Bill Text: CA AB3098 | 2023-2024 | Regular Session | Amended
Bill Title: California Agriculture Relief Act: severe heat impacts.
Spectrum: Partisan Bill (Republican 1-0)
Status: (Introduced) 2024-04-01 - Re-referred to Com. on AGRI. [AB3098 Detail]
Download: California-2023-AB3098-Amended.html
|
Amended
IN
Assembly
March 21, 2024 |
CALIFORNIA LEGISLATURE—
2023–2024 REGULAR SESSION
Assembly Bill
No. 3098
| Introduced by Assembly Member Gallagher |
February 16, 2024 |
LEGISLATIVE COUNSEL'S DIGEST
AB 3098, as amended, Gallagher.
California Small Agricultural Business Drought and Flood Relief Grant Program. Agriculture Relief Act: severe heat impacts.
Existing law, until January 1, 2027, establishes the California Small Agricultural Business Drought and Flood Relief Grant Program in the Office of the Small Business Advocate, under the authority of its director, to provide grants to qualified small agricultural businesses that have been affected by severe drought and flooding, as prescribed. flooding. Existing law requires the office to allocate grants to qualified small agricultural businesses that meet the requirements of the program, upon appropriation of grant funds by the Legislature. Existing law defines a “qualified small business” as a business that, among
other things, has been affected by severe drought according to the United States Department of Agriculture drought monitor or is within or serves a county that has a state or federal disaster declaration for flooding. Existing law defines “decline in annual gross receipts or gross profits” for purposes of the program to mean a decrease in annual gross receipts or gross profits when comparing the 2022 taxable year to the 2019 taxable year.
This bill would make nonsubstantive changes to those provisions.
This bill, the California Agriculture Relief Act, would rename the program as the California Small Agricultural Business Disaster Relief Grant Program and would expand the purpose of the program to
include the provision of grants to qualified small agricultural businesses that have been affected by severe drought, heat, or flooding. The bill would include within the definition of a “qualified small business” one that has been affected by the September 2022 heat wave, as specified. The bill would revise the definition of “decline in annual gross receipts or gross profits” to mean a decrease in annual gross receipts or gross profits when comparing the 2022 or 2023 taxable year to the 2019 taxable year. The bill would make conforming changes. The bill would require funding appropriated related to severe heat impacts to be administered, to the extent feasible, by allocating 20% of grant funds in one or more rounds of grants for small and socially disadvantaged farmers who are qualified small agricultural businesses and by allocating the remainder to qualified small agricultural businesses most impacted by severe heat, including those that are identified using specified codes.
Digest Key
Vote: MAJORITY Appropriation: NO Fiscal Committee:Bill Text
The people of the State of California do enact as follows:
SECTION 1.
This act shall be known, and may be cited, as the California Agriculture Relief Act.SEC. 2.
The Legislature finds and declares all of the following:(a) The agricultural industry is vital to the health of California’s economy, producing over 400 crops and employing over 400,000 people.
(b) California is a state that feeds the nation, growing over one-third of the country’s vegetables and three-quarters of the country’s fruits and nuts.
(c) The 2020–22 drought has had severe economic impacts on the agricultural
industry, with an estimated 395,000 acres of farmland fallowed and notable decreases in the production of many commodities. These impacts will likely intensify due to California’s rigid regulatory environment.
(d) The COVID-19 pandemic interrupted supply chains, with agriculture being one of the most severely affected markets, including farms, processors, handlers, retail outlets, and trade. The industry has still not recovered from these impacts.
(e) High-input costs combined with inflation and regulatory expenses have put the agricultural industry in a precarious situation.
(f) Walnut, tomato, and almond prices have been significantly impacted by the COVID-19 supply chain crunch and extreme drought, heat, and flood conditions, driving prices to record lows and jeopardizing producers’ continued operation.
SEC. 3.
The heading of Article 9.5 (commencing with Section 12100.100) of Chapter 1.6 of Part 2 of Division 3 of Title 2 of the Government Code is amended to read:
Article
9.5. California Small Agricultural Business Drought and Flood Disaster Relief Grant Program
SEC. 4.
