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Legislative Weekly=20
July 26, 2001=20 Issue 30, Volume 3=20 A weekly publication from the=20 California Manufacturers & Technology Association=20 detailing legislative and regulatory developments in Sacramento GOVERNOR SIGNS BUDGET=20 The 2001-02 Budget passed by the Legislature was signed by the Governor thi= s=20 afternoon, July 26.? The amount of the total Budget is approximately $102= =20 billion, of which, about $79 billion is the general fund, the balance is=20 special funds.=20 The bulk of General Fund spending is allocated approximately as follows:=20 $33 billion K-12 Education $22 billion Health and Human Services $10 billion Higher Education $5 billion Youth and Adult Correctional The balance is spent on expenses attributable to programs relating to=20 business, transportation and housing, state and consumer services,=20 environmental protection, to the courts and to tax relief.=20 In addition, Health and Human Services receive the largest portion of speci= al=20 funds.=20 Tax relief, in the version passed by the Legislature, was very insignifican= t,=20 the lion=01,s share was $75 million for assistance to low income seniors an= d=20 disabled persons.?? A total of about $39 million was to go to sales/use tax= =20 exemptions for purchases of:=20 liquefied petroleum used for residential or harvesting use (6.9 million) diesel fuel used for agriculture or food processing (11.4 million) farming equipment (18.4 million) timber equipment (1.7 million) racehorse breeding stock (1.3 million) In order to pass the budget legislation, the Legislature also made a deal= =20 whereby a Constitutional amendment will be sent to the voters regarding=20 permanent allocation of a portion of gasoline sales tax revenues to=20 transportation purposes.? They also agreed to suspend a ?% of the general= =20 sales tax in any year (as of 2002) in which the General Fund reserve is=20 determined to exceed 3% (existing law sets 4% as the trigger).=20 See CMTA's Press Release on the Budget:=20 http://www.cmta.net/press/072601budget.shtml=20 ?=20 SCE BAIL-OUT UPDATE=20 The latest Assembly version of the proposed Southern California Edison (SCE= )=20 bail-out legislation was revealed this week in proposed amendments to ABX2 = 82=20 (Keeley D-Boulder Creek) and SBX2 78 (Sher D-Stanford).=20 CMTA opposes this package as unfairly shifting the cost of SCE debt onto=20 business.? In addition, direct access options may be severely limited as th= e=20 Department of Water Resources (DWR) continues to enter into long term=20 contracts for supply and the utilities may construct new generation.? The= =20 bills may be heard after August 20, or earlier on the call of the Speaker.= =20 CMTA urges you to contact legislators about the impact of high energy price= s=20 on your business and concern about taking on any more costs.=20 Elements of the package:=20 SCE Debt Payment:? Total $3.9 billion debt allocated as follows: $2.5 billion to be collected, 20% from small and 80% from large customers.?= =20 (The demand level division between small and large is yet to be determined.= ) $1 billion is left for SCE to recover from large generators. $400 million tax refund from SCE parent. No transmission system purchase or option. Direct Access:? Allowed without payment of exit fees after January 1, 2002 = so=20 long as there is more demand for power than can be served by SCE native=20 generation and DWR contracts. Green power deals allowed for small residenti= al=20 and commercial customers immediately. Ratepayer Benefit Account:? Positive balances in the account that includes= =20 refunds ordered by FERC, litigation proceeds, and DWR Power fund revenues= =20 would go to customers in refunds in proportion to the March, 2001 CPUC rate= =20 increase. Renewable Portfolio Standard:? Sets a target of 20% renewable power in 2010= =20 through requirements to purchase renewable power for resale. SCE Financials:? CPUC cannot lower SCE rate of return before 2006. SCE may = be=20 required by the CPUC to construct new generation under cost-based ratemakin= g. CRIMINAL PENALTIES ON ENERGY PRODUCERS=20 CMTA and other interested parties met with staff from the offices of=20 Assemblymember Dennis Cardoza and Lieutenant Governor Cruz Bustamante to=20 discuss onerous provisions in ABX2 65 (Cardoza D-Merced) that would impose= =20 severe criminal penalties on energy producers. Amendments taken in the Assembly Appropriations Committee on July 19 delete= =20 references to petroleum products, coal and coal products, and limit the bil= l=20 to apply to electricity and natural gas.? While no specific agreement was= =20 reached, the staff indicated that the author would consider amending the=20 measure to more narrowly focus the penalty provisions of the bill.