CMTA | Legislative Weekly 2002

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Legislative Weekly
June 21, 2002

Governor requests larger budget reserve

Davis

With the Constitutional deadline for passage of the state budget come and gone, the budget conference committee continues to meet in hopes of crafting a comprehensive budget plan that can be approved by a 2/3 vote of both houses of the legislature prior to the start of the state's new fiscal year on July 1st. This week, Governor Davis asked for a $1 billion budget reserve to ensure repayment of an unusual $7.5 billion loan the state will seek to avoid running out of cash. Davis originally had asked for a reserve of $516 million. Budget conference committee members are struggling to close a budget gap estimated at $23.6 billion -- and with Davisā request for a $1 billion reserve -- more loans, budget cuts or tax increases are being seriously considered by conferees.

Conference committee to close budget gap hits snag

Peace

In another budget related development, the Assembly failed to pass SB 1830 (Peace D-El Cajon), which embodies a $1.6 billion school funding shift sought by Governor Davis to help close the unprecedented budget gap. The school-funding shift in SB 1830 was rejected on a 48 to 26 vote. This measure shifts $1.1 billion from the current year to next year to help meet the Proposition 98 school-funding guarantee. The proposal would also shift $500 million in unspent school funds, known as the "reversion" account, from next fiscal year to the current year to help close the budget gap. This shift must take place by July 1 in order to partially alleviate the existing budget gap.

This action on the Assembly floor prompted Senator Peace to adjourn the Legislature's budget conference committee and suggest they not meet again until the matter is resolved. Peace had hoped to wrap up the conference committee work by Sunday, June 23, but that goal appears unlikely since the Assembly action may have left the size of the budget gap in question. Many in Sacramento are wondering if the latest stand-off on the Assembly floor is just the beginning of a long, hot, summer budget battle.

More fines and penalties for safety violations

Koretz

AB 2837 (Koretz D-W. Hollywood) would make several changes to the California Occupational Safety and Health Act (Cal-OSHA) relating to safety in employment that would have an adverse impact on California's employers. CMTA is opposed.

Cal-OSHA of 1973 was enacted to assure safe and healthful working conditions for all workers. Cal-OSHA (the division) is specifically vested with authority over employment and places of employment in California. AB 2837 would permit local District Attorneys to usurp the division's authority, putting the state's plan at risk of violating the authorization agreement with the federal Occupational Safety and Health Act Administration.

There are five key problems with the bill:
1. Current law requires the division to investigate an employment accident that is fatal or serious unless it determines an investigation is unnecessary. AB 2837 bill would require the division to investigate the causes of any employment accident that is fatal or serious, taking away any discretion. Current law already requires an accident resulting in a fatality to be reported within 24 hours from the time the division learns of the accident.

2. The Division's Bureau of Investigations (BOI) is headed by an attorney experienced in criminal law who is responsible for directing accident investigations involving violations of standards, orders, and special orders. The bureau is responsible for preparing cases for prosecution including evidence and findings and may communicate with the appropriate prosecuting authority at any time it deems appropriate. When BOI conducts an investigation of serious injury or death, the results of the investigation are referred by the bureau to the prosecuting authority having jurisdiction for action, unless the bureau determines that there is legally insufficient evidence of a violation of the law. AB 2837 removes BOI's discretion and requires the results of the investigation to be immediately referred to the appropriate prosecuting authority. It also requires BOI to communicate with the appropriate authority where there is a reasonable suspicion that a crime has occurred and may not limit any criminal investigation in those cases. This clearly usurps BOI's authority and calls into question the legal qualifications of the BOI supervisor and the qualifications and performance of the bureau's investigative personnel.

3. Furthermore, the bill would permit the county district attorney to require the Department of Industrial Relations to develop a protocol for immediate referral of cases to the appropriate prosecuting authority in lieu of or in cooperation with an investigation by BOI. The protocol would provide for the voluntary acceptance of referrals after a review of the case by the prosecuting authority. Where a case has been referred, the prosecuting authority would have authority to direct the investigation. Both BOI and the division would cooperate with the prosecuting authority's investigation. However, if the prosecuting authority declines a referral, BOI would have to investigate the case as provided under current law. District attorneys benefit at the expense of the division and BOI. This change is a violation of the Labor Code and the authority vested in the division by federal OSHA. It could lead to the loss of federal funds for the program.

4. Currently an employer is required to report serious cases to the division by telephone or telegraph. Under this bill, a violation of this provision would result in a civil penalty of not less than $5,000 or more than $25,000. This is nothing more than a trap for the unwary (especially when you consider that there are over 600,000 small employers who are highly unlikely to know this rule). A $25,000 civil penalty for a reporting violation is unprecedented anywhere in the nation. However, this provision pales in comparison to the new penalty in the bill for an employer who fails to report a death to the division who could be imprisoned in the county jail for up to one year and fined up to $25,000. The bill does nothing to address the real problem of making employers aware of their reporting responsibilities and is simply punitive in nature.

5. AB 2837 would establish a Worker Safety Bilingual Investigative Support, Enforcement, and Training Account and authorize DIR to receive and accept contribution of funds from an individual or private organization, including the proceeds from a judgment in a state or federal court if the contribution is made to carry out the purposes of this part. An enforcement organization should not be in the position of benefiting from enforcing the law. This provision would authorize a new low in legal extortion by district attorneys who could pursue funds for this purpose in every complaint filed. In CMTA's view, the program is not worth having if the state is not willing to fund it.

AB 2837 will be heard in the Senate Labor and Industrial Relations Committee on June 26.