Section 12100.100 of the Government Code is amended to read:12100.100.
(a) The Legislature finds and declares that it is in the public interest to assist small agricultural businesses in the State of California that are impacted by severe(b) This article shall govern the procedure by which qualified small businesses may obtain grant relief from the California Small Agricultural Business Drought and Flood Disaster
Relief Grant Program.
SEC. 5.
Section 12100.101 of the Government Code is amended to read:12100.101.
For the purposes of this article, unless the context requires otherwise:(a) “Applicant” means any California taxpayer, including, but not limited to, an individual, corporation, nonprofit organization, cooperative, or partnership, who submits an application for the program.
(b) “California Small Agricultural Business Drought and Flood Disaster Relief Grant Program” or “program” means the grant program established by this article.
(c) “CalOSBA” or “office” means
the Office of the Small Business Advocate within the Governor’s Office of Business and Economic Development.
(d) “Decline in annual gross receipts or gross profits” means a decrease in annual gross receipts or gross profits when comparing the 2022 or 2023 taxable year to the 2019 taxable year, as documented by tax returns or Internal Revenue Service Form 990.
(e) “Director” means the Director of the Office of the Small Business Advocate.
(f) “Fiscal agent” means a nonprofit or private institution capable of online and mobile application development, customer support, document validation, impact analysis, grant agreements, and awards disbursement, as well as
and marketing, engagement, and strategic partnerships for implementation.
(g) “Full-time employee” has the same meaning as in subdivision (c) of Section 515 of the Labor Code.
(h) (1) “Qualified small business” means a business that meets all of the following criteria, as confirmed by the office or fiscal agent through review of revenue declines, other relief funds received, credit history, tax returns, payroll records, and bank account validation:
(A) Is a sole proprietor, independent contractor, C-corporation, S-corporation, cooperative, limited liability company, partnership, nonprofit, or limited partnership, domiciled in California, with 100 or fewer full-time employees in the 2022 and 2023 taxable years.
(B) Began operating in the state prior to before January 1, 2020.
(C) Is currently active and operating.
(D) Has been affected by severe any of the following:
(i) Severe drought according to the
United States Department of Agriculture drought monitor or is within or serves a county that has a state or federal disaster declaration for flooding.
monitor.
(ii) A state or federal disaster declaration for flooding applicable to the county that the business serves or in which the business is located.
(iii) The September 2022 heat wave.
(E) Provides organizing documents, including a federal tax return or Internal Revenue Service Form 990, and a copy of official filings with the Secretary of State or with the local municipality, as applicable, including, but not limited to, articles of incorporation, certificate of organization, fictitious name of registration, or government-issued business license.
(2) Notwithstanding paragraph (1), “qualified small
business” shall does not include any of the following:
(A) Businesses without a physical presence in the state.
(B) Governmental entities, other than Native American tribes, or elected official offices.
(C) Businesses primarily engaged in political or lobbying activities, regardless of whether the entity is registered as a 501(c)(3), 501(c)(6), or 501(c)(19) nonprofit entity or other nonprofit entity.
(D) Passive businesses, investment companies, and investors who file a Schedule E on their tax returns.
(E) Financial institutions or businesses primarily engaged in the business of lending, such as banks, finance companies, and factoring companies.
(F) Businesses engaged in any activity that is unlawful under federal, state, or local law.
(G) Businesses that restrict patronage for any reason other than capacity.
(H) Speculative businesses.
(I) Businesses with any owner of greater than 10 percent of the equity interest in it who meets one or more of the following criteria:
(i) The owner has, within the prior three years, been convicted, or had a civil judgment rendered against the owner, or has had commenced any form of parole or probation, including probation before judgment,
for commission of fraud or a criminal offense in connection with obtaining, attempting to obtain, or performing a federal, state, or local public transaction or contract under a public transaction, violation of federal or state antitrust or procurement statutes or commission of embezzlement, theft, forgery, bribery, falsification or destruction of records, making false statements, or receiving stolen property.
(ii) The owner is presently indicted for, or otherwise criminally or civilly charged by, a federal, state, or local governmental entity, with commission of any of the offenses enumerated in clause (i).
