California Legislature—2013–14 Regular Session

Assembly Bill No. 1277

Introduced by Assembly Member Skinner

February 22, 2013

An act to amend Section 62.5 of the Labor Code, relating to employment.

LEGISLATIVE COUNSEL’S DIGEST

AB 1277, as introduced, Skinner. Department of Industrial Relations.

Existing law creates various funds within the State Treasury that are administered by the Department of Industrial Relations, including, among others, the Labor Enforcement and Compliance Fund and the Occupational Safety and Health Fund.

Under existing law, moneys in the Labor Enforcement and Compliance Fund are required to be expended by the department, upon appropriation by the Legislature, for the support of specified activities performed by the department’s Division of Labor Standards Enforcement. Existing law imposes certain surcharges upon employers, as defined, which are deposited into these and other designated funds.

Under existing law the Labor Enforcement and Compliance Fund and related surcharges, as well as a limitation on the surcharge generating revenues for the Occupational Safety and Health Fund, become inoperative on July 1, 2013.

This bill would extend the dates upon which the povisions described above become inoperative, to July 1, 2017.

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, as amended by
Section 4 of Chapter 363 of the Statutes of 2012, 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. Money in the fund may 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
paragraph (2) of subdivision (a) of Section 3702.5.

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

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

(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 begin delete provision of end delete 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 begin delete over/under
assessments end delete begin insert overassessments or underassessments end insert 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 begin delete over/under assessments end delete
begin insert overassessments or under assessments end insert 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, begin delete 2013 end delete begin insert 2017 end insert , subdivision (e) and
paragraphs (2) to (4), inclusive, of subdivision (f) are inoperative,
unless a later enacted statute, that is enacted before July 1, begin delete 2013 end delete
begin insert 2017 end insert , deletes or extends that date.