BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                AB 228
                                                                Page  1


        ASSEMBLY THIRD READING
        AB 228 (Fuentes)
        As Introduced  February 2, 2011
        Majority vote 

         INSURANCE           11-0                                         
         
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        |Ayes:|Solorio, Hagman, Charles  |     |                          |
        |     |Calderon, Carter, Feuer,  |     |                          |
        |     |Hayashi, Miller, Olsen,   |     |                          |
        |     |Alejo, Torres, Wieckowski |     |                          |
        |-----+--------------------------+-----+--------------------------|
        |     |                          |     |                          |
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         SUMMARY  :  Clarifies that employees of the State Compensation 
        Insurance Fund (SCIF) are exempt from work furlough orders.  
        Specifically,  this bill  adds "furloughs" to the Insurance Code 
        Section that exempts SCIF employees from "hiring freezes" and "staff 
        cutbacks" that are otherwise required by law.

         EXISTING LAW  :

        1)Establishes the SCIF to provide workers' compensation insurance 
          both as a competitor to private insurers and as the insurer of 
          last resort for employers unable to procure insurance from private 
          insurers.

        2)Provides that employees of SCIF, other than statutorily exempt 
          employees, are subject to the civil service laws applicable to 
          state employees.  However, SCIF employees are paid entirely from 
          premium and other revenues derived from SCIF's insurance 
          operations.

        3)Provides that SCIF is not subject to any other provisions of the 
          Government Code, except where certain provisions are expressly 
          made applicable.

        4)Provides that employees of SCIF are not subject to hiring freezes 
          and staff cutbacks otherwise required by law.

         FISCAL EFFECT  :  None anticipated.  This bill is keyed nonfiscal.

         COMMENTS  :   








                                                               AB 228
                                                                Page  2



         Purpose  :  The purpose of this bill is to clarify that "furloughs" do 
        not apply to SCIF.  

         Background  :  Former Governor Schwarzenegger included SCIF employees 
        in the furlough orders that he issued as cost-saving measures during 
        the past several years.  While many lawsuits were filed raising 
        various legal issues surrounding these furlough orders, the lawsuit 
        filed by representatives of SCIF employees, which SCIF itself 
        joined, was one of the first to be decided.  In that case, the 
        courts ruled that "furloughs" were just another word for the hiring 
        freezes and staff cutbacks from which SCIF was already exempt.  The 
        bill merely conforms the statute to this ruling so that there is no 
        doubt in the future that furloughs of state employees do not apply 
        to SCIF employees.


         Analysis Prepared by  :    Mark Rakich / INS. / (916) 319-2086FN: 
        0000155