(J) Affiliated companies, as described in Section 121.103 of Title 13 of the Code of Federal Regulations, as it read on August 1, 2022.
(K) Other businesses to be determined by the office consistently with the
requirements and intent of this subdivision.
SECTION 1.SEC. 6.
Section 12100.103 of the Government Code is amended to read:12100.103.
(a) The California Small Agricultural Business(b) The program shall be under the direct authority of the director.
(c) The purpose of the program is to provide grants to qualified small agricultural businesses that have been affected by severe drought
drought, heat, and flooding.
(d) The office may contract with a fiscal agent, or amend an existing contract with a fiscal agent to meet the requirements of this article, to carry out the programs at a rate of no more than 5 percent of administrative and program funds appropriated by the Legislature for purposes of this article.
(e) Subject to appropriation of funds for grants by the Legislature, the office shall allocate grants to qualified small agricultural businesses that meet the requirements of this article in one or more rounds.
(f) (1) The office shall conduct marketing and outreach for equitable awareness and the distribution of grants that includes all of
the following:
(A) Engaging multiple partners, including, but not limited to, business and nonprofit associations, chambers of commerce, economic development corporations, and other nonprofit mission-based organizations, and organizations with nonprofit expertise.
(B) Providing access to technical assistance services covering all counties in the state and in multiple languages to reach non-English-speaking individuals in all counties in the state.
(C) Building awareness, including, but not limited to,
including those in underserved and underbanked communities, by collaborating with multiple community groups to distribute program information, provide applicant access through multiple branded partner portals, or advertising or social media outreach through owned, paid, or earned media channels.
(2) For the qualified small agricultural business portion of the program, the office shall conduct outreach in advance of open application rounds for a minimum of three weeks prior to before opening each application round. Following each application round, the fiscal agent shall assess service gaps and address outreach deficiencies as
necessary to improve program equity.
(3) The office or fiscal agent shall provide information on how to connect to additional support resources to each applicant, whether or not the applicant is selected as a grant recipient.
(g) Program grant funds allocated in the Budget Act of 2022 (Chapters 43, 45, and 249 of the Statutes of 2022) related to drought impacts shall be administered as follows:
(1) A total of 10 percent of grant funds shall be held for qualified small agricultural businesses that do not file 2022 tax year returns until 2024.
(2) A total of 20 percent of
grant funds shall be allocated in one or more rounds of grants for small and socially disadvantaged farmers who are qualified small agricultural businesses pursuant to the following:
(A) Grants shall be awarded in the following amounts:
(i) Twenty thousand dollars ($20,000) for applicants with a decline in annual gross receipts or gross profits of 10 percent or more and less than 30 percent.
(ii) Sixty thousand dollars ($60,000) for applicants with a decline in annual gross receipts or gross profits of 30 percent or more and less than 40 percent.
(iii) Eighty thousand dollars ($80,000) for applicants with a decline in annual gross receipts or gross profits of 40
percent or more and less than 50 percent.
(iv) One hundred thousand dollars ($100,000) for applicants with a decline in annual gross receipts or gross profits of 50 percent or more.
(B) The office or fiscal agent shall allocate up to 5 percent of program funds to nonprofit entities, tribal governments, resource conservation districts, or other entities with experience providing technical assistance to small farms or socially disadvantaged farmers to provide services to help maximize the participation of small farms or socially disadvantaged farmers in the one or more rounds of grants authorized by this subdivision.
(C) For the purposes of this subdivision:
(i) “Small farm” has the meaning described in the publication Updating the ERS Farm Typology, dated April 2013, issued by Economic Research Service of the United States Department of Agriculture.
(ii) “Socially disadvantaged farmer” has the meaning provided by subdivision (b) of Section 512 of the Food and Agricultural Code, as it read on August 1, 2022.
(D) For the purposes of this subdivision, the office or fiscal agent may contract with other fiscal agents to provide technical assistance.
(E) The office shall consult with the Farm Equity Advisor at the Department of Food and Agriculture for purposes of implementing this
subdivision.
