BILL ANALYSIS                                                                                                                                                                                                    Ó




                   Senate Appropriations Committee Fiscal Summary
                            Senator Kevin de León, Chair


          AB 607 (Perea) - Workers' Compensation: Dependent Children
          
          Amended: As Introduced          Policy Vote: L&IR 4-0
          Urgency: No                     Mandate: No
          Hearing Date: August 12, 2013                           
          Consultant: Robert Ingenito     
          
          This bill does not meet the criteria for referral to the  
          Suspense File.


          Bill Summary: AB 607 would allow a deceased employee's totally  
          dependent children to receive workers' compensation death  
          benefits with or without a surviving totally dependent parent. 

          Fiscal Impact: State costs would be unknown, but likely below  
          $50,000 (General Fund and special funds). The fiscal impact of  
          each case would depend on the number of dependent children.

          Background: Current law provides for a comprehensive system of  
          workers' compensation benefits to be paid to employees, or their  
          dependents in the case of a job-related death, or in the event  
          of illness/injury that arises out of or in the course of  
          employment. This system requires all employers to secure payment  
          of benefits by either (1) self-insuring, or (2) securing  
          insurance from an insurance company duly authorized by the  
          State.

          Under current law, if a child is a minor or found to be  
          physically or mentally incapacitated from earning, that child  
          must be conclusively presumed to be wholly dependent for support  
          upon a deceased employee-parent with whom that child is living  
          at the time of injury resulting in death. However, this only  
          applies if there is no totally dependent spouse, defined to be  
          one earning $30,000 or less in the twelve months immediately  
          preceding the death.  

          Current law provides that with respect to minor dependent  
          children, death benefits shall continue until a child reaches  
          the age of 18, or for the life of the child who is totally  
          disabled due to a physical or mental incapacitation. 









          AB 607 (Perea)
          Page 1


          Proposed Law: This bill would (1) require that dependent  
          children receive workers' compensation death benefits,  
          irrespective of if the surviving spouse is totally dependent,  
          and (2) make a conforming change to existing law.

          Prior Legislation: AB 749 (Calderon), Statutes of 2002, Chapter  
          6, expanded workers' compensation benefits, including death  
          benefits for dependent adult children.
          
          Staff Comments: This bill would ensure that totally disabled  
          dependent children, regardless of their age, obtain the death  
          benefit in the event of a deceased parent. This benefit would be  
          available to totally disabled dependent children of any employee  
          who dies as a result of a job-related injury.

          The Department of Industrial Relations reports an average of  
          roughly 400 workplace fatalities between 2008 and 2010. This  
          bill would pertain to any fatalities that occur to state  
          employees, which is unknown. The fiscal impact of the bill would  
          be case specific and subject to the number of eligible  
          dependents. Currently, death benefits are payable at $250,000  
          for one totally dependent child; $290,000 for two totally  
          dependent children and $320,000 for three or more, each paid at  
          a maximum rate of $224.00 per week per dependent.

          Regarding state costs, as an order of magnitude, if a state  
          employee with two dependent children were to suffer a  
          job-related death, the maximum annual increase in costs would be  
          $11,648.