Episode 108: Bills Offer Business Economic Relief

Welcome to the Workplace, a podcast by Cal Chamber. I'm Erica Frank, Cal Chamber's executive vice president and general counsel. And today on the podcast we are joined by Preston Young, a Cal Chamber policy advocate who is working hard on behalf of California employers at the state Capitol. Preston does a great job of educating lawmakers about the need for measures that will help our businesses stay afloat during the pandemic so they can fully resume operations when the economy reopens. Welcome, Preston.

Hey, thank you for having me today. I appreciate it. Longtime listener, first time guest, so very exciting.

Awesome. Preston. So the deadline for California legislators to introduce new bills has just passed, and among the new proposals this year are some that appear to be beneficial to small businesses who are struggling due to the COVID 19 pandemic. So let's talk about a few of those measures that have been introduced to help small businesses stay afloat that you've been working on on behalf of the Cal Chamber business community. What bills are out there that could provide relief?

Hey, so I'll answer your short question with a short answer. There's three I want to talk about, and I'll elaborate on those. Make it a little bit longer. So the good news is the three bills I'm about to talk about have gotten sucked into the budget. So for those listening who aren't aware, the Legislature has come to an agreement with Governor Newsom in regards to what will become part of the budget process. So you'll see more immediate action than you typically would during the legislative process. So the first thing I want to Talk about is SB87. It's a small business grant trailer bill. Now, this small business grant program was something people are likely familiar with. It rolled out a couple of months ago and was a $500 million fund. However, since then, the governor has now expanded the pool for that to approximately 2.6 billion total dollars. So he's allocating 2.075 billion more to the pool. Now, when I say small business grants, it is quintessentially small business that will get the grants. So to qualify for the grants, the threshold will be based upon annual gross revenue levels. So if you're a small business that has an annual gross revenue level that ranges anywhere from $5,000 annually to $2.5 million annually, then you qualify for these grants, and the grants will range anywhere from $5,000 to $25,000. So it's not a huge chunk of money, but it's certainly a bridge that will help you get to the next hopefully stopgap, which will be opening up the economy here soon. So when you pair that with PPP loans, prior grants that have come out, SB87 is a good tool for that. So if you're listening and you qualify for that, you should certainly jump on it. That money can be used for things like payroll, healthcare, benefit, paying your rent, utilities, a lot of different things it can cover. So SB87 is a big one. AB83 is a companion bill with SB94. This is another one for bars, restaurants, barbers, cosmetologists, manicurists, true small businesses. Again, to pay attention to. This is a fee waiver bill. And so.

Senator Umberg had a bill, SB49, and not to suck everyone down into the weeds, but that really aimed to waive fees for state and local fees in and of itself. However, the trailer bill language that has come out and everybody will notice this next week, is it's only going to waive renewal fees for bars, restaurants, and those licensed by the barbering and cosmetology boards. So it's not as wide ranging. However, the fees can range anywhere from $455 to over $1200. So again, a little bit of money in every penny counts right now, especially as businesses struggle. The last one, and then I promise I'll come up for air. Here is AB80. So this is the paycheck protection program conformity bill. I know this one was giving accountants and small business owners a decent amount of heartburn and hair loss. So what AB80 is going to do is bring California into conform, partial conformity with the IRS and federal treatment of PPP dollars. So if you're a small business that received PPP loan funds and you use those to pay for deductible expenses, the IRS says now those are fully deductible expenses. However, California was left in a lurch and nobody knew what to do with all this. And so the trailer bill that is coming out on Monday, AB80, that we'll have a hearing says that you can now deduct in California for state income tax purposes up to $150,000 of deductible expenses that you paid for using PPP loan funds. So as a Cal Chamber advocate, we wanted to see full conformity. However, this is certainly a workable framework and at the very least, at least it gives some clarity to employers to understand tax implications, quarterly, estimated things of that nature. So those are my three I wanted to touch upon really important and coming down the pipe here.

Okay, excellent. As far as AB83, the relief on renewal fees. Is that something that's available right now as well, or does it still need to go through the legislative process?

So it's going to have to be approved. That will likely come next week and be signed in. And after that happens, there'll be an application process and we'll know more about that once the bill is finalized.

Okay, excellent. So for those of you that are interested in the fee renewal bill, a couple more weeks ahead of you before there's actual application forms for you to utilize to tap into that to that fund. And then speaking to AB80, the last bill that you talked about, as far as it being somewhat of a conformity bill to federal when do you think this will go into effect? And is this something that you had mentioned accountants were concerned about? Is this something that a lot of accountants will have their fingers on the pulse and will be able to help these small businesses, or is this something that small businesses definitely want to raise with their accountants?

So first question is, when will we see action on this? It has a hearing on Monday and this should be signed in before the tax deadline. So well before March, I'd imagine, or well into March, I would imagine. In regards to small businesses concerned about what to do with the deductibility issue, talk to your accountants. They, I would say, don't have a finger on the pulse. I would say they have a full hand on the pulse at this point. They are all very concerned with how to treat this stuff. And so, yes, get in touch with your, your accountants. They'll know what to do with you.

And for and Preston, I know, you know, you're one of the chamber's policy advocates. You live and breathe the legislative process and have access to legislative staff and the legislators as well and are able to convey cal chambers concerns. What about those small businesses that want to be heard and they want to encourage, you know, they really want these bills to pass and they definitely want to help in the legislative process. Are there things that they can do? How can they voice their support for these bills?

Absolutely. That's a great question. And I got to tell you, talk to your local representatives, talk to those that represent your districts. Send letters of concern, give telephone calls to their offices, get in touch with the governor's office. This is something that is of enormous concern to the legislature right now. And this is a year where they really are looking out for small businesses and trying to help. So they will be receptive to your calls and letters. They will be receptive to your concerns. Get in touch with your representatives. I can't implore you enough and do it quickly because this is all coming up fast.

Yes. So it sounds like for those of you that are interested in voicing your support for the three that particularly the two pieces of letter that are still working their way through AB83 and AB80, reach out to your representative, to your legislators, senators or assembly members and let them know that you definitely care about these bills and are urging that they support the bills so they get on the governor's desk and sign into law. Preston, thank you so much. I know that you are extremely busy right now, especially as we begin the year still managing the pandemic with a lot of businesses and employees doing what they can to stay afloat. So thank you for all your hard work.

Hey, nowhere else I'd rather be. Thanks so much for your time and having me today. Appreciate it.

And thank you all for joining us on the Workplace. Please comment, share and subscribe to Cal Chambers podcast by visiting calchamber.com.