2020 California Policy Agenda — Small Business Majority (March 2020)

Summary

The Agenda for California's Entrepreneurs is a state policy agenda from Small Business Majority, dated March 2020. It says California's 3.9 million small businesses employ seven million people, according to the U.S. Small Business Administration. Proposals cover access to capital, including implementing SB 1235, the truth in lending law for small businesses that California passed in 2018, and expanding CalCAP; healthcare, including an Office of Healthcare Affordability, MediCal coverage for undocumented immigrant seniors and action on surprise billing; paid leave and CalSavers; and support for entrepreneurship, including home-kitchen meal sales under Assembly Bill 626, the Earned Income Tax Credit and a state bank.

Summary drafted by a model from the document's text below and checked by script against that text before publication. It is a navigation aid, not a reading of what the document proves. Where AI is used

Cite this document

“2020 California Policy Agenda — Small Business Majority (March 2020).” Archived at Pandemic Darlings, https://pandemicdarlings.com/source-documents/2020-01-01-2020-california-policy-agenda-small-bus-maj-89f903f256/, SHA-256 17428a281dd4c82cf07adc62994e5f68d4f83c876b40d13399ab723c9718fadc.

Full text

The Agenda for California's Entrepreneurs
Small Business Majority has created a comprehensive state policy agenda to ensure entrepreneurship is at
the center of a thriving and inclusive economy in California. California’s 3.9 million small businesses
employ seven million people, which amounts to about half of the private workforce, according to the U.S.
Small Business Administration. This is why it’s critical that state lawmakers enact policies to support and
empower these entrepreneurs, guaranteeing they have access to capital to start and grow their business,
affordable and quality healthcare and the ability to compete for top talent with larger companies. To
achieve these goals, policymakers should consider the following policy proposals.

Expand access to capital for entrepreneurs
Entrepreneurs—particularly women, people of color and other underrepresented populations—face
significant hurdles accessing capital. Increasing access to capital and expanding opportunities for
marginalized communities is key to driving more inclusive economic growth. However, it’s critical to
ensure that any new opportunities to access capital are safe. California made history in 2018 by passing
SB 1235, the nation’s first truth in lending law for small businesses. This law will protect small business
owners seeking alternative sources of capital by promoting more transparency in small business loan
products, without placing an undue burden on lenders. California can pursue additional policies to
ensure greater access and more options for entrepreneurs to obtain responsible capital, including:

• Implement SB 1235 by working with the California Department of Business
Oversight to develop disclosures that give small business owners clear and concise
information about their financing options. Disclosure of APR and estimated monthly
payments are some of the elements necessary for informed comparison. APR is the only
established metric that enables informed comparisons of the cost of capital over time, and between
products of different dollar amounts and term lengths. In addition, these regulations should bring
transparency to the abusive practice of “double dipping,” or double charging the borrower.

• Support the expansion of the Department of Business Oversight and ensure that this
expansion includes protections for small businesses, not just consumers. This expansion will help
small business owners have access to a fair and transparent financing marketplace.

• Continue state investments into federally-matched business support services, such
as Small Business Development Centers (SBDCs) and Women Business Centers
(WBCs). These centers provide low and no-cost critical counseling and assistance by
professional staff to all entrepreneurs, especially to women and people of color, helping small
business owners maximize their potential for creating a positive economic impact.
• Expand and protect programs like the California Capital Access Program for Small
Business (CalCAP) and the Small Business Loan Guarantee Program to ensure
lenders are able to continue to use these tools. These programs encourage banks and other
financial institutions to make loans to small businesses that have difficulty obtaining financing.
According to the State Treasurer’s Office, for every $1 in CalCAP funding, another $18 in private
investments was leveraged for small businesses in 2017. We support legislation that would keep
these programs healthy and successful for small businesses. We also support similar programs that
drive responsible capital to micro-entrepreneurs.

© 2020 Small Business Majority www.smallbusinessmajority.org March 2020
Strengthen healthcare markets, expand coverage and contain costs
California has led the way in expanding access to healthcare, yet millions remain uninsured, including
many entrepreneurs and small business employees. California can address its remaining uninsured rate
and promote more affordability for the small business community through common-sense policies to (1)
strengthen healthcare markets and (2) expand health coverage, while (3) containing other inefficient
underlying costs in the system. Specific proposals include the following:

• Establish the Office of Healthcare Affordability to address increasing healthcare
costs. Governor Newsom proposed a new office to study, review and combat increasing costs
throughout the healthcare system. This office has the potential to significantly reduce systemic
cost increases through comprehensive research and increased transparency, and by preventing
significant increases in costs throughout the healthcare system.

• Expand historic assistance to individuals in the middle class who are eligible for
state subsidies for the first time. California made history in 2019 by extending state premium
assistance to those struggling to afford insurance. Building on this success by increasing those
subsidies would significantly improve affordability for thousands of moderate-income individuals
and families, including many entrepreneurs and small business employees. According to the Small
Business Administration, the average income for incorporated small business owners is around
$57,000, just above the $50,000 threshold of 400% FPL. Thus, the average California small
business owners would benefit from an increase in premium support for those making between
400% and 600% of the federal poverty level.

