Leasing News

SINGAPORE (Reuters) - U.S. speculators dumped dollars for yen and Asian stock markets slipped on Wednesday after the Federal Reserve left interest rates unchanged at 40-year lows and warned of weak conditions in the world's biggest economy.

The dollar softened against major currencies after the Fed said America's economic risks had shifted toward weakness, fanning speculation of a return to recession.

"People are worried about a double-dip recession and now they think the Fed is a little worried as well," said currency strategist Meg Browne at HSBC .

Traders said the Fed's statement did leave the door open for further cuts, and some investors said the sell off would be brief.

Dealers said U.S. speculators were selling the dollar during lunch hour, when trade tends to be thin. At 0440 GMT, it was quoted at 117.00 yen more than a full yen down from 118.72 yen in late U.S. trade on Tuesday.

The euro was also gaining ground against dollar, climbing to 98.81 cents, compared with 98.30 cents in late U.S. trade on Tuesday.

The U.S. central bank's Federal Open Market Committee voted unanimously to leave its trend-setting federal funds rate at 1.75 percent, but said weak stock markets and corporate scandals were taking a toll.

"The decision was as expected but the reaction in the stock market was bigger than we had thought," said Junya Tanase, global markets officer at JP Morgan Chase..

Poll suggests consumer confidence at lowest level since 1996

By Associated Press

Consumer confidence has slipped to its lowest level since 1996 in the ABC News- Money Magazine consumer index, a 15-year-old tracking poll.

The index, based on Americans' ratings of the economy, their personal finances and the buying climate, was released Tuesday the same day that President Bush convened his economic forum in Waco, Texas, to discuss the current health of the economy.

Consumer confidence in this survey was highest in January 2000 and lowest in February 1992.

Other findings:

A third, or 32 percent, rated the economy this month as excellent or good.

Fewer than four in 10, 38 percent, said now is a good time to buy things.

Those most likely to have a gloomy view of the economy were women, Democrats, blacks and those with low incomes.

The consumer tracking poll is based on interviews with about 1,000 adults each month and has an error margin of plus or minus 3 percentage points.

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HPSC Reports Strong Second Quarter 2002 Results Net Income Increases 292%

BOSTON--HPSC, Inc. (AMEX: HDR) reports a 292% increase in net income for the second quarter ended June 30, 2002, with net income of $1.05 million, compared to $268,000 in the same quarter last year. In line with preliminary results announced last week, earnings per share on a diluted basis were $0.24 in the second quarter of 2002 versus $0.06 in the prior year period. Basic earnings per share were $0.26 in the second quarter of 2002 compared to $0.07 in the same quarter last year. Net revenues for the second quarter of 2002 were $13.8 million, a 2% decrease from $14.1 million reported in the second quarter of 2001, primarily reflecting lower levels of asset sales activity and lower weighted-average implicit interest rates on financing contracts. Net operating expenses for the second quarter of 2002 were $12.1 million, an 11% improvement from the $13.6 million recorded in the same period last year.

Said John W. Everets, Chairman and Chief Executive Officer, "We are very pleased that the past quarter's results were so solid, building on those of the first quarter this year, with exceptionally strong net earnings as well as a strong volume of financings. Our financing margins continue to be attractive, despite the decline in interest rates. We continue to focus on our strategy of gaining market share and providing high quality service to our customers."

On June 17, 2002, the company reported that it had discovered than an employee of its asset-based lending subsidiary, American Commercial Finance Corporation (ACFC), had perpetrated a defalcation by which approximately $5 million had been diverted from the company over the last five years. The company has completed its formal investigation into this matter. As a result, the company has restated its financial statements for the periods affected beginning in 1996 through the first quarter of 2002. A copy of the restated annual report on Form 10-K/A for 2001 is available on the company's website under investor relations (www.hpsc.com), or can be obtained via the SEC's EDGAR system, or by calling the company at 617-720-7202.

Shortly after the close of the second quarter, the company closed on new revolving credit facilities with Foothill Capital Corporation, a subsidiary of Wells Fargo Bank, as the managing agent for a bank group. The variable-rate lines of credit provide the company and its subsidiary, ACFC, with committed facilities of up to $70 million to warehouse the company's new lease and loan financing contracts and to provide financing support for portions of the company's asset-based lending services provided through ACFC. The company has also entered into a new financing arrangement with ING Capital LLC pursuant to which ING will provide the company up to $20 million of financing collateralized by the company's interest in its existing Bravo facility.

