California Legislature—2013–14 Regular Session

Assembly Bill No. 517

Introduced by Assembly Member Achadjian

February 20, 2013

An act to amend Sections 62.5 and 6434 of the Labor Code, relating to occupational safety and health.

LEGISLATIVE COUNSEL’S DIGEST

AB 517, as introduced, Achadjian. Occupational safety and health: local public entities: penalty moneys: grants.

Existing law requires the Commission on Health and Safety and Workers’ Compensation in the Department of Industrial Relations to review and approve applications from employers and employee organizations, as well as applications submitted jointly by an employer organization and an employee organization, for grants to assist in establishing effective occupational injury and illness prevention programs, as specified.

Existing law requires certain civil and administrative penalties relating to workers’ compensation to be deposited in the Workers’ Compensation Administration Revolving Fund. Existing law authorizes the department to expend these funds upon approval by the commission, and upon appropriation from the fund by the Legislature, to fund the above-described grants and other activities and expenses of the commission.

Existing law requires any civil or administrative penalty assessed pursuant to the California Occupational Safety and Health Act of 1973 against a school district, county board of education, county superintendent of schools, charter school, community college district, California State University, University of California, or joint powers agency performing education functions to be deposited with the Workplace Health and Safety Revolving Fund. Existing law authorizes these entities to apply for a refund of the civil penalties assessed against them if specified conditions are met. Existing law requires moneys in the fund that are not refunded to be expended as provided for in the above-described grant provisions to assist schools in establishing effective occupational injury and illness prevention programs.

This bill would, instead, require any civil or administrative penalty assessed pursuant to the California Occupational Safety and Health Act of 1973 against a school district, county board of education, county superintendent of schools, charter school, community college district, California State University, University of California, or joint powers agency performing education functions to be deposited with the Workers’ Compensation Administration Revolving Fund.

In addition, the bill would require any civil or administrative penalty assessed pursuant to the California Occupational Safety and Health Act of 1973 against a city, county, city and county, special district, public authority, public agency, joint powers agency or authority to be deposited with the Workers’ Compensation Administration Revolving Fund. The bill would authorize these local public entities to apply for a refund of the civil penalties assessed against them if specified conditions are met. The bill would require moneys in the fund that are not refunded to be expended as provided for in the above-described grant provisions to assist these local public entities, regardless of whether any penalty has been assessed against them, in establishing and maintaining effective occupational injury and illness prevention programs.

This bill would add funding the above-described grants to the list of purposes for which moneys in the Workers’ Compensation Administration Revolving Fund may be expended. This bill would make other nonsubstantive changes to these provisions.

Existing law, the Labor Code Private Attorneys General Act of 2004, allows aggrieved employees to bring civil actions to recover penalties for violations of the Labor Code if the Labor and Workforce Development Agency or its departments, divisions, commissions, boards, agencies, or employees do not do so. The penalties collected in these actions are distributed 75% to the agency to be continuously appropriated for purposes of enforcement and education and 25% to the aggrieved employee, except as specified.

This bill would provide that the above provisions pertaining to civil or administrative penalties assessed pursuant to the California Occupational Safety and Health Act of 1973 shall not apply to that portion of any civil or administrative penalty that is distributed directly to an aggrieved employee pursuant to the above-described provisions.

Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

SECTION 1.  

Section 62.5 of the Labor Code is amended to
read:

62.5.  

(a) (1) The Workers’ Compensation Administration
Revolving Fund is hereby created as a special account in the State
Treasury. begin delete Money end delete begin insert Moneys end insert in the fund begin delete may end delete begin insert shall end insert be expended by
the department, upon appropriation by the Legislature, for all of
the following purposes, and may not be used or borrowed for any
other purpose:

(A) For the administration of the workers’ compensation
program set forth in this division and Division 4 (commencing
with Section 3200), other than the activities financed pursuant to
begin delete paragraph (2) of subdivision (a) of end delete Section 3702.5.

begin delete end delete begin delete

(B) For the Return-to-Work Program set forth in Section 139.48.

end delete begin delete end delete begin delete

(C)

end delete

begin insert (B) end insert  For the enforcement of the insurance coverage program
established and maintained by the Labor Commissioner pursuant
to Section 90.3.

begin insert

(C) For the purposes described in Sections 78 and 6434.

end insert

(2) The fund shall consist of surcharges made pursuant to
paragraph (1) of subdivision (f).

