BILL ANALYSIS                                                                                                                                                                                                    

                    Appropriations Committee Fiscal Summary

                                    1661 (Kuehl)

          Hearing Date:  5/23/02          Amended: 5/6/02
                                              + LCR 0210575
          Consultant:  Nora Lynn          Policy Vote: Labor & IR   


          BILL SUMMARY: 
          SB 1661 creates, within the state disability insurance  
          (SDI) program, a family temporary disability insurance  
          (FTDI) program to provide up to 12 weeks of wage  
          replacement benefits to workers who take time off work to  
          care for a seriously ill child, spouse, parent, domestic  
          partner, or to bond with a new child. 

                              Fiscal Impact (in thousands)
          Major Provisions        2002-03             2003-04               2004-05   
          Programming                   7,500          Special*
          Addl. 1st time claims         9,200                  9,200Special*
          Monitoring                    15,000                 15,000Special*
          Employer FTDI contributions          (55,000)         
          Employee FTDI contributions          (109,000)         
          FTDI benefits                  53,500                  
                        * SDI Fund 
          STAFF COMMENTS:  
          The majority of the state's workers - some 13 million  
          people - are covered by SDI, which is financed by a  
          mandatory payroll contribution by employees which is paid  
          into the SDI Fund.  SB 1661 provides disability  
          compensation to employees unable to work due the sickness  
          or injury of a family member or domestic partner or the  
          birth, adoption or foster care placement of a child, and  
          funds these additional benefits through additional employee  
          contributions and by requiring employers to provide  
          benefits either directly, through private insurance, or to  
          pay into the SDI Fund.  

          EDD's estimates for employer and employee contributions as  
          well as anticipated benefits were based on a model where  
          half of the state's 800,000 employers would participate in  
          the new program rather than opting out with a bond. EDD  
          staff anticipate $107 million in benefits would be paid in  
          2004 and $110 million in 2005.  Employers would contribute  
          $109 million to the fund in 2004 and $111 million in 2005,  
          while employees' additional contributions to SDI as a  
          result of the FTDI surcharge would total $219 million in  
          2004 and $223 million in 2005.  EDD staff project that the  


          SDI Fund would remain solvent with this program in place.

          Amendments proposed by the author increase the maximum rate  
          which may be charged to employees to fund the program;  
          delay the effective date to Jan. 1, 2004 and benefits  
          payment until July 1, 2004;  and both clarify how employers  
          will fund their share of the program and that initial and  
          ongoing administrative costs are to be paid from the SDI