THIS WEEK IN SACRAMENTO

Prepared by Norwood & Associates

October 10, 2003

 

 

 

 

Garamendi Pledges Cooperation with Schwarzenegger

 

            Insurance Commissioner John Garamendi sent Governor-Elect Arnold Schwarzenegger an open letter the day after the election to pledge his cooperation on insurance issues.  Most importantly, the Commissioner acknowledged the need for additional workers' compensation insurance reform, and welcomed the new Governor's leadership.  The text of the letter is as follows:

 

"Dear Governor-Elect Schwarzenegger:

 

Congratulations on the success of your campaign.

 

I look forward to discussing with you the many insurance issues that confront consumers in California, and to working with you to protect their interests while maintaining a healthy insurance industry.

 

As you are aware, the Legislature and Governor Davis passed a new law based on my road map to reform of the workers’ compensation system.  This law is but the first step in the process to total reform and will reduce claims costs by $4 billion to $6 billion.  Because it is imperative that we take step two immediately, we are already working with business and labor to structure the required reforms.  Obviously, it is critically important to have your leadership and direct involvement in drafting and passing the legislation necessary to accomplish the second phase of overall system reform.  I would, therefore, like to meet with you to discuss our current direction as soon as possible during your transition.

 

There are many other insurance issues facing business and individual insurance consumers in California and I look forward to briefing you and working together to resolve them.

 

Again, congratulations and best wishes.

 

Sincerely,

 

JOHN GARAMENDI

Insurance Commissioner"

 

 

Legislation Re-evaluated in Wake of Election

 

            The successful recall of Governor Davis near the end of the 30 days window for signing or vetoing bills has created an awkward situation during the transition to the Schwarzenegger administration.  Governor Davis retains all the authority of his post until the recall is certified.  Accordingly, he has the authority to sign or veto the remaining 282 bills from the legislative session that concluded on September 13.

 

The Schwarzenegger team, naturally, would prefer Governor Davis to not take any radical steps while the sun sets on his administration.  However, when it comes to legislation, they have little choice.  If the Governor does not act on a bill, it becomes law automatically.  Thus, Governor Davis would have to do the incoming Governor a favor by vetoing any "radical" bills - an unlikely event.

 

            The only option available to undo radical bills enacted this year is the referendum process.  A referendum is similar to an initiative.  Pending the gathering of the required number of signatures, a referendum stays the effective date of a newly enacted law until the voters can endorse or reject the law.  The referendum was most recently used in 1999 when voters rejected a law signed by Governor Davis establishing third-party bad faith lawsuits.

 

            Business leaders are looking over the batch of bills Governor Davis has signed or is expected to sign to determine if they want to mount a referendum.  They have already targeted SB 2 (Burton), and have submitted the paperwork to the Attorney General's Office to start the signature gathering process.  SB 2 requires employers to provide health insurance coverage for their employees.  If the referendum qualifies, it will most likely be on the March 2004 ballot.

 

"Job Killer" Bills Enacted This Year

 

            The California Chamber of Commerce, one of the leading employer groups in Sacramento, has established a list of "job killer" bills signed by Governor Davis.  These bills, in the view of the Chamber, create a hostile business climate in the state.  Since the referendum process is so expensive, and the outcome uncertain, it is unlikely many of these bills will travel the path of SB 2 (Burton) and be put before the voters for validation.  Accordingly, businesses will have to live with these new laws unless they can be amended in the future - an unlikely event unless more moderate Democrats and Republicans are elected.  The "job killer" bills are as follows:

 

·        AB 16 (Jackson): Restricts movement of oil produced from offshore platforms to pipelines.

·        AB 76 (Corbett): Makes employers liable for the sexual harassment of an employee by a person over whom the employer has no control, such as customers and clients.

·        AB 274 (Koretz): Presumes that an employer is retaliating against an employee if the employer discharges, demotes, suspends or reduces the hours or pay of an employee within 90 days after an employee makes a claim under the Labor Code.

·        AB 1715 (Corbett): Limits use of arbitration in employment contracts.

·        SB 20 (Sher): Imposes fee on manufacturers of any electronic device to fund recycling, and prohibits sale in the state of any device for which a fee has not been paid.

·        SB 288 (Sher): Blocks federal reforms of "new source review" rules and creates new lawsuits.

·        SB 515 (Kuehl): Prohibits business from using California's anti-SLAPP statute, which allows a defendant to move for dismissal of a frivolous lawsuit early in the judicial process.  The bill essentially eliminates a businesses free speech rights.

·        SB 796 (Dunn): Allows a private cause of action for wage-and-hour Labor Code violations.

·        SB 810 (Burton): Requires timber harvest plans be reviewed and approved by regional water boards in addition to the Department of Forestry.

·        SB 923 (Sher): Imposes conditions on waivers for waste discharges.

 

 

 

 

 

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© Copyright 2003 by Norwood & Associates

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