California businesses have been hit hard by this past legislative session.
First, they have been forced to swallow a minimum wage increase and caps on industrial emissions of greenhouse gases as Gov. Arnold Schwarzenegger seeks to bolster his centrist stance in an election year. Now, there are dozens of other bills on the governor’s desk that could impose additional costs on doing business in California. Meanwhile, only a handful of bills supported by business made it through. But it could have been worse. Dozens of other bills dubbed “job killers” were defeated in the closing weeks of the session. Among these: price controls on key industries in the event of a disaster; increases in fines for emission violations; monitoring of concentrations of potentially harmful chemicals in humans; and increasing taxes on multinational corporations based outside the U.S. Here’s a look at some of the key bills that passed the Legislature and now await the governor’s signature or veto.
Assembly Bill 32: Mandates reduction in industrial carbon (greenhouse gas) emissions to 1990 levels by 2020 through an emissions trading system. Major business groups opposed, arguing caps would increase costs and prompt companies to reduce production or move to other states. Governor has said he will sign.
AB 1550: Makes changes to state’s enterprise zone program, allowing for reauthorization of existing zones and creation of new ones. Business groups, concerned about attempt to kill the enterprise zone program, strongly support this bill, saying it preserves one of the state’s few economic development tools. Santa Ana has a state-backed enterprise zone. Governor has not taken a position. Many expect a signature.
AB 1835: Increases state minimum wage to $8 an hour from current $6.75 in two steps: 75 cents on Jan. 1 and another 50 cents on Jan. 1, 2008. Business groups muted in opposition; had focused on defeating provision to index minimum wage to inflation. Stands to impact Orange County restaurants and apparel makers. Governor has said he will sign.
AB 1884/AB 2209: Would increase payments to workers unemployed during a strike; AB 1884 by providing unemployment insurance and AB 2209 through direct monetary payments. Business groups opposed, saying companies would be forced to subsidize strikes against themselves. Governor likely to veto.
AB 2230: Requires state Small Business Advocate to conduct a fiscal study of state regulations to determine compliance cost to small employers. Business groups strongly support, saying it will alert lawmakers to costs already imposed on businesses. Governor likely to sign; has previously referenced cost of regulations on small businesses.
AB 2555: Increases damages for employers found to be violating state gender pay equity laws. Also requires employers with at least 50 employees to provide written statement setting forth the employee’s wage rate, with explanation of how those wages are calculated. Employer groups strongly oppose, saying it would prompt wave of lawsuits and increase paperwork compliance costs for businesses. Governor likely to veto.
Senate Bill 815: Doubles permanent disability payments for injured workers over three years. Business groups opposed to this last-minute bill, saying it threatens to undo reforms that have slashed workers’ compensation costs. Governor likely to veto as he awaits a report due out in December on impacts of previous reforms.
SB 832: Extends for five years existing law allowing the state to collect 75% of punitive damages in civil cases. Business groups oppose, saying it would increase the frequency and size of punitive damage awards. Governor likely to veto.
SB 840: Creates single-payer, state-run healthcare system. Business groups strongly opposed, saying it would eliminate much of the private insurance market, reduce consumer choice and increase employer costs. Governor last week wrote op-ed disclosing veto plans, calling system “socialized medicine.”
SB 927: Imposes a $60 fee on all containers processed through the ports of Los Angeles and Long Beach; funds would be used to make improvements in infrastructure and contribute to diesel emission reduction programs. Business groups oppose, saying it increases the cost of goods movement for both exporters and importers. Governor has not taken a position on the bill, though he has vetoed similar measures in the past two years.
SB 1414: Dubbed the “Wal-Mart” healthcare bill: requires all employers with more than 10,000 employees in the state to spend 8% of payroll on healthcare or pay equivalent amount to the state. Business groups oppose, saying it will drive large employers out of state or cause them to pass these costs on to their customers. Governor likely to veto.
SB 1436: Would re-establish small business ombudsman program to improve access to information on proposed regulations and other state programs. Business groups strongly support. Governor has not taken position, but widely expected to sign.
SB 1489: Permits judges to make defendant companies pay all investigation and lawsuit costs, including attorneys’ fees, if the state attorney general prevails either in a verdict,or a settlement is reached,against a company for any violation of state law. Business groups oppose, saying it would invite “fishing expeditions” by the attorney general. Governor has not taken a position, but many expect a veto.
Fine is a staff writer with the Los Angeles Business Journal.
