California COVID-19 Update: Below is the most current CalOES status update. www.covid19.ca.gov
Global Tax Deal Reached: Over 130 countries, including the largest economies in the world, agreed to sweeping changes to the global tax system, despite staunch opposition from low-tax regimes like Barbados, Ireland, and Hungary. https://www.oecd.org/newsroom/130-countries-and-jurisdictions-join-bold-new-framework-for-international-tax-reform.htm The deal was brokered through the Organization for Economic Cooperation and Development, and the initiative proposes to introduce a global tax for the world's 100 biggest companies and set an international minimum effective corporate tax rate of at least 15%. All G20 countries, including the US and China, back the deal, which is scheduled to be officially approved on July 9.
According to US Treasury Secretary Yellen, “Today is an historic day for economic diplomacy. For decades, the United States has participated in a self-defeating international tax competition, lowering our corporate tax rates only to watch other nations lower theirs in response. The result was a global race to the bottom: Who could lower their corporate rate further and faster?No nation has won this race. Lower tax rates have not only failed to attract new businesses, they have also deprived countries of funding for important investments like infrastructure, education, and efforts to combat the pandemic. In the United States, this agreement will ensure that corporations shoulder a fair share of that burden.
“Today’s agreement by 130 countries representing more than 90 percent of global GDP is a clear sign: the race to the bottom is one step closer to coming to an end. In its place, America will enter a competition that we can win; one judged on the skill of our workers and the strength of our infrastructure. We have a chance now to build a global and domestic tax system that lets American workers and businesses compete and win in the world economy.
“President Biden has spoken about a ‘foreign policy for the middle class,’ and today’s agreement is what that looks like in practice.”
UI Update for Self Employed: The Employment Development Department (EDD) will “begin inviting potentially eligible Californians” to apply for the federal Mixed Earner Unemployment Compensation (MEUC) program starting June 30, 2021. https://www.edd.ca.gov/About_EDD/pdf/news-21-38.pdf According to the announcement, the federal program pays an extra $100 per week in supplemental unemployment benefits to those who earned both regular wages and more than $5,000 in self-employment wages. The following information is summaries from the EDD announcement and related links:
EDD began sending text messages and emails on June 30, 2021, and claimants have until September 6, 2021, to apply.
Potentially eligible UI claimants are being texted or emailed a personalized application link. Paper applications will be mailed to those who are not online.
MEUC payments are retroactive to December 27, 2020, and eligible claimants can receive up to a total of 36 weeks of payments. These benefits are payable for any weeks in which an individual was unemployed and met requirements--even if they have since gone back to work.
Individuals collecting Pandemic Unemployment Assistance (PUA) or Training Extension (TE) benefits are not eligible for the MEUC program.
Additional information about this program is available on the MEUC section of the EDD website.
UI Update on Work Search Requirement: The Employment Development Department (EDD) has announced that as of July 11, California residents receiving unemployment benefits will be required to demonstrate that they are looking for work in order to maintain eligibility. During the pandemic, the work search requirement was suspended. On June 14, 2021, 20 members of the business community wrote to the Governor requesting the work search requirements be reinstated, among other UI related recommendations. https://files.constantcontact.com/3c634807be/436385fa-9fac-445b-b18a-0df151765b6f.pdf The letter was organized by the United Chamber Advocacy Network and signatories to the letter include, but are not limited to: California Building Industry Association, California Business Properties Association, California Retailers Association, Orange County Business Council, Tri-County Chamber Alliance, South Bay Association of Chambers of Commerce, Garden Grove Chamber of Commerce, and the Sacramento Regional Builders Exchange.
Maintaining the Opportunity Zones (OZ) tax incentive.
Investing in disadvantaged communities with 40% of the proposed investments in climate and clean infrastructure being directed to disadvantaged communities. It would also direct funds towards repairs and updates to physical infrastructure, like highways, bridges, and airports, as well as lead pipe removal and service line upgrades to drinking water systems. Funding for the Economic Development Administration is nearly doubled in order to support job creation, capital investment, and workforce development in communities struggling with the transition to a clean energy economy.
