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On September 9, Governor Gavin Newsom signed several bills intended to bolster small businesses in California that have been impacted by the COVID-19 pandemic. The new laws are set to take effect on January 1, 2021.

Senate Bill 1447 creates the “Main Street Hiring Tax Credit,” which allows businesses with fewer than 100 employees to claim a credit against their sales and use taxes. Beginning this year, a $1,000 credit is available for each new full-time employee hired in 2020, up to $100,000; however, the credit is only applicable to businesses whose gross income has declined at least 50% in Q2 (starting April 2020).

Assembly Bill 1577 excludes Paycheck Protection Program loans and other federal CARES Act funds from both federal and state income taxes. The new law also forgives the debt on such loans equal to the amount of the recipient’s payroll costs, mortgages, rents, and utility payments.

Senate Bill 115 appropriates $561 million this year in stimulus and construction projects across California.

While signing the bills into law, Governor Newsom remarked that surveys found that as many as 44% of small businesses in California were contemplating closures due to the economic crisis caused by the COVID-19 pandemic. The bills were all passed without opposition in the Legislature.

For more information, contact us at 916-822-8700 or visit the California Legislative Information site at https://leginfo.legislature.ca.gov/.

On August 8, 2020, President Donald Trump signed one executive order and three memorandum regarding various forms of economic relief in response to the COVID-19 pandemic. This is in contrast to what many have reported; that all were executive orders.

An executive order is directed to, and govern actions by, federal government officials and agencies, and must cite the legal authority the president has to issue it. Executive orders, according to the Library of Congress, have the force of law if their topic “is founded on the authority of the President derived from the Constitution or statute.”

Contrasting this, an executive memorandum is similar, but is not required by law to be reported in the Federal Register, and does not need to cite the legal authority the president has to issue it.

• The Executive Order on Fighting the Spread of COVID-19 by Providing Assistance to Renters and Homeowners calls for the Health and Human Services Secretary and Centers for Disease Control and Prevention Director to “consider whether any measures temporarily halting residential evictions of any tenants for failure to pay rent are reasonably necessary.” The executive order does not provide financial relief to renters.
• The Memorandum on Authorizing the Other Needs Assistance Program for Major Disaster Declarations Related to Coronavirus Disease authorizes the Secretary of Homeland Security to make available up to $44 billion dollars in unemployment aid. The Memorandum calls for the aid to resume at an amount of $400.00 per week, for those who qualify, and to last until December 6, 2020, or until the aid runs out. The federal government will provide $300.00 of that aid, and states must contribute the remaining $100.00.
• The Memorandum on Deferring Payroll Tax Obligations in Light of the Ongoing COVID-19 Disaster delays payroll tax collection for those who make less than $4,000.00 every two weeks. Specifically, the Memorandum instructs the U.S. Treasury to cease collection of payroll taxes from September 1, 2020, through December 31, 2020. The Memorandum additionally instructs the Secretary of the Treasury to “explore avenues, including legislation, to eliminate the obligation to pay the taxes deferred pursuant to the implementation of this memorandum.”
• The Memorandum on Continued Student Loan Payment Relief During the COVID-19 Pandemic waives interest on federal student loans through the rest of the calendar year, and allows holders of those loans to delay payments until December 31, 2020.

Congress has indicated that it will be on recess for the rest of August; as such, it is unlikely that Congress will pass a new economic stimulus package before September. Due to potential judicial challenges, it is unknown which parts of these Presidential actions will be implemented, so check back frequently for further updates.

The deadline to apply for a Paycheck Protection Program (PPP) loan is now  August 8, 2020. Applying sooner rather than later will allow for sufficient loan application processing time before the deadline. As a reminder, you can apply for a PPP loan through:

• any existing SBA 7(a) lender, or
• any federally insured depository institution, federally insured credit union, and Farm Credit System institution that is participating. Other regulated lenders will also be available to make these loans once they are approved and enrolled in the program.

Loan payments will be deferred for six months, and there are no personal guarantees nor collateral required. As long as the loan is used for payroll costs, interest on mortgages, rent, and utilities – with at least 60% of the loan having been used for payroll – the loan will be fully forgiven.

For help getting started, the U.S. Small Business Administration (SBA) has provided a free online tool to connect small businesses with lenders. Prior to applying with your lender, you can download a copy of the PPP application form to see the information that will be requested of you. According to the SBA, as of June 30, 2020, there have been more than 4.8 million loans approved through the PPP loan program nationwide, with over 5,400 lenders participating in the program.

