Legislature to Kick Off Election-Year Session : Toxic Waste Measure May Pass but L.A. County Prison, Campaign Reform, Unitary Tax Doubtful

The California Legislature opens its 1986 session today with an election-year resolve to enact a beefed-up toxic waste disposal program, but such other festering issues as finding a site for a new prison in Los Angeles County, reforming the way campaigns are financed and giving big business a multimillion dollar tax break could fall by the wayside.

This assessment is based both on forecasts by Democratic and Republican legislative leaders and on the time-tested grounds that in the crunch to win new terms and make themselves look good at the expense of the other party, legislators tend to enact relatively little of substance during election season sessions.

This time around, Republican Gov. George Deukmejian will be seeking reelection, and all 80 Assembly seats and 20 of the 40 Senate seats will be on the ballot, as will be the posts of all statewide officers.

Gubernatorial Overtones

Deukmejian is expected to face Los Angeles Mayor Tom Bradley, the Democratic opponent he narrowly defeated in 1982. Meantime, Democrats will attempt to retain their majority control of the Legislature.

Because toxic waste disposal is considered to be a critically important issue with the voters, legislative leaders of both parties agree that something must be accomplished to demonstrate that incumbents solve major problems and deserve reelection.

But, the other major issues--the Los Angeles prison, campaign finance reform and modifying the way in which multinational corporations are taxed in California--could bog down with no substantive action, top lawmakers indicated in pre-session interviews.

“Elections often hamper movement,” said Senate President Pro Tem David A. Roberti (D-Los Angeles). “But sometimes they expedite it. Elections create feelings that are somewhat raw. On the other hand, if someone is running for election, he or she wants . . . to accomplish something (more than just winning at the polls).”

Senate Republican Leader James W. Nielsen of Woodland expressed pessimism that 1986 will be a big year for the Legislature. “We can clean up a few significant issues, but beyond that I don’t think it is going to be a major year.”

Budget Among Topics

Other issues include fashioning a new state budget of approximately $37 billion; attempting to devise an alternative to the so-called “deep pockets” liability rule that subjects local government and businesses to multimillion-dollar judgments against them even when they are only partly at fault, and shoring up the troubled state disability insurance fund, which pays benefits to about 650,000 temporarily disabled workers.

Even while there is strong resolve to deal effectively with the burgeoning issue of disposing of toxic wastes, Assembly Democrats are expected to scuttle Deukmejian’s proposal to create a new Department of Waste Management. The plan was all but sunk during the final hours of the 1985 legislative session when it got caught up in a partisan fight over another unrelated bill in the Assembly.

Now, Assembly Speaker Willie Brown (D-San Francisco) wants to send to Deukmejian a combination of plans advanced by Sen. Art Torres (D-South Pasadena) and Assemblywoman Sally Tanner (D-El Monte). The Torres bill would place the new department under the existing secretary of environmental affairs along with the state water and air quality agencies, a step strongly opposed by Deukmejian, who wants the proposed department to be a cabinet-level entity.

The Tanner bill represents essentially what the governor proposed but was unable to get through the Assembly.

Speaker Brown said “absolutely” that some as yet undefined toxics waste reorganization proposal will reach Deukmejian’s desk.

‘Will Not Be Enough’

However, Assembly GOP Leader Pat Nolan of Glendale warned that an election-year partisan clash over toxics seems inevitable. “The Democrats will put pressure on the governor to try to do more and more and more. No matter how good a job ‘The Duke’ is doing, it will not be enough.”

Roberti, noting that Deukmejian vetoed major toxics legislation last year, said he believes that as the elections draw nearer, the governor “will see that he is most vulnerable on hazardous wastes and conservation.” Deukmejian has insisted that his record on toxics is second to none and has blasted away at Brown and other Democrats for derailing his toxic waste reorganization program.

On the politically charged issue of prisons, Deukmejian wants to construct a new state lockup on a site two miles southeast of the Los Angeles Civic Center. That location is opposed by Bradley, who has offered instead city-owned property near the Magic Mountain amusement park near Saugus. The state previously rejected the Saugus site because of environmental problems and its nearness to homes.

As a result, the Democratic-controlled Legislature, which must decide which site to pick, could be accused of undermining Bradley’s gubernatorial hopes if it goes along with the Deukmejian plan.

Could Be Standoff

On the other hand, if Bradley’s site is selected, Deukmejian is likely to veto it, stalling prison construction not only in the Los Angeles area but statewide for at least another year. A law passed several years ago in the hope of speeding construction of a prison at Los Angeles forbids the state from occupying any new prison facility until a site is selected in Los Angeles County. There is no state prison in the county, even though it supplies nearly 40% of state prison convicts.