=20 ABX2 65 passed (11-5) from the Assembly Appropriations Committee on July 11= ,=20 and will be taken up on the Assembly Floor when the Legislature reconvenes= =20 from its Summer Recess.=20 ?=20 OVERPAYMENT REFUNDS TO PAY FOR TRANSMISSION LINE UPGRADES=20 Assemblymember Sarah Reyes (D-Fresno) has amended her ABX2 78 to use any=20 overpayment refunds ordered by the Federal Energy Regulatory Commission=20 (FERC) for payment of principal and interest on bonds, to upgrade electrici= ty=20 transmission lines and to reimburse ratepayers.=20 CMTA and the California Chamber of Commerce opposed the measure in the=20 Assembly Energy, Costs and Availability Committee on July 17, asserting tha= t=20 100 percent of the refunds should proportionately be returned to the=20 ratepayers who have shouldered the burden of elevated energy prices.=20 As introduced, ABX2 78 required 50 percent of the overpayment to be returne= d=20 to ratepayers, and 50 percent to be deposited into the General Fund.? ABX2 = 78=20 passed (15-1) to the Assembly Appropriations Committee. ?=20 EXIT FEES ON NONCORE GAS CUSTOMERS=20 CMTA and other business groups are working with Assemblymember Pescetti=20 (R-Rancho Cordova) during the Legislature=01,s Summer Recess to amend his A= BX2=20 23 which imposes exit fees on noncore gas customers.=20 The measure also expedites the review process for approval of gas facilitie= s,=20 and requires pipelines within the state to meet the test that every custome= r=20 would expect to be curtailed not more than once every ten years, which=20 increases the current standard of once every five years.=20 ?=20 INITIATIVE TO LOWER NATURAL GAS PRICES CLEARED FOR SIGNATURE GATHERING=20 A ballot initiative to expand the entities that can buy and sell natural ga= s=20 has been approved for signature gathering by the Secretary of State. The=20 measure would allow cities, counties, municipal utilities and irrigation=20 districts to buy and sell natural gas and be exempt from the oversight of t= he=20 California Public Utilities Commission.=20 Assemblyman Dennis Cardoza (D-Merced) is the sponsor of the initiative.=20 Supporters expect that if passed, the measure would increase competition an= d=20 lower gas and electricity prices for consumers. The sponsors need to collec= t=20 the signatures of 670,816 registered voters by October 26, 2001 to qualify= =20 for the March 2002 ballot.=20 This may be the first of several initiatives for the 2002 election seeking = to=20 address the state=01,s energy crisis. According to a public opinion poll=20 recently released by the Public Policy Institute of California, residents b= y=20 a two-to-one margin (65%) say questions of how to address the electricity= =20 crisis should be decided, not by the legislature and governor, but by voter= s=20 through state ballot initiatives in 2002.=20 ?=20 FED-OSHA HOLDS PUBLIC FORUM ON ERGONOMICS AT STANFORD UNIVERSITY=20 The Department of Labor held the third and final public forum on ergonomics= =20 at Stanford University in Palo Alto on July 24.? Following the repeal of th= e=20 federal Occupational Safety and Health Act (OSHA) ergonomic rule by Congres= s,=20 Secretary of Labor, Elaine Chao promised that public forums would be held i= n=20 several locations to explore the issue of developing an ergonomic standard.= ?=20 The forum follows a major victory for California employers when on July 19= =20 the California Occupational Safety and Health Standards Board unanimously= =20 rejected a petition from organized labor to adopt the overturned federal=20 Occupational Safety and Health Act (OSHA) ergonomic rule.=20 The forum began with opening remarks by Assistant Secretary of Labor, Chris= =20 Spear who explained the purpose of the meeting and Secretary Chao expressed= =20 interest in trying to obtain the best information and ideas available.?=20 Federal OSHA requested that comments be focused on three questions: 1) What= =20 is an ergonomic injury? 2) How can the Occupational Safety and Health=20 Administration, employers and employees determine whether an ergonomic inju= ry=20 was caused by work-related activities or non-work-related activities; and, = if=20 the ergonomics injury was caused by a combination of the two, what is the= =20 appropriate response? and 3) What are the most useful and cost-effective=20 types of government involvement to address workplace ergonomics injuries=20 (e.g., rulemaking, guidelines, best practices, publications/conferences,=20 technical assistance, consultation, partnerships or combinations of such=20 approaches)?