May 7, 2020
Federal Update
The House is expected to vote soon on phase III of the stimulus package, H.R. 748 following a 96-0 vote in favor from the Senate. The bill is extensive and represents the largest economic stimulus in recent history, including the actions taken in 2008 and 2009 to address the Great Recession. Coverage of the bill may be found here, and a Chamber analysis that hits on major points can be found here. Small Businesses may find this breakdown helpful.
On Monday, the Federal Housing Finance Authority published a press release announcing that Fannie Mae and Freddie Mac will be offering multifamily property owners mortgage forbearance if they agree to suspend all evictions for tenants unable to pay rent due to the coronavirus.
President Trump announced this week that he would delay the implementation of the REAL ID Act, which was scheduled to be in effect on October 1, 2020. The new in-effect date was announced this morning and is October 2021.
The Chamber has created a document summarizing HR 6201: The Families First Coronavirus Relief Package (FFCRA), signed by President Trump on March 18th. This document outlines the specific requirements targeted at employers. This document can be used as a guideline, but should not constitute legal or formal HR advice. You can view the document here and more information on the requirements of FFCRA can be found here.
The Department of Labor has created this guide for employers and another for employees with regard to FFCRA. Feedback is also being accepted online at https://ffcra.ideascale.com through March 29th.
International Update
On March 20, the Mexican and U.S. federal governments announced the suspension of all non-essential travel across our southern border to help control the spread of coronavirus. Examples of non-essential travel include tourism and recreation. Commercial trade and cargo will NOT be impacted. Our cross-border workforce performing essential operations will continue to have access to the ports of entry. These restrictions went into effect at 12:01 AM on Saturday, March 21.
Guidance on these new restrictions will follow the Federal Register Notice issued for the northern border, available here. However, CBP reports elements of the notice will not be overly prescriptive in order to provide officers discretion and flexibility in applying the guidance. Please visit the official DHS web and social media pages for official updates on port operations.
We recommend employers performing essential operations provide a letter or documentation for their workforce to help identify essential personnel at the ports of entry and in adherence to the State of California’s stay-at-home executive order.
The Federal Motor Carrier Safety Administration has issued a 50-state waiver to the Hours of Service Rule for commercial vehicle drivers transporting goods related to the COVID-19 outbreak. It will last until the end of the day on April 12 or until the end of the emergency. The full emergency declaration can be found here.
Customs and Border Protection (CBP) will approve on a case by case basis additional days for payment of estimated duties, taxes and fees on imports due to the COVID-19 emergency. Requests should be directed to the Office of Trade, Trade Policy and Programs at OTentrysummary@cbp.dhs.gov
Actions Taken by Mexico’s Government: Mexico’s federal government issued nation-wide recommendations that include observing social distance, avoiding crowds and unnecessary travel, and suspending events for over 100 people. President Lopez Obrador announced there will be an economic support package for SME’s and individuals in economic distress. This will include facilitating credit and financing opportunities for both SME’s and individuals that qualify.
The State of Baja closed bars, movie theatres, museums, event venues, churches, casinos, gyms, and strongly recommended residents stay home, avoid crowds, and suspend meetings of 10 or more people. In addition, Baja Governor Jaime Bonilla reiterated the federal order to suspend all non-essential travel across the border and added this should be the general rule for any travel within Mexico. In order to ensure uninterrupted water service, Governor Bonilla also called for local utilities to suspend late water payment penalties.
The State Commission for Consumer Protection (PROFECO) is working with local authorities to enforce regulations and penalize markets and companies that have increased the price of basic grocery items.
State Update
Last Thursday, the Governor issued a “stay home except for essential needs” Executive Order effective immediately and in place until further notice. The full Executive Order can be viewed here. More information on this policy can be viewed here.
The Department of Finance has issued a memo to the heads of all state agencies and departments advising them of the Department’s review of budget requests for the 2020-21 fiscal year. Simply put, departmental budgets will be reevaluated in the “context of a workload budget” reflecting the dramatically reduced economic activity in the state as a result of coronavirus.
Californians now have until July 15 to file their income taxes. The State Franchise Tax Board has postponed the tax deadline due to the COVID-19 pandemic. More information on the extension here. Members of the state delegation are requesting County action to waive penalties for late payment for property taxes, as it is made clear that the authority to do so is a local one. The Chamber also sent a letter requesting the state revisit its discussions around using its authority to extend the property tax deadline similar to actions taken with regard to income taxes.
While the state legislature has been adjourned until April 13, it is increasingly unclear whether the legislature will return on or before that date. Instead, most information indicates that the legislature will be asked to limit legislation to coronavirus-specific bills, and a limited budget will go into effect. This will undoubtedly impact other Chamber priorities for 2020, such as housing production and childcare, but we believe is necessary to sufficiently tackle the myriad impacts of the virus.
On Wednesday evening, Governor Newsom announced that four of the nation’s largest banks, in addition to 200 state-chartered banks, have agreed to a 90-day grace period for mortgage payments by Californians who are impacted by the COVID-19 crisis without any impact on credit. More information on the announcement and details on how to apply for relief can be found here.
Finally, late last week the Chamber signed on to a letter with over 30 other advocacy organizations urging the Governor to provide additional support to California’s small businesses during this unprecedented time. Specifically, the letter requested the State allocate $17 million of supplemental disaster appropriation funding to expand no-cost advising, training, and support for small businesses and establish and convene a COVID-19 Resiliency Taskforce to plan a long-term strategy for small business recovery. Read the letter here.
Local Update
Yesterday, the City voted to approve a temporary moratorium on residential and commercial evictions for renters through May 31. The policy requires that renters provide landlords with documentation of loss of employment, substantial reduction in employment, loss of income, or increase in expenses caused by the COVID-19 pandemic. Evidence of loss of income or increased expenses can be provided in the form of business records, bank statements, employer pay stubs, letter from employer, or copy of increased medical expenses. Tenants are required to notify their landlords on or before the day the rent is due and provide documentation within one week of notification. Please note that this is a rent deferral action, not rent forgiveness. Renters will have up to six months to pay landlords all unpaid rent. Included in this proposal is a request that City staff work with banks and lenders to halt foreclosures of properties whose owners are unable to make mortgage payments.
Additionally, the Council approved a motion to create a Small Business Relief Fund (SBRF) that will provide over $6 million worth of grants, forgivable loans, and low-interest loans to qualifying small businesses. Eligibility criteria include that the business employ 100 employees or fewer, be located within the City of San Diego and have a City of San Diego Business Tax Certificate, be operational for at least six months, and provide proof of economic hardship due to COVID-19. Once a complete application is submitted, the City estimates that qualified business owners will receive these funds within approximately 14 days. More information on the SBRF can be found here. The application portal will go live on Friday, March 27.
On Tuesday, the County Board of Supervisors voted to defer fees from the Department of Environmental Health for restaurants and bars affected by orders related to coronavirus. This action allows for “annual food facility health permit fees, late fees, and plan check correction fees associated with plans submitted prior to March 1, 2020” to be deferred for up to six months.
The Board also voted to adopt a temporary moratorium on evictions (both residential and commercial) within the unincorporated areas of the County.
Parks: This week, the state, county, and city temporarily closed parks to varying degrees. On Tuesday, the County amended its public health order allowing local jurisdictions and municipalities to shut down all public beaches if they could not enforce social distancing guidelines. Later that evening, Mayor Faulconer also announced the closure of all city beaches, parks, boardwalks, trails, bays, and lakes until further notice.
For any questions or needs that are directly related to your council office, you can access a list of San Diego City Council office direct contacts here. Find your city council district here.