In the second quarter of 2002, the volume of the company's new financing contract originations, excluding ACFC, rose to $74.2 million, a 17% increase over volume of $63.6 million produced in the second quarter of 2001. For the first six months of 2002, the volume of the company's new originations, excluding ACFC, increased 10% to $135.0 million from $123.1 million for the comparable period in 2001. For the six months ended June 30, 2002, ACFC originated $2.7 million in new lines of credit compared to $9.9 million for the same period last year. The company's total gross portfolio of owned and managed lease contracts and notes receivable grew to $858 million at the end of the second quarter of 2002, a 6% increase from a gross portfolio of $806 million at the end of 2001. Unearned income increased 8% to $113 million at the end of the second quarter of 2002, from $105 million at the end of last year.

For the first six months of 2002, net income was $1.9 million, a 117% increase over the $863,000 reported for the first half of 2001. Earnings per share on a diluted basis for the first half of 2002 were $0.44, compared to $0.20 for the same period last year. Basic earnings per share were $0.47 for the first half of 2002, compared to $0.22 for the first half of 2001. Net revenues for the first half of 2002 were $26.3 million, a 3% decline from net revenues of $27.2 million reported in the same period last year, reflecting lower interest rates received on the company's portfolio and decreased asset sales. Net operating expenses for the first six months of 2002 were $23.2 million, a 10% reduction from the $25.8 million reported for the same period last year.

HPSC will host a conference call and webcast to discuss these results on Wednesday, August 14, 2002, at 4 pm EDT. The call can be accessed by calling 1-800-310-6649, confirmation code 652791, or on the Internet at www.hpsc.com, and following instructions to the link there. A replay of the call will be available until Wednesday, August 21, 2002 at midnight and can be accessed either via the company's website or by calling 1-888-203-1112, confirmation code 652791.

About HPSC

HPSC Inc. (AMEX: HDR) is a leading non-bank financial services company providing leasing and financing opportunities to the medical and dental professions in all 50 states. Through its asset-backed lending subsidiary, American Commercial Finance Corporation (ACFC), the Company provides asset-based lines of credit to manufacturing and distribution companies throughout the eastern United States. For more information, please visit the company's website at www.hpsc.com.

This release contains forward-looking statements within the meaning of Section 27A of the Securities Act. Such statement are subject to a number of risks and uncertainties, including but not limited to the following: the Company's dependence on funding sources and restrictive covenants in funding documents; payment restrictions and default risks in asset securitization transactions to which the Company is a party; customer credit risks; competition for customers and for capital funding at favorable rates relative to the capital costs of the Company's competitors; changes in healthcare payment policies; interest rate risk; the risk that the Company may not be able to realize the residual value of financed equipment at the end of its lease term; risks associated with the sale of certain receivable pools by the Company; dependence on sales representatives and the current management team; and fluctuations in quarterly operating results. The Company's filings with the Securities and Exchange Commission, including its Annual Report on Form 10-K for the year ended December 31, 2001, contain additional information concerning such risk factors. Actual results in the future could differ materially from those described in the forward looking statements as a result of certain risk factors, including those set forth above, and the risk factors described in the Annual Report. HPSC cautions the reader, however, that such list of risk factors may not be exhaustive. HPSC undertakes no obligation to release publicly the result of any revisions to these forward looking statements that may be made to reflect any future events or circumstances.

