Oil Watchdog

SACRAMENTO, CA — Acting on the last batch of bills from what
experts called a disappointing regular legislative year, Gov. Arnold Schwarzenegger on Sunday signed into law a controversial increase in motorists’ fees that is intended to raise millions to develop alternative fuel and clean-air technology.

Consumer advocates condemned the bill for putting the costs on the backs of motorists rather than oil companies.

Schwarzenegger also signed what became known as the "toxic toys"
bill, which makes California the first state to prohibit the use of
chemical compounds called phthalates in products designed for children
under 3 years old.

Making his way through the final 153 bills, the governor vetoed
legislation proposed by state Senate President Pro Tem Don Perata
(D-Oakland) that would have allocated $611 million to work on solving
the state’s water problems.

Schwarzenegger also vetoed a bill allowing the distribution of
condoms to inmates in all state prisons, but said he would allow a
pilot program at one lockup to see if it helps reduce the spread of
HIV.

He also signed a widely criticized measure allowing the owners
of Staples Center in Los Angeles to access millions of state dollars
earmarked for affordable housing-related programs in order to improve
streets near the sports facility.

The governor’s last signatures before Sunday’s midnight
deadline provided an anticlimactic end to a rather fallow year for the
executive and the Legislature, some political observers said.

"It was a not particularly productive year," said Raphael J. Sonenshein, a political scientist at Cal State Fullerton.

He noted that the Republican governor and the Legislature have
failed so far to reach agreement on what the leaders agreed were the
two most pressing matters: healthcare reform and a comprehensive plan
to upgrade the state’s over-stressed water system.

The governor has called a special session on both matters, but no consensus has been reached.

Indeed, one of the governor’s last actions Sunday was to veto SB
1002, which sought to address part of the water system problems by
providing $611 million in bond money to fund water-related projects,
particularly in the Sacramento-San Joaquin Delta.

Perata called the bill vital to starting to address the water issue.

Sonenshein said the governor’s embarrassing inability to get his
fellow Republican legislators to support his initial budget — which
led to a 51-day stalemate — may spur Schwarzenegger next year to
simply negotiate with the Democratic majority on big-ticket issues and
go directly to the ballot with any financial matters requiring the
elusive two-thirds vote of the Legislature.

Assembly Speaker Fabian Núñez (D-Los Angeles) was already talking Sunday about getting more done next year.

"Legislative sessions are not one-year cycles. They are two-year
cycles," he said. "People want to judge this legislative session, but
you have to wait until the end of 2008."

There were indications this month that, without the support of
lawmakers from his own party on key issues, the governor is moving more
and more to accommodation with the Democrats.

He vetoed a little under 22% of the 965 bills sent to him this
year by the Democratic-controlled Legislature, a 2% lower rejection
rate than in his first two years in office. Last year, he vetoed 22% of
the 1,172 bills sent his way.

One of his signatures late Sunday went to one of the most
controversial bills of the year, AB 118, which increases the fees
charged to car owners in order to raise $210 million for new energy
subsidies and clean-air programs.

The governor denied through a representative that he was being
inconsistent in approving increases in the smog abatement and vehicle
registration fees after initially winning election on a vow to kill an
increase in the vehicle license fee.

The bill follows the 2006 passage of AB 32, which requires the
state to cut the emission of carbon dioxide and other planet-warming
gases by 25% by 2020.

"AB 118 provides significant funding for air-quality
improvements, and to further the goals of AB 32 and the low carbon fuel
standard by investing in alternative fuels and technologies," said Gena
Grebitus, a spokeswoman for Schwarzenegger, who confirmed that the bill
was signed.

Some consumer advocates accused Núñez of slipping the bill
through in the waning hours of the legislative session to let oil
companies — big campaign contributors in Sacramento — off the hook
financially for the cost of meeting clean-air and alternative fuel
goals.

"Instead of going to the deep pockets of big oil, this bill
goes to the much shallower pockets of the average consumer," said Judy
Dugan, research director for the Foundation for Taxpayer and Consumer
Rights. "It’s business as usual in the Capitol."

The bill was pushed through by Democrats in the Legislature.
But even some Democratic lawmakers said a large share of the money
could end up going to oil companies to fund pollution reduction
measures already required by law, something the bill’s proponents
dispute.

The bill calls for the state, starting in mid-2008, to increase
the smog abatement fee charged to new vehicle purchasers for the first
six years of ownership, from $12 to $20 annually. The measure also
increases the vehicle registration fee by $3 per year for all vehicles.

With its increase in consumer costs, the bill divided the
Legislature along party lines. No Republican in the Assembly and only
one in the Senate voted for the bill, making the Republican governor’s
signature a telling sign of the divide that has opened.

Among its provisions, the legislation creates an account to
compensate vehicle owners who voluntarily retire or replace passenger
cars or light-duty trucks that are high polluters.

Núñez said the governor’s approval of the bill "means we’re
closer to the day when fewer children will have to start their mornings
by taking a hit from asthma inhalers."

The governor also signed AB 1053, a last-minute measure that
allows a company headed by billionaire Philip Anschutz, who owns
Staples Center, to tap millions of dollars in state housing funds to
improve the streets near the downtown arena and the company’s
$2.5-billion L.A. Live development.

The bill would allow Anschutz’s firm, through a business
improvement district in the area, to partner with the city to apply for
tens of millions of dollars earmarked for street improvements to
support affordable housing.

Companies affiliated with the Denver businessman have donated
$225,000 in the last three years to Schwarzenegger’s California
Recovery Team.

Gilda Haas, executive director of Strategic Actions for a Just
Economy, which works to advocate for tenants in the downtown area,
called the governor’s decision to sign the bill "very disappointing."

She said business improvement districts such as the one
involving the Staples owners are not primarily concerned with providing
affordable housing.

"They are being given a competitive advantage to obtain money for a narrow purpose," she said.

Another last-minute, controversial measure signed by the
governor is SB 976, which allows the consolidation of several Bay Area
cities’ ferry lines and puts all operations under control of a new
five-member authority.

In vetoing for the second time in as many years legislation
that would have authorized the distribution of condoms to inmates in
state prison, Schwarzenegger said it conflicts with rules prohibiting
sexual activity in prisons.

He said in his veto message, however, that he would designate
one prison for a pilot program to "determine the risk and viability of
such a program."

Earlier in the day, the governor signed the bill prohibiting
the use of phthalates in toys and child-care products designed for
children under age 3.

Although the chemical industry had produced government testing
reports indicating the compounds used to soften plastics are safe,
Schwarzenegger said the bill was a prudent step to take for the health
of infants and toddlers prone to chewing on plastic toys.

"These chemicals threaten the health and safety of our children at critical stages of their development," he said.

The governor also made good on a long-standing promise and
signed a bill requiring California’s multi-billion-dollar state pension
funds to divest from companies that have specified energy- or
defense-related operations in Iran.

Schwarzenegger said he signed AB 221 by Assemblyman Joel Anderson (R-San Diego) as part of an effort "to prevent terrorism."
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