BILL ANALYSIS                                                                                                                                                                                                    





          SENATE COMMITTEE ON LABOR AND INDUSTRIAL RELATIONS
                             Senator Tony Mendoza, Chair
                                2015 - 2016  Regular 

          Bill No:               SB 1166      Hearing Date:    April 13,  
          2016
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          |Author:    |Jackson                                              |
          |-----------+-----------------------------------------------------|
          |Version:   |February 18, 2016                                    |
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          |Urgency:   |No                     |Fiscal:    |Yes              |
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          |Consultant:|Alma Perez-Schwab                                    |
          |           |                                                     |
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               Subject:  Unlawful employment practice:  parental leave


          KEY ISSUES
          
          Should the Legislature establish a parental leave policy  
          requirement for businesses of five or more employees that allows  
          workers to take up to 12 weeks of unpaid leave to bond with a  
          new child within one year of the child's birth, adoption or  
          foster care placement? 

          Should this parental leave policy include a guarantee of  
          employment upon the employee's return?

          Should employers be required to pay for continued group health  
          coverage during the duration of the employee's parental leave? 


          ANALYSIS
          
           Existing law:

              1.   The California Family Rights Act (CFRA) and the federal  
               Family and Medical Leave Act (FMLA), required to be taken  
               concurrently,  entitles eligible employees of covered  
               employers (employers with 50 or more employees) to:








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                  a.        Take up to  12 workweeks of unpaid,  
                    job-protected leave  during a 12-month period for  
                    specified family and medical reasons, including that  
                    of bonding with a newborn, child adoption or foster  
                    care placement, among others.
                  b.        Guaranteed reinstatement to the same or  
                    comparable position upon the return of the employee  
                    from his/her leave.
                  c.        Continued group health coverage during the  
                    duration of the leave under the same terms and  
                    conditions as if the employee had not taken the leave.  

               (Government Code 12945.2)

             2.   Establishes the State Disability Insurance (SDI) program  
               as a partial wage-replacement plan funded through employee  
               payroll deductions that is available (through the  
               Disability Insurance and Paid Family Leave programs) to  
               eligible individuals who are unable to work due to sickness  
               or injury of the employee (including pregnancy), the  
               sickness or injury of a family member, or the birth,  
               adoption, or foster care placement of a new child.  

                  a.        The Paid Family Leave program (PFL): 
                                      Provides eligible employees (those  
                         paying into SDI) with  up to 6 weeks of wage  
                         replacement benefits  to care for a seriously ill  
                         child, spouse or registered domestic partner,  
                         parent, siblings, grandparents, grandchildren,  
                         and parents-in-laws or to bond with a minor child  
                         within one year of the birth or placement of the  
                         child in connection with foster care or adoption.
                         (Unemployment Insurance Code 3301)

                                      Provides wage replacement equal to  
                         one-seventh of the employee's weekly benefit  
                         amount for each full day during which he or she  
                         is unable to work (a wage replacement of  
                         approximately 55 percent of lost wages). 
                                      Employers may require that  
                         employees take up to two weeks of earned but  
                         unused vacation when using PFL. The law does not  
                         allow employers to require employees to use sick  
                         leave. 







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                  b.        SDI does not provide job protection or return  
                    to work rights.
                  c.        SDI does not require continued group health  
                    coverage during the leave. 
                    
             1.   Pregnancy Disability Leave (PDL), under the Fair  
               Employment and Housing Act, requires private employers with  
               five or more employees and public employers to provide  up  
               to four months of unpaid, job-protected leave  for  
               pregnancy, childbirth or related conditions. 

                  a.        Employees may use accrued vacation and paid  
                    sick leave during PDL.
                  b.        Employees are entitled to reasonable  
                    accommodations and reinstatement to the job held  
                    before PDL began. 
                  c.        Employers are required to continue the  
                    employee's health coverage during PDL.
                  d.        Prohibits employers from refusing to allow an  
                    eligible employee to take PDL leave and thereafter  
                    return to work.
                    (Government Code 12945)

           
          This Bill  would establish a new parental leave right of  
          specified employees to bond with a new child either through  
          birth, adoption or foster care placement.  

