The first seven months of the 2003 legislative session were dominated by a deep -- and still unresolved -- budget crisis.

The last month of the session, which begins today, will be dominated by the most dramatic political conflict in modern California history: a looming recall election aimed at Gov. Gray Davis, and the incredible scramble among would-be successors.

Unions, environmentalists, consumer advocates, gay-rights activists, personal injury attorneys and other Democratic interest groups, knowing that Davis needs their help to stave off the recall and that he could be doomed, see a small window of opportunity to push their legislative agendas. Davis has already signaled that he's prepared to reward their help with signatures on their bills -- such as a highly controversial measure to provide driver's licenses to illegal immigrants.

Business groups, meanwhile, worry that Davis, who shifted somewhat to the left last year as he faced an unexpectedly tough re-election battle, will tilt even further now and will endorse a number of bills that they have labeled "job killers." During the first three years of his governorship, Davis cultivated business executives, calling himself a "pro-business centrist." But now he characterizes himself as an embattled "progressive."

Legislation expanding the ability to sue businesses, creating new health care mandates on employers, reforming workers' compensation, and imposing new fees are expected to be flashpoints in the high-pressure atmosphere of the last month. And Capitol veterans expect entirely new pieces of legislation to be drafted in the final weeks because liberal sponsors may not have the luxury of waiting until next year, given the uncertainties of the Oct. 7 recall election.

As it happens, the date of the election will intertwine itself with the legislative session. Some groups want to push their measures to Davis' desk by Aug. 29, thereby forcing him to sign or veto them by mid-September. Any bills that reach him after Aug. 29 can be held by Davis until Oct. 12, and even if he were to be recalled on Oct. 7, Davis would remain governor for at least a few days until the election results are certified.

While the perennial tussle between liberal groups and the business community will occupy one stage in the last month, another will feature aftershocks of the deficit-ridden state budget that was enacted just before the Legislature left for its summer recess. Democrats are now trying to put together a post-budget overhaul of taxes that would roll back the tripling of auto license fees decreed by the Davis administration and substitute a $4 billion boost in income and cigarette taxes.

Clearly, it's designed to cool off the voter anger directed at Davis over the unpopular car tax increase, or boost Lt. Gov. Cruz Bustamante as a Davis successor. But the tax swap must overcome hurdles, such as a constitutional mandate that a substantial portion of any new revenues go to schools. Democrats think they can draft a "revenue-neutral" bill that could be passed by a simple majority of legislators without Republican votes, but that, too, is legally debatable.

Capitol insiders, meanwhile, expect that Senate President Pro Tem John Burton and Assembly Speaker Herb Wesson will attempt to push through a package of measures that would loosen up legislative term limits and thus, if enacted, make it possible for both of them to remain in power. The scheme, sources say, would involve splitting next year's primary elections into one in March for president and one in June for legislative offices, then placing a constitutional amendment on the March ballot to lengthen term limits, perhaps to 12 years in each legislative house.

A presidential-only March primary would draw a bumper crop of Democrats who would be more likely to vote to loosen term limits. If the measure were to be enacted, Burton, Wesson and others scheduled to be termed out next year could then file for the June primary. The plan would require at least a few Republican votes for enactment, and GOP legislators who also face term limits next year are being courted.

The term-limit maneuver could add even more flavor to what promises to be an extraordinary end-of-session scramble.