Gilroy Chamber Business Focus – April 2021

The Gilroy Chamber of Commerce represents the business community’s interests at all levels of government.

The Gilroy Chamber of Commerce along with the Silicon Valley Chamber Coalition, OPPOSE AB 257 as it will devastate restaurants/franchise businesses throughout California. Many franchises are independent small businesses. Just because they are associated with a corporation for branding and marketing purposes, that does not mean that franchises are large businesses themselves or have similar profitability margins. Small franchise businesses make their own decisions when it comes to hiring and general business operations. 

In fact, the reason why so many minorities and independent entrepreneurs choose to open a franchise business is because they do not have the resources to start a new business by themselves. Minority entrepreneurs link themselves to a franchisor so that they can access a successful business model to access new opportunities that may otherwise be unattainable on their own. Nearly 33% of all franchises across the country are owned by minorities, compared to just 18% of non-franchise businesses. Restaurants and franchises are where minorities achieve financial success which uplifts up people from all walks of life and socioeconomic backgrounds. 

AB 257 would open the door to creating new barriers against minority business entrepreneurship. The legislation could create new costly regulations, independent from any elected official’s oversight, and would devastate small businesses that are linked to a franchisor. The bill would also eliminate autonomy for franchises/restaurants. Small businesses, especially restaurants, cannot afford new costly regulations and AB 257 relies on the false premise that all small franchises are as profitable as the parent corporation. 

Also, creating an 11-member council that does not bear the burden of meeting payroll, paying bills, covering overhead, or have any investment in the business at all make decisions about employment standards, wages, working hours and other working conditions does not make sense, especially when other state agencies already exist to regulate such issues. AB 257 will create a Fast Food Sector Council that is slanted against franchise owners to begin with, is completely biased, unfair, and will discourage job creation. 

The Gilroy Chamber of Commerce represents the business community’s interests at all levels of government.

The Gilroy Chamber of Commerce along with The California Chamber of Commerce and other business organizations respectfully OPPOSE AB 570 as amended on March 18, 2021, as it would require health plans and insurers to offer dependent coverage to parents and stepparents of enrollees and insureds. 

While the bill is certainly well-intentioned, it will place an additional strain on struggling businesses for coverage that is already accessible and affordable for those who need it.  

AB 570 would require a group or individual health insurance policy issued, amended, or renewed on or after January 1, 2022, that provides dependent coverage to make that coverage available to a parent or stepparent who meets the definition of a qualifying relative under Section 152(d) of Title 26 of the United States Code. Notably, the bill indicates if an employer offers dependent coverage then that employer must accommodate this coverage change. 

While the provision is well-intentioned, it is largely unnecessary. Covered California is currently offering a special enrollment period that allows individuals to sign up for health care coverage since approximately $3 billion in federal aid is being allocated towards health care subsidies. This federal aid infusion is paired with subsidies that have already been provided to low and middle-income individuals through the Affordable Care Act. Covered California estimates about 2.5 million people will benefit from the new and expanded help – including about 810,000 currently uninsured people. 

Additionally, AB 570 indicates that for dependent parents and stepparents to qualify for coverage they must meet the income threshold requirement contained within Section 152(d) of Title 26 of the United States Code. However, the availability of Medi-Cal already provides health care coverage for these individuals. Additionally, if the dependent parent or stepparent is 65 or older, they would qualify for Medicare coverage.  

The California Health and Benefits Review Program’s (CHBRP) analysis is due to be completed on April 30, 2021. While the cost impact has not been revealed yet, it is anticipated this bill will cause health care costs to increase. Employer group health plans are already difficult for employers to afford. Typically, employer plans, particularly in the small group market, include employers that contribute an apportioned payment towards dependent premiums in addition to employee premium contributions. 

AB 570 would introduce older and higher premium dependents to already strained employer budgets and potentially discourage any dependent contributions or encourage lower contributions to all dependents. This is not a trend that should be encouraged as it could lead to more uncovered Californians.

Article by CalMatters

On April 21, Governor Gavin Newsom declared a regional drought emergency, but stopped short of issuing a statewide proclamation or mandating water conservation measures — a decision that drew ire from some lawmakers.

Newsom’s emergency declaration applies to the Russian River watershed, which spans Sonoma and Mendocino counties and serves hundreds of thousands of Californians. The region relies on rainfall and is isolated from state and federal aqueducts, making it especially vulnerable to the drought parching California. Newsom’s order authorizes state agencies to restrict the amount of water diverted from the river and speed up contracts for certain services, such as relocating endangered fish stranded in drying puddles, CalMatters’ Rachel Becker reports.

Although the declaration also calls for a number of statewide actions — such as improved monitoring of groundwater pumping and reporting of dry wells — it wasn’t enough to satisfy lawmakers who have repeatedly called on Newsom to declare a state drought emergency and ensure Central Valley farmers receive enough water.

• State Sen. Scott Wilk, a Santa Clarita Republican: “While the overwhelming majority of the state is experiencing extreme drought conditions, Governor Newsom has chosen to only serve his French Laundry wine and cheese crowd.”
• Newsom: “We need to … approach the challenges with a laser-like recognition that you can’t focus this state as a one-size-fits-all solution, meaning we have to target our solutions regionally.”

The governor added that he will “add other counties to that list as necessary … based upon actual conditions on the ground.” He also said it isn’t yet necessary to mandate water conservation, noting that Californians in urban areas are using 16% less water than they were at the start of the last major drought in 2012. Nevertheless, a major Bay Area water agency — which receives about 25% of its water from reservoirs on the Russian River — on Tuesday approved mandatory water restrictions for its 200,000 residents.

Tensions are also rising on the Oregon-California border, where the federal government recently told farmers they will only get a tiny portion of the water they need even as endangered fish remain at risk.