• Provide additional cost-sharing assistance to individuals struggling to access
affordable healthcare. Proposed legislation will strengthen existing ACA subsidies and provide
additional support to individuals who have incomes below 400% of the FPL and are unable to
afford monthly healthcare premiums, which would benefit California’s small businesses, their
employees and self-employed entrepreneurs who are struggling to afford health coverage.

• Implement a new state bulk purchasing prescription drug program for public and
private payers, as proposed by Governor Newsom, which would establish the nation’s largest
purchasing program for prescription drugs. This initiative will strengthen the existing California
Pharmaceutical Collaborative, administered by the state Department of General Services, which
allows state and local governments to access state contracts for purchasing bulk pharmaceuticals
and related pharmaceutical services at a reduced cost.

• Expand MediCal coverage to undocumented immigrant seniors. Extending this coverage
would drastically decrease the number of remaining uninsured in the state, as roughly 1.8 million
undocumented Californians are without healthcare coverage (more than half of the total
uninsured). Undocumented Californians, many of whom run or work in small businesses, are
accessing our healthcare system in an inefficient manner, without any way to pay for their care,
thereby adding to the instability of the system and increasing healthcare costs for everyone.

• Protect Californians from the practice of surprise billing. Surprise billing, also known as
balanced billing, is a deceptive practice in which a healthcare provider charges more money above
what a consumer’s insurance covers, usually as a result of receiving care from an out-of-network
provider at an in-network facility. Legislation such as SB 1611 would substantially reduce this
practice.

Ensure a skilled workforce for California’s job creators
California’s lawmakers must address the particular challenges small businesses face in finding and
retaining skilled workers. Small employers face barriers to offering benefits that are crucial to attracting
top talent, which puts them on an unequal playing field with larger businesses that have the resources to
provide robust benefits. We encourage policymakers to consider the following:

© 2020 Small Business Majority 2 March 2020
• Expand the state’s paid leave program. The state’s Paid Family Leave program is currently
vastly underutilized, and many small businesses and employees are unaware the program exists.
Lawmakers should join the governor in considering ways to expand the program that would
benefit the small business community. Increasing the wage replacement rate while ensuring that
all Californians can access this program through expanded job protection is a critical step.
Additional funding should also be identified to promote education and outreach to small
businesses so that more Californians are able to take advantage of the program.

• Support the implementation of CalSavers to ensure small business owners understand the
opportunities and responsibilities within the program. It’s critical that small business owners have
access to information about how they can use the program to attract talent and grow their
business.

• Strengthen the workforce development system in California by ensuring small
businesses are supported and provided the resources they need to hire and retain talented
employees, understanding small businesses are an essential part of the development system.

Support entrepreneurship and the freelance economy
A healthy entrepreneurial ecosystem provides an innovative and singular pathway for women, people of
color, youth, veterans, disabled people and immigrants to enter California’s economy and build income
and independence. We must to do all we can to ensure our economy flourishes by implementing the
following policy recommendations to support entrepreneurship and the freelance economy:

• Assist local and regional health departments in implementing a regulatory framework
for aspiring entrepreneurs to sell meals prepared in home kitchens. Assembly Bill 626, signed into
law in 2018, provides a pathway for thousands of existing cooks to openly access business
education and training on safe food handling practices. Local and regional health departments
must now decide to authorize home-cooked operations in their jurisdictions, the necessary next
step for these businesses to receive health permits.

• Expand the state’s investment in the Earned Income Tax Credit (EITC). As one of our
nation's largest anti-poverty programs, expansion of the EITC can have a powerful effect on
economic security for entrepreneurs and independent workers as they're getting their business off
the ground.

• Facilitate access to equity financing to small businesses within new Opportunity
Zones investments. While investments in Opportunity Zones hold the potential to benefit small
businesses, especially those in underserved communities, they must be implemented responsibly.
This includes requiring reporting metrics that measure program success based on the number of
jobs created, where those jobs are located, employee wages and the number of businesses created,
particularly businesses formed by women or people of color.

• Support implementation of a state bank that will make low-interest loans for infrastructure,
agriculture, affordable housing, student loans and small businesses. This will spur economic
growth and lead to thriving community banks with higher lending totals .

• Increase collaboration and coordination between public agencies and assistance
organizations to promote microenterprise development. Increased partnership across
these entities will encourage vital investment in California’s job creators and chief exporters,
particularly helping women entrepreneurs and entrepreneurs of color.

File and source

File: 2020-01-01_2020-california-policy-agenda-small-bus-maj.pdf
Size: 147,536 bytes
SHA-256: 17428a281dd4c82cf07adc62994e5f68d4f83c876b40d13399ab723c9718fadc
Our copy: 2020-01-01_2020-california-policy-agenda-small-bus-maj.pdf
Original: No public link identified.