Making a renewed commitment to research and development (R&D) by increasing investments in climate and clean energy research. By encouraging R&D, the budget intends to strengthen the US’ position as a global leader in scientific innovation.
Encouraging entrepreneurship by strengthening America’s innovation ecosystem through investments in Growth Accelerators, Regional Innovation Clusters, and many of the Small Business Administration’s programs, including those aimed at enhancing innovation. The budget would also invest $330 million to support the expansion of Community Development Financial Institutions, which help small businesses in disadvantaged communities access capital.
Investing in American workers. The proposed budget would spend $32 million to help residents in impoverished rural communities access federal resources. It would also spend $318 million on “regional commissions,” which bring economic assistance, infrastructure investment, and workforce development to distressed rural areas.
Check Status on SBA Financial Assistance: The Small Business Administration has created a webpage to assistance small businesses check on the status of the disaster assistance. https://www.sba.gov/about-sba/open-government/about-sbagov-website/sba-account-login-registration-portals?utm_medium=email&utm_source=govdelivery This page includes links to borrower and grantee accounts under the Economic Injury Disaster Loan Program and various non-disaster SBA lending programs, as well as the Shuttered Venue Operators Grant Application Portal, Restaurant Revitalization Fund Application Portal, System for Award Management (SAM) account registration, and the SBA certification account login, and other federal contractor programs.
COVID-19 Vaccine Passport Debuts in EU: The European Union (EU) has launched a digital health certificate which permits vaccinated individuals to travel freely within the EU without the need to quarantine or test negative for COVID-19 upon arrival. https://ec.europa.eu/info/live-work-travel-eu/coronavirus-response/safe-covid-19-vaccines-europeans/eu-digital-covid-certificate_en The EU Digital COVID Certificate contains a QR code with a digital signature to protect it against falsification. When the QR is scanned, data is shown as to whether a passenger has received a vaccination, had a recent negative COVID-19 test, or has proof of antibodies. According to reports, the EU has a population of 450 million. Approximately 200 million certificates have been generated as of late July 1, 2021, when the digital health certificate was launched.
USTR Goes to Mexico: US Ambassador Katherine Tai is attending a meeting in Mexico City to commemorate the first anniversary of the entry-into-force of the United States-Mexico-Canada Agreement. https://ustr.gov/about-us/policy-offices/press-office/press-releases/2021/july/ambassador-katherine-tai-travel-mexico-city-mexico Mexico and Canada representatives attending the meeting include the Mexico’s Secretary of Economy Tatiana Clouthier and Canada’s Minister of Small Business, Export Promotion and International Trade. Also on the meeting agenda is a discussion of opportunities to strengthen the trilateral relationship and ensure the long-term growth and competitiveness of the region.
Supply Chain Report: The White House released the findings of a 100-day review of critical supply chains ordered by President Biden, Executive Order 14017. FACT SHEET: Biden-Harris Administration Announces Supply Chain Disruptions Task Force to Address Short-Term Supply Chain Discontinuities | The White House The White House report focused on four critical products: semiconductor manufacturing and advanced packaging; large capacity batteries, like those for electric vehicles; critical minerals and materials; and pharmaceuticals and active pharmaceutical ingredients. A US Supply Chain Disruptions Task Force has also been established to monitor and address short-term supply issues. The report found five common themes contributing to supply chain vulnerabilities:
Insufficient U.S. manufacturing capacity;
Misaligned incentives and short-termism in private markets;
Industrial policies adopted by allied, partner, and competitor nations;
Geographic concentration in global sourcing; and
Limited international coordination.
Workforce Compass: The National Association of Workforce Boards launched an AI-powered career navigation and learning platform, Workforce Compass. https://www.nawb.org/nawb-future-fit-ai-workforce-compass The project was developed through a partnership with technology provider FutureFit AI. The platform enables participating workforce development boards to provide job seekers with career exploration, reskilling, and job placement support that is personalized through local labor market data and artificial intelligence.
