CMTA | Legislative Weekly 2002

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Legislative Weekly
February 8, 2002

No Retroactive Suspension of Direct Access?

On February 21, the CPUC will consider adoption of a proposed decision to retroactively suspend direct access contracts entered into July 1, 2001 or later, contravening an earlier decision to allow direct access contracts until September 20, 2001. Now, based on arguments presented by CMTA and CLECA, Commissioner Geoff Brown has issued an alternate decision (AD) for the treatment of direct access contracts entered into after July 1, 2001:

“Generally, we favor a balanced approach which allows existing direct access customers to continue in the direct access market, but limits additional load moving to direct access. This standstill concept is consistent with the provisions of ABX1 and D.01-09-060 that direct access be suspended and that there be no new arrangements.” The AD includes the following elements and conclusions of law:

The Contract Clause may prohibit a retroactive suspension if an evident and more moderate course of action, such as exit fees, would achieve the goals of ABX1.
The Commission should consider imposing exit fees on direct access customers in A.00-11-038, et al. in order to spread DWR costs equitably among both bundled and direct access customers.
It is reasonable to interpret a September 20, 2001 date for suspension of direct access to mean the level of direct access load as of that date should not be allowed to increase, apart from normal load fluctuations.
Assignment or renewal of a direct access contract, if allowed by the contract should be allowed and does not constitute a new contract or arrangement. (In another part of the AD, going to a new ESP is also not considered a new agreement – “Customers are allowed to switch from one
ESP to another after September 20, 2001.”) Also, “direct access contracts may be assigned after September 20, 2001, to either a new ESP or a new retail end use customer.”
For a direct access customer as of September 20, 2001, addition of new location or load that involves additional meters or would require a new
DASR constitute a new arrangement and should not be allowed pursuant to the September 20, 2001 suspension date.
Direct access residential and small commercial customers may move from one address to another within the UDC service area and continue to be served by the ESP serving them prior to the move.
A customer who had direct access prior to September 20, 2001, but who became a bundled customer cannot return to direct access after September 20, 2001.
A direct access customer can change its identity (i.e., Jones Company to Acme Electronics) provided no other implementation restriction applies.

Workers' Compensation Benefits Bill on Governor's Desk

Last week's Legislative Weekly reported that AB 749 (Calderon D-Montebello), the workers’ compensation benefits bill, would be fast-tracked and on the Governor's desk by Thursday, February 7. AB 749 passed both the Senate and Assembly and was sent to the Governor on Monday, February 4. At a 9:00 a.m. press conference, on the same day, CMTA learned of the plan to move the bill through the entire legislative process in one day.

The bill was heard on the Senate Floor and passed 23-14 with all the Republicans present and one Democrat voting no. The bill was sent immediately to the Assembly. The Assembly waived the file notice rules and the bill was heard by the Assembly Insurance Committee and passed 12-6 after taking testimony from proponents and opponents who found out in time to get there. The file notice rule was waived again and the bill was heard by the full Assembly in the late afternoon and passed on a 45-29 vote with all Republicans present voting no on the bill. The bill was sent immediately to the Governor, who has 12 days from the date he receives the bill to sign, veto or let the bill become law without his signature.

At every step along the way authors Assemblyman Tom Calderon and Senator John Burton, told legislators and the audience that Governor Davis would sign the bill. Obviously with a signature assured, the authors did not need to seriously consider any changes being sought by employers. Besides, both authors repeatedly indicated that employers concerns were addressed in the bill. However, any substantive changes sought by employers that are alleged to be in the bill were tweaked or changed so much by labor and the attorneys as to render them ineffective in containing or reducing cost.

Even with all the cards stacked against us, CMTA is still asking employers to write the Governor and ask him to veto the bill because it is not a balanced bill and it will cost employers over $3.5 billion dollars over the next four years. Of utmost importance to employers is the fact that the bill contains automatic cost of living increases on some benefits, and indexes other benefits to the federal average weekly wage. Therefore, benefits will continue to rise after four years and will eliminate any incentive for labor and the attorneys to return to the table to fix any mistakes or problems in the future. The only way for employers to seek any changes in the future will be through offering more benefits.

No date has been announced on when the Governor plans to sign the bill, so it is imperative that you get letters, faxes, telephone calls in now. CMTA has received copies of a modest number of letters to the Governor, but so far not in the magnitude that would push him to a veto. It is unknown how many letters he is receiving from other employers. The deal is not done until the bill is signed, so there is still a chance to make your voices heard. More information

Wesson Names New Leadership Team
Assembly Speaker Herb Wesson (D-Culver City) announced his new leadership team and committee chairs this week. The members listed as “designee” will assume their positions some time in the future.

