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Legislative Weekly
September 27, 2002
Paid Family Leave Bill Signed by Governor
 Kuehl |
SB 1661 would establish within the state disability insurance program, a Family Leave Temporary Insurance program to provide up to 6 weeks of partial wage replacement benefits to workers who take time off work to care for a seriously ill child, spouse, parent, domestic partner, or to bond with a new child. About the only good news from the employers’ point of view is that the bill does not go into effect right away. The provision in the bill to fund the program doesn't go into effect until January 1, 2004 when the Employment Development Department will require employers to start withholding employee taxes to fund the program. And the provision that permits employees to take paid leave doesn't go into effect until July 1, 2004.
Small employers take note: Unlike the federal family medical leave and California family rights acts that only apply to employers with 50 or more employees, SB 1661 would apply to employers with less than 50 employees. CMTA is concerned about this because the bill captures a whole new universe of employers who are completely unfamiliar with managing any kind of family leave program paid or unpaid. These employers will need the lead-time to develop policies and procedures to comply with SB 1661.
As a result of the tremendous pressure on the legislature from over 2000 businesses across the state, the bill was significantly modified from it's original version. The number of weeks of paid leave was reduced from 12 weeks to 6 weeks and mandatory employers’ contribution to the program was removed altogether. A provision was added to permit employers to require employees to take up to two weeks of their unused vacation time when applying for paid family leave that may help shorten the total time an employee may take away from work. However, even after these modifications, SB 1661 remained a bad bill.
CMTA is very disappointed that Governor Davis signed SB 1661 over the very strong objections of California employers struggling to survive in California's increasingly hostile business environment. While our combined efforts were not successful in stopping the bill or gaining a veto, it does show that grassroots participation of employers can make a difference.
Listen to Sam Donaldson interview CMTA President Jack M. Stewart about SB 1661(Real Audio) Governor Signs Key Energy Bills
Earlier this week, Governor Davis signed into law several key energy bills, including legislation to get the investor-owned utilities back into the procurement business.
AB 57 (Wright D-South Central Los Angeles) establishes the IOU procurement rules, and requires utilities to submit procurement plans prior to resuming their procurement role.
In a partial victory for CMTA and other business organizations, the governor indicated in his signing message for AB 80 (Havice D-Cerritos) and AB 117 (Migden D-San Francisco) that the bills' intent language does not obligate customer generation to be on the hook for Department of Water Resources forward contract obligations. To view the governor's signing messages on both bills, go to the September 24 press release on his website, www.governor.ca.gov:
The governor's signing message fell well short of what CMTA and others were requesting. CMTA urged the governor to veto both measures, or at a minimum, indicate in his signing message that the intent language in the bills does not impact the authority of the California Public Utilities Commission to determine cost responsibility in the exit fee proceedings. The governor's signing message was helpful as far as customer generation is concerned, but was silent on the issue of direct access customer cost responsibility.
A proceeding is currently underway at the CPUC to determine cost responsibility for Department of Water Resources power purchases.
Exit Fees Proceeding at PUC
An administrative law judge (ALJ) for the CPUC yesterday issued a proposed exit fees decision on how above market DWR power costs should be calculated for customers on direct access contracts. This is the continuation of the case that last March kept September 20, 2001 as the cut-off date for direct access contracts, refusing to push back the date to July 1, 2001 or some earlier date. At that time the CPUC emphasized that "bundled service customers should not be burdened with the additional costs that would otherwise shift to them due to the significant migration of customers from bundled service to direct access between July 1, 2001 and September 20, 2001."
The standard adopted for judging the accuracy of an exit fee is whether "bundled service customers are indifferent" as to the departure of customers to direct access contracts so long as that fee is paid. Because it is not known in advance how much of the DWR contract power is uneconomic, whatever fee is established must be annually adjusted to maintain the appropriate level of collection and ensure this indifference. The proposed decision determines how to calculate the cost allocation to ensure indifference, how the a annual true-up would work, and also adopts a cap of 2.7 cents per kWh to preserve the viability of direct access.
In setting a cap, the ALJ had to balance the need to collect the costs at an annual level sufficient to not jeopardize indifference, yet small enough to preserve direct access viability. CMTA argued for a lower cap in the range of 2.0 cents. The sensitivity to energy prices is what forced many businesses to sign up with other suppliers, and even 2.0 additional cents could make some California businesses not able to compete in the global marketplace. The failure of a business (and the loss of the exit fee they would have paid) would shift costs to other direct access and bundled service customers in a fashion the CPUC would not be able to remedy, undermining the goal of indifference and harming the economy. Despite this urging, the ALJ determined that “subjective judgment and anecdotal accounts of discussions with industry representatives” was not sufficient to justify a lower cap.
In addition, the ALJ noted that since "the CPUC retains the flexibility to increase the cap in the future as deemed necessary to protect bundled customers from cost shifting, bundled ratepayer indifference is not violated by adopting an initial cap of 2.7 cents/kWh.” No similar comment was made with regard to lowering the cap if deemed necessary to ensure viability of direct access.
CMTA will be filing comments on the proposed decision.
Talking Point
"California indexes 32 percent higher than the national average in business costs. This means that every manufacturer in the state has to be 32 percent more productive and work 32 percent harder than businesses in most other states before they can earn their first dollar in profit."
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