BILL ANALYSIS SENATE JUDICIARY COMMITTEE Adam B. Schiff, Chairman 1999-2000 Regular Session AB 26 A Assembly Member Migden B As Amended April 8, 1999 Hearing Date: July 7, 1999 2 Family Code; Health and Safety Code; Insurance Code 6 GMO:cjt SUBJECT Domestic Partnerships DESCRIPTION This bill would define a domestic partnership and provide for its registration and termination in the state. It would specify the legal effect of a domestic partnership, establish the validity of domestic partnerships entered into outside of the state, and establish the right of a domestic partner and his or her child and the domestic partner of a patient's parent to make hospital visits to a patient. The bill would require group health plans and group disability insurers to offer employers coverage for domestic partners of employees, in the same manner as other dependents. If an employer elects coverage of domestic partners by a group health plan or a group disability insurer, the bill would require that the health plan or disability insurer that provides hospital, medical or surgical expense benefits for employees also enroll domestic partners in the same manner as other dependents. BACKGROUND This bill is a partial resurrection of AB 1059 (Migden, 1998), which was vetoed by the Governor. AB 1059 contained only the health plan aspects of this bill, and did not include a definition of domestic partners. The domestic partnership portion of the bill is a (more) AB 26 (Migden) Page 2 resurrection of AB 2810 (Katz) of 1994, which was vetoed. SB 75 (Murray), previously approved by this Committee, contains language very similar to this bill vis-?-vis domestic partnership creation, registration, and termination. According to the 1990 census, there are approximately 500,000 unmarried couples in California, 93 percent of which are heterosexual couples and 7 percent are same-sex couples. Of the 500,000 unmarried couples, 35,000 are senior citizen couples who are not married because of social security or other pension restrictions. CHANGES TO EXISTING LAW Existing law provides for the creation of marriages, specifies the rights and obligations of spouses during marriage, and provides the procedure for the termination of marriage and the division of marital property and obligations after death or marriage. This bill would define the term "domestic partners" and require that a domestic partnership meet all of the following: Both persons have a common residence. Both persons agree to be jointly responsible for each other's basic living expenses incurred during the partnership. Neither person is married or a member of another domestic partnership. The two adults are not related to each other such that they could not be married to each other under existing law. Both persons are at least 18 years of age. Both file a Declaration of Partnership with the Secretary of State, as provided. This bill would require the Secretary of State to provide forms for the registration and termination of domestic partnerships, to distribute such forms in each county, and to establish and charge fees for the actual costs of processing these forms. Termination of a partnership would occur under one of the following scenarios: AB 26 (Migden) Page 3 1) One partner serves on the other a written notice that he or she is terminating the partnership; 2) One of the domestic partners dies; 3) One of the domestic partners marries; 4) The domestic partners no longer have a common residence. A Notice of Termination of Domestic Partnership would be filed with the Secretary of State, and all third parties to whom a copy of the Declaration of Partnership had been given would have to be notified. The bill would define the legal effect of creating a domestic partnership and would expressly provide that registration of the domestic partnership would not establish any rights except those specifically provided in the bill, and that upon termination of the partnership the partners shall incur none of the obligations to each other that the bill would establish. The bill would recognize domestic partnerships validly entered into and recognized in other jurisdictions. The bill would require health facilities to allow domestic partners, their children, and the domestic partner of a patient's parent to visit a patient in the facility, except where no visitors are allowed or other specified conditions. The bill would require a group health care service plan or group disability insurer that provides hospital, medical or surgical expense benefits to offer to employers or guaranteed associations coverage for the domestic partner of an employee or subscriber and to inform employers of the availability of this coverage. The bill would further require that, if an employer elects to purchase coverage for domestic partners of employees or subscribers, the health care service plan or disability insurer enroll as a dependent the domestic partner of said employee or subscriber, in accordance with the terms and conditions applicable in general to all dependents under the plan. COMMENT AB 26 (Migden) Page 4 1.Need for the bill According to the statistics quoted from SB 75 background material, hundreds of thousands of Californians cohabit without the benefit of marriage, yet their relationships could be as stable as the married couples around them. Especially to senior citizens, cohabitation with a trusted friend, male or female, could give them companionship, security and independence they so need at this time of their lives. Yet, many would not, or could not, marry due to restrictions on social security or other pension benefits that would affect their incomes. The author states that AB 26 will help resolve the inequity in law with respect to health benefits available to employees or other group health plan subscribers. Some health plans currently offer benefits to spouses that are not available to a subscriber's partner because the subscriber and partner are not married. The problem is the same for heterosexual couples, same-sex couples, and elderly couples who form committed and exclusive relationships, proponents say. AB 26 would ensure that "unmarried couples will not be denied access to health benefits for their partner solely because of their sexual orientation or marital status." 