For more information, please contact us at 916-737-5658 or visit the SBA website at https://www.sba.gov/funding-programs/loans/coronavirus-relief-options/paycheck-protection-program.

Effective July 13, 2020, all bars, breweries, and pubs in California must close both indoor and outdoor operations due to rising COVID-19 infections and hospitalizations. Additionally, statewide closures of indoor operations in the following sectors have been ordered:

• Dine-in restaurants,
• Wineries and tasting rooms,
• Movie theaters,
• Family entertainment centers including bowling alleys and similar venues,
• Zoos and museums, and
• Cardrooms

There are additional mandated closures for California counties that have been on the County Monitoring List for three consecutive days. Unless the activity can be modified to operate outdoors or via pick-up, the following industries and activities must shut down immediately:

• Fitness centers
• Worship services
• Protests
• Offices for non-essential sectors
• Personal care services, including nail salons, and body waxing and tattoo parlors
• Hair salons and barbershops
• Malls

As of July 13, 2020, the following counties have been on the County Monitoring List for three consecutive days: Colusa, Contra Costa, Fresno, Glenn, Imperial, Kings, Los Angeles, Madera, Marin, Merced, Monterey, Napa, Orange, Placer, Riverside, Sacramento, San Benito, San Bernardino, San Diego, San Joaquin, Santa Barbara, Solano, Sonoma, Stanislaus, Sutter, Tulare, Yolo, Yuba, and Ventura.
According to the Official California State Government Website, as of July 13, 2020, California has 329, 162 confirmed cases of COVID-19. For more information, visit https://covid19.ca.gov/.

On June 28, 2020, the California Department of Public Health (CDPH) mandated the closure of bars for California counties who have been on the County Monitoring List for more than 14 days. The mandatory closures are in effect in Fresno, Imperial, Kern, Kings, Los Angeles, San Joaquin, and Tulare counties. The CDPH additionally recommended the closure of bars in counties that have been on the County Monitoring List for three or more consecutive days but less than 14 days. Those counties include Contra Costa, Glen, Merced, Orange, Riverside, Sacramento, San Bernardino, Santa Barbara, Santa Clara, Solano, Stanislaus, and Ventura.

According to the CDPH, the County Monitoring List consists of counties that have concerning levels of disease transmission, hospitalizations, or insufficient testing. As of June 28, 2020, California has conducted 3,955,952 tests and has 211,243 confirmed COVID-19 cases. For more information about state and local guidelines, visit cdph.ca.gov/covid19.

On Thursday, June 18, Governor Gavin Newsom announced that Californians are required to wear face coverings in public spaces, effective immediately. According to the California Department of Public Health, the specific higher-risk situations in which face coverings are required are:

• Inside of, or in line to enter, any indoor public space;
• Obtaining services from the healthcare sector in settings including, but not limited to, a hospital, pharmacy, medical clinic, laboratory, physician or dental office, veterinary clinic, or blood bank;
• Waiting for or riding on public transportation or paratransit or while in a taxi, private car service, or ride-sharing vehicle;
• Engaged in work, whether at the workplace or performing work off-site, when:
  • Interacting in-person with any member of the public;
  • Working in any space visited by members of the public, regardless of whether anyone from the public is present at the time;
  • Working in any space where food is prepared or packaged for sale or distribution to others;
  • Working in or walking through common areas, such as hallways, stairways, elevators, and parking facilities;
  • In any room or enclosed area where other people (except for members of the person’s own household or residence) are present when unable to physically distance;
• Driving or operating any public transportation or paratransit vehicle, taxi, or private car service or ride-sharing vehicle when passengers are present. When no passengers are present, face coverings are strongly recommended;
• While outdoors in public spaces when maintaining a physical distance of six feet from persons who are not members of the same household or residence is not feasible.

Exemptions

Individuals exempt from wearing a face covering include persons age two or younger; persons with a medical condition, mental health condition, or disability condition that prevents wearing a face covering; persons who are hearing impaired or are communicating with someone who is hearing impaired; persons for whom wearing a face covering would create a risk to the person related to their work, as determined by local, state, or federal regulators or workplace safety guidelines; persons who are obtaining a service involving the nose or face for which temporary removal of the face covering is necessary; persons seated at a restaurant or other establishment that offers food or beverage service, while they are eating or drinking, provided they can keep a distance of six or more feet away from those who are not members of their household; persons who are engaged in outdoor work or recreation, when alone or with household members, and when they are able to keep a six foot distance from others; and persons who are incarcerated.