UPDATES ON THE CALIFORNIA BUDGET
The Assembly and the Senate reached a historic compromise on the budget weeks ahead of the June 15 deadline. Based on that agreement, the Budget Committee have worked with Leadership and the Administration on the details. The initial budget was contained in AB 128 (Ting), Chapter 21, Statutes of 2021.
Federal Infrastructure Bill: The US House of Representatives passed HR 3684 on July 1, 2021, which approves a $715 billion surface transportation and water infrastructure bill. https://www.congress.gov/bill/117th-congress/house-bill/3684?s=2&r=1 The legislation, entitled the Investing in a New Vision for the Environment and Surface Transportation in America (INVEST in America) Act, has different provisions than the bipartisan Senate proposal and is a key step in the US Congress reaching a compromise. Advancement of a significant infrastructure bill is supported by many business groups, including the US Chamber of Commerce. Key elements of the House bill include:
$547 billion is proposed for surface transportation programs, representing a 54% increase in funding when compared to current funding levels. Included in that amount is $334 billion for highway and related research programs, $109 billion for transit, $95 billion for rail, and $11 billion for safety.
According to the California State Association of Counties, “In contrast to previous long-term surface transportation Acts, HR 3684 places a heavy emphasis on returning transportation assets to a state of good repair rather than adding significant new capacity. The legislation also promotes resiliency to climate change and prioritizes local bridge needs – all key CSAC priorities.” https://www.counties.org/csac-bulletin-article/house-passes-major-infrastructure-package
Digital Infrastructure Advocacy: A group of 197 business community leaders (42 from California) called on the US Congress to prioritize digital infrastructure investment when considering infrastructure legislation. https://www.uschamber.com/sites/default/files/2106122_coalition_digitalinfrastructure_congress.pdf According to their letter, the COVID-19 pandemic highlighted awareness of the critical digital tools needed by healthcare providers, students, government, and others, as well as exposing the significant gaps in America’s connectivity. California signatories include, but are not limited to: Bay Area Council, CalChamber, Fresno Chamber of Commerce, Greater Riverside Chambers of Commerce, Los Angeles Area Chamber of Commerce, North Orange County Chamber, Orange County Business Council, Paso Robles Chamber of Commerce, Sacramento Metropolitan Chamber of Commerce, San Diego Regional Chamber of Commerce, San Gabriel Valley Economic Partnership, Silicon Valley Leadership Group, Valley Industry and Commerce Association, and Vista Chamber of Commerce.
Status of Digital Infrastructure: The New York Legislature is considering A 8076 which authorizes the state’s Office of Information Technology Services to select a private firm to examine four different areas (https://nyassembly.gov/leg/?bn=A8076&term=2021):
Evaluating the state’s information technology infrastructure, applications, data use and management, policies, procedures and operational processes of the state's departments of labor and health.
Looking at all applications and systems operated by the state that are used by the public to obtain services, such as benefits.
Conducting a study of the applicable best practices being used in both public and private Internet and technology services.
Identifying deficiencies and recommendations of how to address any issues affecting the state's information technology infrastructure.
DATA, SURVEYS, AND ANALYSES
June US Employment Data (most current): US Bureau of Labor Statistics (BLS) released national-level employment data for June 2021. https://www.bls.gov/news.release/empsit.nr0.htm According to the report, total US nonfarm payroll employment increased by 850,000 jobs in June, reflecting a 5.9% unemployment rate. In releasing the data, the BLS stated: “Notable job gains occurred in leisure and hospitality, public and private education, professional and business services, retail trade, and other services..” Unemployment among selected worker groups: 9.9% for Teenagers, 5.5% Adult Women, 5.9% Adult Men, 9.2% for Blacks, 7.4% for Hispanics, 5.8% for Asians, and 5.2% for Whites.