2. Opponents' concerns Opponents, the Committee on Moral Concerns, asserts that there is no need for AB 26 because the bill doesn't confer on persons who would register as domestic partners any more rights than they have under current law. If they are adult friends, the CMC states, there is no reason for them to register; they are free to get their own job, and live with whom they please. If they are heterosexual couples and they are "unwilling to commit to each other in a real marriage, the taxpayer-supported state government should not commit to their relationship either." "The historical family arrangement works best for society. Struggling families do not need their tax AB 26 (Migden) Page 5 burden increased to recognize and support non-dependent adult relationships, which is all domestic partnerships really are. ?.Our society now suffers from high rates of divorce, spousal and child abandonment, child neglect, and illegitimacy. We cannot afford to further devalue the family with a new easy-in, easy-out semi-marriage. This bill will hurt children." -- Committee on Moral Concerns, Sacramento An individual who has had seven years of experience as a Marriage and Family Therapist specializing in partnerships of all kinds, asserts that "domestic partners" are "the least stable of family units, regardless of their sexual orientation. The rate of 'partner turnover' makes them difficult to keep track of and will open this kind of legislation to a great deal of costly abuse and fraud." This opponent and others also contend that the bill could "drive up the cost of healthcare and disability insurance, which, we as taxpayers, will have to pay for directly through our insurance plans or indirectly through taxes." In addition, the Secretary of State is opposed to the bill, based on implementation concerns. (See Comment 8 on Page 10.) 4. Health plan coverage for domestic partners This bill would require group health care service plans that provide hospital, medical, or surgical expense benefits to offer coverage to employers or guaranteed associations for the domestic partner of an employee or subscriber, and would require that the health care service plan inform employers and guaranteed associations of the availability of coverage. Should an employer or guaranteed association elect to purchase coverage for domestic partners, the group health care service plan must enroll domestic partners who wish coverage, under the same terms and conditions of group coverage applicable to all dependents. Similarly, a group disability insurer that provides hospital, medical or surgical benefits would be required to offer coverage to employers and guaranteed AB 26 (Migden) Page 6 associations for the domestic partner of an employee or subscriber and if the employer elects to purchase the coverage, the group disability insurer must enroll the domestic partner under the same terms and conditions as other dependents enrolled in the plan. The author emphasizes that this bill would not require employers to provide domestic partner benefits; requiring the health care service plan to offer the coverage however would give the employer the choice to do so. This would also make it easier and less expensive for those small and medium sized employers who do want to provide benefits to domestic partners, but who do not have the bargaining strength of large companies and municipalities. Further, employers who choose to obtain this coverage for employees may require the employee to pay the premium, as would be the case with most dependent coverage, and if the employer decides to pay the premium, it would be fully deductible as a business expense. Insurers and HMOs, proponents state, would not suffer unreimbursed costs, as they will be able to charge a premium for the coverage. Lastly, the author cites statistics that show 60 percent of all Californians support allowing domestic partners to receive benefits such as health coverage, pensions, family leave and death benefits. Reports from institutions such as the University of California indicate that extending health benefits to the partners of gay and lesbian employees has cost UC far less than predicted, adding only about $1 million to its yearly $442 million health insurance bill (Los Angeles Times, 11/6/98). Further, the University stated, the year-old UC policy has not spawned any costly lawsuits, as was suggested when then-Governor Wilson mounted an all-out fight opposing the adoption by the Regents of a policy to include same-sex domestic partners in the University's health plan. The argument was that lawsuits would come from unmarried heterosexual couples who would want coverage. To date, no lawsuit has been filed. 