=20 Panels began with organized labor representatives who criticized the repeal= =20 of the ergonomic rule and urged the Secretary to quickly adopt new rules to= =20 protect workers.? The second panel was made up largely of educators and=20 scientists who have studied the ergonomics issue extensively and believe th= at=20 the science does not justify an ergonomic standard such as the federal OSHA= =20 rule.? The third and final panel was a mixture of employers, employer=20 associations, medical professionals, organized labor, university=20 representatives, professional safety organizations, and individuals, which= =20 provided vastly contrasting views on the merits of ergonomics rules in the= =20 workplace.=20 Employers resisted the federal rule stating that it was based on dubious=20 science that cannot accurately identify the cause of repetitive motion=20 injuries attributable to work.? Further, employers stressed that California= =20 already has the only ergonomic regulation (Title 8, CCR 5110) and the only= =20 illness and injury prevention program (Title 8, CCR 3203) in the nation,=20 already protecting California workers. Hopefully, Secretary Chao will take = a=20 closer look at employers' concerns and the lack of credible science before= =20 deciding what, if any, new federal rules or guidance is needed in the=20 workplace.=20 ?=20 ENVIRONMENTAL LEGISLATION AT THE BREAK=20 The week of August 20 promises to be a busy one, with several measures=20 scheduled for late policy committee hearings.? Among them, SB 72, Senator= =20 Sheila Kuehl=01,s (D-Santa Monica) stormwater monitoring bill, which was pu= t=20 over in Assembly Environmental Safety following a last-minute push for majo= r=20 amendments by bill sponsor Heal the Bay.? It is unclear at this time what= =20 form the bill will take for the August 21 hearing. AB 1390, a controversial= =20 environmental justice measure by Assemblymember Marco Firebaugh (D-East Los= =20 Angeles), will be heard in Senate Environmental Quality.? AB 1390 is=20 pre-determinative of the state-level program reviews required by SB 115=20 (Solis, 1999) and SB 89 (Escutia, 2000).=20 Cleanup language on the state=01,s greenhouse gas registry program, establi= shed=20 last year by SB 1771 (Sher), is now in limbo following Senator Sher=01,s=20 (D-Stanford) decision to use SB 532 for a renewable energy initiative.? The= =20 cleanup language may resurface toward the end of session, not unlike the SB= =20 1771 registry program language.=20 Among significant late entries in the environmental arena include:=20 SB 471 (Sher), discussed in last week=01,s Legislative Weekly, amended on J= uly 5=20 with Proposition 65 language and passed out of Assembly Environmental Safet= y=20 on July 10.? The bill contains language that invites multiple lawsuits for= =20 the same alleged violation, even in the face of a court-approved settlement= . AB 1329 (Lowenthal D-Long Beach) last amended on June 26 and again on July = 9=20 to place further restrictions on handling and treatment of oily wastewater.= ?=20 To quote the Senate Environmental Quality Committee analysis, the sponsors= =20 (hazardous waste treatment facility operators) =01&have not provided any=20 information that demonstrates they are solving an environmental protection= =20 problem.=018? Moreover, their proposal has the effect of =01&reserving the = market=20 for offsite oil/wastewater treatment to themselves.=018 ABX2 60 (Daucher R-Brea & Hollingsworth R-Murrieta), last amended on July 1= 4,=20 creates a voluntary environmental dispatch program for backup generators.?= =20 The intent of the bill is to help stabilize the grid when a rotating outage= =20 is imminent by deploying the cleanest backup units first.? Interestingly,= =20 despite the lack of outages during the critical months of May and June, thi= s=20 bill is getting political traction, passing out of Assembly Energy Costs an= d=20 Availability on July 17 on a 17-0 vote. Of course, there is still plenty of opportunity for last-minute mischief,= =20 perhaps more so this year than in past years if the energy crisis continues= =20 to dissipate and attention turns to other matters.=20 ?=20 www.cmta.net=20 California Manufacturers & Technology Association=20 980 9th Street, Suite 2200=20 Sacramento, CA? 95814=20 (916) 441-5420 phone=20 (916) 447-9401 fax=20 ?
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