Welcome to the November 18-22 edition of the Main Street Minute from your small-business-advocacy team in Sacramento.

Victory!

Proposition 32 defeated

• Two weeks after the election, the Associated Press finally pronounced Proposition 32, the minimum-wage ballot measure, defeated.

— NFIB California State Director John Kabateck provided the first quote for the Los Angeles Times story on the failure of the initiative, whose defeat was NFIB California’s top political priority this year.

— “The rejection was ‘a pretty poignant sign of the times in a state like California,’ said John Kabateck, state director of the National Federation of Independent Business, which had urged voters to vote no. ‘It is certainly sending a message that Californians across the political spectrum are fed up with higher costs and greater uncertainty on Main Street.’”

— Of all the business groups, the media know how important the issue is to small business, and many reporters made NFIB California their first call for comment. Additionally, State Director John Kabateck debated Yes on 32’s biggest backer, Joe Sanberg, four times on radio stations with dozens of affiliates throughout the state. NFIB also paid for radio and digital ads urging a ‘No’ vote on Prop. 32.

• Speaking of election results, there has been a slight change since the last time we reported. Assemblymember Greg Wallis, whom we had in the ‘currently trailing’ category has inched ahead of opponent Christie Holstege. If Wallis’s lead holds, it would give NFIB a 16th victory, against four losses, in the number of Assembly candidates we endorsed. All four state senate candidates endorsed by NFIB won their contests.

CARB, Trump, the Environment, and NFIB Members

The following bullets use a variety of news accounts to help keep track of two big events affecting our state’s and nation’s environmental laws that may soon impact many NFIB members.

• The first is the California Air Resources Board’s November 8 vote to adopt amendments to the state’s Low Carbon Fuel Standard, of which The Orange County Register’s columnist Susan Shelley says, “measures the carbon density of different types of fuel and then requires producers of high-carbon fuel to buy credits from producers of low-carbon fuel. It’s all arbitrary, just a system of penalties and subsidies to try to force a transition away from petroleum products by imposing economic hardship.”

• Shelley’s peppery opinions are not necessarily NFIB’s, but her recent column provides some valuable context.

o “Under the Clean Air Act,” she writes, “the Golden State is allowed to have stricter standards than the federal government has approved, but waivers are still needed for each specific regulation.

o “To get the waivers, the state must demonstrate compelling and extraordinary conditions that justify more stringent standards, which also have to meet criteria for technical and manufacturing feasibility.

o “So far, the Biden administration has not approved waivers to allow California’s rules banning the sale of cars and trucks with internal combustion engines to take effect as scheduled. A rule banning the sale of gas-powered leaf blowers and lawnmowers also needs a waiver, as do rules requiring new ferry boats to be zero-emission and diesel locomotives to be phased out. Other rules awaiting waivers would eventually ban diesel engines in farm equipment, construction vehicles and refrigeration units used in cargo trucks.

o “These rules come to us from those wonderful folks at the California Air Resources Board, the same people who just approved a new 300-page rule that will drive up the cost of gasoline by an estimated 65 cents per gallon starting next year.”

• The second big event affecting environmental laws is the election of President Trump. Reports Kate Selig of The New York Times, “Several members of the California Air Resources Board, a powerful body that can influence global policies, called the rule changes a critical step on climate amid an expected rollback of federal environmental efforts under President-elect Donald Trump.”

• Los Angeles Times environmental reporter Tony Briscoe provides a little more detail about the California rules now at risk under the new federal regime:

o “The Small Off-Road Engines rule, adopted in 2021, would ban the sale of gas-powered yard equipment, including leaf blowers, lawn mowers and other equipment.

o “The Commercial Harbor Craft rule, adopted in 2022, would require new ferry boats and excursion vessels to be zero-emission where feasible. It also calls for more watercraft, including commercial sportfishing boats, to replace their older engines with newer, cleaner models to reduce pollution.

o “The In-Use Locomotive rule, adopted in 2023, would establish age limits for trains operating in California and gradually phase out diesel engines.

o “The Advanced Clean Cars II rule, adopted in 2022, would require an increasing percentage of new cars sold at California auto dealerships to be zero-emission or plug-in hybrids. The regulation would eventually culminate in a ban on selling new, gasoline-powered cars by 2035.

o “The Advanced Clean Fleets rule, adopted in 2023, would ban fossil-fuel-powered cargo trucks from registering to serve California ports and rail yards. It would ultimately require all cargo trucks serving the ports to be zero-emission in 2035.

o The In-Use Off-Road Diesel-Fueled Fleet rule, adopted in 2022, would phase out some of the dirtiest engines from agricultural and construction equipment.

o The Transport Refrigeration Units rule, adopted in 2022, would phase out diesel-powered refrigeration units for cargo trucks.

o The Heavy-Duty Omnibus rule, adopted in 2020, would establish cleaner engine standards and require warranties for new heavy-duty vehicles.

• So, where does it all stand?

