like to speak since several members mentioned in public hiring, we had been aware that there was a meeting between companies and some of the local hiring advocates. i am delighted to see progress being made on two different fronts. the conversations are taking place in the industry where they had not taken place before because the first source does

not extend into this industry. and the support of many of these advocates that would like to see the legislation in advance. as we attempt to try to figure out what that nexus is, we will continue to help facilitate these discussions. and maybe that will move towards the expansion of the local hiring laws. i am confident that will happen. to the chair, i like to ask the mayor's office about their feelings on this legislation. >> from the office of work-force development. as you know, the potential payroll tax hit that private

companies that decide to go public, the potential supply was an issue that was first raised in the conversation around the central market payroll tax exclusion discussion. it was raised in the context of twitter, which became a case study. there was a discrete issue that was probably going to face a very small handful of companies in the future, that it was the type of tax hit that would be so prohibitively high on these highly valued at tech companies, that it was something that could be very discreetly and quickly solved. it was clearly something that we felt and that the mayor felt should be done the in order to

not have the companies may what would otherwise be in a rational business decision. our office and the mayor was supportive of dealing with this issue on a very discreet manner as they led by the city was the economist's. just as the issue of pre-ipos stock-option was daylight it has part of the tax exclusion, the larger issue of compensation and how it affects all companies, the effect that it can have on companies doing business here has now been daylighted and weakening kurds the board to continue to work with the mayor and our office in finding a solution to that barrier in a more comprehensive manner. and the mayor has recently spent

several attempts bringing that forward. there are sort of two different issues. the private companies dealing with this supply, the other being a larger issue. >> the different issues that i think you referenced, one being now, when private ipo. and the comfort level of the mayor's office supports that, correct? >> jason is here if he wants to add anything. >> unless there are any specific questions, there are a couple discrete issues indiscrete proposals. we appreciate the input from the supervisors that have worked on

this. haute there were issues that needed ironing out. there was a proposal. those issues were resolved regarding some of the issues earlier in this meeting. and there were certainly open to that larger compensation. president chiu: thank you. let me start off by saying that this is an incredibly important topic for us to be engaged in. unfortunately, with these proposals in front of us, i think the debate has been framed in in either or kind of manner which i do not necessarily agree with. the real problem that we have is the fact that we have a payroll tax, the only tax of its kind in the entire state.

it is also on the first of its kind in the entire country. if we have a comprehensive reform of the payroll tax, we would not have to deal with these issues. i hope that we deal with it in the coming months and not in the next year or two. i think both proposals deal with different aspects into facets. there is the pre-ipo situation, and i very much appreciate the economic analysis that the city economists did that has helped to improve the original proposal for the better. a hand right now, the proposal is narrow and tailored that helps to ensure that we are moving obstacles and barriers for pre-ipo companies to leave san francisco. we can all agree that that is something that we need to do. hallett thank the supervisor for handling.

i am supportive of this city honking about a solution that will address the plight of public companies for the taxation of stock options. in the case that we thought -- obviously still need to wait for an economic analysis, and i also have concerns about the nature of the legislation as well as the fact that i would like to see if there is a way to create a nexus between the creation of jobs and any change to the tax policy that we make. all that being said, i am willing to work with oewd and supervisor farrell as well as the broader community and companies to figure out what the solution is. i think we have a solution with regard to pre-ipo companies.

there is a difference of opinion with some of our colleagues. we are willing to work with all of the stakeholders and her supervisor -- and supervisor farrell's proposals to see if there are changes that we can make to alleviate the different concerns that we have been raising. supervisor chu: if i am understanding your motion, it is to send item #3 forward without recommendation at this time and [unintelligible] before we take that motion, can we take the motion to amend item number three? i believe supervisor mirkarimi previously made that motion.

the last amendment was amended to say that the amount of stock based compensation that a person may exclude is the amount that creates the tax liabilities in excess of $750,000, or the company's 2010 stock compensation, whichever is greater. we can take the motion without objection? we now have the other items before us. i would just speak against it. i think there is a real opportunity to really look at both measures have think a little more thoughtfully about what the economic impacts are. and the that the information is not perfect as we don't have information on stock based compensation at this time considering where the impact would be. i am concerned a little bit about what the general fund reputation would be if we had

given a little more time to have the thinking of economic work force development. before moving forward, we would actually prefer the items continuing for a little bit longer. but take the action lightly. it is tax relief. we're giving certain companies a tax break. it is not something that i think we should rush into. we feel that there is opportunities for both pieces of legislation. in a few weeks, i will be voting against it. right now, what i would like to reserve is that if the controller's office of economic and work-force development can work with me to better understand what the implications of the general fund would be, we

can take a roll call on the item. supervisor wiener: thank you. i will be voting in favor. i want to second supervisor chu's comments. the process leading up to this has been rather russia. it has been in perfect. but in talking to a number of different people, i believe that even if we were to pass the legislation, which can still and evaluate supervisor farrell's legislation. the two can be melded. supervisor farrell's