Operating Performance:

(in thousands, except per share and share amounts)

Three Months Ended Six Months Ended

June 30, June 30, June 30, June 30,

2002 2001 2002 2001

(Unaudited)(Unaudited)(Unaudited)(Unaudited)

Revenues

Earned income $ 12,789 $ 12,416 $ 25,002 $ 24,447

Gains on sales of leases

and notes 3,839 4,218 5,907 6,862

Provision for losses (2,806) (2,553) (4,586) (4,060)

Net revenues 13,822 14,081 26,323 27,249

Selling, general and

administrative 5,566 6,246 10,524 11,432

Loss from employee

defalcation 157 345 448 753

Interest, net 6,347 7,036 12,215 13,591

Income before income taxes 1,752 454 3,136 1,473

Provision for income taxes 702 186 1,262 610

Net income $ 1,050 $ 268 $ 1,874 $ 863

BASIC NET INCOME PER SHARE $ 0.26 $ 0.07 $ 0.47 $ 0.22

Shares used to compute

basic net income per

share 4,064,324 3,962,100 4,030,106 3,957,199

DILUTED NET INCOME PER

SHARE $ 0.24 $ 0.06 $ 0.44 $ 0.20

Shares used to compute

diluted net income per

share 4,356,733 4,354,278 4,274,475 4,288,031

Selected Financial Data

June 30, Dec. 31,

2002 2001

(Unaudited)(Unaudited)

Cash and cash equivalents $ 1,510 $ 1,211

Restricted cash- Securitization servicing 27,353 28,786

Unearned income 112,841 104,741

Net investment in leases and notes 443,142 396,996

Senior notes and notes payable to banks 381,145 336,806

Senior subordinated notes 19,985 19,985

Stockholders' equity 38,031 36,781

--30--ma/bos*

CONTACT: HPSC Inc.

John Everets, 617/720-3600

________________________________________________________________________________________

GROWTH 1 FUNDING CORP.

1616 East Fourth Street

Suite 110

Santa Ana, CA. 92701

Email: info@growth1.com

Phone: (714) 835-6961

Fax: (714) 835-7532

www.growth1.com

http://www.growth1.com/Large_Projects/large_projects.html

Leasing News is seeking any experience a reader may have had regarding

this company. If you have any information or had dealings with this company, please let us know. Also, if you have any background information on Roxanna Munoz and/or Dane Moore? We are seeking information and have no opinion on these individuals or this company.

Growth 1 Funding Corp. was written about in Landline Magazine regarding allegedly not funding trailer-truck leases, and at one time were working with Kendra Bernal of the Funding Tree. It appears they are now offering to finance large projects $40 million and larger.

Kit,

Here are the two stories I wrote that include information about Growth 1.

The first one is what got me started on these finance companies, and the

second is my follow-up story. I’ll be out of the office for the next couple

days, so I’ll talk to you Friday.

Later,

Rene

Easy money?

by Rene Tankersley, feature editor

(Owner- Operator Independent Drivers Association)

They are a new breed of loan sharks and they are helping themselves to

thousands of dollars from owner-operators seeking easy money through

alternative financing or special lease programs. In reality, these

advance-fee finance companies are the ones getting the easy money.

*OOIDA Business Services department recently received complaints f

rom owner-operators who reportedly lost money to Growth 1 Funding Corporation in Santa Ana, CA, for promised equipment leasing and financing services. On the surface, Growth 1 looks legitimate with its professional-looking web site, but the Better Business Bureau (BBB) of the Southland in Colton, CA, rates Growth 1 as having an “unsatisfactory business performance record.”

*The BBB report on the company further states: “Complaints contain a pattern of allegations that the company made promises of obtaining financing with specific terms. When the company failed to obtain the financing at rates originally quoted or provide promised terms, customers requested refunds of the deposit amounts. The company responded by generally denying requests, referring to the terms and conditions of the commitment fee, or that a portion of the deposit amount was kept due to expenses incurred by the company attempting to obtain the financing.”

*OOIDA members Johnnie Banner, Lawrence McCafferty and Steven Long all reported similar experiences with Growth 1.

*An unsuspecting equipment dealer in Tampa, FL, referred Banner, of Auburndale, FL, to Growth 1 in July 2001 to obtain financing for a 2000 Kenworth W-900L (total cost $85,547.99) to be purchased from the dealer. Per written instructions by Growth 1, Banner signed a preliminary lease agreement for the promised financing and paid documentation fees and two lease payments totaling $5,510.77. After wire transferring the money from Banner’s checking account, Growth 1 did not provide the promised financing. Banner, his attorney and the equipment dealer have all contacted Growth 1 several times by phone and letters trying to get a refund for Banner. All they received was empty promises of “we will look into it.”

*On Nov. 5, Roxanna Munoz, senior underwriter for Growth 1, told Land Line the company owes Banner a refund.

