Compared with previous years, California businesses aren’t facing the prospect of dozens of new regulations being drawn up from new laws passed by the Legislature, thanks to a series of vetoes by Gov. Arnold Schwarzenegger. The governor rejected all of the high-priority “job-killer” bills singled out by business as being especially onerous, including a package of bills requiring all new buildings to meet green standards.

However, Schwarzenegger did sign a handful of bills that will entail new regulations for businesses. The law grabbing the most headlines was Assembly Bill 1108, which bans the manufacture, sale and distribution of toys and child care products containing more than trace concentrations of phthalate chemicals, which according to studies cited by some health experts and activist groups have been linked to reproductive problems and some cancers.

Manufacturing interests say the science is inconclusive on the health impacts of the widely used chemical compounds and that requiring manufacturers to switch to other alternatives is costly and not without its own risks.

“This is another California-only mandate with no scientific basis, giving companies another reason not to produce or manufacture in the state,” said Gino DiCaro, spokesman for the California Manufacturers and Technology Association. “Companies will now have to spend money testing alternatives that may themselves carry risks.”

Some companies, including toy maker giant El Segundo-based Mattel Inc. have already phased out phthalates, while other manufacturers could be hit hard.

But the number of companies using phthalates is relatively limited, at least when compared with the host of companies that will be hit by another law that Schwarzenegger signed this month: AB 833, which lowers the threshold for reporting emissions and discharges of toxic chemicals.

AB 833 was crafted in response to a decision by the U.S. Environmental Protection Agency last year to raise the reporting threshold from 500 pounds of total annual emissions of a toxic chemical to 2,000 pounds. That move had been blasted by the environmental community as letting polluting companies off the hook. AB 833 brings the threshold back to the level prior to the EPA ruling, at least for companies in California.

But manufacturers were not so happy with the outcome.

“The EPA decision was beneficial not only because it spared small companies the expense and hassle of reporting small releases but also because it encouraged big companies to get their emissions below that threshold,” DiCaro said. “Now, with AB 833, big companies will no longer be able to get under the threshold, so you lose that benefit. And small companies will once again not be able to absorb the cost of reporting these small discharges.”

One other bill Schwarzenegger signed that will have an impact on businesses is AB 1073, which lifts the cap on the number of post-surgery treatments such as chiropractic visits that injured workers can receive. The 2004 workers’ compensation reforms had set a limit of 24 post-surgery treatments.

Boards Cut

When it comes to regulatory boards in California, the trend is typically upwards, both in terms of number of boards and the size of their staffs. But not this year. Thanks to a last-minute foul-up, the state Legislature failed to re-authorize five consumer-oriented boards that oversee vocational nursing, barbering and cosmetology, speech-language pathology, dental hygiene and court reporters.

Legislation had been crafted to re-authorize four of the five boards, but a dispute over a prison guards contract stalled final negotiations on the bill; by the time that dispute was resolved, the clock had run out on the legislative session. As for the fifth board the one overseeing dental hygienists Gov. Arnold Schwarzenegger had earlier vetoed legislation that would have extended its life beyond next year.

All five boards will cease to exist at the end of June.

New Diesel Regs

Following on the hotly-contested decision to limit diesel emissions from construction equipment and other off-road vehicles, the California Air Resources Board this month released a preliminary proposal to regulate diesel emissions from an estimated 1.7 million on-road commercial and fleet vehicles everything from concrete mixers and fuel tankers to trash trucks and passenger buses.

In its proposed regulation, ARB staff lays out timetables for retrofitting or replacing diesel engines, which would reduce oxides of nitrogen emissions by as much as 85 percent. The first deadline would be the end of 2010, when pre-1998 engines must be retrofitted with diesel filters or replaced to meet emission levels of engines built in 2007. Even stricter standards would be in place by the end of 2020.

ARB staff estimates that the cost of retrofitting engines would range from $9,000 to $20,000, but it does not quantify the cost of replacing engines. The draft also doesn’t quantify the “emissions benefits,” saying that calculation depends on the final language of the regulation and choices made by diesel vehicle operators.

Stiff opposition is expected from the trucking industry.

Staff reporter Howard Fine can be reached at (323) 549-5225, ext. 227 or at [email protected]