BILL ANALYSIS Ó
Senate Appropriations Committee Fiscal Summary
Senator Kevin de León, Chair
AB 1035 (J. Perez) - Workers' Compensation: Firefighters and
Peace Officers
Amended: March 27, 2014 - as proposed to be amended by RN: 14
09444
Policy Vote: L&IR 4-0
Urgency: No Mandate: No
Hearing Date: April 21, 2014
Consultant: Robert Ingenito
This bill meets the criteria for referral to the Suspense File.
Bill Summary: AB 1035 would extend the time frame for dependents
to request death benefits for firefighters and peace officers,
from 240 weeks to 420 weeks from the date of injury (but no more
than one year from the date of death), if specified criteria are
met.
Fiscal Impact: This bill would result in an increase in workers'
compensation costs related to state employees who are
firefighters and peace officers, as specified. The specific
state departments that would be impacted are the Department of
Forestry and Fire Protection (CAL FIRE) and the California
Highway Patrol (CHP). The amount of the increase is unknown (see
Staff Comments).
Background: Presumptions for peace officers and firefighters
have been included in workers' compensation law since 1917.
While their scope has grown, the fundamental idea behind each
presumption is similar: such injuries are intuitively likely to
be job related, and therefore occupational injuries compensable
in the workers' compensation system, but are difficult for the
employee to prove.
Current law requires, with certain exceptions, that the
collection of workers' compensation death benefits must be
commenced one year from (1) the date of death where death occurs
AB 1035 (J. Perez)
Page 1
within one year from date of injury; or (2) the date of last
furnishing of any benefits where death occurs more than one year
from the date of injury; or (3) the date of death, where death
occurs more than one year after the date of injury and
compensation benefits have been furnished. No such proceedings
may be commenced more than one year after the date of death, nor
more than 240 weeks from the date of injury.
Advances in medical science are allowing patients with cancer or
infectious diseases to have a longer lifespan than was
previously the case. The National Cancer Institute reported in
2011-12 that the cancer survival rate is increasing;
specifically, two-thirds of patients diagnosed in 2003 survived
five years from diagnosis. New drug treatments are also
allowing Hepatitis C and HIV patients to enjoy a longer
lifespan. An employee with a work-related injury of cancer,
tuberculosis, blood-borne infectious disease, or MRSA skin
infection, may not succumb to the illness until after the
current limit of 240 weeks (almost five years) from the date of
injury has elapsed, thus denying death benefits for the
surviving family.
Proposed Law: This bill would increase the time frame, from a
maximum 240 weeks to 420 weeks from the date of injury, for
family members of a deceased peace officer or firefighter, as
specified, to file a workers' compensation death benefits claim
if the death of the employee resulted from any of the following:
(1) Cancer; (2) Tuberculosis; (3) Methicillin-resistant
Staphylococcusaureus (MRSA) skin infections; or (4) Bloodborne
infectious disease. It is not retroactive to previously
adjudicated or finalized claims. This provision would sunset on
January 1, 2019.
Related Legislation: AB 1373 (Perez) from 2013 would have
allowed dependents of a firefighter or peace officer who dies of
certain occupational ailments to file for workers' compensation
death 480 weeks from the date of injury. AB 1373 was vetoed by
the Governor.
Staff Comments: The Office of the Legislative Counsel has keyed
this bill "non-fiscal." However, the purview of this Committee,
pursuant to Joint Rule 10.5, is to review and analyze bills that
would, among other things, result in a substantial expenditure
AB 1035 (J. Perez)
Page 2
of state money. Thus, even though AB 1035 was keyed
"non-fiscal," the Committee requested the bill to examine the
extent to which it might potentially increase state costs.
Under current Appropriations Committee rules, bills are referred
to its suspense file if they increase costs for any state fund,
in any fiscal year, by specified thresholds. Those thresholds
are $50,000 for the General Fund, and $150,000 for most other
state funds.
Current state law refers to peace officers/firefighters in at
least 57 civil service position classifications across 22 state
departments. AB 1035 appears to be limited to peace
officers/firefighters in just two state departments: CAL FIRE
and CHP. The former is predominantly funded from the General
Fund, while the latter's funding comes from a special fund.
Generally speaking, data at the state level specifically
quantifying death claims and related costs from employees (both
past and present) who have died from presumption-related
injuries do not exist, as state departments do not break out
related data to that fine of a degree. Nevertheless, available
data do indicate that each accepted death benefit claim adds
approximately $50,000 to state departments' annual workers
compensation expenditures. Using this statistic, it would take a
single claim resulting from the bill's extended timeframe to CAL
FIRE or three claims to CHP for costs to reach the Committee's
suspense file threshold. With respect to CHP, the three claims
need not be in a single fiscal year, as the aggregate impact of
one claim in each of three different years would result in costs
of $150,000 in one year, thus exceeding the Committee's suspense
threshold.
This potential in increased costs to the State would most likely
result from deaths related to cancer, as medical advances allow
those patients to have a longer lifespan. With respect to the
other three causes of death identified in the bill, current
medical science and treatment are such that the timeframe
between date of injury and death is less likely to exceed the
240 weeks in current law.
As noted above, in 2013 the Governor vetoed AB 1373, which was
substantially similar to this bill. In his veto message, the
AB 1035 (J. Perez)
Page 3
Governor cited the bill's fiscal impacts and the lack of
relevant data. Specifically, the Governor noted an in-process
review by the National Institute for Occupational Safety and
Health (NIOSH) of risks of death to firefighters from cancer. In
October 2013, NIOSH published initial results regarding
mortality and cancer incidence for roughly 30,000 firefighters
in three cities (Philadelphia, Chicago, and San Francisco) since
1950. Compared to the general population, the study found "small
to moderate increases in risk for several cancer sites and for
all cancers combined." The NIOSH study only focused on
firefighters and cancer. It did not study the impacts of the
other three classifications of illness included in AB 1035, nor
did it examine AB 1035's full population impact (which includes
peace officers).
In March 2014, the Department of Industrial Relations'
Commission on Health and Safety and Workers' Compensation heard
a presentation that attempted to quantify the costs of extending
the timelines for collection of workers' compensation death
benefits for firefighters and peace officers. This presentation
used the timeline proposed by AB 1373 (480 weeks) in its
analysis, and focused on active employees. Using these
parameters, it estimated an annual cost of $4.25 million to $5
million. Given that the timeline extension in this bill is 25
percent shorter than the 480 weeks contained in AB 1373,
assuming claims are evenly distributed over the extended
timeline, this presentation suggests that annual costs could
range between $3.2 to $3.8 million. The study does not break out
the data for state and local employees (firefighters and peace
officers), respectively; consequently, projected state costs
would represent a small percentage of this amount, as the number
of state-level employees affected by the bill would be small
compared to the number at the local level. Instead, the fiscal
impact of this bill would be felt disproportionately by local
jurisdictions.
Finally, the study concentrated on cancer claims, not the other
illnesses impacted by AB 1035. This suggests that the reported
costs could be understated if the extended timeframe in the bill
impacts public safety officers who contract one of the other
specified illnesses.
AB 1035 (J. Perez)
Page 4