          Specifically, the bill would: 

             1.   Prohibit an  employer of five or more employees  from  
               refusing to allow an employee, upon request, to take up to  
               12 weeks of parental leave to bond with a new child within  
               one year of the child's birth, adoption, or foster care  
               placement.  

             2.   Require the employer to provide a guarantee of  
               employment in the same or comparable position upon return,  
               or otherwise be deemed to have refused to allow the leave. 

             3.   Provide that the employee can utilize accrued vacation  
               pay, paid sick time, other accrued paid time off, or other  
               paid or unpaid time off negotiated with the employer,  
               during the period of parental leave. 








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             4.   Require the employer to pay for continued group health  
               coverage for an eligible employee who takes parental leave  
               for the duration of the leave at the level and under the  
               conditions that coverage would have been provided had the  
               employee continued to work.

             5.   Specify that this parental leave shall run concurrently  
               with CFRA and FMLA, except for leave taken for a disability  
               on account of pregnancy, childbirth, or related medical  
               condition (PDL), and the aggregate amount of leave - or  
               combination of leaves - cannot exceed 12 work weeks in a 12  
               month period.

             6.   Specify that an employee is entitled to take Pregnancy  
               Disability Leave, in addition to the leave provided in this  
               bill, CFRA and FMLA, if he or she is otherwise qualified.



          COMMENTS
          
          1.  Background on California Medical Leaves:

             California has several medical leaves under which an employee  
            may be able to take time off of work to care for his or her  
            illness, that of specified family members or for the bonding  
            with a new child through birth, adoption or foster care.  
            However, each medical leave is unique and may or may not be  
            available to all employees. Below is a brief summary of some  
            of the leaves and their eligibility requirements. 
             ------------------------------------------------------------------------- 
            |                                                                   | | | |
            |                                                                   | | | |
            |                            CFRA/FMLA                              | | | |
            |                          (Job Protected)                          | | | |
            |                                PFL                                | | | |
            |                        (No Job Protection)                        | | | |
            |                                                                   | | | |
            |                                PDL                                | | | |
            |                          (Job Protected)                          | | | |
            |                                                                   | | | |
            |                              SB 1166                              | | | |
            |                          (Job Protected)                          | | | |
            |                                                                   | | | |
            |                                                                   | | | |







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            |Employers Covered                                                  | | | |
            |                                                                   | | | |
            |        50 or more employees in 75 mile radius of worksite         | | | |
            |                                                                   | | | |
            |            One or more (employee pays, employee gets)             | | | |
            |                                                                   | | | |
            |                      Five or more employees                       | | | |
            |                                                                   | | | |
            |                      Five or more employees                       | | | |
            |                                                                   | | | |
            |                                                                   | | | |
            |Employee Eligibility                                               | | | |
            |                                                                   | | | |
            |               Worked 1,250 hours in prior 12 months               | | | |
            |                                                                   | | | |
            |   Once employee earns $300 in base period for fund contribution   | | | |
            |                                                                   | | | |
            |                      Immediate as necessary                       | | | |
            |                                                                   | | | |
            |                      Immediate as necessary                       | | | |
            |                                                                   | | | |
            |                                                                   | | | |
            |Reason for Leave                                                   | | | |
            |                                                                   | | | |
            |  Employee serious health condition; seriously ill family member   | | | |
            |  care; bond with newborn or newly placed adopted or foster child  | | | |
            |                                                                   | | | |
            |  Care for seriously ill family member; bond with a child within   | | | |
            |        1year of birth, foster care or adoption placement          | | | |
            |                                                                   | | | |
            |    Disability due to pregnancy, childbirth or related medical     | | | |
            |                            condition                              | | | |
            |                                                                   | | | |
            |  Bond with a child w/in 1 year of birth, adoption or foster care  | | | |
            |                             placement                             | | | |
            |                                                                   | | | |
            |                                                                   | | | |
            |Length of Leave                                                    | | | |
            |                                                                   | | | |
            |                    12 weeks in 12-month period                    | | | |
            |                                                                   | | | |
            |                    6 weeks in 12-month period                     | | | |
            |                                                                   | | | |
            |                          Up to 4 months                           | | | |
            |                                                                   | | | |







