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Laurie Batter

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batterup@batterupproductions.com

California Legislature Considering 3% Withholding of Fees Paid                             to IndependentContractors

Sacramento, Calif. /February 10,2010 –

California legislators are reportedly considering adding language to a state budget bill that would mandate a 3% withholding of feespaid to independent contractors, possibly including fees paid to pool serviceprofessionals.

This proposal could be included in a budget bill to be sent to Governor Schwarzenegger within the next week or so as part of the 8^thSpecial Legislative Session currently underway to address California’s budgetdeficit. 

“Such a proposal only robs working capital from law abiding independent contractors and forces people into the underground economy,” saidJohn Norwood, SPEC President.  “The pooland spa industry, and the service industry in particular, is in a perfect positionto mount a campaign to oppose this proposal.  Service professionals live and work in every legislative district inCalifornia.”

SPEC is requesting that every member of the spa and pool industry, pool service technicians in particular, immediately contact theirstate Senator or Assembly Member to voice opposition to this ill-conceivedproposal. 

Attached is a sample letter SPEC has prepared for industry professionals that can be personalized and used to fax or e-mail immediately to their legislatorsin opposition to this proposal.  DON’TWAIT – send it now!  SPEC members candetermine the Senator and Assembly Member(s) representing their district byvisiting http://www.leginfo.ca.gov/yourleg.html,and entering the zip code of your place of business or residence.  From there, you will be presented with thelink to each legislator’s website, where you can either cut and paste thepersonalized sample letter and e-mail, or obtain the fax or mailing address.

The California Chamber of Commerce, along with some 100 associations and organizations, is implementing an all out campaign to opposethis flawed idea and the pool and spa industry must have their voice heard aswell. 

“This is an extremely important issue that SPEC members need to take seriously.  A budget fix billmust be sent to the Governor within the next couple of weeks.  If we jump on this issue now we can likely stopsuch a proposal from being considered this year,” Norwood concluded.   

About SPEC

SPEC, the California Spa and Pool Industry Education Council, serves as the statewide public policyrepresentative for the pool and spa industry. We advocate on behalf of industryinterests before the California Legislature and state and local regulatoryagencies, and for individual members dealing with enforcement issues. Workingdaily on the industry’s behalf, we have an unmatched track record insuccessfully negotiating and fighting against unreasonable and costlylegislation and for enforcement of unlicensed contractor laws. SPEC promotesthe highest standards of professional conduct in pool construction, service andrepair, and seeks to educate the public on the proper maintenance and safe useof swimming pools and spas/hot tubs. For over 40 years, SPEC has been the onlyorganization registered to lobby at the State Capitol on behalf of the pool andspa industry. SPEC is funded by membership donations.  For more information on SPEC and legislationwe are watching, visit www.calspec.org,or call 916-447-4113.

SAMPLE LETTER OPPOSING INDEPENDENT CONTRACTOR WITHHOLDING PROPOSAL

[DATE]                                                             

Dear Assembly Member / Senator _____:

I am a small business owner in your district.  My company, _____, employs ____ persons.  We have been in business in ______ since ____.

I am writing to oppose the independent contractor withholding proposal.  This is another budgetgimmick that does not generate more revenue to the State of California. Instead, it merely accelerates monies that will already be paid to the Stateand imposes an onerous burden upon small businesses like my company.

Under this proposal, businesses in this state would be required to collect taxes from other businesses and wewould serve as a collection agent for the State.  The new expense ofwithholding and remitting these monies to the Franchise Tax Board would be acost borne by small businesses, effectively providing interest-free loans tothe state.  Even if we, as independent contractor, owes no state taxes, 3%would still be withheld, affecting our cash flow and impacting our business.

In an already difficult time for many businesses, including the hard hit swimmingpool and spa industry of which I am a member, this proposal adds one more burdenthat could push us over the edge.

I believe this proposal is unreasonable and should be rejected by the Legislature.  I wouldappreciate hearing from you at your earliest convenience as to your position onthis ill-conceived proposal.

Sincerely,

PR 3% Withholding Call To Action Alert.pdf