Dear Client:
Whether impatient with Washington or miffed at its pro-business tilt...

State governments are taking charge.  Legislatures, regulators and judges are forging new policies on hot-button issues affecting businesses as well as individuals.

States have long served as laboratories to test out how well programs work. But...

They’ll chart new territory in the days and weeks ahead. And in at least some cases,
federal lawmakers are sure to play catch-up.

Take a peek at where they are heading.

In Maine, universal health insurance is under way. A new law offers subsidies to small firms and low-incomers in a bid to extend health care to all.

A half dozen states want residents to be able to import Rx drugs from Canada, defying federal regulators and the pharmaceutical industry. Kan. will soon join Minn., Wis., N.H. and Ill. in passing legislation. Vt. is suing to get Bush officials to reverse their policy on imports.

Eleven northeastern states will limit emissions of carbon dioxide and other greenhouse gases beginning this spring. The multistate accord allows pollution credit trading, paralleling the approach that is taken in the global Kyoto pact, which the federal government did not ratify.

And Calif. is tightening vehicle emissions standards for CO2, a step the Bush administration has been reluctant to take. Automakers have taken the state to court over the requirement to cut emissions 30%
over 12 years, saying only the federal government can set fuel standards.

Consumer protections are getting attention from attorneys general in states where they believe that Uncle Sam’s regulators are too lax. Targets include predatory mortgage lending, credit card fees, car leases, online fraud, gasoline pricing, medical privacy and cell phone spam.

Fourteen states will soon have a minimum wage over $5.15 an hour, the federal rate since 1997. Wash. state’s minimum will go to $7.35/hour.

Maine will override overtime rules issued by the U.S. Labor Dept. this year. The federal regs require that low-paid managers get overtime but also curb eligibility for workers who make more than $100,000 a year.

Medical malpractice reform is moving since Congress hasn’t acted. Fla. will cap punitive damages. Nev., Wash. and Wyo. will follow suit.

Other states will mimic Calif.'s bid for stem cell research, though few can match the Golden State’s juicy offer. N.J., Fla. and Wis. are dangling incentives to scientists who can’t get federal funding.