Update on top policy issues for 2013

By CMTA Staff

Capitol Update, May 23, 2013 Share this on FacebookTweet thisEmail this to a friend


CMTA is the only statewide organization dedicated to improving the business climate for manufacturers. We support policies to remove barriers to investment, reduce regulatory burdens, provide a skilled workforce and ensure competitive tax rates.

The Legislature is at mid-point for the first of a two-year session. Next week is dedicated to floor sessions as bills must pass their house of origin. It’s a good time to take stock of what’s been happening with our top policy issues.

Workers’ Compensation– Regulatory implementation of SB 863 (Chapter 363, Statutes of 2012, Kevin de Leon, D-Los Angeles) is on track. A legislative attempt to undo the reforms of SB 863 was pushed back when SB 626 (Jim Beall, D-San Jose) failed to get a hearing. We continue to monitor and weigh-in on implementation issues as they arise. 

Manufacturing Tax Policies– Two bills are moving with bi-partisan support to provide a manufacturing Sales Tax Exemption: SB 376 (Lou Correa, D-Santa Ana) is sponsored by CMTA. The other is AB 486 (Kevin Mullin, D-So. San Francisco). The Governor has proposed the addition of a statewide STE as a component of his “Job Creation Plan” in the “May Revise” of the state budget along with substantial reform or possible elimination of the Enterprise Zone program. CMTA opposes a labor-backed bill to impose misguided new requirements for EZs. 

Workforce Development and CTE– The education finance formula contained in the Governor's budget would essentially eliminate funding for workforce education and training at the K-12 level. The Senate Democrats have an alternative to the Governor's plan that contains provisions to preserve CTE programs and implement much needed accountability requirements to ensure relevant outcomes. CMTA is working to protect CTE funding by supporting this alternative plan.

Green Chemistry– Additional changes are not anticipated from the last draft of the “Safer Consumer Products Regulation.” This program is expected to be adopted in October of this year with the first list of chemicals and products expected to be released around the first of the year.

AB 32 Cap and Trade Auction Tax– CMTA companies have directly contacted legislators and the Governor to maintain the level of free allowances provided in the first compliance period through 2020. CMTA also opposes a handful of bills to direct the use of cap and trade revenue partly because they jump ahead of findings CARB should make in an update to the AB 32 scoping plan. In the “May Revise” the Governor decided to direct the revenue to the General Fund as a one-year loan, partly for this same reason. 

AB 32 Cap and Trade Electricity Costs– Qualifying for return of cap and trade allowance value depends on a manufacturer’s vulnerability to out of state competition and the energy intensity of their operations. CMTA is supporting such efforts by already identified qualified manufacturers, and is working with the CPUC to include aerospace firms in this group.

Transportation Fuel Policies– Refineries will likely not be able to achieve targets in the AB 32 Low Carbon Fuel Standard without tremendous cost according to a Boston Consulting Group study now being reviewed by economists at UC Davis. CMTA opposes a group of bills to limit or ban the use of hydraulic fracking for oil recovery. 

Unemployment Insurance– Employers are on the hook for $11 billion in UI costs incurred during the recession. CMTA has been working with the Administration and other business stakeholders to consider cost-effective repayment options and formulate reforms to improve the efficiency and integrity of the system. 

California Environmental Quality Act (CEQA) Reform– Discussions continue on CEQA reform as the "modernization" bill, SB 731, by Senate President pro Tempore Darrell Steinberg (D-Sacramento) continues to move through the legislative process. However, other measures that seek to expand CEQA have also been introduced and threaten to cloud the discussion. CMTA is working to defeat these measures while supporting the continuation of the broader discussion.

Stormwater Regulations– CMTA led a business/industry coalition to force the State Water Board to modify their initial General Industrial Stormwater Permit to provisions that were more business friendly, less command and control oriented and significantly less costly. We anticipate their release at any time and then will focus on assisting companies’ understanding of the steps necessary to comply with the new requirements.

Environmental Justice– OEHHA recently released what they consider their final draft for the time being of “CalEnviroscreen.” We will monitor the use of this “tool” over the remainder of the year in an effort to document if it is used in an inappropriate manner, such as for CEQA or permitting purposes.

Proposition 65– The Governor has announced his desire to see Prop 65 revamped to eliminate frivolous lawsuits and make it more useful to the public. CMTA with be working with the Administration to assist in accomplishing these goals.

Healthcare Reform Implementation– To fund expenses related to the Medi-Cal expansion, the Legislature is considering a bill that would impose a penalty on large employers whose employees elect to receive health coverage under Medi-Cal. This penalty would apply for both part-time and full-time workers and could be as much as three to six times higher than the federal penalty under the Affordable Care Act. CMTA is part of the lobbying coalition to defeat this measure and is also assisting in the public affairs effort, as needed.

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