4. Domestic partnership: comparison to SB 75 (Murray); remaining issues to reconcile AB 26 (Migden) Page 7 Because both SB 75 and AB 26 would define "domestic partners" and establish the procedure for the creation, registration, and termination of a domestic partnership, the author of AB 26 has agreed to amend into the bill many of the amendments made to SB 75 when it was heard in this Committee (most of them technical, such as requiring joint filing of registration of partnership with the Secretary of State). However, there are remaining important issues to reconcile, which should be resolved to avoid inconsistent policies. a) Question of preemption of local ordinances The provisions of SB 75 would preempt, on and after July 1, 2000, any local ordinance or law that provides for the creation of a domestic partnership, except that a local jurisdiction may retain or adopt policies or laws that offer rights to domestic partners within that jurisdiction that are in addition to the rights established by state law. In other words, SB 75 would set a minimum floor. (SB 75 would also provide that pre-existing domestic partnerships created under a local ordinance remain valid.) This preemption language is absent in AB 26. Proponents of AB 26 indicate their fear that with state preemption of local ordinances, those domestic partnerships that had qualified previously under the local rules may lose status, and that broader benefits granted by certain jurisdictions may not then be granted to otherwise qualifying domestic partners. However, since not all jurisdictions in the state have adopted local ordinances and since the definition of domestic partnerships is not uniform across the state, having a basic definition of the term may be helpful in the long run to all health care services plans and businesses/associations that purchase coverage for their employees or subscribers. Further, the preemption language in SB 75 preserves pre-existing domestic partnerships and would not prevent local jurisdictions from offering more or broader rights to domestic partners within their jurisdictions. Language for an amendment to SB 75 has been drafted to clarify that any local jurisdiction may adopt AB 26 (Migden) Page 8 ordinances or policies that offer rights to domestic partners or that impose duties on third parties regarding domestic partners that are in addition to the rights and duties provided by SB 75. If AB 26 is amended to include a preemption provision, this language should be included. SHOULD THESE BILLS BE CONFORMED ON THE PREEMPTION ISSUE? b) Issues regarding property acquisition and ownership The Committee amended SB 75 to provide clearly that the formation of a domestic partnership under its provisions would not create any interest in any property, real or personal, owned by one partner in the other partner. The intent of the amendment was to set the basis for any disputes regarding ownership of property in the event of termination of the domestic partnership, and to encourage the domestic partners to set forth in writing their agreements with regards to property ownership. This bill does not address these property issues, the absence of which could lead to contentious litigation in the event of a termination. The following language was adopted in SB 75 to address these property issues. If amended into AB 26, it should be subdivisions (b) and (c) Section 299.5. The filing of a Declaration of Domestic Partnership pursuant to this division shall not change the character of property, real or personal, or interest in real or personal property owned by either domestic partner or both of them prior to the date of filing of the declaration. The formation of a domestic partnership under this division shall not in and of itself create in one partner any interest in any property, real or personal, owned by the other partner. Any property or interest acquired by the partners during the domestic partnership where title is shared shall be held by the partners in the proportion of interest assigned to each partner at the time the property or interest was AB 26 (Migden) Page 9 acquired, unless otherwise expressly agreed in writing by both parties. Upon termination of the domestic partnership, this subdivision shall govern the division of any property jointly acquired by the partners. SHOULD THESE PROPERTY ISSUES BE CLARIFIED? c) Income and estate tax liability Similarly, AB 26 does not address any issue regarding liabilities that could be created by a domestic partnership, although it does provide that upon termination of the partnership neither partner would incur any of the obligations to each other created by the bill (such as responsibility for basic living expenses). The bill also does not address the effect of the domestic partnership on individual income or estate tax liabilities of the partners. In SB 75, the following language was adopted to deal with tax liability: The formation of a domestic partnership under this division shall not change the individual income or estate tax liability of each partner prior to and during the partnership, unless otherwise provided under another state or federal law or regulation. SHOULD THIS TAX LIABILITY ISSUE BE CLARIFIED? d) Basic living expenses definition The definition of "basic living expenses" for which both domestic partners would be responsible continues to be a point of debate between AB 26 proponents and SB 75 proponents. While SB 75 now covers food, clothing, transportation, shelter, utilities