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Assembly OKs Bill on Megastores

Passed by a narrow vote, the legislation would require economic impact studies for retail outlets such as those planned by Wal-Mart.

August 17, 2004|Robert Salladay | Times Staff Writer

SACRAMENTO — Only days after the Los Angeles City Council made it more difficult to build bigger Wal-Mart stores within city limits, the California Assembly approved similar legislation Monday targeting the world's largest retailer.

In a narrow vote after an hourlong debate, the Assembly voted to require economic impact studies before approving large-scale stores similar to ones Wal-Mart is attempting to build across California. The company's new stores would be some of the largest ever built -- covering close to five acres.

The legislation is part of a long-running feud between California Democrats and Wal-Mart. The Arkansas-based company does not hire unionized workers but has become a low-cost mecca for customers and a sales tax boon for cities and counties.

Democrats said the new legislation is an attempt to assess whether Wal-Mart pushes down wages in surrounding areas, shuts out smaller businesses or otherwise changes the local economy when a mega-store comes in.

Wal-Mart has said it wants to build as many as 40 Supercenters in California within the next four or five years. One already has opened in La Quinta, near Palm Springs. Two more are set to open in Hemet and Stockton. The stores are much larger than regular Wal-Marts and feature groceries along with tens of thousands of items as varied as shampoo and lawnmowers.

"This simply says: Look before you leap," said Assemblywoman Jackie Goldberg (D-Los Angeles), who voted in favor of the legislation. "There may be unintended consequences. It says if your area has lots of small businesses, look to see if this puts them out of business."

The legislation, AB 1056, is sponsored by state Sen. Richard Alarcon (D-Los Angeles), who is running for mayor of Los Angeles. The measure passed the Assembly on a 43-31 vote, sending it back to the Senate where it is expected to be approved and forwarded to Gov. Arnold Schwarzenegger. The measure needed 41 votes to pass.

Wal-Mart officials said the state legislation unfairly and arbitrarily targets its Supercenters and forces cities and counties to look only at the negative impact of the stores rather than the new jobs created.

"The rules ought to be the same for everybody, and what isn't being considered in this bill is the fairness issue," said Wal-Mart spokesman Robert McAdam. "This is quite clearly and fairly transparently a union-sponsored piece of legislation that is intended to cater to those interests."

Wal-Mart contends its wages -- averaging $10.37 an hour in California -- are higher than at other nonunion stores. The company also says that more than 90% of its employees have health insurance -- half through the company's medical plan and an additional 40% through a spouse or a parent, Medicare or a retirement plan from a previous job.

The Republican governor has not taken a position on the bill, but he said last week that he prefers local communities to decide. "In most cases in America, the communities welcome them because you have cheaper prices and you have great additional employment. But in some communities, there's the argument: 'I like my little store,' " Schwarzenegger said.

The Alarcon legislation would not require state approval of new Supercenters, but would require local communities statewide to order the economic impact studies and consider them. The studies would apply to any retail outlet with more than 130,000 square feet that devotes at least 10% of sales to groceries -- a narrow enough definition to include all Supercenters, which can run 200,000 square feet.

Last week, the Los Angeles City Council approved an ordinance requiring retailers wanting to build stores larger than 100,000 square feet that devote more than 10% of their sales floor to food to pay for economic reports. Those studies would have to take into account whether the new store would eliminate jobs elsewhere, depress wages or harm smaller businesses in the neighborhood.

Republicans in the Assembly said the state would be interfering in the compete-or-perish nature of the U.S. economy and actually would hurt poor people by forcing businesses to raise prices by hiring unionized workers. If a competing business goes under because Wal-Mart moves next door, they argued, then that is the way the economy should work.

"It is not our place to get in the way of the free-enterprise system," said Assemblyman John Benoit (R-Riverside). "It is not our place to get in the way of where people shop."

The Wal-Mart legislation was one of dozens of bills approved Monday by the Legislature as lawmakers get closer to their Aug. 31 end-of-session deadline. Among other legislation Monday:

* On a 23-9 vote, the Senate approved AB 1854 by Assemblyman Joe Simitian (D-Palo Alto), which would require motorists to turn on their headlights during bad weather that necessitates the use of windshield wipers or hampers vision. Fines would start at $25. The law would take effect July 1, 2005.

* The Senate voted 22 to 11 to prohibit public schools in California from using the term "Redskins" for their mascots, athletic teams or nicknames. The ban would start in January 2006, but would not affect schools in "Indian country." Under AB 858, schools would be allowed to use uniforms that were purchased before the ban begins, so long as the schools have selected a replacement name for their teams.


Times staff writer Jordan Rau contributed to this report.

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