We're now working on three budget requests and eight state bills that are crucial for nonprofits right now; find them below along with other pending state and federal legislation. Items with an " * " were added 4-13-22.

How does CalNonprofits decide what to support and oppose? Each year, CalNonprofits board and staff review budgetary and legislative activity through the lens of our policy goals, and with a focus on addressing inequities and supporting efforts to bring a more equitable distribution of resources to our communities and to our sector. (See our Policy Advocacy Framework.)

Budget requests we are supporting

Nonprofit COVID Relief

Inclusive tax relief for nonprofits - SB 114, signed into law earlier this year, requires employers with more than 25 employees to provide five additional paid sick days for employees who contract COVID or are caring for family members who are sick with the virus. The bill did not include a relief package to offset the costs this policy imposes on small businesses and nonprofits. While small businesses can take income tax deductions for these costs, that remedy does not work for tax-exempt nonprofits. CalNonprofits, with 17 other organizations, sent a letter to the Governor and legislative and budget leaders on March 11 (link to letter) asking for meaningful and accessible tax relief for nonprofits as part of California's ongoing COVID recovery programs. We are following up the letter with meetings with legislative leaders to discuss a possible payroll tax credit, which would provide relief for nonprofits as we continue to respond to the needs of our communities. A March 29 Bloomberg article on California tax relief plans includes our payroll tax credit idea.

*Addressing the workforce shortage in homeless services programs: 
A budget request by Assemblymember Luz Rivas would fund improvements to contracting processes, create career pathways and training, and provide grants to nonprofits to promote "job quality."

Outreach about PSLF (Public Service Loan Forgiveness):
The CA Department of Financial Protection and Innovation is requesting $10 million to do outreach, and sub-grant funds to nonprofits to do outreach, on the federal PSLF program and waiver. Because we know that many nonprofit employees have significant student loans, we are part of a coalition of organizations working to bring better information and support to student loan borrowers. In 2020 we supported a bill (AB 376 – Stone) that provides an ombudsperson and other resources for student borrowers in California. (Learn more about our work on the student debt crisis here.)

Funding a community-based approach to health equity and racial justice:
A statewide coalition of nonprofit advocates that engage in public health advocacy on behalf of underserved communities is requesting at least $100 million a year to support public-private partnerships to improve a wide range of public health outcomes in communities with less access to resources. The communities themselves will identify the issues they want to address with the funding; issues can include food security, environmental justice, community safety, and more. This broad definition of public health outcomes means that many types of nonprofits can support local efforts should the Health Equity and Racial Justice Fund get a budget allocation this year.

The state Legislative Analyst Office (LAO) estimated in their January report that the Governor has $29 billion in surplus to allocate in this fiscal year’s budget process. Not included in the $29 billion in surplus is about $13 billion set aside, through a constitutional mandate, for schools and community colleges.

One of the wildcard variables in the state budget this year is the state appropriations limit (SAL) requirement, also known as the Gann limit. The Gann limit puts parameters around how surplus dollars above a certain threshold can be spent. There are several ways the legislature can deal with the Gann limit: lower the amount of money collected as proceeds of taxes, increase exclusions like grants to local government or capital outlay projects (e.g. roads or broadband), or split excess revenues between additional school spending and taxpayer rebates. We don’t yet know which way the legislature will go.

State bills

The following are three state bills we currently are supporting and one we are watching; more are under review.

We are supporting:

*Improving election information language access – AB 1631 (Cervantes) will increase equitable access to election information by requiring each county registrar of voters to hire election officials who speak a non-English language (and English) if >3% of voters in the district speak that other language.

*Required notification of pending voter registration cancellation – AB 2841 (Low) will protect certain vulnerable voters from losing their voting rights, by requiring notification to them if their voter registration will be cancelled because of a no-competency finding by the courts and reinstating voter rights when a person is found to be competent.

*Strengthening the workforce pipeline for human services nonprofits – AB 2222 (Reyes) will provide grants to post-grad students who do their supervised work experience (towards licensing) at nonprofits.

Improving access to state grants – 

*SB 963 (Laird) updates the funding priorities for the Museum Grant Program to include, among other things, grants for organizations that serve low-income communities and preserve cultural sites and artifacts. The bill is accompanied by a $125 million budget proposal to support the California Cultural and Historical Endowment (CCHE), which administers the grant program.

*SB 1123 (Caballero) will increase the ability of nonprofits to get state emergency resilience grants by requiring technical assistance for applicants and a transparent application process.

Fair compensation on grants & contracts – SB 1069 (Umberg) aims to align state reimbursement rates for indirect costs (aka administrative or overhead costs) with that of the federal government. The goal is fair compensation for nonprofits for the full costs of providing services on state grants. This reimbursement issue is one of several government contracting issues that a coalition of nonprofits, organized by CalNonprofits, is hoping to address through a letter to the administration and through additional legislation still in the works.

  ACTION:   Stay tuned for more information on this topic, and to sign onto a letter.

Retirement savings option for workers – SB 1126 (Cortese) would expand the CalSavers requirement that employers offer a retirement savings option to employees. (The current requirement applies only to employers with five or more employees; the new law expands that requirement to employers with more than one employee.) Employers are not required to contribute to the employees' savings; they can use CalSavers or another savings program. We believe it is important for nonprofit employees to have the opportunity, through their employer, to save for retirement. (You can learn more about CalSavers as an option for nonprofits at our upcoming April 27 webinar.)

Continued grant program for high-risk organizations – AB 1664 (Gabriel) would continue indefinitely the CA State Nonprofit Security Grant Program, which provides grants to increase physical security for nonprofits at high risk for violent attacks or hate crimes. The program is currently scheduled to end in 2025.

We are watching to see how this bill evolves:
Loss of nonprofit status for acts of treason – SB 834 (Wiener) would allow the Franchise Tax Board to revoke a nonprofit’s tax-exempt status if the Attorney General finds that the organization is actively engaged in conspiracy or acts of treason, and other similar illegal activities. This bill is in response to the January 6, 2021 attacks on the U.S. Capitol. We acknowledge the intent of the bill but are concerned about nonprofits being singled out. We are in communication with Senator Wiener’s office with regard to our concerns.

Federal bills

The Accelerating Charitable Efforts (ACE) Act – We have written about this federal bill quite a bit and are still tracking and supporting both the Senate and House versions. No new news on this front. But we are hoping that movement at the federal level on the issue of donor-advised fund (DAF) reform will help inform our state-level efforts TBD to bring greater transparency to DAFs and a DAF-distribution policy that gets these much-needed resources to our communities more quickly. We also recently created a set of Principles for the Reform of Policies Governing Philanthropy and encourage you to offer feedback on them.

The Nonprofit Sector Strength and Partnership Act has not been introduced yet, but this bill, which CalNonprofits is supporting, would provide a White House Office on Nonprofit Sector Partnership, a federal advisory board made up of nonprofit leaders, quarterly economic data on the nonprofit sector as done for other industries, a reduction of paperwork for nonprofits who fundraise in multiple states, and other pro-nonprofit provisions.

*Federal Volunteer Driver Appreciation Act – will support volunteerism by raising the volunteer mileage rate (currently 14 cents/mile) to the same rate as the business rate (currently 58.5 cents/mile), for purposes of income-tax deductions.

We will be sure to send updates as we continue to review and take positions on 2022 bills and budget asks. If you have any questions about our policy work, please don’t hesitate to reach out to me at lucyc@calnonprofits.org.