The appellate court’s ruling is a victory for small business groups who characterized Senate Bill 2 (SB 2) as “one of the worst job-killer bills passed by the Legislature in years.” Now the coalition of groups will get to take their position to the people on a November ballot, according to a San Jose Mercury News report.

Originally, a coalition of businesses led by the California Chamber of Commerce gathered more than 620,000 signatures for a 2004 ballot measure to overturn SB 2. But a Sacramento County Superior Court judge in December ruled that the petitions used were invalid because they did not say that small businesses would not have to provide health insurance unless state lawmakers first approve a tax credit.

The appeals court though found that while the petitions’ descriptions may be “technically imprecise” they are “fatally defective.” In this case, the law dictates that the benefit of the doubt is handed over to the referendums, the appeals court said.

Under provisions of the legislation,all companies with 200 or more workers have to offer insurance for employees and their families starting in 2005 or pay fees to support a statewide insurance program. Firms with between 20 and 199 employees will have to give workers, but not their families, insurance by 2006 or pay similar fees to the state. In most cases, companies will pay at least 80% of the monthly insurance premium, leaving workers to pay no more than 20% of the tab.

Early polls though are an ominous sign for small business groups. Sixty-five percent of California registered voters support the provisions of SB 2, although the measure was not well known among those polled. Twenty-seven percent opposed the bill, while 8% had no opinion.