California Gov. Gavin Newsom signed three laws on Wednesday intended to boost struggling small businesses in the state.

The move was intended to make California small businesses encouraged to hire more workers.

Each law received bipartisan support with only light scrutiny by the California legislature before it adjourned last week, said a Los Angeles Times report.

"Small businesses are feeling vulnerable to the pressures of this pandemic," Newsom noted. He said the pressure is so high for them that many owners believe they will close in the "not too distant future."

He cited a survey that found 44% of businesses are considering closing down. "That is a jaw-dropping percentage of small businesses that are looking at the prospect of a financial cliff," he said.

What do the laws entail?

Newsom detailed each bill. The first one ensures that coronavirus loan funds are not treated as taxable income.

Small businesses will get reduced state taxes if they have more working employees between July 1 and December 1 than they did between the months prior.

The loan forgiveness plan was put to protect business owners against any tax increase. This could be caused by the use of federal Paycheck Protection Program funds.

For the second bill it will accelerate the use of various bond funds as part of the state budget. But it will include various proposals that are not related to helping businesses.

The third bill will give businesses with 100 workers or less will get a $1,000 credit for the net increase of each new worker, reported Associated Press.

The laws will only apply to businesses that lost at least half of their usual profits from April to June this year. In a Sacramento Bee article, Newsom said this component was needed to make sure that the money goes to businesses that are actually struggling. It will also only apply to those that hire workers, not contractors.

The credit is priced at a $100 million cap statewide or $100,000 per business. All of the credit is only usable for five years and can apply it to any taxes owed, like sales and use taxes.

Small businesses under large ones will not be qualified for the tax breaks.

All bills were easy for Newsom to embrace. He has to sign or veto about 400 bills by the end of the month.

Sen. Anna Caballero, a co-author of the tax credit bill said small businesses are "looking for hope."

"They're looking for leadership, and they're looking for the opportunity to be able to access resources to make them successful," she added.

Exact Cost of Tax Cut Bills

The exact cost of the bill and, whether or not it will work is still unclear. Jay Chamberlain of the California Department of Finance said in a committee hearing that uncertainty was one of the reasons for the $100 million cap.

Chamberlin is the chief of the financial research unit of the California Department of Finance.

"We don't really have real good data on how many businesses are going to meet the criteria for this credit," he said.

The program could however benefit as much as 1,000 California companies.

Check these out!

No Trick-or-Treat: LA County Health Officials Announce Strict Halloween Rules
California National Forests to Close Due to Extreme Fire Threat
Newsom Declares State of Emergency in Five California Counties