Welcome to the April 21-25 edition of the NFIB California Main Street Minute from your small-business advocacy team in Sacramento.

The Legislature

The Legislature returns to work today (April 21) after more than a week off.

“The Legislature’s return from spring break will kick off a monthlong race to the Senate and Assembly deadline to move bills out of their houses of origin,” reports Politico California. “A flurry of high-profile legislation will be vetted for the first time in committee hearings starting on Tuesday [April 22].

“Gov. Gavin Newsom is just weeks out from releasing his revised May spending plan, so budget subcommittees are also in full swing.”

There was no week off for NFIB’s Sacramento lobbying team, which busied itself with sending letters of opposition or support to key lawmakers, burning up the phone lines, and pressing the flesh.

NFIB is now tracking 43 bills (19 good ones for small business, 24 bad) for the legislative surge ahead. For public consumption, NFIB has highlighted eight of the bills in this Good, Bad & Ugly web story.

Why We Need More Small Business Owners in the Legislature

From CalMatters

“The bill [SB 222] failed to advance last week, but not due to any fierce opposition from oil companies. Rather — in yet another example of how Big Oil wins in a state known for being a ‘climate leader’ — it was Big Labor that had the outsized role in blocking the bill.

“… Chris Hannan, president of the State Building and Construction Trades Council of California: ‘This bill’s terrible, terrible policy. And it puts our jobs in jeopardy and puts our state in jeopardy.’

“Compared to other lobbying organizations, labor unions fare better at passing or spiking legislation that fits their agenda, and roughly a quarter of the Legislature is made up of current or former union members. At the hearing, the judiciary committee, composed mostly of pro-labor Democrats, rejected the measure.”

NFIB and its business group sisters also had a huge role in SB 222’s defeat, check out last week’s Main Street Minute, but we’ll content ourselves to pass on making that point. Plenty of fish to fry coming up.

The Future of Transportation Taxes

To those in a hurry, the short of the following is this: The state is, slowly but surely, laying the groundwork for a vehicle miles-traveled tax. Read on for more.

With lawmakers gone last week, we speculate that the Research Bureau of the California State Library thought it a good time to slap a fresh coat of paint on a year-old study from the Mineta Transportation Institute at San Jose State University, How Will California’s Electric Vehicle Policy Impact State-Generated Transportation Revenues? Projecting Scenarios through 2040.

“While there is no doubt that replacing ICE [internal combustion engine] vehicles with ZEVs [zero-emission vehicle] will reduce fuel purchases and thus fuel tax revenue, there is considerable uncertainty as to how quickly the vehicle fleet will convert to ZEVs and, thus, the impact on future transportation revenue,” noted the state library on its website. “The almost daily announcements from vehicle technology markets, along with the uncertainty in economic conditions and consumer behavior, make it impossible to anticipate the future with any degree of certainty.”

On Page 28 of the Mineta Institute’s report, you’ll find seven policy recommendations, the second of which suggests:

“One potential alternative to motor fuel taxes that is receiving increasing consideration is the concept of replacing motor fuel taxes with ‘mileage fees.’ These charges, often in California called ‘road-user fees,’ assess drivers a fee for every mile traveled.

“California has completed multiple field trials of road-user charges, 30 with more currently underway, and the federal government is about to begin a new national mileage fee pilot as called for in the Infrastructure Investment and Jobs Act of 2021 (H.R.3684).

“Other revenue options to replace dwindling fuel tax revenue include taxing the electricity used to power electric vehicles, increasing annual vehicle registration fees, or moving away from user fees altogether to rely more on general revenues, such as income and sales taxes.

“Regardless of what revenue alternative(s) are selected to replace the motor fuel tax, the rates should be indexed to inflation to retain purchasing power over time without the need for regular legislative action.”

As reported in the NFIB California Main Street Minute, March 31-April 4, “California members of NFIB aren’t keen on the idea of a VMT [vehicle miles traveled] tax. When asked on their 2015 State Member Ballot, Should California add to the current tax on motor fuel a vehicle miles traveled (VMT) tax to fund future highway and road construction and maintenance, 91% were opposed to the idea.

“Has that opposition softened or changed in 10 years? Doubtful, but NFIB might be coming back to its members for a second opinion.”

It’s None of Your Damn Business

Like their California counterparts, Nevada legislators also aren’t keen on the idea of transparency.