*”I did find out that definitely this customer is owed a refund, there is no argument on that,” Munoz said. “Unfortunately, right now we’re just not allowed to cut out any checks at this moment due to a freeze that has been put in our company with our account due to an internal bank auditing that’s going on. We’re just looking at about another couple of days from now, it could be any day now that I have word that we have clearance and we can go ahead and start the accounting department back up to go ahead and do what they’ve got to do. I have your information here as to give you a concrete date of when Mr. Johnnie Banner should be getting his check.”

*McCafferty of Fernley, NV, says he’s heard this and several other promises from Munoz regarding the $1,653.73 he gave the company in June for an equipment lease that never materialized. His introduction to Growth 1 also came through a nearby unsuspecting truck dealer.

Long, of Palm Bay, FL, had a similar experience in July when he tried to purchase a drop trailer from a Kansas City, MO, equipment dealer, who referred him to Growth 1. Like the others, he signed a preliminary lease agreement and paid $200 in documentation fees and two lease payments of $610 each, totaling $1,420. As with Banner and McCafferty, the lease went nowhere.

Growth 1 has refunded $1,000 to Long, who still believes the company owes him $420 plus the other related expenses. Growth 1 isn’t the only finance company causing problems for OOIDA members. Two other California companies - Funder Direct and Commercial Money Center Inc. - have been the subjects of complaints by OOIDA members Lonnie Byers of Ozark, AR, and Darren Purrier of Las Vegas. Byers gave Funder Direct out of San Diego, $1,353.32 in May to lease a trailer that never was delivered.

Darren Purrier purchased a new truck through a dealer on Commercial Money Center’s lease program. Because he knew he had credit problems, Purrier says he expected the high payments and a higher interest rate, but not 48.672 percent interest. Because the interest rate was never stated in the lease agreement, Purrier did not realize how much interest he was paying until his accountant reviewed his records at tax time. He’s talked to a couple of people about refinancing the truck at a lower interest rate, but the lease agreement requires any early pay-off to include all the interest for the entire lease.

Funder Direct and Commercial Money Center have something in common. Although Funder Direct is using an address in San Diego, the California Secretary of State’s corporation filings list the company address as 221 West Crest in Escondido, CA, the same address used by Commercial Money Center.

WEB SPECIAL: Easy money? The sequel

Since the first report on Commercial Money Center Inc., Growth 1 Funding Corp. and other advance fee loan companies (Dec/Jan, Land Line), three OOIDA members - Johnnie L. Banner, Steven D. Long Sr. and Lonnie Byers - received refunds from Growth 1 and Funder Direct. However, more small-business truckers have reported losing thousands to this new breed of loan sharks who promised equipment financing, took their money and gave them nothing but excuses.

OOIDA member Lawrence E. McCafferty of Fernley, NV, is still waiting for his $2,573 refund from Growth 1 for a failed truck financing deal. OOIDA member Maxie McIntosh of Perris, CA, also paid $2,573 to Growth 1 on April 3, 2001, but the finance company never came through with the funding. Roxanna Munoz, senior underwriter for Growth 1, has agreed to look into refunds for McIntosh and McCafferty. Based in San Diego, CA, Growth 1 is owned by Dane Moore, but most owner-operators report dealing with Munoz.

At least five owner-operators reported problems with Commercial Money Center, headquartered in Las Vegas with an office in Escondido, CA. Burrell L. Lee Jr., OOIDA member from Radcliff, KY, gave CMC $5,194.53 in advanced payments plus $220 for processing fees and $175 for a Quicktrak inspection on May 8, 2001, to finance a truck. For his money, he received no financing, no equipment and no refund.

The same rings true for owner-operator Dane Stieben, of Colby, KS, who paid $5,840 to CMC; Phil and Victoria Stone, of Nortonville, KY, paid $4,520.56 to finance a trailer with CMC; and Galloway Transport, of Grandville, GA, who reported to the Federal Trade Commission it paid $2,000 to CMC for financing.

Senitteau Norton of Boulderick Farms and Norton Refrigeration financed three trucks through CMC, and then some refrigerated trailers in October 2000. To finance the trailers, Norton paid $4,787.26 in advanced payments plus a $220 processing fee and $175 for a Quiktrak inspection.

