Jay Sachetti joined Jeff O’Brien, partner at Husch Blackwell and Dyanne Ross-Hanson, president of Exit Planning Strategies talked about the market for mergers and acquisitions, exit planning opportunities for companies that don’t end up for sale and how companies can maximize their eventual sale price during an early October panel at the first Upsize on Tap event at Summit Brewing Co. in St. Paul.
When the state Legislature passed a law requiring employers to provide paid leave and safe time for employees, Justin Bieganek started hearing differing details from friends, colleagues and peers.
Robert Tennessen
Tennessen Law PLC:
612.235.6028
robert.tennessen
www.tennessenlaw.com
IT IS MONDAY MORNING.
The attorney general has subpoenaed your business records, the revenue department has filed a tax lien for unpaid employee withholding taxes, your accountant refuses to certify your financial statement, the Legislature is considering a bill that would prohibit the discharge of waste from your plant, your sales force is accused of using false and deceptive practices to sell unsafe products, and the pollution control agency and neighbors have sued to have your business declared a nuisance.
You believe that you have a valid response to each issue.
You discover that the products you produce were mistakenly included in the law classifying as hazardous and requiring a permit to manufacture and sell.
Consequently, the effluent from your plant is not hazardous and meets applicable discharge standards. Except for the mistaken classification, you would not need a permit to make and sell your products and the attorney general would not be seeking your records. There would be no basis for the nuisance suit or the false and deceptive sales practices charges.
Under the IRS code your sales people are independent contractors and not subject to withholding. With these issues resolved, the accountant would certify your financial statement.
Could you have avoided this conundrum or at least minimized the disruption?
Yes, but how?
Had you been aware of the bill erroneously classifying your products as hazardous and informed the Legislature, you would not be in this mess. Now you must head off further legislation regarding your sewage.
There are several avenues into the legislative process. You can do it yourself, join a trade association, hire a monitoring company or engage a lobbyist. It is not difficult and, compared to solving problems later, it is reasonably inexpensive depending upon your level of need.
First, you can do it yourself. You can talk to your legislators; explain why your products are not hazardous and why the mistaken classification should be corrected. You can ask any interested legislator to author a bill to correct the mistake.
Doing it yourself will likely require several days of your time to learn a bit about the process, meet with legislators to tell your story, prepare testimony and attend committee meetings in both the House and Senate at times that are not of your choosing.
To guard against future erroneous legislation you can monitor the Legislature. The Minnesota legislative Web site provides the means to search all bills for topics you select. You can register to receive free electronic notices of committee meetings and schedules. All states have legislative Web sites. Consult each for the services available.
Another means of monitoring legislation is to hire a nationalcompany that electronically monitors legislation in the states.Monitoring firms generally use key words provided by you to searchlegislative databases to identify bills of interest. Typically theyoffer a daily report of new bills, amendments and committee schedules.
Some monitoring organizations add valuable on-the-ground humanintelligence to cull bills that are unlikely to pass and focus on thosethat may. This can save you a lot of time and worry by eliminating theextraneous bills from your daily report.
If your industry has atrade association that monitors and lobbies on issues affecting yourindustry you can obtain the benefit of its expertise and resources byjoining it. Trade associations vary in size, effectiveness andreputation.
Performing some basic due diligence on the association should giveyou the information you need to make a decision. However, legislationdoes not affect every industry member in the same manner. You mustprotect your interests within the association.
Retaining a lobbyist is often necessary to secure the passage,amendment or defeat of a bill. Your lobbyist constantly monitors theLegislature and keeps you informed. They know the legislative process,the legislators and their staff, the course a bill will follow, andhave a good idea of whether something is possible.
A good lobbyist hired on a long-term basis will get to know yourbusiness well, look out for your interests proactively, and be aware ofpotential problems and opportunities while there is still time toeffectively influence legislative and regulatory processes.
Some companies use multiple means to engage the Legislature. Theymay retain a monitoring service, belong to a trade association and hirea lobbyist.
It is not only the Legislature that affects your business. Federal and state agencies promulgate rules and enforce them. Federal and state agencies maintain Web sites that contain contact and other information relevant to their scope of responsibility.
Federal and state agencies proposing new rules are required to publish them in the Federal Register or State Register respectively. You can learn of proposed regulations by checking those registers.
You generally have a right to submit comments, suggestions andobjections to proposed rules provided you do so within the parameterspermitted by law. It is probably not practical for most businesses toread the register each week. Joining your industry’s trade associationor hiring a lobbyist is a good way to be alerted to potentiallyapplicable rules.
Counties and cities generally post information on their Web sitesincluding meeting schedules, agendas and minutes of the governingboard’s actions. Often the elected officials are easily reached bytelephone and available to discuss issues.
Lobbying them is somewhat the same as lobbying state legislaturesexcept that electronic monitoring by a monitoring firm is problematicor does not exist.
Personal contacts or engaging a lobbyist are frequently employed.
Looking after your interests in the Legislature and other governmentbodies can be important to the health and future of your business.Being informed and using appropriate techniques can avert problems andincrease the likelihood you will have an early and effective voice ingovernment deliberations that impact your business.