May California Employment Data (most recent): The Employment Development Department released state-level data for May 2021. https://www.laborma rketinfo.edd.ca.gov/Publications/Labor-Market-Analysis/calmr.pdf California’s seasonally adjusted unemployment rate was 7.9% in May. Nonfarm payrolls increased by 104,500 jobs from the prior month. The civilian labor force was up 13,000 workers from the prior month and 515,000 (2.8%) from the prior year. Unemployment among Blacks and Latinx remained significantly higher than the statewide average, reported as 13.6% and 11.0% respectively.
Data received from Great Plates Data Portal updated on Sundays.
GRANTS AND INCENTIVE AWARDS
Veteran Federal Procurement Entrepreneur Training Program (VFPETP): The US Small Business Administration has announced the Veteran Federal Procurement Entrepreneur Training Program (VFPETP). https://www.sba.gov/business-guide/grow-your-business/veteran-owned-businesses Grant awards of up to $500,000 will be made to support the scaling of existing entrepreneurship training program(s) that target veteran-owned and service-disabled-owned small businesses who intend to pursue, or are already engaged in, federal procurement. Eligible applicants include non-profit organizations and small businesses. Applications are submitted through www.grants.gov with the funding opportunity number of SB-OVVT-21-001. The application deadline is July 12, 2021.
Community Air Grants Program: The Air Resources Board announced their Community Air Grants Program. https://www.grants.ca.gov/grants/2021-ab-617-community-air-grants-program/ Grant awards of up to $300,000 can be made to eligible California Native American Tribes, California 501(c)(3) organizations, or California organizations in partnership with a 501(c)(3) organization. Grants will be awarded to provide community-based organizations with logistical and technical assistance to support their efforts in improving local air quality. Projects are intended to further the purposes of AB 617 and AB 32 by designing and executing projects that build capacity in communities through supporting community-based organizations’ and community members’ participation in the Community Air Protection Program. The application deadline is October 1, 2021.
Site Cleanup Subaccount Program (SCAP): The State Water Resources Control Board (State Water Board) announced a new funding round under their Site Cleanup Subaccount Program (SCAP). https://www.waterboards.ca.gov/water_issues/programs/grants_loans/scap/ Grant awards of up to $3,400,000 can be made to eligible nonprofits, small businesses, and other for-profit organizations. Grants will be awarded to projects that remediate the harm, or threat of harm, to human health, safety, or the environment caused by existing or threatened surface water or groundwater contamination. Applications are accepted on a rolling deadline basis.
Sales and Use Tax Exclusion Program (STE): The California Alternative Energy and Advanced Transportation Financing Authority (CAEATFA) announced their Sales and Use Tax Exclusion (STE) Program. https://www.grants.ca.gov/grants/sales-tax-exclusion-ste-program/ The program excludes from sales and use taxes purchases of qualified property if its use is either to process recycled feedstock or using recycled feedstock in the production of another product or soil amendment; or that is used in an advanced manufacturing process; or that is used to manufacture alternative source products or advanced transportation technologies. Total funding is $100,000,000 and grant awards of varying amounts can be made to eligible California manufacturers of alternative source products (solar, renewable hydrogen, biofuels, dairy biodigesters); advanced transportations technologies (ZEV vehicles and charging stations); advanced manufacturers (food production, aerospace, biopharmaceutical); and manufacturers that process recycled feedstock or utilize it in the production of another product of soil amendment. Applications are accepted on a rolling basis.
UNEMPLOYMENT INSUANANCE, PANDEMIC UNEMPLOYMENT ASSISTANCE, AND WORKER SAFETY
103,509 initial Unemployment Insurance (UI) and Pandemic Unemployment Assistance (PAU) claims, plus extensions, were filed during the report period.
Over 78,820 (63.2%) of initial claims filed during the report week were filed by individuals aged 25-54. (Not all claims included information on age)
Over 38,299 (43.3%) of initial claims were filed by individuals with a high school diploma or GED or less education. (Not all claims included information on education)
Over 42,391 (37.9%) of initial claims were filed by individuals who self-identified as Hispanic. (Not all claims included information on race)
Over 22.9 million initial unemployment benefit claims, including extensions, have been filed with EDD between March 1, 2020 and the close of the report period.
