are there any members of the public that wish to comment on the item number five, six, or seven? and we entertain a motion to continue these items to the call of the chair. we can do that without objection. supervisor mirkarimi: we look forward to hearing from the health center that we mentioned earlier, the ball was in their court. they need to complete their financial assessment so that they are in a very clear and confident position of being able to answer the questions of the department of public health and a number of others associated with the board of supervisors with regard to their ability to consider taking on a loan. that is what is spending until it is returned back to us. supervisor chu: item 3 and 4. >> amending article 12a. establishing a payroll expense tax exclusion that is attributed to stock based compensation. adding section 906.5. inclusions first of based compensation. supervisor chu: and these were brought to us by numerous individuals. i would like to provide the supervisors the opportunity to speak on these items. >> like to thank the supervisors. i also want an of that it was just of the night before last that the small business commission when they talk about legislation. they identified an economic problem facing the city, and it certainly came on line with regard to the liberations with the tour -- twitter payroll tax exemption. it is the stock option tax. it seems has have significant -- it seems to be a significant reason for firms to leave san francisco. when it was placed on them, then made it clear that they are in a difficult position tuesday in san francisco, and one is to seek some relief. without adversely affecting san francisco in the budget general fund. they often start with limited capital, but expects significant growth. they primarily compensate employees in the stock compensation that has little -- but that has had little value before going public. the huge tax hike in san francisco, a cost that does not exist anywhere else. the comptroller's office includes a handful of sand and cisco companies likely to issue an ipo in the coming years. we very much appreciate the efforts to of mayor wheat and supervisors that have begun a broad evaluation with the city cozy business sector. the public-private sector discussions with regard to the best approach while maintaining the city's general fund. in this context, in direct response to the recommendations, with regard to what is the best approach in advancing considerations for stock-option exemption, i introduce legislation that is aimed at keeping the pre-ipo companies in san francisco. it features a limited stock options tax incentive. these companies undertake a public stock offerings while in san francisco. it is a time frame that they can be renewed. a requirement that companies pay that least $750,000 in stock- option is the story -- but before receiving the exemption. and a study to determine the tax exemption's economic impact, including the effect on retaining companies in the general fund. the company in the history would have been eligible for the tax exemption of a proposed. they all paid less in stock compensation taxes. the company would have to issue more to be eligible for my exclusion. there are very few companies located that are expected to come anywhere close to that figure in the next six years. according to the chief economist, the three companies with sought compensation of more than 50 million annually, the city posed a general fund would be between 500,750 thousand. san francisco can expect to retain robust companies and millions more in payroll taxes simply because of the growth that company's employment -- that there are a number of companies that fit this description as applied when twitter was before us for their exemption. what is important to us is that we have something that is able to be accountable and discreet. since the city treasurer and controller have never been faced with the question of either a limited stock exemption, the supervisors suggested there be a permanent home at large sleeping stock-option for those that are public. we believe these pieces of legislation are immensely different due to the simple fact that ours is stipulated by a six-year time line. it does not go into eternity or perpetuity. the definition in the universe of those companies that will be affected are minimal at best. it is important that we have the ability to gauge what that impact is based on the information provided to us and through the treasurer's office for their ability to be able to count what that impact looks like. through ongoing discussions with the treasurer and the mayor's office, we feel that this is the right approach in beginning to explore the possibilities of more sweeping change. but before we understand what that sweeping change looks like, we should start with a more effective and honest in caves that helps us be able to track when it is through the general fund. we believe this is the right solution to do just that. i have amendments. i don't believe they are substantive at all, but i handed these out. i want to make sure that if you don't have a copy, you can take mine. on page 3, language was added to clarify the definition of stock based compensation. these were mentioned last week. these were already submitted last week which was held over. stock based compensation, it makes it clear that it must be granted prior to when the company makes an initial public offering. page three lines 16 through 19, only compensation a company may exclude from its payroll taxes are stuck based compensation. and also on page 3, it adds language to say that the amount of stock based compensation, a company may exclude from the payroll, the amount of the liability that exceeds 750,000, where the stock compensation liability, whichever is greater. supervisor chu: the first two items change. you mentioned these were made last week. and then would be item number three, hong 19 and 16. >> that is right. supervisor chu: i would like to take public comment before these things, but i would like to discuss the legislation. >> the issue that the supervisor is going to address, and doing it in a different way. the goals of my legislation were to fold. first of all, after the realization that we're the only major city in the u.s. to tax stock based compensation, to send a statement to the broader community that we actually get it and we will create a solution to a lemonade or minimize this tax. a second of all, making sure we don't create a budget deficit. my legislation is relatively simple. it states at 2010 or 2011, it will be a company space here. and that will be the maximum payroll tax to travel to compensation. the goals of sending a message to our business community and insuring that we do not create any budget deficit compared to last year is exactly what my legislation does. the protect the general fund and create some jobs going forward. there are differences between supervisor mirkarimi's legislation and mine. i applaud him for providing an amendment that also includes what companies were banned last year. my legislation capped the revenue growth related to stock based compensation. it has been discussed at great length already, and now that we and everyone else realize that we're the only major city to impose this tax, if we want to create an economically competitive city, we cannot continue to tax this moving forward. it is too easy for companies to move to oakland or out of state. perhaps most importantly, my legislation applies to both private and public companies. i believe that if we're going to create a long-term economic policy here in san francisco, we have to sound viable. as we have learned in the past few weeks, public companies are moving employees out of san francisco. if you only benefit private companies, who create a huge gap between public and private companies in terms of the cost. it will be adding significant disadvantages, and many ceos are based in located here in san francisco that employ thousands have emphatically stated that they will continue to hire outside of san francisco going forward. that is not something i believe that we should promote, create, or indoors. to not include all companies in this dialogue is a huge mistake. 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 a