According to the Office of Public Affairs, Governor Newsom explained his reasoning for mandating face coverings in public spaces now: “Simply put, we are seeing too many people with faces uncovered – putting at risk the real progress we have made in fighting the disease. California’s strategy to restart the economy and get people back to work will only be successful if people act safely and follow health recommendations. That means wearing a face covering, washing your hands and practicing physical distancing.”

For more info see: https://www.cdph.ca.gov/Programs/CID/DCDC/CDPH%20Document%20Library/COVID-19/Guidance-for-Face-Coverings_06-18-2020.pdf

H.R.7010 has passed both the House and the Senate and is expected to be signed by the White House momentarily. This bill provides much needed relief to the PPP program:

1. The 8 week limit to spend their fund has been extended to 24 weeks;
2. The requirement that 75% be spent on salaries has been reduced to 60%, meaning that not 40% can be spent on utilities & rent;
3. The “workforce amnesty” provision that allowed employees to be replaced or rehired in sufficient number to replace the entire workforce was rolled back from June 30th to December 31st;
4. There will be no payment due until five years after the borrower received the PPP loan (with the 1% interest in tact);
5. Forgiveness for laid off employees who them, or a replacement, are not rehired if the borrower can show that they were unable to find similarly qualified employees or get that employee back; and
6. Also,  employers will be able to defer paying the 6.2% payroll tax that employers are charged for employees for a period of two years, regardless of whether the borrower receives loan forgiveness under the PPP program

There are no new talk of increased funding, thus if you were unable to apply that is unlikely to change. Still, for those lucky enough to meet the PPP requirements, this is great news.

For more information see the full text at: https://www.congress.gov/bill/116th-congress/house-bill/7010/text.

Order N-65-20 was issued to help ease the strain on domestic violence service providers by waiving the 10 percent cash or in-kind matching requirements for state grants awarded to these organizations. The order also waives the deadline to verify grade point average and waives certain certification requirements and selective service registration verification for Cal Grant applicants. Additionally, the order suspends programmatic deadlines for entities that receive funding from the Energy Commission for the development and deployment of new technologies that support the state’s clean energy and decarbonization goals.

A full copy of the order can be found here: https://www.gov.ca.gov/wp-content/uploads/2020/05/5.19.20-EO-N-65-20.pdf

California slowly moves towards Stage Three of the Covid-19 release. Therein, Yolo, Sacramento, and Placer counties have all been cleared to reopen Dine-in restaurants and hair salons and barbershops. Specific guidance for opening such can be found here: https://covid19.ca.gov/roadmap-counties/.  Also open are Curb-side retail; Manufacturers; Logistics; Childcare for those outside of the essential workforce; Office-based businesses (telework remains strongly encouraged); Select services: car washes, pet grooming and landscape gardening; Outdoor museums, open gallery spaces and other public spaces with modifications.

San Francisco, and surrounding counties, have not yet reached this point.

Approval has not yet been provided for reopening Personal services such as nail salons, tattoo parlors, gyms and fitness studios; Indoor museums, kids museums, gallery spaces, zoos and libraries; Community centers, including public pools, playgrounds, and picnic areas; Entertainment venues, such as movie theaters, gaming, gambling, arcade venues, pro sports; Hospitality services, such as bars, wineries, tasting rooms and lounges; Nightclubs; Concert venues; Live audience sports; Festivals; Theme parks Hotels/lodging for leisure and tourism – non-essential travel; and Higher Education. But, that is expected soon, as both Placer and Yolo county have recently been able to reduce casualties related to COVID-19 to “0.”

For more details see: https://www.cdph.ca.gov/Programs/CID/DCDC/Pages/COVID-19/County_Variance_Attestation_Form.aspx

California is asking everyone who tested positive for COVID-19 and survived to donate blood so they can use those antibodies to help currently ill individuals.

Who can donate COVID-19 plasma?

• A person who had a test that showed coronavirus infection,
  AND
• Has felt well for at least 14 days,
  AND
• Passes the usual rules for blood donation. 

Most blood centers require a negative swab test if you plan to donate before one month has passed since you recovered. The blood center may also have other rules.

You can find a donation center at: https://covid19.ca.gov/plasma/.