Low level radioactive waste disposal -- another california crisis in the making
California has a long history of ignoring vital infrastructure issues to the point that decisions must be made in crisis mode. The recent energy crisis is a dramatic illustration of the consequences of inattention. Water supply, transportation and housing are all trending in the same direction, along with an issue that could affect innovations in health science, treatment of chronic diseases like cancer and restoration and beneficial reuse of contaminated properties.

The issue is management of low level radioactive waste, which has been embroiled in political controversy ever since the California Department of Health Services licensed a disposal facility in Ward Valley in the mid-1980's pursuant to an agreement with the federal government and neighboring states. That facility was never built. Today, the majority of low level waste from California facilities, including hospitals, universities and biotechnology companies, goes to a South Carolina facility that will close its gates to California waste in 2008. Barring some unforeseen development between now and then, California facilities will have to stockpile their waste on site. Of course, this practice cannot be sustained and is not in the best interest of public health or the environment.

Environmental activists continue to push for new barriers to disposal of low level waste and reuse of formerly contaminated properties. The latter issue has become heated in the last few months due to a court decision to suspend a DHS regulation governing the decommissioning of sites licensed to use radioactive materials. There are many sites in the state, both private and military, that have undergone extensive cleanup but remain in limbo because of the court decision. These sites, including the former McClellan Air Force base in Sacramento, represent significant economic growth potential for their communities.

Keeley

Kuehl

Romero

Four bills were introduced this year dealing with various aspects of the low-level radioactive waste issue: AB 2214 by Assemblymember Keeley (D-Boulder Creek), SB 1444 and SB 2065 by Senator Kuehl (D-Santa Monica) and SB 1623, now SB 1970, by Senator Romero (D-Los Angeles). All have survived to the second house. None of them offer solutions to the looming crisis that faces users of radioactive materials and communities with contaminated properties. Moreover, these bills would make a bad situation much worse by promoting onsite stockpiling of waste, and by condemning valuable properties. AB 2214 will be heard in Senate Environmental Quality on Monday, June 24. The Senate bills will be heard in Assembly Environmental Safety and Toxic Materials on Tuesday, June 25.

Renewable power gains momentum

Sher

Wright

After being stalled in the Senate for nine months, legislative efforts to establish a utility renewable portfolio standard (RPS) are gaining momentum. Last fall, SB 532 (Sher), which would have increased the amount of renewable energy in the investor-owned utilitiesā (IOUs) procurement portfolio to 20% by the year 2010, was narrowly defeated in the Assembly Energy Costs and Availability Committee. On Tuesday, June 11, utility RPS language was amended into AB 57, legislation authored by Assemblyman Roderick D. Wright (D-South Central Los Angeles) which establishes a framework for utilities to resume their procurement responsibilities. The bill is now on the Senate floor. If approved by the Senate, it will go back to the Assembly for a final vote.

The RPS language amended into AB 57 establishes a "goal" to increase the percentage of renewable procurement by 1% per year up to 20% "provided sufficient funds are made availableä in order "to cover above-market costs." Meanwhile, however, discussions are underway to establish a mandatory RPS for IOUs. The designated vehicle for this is SB 1524 (Sher D-Stanford). The bill was scheduled to be heard on Monday, June 24 in the Assembly Utilities and Commerce Committee, but has been postponed. Assemblyman Wright, who chairs the committee, has pledged to help Senator Sher get the necessary rule waivers for a later hearing.

Amendments have not yet been drafted, but the SB 1524 language is likely to include a mandated requirement for a utility RPS, gradually increasing each year, with the CPUC setting a benchmark price for renewable power procured by the utilities. Under this scenario, renewable power priced below the benchmark would be recoverable in rates, and power priced above the benchmark would be recovered through public goods charge funds÷with a cap on available funds.

CMTA's top two priorities when it comes to a utility RPS are cost allocation and cost-containment. Renewable power may be a laudable goal, but in the final analysis it comes down to who is going to pay, and how much is it going to cost? Currently all customers pay a public goods charge as part of their electric bill. This is used in part to subsidize renewable power development. While it is not clear as of this writing precisely what approach Senator Sher will take, a mandatory utility RPS will likely increase the price of electricity for utility ratepayers, including industrial customers who were subjected to disproportionate rate increases last year. As SB 1524 makes its way through the legislative process, the bottom line for CMTA is the bottom line.

Manufacturing employment continues to slide
According to the just-released June California Department of Finance Bulletin, the decline in manufacturing jobs continues, with 6,500 jobs lost in April. The bulk of these jobs were lost in food processing and high tech. On a year-over-year basis, manufacturing lost 103,400 jobs in the last twelve months. During this same 12-month period, services lost 19,800 jobs, led by losses in business services and motion pictures. Transportation and public utilities lost over 33,900 jobs. Government added 74,900 jobs. Wholesale and retail trade followed with 25,400 jobs. The net loss of jobs from all sectors for the last 12 months is 54,000. (More data on CMTA's Manufacturing Employment Report)

CMTA Services
CMTA Service Corp. awarded $500,000 from state employment training panel
At its May meeting in Los Angeles, the California Employment Training Panel (ETP) approved a $500,000 "Multiple Employer Contract" for the CMTA Service Corporation. The new agreement will allow the Service Corporation to provide flexible, on-site training to companies in a number of curriculum areas including computer skills, continuous improvement, and manufacturing skills.

Training can be delivered to companies at no cost and without the need for participating employers to contract directly with ETP. The new CMTA agreement is ideal for companies with immediate training needs, limited training resources, or the need to train a limited number of employees. For more information please contact Brian McMahon at 916-498-3338 or bmcmahon@cmta.net.

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