BILL ANALYSIS                                                                                                                                                                                                    



                                                          AB 107
                                                          Page  1

Date of Hearing:   May 12, 1999

              ASSEMBLY COMMITTEE ON APPROPRIATIONS 
                    Carole Migden, Chairwoman

           AB 107 (Knox) - As Amended: March 10, 1999 

Policy Committee:                               
P.E.R.&S.S.Vote:5-2

Urgency:     No                   State Mandated Local  
Program:YesReimbursable:          Yes

  SUMMARY  :

This bill provides state and local government agencies that  
participate in the California Public Retirement System (CalPERS)  
the option to extend health benefits to the domestic partners of  
their employees.  Specifically, this bill:

1)Defines a domestic partnership as meeting all of the following  
  criteria:

   a)   Both persons have a common residence.
   b)   One of the persons is enrolled as an employee or  
     annuitant of a contracting employer.
   c)   Both persons share the common necessities of life and  
     agree to be jointly responsible for each other's basic  
     living expenses during the domestic partnership.
   d)   Neither person is married nor a member of another  
     domestic partnership.
   e)   The persons are not related in a way that would prevent  
     them from being married in this state.
   f)   Both persons are at least 18 years of age.

2)Specifies that a domestic partnership shall terminate when any  
  of the following occurs:

   a)   One partner gives or sends to the other partner a  
     notarized, written notice that he or she is terminating the  
     partnership.
   b)   One of the domestic partners dies.
   c)   One of the domestic partners marries.
   d)   The domestic partners no longer have a common residence.









                                                          AB 107
                                                          Page  2

3)Makes the domestic partner benefit optional upon election by  
  the employer.  The option is available to the state and local  
  agencies and school districts that contract with CalPERS for  
  health benefits, as well as the California State University,  
  the Judicial Council, the Senate and the Assembly.  

  FISCAL EFFECT  :

1)CalPERS indicates that the state employer contribution would  
  increase by about $130 per month per domestic partner.   
  Although it cannot predict the number of employees that would  
  register domestic partners under the bill, total state costs  
  are likely to exceed $200,000 annually.

2)The bill imposes a state-mandated local program by requiring  
  certain forms to be filed under penalty of perjury.  Local law  
  enforcement costs would not be state-reimbursable.

  COMMENTS  :

  1)Background.   According to the author, a total of 550  
  organizations in the United States and Canada recognize  
  domestic partners of employees.  Over 400 private sector  
  companies, over 90 colleges and universities and about 80  
  municipalities offer full or partial benefits to domestic  
  partners.

  2)Rationale  .  The sponsor, the City of West Hollywood, believes  
  that the bill will strengthen and protect families by  
  promoting better health care for those in committed, lasting  
  relationships.  Proponents state that the diversity of  
  families in modern society should be acknowledged in public  
  policy, and that access to quality health care should be a  
  basic right of all Americans.  Proponents also note that  
  actuarial data on domestic partner coverage in the private  
  sector indicate that the pay out rate for health insurance  
  policies on domestic partners is no higher than the pay out  
  rate for other family members. Finally, this bill is optional  
  so that a local agency contracting with CalPERS that does not  
  wish to cover domestic partners is not required to do so.

  3)Opposition  .  According to the analysis prepared by the  
  Assembly PERSS Committee, "Opponents of the measure contend  
  that 'the historical family arrangement works best for  
  society.  Employers, public and private, have long recognized  








                                                          AB 107
                                                          Page  3

  the advantage of covering an employee's dependents.  However,  
  struggling families do not need their tax burden increased to  
  support public employees' non-dependent adult friends.'"
  
4)Related Legislation  .  AB 26 (Migden) requires health insurers  
  to offer to employers the option to purchase coverage for  
  domestic partners, according to the same terms and conditions  
  by which the insurer makes available coverage for employee  
  dependents.  AB 1059 (Migden) of 1998, which was vetoed, was  
  substantially similar to AB 26.

  5)Possible Amendment  .  AB 107 meets the criteria to be placed  
  upon the Committee suspense file.  In the meantime, the author  
  is considering amendments to reference the statewide domestic  
  partner registry that would be established under AB 26.  AB  
  107 essentially requires each employer that offers domestic  
  partner coverage to maintain its own internal registry, and it  
  may be more efficient to conform to the model in AB 26.

, 



  Analysis Prepared by  :    Stephen Shea / APPR. / (916) 319-2081