(3) (A) The remaining percentage of grant funds shall be allocated to qualified small agricultural businesses most impacted by severe drought, including, but not limited to, those that are identified as in the following 2022 North American Industry Classification System codes:
(i) Codes beginning with 115 – Support Activities for Agriculture and Forestry.
(ii) Codes beginning with 311 – Food Manufacturing.
(iii) 424910 – Farm Supplies Merchant Wholesalers.
(iv) 444240 – Nursery, Garden Center, and Farm Supply Retailers.
(v) 484220 – Specialized Freight (except Used Goods) Trucking, Local (local agricultural products trucking).
(vi) Codes beginning with 1121 – Cattle Ranching and Farming.
(B) Grants shall be awarded in the following amounts:
(i) Sixty thousand dollars ($60,000) for applicants with a decline in annual gross receipts or gross profits of 30 percent or more and less than 40 percent.
(ii) Eighty thousand dollars ($80,000) for applicants with a decline in annual gross receipts or gross profits of 40 percent or more and less than 50 percent.
(iii) One hundred thousand dollars ($100,000) for applicants with
a decline in annual gross receipts or gross profits of 50 percent or more.
(4) Grant moneys awarded under this subdivision shall only be used for costs to maintain the recipient business through the drought, including the following:
(A) Employee expenses, including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums.
(B) Working capital and overhead, including rent, utilities, mortgage principal, and interest payments, but excluding mortgage prepayments, and debt obligations, including principal and interest, incurred before the onset of severe drought.
(C) Any other drought-related expenses not already covered through grants, forgivable loans, or other relief through state, county, or city programs.
(h) Program grant funds allocated in the Budget Act of 2023
(Chapters 12, 38, and 189 of the Statutes of 2023) related to storm flooding impacts shall be administered as follows:
(1) Grant funds shall be allocated to qualified small agricultural businesses impacted by flooding including, but not limited to, those that are identified as in the following 2022 North American Industry Classification System codes:
(A) Codes beginning with 115 – Support Activities for Agriculture and Forestry.
(B) Codes beginning with 1121 – Cattle Ranching and Farming.
(C) 424910 – Farm Supplies Merchant Wholesalers.
(D) 444240 – Nursery, Garden Center, and
Farm Supply Retailers.
(E) 484220 – Specialized Freight (except Used Goods) Trucking, Local (local agricultural products trucking).
(2) Three tiers of grant amounts shall be relative to revenue levels for qualified small agricultural businesses, to be determined by CalOSBA.
(3) Grant moneys awarded under this subdivision may be used for costs to maintain the recipient business through flooding, including, but not limited to, the following:
(A) Employee expenses, including payroll costs, health care benefits, paid sick, medical, or family leave, and insurance premiums.
(B) Working capital
and overhead, including rent, utilities, mortgage principal, and interest payments, but excluding mortgage prepayments and debt obligations, including principal and interest, incurred before the onset of flooding.
(C) Any other flooding-related expenses not already covered through grants, forgivable loans, or other relief through state, county, or city programs.
(i) Funding appropriated for purposes related to severe heat impacts shall be administered as follows:
(1) To the extent feasible, 20 percent of grant funds shall be allocated in one or more rounds of grants for small and socially disadvantaged farmers who are qualified small agricultural businesses pursuant to the following:
(A) Grants shall be awarded in the following amounts:
(i) Twenty thousand dollars ($20,000) for applicants with a decline in annual gross receipts or gross profits of 10 percent or more and less than 30 percent.
(ii) Sixty thousand dollars ($60,000) for applicants with a decline in annual gross receipts or gross profits of 30 percent or more and less than 40 percent.
(iii) Eighty thousand dollars ($80,000) for applicants with a decline in annual gross receipts or gross profits of 40 percent or more and less than 50 percent.
(iv) One hundred thousand dollars ($100,000) for applicants with a decline in annual gross receipts or gross profits of 50 percent or more.
(B) (i) The office or fiscal agent shall allocate up to 5 percent of program funds to nonprofit entities, tribal governments, resource conservation districts, or other entities with experience providing technical assistance to small farms or socially disadvantaged farmers to provide services to help maximize the participation of small farms or socially disadvantaged farmers in the one or more rounds of grants authorized by this subdivision.
