If it’s not enough that gasoline and basic materials costs are going through the roof, government regulators are either about to impose or approve a series of fee and rate hikes that will hit local businesses hard.

The state Public Utilities Commission is set to vote Thursday on Southern California Edison’s request for rate hikes totaling 1.5 percent for the second half of 2006, on top of 13 percent in rate hikes already approved for this year.

This move caps a complex two-year rate case in which Edison and the PUC went back and forth over the utility’s revenue requirements. It also comes on top of emergency rate increases granted earlier this year to offset higher natural gas costs.

Edison serves customers throughout most of L.A. County, except for cities like Los Angeles, Burbank and Pasadena that have their own utilities. But business owners who live in Los Angeles may not escape higher energy costs. An outside audit of the L.A. Department of Water & Power recommended a surcharge to fund the use of more “green power” energy sources. The same audit recommended a 7 percent hike in water rates over two years for DWP customers.

Meanwhile, the South Coast Air Quality Management District is proposing to increase fees for all businesses required to obtain permits from the agency to offset a budget deficit of up to $7 million for the next fiscal year beginning July 1.

Two proposals are on the table for the AQMD’s June meeting. One would increase most fees by 3.7 percent for 2006-07, the same amount as the Consumer Price Index. The other would hike most fees 10 percent for each of the next three years.

Arbitration Assault


Business groups are decrying the latest effort by lawmakers to expand the right of employees to sue employers.

Last week, Assemblyman Lloyd Levine, D-Van Nuys, unveiled AB 2371, which would bar employers from enforcing arbitration agreements after a worker files a discrimination or harassment suit. Those arbitration agreements generally say that if an employee files a lawsuit instead of going to arbitration, the employer can fire the worker.

In announcing his bill, Levine said that arbitration proceedings are biased in favor of employers.

“An employer, with far more resources than their employee, will often bear the entire cost for hiring and paying an arbitrator,” he said. “Then, the arbitrator is supposed to render an unbiased decision between the defendant, who provides his income and the plaintiff, who is seeking redress from the person who provides his income.”

But employer groups oppose the bill, saying this is the first step towards banning the use of arbitration outright.

“This bill effectively bans the use of arbitration,” said Michael Shaw, assistant state director for the National Federation of Independent Business, which represents small businesses. “Small employers don’t have the ability to fight protracted legal battles, which is why they use arbitration in the first place. This continues the pattern that the Legislature has embarked upon of stripping rights away from employers.”

The California Manufacturers and Technology Association also opposes the bill.

Drug Tax


State tax regulators are poised to give Irvine-based Allergan Inc. which makes the popular Botox drug a break.

The state Board of Equalization next month will likely approve a proposal to exempt from sales taxes Botox and all other prescription drugs that are used to treat illnesses, regardless of whether those drugs are also used for cosmetic purposes.

Besides benefiting Allergan, physicians prescribing these drugs and patients that purchase them will also reap tax savings.

Under existing law, the state does not impose sales taxes on prescription drugs like penicillin or medical devices like dialysis machines that are used to treat illnesses. But prescription drugs or medical devices used for cosmetic purposes are taxable. The confusion is when the same drugs or medical devices are used both to treat illnesses and for cosmetic purposes, such as Botox.

Construction Permits


State regulators are considering changing the way safety permits are issued to general contractors and subcontractors at construction sites where major buildings are put up or demolished.

Current regulations allow for the state Division of Occupational Safety and Health to issue a single permit for each project. But according to a staff report, in recent years permits had been issued to general contractors or to subcontractors and it became increasingly unclear who was in charge of safety precautions at the site.

Toxic Cleaning


The California Air Resources Board next month will take up new rules to reduce emissions of perchloroethylene from dry cleaners.

Perchloroethylene, or “perc” as it’s commonly known, is the chemical solvent most dry cleaners use, but it’s also been designated as a cancer-causing, toxic air contaminant. Local air quality regulators have already enacted regulations to require most dry cleaners in the L.A. area to phase out the use of perc over the next decade.

The Air Board regulations would require dry cleaners that open new facilities to install advanced ventilation systems and other pollution control devices on machines using perc.

Existing dry cleaning facilities would have to install these ventilation systems and devices on their machines starting in 2008, with deadlines of 2009 for facilities within 100 feet of homes or schools and 2010 for facilities more than 100 feet from homes or schools.

The proposals are set to be considered at the Air Board’s May 25 meeting.

Staff reporter Howard Fine can be reached by phone at (323) 549-5225, ext. 227, or by e-mail at

[email protected]

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