Orange County Business Journal

It's show time for Gov. Gray Davis.

The next several weeks could go a long way in showing how the freshman governor balances his self-proclaimed political moderation against a Democratic legislative agenda that many business groups warn would hinder and maybe eventually reverse California's economic recovery.

Thus far, Davis has been able to put off decisions, save for signing a bill on overtime that was sought by organized labor and opposed by business interests.

Also on the agenda are about a dozen other bills opposed by business groups but sought by key Davis political allies trial lawyers, environmentalists and organized labor.

The measures would limit the ability of companies to have material sealed in court cases to keep it out of the hands of competitors or potential future litigants; expand environmental rules; and increase unemployment insurance.

One is SB 1237, authored by state Sen. Martha Escutia, D-Whittier, which would allow third-party suits against insurance companies. The measure would reverse state Supreme Court rulings that prohibited such third-party lawsuits.

A study sponsored by one business group said the bill would increase premiums across the board by 14.7 percent.

Davis has said nothing publicly on SB 1237. His spokeswoman, Linda Chou, said the governor hasn't taken a position.

But behind the scenes, the bill is such a hot potato that it hasn't taken the normal route to the governor's desk. Typically, after a piece of legislation is approved by the Legislature, it goes to "enrollment" for two or three days to be officially prepared for signing, after which the governor has 12 days to approve it.

Although SB 1237 passed the Legislature on July 12, it has been held in enrollment for the past six weeks a sign that the governor might not sign the bill as written and that it will go back to the Legislature for amendments.

"Everybody's trying to figure out what the governor wants to do with it," said Fred Main, vice president of the California Chamber of Commerce.

Lobbying behind the scenes is fierce. The bill is being pushed by California Consumer Attorneys, an organization of trial lawyers. Opposing it are the insurance industry and other business groups. "Everybody's in play on it," said Main.

Another contentious bill is SB 320, which would increase workers' compensation benefits and expand rehabilitation programs.

Critics of the proposal contend that it would increase costs by an estimated 33 percent and mostly benefit trial lawyers. The result would be higher premiums for employers.

The bill, sponsored by state Sen. Hilda Solis, D-La Puente, is currently before the Assembly Appropriations Committee. Main said his group was reconciled to some increase in benefits but in return wanted to get further reforms.

"There will be some increase, and what we're negotiating is some reform to make the system more efficient," he said.

The bills that make it out of committee must be approved on the floor of either the state Senate or Assembly by Sept. 10. There are already about 1,500 bills on the floors of the two bodies. Once the session ends, which is expected to happen Sept. 10, the governor has 30 days to sign bills that receive approval.

By this time of year, all the legislation under consideration has already passed the Senate or the Assembly and is in front of the other house.

Among other bills being closely watched by business groups:

? SB 1254: Sponsored by state Sen. Adam Schiff, D-Burbank, it creates the "Sunshine in the Courts Act" to provide access to confidential agreements reached between private parties in lawsuits. The bill prohibits secrecy agreements that conceal evidence of financial fraud, defective products or an environmental hazard. Business lobbyists argue that this would make all agreements open to public scrutiny and damage high-tech and biotech companies that are trying to protect trade secrets.

? AB 633: Sponsored by Assemblyman Darrell Steinberg, D-Sacramento, it's designed to curb abuses of wage laws in the garment industry. But some believe it could affect all companies because it provides incentives for wage claimants to seek civil penalties for labor code violations. It's expected to reach the governor.

? AB 1127: Also sponsored by Steinberg, it holds employers liable for the actions of independent contractors and subcontractors. It also establishes what the chamber said are "unfair, unreasonable and confusing revisions to occupational health and safety laws."

? SB 546: Sponsored by Solis, it would increase the maximum weekly unemployment insurance benefit from $230 to $300 a week while linking all future increases to the Consumer Price Index. Currently, employers are taxed on the first $7,000 of wages earned by each of their employees.

? SB 1149: Sponsored by state Sen. Jackie Speier, D-San Francisco, it would expand the Family Care and Medical Leave Act. Currently, companies with fewer than 50 employees don't have to follow the act, but the proposed law would lower the exemption to 20 employees. It could have trouble getting out of the Assembly because of its impact on small businesses.

? AB 858: Sponsored by Assemblywoman Sheila James Kuehl, D-Santa Monica, it prohibits an employer from requiring or requesting an employee to agree to waive jury trial, civil rights or anti-discrimination rights as a condition of employment or continued employment.

A recent amendment would exempt those making over $150,000. A proposed amendment would also exempt people who receive stock options, a move that would please computer companies.

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