With the focus on the special election in November, fewer bills that warranted red-flag attention from business groups passed the state Legislature this session.

Of the 45 measures that business interests tagged as "job killer" bills earlier this year, only eight made it through to Gov. Arnold Schwarzenegger's desk. And Schwarzenegger is expected to veto most, if not all, of these bills.

"Many of the bills that were bad for business were pared down or put on hold," said Michael Shaw, assistant state director for the National Federation of Independent Business.

Of the bills that passed, one would increase the minimum wage, and several would expand the right of employees to sue their employers or add new health care mandates.

To the degree that any of these bills get signed into law, they could slow hiring around the state, Shaw said.

But business groups are mostly happy. They credited moderate Democrats with sidetracking a number of bills costly to business earlier in the session, during a brief phase in which Democrats sought to be more cooperative with the governor. During talks over the state budget, Democratic leaders decided that appearing to be uncooperative would open Democrat lawmakers to charges of obstructionism, just as the campaign over a slate of initiatives for the Nov. 8 special election was getting started.

That brief period of cooperation ended in August, however, as Democrats saw the slip in poll ratings for Schwarzenegger and the initiatives he's backing on the Nov. 8 ballot, and decided to press their advantage.

Labor groups, meanwhile, said that rather than face more Schwarzenegger vetos, they introduced fewer sweeping bills and focused on the special election.

"We started with a thinner agenda that focused on expanding already existing programs, like the minimum wage," said Angie Wei, legislative director for the California Labor Federation. "We didn't introduce any sweeping new programs like SB 2," she said, referring to the mandatory employer-paid health insurance program passed two years ago but rejected in a referendum by voters last year.

The few major bills that did make it through the Legislature have prompted fierce lobbying of Schwarzenegger by both business and labor groups.

Assembly Bill 48, by Assemblywoman Sally Lieber, D-Mountain View, would increase the state's minimum wage to $7.75 an hour from $6.75 in two years and then index the minimum wage to inflation.

Proponents say the bill would bring California more in line with minimum wage levels in surrounding states and would prevent the need for future major jumps. Opponents, who generally oppose any increase in the minimum wage, say this bill would require automatic increases even when the economy is in a downturn.

"There's absolutely no flexibility to deal with difficult economic conditions," Shaw said.

Earlier this month, Schwarzenegger indicated through spokespeople that he would likely veto the bill.

Status unsure
Schwarzenegger hasn't tipped his hand on several bills that would either expand the rights of workers to sue employers or increase penalties for labor violations; he is, however, widely expected to veto most of these measures.

Among them: AB 169, which would increase penalties for gender pay equity violations; SB 174, which would allow employees to file class-action lawsuits against employers over alleged minimum wage or overtime violations; and AB 875, which would require referral of alleged labor code violations to state tax agencies for audits.

A similar bill, AB 89, would require applicants to taxpayer-financed benefits programs to disclose the names of their employers. Labor lobbyist Wei said this bill targets companies like Wal-Mart Stores Inc., which has been accused of providing inadequate employee benefits (charges that Wal-Mart denies).

Also on the health care front, SB 576 would mandate health insurers to cover smoking cessation treatments, while SB 399 would require insurers to pay for treatment costs at levels above Medi-Cal reimbursement rates.

And AB 391 would provide unemployment insurance benefits to workers who are unemployed due to a strike. "In effect, employers will be forced to subsidize a strike against their own company if this passes," said California Chamber of Commerce spokeswoman Sara Lee.

Several bills that employers targeted for defeat were stopped in the legislative session, including one that would have required a reassessment of commercial property if even a portion of that property changed ownership (instead of the current 51 percent).

And a handful of bills that employer groups supported passed the Legislature this session. Among them, AB 489 requires the ports of Los Angeles and Long Beach to track the movement of cargo during off-peak hours, and SB 157 allows employers to make installment payments on their tax bills to the state Franchise Tax Board.

But several business-supported bills failed, including one that would have allowed employers to set up flexible work schedules, and another to allow major manufacturers to choose their energy providers.

"While you can say there weren't quite as many bills bad for business this time around, barely any that we supported made it through. That made this year just as bad as the last several years," said Gino DiCaro, spokesman for the California Manufacturers and Technology Association. "We can only hope that the governor will veto the bills that did get through."

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