NFIB California Main Street Minute

For the legislative and political week ending April 16

Welcome to the April 12 edition of the NFIB California Main Street Minute from your NFIB small-business advocacy team in Sacramento.

• The big news of last week was Gov. Gavin Newsom’s announcement that “On June 15, California will fully open its economy if two criteria are met:
  • If vaccine supply is sufficient for Californians 16 years and older who wish to be inoculated; and
  • If hospitalization rates are stable and low.”

• The Governor’s Office of Business and Economic Development (GO-Biz) alerted NFIB State Director John Kabateck in advance that the announcement was coming. NFIB issued this news release after the announcement was made.

• NFIB has narrowed to 25 the number of bills it is concentrating its supporting or opposition energies on, for the moment. Other bills may join the list once they are scheduled for a hearing. They are grouped in the following sections.

Yellen, Yellen, and Yellen Even Louder

• New York Sen. Charles Schumer’s 58 pages of last-minute amendments in the American Rescue Plan Act, signed into law by President Biden on March 11, threw into doubt what states could or couldn’t do with their own tax cuts, many of which were planned long before the Rescue Plan. The Act doesn’t want states supposedly back-filling tax cuts with its money. The amendments also gave U.S. Treasury Sect. Janet Yellen wide powers to clear things up, which, except on one issue, she hasn’t done.

• NFIB is not waiting and on Friday, April 9, filed a friend-of-the-court brief in the case of Ohio v. Yellen, which challenges the tax provision in the American Rescue Plan on how states can’t use COVID relief funds directly or indirectly for tax relief. Other states have filed their own suits challenging the constitutionality of the Schumer amendments.

• So, what does it all mean for California? It had meant that seven legislative bills, all of them beneficial for small business, were on hold. Last Thursday afternoon, however, a memo from the U.S. Treasury Department would seem to have given the green light to the California Legislature to proceed on Assembly Bill 80, which would conform state tax law to the federal government’s on Paycheck Protection Plan (PPP) loan forgiveness.

• That leaves in limbo:
  • Assembly Bill 62, which provides a tax credit for complying with Cal/OSHA’s COVID-19 regulations
  • Assembly Bill 91, which would reduce the Minimum Franchise Tax fee from $800 to $400 and to $200 for microbusinesses
  • Assembly Bill 632, another bill reducing the Minimum Franchise Tax fee based on gross revenues
  • Assembly Bill 664, suspending the Minimum Franchise Tax Fee until the governor lifts the state of emergency
  • Assembly Bill 259, a tax credit for alcohol licenses
  • Assembly Bill 1146, which would enact the California Property Tax Small Business Rent Relief Act, authorizing a county to establish a local property small business rent forgiveness and tax relief program.

SALT Still Shaking

• Senate Bill 104, which seeks a way around the $10,000 limit clamped on the amount of state and local taxes (SALT) you can deduct on your federal income taxes is unaffected by the Schumer amendments in the Rescue Plan Act and is still very much alive. NFIB California has been particularly aggressive in fighting for its passage. See the top three bullets in last week’s Main Street Minute for more information.

• Also alive is Assembly Bill 879 establishing a tax amnesty period.

More Small Business Beneficial Bills

• Assembly Bill 385—would establish certain conditions before a Private Attorneys General Act (PAGA) case could be filed

• Assembly Bill 530—employer notification of PAGA lawsuit

• Senate Bill 440—would mitigate some of the insurance risks from wildfires

• Assembly Bill 230—would provide employees with greater workplace flexibility in setting their schedules by enacting the Workplace Flexibility Act of 2021

• Assembly Bill 513—transmission of documents for employees who telecommute

• Senate Bill 657—Companion measure to Assembly Bill 513 on the receipt of legally required notices for employees who work from home

