BILL ANALYSIS                                                                                                                                                                                                    

                   Senate Appropriations Committee Fiscal Summary
                           Senator Christine Kehoe, Chair

                                          SB 651 (Leno)
          Hearing Date: 05/16/2011        Amended: 04/25/2011
          Consultant: Jolie Onodera       Policy Vote: Judiciary 3-2


          BILL SUMMARY: SB 651 would eliminate the requirement that 
          domestic partners have a common residence in order to establish 
          a registered domestic partnership (RDP). 
                            Fiscal Impact (in thousands)

           Major Provisions         2011-12      2012-13       2013-14     Fund
          Secretary of State registration   Minor, absorbable one-time 
          costs                  General

          Income tax revenue lossUnknown; potentially significant General
                                 revenue loss in excess of $110 - $825
                                 per one percent increase in RDPs 

          Health benefits for increased     Unknown; potentially 
          significant costs      General
          enrollees              of $550 per 100 new RDPs

          Unemployment insurance Minor, absorbable costs annually Special*

          *Unemployment Fund

          STAFF COMMENTS: This bill meets the criteria for referral to the 
          Suspense File.

          Under existing law, in order to register as a domestic 
          partnership with the Secretary of State, two people must 1) have 
          a common residence; 2) not be married to someone else or be a 
          member of another domestic partnership; 3) not be related by 
          blood in a way that would prevent them from being married to 
          each other in this state; 4) be at least 18 years of age; 5) be 
          members of the same sex, or if members of the opposite sex, one 
          or both persons must be over the age of 62; and, 6) both persons 
          must be capable of consenting to the domestic partnership. This 
          bill would eliminate an existing difference between domestic 
          partners and married spouses by eliminating the requirement that 
          domestic partners have a common residence.

          By removing this existing requirement, this bill would expand 
          the number of persons who may establish and register a domestic 


          SB 651 (Leno)
          Page 3 

          partnership, and extends the legal rights and economic benefits 
          of domestic partners. The Secretary of State indicates there are 
          110,498 individuals registered as domestic partners, based on 
          55,249 RDP filings. It is unknown how many additional RDPs will 
          result due to the provisions of this bill as data is not 
          collected by the Secretary of State for those individuals who 
          have previously been denied due to the common residency 
          requirement or have not applied due to the existing registration 
          requirements. However, even a one percent increase in RPDs would 
          represent approximately 1,100 individuals or 550 RDP filings. 
          The Secretary of 

          State indicates minor and absorbable costs to revise the RDP 
          filing form and update the agency website. The Secretary of 
          State has not identified any cost savings as a result of this 
          proposed change in eligibility criteria.

          Several domestic partnership laws enacted in prior years granted 
          domestic partners additional rights and benefits in order to 
          achieve parity between marriage and domestic partnerships in 
          California. AB 26 (Migden) 1999 created the official domestic 
          partnership registry and among other things, granted health 
          benefits to domestic partners of state employees. By increasing 
          the number of potential registered domestic partnerships could 
          result in increased health benefit costs to the state of an 
          unknown amount. The Public Employees Retirement System (PERS) 
          has indicated for any employee who adds a spouse or domestic 
          partner to his or her health plan would cost $5,500 more 
          annually in health benefits and an unknown amount for retiree 
          and survivor's health benefits as afforded by the state. It is 
          unknown how many of the new RDP filings would have a member 
          employed by the state, but every 100 applicable new RDP filings 
          would result in $550,000 annually in increased health benefits.

          SB 1827 (Migden) 2006 created the State Income Tax Equity Act 
          which allowed registered domestic partners to file joint income 
          taxes in order to receive the same financial protection afforded 
          to married couples.  According to the Franchise Tax Board, the 
          average income tax benefit for married filing jointly versus 
          those filing as single or head of household could range from 
          $200 to $1,500 per year depending on the income levels of each 
          individual. For every one percent increase in registered 
          domestic partnerships who so choose to file could result in 
          income tax revenue loss of up to $110,000 to $825,000 annually. 


          SB 651 (Leno)
          Page 4 

          Additional taxpayer benefits extended to RDP and RDP's 
          dependents including the exclusion from gross income for 
          specified medical expenses and health insurance benefits could 
          result in additional lost tax revenue of an unknown, but 
          potentially significant amount.

          The Employment Development Department indicates that although 
          there would likely be some increase in unemployment insurance 
          (UI) claims due to more individuals meeting the requirements for 
          a valid domestic partnership, any increase would likely be very 
          minor. Less than one percent of all UI benefit eligibility 
          issues adjudicated involve an individual who quit due to 
          domestic reasons, which includes quitting work to move with a 
          spouse, imminent spouse, registered domestic partner, or 
          imminent registered domestic partner, as well as other 
          circumstances such as lack of child care or caring for an ill 
          family member. It is not anticipated that this bill would result 
          in a significant increase in UI claims.