Capitol punishment: senators wasting time with repeal.

MAY I have the envelope, please? Here it is! This year's award for the most punishing move by a legislative body goes to: the California Senate!

In a move that can only be described as "punishing," the California Senate's Labor and Industrial Relations Committee voted to repeal SB 228, the recently approved workers' compensation reform bill. Why did this happen? Could it be that our senators decided to show our new governor and almost two-thirds of the California voters, who's really in charge? In other words, that the governor cannot order the legislature to abandon "politics as usual" and fix our state's problems without regard to the special interests that have a stranglehold on many of our legislators.

The recently unveiled Schwarzenegger plan for additional reforms to California's workers' compensation system includes a number of well thought-out additions to supplement SB 228 and potentially add up to $11 billion in savings to the estimated $4 billion to $6 billion savings that were anticipated to be accomplished by SB 228. This combined solution would make a significant dent in the current $29 billion cost of workers' compensation. So what could be wrong with this? The answer appears to be that Senator John Burton, President Pro Tem of the California Senate and Chair of the Senate Rules Committee doesn't do well with criticism. Burton, who formed a conference committee during the last legislative session for the purpose of arriving at workers' compensation reform, apparently didn't like hearing from the governor and the business community that SB 228, the result produced by the committee, although significant, didn't go far enough to curb the flight of businesses and loss of jobs caused by the substantial rise in workers' compensation costs. In a "sour grapes" move to punish, Burton called upon his colleagues in the Senate to repeal SB 228, thereby throwing the baby out with the bath water.

The greatest disappointment is that Senator Burton's colleagues heeded his call showing that despite the overwhelming call for change from California's voters, "politics as usual" is apparently here to stay. It's important to note that even Sen. Alarcon, who authored SB 228, voted for its repeal. Alarcon was a major champion of the bill's passage, believed it provided significant reform and publicly voiced opposition to its repeal, yet, when the vote to repeal was called, Senator Alarcon said "aye." What happened?

If SB 228 is ultimately repealed, the resulting waste of time and energy will be monumental. During the last legislative session, approximately 65 workers' compensation bills were introduced. After spending significant time considering these bills, 20 of them were moved to the conference committee composed of six members, three senators and three Assemblymembers, two Republicans and four Democrats. The bills were gutted and amended, deleting all prior language with intent language inserted that recognized the need of the legislature to reform the workers' compensation system. The committee was charged with the responsibility of developing such reform. After a significant amount of work and compromise, companion bills SB 228 and AB 227 were produced. These bills which provide fee schedules for outpatient surgery centers, prevent physicians from referring patients to surgery centers in which the physician has an ownership interest, expand alternative dispute resolution provisions and place a ceiling on chiropractic visits, among other items, were recently signed into law by former Gov. Gray Davis. Although additional reforms such as those proposed by Gov. Schwarzenegger are needed, it would be unconscionable to scrap the results attained from the significant efforts expended to date and start over from scratch.

When, oh when will our legislators stop impeding progress and return our state to economic prosperity? How can we minimize the effects of egos and special interests?

The following are the anti-business bills I have chosen to profile this month:

* SB 288: Provides more stringent requirements than those of the U.S. Environmental Protection Agency with respect to new and modified sources of air pollutants. Potentially creating increased costs and susceptibility to litigation. Provides one more reason for California manufacturers to avoid expanding and modernizing their facilities within the state or to leave the state entirely, thus causing the loss of more manufacturing jobs and creating a further negative impact to our economy.

Status: Passed Senate and Assembly, approved by governor Sept. 22, 2003.

Valley legislators voting for bill: Senate, Alarcon, Kuehl, Scott; Assembly, Frommer, Koretz, Levine, Montanez, Pavley.

Valley legislators voting against bill: Senate, Knight, Margett, McClintock.

* AB 47: Requires new studies and findings for Timber Harvesting Plans (THPs) that are redundant to existing cumulative impact analysis for THPs. The result will be increased costs of California timber products making California less competitive than other states and countries. California is already at a competitive disadvantage to Canada. Currently a significant amount of the lumber used in California is purchased from Canadian companies. This bill will increase the existing competitive disadvantage, resulting in the loss of more jobs and businesses.

Status" Passed Assembly and Senate, approved by governor on Oct. 10, 2003.

Valley legislators voting for bill: Assembly, Koretz, Levine, Montanez, Pavley, Richman; Senate, Alarcon, Kuehl, Scott.

Valley legislators voting against bill: Assembly, Strickland; Senate, Knight, Margett, McClintock.

Valley legislators absent, abstaining or not voting: Frommer

Gregory N. Lippe, CPA, is managing partner of the Woodland Hills-based CPA firm of Lever, Lippe, Hellie & Russell LLP (LLHR) and a director of the Valley Industry and Commerce Association (VICA).