Gotten rid of it in your system. If you are currently using it . This would steer you toward giving out less paper you would offer as first resort electronic. Or convert to nontoxic paper. You are not covered at all then. It is marketed as nontoxic urea based paper. It is compatible with the systems today. The only Financial Impact would be the slight impact in paper cost. You could deplete your current pile of paper and move to nontoxic and not worry about the bill, correct . Correct. These are further back to a lot of years. That is to allow for the natural running out of paper andry stocking. The other question if i understand it properly, businesses covered by the state legislation exclude businesses defined as the Small Businesses as they are defined here. 2 million in revenue for retailer and some other qualifications. Yes, that references government code sections 11342. 510 to 11342. 610. Those came in effect in 2001. There has not been any change since the year 2000. I think that is the conversation to have under a different bill. We do understand that for San Francisco that could be consideration that Small Business and then people who are franchisees and the code doesnt speak per location or entire business. I would read entire business. With two locations you could be over 2 million pretty quickly. Back to the question. Small business as defined here is excluded from your bill, correct. That is correct. If you have a sing will store doing less than 2 million each single store and less than 2 million you dont worry . Correct. If you only take cash. I think it would be worthy of some analysis as to what a reasonable hurdle rate for Small Business in terms of revenue is. 2 million is a lot of money for a single store. Someone with multiple stores might exceed that but having done retail myself i would be delighted to do 2 million a year. Grocery seats gross receipts. Dont boil the ocean. This is not to change the definition of Small Business. This is legislation to address this issue. What i am trying to get at. I dont actually have i will let other commissioners weight in on this. I dont have objection to the state bill from my perspective and agree with the spirit of it. I want an understanding whether San Francisco is proposing something less stringent than you or a matter of agreeing both of these organizations are going down the path that we can agree on. I think San Francisco the department of environment is proposing a more you might say stringent in terms of ensuring the type of paper that is used. That is what you spoke of. They are more aggressive in assuring that if you are using paper that you use nontoxic paper. It is my understanding. The first yesterday was the first i had seen these considerations. These are both dealing with january 1, 2022 is that you get rid of paper receipts. Provide only in electronic form. A date that we get rid of chemicals. It would be additionally stringent. There has been some discussion and expression of potential hardship for a business that would be a great expense for them to go to an emailbased system. I think that someone mentioned that their business would cost them 100,000 to switch from the system they have to the system that would generate email receipts. This is not a pie in the sky number with a lot of hardware skews. If you are independent it could be quite expensive. That being said, i think that your legislation leaves open the option to provide one or the other, is that correct . That is why i am appreciating this. I have been with the merchants, the chamber, you know, just from me coming into this, well the terminal is 400 that is the cost out there. It would be interesting to hear from businesses from the cost of buying the terminal if there are additional costs. Not the equipment costs . That is the overriding process of converting the database. You may not have a database, creating a database of all of the skies. If it is 10,000 or 100,000. It could be a lot of money. We want to behind full of that. Is there any provision for a hardship . I like to leave an out. For the government and for Small Business to say, hey, this is the situation we did not anticipate. It is nice to have a clause that says in the event of undue financial hardship, a business may petition somebody for an exemption. Just putting it out there. Is point is welltaken. Legislation for this or anything else in the future. We represent potentially seven different business categories up here. How can we anticipate all of them and who knows what comes next . Just a thought. Absolutely. Not to speak for the authors intent. I think the exemption was a factor. If we see over 2 million in Gross Revenue that is a hard ship and something i will take to this to talk to legislative staff. I did connect with the capital staffer. Always happy to have conversations and take feedback amendments as the bill moved forward. If you could take to the powers that be, a desire to address if the Small Business definition needs refinement. Every decade is a good idea. We are at that milestone. Maybe we did get data and say this would be very easy data to get from the tax roles. What is 2 million a lot . I dont know that cpi is the right adjustment. We should look at the data to see wha what is the right number today . Maybe we can get remainment. If you can help us in sacramento. We are always grappling with the definition of Small Business, how many people, how much revenue . We find there are several different definitions in each dimension. You can see from your office and from the capital you have been talking to say your cohorts in los angeles how many businesses for all appearances would be small but cross the 23 million threshold. This is something we need to tackle as well. Polling a couple metro areas is where you will have the most Business Activity and highest retail prices, too. Commissioner la. The average retail price plays deeply into this. My business has an average transaction cost of right around 5,000. Pretty easy to cross over to 2 million with a staff in San Francisco we have like three people there. You know, slim margins on 2 million. It is not uncommon for folks to have 5 margins. 