On January 3, the California State Legislature brought in its largest first-year class of lawmakers in 10 years, to resume two legislative sessions: a regular session focused on the typical business debating and passing bills, and a special session focused on Governor Gavin Newsom’s proposal to levy a penalty on oil companies he accuses of price-gouging Californians at the gas pump.
Unlike the last two years, where the state saw historic budget surpluses, the Legislature this year will be dealing with the possibility of an economic downturn and potential impacts to state resources. The California Legislative Analyst Office (LAO) released a report projecting that California will face a $24 billion budget hole and ongoing deficits, a stark difference from the $97 billion surplus last year. In February, LAO updated their projections and reported that the budget problem will likely be worse. Legislators this year may be forced to downsize their policy ideas and delay or cut funding programs they approved in better economic times.
On January 10, Governor Newsom released his 2023-24 State Budget proposal to the Legislature. The budget projects a slightly smaller $22.5 billion budget shortfall in the 2023-24 fiscal year. The Governor stated that, through prudent planning and budget resilience built into previous budgets, the state is in its best fiscal position in recent memory to address this slowdown. By using a portion of the recent surplus to boost the state’s budget reserves and pay down prior debts, by focusing on one-time and near-term spending instead of costly long-term obligations, and by tying or “triggering” a handful of new ongoing programs to sufficient revenue availability in 2024-25, the state does not have to propose the kind of deep reductions to priority programs that marked the budget shortfalls over the past two decades. It will, however, require the state to delay or forego some spending in the near term.
The release of the Governor’s proposal kicks off six months of revisions and negotiations with California legislators to pass a balanced budget the start of the fiscal year on July 1, 2023.
Legislature Introduces New Crop of Workers’ Compensation Bills
The California State Legislature has recently passed its bill introduction deadline – the date by which all new bills must be introduced in order to be considered this year. The two houses introduced 2634 new bills before the deadline. Hundreds of these bills, known as “spot bills,” contain no real change to the law or only express the “intent of the legislature” to enact legislation later. Spot bills must have amendments in the next month or they surrender the right to move through the legislative process until next year.
CCWC’s lobbying team has identified about 15 bills to watch closely in the coming weeks and that the CCWC Board of Directors will adopt positions on.
There are a handful of bills that touch on the PTSD presumption in current law, which was only passed and signed in 2018, Governor Newsom’s first year in office. The presumption, which has a tumultuous path in the legislature, sunsets on January 1, 2025. A study by the Commission on Health and Safety and Workers’ Compensation is supposed to inform the potential reauthorization of the law, but the first study done by the Commission was not adopted because of concerns about quality and the results. Despite the frustrated first attempt by the Commission to adopt a study, the legislature is charging full speed ahead with legislation on the subject this year.
AB 597 by Assemblymember Freddie Rodriguez (D – Pomona) would expand the PTSD presumption to emergency medical technicians and paramedics, but when first introduced the bill also extended the presumption to dispatchers and other similar workers. AB 1107 by Assemblymember Devon Mathis (R – Porterville) expands the existing PTSD presumption to include a few specific classifications of state peace officers. AB 1145 by Assemblymember Brian Maienschein (D – San Diego) takes an entirely different approach by creating an entirely different section of the labor code for their PTSD presumption. That bill creates a PTSD presumption for a state nurses, psychiatric technicians, and other medical and social service providers. And finally, Senator John Laird (D – Santa Cruz) has one of those “spot bills,” which means that we’re watching his SB 623 closely to see what it becomes when amended.
The Chair of the Senate Committee on Labor, Public Employment & Retirement, Senator Dave Cortese (D – San Jose) has introduced a variety of bills. SB 335 is a spot bill on the subject of labor statistics, but we’re watching to see what happens when the bill is amended. SB 631 proposes to have the Division of Workers’ Compensation and UC Berkeley study various aspects of the workers’ compensation system to determine whether there are any differences. SB 636 requires all UR doctors to be licensed in California, but only for private employers. A similar bill introduced in 2011 was widely opposed by employers, but the Legislature passed the bill before it was ultimately vetoed by Governor Jerry Brown.
The California Nurses Association has somehow convinced yet another legislator to reintroduce their legislation to create a broad set of presumptions for some hospital workers. AB 1156 by Assemblymember Mia Bonta (D – Oakland) would cover hospital workers that provide direct patient care and create a presumption for infectious diseases, COVID-19, cancer, PTSD, respiratory diseases, and all musculoskeletal injuries. Some version of this bill has been pushed by CNA repeatedly over the last ten years, but it has always fallen short at some point in the process.The sponsors and various authors have repeatedly failed to bring forward any data or evidence to support the idea that a problem exists and that a presumption is the answer.
AB 1213 by Assemblymember Liz Ortega (D – San Leandro) proposes to change the law related to the 104-week cap on temporary disability benefits. Specifically, the bill would exclude from the TD cap calculations all time between a UR denial date and the date that decision is overturned by IMR. To illustrate, if a UR denial was issued on 6/1/2023 and was then overturned by IMR on 7/1/2023 the temporary disability benefits paid during those dates would be outside of the TD cap. A similar bill sponsored by the California Applicant Attorney’s Association was introduced in 2017, but drew so much opposition that it didn’t even see a hearing. Passage of this bill would be a recordkeeping nightmare for claims administrators, so expect to see CCWC once again opposed to this measure.
Newly introduced bills will all be referred to a policy committee or two based on their subject matter. Workers’ compensation bills are heard by the Insurance Committee in the Assembly, but go to the Labor, Public Employment & Retirement Committee in the Senate.Those committees will start conducting bill hearings in late March and all of these bills will need to pass out of their assigned policy committees by May 5 at the latest. The bills with state costs will then be heard by the appropriations committee, which could hold the bill if the state cost is too significant, before heading to the floor for consideration by the full body. Bills have to be out of their house of origin by June 2, and the bills that survive repeat the same process in the oppose house and must be passed to the Governor by September 14.