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            |                          Up to 12 weeks                           | | | |
            |                                                                   | | | |
            |                                                                   | | | |
            |Paid or Unpaid                                                     | | | |
            |                                                                   | | | |
            |         Unpaid, may run concurrent with other paid leave          | | | |
            |                                                                   | | | |
            |                     Partial wage replacement                      | | | |
            |                                                                   | | | |
            | Unpaid, may run concurrent with SDI for partial wage replacement  | | | |
            |                                                                   | | | |
            |        Unpaid, employee can use vacation, paid sick time          | | | |
            |                                                                   | | | |
            |                                                                   | | | |
            |Continued      Health Coverage                                     | | | |
            |                                                                   | | | |
            |                                Yes                                | | | |
            |                                                                   | | | |
            |                                No                                 | | | |
            |                                                                   | | | |
            |                                Yes                                | | | |
            |                                                                   | | | |
            |                                Yes                                | | | |
            |                                                                   | | | |
            |                                                                   | | | |
            |                                                                   | | | |
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          2.  Need for this bill?  

            As described above, California employees may be entitled to  
            several medical leaves depending on the size of their employer  
            and the reason for the leave. While CFRA and FMLA provide for  
            up to 12 weeks per year of unpaid job protected leave for an  
            employee who takes time for bonding or care, these protections  
            are only available to employees of businesses with 50 or more  
            workers.  Employees of smaller businesses are entitled to take  
            Paid Family Leave and receive a partial wage replacement;  
            however, PFL does not offer any job protection which limits a  
            worker's financial ability to take the leave.  

            Studies have shown that paid family leave policies have  
            positive impacts on infant and maternal health, as well being  
            associated with greater labor force attachment and long-term  







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            productivity. A 2014 White House report by the Council of  
            Economic Advisers, titled "The Economics of Paid and Unpaid  
            Leave", reported the following: 

               "Paid leave policies can help business recruit talented  
               workers who plan to stay with a firm after having children.  
               In a survey of two hundred human resource managers,  
               two-thirds cited family-supportive policies, including  
               flexible schedules, as the single most important factor in  
               attracting and retaining employees. Paid leave has been  
               shown to increase the probability that women continue in  
               their job after having a child, rather than quitting  
               permanently, saving employers the expense of recruiting and  
               training additional employees. A review of 27 separate case  
               studies found that the median cost of replacing an employee  
               was 21 percent of that employee's annual salary - a  
               substantial cost that can be reduced with family-friendly  
               leave policies."

            Although California's Paid Family Leave program is available  
            to all employees paying into the fund, the reality is that  
            without a guarantee of a job upon their return, most employees  
            do not take advantage of the program. A report from the Senate  
            Office of Research entitled California's Paid Family Leave  
            Program found that bonding leave claims ranged from no claims  
            to 10.2 claims per 1,000 people by county since the program  
            started. Additionally, since 2009, the proportions of bonding  
            claims filed were as follows: 94.3% were to bond with a new  
            biological child; bonding with adopted and foster children  
            made up less than 1% each (.35 percent and .31 percent,  
            respectively). Lastly, since 2004, the average bonding leave  
            taken by women is 5.17 weeks, while the average taken by men  
            has been 3.81 weeks. 

            The author and proponents believe this bill is needed to  
            ensure that no worker has to choose between the wellbeing of  
            their new child and their family's financial security. This  
            bill would establish a new parental leave right for employees  
            to bond with a new child either through birth, adoption or  
            foster care placement with the protection of a job upon  
            his/her return and a guarantee of continued group health  
            coverage during the duration of the leave. The existing PFL  
            program provides leave for this purpose, but it is not job  
            protected and does not require continued health coverage. The  
            author believes that these protections are necessary to  







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            encourage people to take the time necessary to bond with their  
            new family members.  

