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Legislative Weekly
August 30, 2002
Workers' Comp Clean-Up Bill Ignores Employers' Concerns
 Calderon |
One provision takes away an alternative dispute resolution carve-out that was supposed to provide substantive savings to aerospace and timber industry employers. The bill provides no offsetting change(s) to make up for the loss.
The bill provides yet another advantage for represented injured workers by requiring an injured worker to be represented in order to receive an expedited hearing. This provision harms the unrepresented worker because the only way that they can get timely access to the legal process is to hire a lawyer. In addition, this provision may become problematic for employers in cumulative trauma claims or other claims where AOE/COE determinations may take longer, adding more costs for employers.
CMTA is also very concerned with the "trier of fact" making a determination that a dependent child of any age is physically or mentally incapacitated from earning a living. There are numerous employees/contractors with the state and counties who are in a position to do this but who have no particular training or credentials to make this decision. This could have a huge financial impact on employers' workers' compensation costs. CMTA believes that only a competent medical professional should make this decision.
According to the Workers' Compensation Insurance Rating Bureau, the provision that would require the use of the state average weekly earnings on injuries occurring on or after January 1, 2006 would add approximately $50 million dollars in new workers' compensation costs in the first year. With no provisions to help off-set these new costs, employers will continue to be burdened with high comp cost without regard to the state of the economy, possibly leading to employee layoffs and eventually plant closures.
Initially the clean-up bill was supposed to make technical changes, clarify unclear issues and even add nonsubstantive issues that could be addressed without having a substantive impact on AB 749.
CMTA proposed to clarify that the presumption remains for the pre-designated physicians only and not for personal physicians under LC 4600. Another proposal clarified that the presumption is for personal chiropractors and not pre-designated chiropractors under LC 4601. Unless this provision is fixed, it would provide a greater presumption benefit to chiropractors than any other physicians in the Labor Code. These clarifications are absolutely necessary in order for the so-called employer reforms/savings to be realized for employers.
CMTA recommends that minimum temporary total disability benefits not apply to volunteers and employees who are not paid wages or salary or those who make less money than the minimum amount stated in AB 749. It would especially hurt not-for-profit employers and organizations such as the Red Cross, churches and others that rely heavily on volunteer services. For some employers, this provision will have a chilling effect on permitting volunteers and non-wage earners to do any kind of work at their facility.
In order to fully realize the employer reforms/savings of the pharmaceutical fee schedule in AB 749, CMTA recommends that the definition of "pharmacies" be clarified to cover hospitals, clinics and physicians that dispense medication. This clarification would prevent the same kind of shift to the non-covered entities listed above that would lead to "unregulated charges abuse" that currently exists with the hospital fee schedule by unregulated out-patients treatment facilities and providers.
Another provision in AB 749 would permit a represented injured worker to settle their vocational rehabilitation benefit for $10,000. CMTA recommends clarifying language regarding self-directed plans and clarifying language requiring the approval of the Vocational Rehabilitation Unit in order to avoid confusion and unnecessary litigation.
Time is short and the bill must move very quickly in order to pass both houses prior to the August 31 midnight deadline. Changes have to occur immediately.
Assembly Judiciary Committee Slaps Business Community, Again
 Kuehl |
The new version continues to propose a distinction between commercial and non-commercial speech and continues broadly to prohibit an Anti-SLAPP motion from being employed against any cause of action arising from statements or conduct in an act in furtherance of a wide variety of commercial activity. CMTA believes that under this bill, manufacturers would not be able to use an Anti-SLAPP motion to dismiss a lawsuit brought simply to harass a company.
CMTA, the Civil Justice Association of California, the California Chamber, and SBC Pacific Bell testified in committee against the bill. The bill then moved directly to the Assembly Floor where it was rushed through and approved. CMTA will be lobbying the Governor's Office for a veto.
Assembly Rushes To Judgment In Approving Last Minute Legal Changes
 Burton  Wesson |
As amended, SB 688 would extend from 28 to 75 days the time allowed for a reply to a motion for summary judgment. Current law allows the party opposing the motion (usually the plaintiff) 14 days to respond to a summary judgment motion. This bill would extend the plaintiff's response time another 61 days. This change is more than four times the length allowed under current law and much longer than the period in other major jurisdictions. The extended time for reply, when added to all other stages of the process, puts pressure on the one-year "fast-track" rules the courts have to speed resolution of cases. In order to stay within the one year, a defendant that wants to move for summary judgment would have to file the motion within weeks of being served the lawsuit. The purpose of this bill is to limit the use of summary judgment to resolve meritless lawsuits.