and all other costs directly related to the maintenance of the common household of the common residence of the domestic partners, AB 26 would cover only food and shelter. The expanded definition of "basic living AB 26 (Migden) Page 10 expenses" was adopted at the Committee hearing on SB 75, due to concerns that joint expenses incurred for utilities (telephone, gas, electric), direct household maintenance (repairs such as plumbing), transportation (shared expenses for gasoline, car) and clothing (a basic necessity for all intents and purposes) should be the joint responsibility of the domestic partnership. While there has been more debate over whether "clothing and transportation" ought to be a "basic living expense" for which the domestic partners would be jointly responsible, utilities and other direct household maintenance expenses have been accepted by SB 75 proponents. There are three possible resolutions for this issue: 1) leave AB 26 as is, with the narrowest definition or; 2) adopt the mini-expanded version (leaving clothing and transportation out) or; 3) adopt the current, expanded version now in SB 75. SHOULD THE DEFINITION OF "BASIC LIVING EXPENSES" BE BROADENED OR LEFT AS IS? e) Protection of creditors To protect creditors, both SB 75 and the original version of AB 26 contained language stating that any person to whom expenses incurred for the basic living expenses of the domestic partners are owed may enforce their rights to payment against the partners. The current version of AB 26 removes this language, while SB 75 clarified the responsibility to third-party creditors. SUGGESTED AMENDMENT: Under the definition of "joint responsibility," include language protecting creditors who extend credit in reliance upon the domestic AB 26 (Migden) Page 11 partnership and the agreement of the partners to be jointly responsible for the expenses. 5. Jurisdictions and companies that already provide benefits to domestic partnerships Information provided by the author and background material from SB 75 indicate that there are hundreds of cities and municipalities, colleges and universities, private employers, labor unions, and even the U.S. House of Representatives that recognize and/or provide benefits to domestic partners. In California, among the local governments with domestic partnership policies are the Cities of Alameda, Berkeley, Laguna Beach, Los Angeles, Oakland, Petaluma, Sacramento, San Diego, Santa Barbara, Santa Cruz, West Hollywood, City and County of San Francisco, Counties of Los Angeles, Marin, San Mateo, Santa Cruz, and the Santa Cruz Metro Transit System. Ten university systems, including the University of California, the University of Southern California, Golden Gate University, and the California Institute of Technology, Pasadena have similar policies. In the California private sector, 129 for-profit, not-for-profit and union organizations have chosen to provide benefits to domestic partners, including such organizations as Levi Strauss & Co., Novell, Kaiser Permanente Foundation Health Plan, Inc., International Brotherhood of Teamsters #70, Southern California Gas Co., Ticketmaster Group, Inc., Dow Chemical, Mattel, Eastman Kodak, IBM, Northwest Airlines, Pacific Stock Exchange, Patagonia, Inc., Paramount Pictures, Seagate Technology, Inc., Silicon Graphics, AFSCME #57 and #827, Consumers Union, Bank of America, Apple Computer, Viacom, CBS, ABC, PBS, FOX, Disney Corporation, and Warner Brothers. Some of the benefits provided by the above list of organizations include dental and health benefits for both AB 26 (Migden) Page 12 same-sex and opposite-sex domestic partners, family leave and bereavement benefits. 6. Hospital visitation rights Many supporters of both AB 26 and SB 75 support the bills because of the provision that would require a health facility to allow a patient's domestic partner, the children of the patient's domestic partner, and the domestic partner of the patient's child or parent to visit the patient, except under specified circumstances (such as, the patient doesn't want the visit, no visitors are allowed, the visit would pose a danger to the patient or others). "Indeed, such visitation rights would do nothing more than recognize the patient's need and right to love and support of those closest to the patient during hospitalization, and the concomitant need and right of the patient's partner to be by the side of his or her loved one during that time. Unfortunately, in some hospitals, a "spouse or immediate family only" visitation rule (e.g., in an intensive care unit) has been used to prohibit the partner of a seriously ill or dying man or lesbian from visiting his or her loved one; no civilized society should tolerate such inhumane practices." -- People for the American Way 6/29/99 letter. 7. Recognizing out-of-state domestic partnerships This bill would recognize as valid those domestic partnerships entered into outside the state, which would be valid in the jurisdiction where the partnership was created. The State of Massachusetts as well as cities such as Atlanta (GA), Ann Arbor (MI), Chapel Hill (NC), District of Columbia (DC), Hartford (CT), Ithaca (NY), Provincetown (MA), Seattle (WA), East Lansing (MI), Cambridge (MA), Madison (WI) have instituted domestic partnership registries. 