Legislature enacts major changes for business
Sacramento Business Journal - by Kathy Robertson Staff Writer
Dennis McCoy | Sacramento Business Journal
Starting pay for workers like Jamie Tritten at Naked Lounge in midtown is pegged above minimum wage. One new labor law will increase the minimum to $8 an hour by 2008.
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Politics packed the usual punch in the Legislature this year, but most agree there was some law-making of substance at the Capitol in what's usually considered the pre-election "silly season."
Even with the typical tendency toward legislative inaction as statewide political races shape up, the 2006 session brought major changes for businesses, from how they handle air pollution to the bottom line on minimum wage workers' paychecks.
Perhaps the most far-reaching development was legislation intended to cut greenhouse-gas emissions, a contributor to global warming, 25 percent by 2020. California was the first state to enact such a cap and did so over the fierce objection of dozens of business groups that fear it will hurt chances of attracting or retaining industry.
Gov. Arnold Schwarzenegger, who pressed for the legislation, said California's leadership in greenhouse-gas emissions could influence other states and nations to follow its path.
The most significant new labor law in California will hike the minimum wage for an estimated 1.4 million California workers to $8 an hour by 2008. The third try in three years by Democratic leaders to raise the rate was opposed by business, but groups grudgingly came on board after a compromise scrapped automatic future increases tied to inflation.
As usual, business leaders and organized labor trumpeted their successes, but they kept post-session whining to a minimum.
"Out of 40 job-killer bills, we prevented three-quarters of them from getting to the (governor's) desk -- or modified them so we were no longer opposed," said Vince Sollitto, a spokesman for the California Chamber of Commerce.
Organized labor also generally gave the session a grudging thumbs up. "Overall, I think we made some progress for workers," said Angie Wei, a lobbyist for the California Labor Federation. "Given we have a Republican governor, we thought we did OK."
There were other legislative battlefields with victors and losers:
- Workers' compensation was mostly left alone, which is what business leaders wanted.
- A hard-fought new law would let phone companies compete in the cable-television market through statewide franchises, a move fiercely opposed by cable-system operators.
- Nine international trade bills were collapsed into one compromise bill that is considered a first step toward getting the state government back in the trade-promotion business for the first time since it disbanded the California Technology, Trade and Commerce Agency three years ago.
- Although "Start with the Kids" was the healthcare mantra for 2006, efforts to expand health insurance to all children in the state were largely punted to the ballot box. One such football was Proposition 86, which would impose an additional $2.60 tax per pack of cigarettes, with some of the funding going toward health insurance for children.
- Small businesses got lawmakers to pay enough attention to their own woes to call for a study of how regulations disproportionately affect them -- and to establish an ombudsman program in state agencies to better explain the rules.
"All in all, the legislative session turned out pretty well for small business," said Michael Shaw, assistant state director of the National Federation of Independent Business.
A heated issue
The emissions cap was the most significant energy and environmental bill of the year. Assembly Bill 32 put California on center stage in the debate over greenhouse-gas pollution.
Dozens of business groups opposed it.
"California already has some of the highest energy prices in the country, and the highest in the West," Sollitto said. "We expect energy prices will rise even further as a result of this bill."
The task of figuring out how to measure and reduce emissions falls to the state Air Resources Board. Big greenhouse-gas emitters, such as owners of power plants and oil refineries, would have to start reporting their emissions by Jan. 1, 2008. It's widely expected the bill will lead to a system of credits for companies that reduce carbon-dioxide emissions, allowing them to sell the credits to other businesses that want to build or expand in the state.
A second bill addressing greenhouse-gas emissions, SB 1368, would block electric utilities from signing long-term contracts with coal-fired power plants. The California Municipal Utilities Association opposed it because it gives the Energy Commission authority to approve or deny contracts between local government agencies and private power suppliers.
"That's a huge precedent," said Jerry Jordan, executive director of the association.
California is also the first state to enact a bio-monitoring program, a move that could have long-term consequences for businesses that use certain chemicals. The passage of SB 1379 means people will soon know the levels of 148 types of synthetic chemicals in the bodies of Californians who volunteer for testing. The bill requires the state Department of Health Services to design the program and provide public access to the information it collects.
Pills, quakes and charity
In other healthcare developments, a new prescription-drug program would force drug companies to discount their prices for 6 million low-income Californians, but there were no broad new healthcare mandates on businesses.
Hospitals got relief from strict state earthquake-safety rules. SB 1661 gives hospitals two more years to complete the work if they have development plans for seismic upgrades by 2013 but are unable to get them done in time.
Consumer groups applauded AB 774, which requires hospitals to maintain an understandable written policy about discounted payments and charity care for low-income patients who have no insurance, and SB 1312, which authorizes the state to levy penalties on hospitals if a situation occurs that is likely to cause serious injury or death.
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