Gov. Gavin Newsom warned that he will push for changes to the Subsequent Injuries Benefits Trust Fund (SIBTF) in 2026, according to the governor’s veto message of a bill that would have changed how the fund operates.
The California governor vetoed Assembly Bill 1329 in early October, which would have made some procedural changes to how injured workers could get benefits from the beleaguered fund.
For those unfamiliar with the Subsequent Injuries Benefits Trust Fund (SIBTF), lawmakers originally created the fund as California’s version of a “Second Injury Fund.” Lawmakers originally created the fund to help encourage World War II veterans to return to the workforce.
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.
AB 1329 would have made a few changes to the SIBTF claims process, such as:
- Requiring applicants to prove their claims via “substantial medical evidence,”
- Created a database of qualified medical evaluators who are familiar with SIBTF claims,
- Changed the trustee of the fund’s money from State Compensation Insurance Fund, to the Department of Industrial Relations.
Newsom vetoed the bill on Oct. 7. In his veto message, he focused on two topics – a) the fund’s liabilities have skyrocketed to astronomical levels, and b) AB 1329 didn’t do enough to save the fund.
“Over the past decade, SIBTF has expanded beyond its original purpose,” Newsom wrote in the veto message. “The number of claims has skyrocketed, leading to an unsustainable future for the program. The Department of Industrial Relations estimates that without comprehensive reform, the annual assessment paid by all employers will increase from $372 million in FY 2021-22 to $1.5 billion in FY 2029-2030.”
It’s worth noting that the employer assessments were only $14 million in 2015. That means that the SIBTF’s employer assessments increased 2,557.14% from 2015 to 2022.
The massive increase in liabilities could cause processing delays of up to 10 years for future SIBTF claimants, Newsom wrote in his veto message.
“Notably, other states, facing similar pressures, have chosen to eliminate their programs rather than reform them,” he said. “This situation is dire and the state must act immediately.”
Newsom went on to say that AB 1329 did not contain enough comprehensive reforms to save the program. The governor was not alone in this sentiment, as our friends at WorkCompCentral previously reported in June that lobbyists had lamented that AB 1329 was “the sort of bill you put out if you don’t want real reform.”
Real reform does appear to be on the way.
“To ensure this program continues to serve workers as intended, comprehensive SIBTF reform must be pursued next year,” the governor wrote. “I am directing the Department of Industrial Relations and its Division of Workers’ Compensation to develop a proposal for comprehensive reform to include in January’s 2026-27 budget proposal. I look forward to working with the Legislature to ensure this program continues to serve California workers.”
This begs the question of whether “real reform” could also be packaged with other reforms. After all, it’s been a long, long time for an omnibus workers’ compensation reform bill.
Perhaps 2026 – the last year of Gov. Newsom’s term before he is term-limited out – could be the year of workers’ compensation’s next big omnibus reform bill.
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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