$155 billion has been paid to out-of-work Californians since the start of the pandemic.
Tracking UI Benefits: The California Employment Development Department (EDD) launched identity verification technology to help address the backlog of unprocessed unemployment benefit applications, including the Pandemic Unemployment Assistance. On June 11, 2021, EDD released its bi-weekly report to the Legislature addressing the backlog (https://www.edd.ca.gov/About_EDD/pdf/CUIC-337-legislative-report-062521.pdf ) covering the time period of March 1, 2020 through June 24, 2021.
UPDATES AND STATUS REPORTS ON SMALL BUSINESS ACCESS TO CAPITAL
State Small Business Credit Initiative: The American Rescue Plan authorized $10 billion to reactivate the State Small Business Credit Initiative (SSBCI), with $5 billion being allocated to states and tribal governments by formula, and $5 billion to be awarded competitively. https://home.treasury.gov/policy-issues/small-business-programs/state-small-business-credit-initiative-ssbci In 2010, California received $168 million in SSBCI. In this round, California will receive up to $895 million.
California Small Business Grants: The Office of the Small Business Advocate launched a Small Business COVID-19 Relief Grant program, which provided nearly $500 million in grants to small businesses and small nonprofits that have been negatively impacted by the COVID-19 pandemic. The Legislature approved and the Governor signed SB 87 (Caballero and Min) on February 23, 2021, which provide an additional $2.1 billion in grant funds through a minimum of three additional funding rounds.
The Texas Agricultural Commissioner Sid Miller sued to stop the debt relief payments and has won another preliminary injunction to freeze the payment process.
Drought Assistance: The US Small Business Administration is accepting applications for Economic Injury Disaster Loans from California small businesses impacted by the drought. Small nonfarm businesses in Imperial, Los Angeles, Orange, Riverside, San Bernardino and San Diego counties are eligible to apply. These loans are intended to offset economic losses due to reduced revenues caused by drought in Orange and San Diego Counties that began April 6, 2021. The deadline to apply for economic injury is Feb. 22, 2022. Download Declaration Fact Sheet for #17007: https://disasterloanassistance.sba.gov/ela/sfc/servlet.shepherd/version/download/068t000000Py5R9AAJ?utm_medium=email&utm_source=govdelivery
Community Navigator Program: The US Small Business Administration is accepting applications for funding under its $100 million Community Navigator Program, authorized under the American Rescue Plan Act. https://www.sba.gov/partners/counselors/community-navigator-pilot-program “Under the community navigator approach, traditional business assistance organizations enlist trusted, culturally knowledgeable partners to conduct targeted outreach to specific sectors of the entrepreneurial community. This can take on several forms, from hiring dedicated staff to focus on these communities or partnering with specialized community organizations and chambers of commerce via a “hub and spoke” model.”
Eligible Applicants: County governments; nonprofits having a 501(c)(3) status with the IRS, other than institutions of higher education; State governments; others (see text field entitled "Additional Information on Eligibility" for clarification); city or township governments; Native American tribal organizations (other than federally recognized tribal governments); economic development organization or similar organization; and SBA resource partners including Small Business Development Centers, Women’s Business Centers, SCORE, Veterans Business Outreach Centers, Community Development Financial Institutions, and nonprofit colleges and universities
Award Amount and Duration: Competitive grant awards will range from $1 million to $5 million for a two-year performance period.
Eligible businesses could receive funding equal to their pandemic-related revenue loss up to $10 million per business and no more than $5 million per physical location. Recipients are not required to repay the funding as long as funds are used for eligible uses no later than March 11, 2023.
As of June 30, 2021, 101,004 restaurants across the US received approvals for a total of $28.6 billion. https://www.sba.gov/sites/default/files/2021-07/RRF_Report-508.pdf In California, 15,988 restaurants received approval for a total of $5.7 billion. Over 24% of the grants were for $50,000 or less and 5.2% of the grants were for over $1 million. Over 64% of funds went to restaurants and 1.3% went to food carts and stands.