• “When we speak with our small business members throughout California, they express great concerns about the cost increases associated with these LCFS proposed amendments,” testified Tim Taylor, NFIB California’s legislative director, at the November 8 CARB hearing. “Specifically, they cite the potentially massive gasoline price hikes and the adverse impacts those increases will have on their businesses and the rippling effect it will have on all Californians, without actually improving the air quality of the state.”

• Ditto, said one California lawmaker, according to the Selig article. “State Sen. Melissa Hurtado, a moderate Democrat, said that many of her constituents in the Central Valley were lower-income and relied heavily on their vehicles for transportation. ‘At a time when people are already struggling to make ends meet, this is a slap in the face,’ Hurtado said.”

• In California, once a regulation has been approved by a state agency, it cannot be undone by the Legislature or elements of it line-itemed out by the governor. “Since the Low Carbon Fuel Standard is a California state program, the federal government has no authority over the changes,” the New York Times article quotes CARB Board Chair Liane Randolph as saying.

• “With the board’s approval, the changes will now be reviewed by the state’s Office of Administrative Law. The board expects the changes to take effect in the spring.”

“History Doesn’t Repeat Itself …

• “… But it Often Rhymes,” said Mark Twain, whose quote was recalled last week when a UC Berkeley Institute of Governmental Studies poll found Vice President Kamala Harris a strong contender for governor in 2026, if she decided to run.

• In 1960, Vice President Richard Nixon ran for president, and, like Harris, lost. Two years later, he ran for governor of California and lost. It remains to be seen if Harris would suffer the same fate.

• “Were Vice President Harris to enter the 2026 gubernatorial race, one in three of the state’s voters (33%) say they would be very likely to consider supporting her candidacy and another 13% would be somewhat likely,” the poll found. “This compares to 42% who would not be likely to give her their support, while another 12% are undecided.”

• Last week’s Main Street Minute had list of nine Democratic candidates either having announced their candidacies or are being talked about as jumping in. This week’s list, arranged alphabetically, adds Harris and three other Republican candidates the IGS poll sampled for. We hope to stop there, lest we make it appear the Main Street Minute has turned into the Daily Racing Form for politicians.

• Democrats

o Toni Atkins, former State Senate President
o Rob Bonta, attorney general of California
o Xavier Becerra, secretary of the U.S. Dept. of Health and Human Services
o Stephen Cloobeck, hospitality industry entrepreneur
o Kamala Harris, vice president of the United States
o Elani Kounalakis, lieutenant governor of California
o Katie Porter, former U.S. Representative
o Tony Thurmond, California superintendent of public instruction
o Antonio Villaraigosa, former mayor of Los Angeles
o Betty Yee, former state controller of California

• Republicans

o Chad Bianco, Riverside County sheriff
o Lanhee Chen, academic and policy adviser
o Brian Dahle, state senator and 2022 candidate for governor
o Steve Hilton, former TV news host.

Calendar

• November 30, National Shop Small Business Saturday Campaign
• December 2, a new Legislature for the 2025-2026 session convenes for organizational purposes and to collect a per diem before adjourning for the rest of the month.
• December 2, a special session of the Legislature convenes concurrent to it regular session to address expected policies from the Trump administration
• December 6, county election officials must report final official results to Secretary of State
• December 13, Secretary of State certifies the November General Election outcome. All votes will have been counted.
• January 6, the 2025-2026 session of the California State Legislature opens for regular business.

National

Highlights from NFIB Federal Government Relations Principal Josselin Castillo’s weekly report

• DOL Overtime Rule Vacated on a National Basis

o Judge Sean Jordan, in the U.S. District Court for the Eastern District of Texas, today [November 15] granted summary judgment to NFIB and the other plaintiffs in our lawsuit challenging DOL’s overtime rule. Considering this decision, the minimum salary threshold is once again set to $35,568, and the threshold for highly compensated employees is set to $107,432.

o DOL may appeal the decision to the 5th Circuit, but the new administration will likely abandon its defense of the rule. Over the next four years, the new administration may choose to issue its own rulemaking to update the threshold. Reach out to SBLC with any questions.

• Beneficial Ownership Issue Spotlight

o Legislative: NFIB continues strong advocacy for H.R.8147 and S.4297 legislation to repeal burdensome Beneficial Ownership Requirements for small businesses. The House legislation now boats 50 co-sponsors. Sign the petition here.

• This Week:

o NFIB will host an event in Washington D.C. in partnership with The Hill, along with other small business leaders, tax experts, and policymakers, to highlight the impact of the Small Business Deduction and the potential consequences of its expiration. Click here if interested in attending.

o NFIB will participate in a Ways and Means roundtable in the U.S. Capitol to discuss health insurance affordability. NFIB members will share their personal stories and encourage policymakers to pursue policies that promote affordability and empower small business with greater choice and control. Share your health care story here.

This Main Street Minute can also be read on the NFIB California webpage here. Next Main Street Minute November 25.