(ii) The office or fiscal agent may contract with other fiscal agents to provide technical assistance.
(2) (A) The remaining percentage of grant funds shall be allocated to qualified small agricultural businesses most impacted by severe heat, including, but not limited to, those that are identified as in the following 2022 North American
Industry Classification System codes:
(i) Codes beginning with 115 – Support Activities for Agriculture and Forestry.
(ii) Codes beginning with 311 – Food Manufacturing.
(iii) 424910 – Farm Supplies Merchant Wholesalers.
(iv) 444240 – Nursery, Garden Center, and Farm Supply Retailers.
(v) 484220 – Specialized Freight (except Used Goods) Trucking, Local (local agricultural products trucking).
(vi) Codes beginning with 1121 – Cattle Ranching and Farming.
(B) Grants shall be awarded in the following amounts:
(i) Sixty thousand dollars ($60,000) for applicants with a decline in annual gross receipts or gross profits of 30 percent or more and less than 40 percent.
(ii) Eighty thousand dollars ($80,000) for applicants with a decline in annual gross receipts or gross profits of 40 percent or more and less than 50 percent.
(iii) One hundred thousand dollars ($100,000) for applicants with a decline in annual gross receipts or gross profits of 50 percent or more.
(3) Grant moneys awarded under this subdivision shall only be used to help cover losses related to the heat-related disaster in order to maintain the recipient business, including the following:
(A) Employee expenses, including payroll costs,
health care benefits, paid sick, medical, or family leave, and insurance premiums.
(B) Working capital and overhead, including rent, utilities, mortgage principal, and interest payments, but excluding mortgage prepayments, and debt obligations, including principal and interest, incurred before the onset of severe heat.
(C) Any other heat-related expenses not already covered through grants, forgivable loans, or other relief through state, county, or city programs.
(4) The office shall consult with the Farm Equity Advisor at the Department of Food and Agriculture for purposes of implementing this subdivision.
(5) For the purposes of this subdivision, both of the following definitions apply:
(A) “Small farm” has the meaning described in the publication Updating the ERS Farm Typology, dated April 2013, issued by Economic Research Service of the United States Department of Agriculture.
(B) “Socially disadvantaged farmer” has the meaning provided by subdivision (b) of Section 512 of the Food and Agricultural Code.
(i)
(j) Applicants may apply for relief grants under subdivisions (g) and (h).
(g), (h), and (i).
(j)
(k) (1) Applicants may self-identify race, gender, and ethnicity. Within 30 business days of the close of the application period, the office shall post the aggregate data, as available, including by legislative district. Within 45 business days of the close of the application period, the office shall post information on grant amounts actually awarded as it becomes available. All information shall be posted on the office’s internet website and the office shall provide an electronic copy of the information to the
relevant fiscal and policy committees of the Legislature.
(2) On or before December 31, 2026, the office shall report to the Legislature the number of grants and dollar amounts awarded for each of the following categories:
(A) Race and ethnicity.
(B) Women-owned.
(C) Veteran-owned.
(D) Located in a disadvantaged community pursuant to paragraph (5) of subdivision (h) of Section 12100.83.
(E) Located in a rural area.
(F) County.
(G) State Senate district.
(H) State Assembly district.
(3) Information report
reported to the Legislature pursuant to this subdivision shall be provided in conformance with the requirements of Section 9795.
(k)
(l) The fiscal agent, or the office if it does not contract with a fiscal agent, shall issue Internal Revenue Service Forms 1099 to grant recipients and otherwise adhere to tax reporting guidelines, regardless of whether the grants are excluded from gross income for purposes of the Personal Income Tax Law (Part 10 (commencing with Section 17001) of Division 2 of the Revenue and Taxation Code) or the Corporation Tax Law (Part
11 (commencing with Section 23001) of Division 2 of the Revenue and Taxation Code).
SEC. 7.
Section 12100.975 of the Government Code is amended to read:12100.975.
