Members of the National Federation of Independent Business (NFIB) California Leadership Council are preparing for a day of advocacy at the state Capitol on August 26. Their efforts will focus on key legislative issues as the California State Legislature approaches the end of the first half of its 2025-2026 session, which concludes September 12.
Among the bills that NFIB is actively lobbying is Senate Bill 690, supported by NFIB. According to a letter from the organization, this bill “is necessary to stop the thousands of shakedown letters and lawsuits against California businesses of all sizes for typical business activities, like website analytics or online advertising that are already governed by the California Consumer Privacy Act (CCPA).” In contrast, NFIB opposes Senate Bill 512, stating in a letter that it “would authorize voters in certain districts to impose transportation-related retail transactions and use taxes through initiative measures,” and that doing so “undermines the two-thirds vote requirement for special taxes.”
Of more than 2,800 bills listed on the Legislature’s website, NFIB has identified 59 as being most significant—either helpful or harmful—to small businesses. Most have either been set aside or placed in suspense files within both legislative chambers. Suspense files act as holding places for bills lawmakers may not wish to address immediately; some could be reconsidered next year without recorded votes.
The process known as ‘gut and amend’ continues to play a role in Sacramento’s legislative maneuvering. This tactic involves replacing a bill’s original content with unrelated provisions after it has cleared initial deadlines. Politico’s California Playbook recently reported on Assemblymember Gail Pellerin’s proposal regarding Supreme Court judges’ terms being replaced with language related to Governor Newsom’s redistricting plan.
NFIB State Director John Kabateck commented on previous instances where gut-and-amend tactics affected small businesses: “The business community was expecting this to happen, so it wasn’t a complete surprise,” said Kabateck in a news release circulated statewide. “The most important thing everyone needs to know is the state’s unemployment insurance trust fund is fast approaching insolvency, and with it the ability to pay current unemployment benefits.”
A recent report from State Controller Malia Cohen indicated that California’s net liability for retiree health and dental benefits rose to $91.5 billion as of June 30, 2024. The figure represents obligations owed for post-employment benefits earned by state retirees and their dependents.
Dan Walters of CalMatters wrote that ongoing economic challenges are putting pressure on California’s budget, which faces an annual shortfall estimated between $10 billion and $30 billion due to spending outpacing revenue growth.
In regulatory developments, law firm Nielsen Merksamer announced its new ‘Regulatory Weekly File,’ summarizing activity across state agencies. In early 2025 alone, over 200 new regulations were proposed by various departments including Fish and Game Commission and Department of Corrections and Rehabilitation.
On national matters, NFIB launched advertisements thanking Congress for making permanent the 20% Small Business Tax Deduction. NFIB President Brad Close stated: “For years, NFIB’s members have spoken out about the importance of making the 20% Small Business Tax Deduction permanent…This huge victory is the direct result of the broad support small businesses have in Washington and the tireless advocacy of small businesses all across America.”
Additionally, episode 68 of NFIB’s “Small Business Rundown” podcast featured discussions about labor unions’ impact on small business operations.
Upcoming dates include Leadership Day at the Capitol on August 26; August 29 marks fiscal committees’ deadline for reporting bills; Labor Day falls on September 1; interim recess begins September 12; and October 15 is when signed or vetoed legislation must be finalized by Governor Newsom.