          3.  Parental Leave Policies in Other States  :
            
            The United States is currently the only developed country in  
            the world that does not have any government sponsored paid  
            maternity or paternity leave law under which employees could  
            take time off to care for their loved ones.  Availability of  
            such a leave is left at the discretion of each state and its  
            policies and employer practices. According to the U.S.  
            Department of Labor, only 12 percent of private-sector workers  
            have access to paid family leave through their employers.  
            Additionally, access is particularly low among low-wage  
            workers, Hispanics and African Americans. Many businesses have  
            voluntarily adopted leave policies, a trend most recently seen  
            in corporate America with companies like Microsoft offering up  
            to 20 weeks of fully paid parental leave. 

            The topic of paid family leave has also been a top priority  
            for the Obama administration, most recently in 2015, the  
            United States Secretary of Labor Tom Perez announced that the  
            Department of Labor Women's Bureau was awarding $1.55 million  
            in grants to research and analyze how paid family and medical  
            leave programs can be developed and implemented across the  
            country. According to Secretary Perez, "passage of a national  
            paid family and medical leave law is not a question of if, but  
            when. But as is so often the case on important public policy  
            issues, we need states and localities to be the incubators of  
            innovation. It's their efforts, which we're funding today,  
            that will pave the way for national reform. These grants will  
            get us closer to a future where working moms and dads can  
            focus on what really matters: time with their families."

            Many States have taken action to address this need by enacting  
            statewide leave policies. Below is a summary of efforts  
            throughout the country. 

             Paid Leaves
             Several states have mandated paid family leave programs  
            including California, New Jersey, Rhode Island and most  
            recently New York. When fully phased in, New York's paid  
            family leave program will provide the highest number of paid  
            time off between all states - 12 weeks - to help meet the  
            employee's family needs.  Benefits will be phased-in beginning  







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            in 2018 at 50 percent of an employee's average weekly wage,  
            and fully implemented in 2021 at 67 percent of their average  
            weekly wage. This program will be job protected and funded by  
            employees who will be eligible to participate after having  
            worked for their employer for six months. California and New  
            Jersey both cover up to 6 weeks of leave time, while Rhode  
            Island only covers 4 weeks.

             Unpaid Leaves
             In terms of unpaid family leave rights, the following chart  
            outlines information gathered by the National Conference of  
            State Legislatures and offers a good summary of how California  
            compares to other states. 


              -------------------------------------------------------------- 
             |STATE               |Employer Size       |Length of Leave     |
             |--------------------+--------------------+--------------------|
             |California (CFRA)   |50 or more          |12 weeks per year   |
             |                    |employees           |                    |
             |--------------------+--------------------+--------------------|
             |Maine               |15+ state/private;  |10 weeks in 2 years |
             |                    |25+local gov.       |                    |
             |--------------------+--------------------+--------------------|
             |Minnesota           |21 or more          |6 weeks per year    |
             |--------------------+--------------------+--------------------|
             |Oregon              |25 or more          |12 weeks per year   |
             |--------------------+--------------------+--------------------|
             |Washington, D.C.    |All public or       |16 weeks per 2      |
             |                    |private employers   |years               |
             |                    |                    |                    |
              -------------------------------------------------------------- 

             San Francisco - Parental Leave
             On April 5, 2016, the San Francisco Board of Supervisors voted  
            unanimously to approve a measure (File# 160065) that would  
            require employers to help provide fully paid family leave for  
            new parents. In conjunction with California's existing Paid  
            Family Leave program, granting a 55% wage replacement for up  
                                                        to six weeks, the SF ordinance would require businesses with  
            more than 20 employees to plug that gap by paying the  
            remaining 45% of their employees' wages. The law, when signed,  
            will take effect January 1, 2017 with a gradual phase in for  
            smaller businesses. Businesses with 35+ employees would be  
            required to comply by July 1, 2017.  Businesses with 20+  







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            employees would have until January 2018.  The measure requires  
            another formal vote by the board as well as approval by the  
            Mayor.  

          4.  Double Referral  :
            
            This bill has been double referred and, if approved by this  
            committee, it will be sent to the Senate Judiciary Committee  
            for a hearing.

