SACRAMENTO : Trade Groups Say State Laws Are Best Way to End Local Regulatory Spats
For years, proposals to ban smoking in public places have incensed the California Restaurant Assn. Then, this summer, the 3,000-member trade group came out with a surprise announcement: It would support a ban on smoking in all public places.
But there was a catch: The support would come only if “such regulation is rendered on a statewide basis.”
Frustrated trying to fend off different regulatory schemes at the city and county level, restaurant owners are asking the Legislature to approve a bill that would adopt state standards and overturn dozens of local laws that regulate smoking in restaurants.
The effort is part of a growing movement among business trade groups of asking state lawmakers to intercede in local regulatory spats.
The real estate industry persuaded the Legislature to curtail local laws that limit the use of for-sale signs in open houses. Banks and thrifts wouldn’t support a bill to make automated teller machines safer until the legislation was amended with a provision that prohibits local communities from enacting their own rules.
Commercial property owners are turning to state lawmakers for relief from local smoke detector rules, and legislation on rent control and pornography is also being pushed by special interests that don’t want to deal with local regulations.
“You see more industries pushing for state legislation because cities are more interested in regulating business,” said Fred Main, vice president of the California Chamber of Commerce.
Main said business first turned to state legislation in the 1950s, when it lobbied for a uniform sales and use tax. “Business has always liked uniformity,” he said.
In the case of the restaurant lobby, its stance is a concession that regulation is necessary.
“We have always taken a position that government should stay out of our way,” said Stan Kyker, executive vice president of the California Restaurant Assn. “But after much soul searching, we decided that the pattern of local regulation that was evolving wasn’t serving anyone, including our industry.”
Restaurant owners admit that economic self-interest is behind their new position. Fearful of suits about secondhand smoke and worried that a patchwork of local ordinances is hurting some of its members, the association decided that a statewide ban was the best way to go.
“The reversal was smart politics, California-style,” Kevin Farrell wrote in a restaurant trade magazine. “CRA, with its announcement, was able to get into step with the public, which has clearly indicated its preference for a smoking ban.”
But Kyker conceded that it will be difficult to persuade the Legislature to adopt the smoking ban. “The tobacco industry isn’t happy with us at all, and we don’t have the resources they do,” he said.
Also, the restaurant association has taken an all-or-nothing position. It wants a ban in “all public places,” which Kyker said might be interpreted as Dodger Stadium and even open-air patios. “Our position is that restaurants should not be singled out, which is what happens with many of these local ordinances,” he said.
Because the restaurant association has not come up with specific recommendations for legislation, some charge that its change of heart was a public relations ploy. Kyker denies that. “We intend to see this through,” he said.
Industries besides restaurants are also turning to the Legislature to try to obtain relief from local regulations.
The California Assn. of Realtors was troubled by homeowner associations and cities adopting laws that regulate placement of for-sale signs. Twice in three years, the industry has pushed through state laws that permit signs to be placed anywhere they don’t pose a safety hazard.
This trend concerns the League of California Cities.
“Unfortunately, it has become too easy for a special interest to come to the Legislature and pass a bill that waters down local laws or eliminates them altogether,” said Executive Director Don Benninghoven. “When several cities consider the same issue, it probably means that there is a legitimate problem out there. Then we permit state lawmakers to squelch the local responses to these concerns.”
Business lobbyists see the trend as a practical response to a proliferation of regulations at the local level.
“I don’t think this is a case of business lobbyists getting together and deciding that we are going to take away local control,” said real estate lobbyist David Booher, who has been pushing for statewide rules on rent control. “Business sees 450 municipalities and 58 counties coming at them with different regulatory schemes, so they look to the state Legislature to better manage the problem.”
State lawmakers must decide what is best left to local leaders and what is of statewide significance. “I try to resist marching out and telling local officials what they should be doing about all of these issues,” said Tom Hannigan (D-Fairfield).
Tough U.S. Plan Irks State Bank Regulator
California Superintendent of Banks James E. Gilleran wants L. William Seidman, chairman of the Federal Deposit Insurance Corp., to tread carefully when he pushes for tougher banking regulations.
When Gilleran heard about an FDIC proposal to prevent banks from underwriting insurance and making real estate investments, he fired off a letter to Seidman.
“California offers a textbook example of how to conduct real estate and insurance powers in a prudent and profitable manner,” wrote Gilleran, who is responsible for regulating state-chartered banks such as First Interstate, Union Bank and Sumitomo Bank of California.
He encouraged Seidman “to reject any broad and sweeping changes.”
“We too are concerned about the condition of banks in an economic downturn,” said John Paulus, deputy superintendent of banks. “But when regulators do something from Washington, they shouldn’t paint everyone with the same brush.”
According to Paulus, the state superintendent carefully examines banking activity and closely monitors real estate investment and insurance activities.
To prove his contention that California banks aren’t in serious trouble with their real estate and insurance portfolios, Gilleran will soon release a report that analyzes these investments and their performance.
Another study that supports Gilleran’s position was released last week by the California Mortgage Bankers Assn. It shows that less than 0.8% of the 8,208 commercial property loans in California are delinquent 30 or more days.