Soon after she picked up the trailers and had them licensed, the dealership repossessed them because CMC never paid for the equipment. Since the financing fell through on the trailers, she asked CMC to apply the trailer down payment toward her truck payments, but CMC refused. With no trailers to go with their trucks, Norton’s company could not earn enough money to pay for the trucks and eventually lost them, too.

These owner-operators may have lost up to $5,000 each to CMC, but OOIDA members Darren Purrier of Las Vegas, Henry Brown of Phoenix, AZ, and Patricia Breeden of Stafford, VA, are paying CMC’s 48-50 percent interest rates. Purrier says when he confronted CMC about the high interest rates, he was told the rates were completely legal because it was a lease, not a loan.

Purrier says recent major repair work has made it difficult to keep up with the lease payments. When the Purriers tried to get a deferment, a CMC representative told them they must miss the payment before CMC would send them deferment paperwork. However, the rep didn’t tell the Purriers about the more than $300 in fees they were charged for the deferment.

Brown says the truck he received is not the one described on his paperwork and he still can’t get a legal title for the truck.

Munoz says CMC is out of business. Attempts to confirm this information were met with a full voice mailbox at CMC’s California office and a know-nothing receptionist at the Las Vegas headquarters, where company execs were unavailable for comment. The receptionist deferred all questions to a Mr. Gwarder (correct spelling not given), who was in a deposition April 4. However, a representative at U.S. Bancorp, who now services CMC’s lease contracts, did say the California office is closed, but the Las Vegas office currently is open.

Although CMC and Growth 1 received the most complaints from owner-operators, a few other companies each received one complaint. Of those, Commercial Leasing of Louisiana, an agent of Florida-based company International Corporate Finance Ltd., took the most money from one individual. Marti Wright of South Star Transport in El Paso, TX, paid Commercial Leasing more than $20,000 to finance three new trucks, which were repossessed about a month after delivery because the finance company never paid the dealer. Telephone numbers for Commercial Leasing are disconnected.

All complaints were forwarded to the Federal Trade Commission; the appropriate state’s attorney general and a private attorney for review. Some owner-operators have sought help from district attorneys in the counties where these companies operate.

If you have experienced similar problems, make an official report to the FTC at 1-877-382-4357 and the attorney general in your state and the state where the company is located. Your attorney general’s office should be listed in the government pages of your local telephone directory.

When a consumer calls these agencies, they usually will send the consumer a complaint form. It is very important to follow through with the complaint by filling out the necessary forms and returning them to the appropriate agencies along with copies (not originals) of all relevant documents. As with any business transaction, keep copies of all contracts, invoices, receipts and correspondence, including any complaint forms filed with various agencies.

--Rene Tankersley, feature editor

(As for Commercial Money Center, the company is going through the bankruptcy

proceedings. The bond insurance companies have their sets of attorneys. Their fees range from $350 to $450 an hour, not including legal assistants and aides, so whatever cash is generated will go to employees with claims, government taxes and fees, then the attorneys. All the officers are back in the leasing business under

different names and entities. They claim they are innocent of any wrong doing

or knowledge to any improprieties.

Leasing News hopes to have an up-date regarding the Funding Tree. Kendra

Bernal has resigned as president and awaits her trial for allegedly violating

parole. )

http://www.utdallas.edu/police/wavs/DragnetSetting.WAV

http://www.utdallas.edu/police/wavs/DragnetTheme.WAV

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Equipment Leasing Association Accountants Conference Sept 9-11

For over 20 years, ELA’s Lease Accountants Conference has provided companies like yours with the most up-to-date information on lease accounting standards. In the past year, the accounting profession has been thrown into the limelight due to reports of non-compliance with these standards.

If there was ever a year to attend the ELA Lease Accountants Conference, THIS IS THE YEAR! It is imperative that a representative from your company attend this significant event, scheduled September 9-11, 2002 at the Renaissance Mayflower Hotel, Washington, D.C.

