FYI.  Indicates where CMTA is on key bills working their way through California's wacked out Legislature.
 
Best,
Jeff
-----Original Message-----
From: Geri L. Royer [mailto:groyer@cmta.net]
Sent: Thursday, September 06, 2001 4:30 PM
To: undisclosed-recipients
Subject: CMTA Legislative Weekly - 09/06/01


Legislative Weekly 
September 6, 2001 
Issue 35, Volume 3 

A weekly publication from the 
California Manufacturers & Technology Association 
detailing legislative and regulatory developments in Sacramento





ELECTRICAL RESTRUCTURING 

SBX2 78 (Polanco D-Los Angeles and Sher D-Stanford).  CMTA supports this bill to allow Southern California Edison to collect $2.9 billion from customers to cover excess power costs incurred between May 2000 and January 2001.  While the debt can only be assessed against customers over 20kw in demand, provisions protecting the right to direct access and customer generation overcome our objections to the disproportionate spread of debt. The bill will be on the assembly floor this week. 

SBX2 27 (Bowen D-Marina del Rey).  This direct access bill remains a potential vehicle for reinstatement of direct access if SBX2 78 fails.  It failed to gain 2/3 votes in the Senate last June. CMTA did not support the bill, but remains willing to work with the author. 

SBX2 18 (Burton D-San Francisco).  CMTA supports this bill to create a separate revenue stream for payment of state energy revenue bonds, saving financing costs and simplifying the relationship between bonds and Department of Water Resources power contracts.  Passed out of Assembly Energy Costs and Availability. 

SBX2 85 (Burton).  CMTA opposes this bill to repeal the sunset on the 10% rate discount for small commercial and residential customers that was created by AB 1890.  It passed out of Assembly EC&A. 
  

NATURAL GAS EXIT FEES 

ABX2 23 (Pescetti R-Rancho Cordova) requires non-core customers to make long-term projections regarding their firm service gas delivery needs, and would allow utilities to impose exit fees on non-core customers that do not later desire that firm service level. 

CMTA is opposed unless exit fees are removed. CMTA supports amendments to simply require the PUC to study the state's natural gas infrastructure to determine ways in which to expand capacity and increase competition.  The bill has not yet been set for hearing in Senate Energy Utilities and Communications. 
  

ELECTRICAL GENERATION - EMINENT DOMAIN 

ABX2 35 (Vargas D-San Diego) authorizes the California Consumer Power and Conservation Financing Authority to exercise eminent domain to acquire generating facilities for 18-24 months.  Generators would be reimbursed a "reasonable rental value" as opposed to "fair market value" for facilities temporarily taken by the State.  Co-generation facilities are not exempt from the bill. 

CMTA is opposed and the bill may not move.  It is rumored that a Legislative Counsel opinion questions its constitutionality. The bill is currently in the Assembly Energy Costs and Availability Committee. 
  

ELECTRICAL GENERATION - STRICT LIABILITY 

ABX2 51 (Reyes D-Fresno) provides that a resale or wholesale operator of an electric generation facility that reduces or discontinues service for solely economic reasons shall be held strictly liable for any damages proximately caused by that reduction or discontinuance.  "Economic reasons" is defined as the withholding of power for financial gain. Cogeneration is exempted from the bill. 

CMTA is opposed.  According to the author's staff, the measure will not be moved. The bill is in Assembly EC&A Committee. 
  

ELECTRICITY AND NATURAL GAS - ILLEGAL BUSINESS PRACTICES 

Despite rigorous debate on the Assembly Floor, on September 4 the Assembly adopted amendments to ABX2 65 (Cardoza D-Merced) which make the bill less onerous.  As amended, the measure makes it a wobbler for any person or entity, whose principal business is the generation or sale of electricity, to exercise market power.  Market power is defined as the profitable maintenance of wholesale electricity prices above the prices that would occur in the wholesale market if that market were competitive.  The measure also allows the imposition of a fine of up to 10 percent of the violator's gross assets, upon conviction.  Felony penalties would apply to any person or entity that exercised market power during a Stage 1, 2 or 3 electrical emergency as determined by the Independent System Operator. 

The September 4 amendments limit the bill to apply only to entities whose principal business is the generation or sale of electricity that are able to exercise market power, and technically exempt qualifying facilities, co-generation, or self-generation.  The measure still includes onerous bounty-hunter provisions that authorize the Attorney General to pay a reward to any person who provides information that materially contributes to the imposition of a criminal fine.  The reward would be equal to 10% of the amount of the criminal fine collected by the AG, district attorney, or imposed by the court.  The measure likely will be taken up for a vote on the Assembly Floor sometime this week. 
  

