Governor Gavin Newsom, Senate President pro Tempore Toni G. Atkins and Assembly Speaker Anthony Rendon announced a $9.6BB economic recovery package, including immediate actions to substantially increase aid for California small businesses & nonprofits who have been devastated by the COVID-19 pandemic.
“This is a terrific result. The momentum generated by Senate Bill 74 – the Keep California Working Act – has helped deliver an additional $1.5 billion in immediate economic relief for small businesses and nonprofits,” said SB 74 Principal Co-Author Assemblywoman Cottie Petrie-Norris (D-Laguna Beach). “When local businesses prosper, our entire community thrives. Investing the State’s budget surplus directly into main street will keep businesses open and protect California jobs after the ravages of this pandemic.”
The budget agreement reflects a four-fold increase – from $500 million to more than $2 billion – for grants up to $25,000 for small businesses impacted by the pandemic, and also allocates $50 million for cultural institutions.
The agreement also partially conforms California tax law to new federal tax treatment for loans provided through the Paycheck Protection Plan, allowing companies to deduct up to $150,000 in expenses covered by the PPP loan. All businesses that took out loans of $150,000 or less would be able to maximize their deduction for state purposes. Larger firms that took out higher loans would still be subject to the same ceiling of $150,000 in deductibility. More than 750,000 PPP loans were taken out by California small businesses. This tax treatment would also extend to the Economic Injury Disaster Loans as well.
Senate Bill 74, with 36 Democrat and 27 Republican sponsors, was a true bipartisan and bicameral small business relief package. Sixty-three out of 120 California legislators, or more than half the Legislature, signed on to the Keep California Working Act. Additionally, more than 80 chambers of commerce, cities, counties, statewide business associations and nonprofit groups lent their support to the bill.
This article was released by the Office of Assemblywoman Cottie Petrie-Norris.