For complete details and to register, or to download a PDF file of the conference brochure, go to: http://www.elaonline.com/events/2002/leaseaccts/

Program highlights include:

o Keynote addresses by SEC Deputy Chief Accountant Jackson Day and FASB member, Michael Crooch: What accountants must do now to accurately report the financial condition of their companies.

o The latest thinking and ELA’s analysis and position on the Consolidation of SPE’s Exposure Draft: What will happen to Off Balance Sheet Financing?

o A discussion of the latest FASB deliberations on Guarantor’s Accounting and Disclosure Requirements: What will this mean for Residual Value Guarantees?

For complete details and to register, or to download a PDF file of the conference brochure, go to: http://www.elaonline.com/events/2002/leaseaccts/, or email Janet Fianko at jfianko@elamail.com for the brochure to be mailed to you.

Look forward to seeing you at this important conference!

Michael Fleming, President

Equipment Leasing Association

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Hawaii Calling---This is Bette Kerhoulas Speaking

http://www.utdallas.edu/police/wavs/DragnetJob.WAV

Bette Kerhoulas, incoming president of the United Association of Equipment

Leasing Association, called from the main island in Hawaii. She is on vacation

from Pacifica-Capital, and promised her husband not to bring a lap top, but

she calls in every day.

It seems even though Leasing News said she was on vacation, she and her

staff received many telephone calls. No, she says, they don’t need to

borrow any money. They have cash to pay any fines or penalties, plus

they do not believe the Franchise Tax Board is correct.

It does appear that document fees for mortgage loans are taxed by the Franchise

Tax Board. At least, she says that is what they claim. The mortgage companies

do not charge the borrower for the sales tax, but they pay it.

It appears if the charge is with the other cost, it is part of the sale. If it is separate, meaning a separate letter, then it may be considered “labor” and not taxable.

Certain states already charge sales tax on passing title, it appears, such as Texas.

The key is the wording on the master document, but it now appears the California

Franchise Tax Board will be auditing all leasing companies in California during

the next two years to see if they are compiling, and if not, they owe the sales

tax plus ten percent interest per year for the last three years.

From Hawaii, she says she does not know if the UAEL Sales Tax meeting will

discuss this, or whether the representatives will have all the definitive answers,

but at Leasing New’s request, she is going to have a Mai Tai.

http://haleokala.com/bobblez.mid

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”We need to fight together,” Paul Menzel, CLP

Santa Barbara Bank and Trust’s discounting agreement does not pass title. Another consideration and argument that should be made to the Franchise Tax Board is that title can only be passed if the underlying transaction is a true lease. Otherwise the lessor never has title. Regardless of what the document says, lessors should examine the substance of the transaction as well.

All the lessors that are arguing with the Franchise Tax Board should ban together and hire a good attorney who has experience in this area. I would suggest Carey Boyden in Sacramento. This is an industry challenge that we need to fight together.

It is another example of the impact of our State’s poor management and the need for revenue at all costs that are threatening the small business person.

Paul J. Menzel, CLP

Senior Vice President / General Manager

Leasing Division

SANTA BARBARA BANK & TRUST

P.O. Box 60607

Santa Barbara, CA 93160-0607

1 South Los Carneros Road

Goleta, CA 93117

Dir Ph# (805)560-1650

Email PaulM@sbbt.com

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Federal and State Income Tax Issues, Too

The question of just selling rents or providing title has federal income tax issues as well. If a leasing company sells the payment stream on a non recourse basis and retains title then you have to look to see if the transaction is a tax lease.

The lessor retainsMACRS depreciation but must report as income the full discounted rent from the funding source because the non-recourse means there is no liability to return it so it becomes earned at once. Some believe that by not taking depreciation they have no quarrel with the IRS when in fact the question is “how much income to report”.

As the owner you report rent income not the fee you earned. If you hold title on a true lease and sell the stream, on a non recourse basis, your income is the discounted rent amount received and it is only off set with the first years MACRS depreciation. That is why many lessors sell the title and obtain a remarketing agreement to obtain residual or purchase option rights..

This California sales tax question now puts an additional problem to sell or not to sell the title ..

Terry Winders CLP

Leaseconsulting@msn.com

-----------

This is not the first time the State Board of Equalization is visiting this

issue. I worked for a leasing company in the 70’s and early 80’s who got

“trapped by their logic.