          5.  Proponent Arguments  :
            
            Proponents argue that while California is one of only four  
            states to offer paid family leave for new parents, it remains  
            impossibly out of reach for most low-wage earners and those  
            who work for small employers.  They believe that this bill  
            would drastically improve access to parental leave for all  
            workers by addressing one of its biggest barriers - job  
            protection.  According to the author, a field poll found that  
            almost 2 out of 5 employees who were eligible to use PFL, but  
            did not apply, chose not to because they feared losing their  
            job or other negative consequences at work [Unfinished  
            Business: Paid Family Leave in California and the Future of  
            U.S. Work-Family Policy (Ruth Milkman, Eileen Appelbaum  
            (2013)].  

            Proponents also note that studies have found that the ability  
            to use parental leave is far greater for salaried employees  
            (mainly managers and professionals) and high earners (those  
            earning over $20 per hour plus employer health insurance) than  
            for those in hourly and low-quality jobs. They argue that  
            existing protections for workers who need to take parental  
            leave are woefully inadequate, noting that CFRA and FMLA  
            provide 12 weeks of unpaid leave and job protection, but these  
            laws only cover employees who work for larger companies with  
            50 or more employees. This leaves over 40% of California's  
            workforce ineligible for job protected leave because their  
            employer is too small. Proponents argue that this  
            unconscionable exclusion affects these workers, their  
            families, as well as their employers, as many workers simply  
            must quit their jobs and find new employment following the  
            birth of their child.  

            At a time when financial security and healthcare coverage are  
            so important, the risk of losing one's job to take leave to  







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            care for a new child is simply a risk that many new parents  
            cannot afford to take. This legislation ensures that  
            California workers who have been paying into the Paid Family  
            Leave insurance program are able to use this benefit for  
            parental leave without risk of losing their job.  The author  
            argues that no one should have to choose between the wellbeing  
            of their new child and their family's financial security.

          6.  Opponent Arguments  :

            Opponents argue that this measure will overwhelm small  
            businesses with as few as five employees by allowing an  
            employee who has only worked for the employer one day to  
            receive 12-weeks of protected parental leave, with the threat  
            of costly litigation for violations. Opponents argue that  
            while small employers must provide their employees with  
            pregnancy disability leave, they are not subject to FMLA or  
            CFRA because large employers are the ones likely capable of  
            accommodating such an extensive amount of time off.  Both CFRA  
            and FMLA require an employee to work for one year and at least  
            1,250 hours before he or she can take a 12-week protected  
            leave of absence. This bill does not impose this same  
            requirement and such a mandate, they argue, is simply too  
            significant to manage. 

            Additionally, they argue that this lack of conformity creates  
            an opportunity for an employee to obtain over 24 weeks of  
            protected leave in one year.  For example, an employee who has  
            only worked 800 hours could take the 12 weeks of leave under  
            this measure, return to work for another 450 hours, and then  
            take another 12 weeks of leave under CFRA and FMLA.  Last  
            year, Governor Brown vetoed SB 406 (Jackson) based, in part,  
            on the fact that the legislation would "in certain  
            circumstances,  require employers to provide employees up to  
            24 weeks of family leave in a 12 month period. I am open to  
            legislation to allow workers to take leave for additional  
            family members that does not create this anomaly." Opponents  
            believe that this bill creates this anomaly. They note that  
            while the bill tried to address this issue by stating that the  
            total amount of leave an employee can receive under this bill,  
            CFRA and FMLA is 12 weeks in a 12-month period, this does not  
            fix the situation because California cannot preempt or limit  
            the application of federal law under FMLA.  