100,000 split three ways is Small Business. Under this definition it is not. I would guess your business is capable of generate g. E. Mail invoices and sales orders . We are talking about a condition here. The most likely businesses that would not be able to comply with this are going to be very, very small because they basically are mom and pop that has been in business so long. They are not going to use email. We want to be careful. Really, today, i have to imagine 95 of business busines businesl and ability to generate electronic receipts. You can take a paper receipt and scan it. Or switch to nontoxic. My comments are to expand. I think you are probably talking way out. They were not intended to reflect. We were going off on a sidebar for a minute. With respect to the legislation at hand do you remember the excessively long receipts that come out of the cvss of the world, is it the authors intention to revisit that or is it fairly constrained to the chemicals now . We are still, you know, the chemicals and paper and water that those receipts create. A recent amendment that we put on here was that it also exemptions retailers that dont include nonessential information. Saying if you are only putting purchase information on the receipts this does not apply. If you put on the coupons, this is going to affect you. If you are only putting onness information for a purchase you are amended out of this bill. It is like a ribbon parade . A mile of paper. It is outrageous. I dont think there is a lot to object to here. Commissioner yee riley. We are putting this on the merchant rather than the manufacturer that makes the paper. That is the point. The whilthe bill has not been mg it. I think this paper is being phased out anyway, i believe, or they are switching over to bps. Then i have to look to see. I think it is also kind much a cause and effect. If you have businesses ordering less paper because it is using less paper. Also if you are not using paper you are not in the bill so ordering the paper. I see your point and i would have to ask staff why it wasnt legislated about the paper. This is making incentives for the paper to be phased out as this goes into effect. Thank you for coming out today. A couple questions. To follow up on the manufacture piece and wholesalers like Restaurant Depot where retailers go to pick up supplies. Have you guys reached out to wholesalers in the state about this piece of legislation to make sure they are aware . Sure, i would have to ask the staff. Im not sure all of the conversations that have been had. By referring to the code that defines Small Business it is 9. 5 million is the cutoff to be considered a Small Business. Businesstobusiness if we are we choired to adopt required to adopt new types every seaofreceipt paper is it y available . Yes, it is available, more expensive. The annual cost of switching paper is minimal. Less than a penny worth of paper per transaction then increasing to a pen me plus a bit of a penny. The numbers are very small to convert paper. These are completely compatible with one another. Does this only include brick and mortar businesses. Is there any dimension with Online Retail delivery considering that is a pretty wasteful industry in terms of Paper Supplies and receipts. Like delivery. Online retailers have stopped putting packaging slips in. You know, i think that it goes back to the definition of Small Business under code because just for me looking over, it is a page and a half of the code that de nines Small Business nothing about brick and mortar versus online. That merits conversation. The thing is like are you a mom and pop . Online business with Gross Revenue under 2 million. You are getting an email receipt for online ordering. That would also kind of just to my thinking it through honor the intend of the bill that there could be a discussion about opting in and out of packaging. In terms of enforcement. There is a violation clause. Being in the retail industry. State enforcement is increasing. They need to go behind the register. Most of the time they use enforcement efforts in the form of sting operationses undercover. I am curious what the enforcement piece will look like. The bill only outlines it is enforced by the city attorney, District Attorney or the torch general. I cant speak to the exact enforcement mechanisms. I think that would be an opportunity for locals to work out who would take this. I dont think we are prescriptive what that would look like. It would be a local. This is just my understanding. That would have to be a local because, i mean, unless it is a business that was. You can cost about multiple cities, statewide action. I cant speak to enforcement. Usually in bills we dont prescribe the method then it is up to the executive branch to enforce that. So to be clear, this doesnt include like internal use every seats, right . Because for example at my familys business we ask customers do they want a receipt or not. We also keep one for internal use. I dont have an answer to that, but my understanding of, you know, the use ever use of rs with tax code would be that you keep records necessary to show you pay the tax. The boe regulates that. I would have to doublecheck. I am making a note myself. I usually check in with them. It is not the internal bookkeeping but i can check on that. One last thing. Can you give me more clarity on whether this full move to pos is going to be party to this and necessitate businesses to do that, and in that case how is that going to work with customers that dont have the email. We say they can ask for a paper receipt. There is the option of creating additional receipts if you would like to go down that as well. They would be used only for the receipts, not promotion. That is covered under existing law. I think the last thing i would say we have had people approach us that do japs. There could be an app. I cant speak how that would look. The last receipt would be a paper receipt if you dont want to give an email or identifying information. Any other questions or comments, commissioners . Alex, just because the last set of amendments included the clause if you are using the appropriate paper. I want to make sure you are not bound to that on or after january 1, 2022 a proof of purchase shall be provided to consumer upon request. 