House Passes American Rescue Plan Act

by Policy Team

 

Federal Update

The House Passed President Joe Biden’s American Rescue Plan Act 

The House passed President Joe Biden’s $1.9 trillion stimulus package over the weekend and now it heads to the Senate this week. President Biden hopes to sign it into law in the next two weeks. The bill includes:  

• $420 billion for $1,400 stimulus checks 
• $15/hr minimum wage increase 
• $240 billion for the expansion of unemployment benefits 
• $20 billion for national vaccination program, $50 billion for virus testing 
• $350 billion for state, local, tribal, and territorial funding 
• $170 billion for K-12 schools and higher education 
• $130 billion for an expansion in tax credits for parents and low-income workers 
• $40 billion for housing assistance 

The American Rescue Plan Act also contains a number of provisions for the business community, especially for small businesses. The bill provides:

• $7.25 billion for Paycheck Protection Program forgivable loans 
• $15 billion for targeted Economic Injury Disaster Loan advance payments 
• $25 billion for restaurants, bars, and other eligible providers  
• $1.25 billion for shuttered venue operators 
• $175 million to increase awareness of and participation in COVID-19 relief programs, especially for businesses owned by socially and economically disadvantaged individuals, women, and veterans.   
• An extension of benefits for gig workers and others who initially didn’t qualify for benefits before the pandemic. 

The Senate is expected to remove the minimum wage increase in the bill. Democrats want to pass a final bill by March 14, when some benefits from the earlier stimulus start to expire.

Business Impact: The funding included in President Biden’s relief package will be critical for the business community to rebound and reopen, from direct funding to businesses, tax credits, and vaccine deployment, but a minimum wage hike will be difficult for many struggling businesses and liability protections are not included in this proposal, which is a top priority for businesses as they struggle to reopen. 

The L.A. Chamber has been consistently advocating for liability protections as they are critical for businesses as they reopen. The LA Chamber also joined Chambers across the country in a coalition letter seeking these protections. Please see the letter here. The Chamber will continue to monitor this bill and advocate for business interests including liability protections and other priorities. 

 

State Update

Governor Newsom and Legislative Leaders Reach a Deal on School Reopenings 

California's public schools could get $6.6 billion from the state Legislature if they return to in-person instruction by the end of March. To be eligible for this new money, school districts in regions that fall under the most restrictive level -- known as the purple tier -- must return to in-person instruction at least through second grade. Districts in the next highest tier, the red tier, must return to in-person instruction for all elementary school grades, plus at least one grade in middle and high school. Additional information on the plan can be found here.

Business Impact: Along with prioritizing our teachers in the vaccination tiers, this announcement is great news for the business community. Students will finally be able to get back into the classroom and we can begin to mitigate the learning loss that resulted from the pandemic.  

State Outlines Equity-Centered Plan to Accelerate Access to COVID Vaccines for Education Workers 

Following the announcement by Governor Gavin Newsom that, beginning March 1, at least 10 percent of vaccine supply would be dedicated to education workers – including teachers, paraprofessionals, bus drivers, child care workers and site-based administrators – the state outlined its plan to execute on the Governor’s commitment.

Business Impact: The business community has long advocated for the safe reopenings of schools. While many schools have set up the necessary infrastructure to open, vaccine distribution has delayed the process. The faster we can vaccinate our teachers, the safer schools will be. 

Budget Bills AB 84/SB 95: Additional Paid Sick Leave Mandate 

A new COVID-19 paid sick leave mandate under budget bills AB 84/SB 95, would require businesses of all sizes to provide an additional 80 hours of paid leave to employees. This is a new leave in addition to any leave that was paid in 2020. There are no tax credits or other financial relief included in the bill to help offset the cost of the leave. Additional information on the bill can be found here.

Business Impact: Employers cannot continue to be the safety net of the state. The new requirements under this bill would apply retroactively to January 1, 2021 and would be additive to the many leaves businesses already provide. Small businesses cannot take this extra cost and it will essentially negate the grant programs for small businesses that were recently passed as part of the Budget. The Chamber is monitoring these bills and actively meeting with state legislators to let them know about our opposition.

State Legislative Hearings  

The State resumes its budget and legislative hearings this week. For a full list of Assembly hearings, please see here and for a full list of Senate hearings, please see here. 