Because I was a partner in a general partnership, they levied a number of partners personal bank accounts to get their money. It took 4 years to get that money back because a suit was brought.( not by us) ( Enterprise Leasing I think) and it was determined that just having the word sale in the documents between you and your lender did not constitute a sale. It was the “intent of the document and not the form” that was binding and relevant.

The only upside of the whole nightmare was that while the state board had our money, they were charging and paying about 5% more than banks. When it was finally resolved, our “enforced savings accounts” had all grown nicely.

I’m getting really sick of governmental agencies waking up every morning with the thought “ Who can I get money from now?”

Doris Tamboryn

J.G. Capital Corp.

Overtam@aol.com

---

I’m not sure why everyone is surprised about the State of Ca’s position

on collecting tax on discounted leases. This has always been the rule

(as far back as I can remember).

There were several UAEL sessions on the topic. When they need more taxes, they enforce stronger. Wasn’t there a 90 day rule (discounting took place within 90 days) that saved a lot of lessors in the past? Someone may be able to look into the specifics to help out Bette.

Hope this helps.

Jim Swander

Jim Swander <jimswander@sprintmail.com>

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Heat records fall in western Oregon

The Associated Press

PORTLAND, Ore. (AP) -- Records were accumulating faster than beads of sweat Tuesday as at least 10 Oregon cities had afternoon temperatures of more than 100 degrees.

More than a dozen cities in the western part of the state set records, including Portland, which declared an "orange" air pollution warning because of high ozone levels.

The air quality warnings mean that state officials expect high temperatures and low-level winds, which mix with auto exhaust and other pollutants to create high levels of smog.

In Medford, smoke from forest fires mixed with the state's worst heat -- 108 degrees -- to create breathing woes.

"To add insult to injury, we're probably looking at some high ozone numbers here as well," said John Becker, an Oregon Department of Environmental Quality air quality expert in Medford. "Right now, the best advice is, if you've got smoke around you, try to take it easy."

Particle pollution, such as that from fires or diesel engines, is even more dangerous to health than ozone pollution, said Michael Heumann, an environmental epidemiologist for the Oregon Public Health Service. That's because particles carry chemicals on their surface and lodge in the lungs, he said, instead of being breathed out like other pollutants.

While wildfire smoke continued to cause problems in a few cities, such as Brookings, wind helped keep Klamath Falls, Eugene and other cities relatively free of smoke or ozone pollution.

Roseburg reached 107 degrees, the second hottest spot in the state, while Corvallis and Troutdale both hit 106, beating records that have stood since the drought-plagued summer of 1977.

Coastal cities were also hit hard by the heat wave. Astoria logged a 95- degree day, 9 degrees higher than the previous record. Tillamook also hit 95, beating its high by 11 degrees. Newport sweltered in 99-degree heat, blasting past its old record of 83 degrees, set Aug. 13, 1942.

But Florence was the hottest coastal spot, hitting 104 degrees. To the east, Eugene recorded the same temperature, and Salem also hit 104, edging out a 103-degree record for Aug. 13 that the capital set in 1920. Gorge winds didn't save The Dalles, which hit 102.

In Portland, the official high temperature as measured at Portland International Airport was 102 degrees, topping a 96-degree record set in 1992.

( How hot was it? Jim Merrilees did not hit the golf balls after work. )

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CIT Small Business Lending Surpasses $2 Billion In SBA Loans

Celebrates 10 Years Of Serving The Small Business Community

LIVINGSTON, NJ - CIT Small Business Lending Corporation (SBL), the nation's number one Small Business Administration lender and a unit of CIT Group, Inc. (NYSE: CIT), today announced it has surpassed the $2 billion mark in total owned and managed SBA Loans made to small businesses nationwide since 1992.

"Growing the business unit from a start-up lender to the nation's number one SBA loan provider for two years in a row is a special accomplishment that we feel very proud of," said John Canning, president of SBL. "Reaching $2 billion in managed assets in our 10th year of operation, especially in such a challenging economic environment, is a testament to the great entrepreneurial spirit that drives the U.S. economy. SBL's focus is on serving the needs of all small business owners," added Canning.

CIT Small Business Lending has a network of approximately 70 field sales offices throughout the U.S., and since its inception has provided loans to over 7,500 entrepreneurs, helping them realize their dreams of starting, acquiring or growing their businesses. Loans range from $50,000 to $3 million, with the average loan size approximately $500,000.

