BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 2305
                                                                  Page  1

          Date of Hearing:   May 5, 2010

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                   AB 2305 (Knight) - As Amended:  April 22, 2010 

          Policy Committee:                              Business &  
          Professions  Vote:                            7-2

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill extends the sunset on a requirement for roofers to  
          maintain workers' compensation coverage even when they have no  
          employees. Specifically, this bill extends a sunset established  
          by AB 880 (Emmerson), Chapter 36, Statutes of 2006 from January  
          1, 2011 to January 1, 2014 and deletes an obsolete reporting  
          requirement. 

           FISCAL EFFECT  

          Annual fee-supported special fund costs of less than $30,000 to  
          the Contractors State Licensing Board to continue oversight of  
          roofers' workers' compensation coverage. 

           COMMENTS  

           1)Rationale  . This bill, sponsored by the Roofing Contractors  
            Association of California, requires  continued increased  
            oversight of roofers as to whether they have workers'  
            compensation coverage. Roofers' face some of the highest  
            workers' compensation premiums of all industries. The author  
            indicates this leads more roofers to avoid paying insurance  
            premiums by declaring they have no employees. This bill is  
            designed to reduce this kind of premium fraud. The bill gives  
            the CSLB a mechanism by which to monitor this area of law.. 

           2)Background  . California employers are required to provide  
            workers' compensation benefits according to state labor laws.  
            Employers must purchase workers' compensation insurance from  
            either a licensed insurance company or through the State  
            Insurance Fund (SCIF). Employers may also choose to  








                                                                 AB 2305
                                                                  Page  2

            self-insure, which means they use a pay-as-you go model,  
            paying benefits to and on behalf of workers as costs are  
            incurred. About 30% of workers' compensation fraud is  
            perpetrated by employers failing to provide coverage to  
            employees. 
           

          Analysis Prepared by  :    Mary Ader / APPR. / (916) 319-2081