The San Francisco Chronicle

With American flags draped over some of their desks, lawmakers yesterday spent the last day of their 2001 session plowing through bills ranging from a rescue plan for one of the state’s utilities to financial aid to the victims of New York’s terrorist attacks.

Even though faced with a midnight deadline to act on hundreds of bills, including multibillion-dollar bond measures for parks and schools, the Assembly and Senate took time to participate in President Bush‘s call for a national day of mourning.

Gov. Gray Davis and lawmakers also moved swiftly to change the California Victims Compensation Program to better assist family members in California who lost loved ones in New York.

The change in law will add grandparents, grandchildren, and in-laws to the group of people eligible to receive state assistance for mental health counseling when a family member is lost.

The bill also gives $1 million to the state of New York’s victim compensation program.

At a press conference announcing the bill, Assembly GOP Leader Dave Cox of Fair Oaks broke down when it was his turn to speak, saying he had just learned of a University of California student who had been on the 80th floor of the World Trade Center and apparently did not survive.

Saying it was their obligation to show terrorism could not disrupt their business, lawmakers then plunged into action on hundreds of pending bills, working late into the night.

Lawmakers continued to wrangle over a plan designed to keep Southern California Edison from being forced into bankruptcy.

Under the bailout plan, the state would guarantee $2.9 billion of Edison‘s $3.9 billion debt. The state would back bonds Edison would issue and would be paid off by the utility’s business customers.

Passage of the bill was Davis’ top legislative priority, but the complicated issue has been a lightning rod for criticism in recent months.

Consumer groups oppose the measure — saying that residential customers will end up paying for the bailout because businesses will pass their higher costs along to customers.

They also complained about the behind-the-scenes negotiating.

“You can’t draft good legislation in 12 hours,” said Doug Heller of the Foundation for Taxpayer and Consumer Rights. That group has threatened to mount a ballot measure that would repeal any Edison deal if it passes the Legislature.

Without a plan, the state’s second-largest investor owned utility would probably be forced into bankruptcy, said Steve Maviglio, Davis’ spokesman.

The chief sticking points include whether big industrial users can buy power directly from generators and how many business would have to pay for the bailout.

The bill has run into the most difficulty in the Senate, where lawmakers do not want to be seen as giving Edison a bailout. A previous version passed by the Senate was changed radically because the Davis administration and Edison said the Senate version would not restore the company to creditworthiness.

Another energy bill on its way to Davis’ desk last night would restructure the way the state pays for a $12.5 billion bond designed to pay for its electricity purchases. Senate leader John Burton’s bill also would require the Department of Water Resources to hold public hearings on its long-term energy contracts.

Although Davis and State Treasurer Phil Angelides are opposed to the measure, Assemblyman Rod Wright, D-Los Angeles, said it has the potential to save ratepayers $1 billion.

“If the governor doesn’t like it he can veto it,” Wright said. “If the governor vetoes it and we’re right, then the ball is in his court.”

Wright said the bill puts the payment of the state’s past energy purchases in front of the payment of long-term contracts, which will allow the bonds to be rated higher, therefore saving money.

But Maviglio said the governor would take Wright up on his offer to veto the bill.

“On recommendation of the treasurer, it’s dead on arrival,” he said.

At least one last-minute bill stemmed directly from the terrorist attacks. Citing a severe shortage of cars because of canceled flights, rental companies sought a three-month exemption for the the state’s air quality laws.

Because California has the strictest emission laws in the country, cars rented in California and driven to other states must be driven back on their next rental. Same for cars rented in other states and driven here.

Rental companies said following that law made it hard to keep pace with the increased demand for rentals.

“The reality is there’s a rental car shortage and this is a modest attempt to help people get around,” said Sen. Jack O’Connell, D-San Luis Obispo.

Lawmakers also acknowledged that Tuesday’s events helped them overcome some of their usual partisan bickering and made them better understand the significance of their actions.

“All of these issues we talk about here mean very little when we live in a moment where our very freedom is under attack,” said Sen. Bill Morrow, R-Oceanside.