TAX - TRIAL DE NOVO 

AB 934 (Hertzberg D-Van Nuys).  CMTA supports reforms to the property tax assessment appeal process, granting courts more power to overturn decisions that are anti-taxpayer. Assessors and counties claim that they will be manipulated into settling disputes too cheaply.  They obtained a Leg Counsel opinion declaring it to violate the California Constitution. 

The bill is in Senate Rules.  CMTA is lobbying to ensure that it is sent to Appropriations and are lobbying members of that committee as well as members whose votes will be needed on the floor.  There is speculation that it is being held in Rules for leverage for a larger deal but it is more probable that it is a tactic to delay it until Hertzberg, the author, is no longer Speaker. 
  

CORPORATE COUNSEL - PROTECTIVE ORDER/CONFIDENTIAL SETTLEMENTS 

AB 36 (Steinberg D-Sacramento), SB 11 (Escutia D-Whittier), AB 881 (Simitian D-Palo Alto).  CMTA opposes these bills to potentially expose proprietary information to the public.  SB 11 and AB 36 drive up litigation costs for defendants, leveraging higher settlements. AB 36 was "Speakerized" with the proviso that its substance would not go to the Governor, that SB 11 would be "the vehicle" and be revised into a more business friendly version.  Nevertheless, AB 36 (unchanged) has received a rule waiver allowing it to move in the Senate. 

CMTA is working on keeping the moderate Democrats in the Assembly from passing SB 11 and, if AB 36 does go to the Governor, in having them help with obtaining a veto.  CMTA is proposing AB 881 as an alternative though it is preferred that it not pass, and the trial lawyers would likely kill it.  At this point it appears that the moderates will stay with us but it appeared that way just before they caved-in in June. 
  

EDUCATION - CAREER AND TECHNICAL EDUCATION 

AB 348 (Wright D-So. Central Los Angeles).  Several "voc-ed" bills designed to bolster this ailing system were passed by the Legislature this year including AB 348 which introduces mechanisms to elevate the academic standing of such courses.  Unfortunately, much of the funding for the voc-ed bills was cut out of the Budget. 
  

EDUCATION - FACILITIES BOND 

AB 16 (Hertzberg D-Van Nuys/Leonard R-San Bernardino) and SB 844 (Chesbro D-Arcata).  CMTA has declared support for this legislation to place a statewide school facilities bond on the ballot in 2002. Their scope spans K-College.  A conference committee is addressing the timing for the ballot (March vs. November), the amount and the allocation between K-12 and higher ed., and the allocation system to use among schools. 
  

HOUSING 

CMTA supports two bills: AB 1284 (Lowenthal D-Long Beach) which provides property tax rewards to local jurisdictions within specified job centers (basically all of the major urban areas) which approve and build housing affordable to the local workforce.  SB 910 (Dunn D-Santa Ana) would impose sanctions on local jurisdictions which chronically fail to plan for their housing needs.  Both bills are in their second houses but are two-year projects.  Their terms will be negotiated during the interim. 
  

$3.6 BILLION WORKERS' COMPENSATION BILL ON THE GOVERNOR'S DESK 

The Senate concurred in the Assembly amendments to the workers' compensation benefits bill on September 6 .  The bill is now on its way to the Governor.  The bill, SB 71 (Burton), would cost employers $3.6 billion over 5 years with no substantive changes to help offset the increased cost.  The quick passage of the bill by the Senate ends any speculation that Senator Burton may be in a negotiating mood. 

There was some hope that some negotiation would ensue after the Governor entered the fray on Thursday, August 30 by revealing a $1.5 billion proposal that was significantly less expensive and onerous to employers.  However, the proposal caused Senator Burton and his co-author, Assemblyman Calderon, to call a hasty press conference where the governor's proposal was characterized as a slap in the face to labor.  Senator Burton predicted that a veto of SB 71 would spark a ballot initiative (that could double employers' costs).  He also thought the veto would be an invitation for injured workers to vote for former Los Angeles Mayor Dick Riordan or someone else. 

Steve Smith, Director, Department of Industrial Relations and the governor's point person on workers' compensation said, "the governor's plan became public only after it was presented to a group of labor leaders and it was intended to stimulate discussion about how best to get a workers' compensation bill that the governor is comfortable with."  Smith dismissed the threat of labor turning to someone else in the next election because the governor has stood with working Californians on issue after issue and he would be shocked if they were considering endorsing someone else. 