            Opponents also argue that this bill labels an employer's  







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            failure to provide the 12-week leave of absence as an "unfair  
            employment practice," a label that exposes an employer to  
            costly litigation under the Fair Employment and Housing Act  
            (FEHA). An employee who believes the employer did not provide  
            the 12-weeks of protected leave, failed to return the employee  
            to the same or comparable position, or maintain benefits while  
            out on the 12-weeks of leave, could pursue a claim against the  
            employer seeking:  compensatory damages, injunctive relief,  
            declaratory relief, punitive damages, and attorney's fees.  
            Opponents cite a 2015 study by insurance provider Hiscox  
            regarding the cost of employee lawsuits in California, ranking  
            our state as exposing employers to a 40% higher risk of a  
            discrimination claim than other states given its state  
            specific statute - FEHA.  The study estimated that the cost  
            for a small to mid-size employer to defend and settle a single  
            plaintiff discrimination claim was approximately $125,000, an  
            amount which reflects the financial risks for employers. 

            Lastly, opponents argue that this bill is an unprecedented  
            mandate as they are unable to identify any other state that  
            imposes such an extensive leave of absence on employers with  
            only 5 employees and for employees who have worked only one  
            day for the employer.  As set forth in a 2013 study for the  
            National Conference of State Legislatures, over 40 other  
            states impose only a 12-week leave of absence on employers  
            with 50 or more employees with the same hours worked  
            requirement as FMLA and CFRA.  Of the remaining states that  
            differ, all have an employee size threshold or hours worked  
            requirement, or both, that is significantly higher than  
            proposed under this bill. 

          7.  Prior Legislation  :

            AB 908(Gomez) of 2015/16: AB 908, among other things, would  
            revise the formula for determining benefits available pursuant  
            to the State Disability Insurance program and the Paid Family  
            Leave program to increase benefits to workers, as specified.  
            AB 908 was enrolled and is at the Governor's desk awaiting  
            signature. 
          
            SB 406(Jackson) of 2015: SB 406 would have expanded various  
            provisions under the California Family Rights Act (CFRA) to,  
            among others, include care for a child of a domestic partner,  
            sibling, grandparent, grandchild, domestic partner, or  
            parent-in-law.  AB 406 was vetoed by Governor Brown. 







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            SB 770 (Jackson) Chapter 350, Statutes of 2013: broadened the  
            definition of family within the Paid Family Leave (PFL)  
            program to allow workers to receive the partial wage  
            replacement benefits while taking care of seriously ill  
            siblings, grandparents, grandchildren, and parents-in-law.



          SUPPORT
          
          California Employment Lawyers Association (Co-Sponsor)
          Equal Rights Advocates (Co-Sponsor)
          Legal Aid Society - Employment Law Center (Co-Sponsor) 
          Alliance for Community Empowerment
          American Assn of University Women
          American Civil Liberties Union of California
          Breastfeed LA
          California Asset Building Coalition 
          California Black Health Network
          California Child Care Resource & Referral Network
          California Domestic Workers Coalition 
          California Edge Coalition
          California Hunger Action Coalition
          California Immigrant Policy Center
          California Labor Federation, AFL-CIO
          California Latinas for Reproductive Justice
          California Partnership
          California Rural Legal Assistance Foundation 
          California Women's Law Center
          California Work and Family Coalition
          Career Ladders Project
          Center for Popular Democracy
          Center for WorkLife Law
          Child Care Law Center
          Children's Hospital Los Angeles
          Common Sense Kids Action 
          Consumer Attorneys of California
          Employment Lawyers Association
          Equal Rights Advocates
          Healthy Communities, Inc. 
          Mexican American Legal Defense and Education Fund
          Mujeres Unidas y Activas
          National Association of Social Workers, California Chapter
          National Council of Jewish Women California







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          Parent Voices
          Raising California Together
          The Opportunity Institute
          Tradeswomen, Inc.
          Voices for Progress
          Western Center on Law and Poverty
          Women's Foundation of California
          9 to 5
          3-Individuals
          

          OPPOSITION
          
          Associated Builders and Contractors of California
          California Association of Joint Powers Authorities
          California Chamber of Commerce
          California Farm Bureau Federation
          California Hotel and Lodging Association
          California League of Food Processors
          California Manufacturers & Technology Association
          California Professional Association of Specialty Contractors
          California Restaurant Association
          California Retailers Association 
          Civil Justice Association of California
          National Federation of Independent Business
          Western Carwash Association
          Western Growers Association



                                      -- END --