Leadership:
Speaker pro Tempore Christine Kehoe D-San Diego	Majority Floor Leader Marco Firebaugh D-E. Los Angeles	Majority Leader designee Wilma Chan D-Oakland	Caucus Chair designee George Nakano D-Torrance

New Committee Chairs:
Budget Jenny Oropeza D-Long Beach	Governmental Organization Jerome Horton D-Inglewood	Judiciary effective March 11 Ellen Corbett D-San Leandro	Appropriations effective March 11 Darrell Steinberg D-Sacramento	Rules Chair designee Joe Nation D-San Rafael

Electronics Waste Legislation

Romero

On February 5, Senator Gloria Romero (D-Rosemead) conducted an informational hearing of the Senate Select Committee on Urban Landfills on the subject of electronic waste management. Speakers included representatives from the environmental community, recyclers, state agencies (Department of Toxic Substances Control and the Integrated Waste Management Board), local governments, Goodwill and Hewlett-Packard. This event sets the stage for a controversial legislative debate on issues related to the design, manufacture, marketing, handling, recycling and disposal of electronic equipment.

Citing statistics on e-waste volumes and growth trends, environmental advocates are calling for aggressive mandates to phase out certain toxic constituents (such as leaded solder in circuitboards and mercury in monitors), product labeling, aggressive recycling rates and new taxes on electronic products to fund recycling infrastructure. These concepts were couched in terms of “manufacturer responsibility” and “extended producer responsibility”, downplaying the critical role that consumers play in influencing product design and ensuring proper handling of discarded electronic equipment.

Also downplayed during the hearing were existing voluntary and regulatory efforts. There was some discussion of the National Electronic Product Stewardship Initiative (NEPSI), a cooperative dialogue among manufacturers, industry, government, recyclers and environmental groups working toward recommendations for national policy on cradle to grave management of electronic equipment. NEPSI is on a fast track to produce recommendations before the end of 2002 that could help to minimize further economic dislocation for California manufacturers that could result from a California-only law. In addition, DTSC is in the early stages of implementing a regulation affecting the handling and disposal of Cathode Ray Tubes (CRTs) found in computer monitors and TVs. CRTs are generally recognized as the most significant aspect of the electronic waste problem.

Manufacturers are actively pursuing solutions to stem the e-waste tide without government mandates. Hewlett-Packard discussed its successful de-manufacturing and recycling operation in Roseville, which processes several million pounds of discarded electronics per month. HP applies experience gained in the de-manufacturing process to new computer design to facilitate end of life recycling and reuse. HP, IBM, Sony and several other manufacturers offer takeback and recycling programs in California.

Of paramount concern to manufacturers is the possibility that a new California law will sacrifice proven programs with significant growth potential in favor of untested, costly and highly bureaucratic formulas.

Online Privacy Legislation

Simitian

Assemblyman Simitian (D-Palo Alto) has announced his intention to carry legislation designed to enhance the privacy protections afforded consumers who engage in online transactions. His concerns pertain to the following:

Privacy policies: whether online retail vendors, service providers and financial institutions should be required to post privacy policies.
If so, what should be required?
On what factual and legal terms should policies be enforceable?
Under what circumstance should waiver be recognized?
Should a system of registering privacy policies be imposed?
Should consumers be able to obtain information about data collected about them?
In the event that false information is associated with the consumer, should he/she have a mechanism of correcting it?
Should an online entity be required to notify consumers whose data has or may have been compromised though a security breach?
To what extent do existing or emergent technologies mitigate or eliminate the need for regulation?

Assemblyman Simitian is seeking insight from business and consumer groups in order to form conclusions on these questions. Please contact Carrie-Lee Coke, CMTA General Counsel, Legislative Director, Corporate Counsel, Education, Tax, at (916) 441-5420 to help formulate a response.

CMTA Takes Positions on March ballot Propositions
CMTA has taken a support position on two propositions on the upcoming March 5 ballot. Proposition 40, formerly AB 1602 (Keeley) Chapter 875,

2001, is known as the California Clean Water, Clean Air, Safe Neighborhood Parks, and Coastal Protection Act of 2002. It allows $2.6 billion in bonds for a variety of purchases and upgrades of parks and environmentally sensitive lands. This infrastructure improvement will enhance the quality of life in California and improve our attractiveness as a place to do business. While CMTA believes transportation, housing and other infrastructure improvements have a higher priority, this initiative is a well-crafted and sensible approach to protecting important California resources.

Proposition 42, formerly ACA 4 (Dutra), Resolution Chapter 87, 2001, funds transportation from sales and use tax revenues. This initiative transfers to

the Transportation Investment Fund the state's share of gasoline sales tax revenue that is now deposited in the General Fund. It authorizes a one-year suspension of the revenue transfer from the GF to TIF, if the Governor issues a proclamation that the transfer would have a significant negative effect on the government functions supported by the GF, and the Legislature enacts a stand alone statute, by a two-thirds vote in each house that suspends the transfer for one year. It authorizes the Legislature to modify the allocation formula for the dedicated revenues through a stand alone statute passed by a two-thirds vote in each house.

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