Now that the bill is on the Governor's desk, it is imperative that employers write the Governor requesting a veto.  For information on SB 71 go to the CMTA web site at <http://www.cmta.net/press/082301work_comp.shtml> 
  

UNEMPLOYMENT INSURANCE 

SB 40 (Alarcon D-Sylmar) would increase unemployment insurance (UI) cost by over $3 billion over four years and includes several other onerous changes for employers.  The bill is in the Assembly Appropriations Committee on the suspense file and is opposed by CMTA. 

Unlike workers' compensation, UI has only two active parties of interest, labor and employers.  CMTA believes that employers are more vulnerable to a benefit increase in UI than workers' compensation because our maximum benefit level is the second lowest of all the states.  Therefore, employer representatives from CMTA, Cal-Chamber, Cal-Tax and Newspaper Publishers Association met with the author and labor to discuss a benefit increase and reforms to help offset some costs. The coalition has put together a proposal to counter SB 40. 

CMTA does not believe that the Governor would sign two benefit bills in the same year unless they were both negotiated and agreed upon by both labor and management.  According to the latest news, the Governor asked labor to choose and labor decided on the workers' compensation bill this session.  Therefore, no further action on UI will be taken this session. 
  

STORMWATER 

SB 72's author, Senator Kuehl (D-Santa Monica), and the bill sponsor, Santa-Monica-based Heal The Bay, agreed to remove all of the controversial minimum stormwater monitoring requirements affecting industrial facilities.  Most notably, the August 21 version deletes the proposed increase in stormwater sampling frequency and language requiring inclusion of additional constituents in each sampling event.  The current version also deletes all references to group monitoring - a regulatory program designed to streamline monitoring requirements for similar industrial facilities - which was originally prohibited.  These changes will spare individual facilities from thousands of dollars in increased stormwater monitoring costs.  All opposition has been removed, and the amendments lower the state's anticipated costs substantially.  The next hurdle is the state water board's renewal of the General Industrial Stormwater Permit next year. 
  

SAFE DRINKING WATER & TOXIC ENFORCEMENT ACT 

The Safe Drinking Water and Toxic Enforcement Act (Proposition 65), SB 471 (Sher), was amended on July 5 to incorporate language developed by the Attorney General's office.  It is intended to help curb frivolous litigation, invited by lucrative bounty hunter provisions, that has overwhelmed the AG's resources.  Although advertised as a pro-business reform measure, the AG's proposal undermined the certainty of Prop. 65 settlements by allowing a district attorney, city attorney or private prosecutor to sue again for the same alleged offense.  The AG and Senator Sher have since agreed to remove that provision and make other lesser changes to avoid opposition from the business community.  The bill requires a 2/3 vote, which may not be achievable without a commitment from the AG to pursue further discussions toward more substantive reform. 
  

2002 PRELIMINARY ENVIRONMENTAL QUALITY FORECAST 

Water Quality Standards - SB 469 (Alpert D-Coronado).  Held up in end of session politics, the bill advances consensus recommendations to improve regional implementation of federal Total Maximum Daily Load program.  Requires state water board to develop guidelines for regional boards on listing and de-listing water bodies and implementing TMDLs.  Would help focus state resources on legitimate water quality problems.  May move as urgency legislation in January, 2002. 

Wastewater Discharge Offset Program - SB 815 (Machado D-Linden). Two-year vehicle to address the affects of legacy sources of pollution (e.g., abandoned mines) without bankrupting the discharger community.  Would provide less costly alternatives to end-of-the pipe permit limits, such as investing in upstream cleanup projects, with greater environmental benefits. 

Environmental Justice.  Under pressure from environmental activists, CARB is pursuing an aggressive agenda that does not track legislative direction.  Staff will present draft guidelines to the Board in December.  CARB's work will serve as a model for other Cal-EPA agencies required by SB 115 (Solis, 1999) and SB 89 (Escutia, 2000) to review their programs to address environmental justice concerns. 

Toxic Injuries - SB 693 (Scott D-Altadena).  Two-year measure sponsored by trial lawyers to extend the statute of limitations for filing injury claims related to hazardous material exposures.  Anticipate an oppose position. 

Brownfields Cleanup Incentives - AB 1114 (Pescetti).  Stalled this year due to politics surrounding Senator Escutia's local agency enforcement-based program in SB 32.  AB 1114 seeks flexible, risk-based cleanup standards, innocent operator liability relief and modest financial incentives for parties seeking to voluntarily initiate cleanup and redevelopment. 
  
  

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