Reports The Nevada Independent on the failure last week of one bill to pass by an important deadline, “SB2 would have subjected collective bargaining proceedings, which are often behind closed doors, between governments and their employees to the open meeting law. The bill, sponsored by Sen. James Ohrenschall (D-Las Vegas) never received a hearing.”

If this has a familiar ring, it was as far back as just last year when California did its own transparency dance when it came to light that a legislative and big business deal was cut under the shroud of non-disclosure agreements over the new law giving fast-food workers a big jump in pay.

As reported by NFIB California State Director John Kabateck in his article, Democracy Dies in Deals, “It started with the 2022 passage and signing into law of Assembly Bill 257, which would have made California the only state in the nation ever to seize complete control of all wage and workplace decisions from fast-food franchisees and given it to a new state agency to regulate.

“The industry responded by quickly gathering enough signatures for a 2024 ballot referendum that had a good chance of voiding the new law. Assemblyman Chris Holden, author of AB 257, didn’t want to see that happen and came back with a deal, Assembly Bill 1228, which de-fanged enough of the sharpest incisors in AB 257 to calm the waters. The deal kept the minimum-wage increase to $20, at least for now.

“But wait. It later came to light, thanks to reporting by Bloomberg, that a special exemption from having to pay the new, higher minimum wage was awarded to a friend of the governor who owns numerous Panera bread franchises. Naturally, and rightfully, an uproar ensued, and after reaching its peak, seemed to be subsiding.

“But wait. Thanks to reporting by KCRA-TV’s Ashley Zavala, it came to light that the deal was negotiated by the principals under the shroud of nondisclosure agreements (NDAs). So, who cut the deal and what else was agreed to? Don’t ask the one person who should know everything about his bill, Assemblyman Holden has gone Sergeant Schultz, seeing nothing, hearing nothing.”

Rightfully outraged, then-Assemblyman, now Congressman, Vince Fong drafted Assembly Bill 2654, which “… would prohibit lobbyists and certain public officials and employees, as specified, from entering into, or requesting that another party enter into, a nondisclosure agreement relating to the drafting, negotiation, discussion, or creation of legislation.”

Fong’s bill never received a vote in its first committee.

All right, nothing more to see here, folks. Everyone back to work.

NFIB in the News

“We really can’t wait,” Josselin Castillo, NFIB Principal of Government of Affairs, told listeners of the Mottek on Money Show on KABC Radio in Los Angeles last Thursday (April 17) about the need for keeping the 20% Small Business Deduction from expiring at the end of the year. Story here.

In a California-specific news release on the Small Business Deduction, State Director John Kabateck’s remarks were published far and wide, including coverage in the Elk Grove Citizen.

Calendar

— May: Big month of bill deadlines for fiscal and policy committees. Check legislative calendar here.

— May: State budget revise issued by governor’s office.

— May 26: Memorial Day. Legislature not in session.

— June 6: Last Day for Senate and Assembly to pass bills introduced in their chambers.

— June 15: Budget bill must be passed by midnight.

— July 4: Independence Day. Legislature not in session.

— July 18-August 17 Summer recess.

— September 12-January 5, 2026: Interim recess of the 2025-2026 session of the California State Legislature.

— October 15: Last day for governor sign or veto bills passed before September 12.

National

Highlights from NFIB Vice President of Federal Government Relations Jeff Brabant’s congressional update

— The reconciliation process is moving forward with the House passing the Concurrent Budget Resolution for the Reconciliation Process. Passage of the resolution didn’t resolve the policy differences between the House and the Senate. Those still need to be addressed as the reconciliation package is developed. NFIB will monitor every step of the way to ensure member priorities remain top of mind, with a sense of urgency on making permanent the 20% small business deduction.

— NFIB sent a press release announcing the Graham amendment to H.Con.Res 14, which would allow Congress to use the budget reconciliation process to make the 20% Small Business Deduction permanent, will be a Key Vote for the 119th Congress.

— NFIB sent a press release announcing that H.J. Res. 20, which would repeal the Department of Energy’s (DOE) rule increasing energy efficiency standards for consumer gas-fired instantaneous water heaters, will be an NFIB Key Vote for the 119th Congress.

Next Main Street Minute, April 28. All Main Streets Minutes can be found on the NFIB website here. Pull down the California tab in the upper-right-hand corner.