"We are also proud to have overseen more than $1 billion in total project costs through our Construction Lending Department since its inception in 1997," said Canning. "This demonstrates our commitment to helping small businesses meet a variety of financing needs, including building their business from the ground-up."

About CIT Small Business Lending Corporation

CIT Small Business Lending Corporation offers Small Business Administration (SBA) loans to finance business acquisitions, owner-occupied real estate purchases and franchise start-ups though a network of field representatives. The nation's #1 SBA lender, CIT Small Business Lending has been designated a "Preferred Lender" by the SBA and can provide quick credit decisions and loan closings. The company's website and online SBA loan application are located at www.smallbizlending.com.

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HP Formally Announces HP Financial Services

HP announced today ) HP Financial Services, the company's new leasing and financial services subsidiary. HP Financial Services is designed to enhance HP's worldwide sales efforts by delivering a broad range of financial services and asset management capabilities that can positively impact HP's customer and partner relationships and shareowner value.

HP Financial Services operates as a wholly owned subsidiary of HP, and HP intends to include its performance as one of five segments in HP's quarterly financial segment reporting. HP Financial Services represents approximately 4 percent of HP's total revenue. Ten percent of total HP sales are leased transactions.

The merger of HP and Compaq has brought together more than 1,500 IT financing professionals -- managing nearly $10 billion in assets in more than 50 countries -- to form one globally consistent team focused on making the process of acquiring, managing and retiring IT solutions simpler. HP Financial Services is the second largest captive IT leasing company in the world and operates in more countries than any other leasing company in its segment.

"HP Financial Services brings to the new HP a centralized business model for the financial services we offer our customers as part of a total HP solution. We are confident our subsidiary will help fuel company growth and increase shareowner value," said Peter Blackmore, executive vice president, HP Enterprise Systems Group. "The new HP is ready to execute for current and future customers, and HP Financial Services is ready to meet their financial asset management needs throughout the technology life cycle."

HP Financial Services is headed by former Compaq Financial Services president and chief executive officer Irv Rothman and has headquarters in Murray Hill, N.J. Regional headquarters are in Dublin, Ireland, and Sydney, Australia. Rothman brings 29 years of financial and leasing experience to the company.

"The combination of HP Technology Finance and Compaq Financial Services has brought together two great organizations to create a global leader in IT financing -- better equipped than ever before to provide customers with globally consistent offerings and ready to take our place among the best-performing financial services companies in the world," said Rothman. "Customers are looking for solutions that fully integrate products and services -- including financial services. Our new organization helps sharpen HP's competitive edge by delivering the broadest range of global IT financial services available."

Rothman will be supported by a team of 11 senior executives including: Tom Adams, Finance; Ed Andrews, Global Structured Finance; Gerri Gold, Corporate Development; Ann Henry, Corporate Resources; Keith Kendall, North America; Cynthia Klustner, Integration Management; Dan McCarthy, Legal; Matt Minetola, Information Technology; Constantin Salameh, Europe, Middle East and Africa; Cintia Silverstre, Latin America; and John Sutherland, Asia Pacific. Current customers from HP and Compaq will continue to receive the same level of service and quality they have come to expect from their account teams.

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Wine consumption grows in U.S. in 2001

Despite a slow economy and slow travel and hospitality industry, U.S. wine consumption is growing, a new handbook showed.

The 2002 edition of the Adams Wine Handbook showed that U.S. wine consumption rose to 233.7 million 9-liter cases in 2001, up about 0.8 percent frm last year. In the last seven years, annual compound growth was 3.6 percent

Table wine, the largest category with a nearly 90 percent market share, was the cause behind the increase, the handbook showed, and was the only category to grow last year. Imported wine grew 6.4 percent last year, while total domestic wine dropped 0.6 percent.

"Consumer demand for quality varietal wines from around the globe, coupled with reports linking moderate wine consumption to good health, has helped fuel the wine boom of the past eight years," said Robert Keane, co-publisher of the Adams Beverage Group, publisher of the handbook.

Other factors attributed to the increase in wine consumption is attractive prices of imports, better educated consumers and more variety.

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