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.


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