Deadline for the governor to sign or veto bills passes
State Director John Kabateck and Policy Director Shawn Lewis report from Sacramento
Sunday, October 13 marked the constitutional deadline for Gov. Gavin Newsom to sign or veto legislation for the 2019 half of the 2019-20 legislative session. Over the past month, following the recess of the Legislature, Governor Newsom’s office has acted on a flurry of legislation, bringing his grand total of new laws signed to 870, with a total of 172 bills vetoed for the year. Governor Newsom’s 2019 veto rate of 16.5% is consistent with Gov. Jerry Brown’s final legislative sessions.
1. Of the 108 bills NFIB actively lobbied throughout 2019, 28 bills stood out as top priorities because they would have had the greatest impact – either negative or positive – to our thousands of small-business members across the state. Among our 28 priority bills, 19 ended as victories for NFIB for the year, while nine remain challenges going into the new year.
- NFIB helped block $6 billion in additional taxes on small-business owners, including a soda tax (Assembly Bill 138), a water tax (AB 217), an increased tire tax (AB 755), and a new oil/gas production tax (Senate Bill 246)
- NFIB also helped stop several unnecessary product bans, including a ban on paper receipts (AB 161), a ban on single-use, non-recyclable packaging materials (AB 1080/SB 54), and a blanket ban on flavored tobacco products (SB 38).
- We also successfully halted numerous bills which would have significantly increased labor costs, including drastic expansions to paid family leave (AB 196, SB 135), and a proposal to increase the number of mandated paid sick days per employee from 3 to 5 days (AB 555).
2. Unfortunately, Governor Newsom did sign a number of bills that will add to the burden of running a small business in California, some of which include:
- AB 5 (Gonzalez) – Codifies the Dynamex Supreme Court decision, removing flexibility for millions of independent contractors in California under new “ABC” test
- AB 51 (Gonzalez) – Increases the threat and the cost of lawsuits by banning arbitration agreements as a condition of employment in California, which is likely preempted by the Federal Arbitration Act.
- AB 142 (Garcia) — $21.4 million tax on car batteries, which represents yet another cost on top of the gas tax, increased registration fees, etc. that a small business pays.
3. Finally, a number of positive NFIB priorities failed to make it across the finish line and will continue to be priorities in the new year, including:
- Minimum franchise tax reform/relief (AB 250, Choi) – a tax paid just for the privilege of doing business in California, even if you made zero profit that tax year.
- Labor Code Private Attorneys General Act (PAGA) reform (AB 440, Fong) – to help curb lawsuit abuse in a state consistently ranked a ‘Judicial Hellhole’ by the American Tort Reform Association.
- Flexible workweek reforms (SB 734, Borgeas) – would allow an employee to opt for a four 10-hour day workweek rather than a five 8-hour workweek, if desired.