42359. 1. By january 1, 2024 customer has option to receive it by electronic or paper. I just want to make sure if the business is absolutely providing the nontoxic paper then it is to the business discretion as to whether they ask the customer or if the customer can request and the business comply. I would like more clarity around the 2022 and 2024 requirements. To my understanding with the amendments that came down, if you arent using that bpa bps paper this bill would be exempted. That is my understanding. That is a pretty broad exception . If you are not using the paper this does not apply to you . I wanted to point out the other exemption he mentioned previously. I want to be clear on that. If receipt only contains the documented evidence of the purchase and no other extraneous information, i believe what you said earlier they were excepted out. The question is and this would be relevant to your familys business because the, you know, i would be inclined to think you are not printing out long coupons after each and every transaction. The question i have is if the information is only specific to the purchase, can it then be on pps paper. My understanding is that currently that if you only include the essential information you are exempt from this bill. I understand that is a large loophole. These were taken a week andahalf two weeks ago in the preparations committee. I cant speak to all of the narrowing of the bill. I think this is revolutionnary. For me speaking off the cup there were asks to narrow it. Wthere were concerns if it is overly broad there may be difficulties. My understanding like the exception it is difficult to conceptualize it being broader. Thank you. It seems narrowly tailored to the long receipts. Most of the businesses in our purview are unlikely to run up against this under any construction. It feels like this legislation doesnt have broad application to Small Business because of the exemptions is my take on it. I agree. Any other comments or questions . All right. Alex, thank you. The public may have questions for you. Any members of the public to comment on this. I see a hardware retailer in our midst. He may have something to say about this. Steven cornell. Just a couple points. Our Grocery Store or Hardware Store has a lot of skus. My business has a full Computer System and most Hardware Stores in San Francisco use this same one since 1982. We have 20,000skus, 500 accounts receivable. It did not have the capacity to email individual receipts to anybody. That would be a whole different thing. You referred to one business costing about 100,000. That is a good possibility of happening. That is one thing. One thing i would like to ask that may be you could have it changed. Instead of 2 million definition. Whatever is in the code with the exception over the years. Maybe the state legislature or doa or doe changes it, it is automatically done rather than revising this bill. Another thing to think about is in my business. 25 years ago the state of massachusetts put in a piece of legislation and the fine was if you didnt do it 25,000 maximum per year, which amounted to less than one employee. The Large Businesses never complied. They just paid the fine. It was much cheaper. 300 annual to a Small Businesses is expensive. You mentioned the long receipt. I can see somebody saying the heck with this. If there is no teeth in there, there is no teeth. Alex one question. In your legislation, do you refer to Small Business as defined elsewhere . You dont mention specifically 2 million . Good point. Dont change every law where it reaves specifically to the characteristics rather than as defined. My understanding is that it does refer. That is how i found the section of the cody finding Small Business. Chapter 5. 8 section 42359. If you go down to line 28. Healthcare providers or 113. 2. 610 of the government code. It refers in abstract . Yes. That makes it easier to change. It is referring to a piece of code that can be changed. Any other members of the public to comment . Seeing none, Public Comment is closed. Do we require action on this item . Preferably direction as we work with the state legislative committee, i think i hear the intent of supportive of we have the definition of Small Business but also that using the nontoxic paper business will be exempt and also not printing out anything other than what is part of the transaction. Businesses will be exempt. As long as those exemptions are there for businesses and we are not really pushing to force hopefully the education to businesses to ask before you start the transaction. I also just want to make sure that forces business businessing to not print receipt has problems down the road. I am cynical a little bit if we are going to mandate businesses not producing a receipt. We can see the issue down the road of consumers be set because they need to return an item. They would have a policy if you do not have a receipt you cannot return pit. There are issues of people turning things of off the self. If we are comfortable with that, that will be the direction we emphasize in supporting. My reading of this is that the exemption for Small Business is suffe sufficient to protect e Small Businesses. The