SACRAMENTO—Business Bills Confront Final Hurdles in Sacramento

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The Democratic National Convention wasn’t the only political hot spot for business leaders last week. Some of them were focused on Sacramento, where their attention will remain as the Legislative session winds down.

One key deadline is Aug. 25, by which time Senate and Assembly committees must approve any bill that could require state spending. It is at this juncture that many bills crash and burn.

Both houses must approve all bills by Aug. 31, and then Gov. Gray Davis has 30 days to sign or veto them.

Roger Soucy, human resources director for Irvine-based Sonnet Technologies Inc., is closely following SB 996, a bill that would increase benefits to recipients of workers’ compensation.

“We work extremely hard to keep workers’ comp in check, yet the minor injuries we see cause the premiums to go up,” said Soucy.

He said Sonnet, which employs 60 people, has already seen its premiums increase. “This bill concerns us because workers’ comp is getting more expensive as a business expense,” he said.

This time of year is the home stretch for final approval of bills that have been working their way through the system. Everything from an increase in unemployment insurance to more rights for unions to how companies can monitor employees’ e-mail is being debated in the halls of the Legislature.

Democrats overwhelmingly control both houses. Last year, there were several bills that worried business groups, but Gov. Davis vetoed the more controversial ones. This sent a signal to Democratic legislators, and there are fewer bills that worry business groups this time around.

The biggest debate is over the bill to increase workers’ compensation payouts. Negotiations among business groups, trial attorneys and unions have stalled. Business groups are betting that Davis won’t sign any bill because of the lack of consensus, and that the debate will continue next year.

But supporters of the bill, trial lawyers and unions, are pushing it forward anyway, in the hope that Davis will be angered by business groups’ refusal to compromise, and sign it.

“The employers are unwilling to negotiate,” said Marc Marcus, president of the California Applicant Attorneys’ Association. “They feel they have no reason to negotiate because they believe Gov. Davis will veto it.”

Marcus said the bill would increase premiums during the next five years from 1.8 cents for every dollar of payroll to about 2 cents, an increase of 10 percent.

“In 1976, it was 2.3 cents and in 1993, it was over 4 cents per dollar,” he noted. “This is not something that would harm the California economy.”

However, employer groups are estimating the increase would be more than twice Marcus’ figure. And it would come on top of steep premium increases already instituted by insurance companies this year.

Davis is not expected to veto all the bills being opposed by business groups. But the fate of many bills remains unclear, because Davis’ practice has been to keep publicly quiet until a bill reaches his desk.

Business groups such as the Employers Group and the California Chamber of Commerce are opposing or trying to soften the effects of several bills. They include:

– SB 546, which would increase the top weekly payout for unemployment insurance from $230 to $380 by 2003. The expected effect would be to drain the state’s unemployment fund and increase by 21 percent the tax collections on unemployment insurance.

– AB 1889, which calls for prohibiting any recipient of state funds or resources from using those funds to discourage unionization.

– AB 2509, which would give far more authority to the labor commissioner, an appointed position, to decide issues such as wage disputes.

– AB 2222, which would expand the definitions of physical and mental disabilities.

– AB 2537, which calls on employers to discipline workers who commit acts of domestic violence outside the workplace and grants protected leave status to employees who are victims of domestic violence.

– SB 1822, which mandates that employers warn employees if the company monitors their e-mail.

– SB 1865, which calls for raising civil and criminal penalties for anyone who violates state or local air-pollution rules, including holding managers liable for actions of their employees, regardless of whether the employees act with the manager’s knowledge. This bill is expected to be softened by the time the Legislature approves it.

– AB 2112, which is intended to reduce litigation related to new homes by offering a 10-year warranty and then arbitration before a homeowner can turn to litigation. This bill is supported by the California Chamber of Commerce.

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