(b) (1) The Uninsured Employers Benefits Trust Fund is hereby
created as a special trust fund account in the State Treasury, of
which the director is trustee, and its sources of funds are as
provided in paragraph (1) of subdivision (f). Notwithstanding
Section 13340 of the Government Code, the fund is continuously
appropriated for the payment of nonadministrative expenses of the
workers’ compensation program for workers injured while
employed by uninsured employers in accordance with Article 2
(commencing with Section 3710) of Chapter 4 of Part 1 of Division
4, and shall not be used for any other purpose. All moneys collected
shall be retained in the trust fund until paid as benefits to workers
injured while employed by uninsured employers.
Nonadministrative expenses include audits and reports of services
prepared pursuant to subdivision (b) of Section 3716.1. The
surcharge amount for this fund shall be stated separately.

(2) Notwithstanding any other provision of law, all references
to the Uninsured Employers Fund shall mean the Uninsured
Employers Benefits Trust Fund.

(3) Notwithstanding paragraph (1), in the event that budgetary
restrictions or impasse prevent the timely payment of administrative
expenses from the Workers’ Compensation Administration
Revolving Fund, those expenses shall be advanced from the
Uninsured Employers Benefits Trust Fund. Expense advances
made pursuant to this paragraph shall be reimbursed in full to the
Uninsured Employers Benefits Trust Fund upon enactment of the
annual Budget Act.

(4) Any moneys from penalties collected pursuant to Section
3722 as a result of the insurance coverage program established
under Section 90.3 shall be deposited in the State Treasury to the
credit of the Workers’ Compensation Administration Revolving
Fund created under this section, to cover expenses incurred by the
director under the insurance coverage program. The amount of
any penalties in excess of payment of administrative expenses
incurred by the director for the insurance coverage program
established under Section 90.3 shall be deposited in the State
Treasury to the credit of the Uninsured Employers Benefits Trust
Fund for nonadministrative expenses, as prescribed in paragraph
(1), and notwithstanding paragraph (1), shall only be available
upon appropriation by the Legislature.

(c) (1) The Subsequent Injuries Benefits Trust Fund is hereby
created as a special trust fund account in the State Treasury, of
which the director is trustee, and its sources of funds are as
provided in paragraph (1) of subdivision (f). Notwithstanding
Section 13340 of the Government Code, the fund is continuously
appropriated for the nonadministrative expenses of the workers’
compensation program for workers who have suffered serious
injury and who are suffering from previous and serious permanent
disabilities or physical impairments, in accordance with Article 5
(commencing with Section 4751) of Chapter 2 of Part 2 of Division
4, and Section 4 of Article XIV of the California Constitution, and
shall not be used for any other purpose. All moneys collected shall
be retained in the trust fund until paid as benefits to workers who
have suffered serious injury and who are suffering from previous
and serious permanent disabilities or physical impairments.
Nonadministrative expenses include audits and reports of services
pursuant to subdivision (c) of Section 4755. The surcharge amount
for this fund shall be stated separately.

(2) Notwithstanding any other law, all references to the
Subsequent Injuries Fund shall mean the Subsequent Injuries
Benefits Trust Fund.

(3) Notwithstanding paragraph (1), in the event that budgetary
restrictions or impasse prevent the timely payment of administrative
expenses from the Workers’ Compensation Administration
Revolving Fund, those expenses shall be advanced from the
Subsequent Injuries Benefits Trust Fund. Expense advances made
pursuant to this paragraph shall be reimbursed in full to the
Subsequent Injuries Benefits Trust Fund upon enactment of the
annual Budget Act.

(d) The Occupational Safety and Health Fund is hereby created
as a special account in the State Treasury. Moneys in the account
may be expended by the department, upon appropriation by the
Legislature, for support of the Division of Occupational Safety
and Health, the Occupational Safety and Health Standards Board,
and the Occupational Safety and Health Appeals Board, and the
activities these entities perform as set forth in this division, and
Division 5 (commencing with Section 6300).

(e) The Labor Enforcement and Compliance Fund is hereby
created as a special account in the State Treasury. Moneys in the
fund may be expended by the department, upon appropriation by
the Legislature, for the support of the activities that the Division
of Labor Standards Enforcement performs pursuant to this division
and Division 2 (commencing with Section 200), Division 3
(commencing with Section 2700), and Division 4 (commencing
with Section 3200). The fund shall consist of surcharges imposed
pursuant to paragraph (3) of subdivision (f).

(f) (1) Separate surcharges shall be levied by the director upon
all employers, as defined in Section 3300, for purposes of deposit
in the Workers’ Compensation Administration Revolving Fund,
the Uninsured Employers Benefits Trust Fund, the Subsequent
Injuries Benefits Trust Fund, and the Occupational Safety and
Health Fund. The total amount of the surcharges shall be allocated
between self-insured employers and insured employers in
proportion to payroll respectively paid in the most recent year for
which payroll information is available. The director shall adopt
reasonable regulations governing the manner of collection of the
surcharges. The regulations shall require the surcharges to be paid
by self-insurers to be expressed as a percentage of indemnity paid
during the most recent year for which information is available,
and the surcharges to be paid by insured employers to be expressed
as a percentage of premium. In no event shall the surcharges paid
by insured employers be considered a premium for computation
of a gross premium tax or agents’ commission. In no event shall
the total amount of the surcharges paid by insured and self-insured
employers exceed the amounts reasonably necessary to carry out
the purposes of this section.

