BILL ANALYSIS                                                                                                                                                                                                    �



                                                                  AB 55
                                                                  Page  1

          Date of Hearing:   April 13, 2011

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Felipe Fuentes, Chair

                  AB 55 (Gatto) - As Introduced:  December 6, 2010 

          Policy Committee:                              InsuranceVote:11 
          - 0 

          Urgency:     No                   State Mandated Local Program: 
          No     Reimbursable:              

           SUMMARY  

          This legislation removes the January 1, 2012, sunset date on the 
          law that allows a motion picture payroll services company to 
          serve as the employer of motion picture production workers for 
          purposes of payroll tax reporting and employee benefits pursuant 
          to the unemployment insurance (UI) and state disability 
          insurance (SDI) programs.

           FISCAL EFFECT  

          Absorbable workload to the Employment Development Department 
          (EDD), to continue reviewing and approving extensions of 
          voluntary benefit plans.  

           COMMENTS  

           1)Purpose  . 

           2)State Disability Insurance  (SDI) is a public disability 
            insurance program funded through premiums and payroll taxes 
            and provides most California employees with cash benefits for 
            disabilities lasting more than seven days that result in 
            partial or total disability. SDI generally pays up to 55% of 
            wages earned before the disability and lasts up to a year. SDI 
            differs from federal Social Security disability benefits. 
            Federal benefits are only provided if a disability lasts more 
            than a year and results in not being able to work in any 
            industry.  

          Under current law, companies may opt to provide disability 
            coverage via a voluntary plan which is also funded with 








                                                                  AB 55
                                                                  Page  2

            employee contributions, but provides better benefits than SDI. 
            For large companies like Entertainment Partners, there are 
            challenges of maintaining a dual system, with some employees 
            receiving SDI and some receiving benefits from a voluntary 
            plan. This bill allows Entertainment Partners to increase 
            efficiency by providing uniform disability benefits through a 
            voluntary plan, subject to approval by EDD.


           Analysis Prepared by  :    Julie Salley-Gray / APPR. / (916) 
          319-2081