The second part of the bill, deals with extending the statute of limitations in personal injury actions. SB 688 doubles the statute of limitation from 1 to 2 years. Additionally, the bill is retroactive for 9/11 victims.
CMTA has met with the Governor's staff to discuss our extreme displeasure and opposition with the process and policy behind this measure and we will encourage a veto of this bill.
Aggregation Bills Approved With Exit Fee Intent Language
Two bills authorizing community aggregation -- with legislative intent language related to exit fees -- received final legislative approval and are on their way to the governor.
AB 117 (Migden D-San Francisco), which authorizes cities and counties to aggregate load, and AB 80 (Havice D-Cerritos) which authorizes the cities participating in the Magnolia Power Project (Anaheim, Colton, Glendale, Burbank, and Pasadena) to aggregate load and provide direct access to their residents, were approved on the Assembly floor on Thursday, August 29. Both measures contain identical intent language that applies not only to aggregation customers but also to direct access customers and departing load. The language states the Legislature's intent that the California Public Utilities Commission should impose exit fees on all retail end-use customers not receiving service from an investor-owned utility:
"It is the intent of the Legislature that each retail end-use customer that has purchased power from an electrical corporation on or after February 1, 2001, should bear a fair share of the Department of Water Resources' electricity purchase costs, as well as electricity purchase contract obligations incurred as of the effective date of the act adding this section, that are recoverable from electrical corporation customers in commission-approved rates. It is further the intent of the Legislature to prevent any shifting of recoverable costs between customers." The intent language is unnecessary and premature. The CPUC is currently engaged in proceedings to determine the appropriate cost responsibility for direct access and departing load customers for Department of Water Resources power procurement costs.
The main proponent of the intent language is Senator Debra Bowen (D-Marina del Rey), who chairs the Senate Energy, Utilities, and Communications Committee. Bowen believes that any bill authorizing aggregation should contain a legislative statement on DWR cost recovery.
CMTA has taken a "oppose unless amended" position on both bills, pushing for amendment language that doesn't pre-judge the issue of cost responsibility of customer generation and distributed generation.
On the eve of the final vote on AB 80, the bill's author, Sally Havice, at the urging of CMTA and others, agreed to write a letter to the Assembly Journal stating her intent that the use of the words "fair share" in the bill's intent language "should be read to show that the legislative intent is that a fair share of the Department of Water Resources' power purchase costs and power purchase obligations could be zero if evidence before the Commission supports the conclusion that zero is a fair share."
Gut And Amend Breathes New Life Into SB 1444
Last week, Senator Kuehl's (D-Santa Monica) controversial radioactive contamination cleanup measure, SB 1444, was held in the Assembly Appropriations Committee. On Wednesday of this week, the Committee passed an amended version of the bill, which the author contends only affects one piece of property -- Boeing's (Rocketdyne) Santa Susanna Field Laboratory in Ventura County. Certainly, this interpretation seems consistent with the new bill language. Why then, do seemingly unaffected groups, such as Southern California Edison and BIOCOM (a San Diego-based association of biotechnology companies), remain opposed to this measure?
Existing federal and state regulations already prescribe low risk cleanup standards for sites with residual radioactive contamination that are fully protective of public health and safety. SB 1444 would eclipse this policy by setting an arbitrary cleanup standard for the Rocketdyne site in statute. The levels referenced in the amendments are taken out of context from an outdated report. If SB 1444 becomes law, other operators will be vulnerable to unfounded accusations of favorable treatment at the expense of public health and safety.
The legislative debate over the cleanup level at the Rocketdyne site transcends the local land use dispute. The proponents of SB 1444 have demonstrated their desire to broadly constrain use of radioactive materials in California, regardless of what science indicates is safe for the public. CMTA and several other organizations remain opposed to SB 1444.
State Budget Stalemate Continues
Can the State's Fiscal Picture Get Any Worse?
 Connell |
Additionally, Connell announced that revenues are down and that the state could face an additional $3 billion deficit that would add to the list of financial problems that the state must address. She suggested that its possible that the state would not have enough cash to meet financial obligations in October and November. In that case, the state would have to sell short-term debt security, which could come with a high interest rate. If there is no budget by Monday, September 2nd, lawmakers and Governor Davis will break the current record 62-day budget stalemate set in 1992.
Manufacturing Facts
* California manufacturing jobs have declined by 8% since January, 2001 while state government jobs grew by 5%.
* California's business costs are 32 percent higher than the National average.
Talking Points
* On the budget: "We cannot cut, beg, tax and borrow our way to prosperity. Only economic growth will restore California's fiscal vitality."
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