(2) The surcharge levied by the director for the Occupational
Safety and Health Fund, pursuant to paragraph (1), shall not
generate revenues in excess of fifty-two million dollars
($52,000,000) on and after the 2009-10 fiscal year, adjusted for
each fiscal year as appropriate to reconcile any over/under
assessments from previous fiscal years pursuant to Sections 15606
and 15609 of Title 8 of the California Code of Regulations, and
may increase by not more than the state-local government deflator
each year thereafter through July 1, 2013, and, as appropriate, to
reconcile any over/under assessments from previous fiscal years.
For the 2013-14 fiscal year, the surcharge level shall return to the
level in place on June 30, 2009, adjusted for inflation based on the
state-local government deflator.

(3) A separate surcharge shall be levied by the director upon all
employers, as defined in Section 3300, for purposes of deposit in
the Labor Enforcement and Compliance Fund. The total amount
of the surcharges shall be allocated between employers in
proportion to payroll respectively paid in the most recent year for
which payroll information is available. The director shall adopt
reasonable regulations governing the manner of collection of the
surcharges. In no event shall the total amount of the surcharges
paid by employers exceed the amounts reasonably necessary to
carry out the purposes of this section.

(4) The surcharge levied by the director for the Labor
Enforcement and Compliance Fund shall not exceed thirty-seven
million dollars ($37,000,000) in the 2009-10 fiscal year, adjusted
as appropriate to reconcile any over/under assessments from
previous fiscal years, and shall not be adjusted each year thereafter
by more than the state-local government deflator, and, as
appropriate, to reconcile any over/under assessments from previous
fiscal years pursuant to Sections 15606 and 15609 of Title 8 of the
California Code of Regulations.

(5) The regulations adopted pursuant to paragraph (1) to (4),
inclusive, shall be exempt from the rulemaking provisions of the
Administrative Procedure Act (Chapter 3.5 (commencing with
Section 11340) of Part 1 of Division 3 of Title 2 of the Government
Code).

(g) On and after July 1, 2013, subdivision (e) and paragraphs
(2) to (4), inclusive, of subdivision (f) are inoperative, unless a
later enacted statute, that is enacted before July 1, 2013, deletes
or extends that date.

SEC. 2.  

Section 6434 of the Labor Code is amended to read:

6434.  

(a) Any civil or administrative penalty assessed pursuant
to this chapter against a school district, county board of education,
county superintendent of schools, charter school, community
college district, California State University, University of
California, or joint powers agency performing education functions
shall be deposited begin delete with end delete begin insert in end insert the begin delete Workplace Health and Safety end delete
begin insert Workers’ Compensation Administration end insert Revolving Fund
established pursuant to Section begin delete 78. end delete begin insert 62.5. end insert

(b) Any school district, county board of education, county
superintendent of schools, charter school, community college
district, California State University, University of California, or
joint powers agency performing education functions may apply
for a refund of begin delete their end delete begin insert its end insert civil penalty, with interest, if all conditions
previously cited have been abated, begin delete they have end delete begin insert it has end insert abated any
other outstanding citation, and if begin delete they have end delete begin insert it has end insert not been cited
by the division for a serious violation at the same school within
two years of the date of the original violation. Funds not applied
for within two years and six months of the time of the original
violation shall be expended as provided for in Section 78 to assist
schools in establishing effective occupational injury and illness
prevention programs.

begin insert

(c) Any civil or administrative penalty assessed pursuant to this
chapter against a city, county, city and county, special district,
public authority, public agency, or joint powers agency or authority
shall be deposited in the Workers’ Compensation Administration
Revolving Fund established pursuant to Section 62.5.

end insert begin insert

(d) Any entity listed in subdivision (c) may apply for a refund
of its civil penalty, with interest, if all conditions previously cited
have been abated, it has abated any other outstanding citation,
and if it has not been cited by the division for a serious violation
within two years of the date of the original violation. Funds not
applied for within two years and six months of the time of the
original violation shall be expended as provided for in Section 78
to assist the entities listed in subdivision (c), regardless of whether
any penalty has been assessed against them, in establishing and
maintaining effective occupational injury and illness prevention
programs.

end insert begin insert

(e) This section does not apply to the portion of any civil or
administrative penalty that is distributed directly to an aggrieved
employee pursuant to Section 2699.

end insert