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‘Be a Manager, Go to Jail’ Bill Moving Through Senate



SBA Granting More Loans To Women-Owned Firms

The California Chamber of Commerce is warning small business owners that a new bill winding its way through the state Legislature could spell trouble for California.

Its official title is SB-1865, but Brian White, director of education and environmental issues for the chamber, has another name for it: “Be a Manager, Go to Jail.”

SB-1865, authored by state Sen. Don Perata (D-Alameda), passed through the Senate committee two weeks ago and will soon be taken up by the full Senate. The bill dramatically raises civil and criminal penalties for violators of state or local air pollution rules.

The problem is that the law holds managers responsible for the action of their employees , whether or not they knew about an employee’s action, White said.

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Despite amendments to soften the impact of the bill, SB-1865 increases criminal penalties for some liability violations as high as $75,000, he said.

More frightening, says White, is how the bill goes after “public nuisances.” Under current law, a public nuisance is defined fairly loosely , including non-injury situations in which people simply filed a complaint about odors in the air.

That would affect large and small businesses alike, including bakeries, restaurants, dry cleaners and paint shops. Under the bill a public nuisance could result in a maximum fine of $10,000 and a six-month jail sentence, as opposed to the current penalty of $1,000 and a six-month sentence, he said.

The bill also creates a new penalty for negligent violations where contaminants are released into the air. For businesses that fail to correct a violation, penalties go as high as $75,000, White said.

In his testimony before the Senate committee, White called the bill overly broad and restrictive, and said it would encourage aggressive enforcement actions that could have unintended consequences for small business. The bill also places into jeopardy some already existing compliance programs, which rely on good relations between business and regulators, he said.

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Women-Owned Businesses Boom: The Small Business Administration announced it has tripled both the number and the dollar value of approved loans to women entrepreneurs over the past eight years.

In fiscal year 1999, the SBA backed 10,244 loans worth $1.9 billion to women-owned small businesses. That’s compared against 3,589 loans worth $633.8 million in 1992, said Dolores Braswell, spokeswoman for the Small Business Administration.

Nationally, there are 9.1 million women-owned businesses, about 40 percent of all businesses. They employ 27.5 million people and generate $3.6 trillion in sales. Women continue to start up new firms at twice the rate of all other business owners, Braswell said.

“With their increasing visibility and viability, women-owned businesses are getting more and more of the finance pie,” she said.

Braswell urges women business owners who are thinking of expanding to seek out sources of money before they need it.

Oftentimes, the banker is unfamiliar with the business. By putting the banker on an informal board of advisors, along with an accountant, attorney, and marketing professional, they can work together to steer a business toward increased profitability, Braswell said.

Rabbit Multiplies: The children’s bookstore White Rabbit, a fixture in the La Jolla community since 1978, has opened another store. The new location opened last month in Costa Mesa.

The 2,000-square-foot store offers 35,000 fiction and nonfiction titles in a child-friendly design , just like the original location. Both stores also hold special events such as story readings and costumed character events.

Send small business and retail news to Lee Zion at lzion@sdbj.com.

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