Following a surge up 225% increase in cases, on December 3, 2020 Governor Gavin Newsom announced that a Regional Stay Home Order would be in effect for 3 weeks after a trigger-event, where their regional ICU drops under 15% capacity, which will instruct Californians to stay at home as much as possible to limit the mixing with other households that can lead to COVID-19 spread.

The order will be much less inhibiting than earlier as it allows access to (and travel for) critical services and allows outdoor activities with the goal to preserve Californians’ physical and mental health.

In any region that triggers a Regional Stay Home Order because it drops below 15% ICU capacity, the following sectors must close: 

• Indoor and outdoor playgrounds
• Indoor recreational facilities
• Hair salons and barbershops
• Personal care services
• Museums, zoos, and aquariums
• Movie theaters
• Wineries
• Bars, breweries, and distilleries
• Family entertainment centers
• Cardrooms and satellite wagering
• Limited services
• Live audience sports
• Amusement parks

The following sectors will have additional modifications in addition to 100% masking and physical distancing:

• Outdoor recreational facilities: Allow outdoor operation only without any food, drink or alcohol sales. Additionally, overnight stays at campgrounds will not be permitted.
• Retail: Allow indoor operation at 20% capacity with entrance metering and no eating or drinking in the stores. Additionally, special hours should be instituted for seniors and others with chronic conditions or compromised immune systems. 
• Shopping centers: Allow indoor operation at 20% capacity with entrance metering and no eating or drinking in the stores. Additionally, special hours should be instituted for seniors and others with chronic conditions or compromised immune systems.
• Hotels and lodging: Allow to open for critical infrastructure support only.
• Restaurants: Allow only for take-out, pick-up, or delivery.
• Offices: Allow remote only except for critical infrastructure sectors where remote working is not possible. 
• Places of worship and political expression: Allow outdoor services only.
• Entertainment production including professional sports: Allow operation without live audiences. Additionally, testing protocol and “bubbles” are highly encouraged.

The following sectors are allowed to remain open when a remote option is not possible with appropriate infectious disease preventative measures including 100% masking and physical distancing:

• Critical infrastructure 
• Schools that are already open for in-person learning
• Non-urgent medical and dental care
• Child care and pre-K

For more information, visit here, or https://www.cnn.com/2020/12/03/us/los-angeles-hospital-beds-christmas-covid/index.html.

 On November 13, 2020, Sacramento County moved from California’s Red Tier back into the Purple Tier based on current COVID-19 test positivity rates and the adjusted daily rate of new cases. In Purple Tier counties, the risk level of COVID-19 is considered widespread. Sacramento County’s new categorization means the following business restrictions are back in place:

• Dine-in restaurants and wineries may open outdoors only, with modifications
• Bars, breweries, and distilleries are closed

El Dorado, Placer, and Yolo counties have also moved back into the Purple Tier and have the same restrictions in place.

In Sacramento County, as of November 16, 2020, the COVID-19 positivity rate is 6.7% and there are approximately twenty-one new COVID-19 cases per 100,000 people, per day. In El Dorado County, the positivity rate is 3.3% and there are approximately 8.2 new cases per 100,000 people, per day. In Placer County, the positivity rate is 6% and there are approximately 15.7 new cases per 100,000 people, per day. In Yolo County, the positivity rate is 6.7% and there are approximately 17.4 new cases per 100,000 people, per day.

For any county to move back into the Red Tier, the positivity rate must drop below 8%, and the daily rate of new cases must drop to between four and seven new cases per 100,000 people, per day.

For more information and industry-specific guidlines, please call our firm at (916) 822-8700 or you may visit covid19.ca.gov/industry-guidance.

On October 8, 2020, the Small Business Administration (SBA) announced that the loan forgiveness application process has been simplified for roughly 60% of its Paycheck Protection Program (“PPP”) borrowers. PPP borrowers who have borrowed $50,000 or less may now use the new SBA Form 3508S to apply for loan forgiveness. If the business combined with its affiliated subsidiaries borrowed more than $2million, they cannot use this form. Despite being a short form, its contents are to be reviewed with much less scrutiny. As an added bonus, borrowers who use the new form are not subject to reductions in their loan forgiveness amount due to reductions in their number of full-time employees or reductions in employee wages.

The application approval process also benefits the lender side of things, allowing for faster forgiveness approvals. Lenders no longer need to independently verify loan forgiveness amounts reported by borrowers, so long as the borrower submits documentation in support of its request for loan forgiveness. The new loan review process applies to PPP loans of all sizes.

In support of the changes to the loan forgiveness process, the Administrator of the SBA and the Secretary of the Treasury reported that the new SBA Form 3508S “strikes an appropriate balance between the need for simplification in the forgiveness process with the responsibility to protect the integrity of the program and safeguard taxpayer funds.”

For more information on obtaining PPP loans or changes to the loan forgiveness process, call us at (916) 822-8700 or visit https://www.sba.gov/article/2020/oct/08/sba-treasury-announce-simpler-ppp-forgiveness-loans-50000-or-less.

On September 29, 2020, California officials announced that the number of coronavirus cases in Sacramento County had dropped sufficiently over the previous two weeks to categorize the county risk level as “substantial” rather than “widespread.” This new categorization allows for expanded indoor business for certain industries in Sacramento County.

Sacramento County’s previous risk level “widespread,” meant that more than eight percent (8%) of coronavirus tests were positive, and there were more than seven new coronavirus cases per 100,000 people, per day. For county risk to be classified as “substantial,” the positivity rate for coronavirus tests has dropped to between five and eight percent (5 – 8%), and there must be no more than four to seven new coronavirus cases per 100,000 people, per day.

With this news, restaurants in Sacramento County can now open indoors, with modifications. Restaurants must operate at a maximum of 25% capacity or 100 people, whichever is fewer. Wineries may also now operate outdoors only, with modifications. Bars, breweries, and distilleries that do not serve food are currently to remain closed.

For more information, please call our firm at (916) 822-8700 or you may visit covid19.ca.gov/industry-guidance.

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