 

Los Angeles City Update

Second Consideration of Additional Pay to Grocery and Drug Retail Workers 

Second Reading of and voting on the ordinance relative to adding Article 9 to Chapter XX of the Los Angeles Municipal Code to provide additional pay to grocery and drug retail workers on the frontlines of COVID-19.

The LA City Council preliminarily approved its Hazard Pay Ordinance last week which provides for the following: 

• Increase of $5 per hour 
• Defines large grocers as those with at least 300 employees nationwide and ten employees on site 
• Allows for an employer already providing “Hazard Pay” to be credited 
• Private right of action 
• Sunsets after 120 days 

The LA County Hero Pay Ordinance was also approved last week. The ordinance provides for the following: 

• Increase of $5 per hour 
• Applies to unincorporated areas of LA County 
• Rebuttable presumption and private right of action 
• Sunsets in 120 days 

The L.A. Area Chamber has been advocating against these ordinances and submitted letters to LA City Council Members and Board of Supervisors’ offices, and for the public record. Chamber staff has also spoken with many of the offices directly, and testified at meetings held by the Board and City Council.  

Business Impact: To protect their workers, customers, and businesses, grocers and drug retail stores have invested billions in equipment, enhanced safety protocols, extra pay and bonuses, and additional health benefits for grocery workers. This ordinance targets grocery and drug retail stores that have complied with safety ordinances, drives up grocery costs for families, and puts more financial strain on struggling grocery stores and their employees at the worst time. Also, of significant concern is that the County ordinance includes rebuttable presumption and Private Right of Action language, which would further threaten businesses and lead to more closures.  

Renewing and Expanding Project Roomkey 

Report pursuant to a motion by Council Members Bonin and Raman on opportunities for renewing and expanding Project Roomkey, and ways to improve the Project's operations and participation. 

Business Impact:  It is important to renew and expand the successful operations of Project Roomkey to increase homeless housing not only for those that are unhoused, but for our communities and businesses, but  commandeering hotels and motels is not appropriate under any circumstances. We are opposed to that consideration and have sent a coalition letter expressing our concerns. Project Roomkey's success depends upon willing private sector partners, a nimble government response, and highly skilled homeless services providers. 

Expansion of Fire District 1 

A motion by Council Members Blumenfield and Rodriguez on the expansion of Fire District 1, a tool that exists to address increased fire risk in our dense urban communities and is already in place in the City's Building Code.  

Business Impact: The business community is committed to fire safety and sustainable land use practices, but the Chamber is concerned that this motion is based on the false premise that wood construction today creates an elevated wildfire risk. In reality wood construction is very safe and banning it will dramatically reduce housing production in the City and continue to price hardworking Angelenos out of the LA housing market 

Protecting 30 Percent of Land and Waters for Open Space and Conservation 

Report pursuant to a resolution by Council Members Ryu and Koretz relative to establishing the City's support for any legislation and/or administrative action that would protect 30 percent of land and waters for open space and conservation. 

Business Impact: While the business community is supportive of open space and conservation, the implementation of this type of legislation based on the Governor’s Executive Order should not unnecessarily limit development especially considering there is a housing shortage, homelessness crisis, and pandemic facing Los Angeles. 

Comprehensive Fee Update 

Reports from the Department of City Planning and City Administrative Officer relative to a Comprehensive Fee Update to more accurately reflect the cost of providing planning and land use services, based on new trends and data collected. 

Business Impact: The Department of City Planning believes an update of fees will more accurately reflect the cost of project planning services and significant financial impacts from the COVID-19 pandemic, but these fees may become a significant burden on landlords that have also been hit hard by the pandemic.  

Penalties for Unpermitted Remodels, Additions, and Demolition of Buildings and Structures 

Report pursuant by a motion by Council Members O’Farrell and Koretz relative to penalties imposed for unpermitted remodels, additions, and demolition of buildings and structures. Adopt enhanced non-monetary penalties and increased fines via civil penalties tied to a property's fair market value. 

Business Impact: Whereas the business community follows the permitting process, enhanced penalties, restrictions, and fines may overly punish property owners who are struggling during the pandemic and  stifle the development of affordable housing during a housing shortage. 

Creation of a Renters Relief Registry 

Report pursuant to a motion by Council Members De Leon and Bonin on the creation of a Renters Relief Registry, including funding and staffing needs to maintain a standing registry to meet the permanent citywide need for rental assistance.  

