Lawmakers in the California state Senate are scheduled to discuss a bill that proposes changes to the state’s Subsequent Injuries Benefits Trust Fund (SIBTF), amid the backdrop of the fund’s payouts and employer assessments reaching new highs.
Assembly Bill 1329, by Liz Ortega (D – San Leandro), presents multiple changes that could impact the SIBTF and how it is run.
BACKGROUND
For those who are unfamiliar with the SIBTF, the fund is California’s version of a “Second Injury Fund” that provides benefits to injured workers who have a prior preexisting disability that combines with a second injury.
Applicants can get benefits from the fund by proving that a combination of a preexisting disability and a second injury have brought them to 70% PD or more, which is the level of PD where life pension benefits begin.
In November 2024, our friends at WorkCompCentral reported that the amount of money SIBTF is paying to injured workers is higher than ever before. That translates to the money used to pay for the fund – which is paid for by employer assessments – has been increasing every year.
For instance, the assessment was at $14 million in 2015. Three years later it jumped to $87 million, and by 2022, it was $372 million.
The rising numbers caught the attention of Gov. Gavin Newsom, who mentioned it in his 2025 budget proposals.
“Without changes to the program, claim payments are expected to increase from $87 million in 2019-20 to $1.3 billion in 2029-30 and the impact to the employer assessment is expected to grow from $112 million to $1.5 billion,” the governor’s May 2025 budget proposal states. Newsom also went on to note that SIBTF caseloads are on the rise, and that “creating efficiencies through statutory changes” could mitigate the workload on SIBTF cases.
It is quite notable that the governor prefaced one of his sentences in that SIBTF commentary with the fact that “18 states have eliminated similar subsequent benefits programs,” presumably because of those funds’ rising costs.
WHERE AB 1329 COMES IN
With the SIBTF becoming a political hot topic, it’s not surprising to see lawmakers introducing bills to address it, such as AB 1329.
AB 1329 proposes some changes to how the SIBTF operates, and what applicants would have to prove in order to get benefits.
The bill would require applicants who want SIBTF benefits to provide “substantial medical evidence” of a prior permanent partial disability that predates a second injury, and that the disability caused earnings loss. (This appears to be a reference to the famous en banc decision in Escobedo v. Marshalls (2005) 70. Cal.CompCases 604. To paraphrase, the Escobedo decision stated that in order for a medical opinion to be substantial medical evidence, the opinion must be well-reasoned, have an adequate history and examination, and disclose a solid underlying basis for the opinion.
Additionally, AB 1329 would call for the Division of Workers’ Compensation to create a database of qualified medical evaluators who are familiar with second injury claims. In theory, this could help the fund obtain more “substantial” opinions per the requirements set forth in Escobedo and the line of case law that followed it.
Third, the bill would change the trustee of the fund’s money from State Compensation Insurance Fund, to the Department of Industrial Relations.
While these changes may sound significant, WorkCompCentral reported comments from lobbyist Jason Schmelzer that AB 1329 is “the sort of bill you put out if you don’t want real reform.” Schmelzer, a lobbyist for the California Coalition on Workers’ Compensation, said that the CCWC opposes the bill and has been weighing what amendments to the bill it wants to propose.
WHERE IS THE BILL AT THIS TIME?
The bill originated in the state Assembly, and was approved by the Assembly’s committees and eventually the Assembly itself. Now it is making its way through the state Senate, and has to be approved by the various state Senate committees before the entire Senate can vote on it.
The state Senate Labor, Public Employment, and Retirement Committee is scheduled to discuss during it’s July 9 hearing.
If the Senate committees and later the full state Senate approves the bill, then the Assembly and Senate would “conference” to hash out any differences between each house’s bill. If the two houses are able to sort out their differences, the bill would then head to Gov. Newsom’s desk for either an approval or a veto.
One thing to keep in mind during all of this is as the bill makes its way through all of these steps, there is a good chance it will be amended multiple times. In other words, the summary of AB 1329 mentioned above could be very different later this summer.
We at the Law Offices of Bradford and Barthel will continue to cover the bill as it progresses, and have future updates on the bill at our blog. Stay tuned for further developments!
Got a question about workers’ compensation defense issues? Feel free to contact John P. Kamin. Mr. Kamin is a workers’ compensation defense attorney and partner at Bradford & Barthel’s Woodland Hills location, where he monitors the recent legislative affairs as the firm’s Director of the Editorial Board. Mr. Kamin previously worked as a journalist for WorkCompCentral, where he reported on work-related injuries in all 50 states. Please feel free to contact John at jkamin@bradfordbarthel.com or at (818) 654-0411.
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