Building industry lobbyists resume reform efforts; they're pushing legislation to get builders more jobs.

The politically powerful construction industry trade groups of California, despite a lingering recession and resulting drop in their membership ranks, are once again lobbying Sacramento lawmakers to undertake an ambitious slate of business-related reforms.

On top of their wish list for this legislative session, which started Dec. 7, 1992 and runs through Sept. 10, is restructuring the state's workers' compensation system and speeding up the development approval process. Construction industry lobbyists insist such reforms are crucial to getting construction projects started faster and getting building craftsmen back to work.

An estimated 200,000 California construction workers have lost their jobs in the past 18 months, according to building industry lobbyists.

Membership in California's various chapters of the Building Industry Association dropped from 7,000 companies 18 months ago to just 5,500 companies today, said Cliff Allenby, California Building Industry Association's chief lobbyist in Sacramento. That drop-off in membership is reflective of the huge number of construction companies have gone out of business in that period, Allenby added.

As such, the construction lobbyists are pushing legislation that they say would directly or indirectly put their constituents back to work.

"The top issue for this session is finding a way builders, citizens groups, environmentalists and cities can come up with a realistic growth management policy that doesn't shut down construction," Allenby said.

The building industry lobby will flex all the muscle it can muster to see that Assembly Speaker Willie Brown appoints the "appropriate" members to his chamber's Environmental Committee, he said.

"We want the Legislature to guard against setting urban limit lines in California. We want a growth management policy that designates preferred development," Allenby said, adding that county planning departments should play a greater role in regional planning.

Construction industry leaders also promise to badger lawmakers for workers' compensation reform this session.

"From 30 to 50 percent of employers' payroll expenses go out in workers' compensation premiums," said John Hakel, executive director of Southern California Associated General Contractors, a trade group of mostly nonresidential construction companies.

"The (workers' comp insurance) rates in California are among the highest in the nation, and we want some type of reform legislation passed this session," Hakel said. The high rates drive up the cost of building in a market that already has trouble competing with other, lower-cost regions where restrictions are more relaxed. It is those lower-cost markets -- such as Phoenix, Salt Lake City and Las Vegas -- that are recruiting industry and jobs from Southern California.

Phil Perry, press secretary for newly appointed Assembly Minority Leader Jim Brulte, R-San Bernardino, is among those predicting the workers' comp issue will be handled this session.

"Workers' comp reform, and finding a way to fund state agencies and avoid another budget deficit, will take priority," Perry said. He added that other concerns voiced by the building industry lobbyists -- such as growth management and streamlining the California Environmental Quality Act -- have merit, but they will be put on the back burner.

"But we have to wait for Assembly Majority Leader Willie Brown to set the legislative agenda," Perry said.

Also near the top of the building industry's wish list is getting the permit approval and inspection process streamlined, Hakel said.

"We want simultaneous plan review by the many government agencies that must pass on environmental reviews," Hakel said. As things stand, the South Coast Air Quality Management District, Southern California Association of Governments, city planning departments, city building departments, and county and state transportation agencies each take separate looks at development plans.

Parallel plan check would put construction workers back to work more quickly, said Hakel, and it would reduce builders' interest expense on construction loans because projects could be finished sooner.

Perry from Minority Leader Brulte's office predicted the Legislature would also succeed in streamlining the project-approval process this session.

On a related front, construction industry lobbyists this session will be pushing to get the California Subdivision Map Act amended. Such an amendment, lobbyists said, would allow developers more time to arrange construction financing once they get their projects approved. As it stands, developers have 24 months to start construction after getting their subdivision approval. If the deadlines are not met, the developer may lose its entitlements. The building industry lobby wants the 24-month deadline increased to 36 months.

Moving on to other issues, builders' lobbyists say they will ask legislators for a bill that will let builders defer at least part of the "impact fees" they are routinely required to pay. Impact fees are assessments against developers to offset the "impacts" of their proposed developments (e.g. more people, more cars, etc.) Hence, the impact fees are used to build new roads, schools, fire stations and other community facilities. Under the existing formula, developers must pay most of their impact fees as soon as their building permit is issued. The building industry lobby wants at least part of those fees postponed until after the project is finished.

"For instance, the fees that go to build schools, fire stations and police stations should not have to be paid until sale of the new house is finalized," Hakel said. Such a measure would reduce the interest expense home builders pay on construction loans. That's because builders typically use a portion of their construction loans to pay for the "impact fees," Hakel explained. So, deferring those fees would reduce builders' up-front borrowing requirements and, therefore, their interest expense.

In a somewhat bolder step, the construction lobby will also push the Legislature to alter the way property taxes are allocated to cities. Builders want the state to allocate a larger share of its property tax revenues back to local governing bodies so those local governments can, in turn, fund more building programs, Hakel said.

For instance, local school districts should have more say over how money is spent in their districts than state officials in Sacramento, he argued.

Perry of Brulte's office was noncommittal about which, if any, of the issues on the construction lobbyists' agenda will be supported by his boss. "I don't have any comment on which of these proposals we'll push for. It's a very touchy issue and the entire caucus needs to get involved to solve it," he said.

Similar to its stand on property tax allocation, the building industry lobbyists are also pushing to revise the formula for allocating sales tax revenues. As it stands, 90 percent of state sales tax dollars are sent back to the cities in which the sales were made. The lobbyists want the money kept in a large pool and spent in the neighborhoods that have the greatest needs.

"That would provide more funding for projects that are needed in densely populated neighborhoods that have few retail outlets, such as South Central and East Los Angeles," Hakel said.

Construction industry lobbyists are also pushing legislators to require standardized architectural designs for public school buildings.

"That would let school districts stretch the budgets further and would let them build facilities faster because they could use components that are made in a factory," Hakel said.

Perry said any plan that would allow the state to stretch its budget will be considered. But he predicted revenue-flush cities, such as Beverly Hills and Santa Monica, would vehemently oppose any bill that would reallocate their sales tax dollars to inner-city communities where basic services are needed, like South Central or East L.A.

Also expect legislators to consider at least two earthquake-related bills this session, as a result of the temblors that shook the Inland Empire in the first half of 1992, Hakel said. Under one bill being pushed by the building industry, a surcharge would be tacked on to building permit fees. The resulting proceeds would be put into a special state fund to provide relief to homeowners suffering earthquake-related damages. Hakel asserted such a fund is needed to replace the Earthquake Recovery Act, which the Legislature repealed at the end of the 1992 session.