• Assembly Bill 1028—employee remote work flexible schedule

And now for the bad news …

The Worst

• Never mind that former Vermont Gov. Pete Shumlin, who campaigned on a single-payer, universal health-care system, abandoned his No. 1 pledge when handed the bill for it. Never mind that Colorado voters, while going for Hillary Clinton in 2016, also rejected by a huge margin a ballot measure that would have created a single-payer, health-care system when the beginning price tag was calculated to be as big as the entire state budget. We’re Californians and we know how to do it, or so the supporters of Assembly Bill 1400 would have us believe. And the cost? No staff analysis attached to the bill yet, but when the Legislative Analyst’s Office looked at a similar proposal, the California Health Insurance Reliability Act (CHIS), in 2006 it found that “If the Legislature and Governor took the steps necessary to ensure that CHIS was implemented, the measure could eventually result in an increase in state revenues of roughly $155 billion annually beyond the amount of funds it already receives for the operation of existing health care programs (for example, beyond the federal funds received for the Medi-Cal Program).”

Leave Paradise

• Just how many leave laws, paid and unpaid, does California have? The Shouse Labor Law Group counts 16. (Click here and scroll down to the powder blue, screened-down box) But that list was as of the beginning of the year and doesn’t count the recently passed and signed into law Senate Bill 95, the supplemental paid sick leave for COVID-19 cases that took effect March 29, and will last until September 10.

• Think that’s more than enough leave time? Yes? Well, you’re clearly not welcome in the California Legislature, which can’t get enough leave. Here are three more leave proposals that NFIB is opposing:
  • Assembly Bill 95—granting 10 days of unpaid bereavement leave
  • Assembly Bill 1041—would expand the population of people you could take leave to care for
  • Assembly Bill 995—amending paid sick leave law to give employees more accrual flexibility

• Ever wonder if someone will figure out how to manipulate all the leave time California gives to take a whole year off?

More Anti-Small-Business Bills

• Assembly Bill 1179—a requirement on employers to provide paid backup childcare benefits

• Assembly Bill 119—Making direct levies assessed on real property available for everyone to see on the websites of county officials.

• Senate Bill 606—Giving Cal/OSHA greater enforcement powers

• Assembly Bill 1003—Adds the charge of Grand Theft to unpaid wages

• Assembly Bill 1074—New re-hire requirements on employers who have had to lay off employees

So, there you have it, the 25 Good, Bad, and the Ugly bills. Check future Main Street Minutes for their progress, and for other bills added once they get a hearing date.

• But wait! Nothing about liability protection against unfair COVID-19 lawsuits? Assembly Bill 247 and Assembly Bill 1313 are both technically alive, but there is little legislative stomach for passing them. Think lawyers are a big influence in California politics? NFIB is still working to see if the principles in both bills can be added to another bill that stands a better chance of passage …

• … Meanwhile, Arizona Gov. Doug Ducey signed liability protection for small-business owners into law last Monday, April 5. One more reason why so many California businesses find the Grand Canyon State increasingly attractive.

Media wise …

• In addition to interviews by KNX-AM News/Talk radio in Los Angeles and by ABC 10 in Sacramento, State Director John Kabateck spoke to The Epoch Times about Governor Newsom’s reopening announcement. “We’re excited about the reopening, and we’re encouraging as many Californians to get out there and shop at your local toy store, restaurant, auto shop, café. Give them the business they deserve, because when they start to see their cash registers flowing again, more people will be hired, our communities will get more support, and our public services will thrive the way they had been before this terrible crisis.”

Nationally,

• The next NFIB webinar is this Wednesday, April 14, at 9 a.m. PT. Special guest Jamie Trull, owner of Balance CFO, a financial literacy coach and profit strategist for small business owners, and social media star, will cover the new supercharged Employee Retention Tax Credit. Register here.

• On April 7, the U.S. Treasury Department released the Made in America Tax Plan, which describes proposals to increase corporate taxes that the Administration claims will fully pay for the American Jobs Plan over the next 15 years (and reduce deficits in the years after). About 20-30% of NFIB members’ businesses are organized as C-corporations, so this proposal represents a tax increase for many NFIB members.

• NFIB expects the administration to release the American Family Plan for “human infrastructure” in the next couple of weeks. This plan will propose tax increases on individuals and pass-through businesses (70-80% of NFIB members).

Next Main Street Minute, April 19.

###