NFIB California Main Street Minute

Date: October 11, 2021

For the legislative and political week October 11-15

Welcome to the October 11-15 edition of the NFIB California Main Street Minute from your NFIB small-business-advocacy team in Sacramento.

The Wait is Over

  • Although he had up until yesterday, October 10, to either sign or veto all the legislation put on his desk, Gov. Gavin Newsom acted on three measures earlier in the week that wrapped up for the year on the bills NFIB was monitoring.

  • With his decisions on Assembly Bills 570, 654, and 1177, he concluded action on the 35 bills NFIB fought for, fought against, is still fighting for, won amendments on, and helped defeat for this year. The entire list of them, with brief descriptions and hyperlinks to the bills themselves, can be read here. A one-page Good, Bad, & Ugly document from that list can be read here.

  • The Legislature reconvenes for the second half of its 2021-2022 session on Monday, Jan. 3, 2022. In the meantime, it will contend with reapportionment. Governor Newsom can still promulgate rules and regulations by executive order.

If You Insist

  • Assembly Bill 1276 was not part of the small-business agenda, but the Main Street Minute wants to make sure its readers are aware of its passage and signing into law, because – Dang it! – we’re a world leader on environmental issues.

  • From The Sacramento Bee:
    • “You’ll have to ask for that ketchup packet now. California Gov. Gavin Newsom on Tuesday signed a bill into law prohibiting restaurants and other food facilities from providing single-use foodware accessories or condiments — such as forks or soy sauce packets — unless they are specifically requested by the customer.

    • “The bill, Assembly Bill 1276 authored by Assemblywoman Wendy Carrillo, D-Los Angeles, prohibits single-use items from being bundled or packaged in a way that prevents the customer from taking only the item desired.”

Another Run at Prop. 13?

  • Less than a year since voters reaffirmed Prop. 13 property tax protections with the November 2020 rejection of Prop. 15, are advocates for upending the beloved 45-year-old law back for another try?

  • The Kaufman Legal Group, whose client list is a Debrett’s Peerage of big government, big labor royalty, filed with the attorney general’s office on October 6 a “Request for Circulating Title and Summary ‘The Tax Cut and Housing Affordability Act of 2022.’”

  • Kaufman did so on behalf of its client, Studio City attorney Stanley R. Apps, whose website pretty much tells you the emphasis he places on small business, “If you have been mistreated at work or school, Stanley R. Apps would like to speak to you and find out more about your situation.”

  • NFIB has not done a full analysis of the proposed Act, yet, but sections like this raise some concerns, “SECTION 4. PROPERTY TAX SURCHARGE Subdivision (a) of Section 1 of Article XIII of the California Constitution is amended to read: ( a) All property is taxable and, except for the surcharge imposed by Article XIIIA, Section 1 (d), shall be assessed at the same percentage of fair market value. When a value standard other than fair market value is prescribed by this Constitution or by statute authorized by this Constitution, the same percentage shall be applied to determine the assessed value. The value to which the percentage is applied, whether it be the fair market value or not, shall be known for property tax purposes as the full value.”

  • Stay tuned. Property taxes are a small-business issue. When asked on our 2021 tax survey of the NFIB membership, “Do you own the building or property where your business is located (not including your primary residence)?” 65% said Yes. When asked on one of NFIB’s COVID-19 surveys, “Do you pay rent or pay a mortgage on property used for business purposes?” 79% said Yes.

Spreading the Small Business Message

  • State Director John Kabateck participated in a Small Business Roundtable on October 6. The Costa Mesa event was hosted by Assemblywoman Cottie Petrie-Norris, who expressed a desire to work more closely and directly with NFIB on getting more people heard.

  • On Friday, October 8, Kabateck arranged a visit for local Congressman Darrell Issa to meet with NFIB member Susan Wait, owner of Doors Unlimited in San Marcos, to discuss congressional issues of importance to small business.

  • Click here to see photos from both events.

Federally

International Intrigue!

  • The Pandora Papers. Heads of state. Foreign tax shelters.

  • It’s got it all, but could a seemingly distant scandal sweep up Main Street, American small businesses in its net?

  • The Pandora Papers, a leak of confidential information showing how heads of state have been using shell companies to hide their wealth certainly commanded the attention spans of the world.

  • Reformers of the abuse want to concentrate on the beneficial ownership proviso in our tax laws.

  • “While a beneficial owner may be required to pay taxes in the home country, it’s often difficult for authorities to discover that an offshore account exists, especially if offshore governments don’t cooperate,” reports the Associated Press.

  • “A Treasury Department agency working on new regulations for a U.S. beneficial ownership directory has been debating whether partnerships, trusts and other business entities should be included. Transparency advocates say they must or else criminals will devise new types of paper companies for slipping through the cracks.”

  • But Wait!

  • NFIB is not sure of that.

  • “Beneficial ownership burdens small business with additional compliance costs and red tape at a time when Main Street can least afford it, during the coronavirus pandemic. NFIB research shows the mandate will lead to 12.2 million paperwork hours and at least $531 million in higher costs. Four out of five NFIB members oppose the mandate for violating their privacy and hurting their companies,” says NFIB.

  • “’We’ve beaten beneficial ownership many times,’ said Kevin Kuhlman, Vice President of NFIB’s Federal Government Relations. ‘Even though it passed Congress in the least transparent way last December, we continue the fight to protect small business owners.’

  • “The mandate passed as part of the National Defense Authorization Act shortly before the end of the year. Under the final legislation, corporations and limited liability companies with 20 or fewer full-time employees will be required to file new reports with the Treasury Department’s Financial Crimes Enforcement Network (FinCEN) containing the personally identifiable information of small business owners and update that information periodically. The legislation creates a first-of-its-kind federal registry of small business owners, raising serious privacy concerns for owners.”

  • Stay tuned.
  • Elsewhere, NFIB, as it does the first Thursday of every month released its latest Jobs Report. Yes, it does get worse.
  • Tomorrow, October 12, as it does the second Tuesday of every month, NFIB will release its latest Small Business Economic Trends (SBET) report, aka the Optimism Index. The Jobs Report is one of the 10 components in the SBET.

Next Main Street Minute October 18.

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