(a) The California Small Business and Nonprofit COVID-19 Supplemental Paid Sick Leave Relief Grant Program is hereby created within GO-Biz to be implemented by CalOSBA.(b) The program shall be under the direct authority of the advocate.
(c) The purpose of the program is to assist qualified small businesses and nonprofits, incurring costs for COVID-19 supplemental paid sick leave pursuant to Sections 248.6 and 248.7 of the Labor Code.
(d) CalOSBA or its fiscal agent shall consult with local, regional, state, and federal public and private entities, as applicable, that share a similar mission to support the needs of small
businesses and nonprofits in California.
(e) CalOSBA may contract with a fiscal agent, or amend an existing contract with a fiscal agent to meet the requirements of this article, to carry out the programs, at a rate of no more than 5 percent of administrative and programs funds appropriated by the Legislature for the purposes of this article.
(f) CalOSBA shall allocate grants to qualified small businesses and nonprofits that meet the requirements of this article.
(g) Grant moneys awarded under this section shall only be for reimbursement of COVID-19 Supplemental Paid Sick Leave provided between January 1, 2022, and December 31, 2022. Applicants shall provide proof of employee payroll records that verify all COVID-19 Supplemental Paid
Sick Leave provided by the applicant pursuant to the requirements of Sections 248.6 and 248.7 of the Labor Code that match the amount of the grant request.
(h) Grants to qualified small businesses or nonprofits shall be no more than the actual costs incurred for supplemental paid sick leave provided between January 1, 2022, and December 31, 2022, with a maximum grant amount per applicant of fifty thousand dollars ($50,000).
(i) The total amount an applicant can request under the program is an amount not to exceed the sum of fifty thousand dollars ($50,000).
(j) If General Fund savings are achieved due to increases in federal funds funds,
including, but not limited to, federal funds becoming available to support the California Small Agricultural Business Drought and Flood
Disaster Relief Grant Program, the Department of Finance shall increase the appropriation to the California Emergency Relief Fund for purposes of this article by up to seventy million dollars ($70,000,000). The Department of Finance may transfer this sum from the General Fund to the California Emergency Relief Fund for this purpose.
(k) Any unused money remaining in the California Emergency Relief Fund, transferred for the purpose of this article, shall be transferred to the General Fund by June 1, 2024.
(l) (1) CalOSBA shall conduct marketing and outreach for equitable awareness and the distribution of grants that includes all of the following:
(A) Engaging multiple partners, including, but not limited to, business and nonprofit associations, chambers
of commerce, economic development corporations, and other nonprofit mission-based organizations, and organizations with nonprofit expertise.
(B) Providing access to technical assistance services covering all counties in the state and in multiple languages to reach non-English-speaking individuals in all counties in the state.
(C) Building awareness throughout the state, including in underserved and underbanked communities, by collaborating with multiple community groups to distribute program information, applicant access through multiple branded partner portals, and advertising and social media outreach through owned, paid, and earned media channels.
(2) The fiscal agent shall provide information on how to connect to additional support resources to each applicant whether or not the applicant is selected as a grant
recipient.
(m) (1) Applicants may self-identify race, gender, and ethnicity. Within seven business days of the close of each application period, CalOSBA shall post the aggregate data, as available. Within 15 business days of the close of each application period, CalOSBA shall post data by legislative district, as available. Within 45 business days, CalOSBA shall post the actual awarded information, as available. All information shall be posted on the GO-Biz internet website and GO-Biz shall provide an electronic copy of the information to the relevant fiscal and policy committees of the Legislature.
(2) CalOSBA shall report to the Legislature the number of grants and dollar amounts awarded for each of the following categories:
(A) Race and ethnicity.
(B) Women owned.
(C) Veteran owned.
(D) Located in a rural area.
(E) County.
(F) State Senate district.
(G) State Assembly district.
(H) Nonprofits, including by geography.
(n) The fiscal agent shall issue Forms 1099 and otherwise adhere to tax reporting guidelines regardless of whether the grants are excluded from gross income for purposes of the Personal Income Tax Law (Part 10 (commencing with Section 17001)) or the Corporation Tax Law (Part 11 (commencing with Section 23001) of Division 2 of the
Revenue and Taxation Code).