Shuttered Venue Operators: The US Small Business Administration’s Shuttered Venue Operators (SVO) Grant program, as authorized by The Economic Aid to Hard-Hit Small Businesses, Non-Profits, and Venues Act, is CLOSED to new applicants. Under the program, $15 billion is dedicated to the making of grants to shuttered venues who may receive up to 45% of their gross earned revenue, up to a $10 million. $2 billion of the grants are reserved for businesses with 50 or less employees.
COVID-19 EIDL Updates: The COVID-19 Economic Injury Disaster Loans (EIDL) is still accepting applications (OPEN) through December 31, 2021. New funding was provided in the Consolidated Appropriation Act of 2021. The program provides economic relief to small businesses and nonprofit organizations that are currently experiencing a temporary loss of revenue.
National-Level Data Update: The US Small Business Administration released program utilization information for the COVID-19 Economic Injury Disaster Loan (EIDL). As of July1, over 3.8 million EIDL loans have been approved in the US for a total of $214 billion. For the Supplemental Targeted Advance, 49,451 small businesses received $247.2 million. https://www.sba.gov/sites/default/files/2021-07/COVID-19%20EIDL%20TA%20STA_07.01.2021_Public-508.pdf
State-by-state data on number of EIDL Loans and Targeted EIDL Advance in 2021: As of July 1, 2021, California businesses had 576,658 EIDL loans approved for a total of $37.6 billion. Relative to the Targeted EIDL Advance, 38,665 advances were approved for California businesses for a total of $318.3 million. For the Supplemental Targeted Advance, 26,608 California small businesses received $133 million https://www.sba.gov/sites/default/files/2021-07/COVID-19%20EIDL%20TA%20STA_07.01.2021_Public-508.pdf
SBA Weekly Lending Report on Race and Ethnicity of Clients: The US Small Business Administration’s most recent weekly lending report for its core SBA products is for the week ending June 25, 2021. Information includes race, ethnicity, gender, and veteran participation in the SBA 7(a), 504, and Advantage Loan Programs. https://www.sba.gov/document/report-2021-weekly-lending-reports
Small Business Disaster Loan Guarantee Program: The Small Business Finance Center at the California Infrastructure and Economic Development Bank administers a credit enhancement (loan guarantee) as a way to encourage traditional and mission-driven lenders to loan money to small businesses who have been impacted by a disaster. https://www.ibank.ca.gov/wp-content/uploads/2021/06/JLBC-5.28.2021-Website.pdf Below is the most recent program activity.
State Small Business Disaster Loan Guarantee Program (May 28, 2021)
Conditionally Approved
Loan Amount
Guarantee Amount
Amount Encumbered
Employees
Total
1698
$73,784,261
$69,820,282
$34,910,141
8483
The IBank provides the Joint Legislative Budget Committee an update monthly.
CURRENT GUIDANCE ON STATE COVID-19 AND RECOVERY ACTIONS
Employer Vaccination Toolkit: Governor Newsom announced the availability of a new Employer Vaccination Toolkit, which is intended to assist employers make a request to have a workplace clinic or local provider partner for an onsite COVID-19 vaccination event. www.saferatwork.ca.gov
Shop Safe Shop Local: GO-Biz is leading a campaign to remind Californians to shop local and help small businesses prepare for the business realities of COVID-19. The #ShopSafeShopLocal website highlights free/discounted resources to help small businesses digitize, increase their on-line presence, find e-commerce tools, learn more about industry guidance, locate small business centers, and access PPE. https://business.ca.gov/shopsafeshoplocal/
Safely Making Web Platform: California manufacturers who produce PPE, including face masks and gloves, can advertise their wares on https://www.safelymakingca.org/. The website is a joint effort by the California Manufacturers and Technology Association (CMTA) and the State of California. A manufacturer does not have to be a member of CMTA to participate. To apply, manufacturers should complete this form.