8. Secretary of State: concerns The Secretary of State is concerned about the effective date of the bill. He suggests that the effective date of the bill be changed to July 1, 2000, to allow appropriate AB 26 (Migden) Page 13 funding to be placed in the Secretary of State's budget to cover the automated system necessary for start-up of the registry. SHOULD THE EFFECTIVE DATE OF THE BILL BE CHANGED TO JULY 1, 2000? The Secretary of State further suggests that registration be done at the local level, not at the state, because vital statistics have traditionally been recorded and maintained at the local level. He also states that requiring domestic partners to register with the state would be more burdensome for them than is currently required for engaged couples who can walk into a local government facility to obtain a marriage license. The Secretary of State would be required, under this bill, to establish fees for the processing of forms for the registration and termination of domestic partnerships. All marriage license fees and confidential marriage certificate fees in California include an add-on fee of $23, to be used for funding domestic violence shelters and programs. These shelters and programs are available to those who need the services, whether they are married or not. SHOULD THE SAME ADD-ON FEE BE ADDED TO FEES CHARGED FOR THE REGISTRATION OF A DOMESTIC PARTNERSHIP? 9. AB 1059: Governor's veto message Last year, AB 1059 (Migden) was sent to the Governor, who vetoed it with this message: "Domestic partner health benefit coverage is an issue that is more appropriately left to negotiations between employers and employees. This coverage is available for both large and small employers who wish to provide the benefit, as evidenced by the many employers who choose to do so. This bill would also increase the cost of health insurance. No definition for "domestic partner" is AB 26 (Migden) Page 14 provided?. The lack of definition for "domestic partner" lends itself to instability, fraud and adverse selection?" The problem of defining "domestic partner" has been taken care of by AB 26. 10. The California Family: dealing with its changing character Some eight years ago, the Legislature appointed a Joint Legislative Task Force on the Changing Family, to study the nature of different forms that the California family was evolving into, and to make recommendations to the Legislature as to how the needs of that changing family could be better met. The task force found that indeed, the traditional structure of the family, as it was known in the 50's and 60's, had changed over the years. Today, there are as many forms that are "the family" as people in growing and fluid relationships could fashion to provide some stability to their lives. The traditional "nuclear family" is no longer the dominant description of the family in California, rather, the concept of family has been extended to include stepparents, grandparents, parents-in-law, and, in many cities, even domestic partners. Children have learned to have multiple families, as their biological parents get divorced, remarry and reconstitute new, extended families. This session, several bills have been introduced to deal with the changing needs of this changing family. SB 1173 would provide status for a caring de facto parent to maintain a long-term relationship with a child; SB 75 and AB 26 would acknowledge that domestic partners, whether they be of the same sex or not, should have some rights and privileges even though the sanctions of a legal, traditional marriage are not available; and SB 442 would allow the family of an aging, vulnerable person to protect him or her and his or her property from those who prey on the elderly, even after death. These are major steps in filling the gaps in family law and other areas, where existing law is insufficient or non-existent. Support: Service Employee International Union (SEIU); AB 26 (Migden) Page 15 American Civil Liberties Union (ACLU); City and County of San Francisco; California Teachers Association; City of West Hollywood; Elections Committee of the County of Orange (ECCO); L.A. Gay and Lesbian Center; Congress of California Seniors; California Nurses Association; California School Employees Association; California Alliance for Pride and Equality (CAPE); East Bay Municipal Utility District; Older Women's League of California; California National Organization for Women (NOW); Association of Bay Area Governments; Santa Barbara Stonewall Democratic Club; Academic Senate of the California State University; California Child, Youth & Family Coalition (CCYFC); California Professional Firefighters (CPF); People For the American Way; Wildcat International; California State Employees Association; Hit Construction, Fresno; Central California Alliance; Friends Committee on Legislation of California; Kaiser Foundation Health Plan, Inc.; California Church Impact; Inland Empire Lesbian and Gay Democratic Club; National Center for Lesbian Rights; Parents, Families & Friends of Lesbians & Gays, San Jose/Peninsula Chapter; California Federation of Teachers; numerous individuals Opposition: Secretary of State Bill Jones; California Catholic Conference; Committee on Moral Concerns; Osborne Neighborhood Church; Calvary Chapel Grass Valley; Central Assembly; Los Gatos Christian Church; Women V.I.P.s (Volunteers in politics); numerous individuals HISTORY Source: Author Related Pending Legislation: SB 75 currently in the Assembly Judiciary Committee Prior Legislation: AB 1059 (Migden, 1998) vetoed Prior Votes:Asm. Health (Ayes 9. Noes 4.) Asm. Appr. ( Ayes 14. Noes 7.) AB 26 (Migden) Page 16 Asm. Flr. (Ayes 41. Noes 38.) **************