BILL ANALYSIS Appropriations Committee Fiscal Summary 205 (Goldberg) Hearing Date: 8/18/03 Amended: 7/16/03 Consultant: K. French & A. Maitland Policy Vote: Judic: 5-1 Rev&Tax: 4-3 ____________________________________________________________ ___ BILL SUMMARY: AB 205 enacts the California Domestic Partner Rights and Responsibilities Act of 2003, which recasts the existing Domestic Partnership Act and extends to registered domestic partners substantially all rights, benefits, and obligations of married persons under state law, with the exception of those rights, benefits, and obligations accorded only to married persons by federal law, the California Constitution, or initiative statutes. Fiscal Impact (in thousands) Major Provisions 2003-04 2004-05 2005-06 2006-07 Fund CalPERS-Admin. --------------minor------------------------General CalPERS--State Retirement & Death benefits ---------minor, if any increase----------PERF Health benefits ----------------minor-------------------PERF CalPERS-Contracting Agencies --------------unknown--------------Local SOS notifications minor -- -- --General Local mandate --------Unknown, offset by filing fees---Local Courts -------Unknown, offset by filing fees----General STAFF COMMENTS: In its current form, this bill meets the criteria for referral to the Suspense File. If the author's amendment noted below is adopted, the bill probably would not be a candidate for Suspense. As proposed to be amended, the provision allowing registered domestic partners to file a joint income tax return beginning in 2005 would be deleted. Currently, each partner in a domestic partnership files an income tax return as a single filer or as a head of household if the partner has a dependent. Medical expenses for a domestic partner can be included in a taxpayer's medical expense deduction. The provision allowing joint filing was projected by the Franchise Tax Board to reduce General Fund revenue $500,000 in the current year, $4 million in 2004-05 and $5 million in 2005-06. In addition, FTB would incur administrative costs. Staff recommends the bill be amended on page 6, line 38, to strike the word "subdivision" and insert "section." This amendment will ensure that AB 205 does not jeopardize the tax-qualified status of the long-term care insurance plans provided by the CalPERS Long Term Care Program. CalPERS notes that costs for increased benefit eligibility associated with this bill would be minor and would not result in an increase in rates or actuarial assumptions. Domestic partners already have rights with respect to health benefits, which is the most costly area. AB 205 will increase costs for contracting agencies, because it eliminates a contracting agency's discretion in providing health coverage for domestic partners of its employees and annuitants. Assuming an additional 600 enrollees at an annual cost of $2,400 per enrollee, costs to employers and emplloyees could be $1.8 million annually. A precise figure for the additional cost to employers of this extended coverage is not possible, because public agencies have different employer contribution amounts.