Brown, Roberti, Nolan and Nielsen all agreed that something should be done to reform the way election campaigns are financed in California, but stressed that passage of a bill acceptable to both the lawmakers and Deukmejian, a foe of public financing, is not likely.

A new spark for reform was struck last November by a private bipartisan citizens’ commission that called for limiting campaign contributions and expenditures, completely banning donations during non-election years, prohibiting the transfer of funds from one legislator to another, limiting fees for speeches and partial public financing of legislative races.

However, the commission observed that because the Legislature was likely to reject this proposal, it probably would have to be placed before the voters as a ballot initiative. A similar campaign reform initiative was defeated at the polls in 1984.

Roberti’s Position

Roberti said he expects to carry a campaign reform bill, but the provisions of the commission’s plan would have to be expanded to include gubernatorial candidates as well as legislative contenders. For instance, he said, it would be unfair for the governor in one party to spend “unlimited funds” on such projects as getting out the vote while lawmakers of another party were restricted.

Brown recalled that the Legislature previously approved a reform bill, but Deukmejian vetoed it because it contained provisions for public financing. “We will pass it again, and he will veto it again,” he said. “But hopefully we can override (a veto) by building public pressure.”

However, Republican Nolan declared: “Everybody will have a plan, but I don’t think the Legislature has the guts to do something about it. We’ll have to go the initiative route on that one.”

For his part, Nielsen, the Senate GOP leader, said he expects some kind of reform effort but “it isn’t going to be earthshaking.”

The legislative leaders indicated that efforts to modify the unitary method of collecting business taxes from multinational corporations may be put on a back burner this session. Despite intense lobbying for the last two years, proposals to overhaul the unitary tax failed in the sessions’ final hours both times.

‘It Is Not a Big Deal’

“There is no compelling pressure on the Legislature to do anything about it,” Nielsen said. “To the citizens of California it is not a big deal. It is not an issue for the person on the street.”

California is one of six states that use the unitary tax formula, which bases a corporation’s tax obligation on the worldwide income of its global subsidiaries. Foreign businesses complain that the system is unfair, and some, such as Japan’s Sony Corp., warn that future investment in California would be limited unless the unitary method is repealed.

However, President Reagan has added to the pressure on state lawmakers by announcing that he will move forward with federal repeal legislation if the states do not. According to some estimates, federal legislation would cost California $500 million a year in tax revenue instead of approximately $250 million as envisioned by those supporting state legislation.

Last year, the principal unitary tax measure got tied up in a fight over legislation protesting South Africa’s policy of apartheid and failed to clear the Assembly Ways and Means Committee.

Disability Fund

Also before lawmakers will be the task of trying to restore health to the $1.2-billion disability insurance fund, which is supported by withholdings from the paychecks of 10 million California workers. The fund was rescued from threatened bankruptcy last year with a last-minute loan from the state’s general fund authorized by Deukmejian.

Because of escalating claims and a complex formula that limits amounts withheld from paychecks, the fund is expected to continue dwindling and could end 1986 with a deficit of $90 million.

Many economists insist that the only permanent solution is to cut benefits or increase worker contributions when necessary. In the Democratic-dominated Legislature, there is little sentiment for reducing benefits and Deukmejian already has indicated that he opposes boosting withholding taxes for disability insurance.

This means the governor could be forced to approve another, bigger loan at the end of the year and risk even larger deficits in the future.

On the so-called “deep pockets” issue, a coalition of local agencies, chambers of commerce, manufacturers, growers, truckers and physicians have collected more than 660,000 signatures to put an initiative on the June ballot that would drastically alter the rules of liability.

Burden of Damages

Under the current “deep pockets” rule, any one of several defendants in a suit, regardless of how small their share of the blame, can be ordered to pay all the damages that other less affluent defendants cannot pay. Under the proposal, injured parties could still collect the full amount for medical costs and loss of earnings. But where there are large judgments for such claims as emotional distress, liability would be apportioned strictly according to fault. Virtually assured of qualifying for the June ballot, the initiative would provide that a defendant in a lawsuit who was found to be 10% at fault for an accident, for example, could be held liable for no more than 10% of damages for emotional distress.

Trial lawyers, whose pay for handling such lawsuits is commonly a proportion of the damage award, are expected to wage a high-spending campaign against the initiative. Speaker Brown, himself a trial lawyer and a recipient of major contributions from other trial lawyers, has pledged to seek a legislative solution that supporters hope could head off the initiative.

Contributing to this story were Times staff writers Paul Jacobs, Richard Paddock, Douglas Shuit and Leo Wolinsky.