Business Impact: In order to better prepare for the City’s housing needs, it must acknowledge that there is a permanent citywide need for rental assistance and create a standing registry for residents who need help. Residents signing up for the registry should be able to securely request help from the City. In return the City will be able to triage assistance to those who will need the most help paying back rent to avoid future eviction. 

Emergency Renters Assistance Subsidy Program 

Report pursuant to a motion by Council Members Martinez and O’Farrell relative to the Emergency Renters Assistance Subsidy Program including a framework to assist tenants and small landlords and funding to implement the program.  

Business Impact: Given the new federal legislation, the City needs to provide a new framework for the Renters Assistance Program that will build on the Council’s previous program, provide assistance to low-income tenants, and help stabilize small property owners who are also struggling. 

Resolution about Providing Increased State Funding of Project Homekey 

Resolution by Council Members O’Farrell and Martinez relative to establishing the City's position regarding legislation and/or administrative action that would provide for increased State funding of Project Homekey or from the $1.9 trillion-dollar American Rescue Plan or any other source of funding available. 

Business Impact: Expanding Project Roomkey will benefit communities in Los Angeles, provide housing for the unhoused, and create environments that are more conducive to prosperous businesses as they continue to operate and reopen. Project Roomkey has been successful and allowed the City to get units online quickly and efficiently, but the program must partner with willing property owners. 

Updating the Adaptive Reuse Ordinance 

Report pursuant to a motion by Council Members Koretz and Harris-Dawson on updating the Adaptive Reuse Ordinance to allow eligible conversions by-right beyond those located in the six Specific Plan Incentive areas. 

Business Impact: Vacant and underutilized commercial buildings within the city should become viable candidates for affordable housing, and this can be done by expanding the Adaptive Reuse Ordinance to allow eligible conversions by-right beyond those located in the six Specific Plan Incentive areas. This will preserve a neighborhood's character by keeping existing buildings intact and repurpose them as living space, which will expand the supply of affordable housing units.    

City's Short-Term Rental Ordinances 

Report pursuant to a motion by on the progress of implementing and enforcing the City's Short Term Rental Ordinances and advise if more remedies are needed to ensure Short Term Rental companies and users abide by established law. 

Business Impact: LA City Council legalized some short-term rentals, such as extra rooms in their homes, or their full primary residence when they are out of town, on sites like Airbnb. This legislation explicitly prohibited property owners from renting out multiple units in apartment buildings and extra houses they may own for short-term stays. This ordinance would preserve units designed for long-term housing that not only benefits tenants who are dealing with a housing shortage, but also other lodging businesses that have to abide by many regulations to provide safe lodging for visitors. 

Ordinance for Rent Stabilization Ordinance Units 

Report pursuant to a motion by Council Members Martinez and Cedillo on the creation of a Citywide one-to-one replacement Ordinance for RSO units, with an analysis of replacing the units on site and having the developer pay into a fund as well as its impact on existing inclusionary housing programs. 

Business Impact: One to one replacement of rent-controlled units is important, but we must not stifle development. The preservation of affordable housing is important, but the city may need to revisit the impacts on developers and projects before requiring that RSO units be replaced at a one-to-one ratio citywide.  

Comprehensive Crisis Response Strategy and a Right to Housing Framework 

Report pursuant to a motion by Council Members O’Farrell and Ridley-Thomas relative to recommended local initiatives that align with the Comprehensive Crisis Response Strategy, and necessary resources for establishing a Right to Housing framework within the City.  

Business Impact: The business community supports increased housing for the homeless and addressing the structural disparities that disproportionately affect historically oppressed people. The business community understands the need for these initiatives, but in doing so the City should definitely partner with property owners and businesses and not limit development, increase red tape, or look to commandeer property. The business community has supported and invested in the fight to address the homelessness crisis and should be included as willing partners. 

Project Roomkey Eligibility for Federal Emergency Management Agency (FEMA) reimbursement 

A motion by Council Members Krekorian and Martinez on Project Roomkey eligibility for FEMA funding. Seek written guidance from FEMA on the timeline for when the city will receive reimbursements for these expenses. 

Business Impact: Expanding Project Roomkey with federal funds will benefit communities in Los Angeles County, provide housing for the unhoused, and create environments that are more conducive to prosperous businesses as they continue to operate and reopen. It will also allow for Los Angeles County to provide more housing without cutting more into its budget, so it will be better prepared to fund urgent priorities as we look to economically recover from this ongoing pandemic.