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CALIFORNIA | Capitol Matters

A roundup of important bills, regulatory news, upcoming legislative issues and recent appointments.

November 08, 1996|From Legi-Tech News Service


The capture of the state Assembly by the Democrats on Tuesday has sent California's business lobby into retreat--literally--to rethink a legislative strategy for the next session, which begins Dec. 2.

Top brass from the California Chamber of Commerce held a retreat Thursday to revise an agenda that must win approval from a Democratic Legislature--one historically more receptive to labor unions and trial attorney lobbyists. Chamber officials weren't alone in the soul-searching.

"We're disappointed. We found the Republican Assembly extremely open to business concerns," said Jeff Gorell, a spokesman at the California Manufacturers Assn. "We're going to have a different group of people coming in and they will have to understand that the California comeback is not over."

Indeed, business and industry lobbyists enjoyed record legislative success under a Republican-controlled Assembly. More than 50% of the bills backed by the manufacturers' group won approval, Gorell said. Perhaps more significant, "every single bill we opposed got killed," he said.

The Democratic victory reverberates beyond the Legislature. Business leaders expect the character of dozens of state boards and advisory panels to change with hundreds of new appointments coming from a Democratic speaker of the Assembly. The first target is likely to be the powerful California Coastal Commission, whose 12 appointed members govern development along the state's coastline.


Insurance executives already basking in the industry-friendly policies coming from Insurance Commissioner Chuck Quackenbush's office got more good news last week with the selection of Greg Butler as interim chief executive of the newly created California Earthquake Authority.

The odds-on favorite to win the job permanently, Butler, a deputy insurance commissioner, has worked under Quackenbush for more than eight years, including when Quackenbush toiled as a Republican assemblyman in a Democratic Assembly.

Now, as the earthquake authority's top executive, the 31-year-old Butler becomes one of the highest- paid state bureaucrats, earning a cool $115,068 a year, slightly more than the $114,000 paid to Gov. Pete Wilson.

The Earthquake Authority was established this fall to guarantee availability of earthquake insurance at a time when private insurers, fearful of heavy losses in an temblor-prone state, considered pulling out of California. When fully operational next year, the state-run insurance agency will have the financial clout to pay more than $10 billion in claims.

Hot Bills

Here's a quick look at some of the important business-related legislation recently signed.

* Business Tax Breaks (SB 38)

Provides more than two dozen business tax breaks, including the option for small businesses to immediately write off up to $17,500 in new equipment purchases rather than deduct the depreciation over time. The bill also doubles to 24% the share of business-sponsored university research costs that can be taken as a tax credit. Supporters, including the California Taxpayers' Assn. and Atlantic Richfield Co. of Los Angeles, argued the changes conform with federal tax laws. Opponents, including the California Tax Reform Assn., argued the bill provides tax relief to special interests, not the public, and will result in annual revenue losses that could grow to $42 million after three years. Author: Bill Lockyer (D-Hayward)

* Air and Water Quality Violations (AB 2937)

Prohibits state air and water boards from fining companies for first-time "minor violations" of environmental laws. For unintentional violations not deemed to present a "significant" effect on human or environmental health, the boards may now issue a 30-day fix-it ticket. Supporters, including the California Manufacturers Assn., argued the legislation will allow state agencies to concentrate on major environmental offenders. Opponents, including the Planning and Conservation League, said eliminating the threat of fines will remove incentives for businesses to comply with air and water quality laws. Author: Jim Brulte (R-Rancho Cucamonga)

* Private Investment in Public Projects (AB 2660)

Permits cities and counties to solicit private financing to design, build and renovate an array of fee-producing public projects, including stadiums, water-treatment plants and airports. The legislation then allows private companies to recoup and profit from their investment through the fees generated. Supporters of the bill, including the California Building Industry, argued it has become increasingly difficult to publicly finance the amount of infrastructure projects needed to maintain economic stability and quality of life. Opponents, including the Professional Engineers in California Government, argued that private companies using private financing would mean higher costs for taxpayers. Author: Fred Aguiar (R-Chino)

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