Bill Text: CA SB171 | 2025-2026 | Regular Session | Enrolled

California Senate Bill 171

NOTE: There are more recent revisions of this legislation. Read Latest Draft

Bill Title: Labor.

Sponsorship: Committee Bill

Status: (Passed) 2026-07-13 - Chaptered by Secretary of State. Chapter 83, Statutes of 2026. [SB171 Detail]

Download: California-2025-SB171-Enrolled.html

Enrolled June 29, 2026

Passed IN Senate June 29, 2026

Passed IN Assembly June 29, 2026

Amended IN Assembly June 26, 2026

CALIFORNIA LEGISLATURE— 2025–2026 REGULAR SESSION

Senate Bill

No. 171

Introduced by Committee on Budget and Fiscal Review

January 23, 2025

An act to amend Section 11553 of, and to add Section 20825.21 to, the Government Code, to amend Sections 62.5, 138.1, 3702.9, 4706.5, 4751, 4753, 4753.5, 4754, 4755, and 4756 of, to amend and repeal Section 5909 of, to add Sections 4750, 4754.1, 4754.2, 4754.3, and 4757 to, and to add and repeal Section 4578 of, the Labor Code, to amend Section 2038 of the Streets and Highways Code, and to amend Sections 14013, 14014, 14033, and 14042 of the Unemployment Insurance Code, relating to labor, and making an appropriation therefor, to take effect immediately, bill related to the budget.

LEGISLATIVE COUNSEL'S DIGEST

SB 171, Committee on Budget and Fiscal Review. Labor.

(1) Existing law establishes a workers’ compensation system, administered by the Administrative Director of the Division of Workers’ Compensation with the Department of Industrial Relations, to compensate an employee for injuries sustained in the course of employment. Existing law provides that the administrative director shall be appointed by the Governor, with the advice and consent of the Senate. Existing law sets, among others, the director’s annual salary at $81,635 and provides for general salary increases, as specified.

This bill would remove the director from the above-described compensation structure.

(2) The Public Employees’ Retirement Law (PERL) creates the Public Employees’ Retirement System (PERS) for the purpose of providing pensions and benefits to state employees and their beneficiaries and prescribes the rights and duties of employers participating in the system. Under PERL, benefits are funded by investment income and employer and employee contributions, which are deposited into the Public Employees’ Retirement Fund, a continuously appropriated trust fund administered by the system’s board of administration.

PERL prescribes methods for the calculation and payment of the state employer contribution for its employees who are PERS members. PERL provides for an annual adjustment of the state’s contribution in the budget and quarterly appropriations to the Public Employees’ Retirement Fund from the General Fund and other funds that are responsible for payment of the employer contribution.

Existing law makes additional General Fund appropriations to the Public Employees’ Retirement Fund for the 2020–21, 2021–22, 2022–23, 2023–24, 2024–25, and 2025–26 fiscal years. Supplemental payments connected with appropriations for those fiscal years are to be apportioned to the state employee member categories generally, as directed by the Department of Finance, and to specified state employee member categories, including to the state miscellaneous member category, the industrial member category, the state safety member category, and the state peace officer/firefighter member category.

The California Constitution establishes the Budget Stabilization Account in the General Fund and requires the Controller, in each fiscal year, to transfer from the General Fund to the Budget Stabilization Account amounts that include a sum equal to 1.5% of the estimated amount of General Fund revenues for that fiscal year. These provisions further require, until the 2029–30 fiscal year, that the Legislature appropriate a percentage of these moneys, the amount of which is generated pursuant to specified calculations, for certain obligations and purposes, including addressing unfunded liabilities for state-level pension plans.

This bill would appropriate $3,018,000,000 from the General Fund for the purposes identified in the constitutional provisions described above, to supplement the state’s appropriation to the Public Employees’ Retirement Fund. The bill would specify that this appropriation represents a portion of the amount identified in a specific provision of the Budget Act of 2026. The bill would require the Department of Finance to provide the Controller with a schedule establishing the timing of specific transfers. The bill would require the supplemental payment to the Public Employees’ Retirement Fund to be apportioned to specified state employee member categories, not to exceed $1,434,683,000 to the state miscellaneous member category, $83,555,000 to the state industrial member category, $174,232,000 to the state safety member category, and $1,325,530,000 to the state peace officer/firefighter member category. The bill would require the appropriation described above to be applied to the unfunded state liabilities for the state employee member categories that are in excess of the base amounts for the 2026–27 fiscal year.

(3) Existing law requires all employers, as defined, to secure payment of that compensation either by being insured against liability to pay compensation or by securing a certificate to self-insure from the Director of Industrial Relations. Existing law requires that separate assessments and surcharges be charged on all employers and deposited in specified funds for expenditure by the Department of Industrial Relations for purposes relating to workers’ compensation, occupational safety and health, and enforcement activities. Existing law imposes various penalties and remedies against employers who fail to secure payment of compensation. Existing law authorizes the director to additionally order a civil penalty for specified violations, including failure to timely or completely pay an assessment, the lesser of the amount of the assessment or $2,500.

This bill would require that surcharges and assessments be paid by electronic funds transfer, as defined, and would impose a 10% penalty on untimely or unpaid amounts of the above-described surcharges and assessments and for failure to pay by electronic funds transfer. The bill would require that these penalties be deposited in the Workers’ Compensation Administration Revolving Fund, as specified.

(4) Existing law imposes a 5-year statute of limitations by which to bring a workers’ compensation proceeding. Existing law also establishes the Subsequent Injuries Benefits Trust Fund, a continuously appropriated fund. Under existing law, if a permanently, partially disabled employee receives a subsequent compensable injury resulting in additional permanent disability, that employee receives compensation from the Subsequent Injuries Benefits Trust Fund. Existing law requires, when applicable, the additional permanent disability resulting from the subsequent injury to be equal to 35% or more of total, when considered alone and without regard to, or adjustment for, the occupation or the age of the employee. Existing case law requires the prior injury to be “labor disabling” and describes that term to mean an injury that could support an award, if industrially caused, but has not required that disability be demonstrated in loss of earnings.

This bill would define “labor disabling” to mean specified impairments that resulted in loss of earnings, interfered with an employee’s work in the occupation in which they were employed, or otherwise had a demonstrable impact on the employee’s ability to perform work. The bill would clarify that an employee has 5 years from the date of the subsequent compensable injury or 6 months from the resolution of the issue of permanent disability in the subsequent injury claim, whichever is later, to file a claim for benefits from the Subsequent Injuries Benefits Trust Fund. The bill would additionally exclude any adjustment for future earning capacity or a specified adjustment factor when determining whether an employee qualifies for these additional benefits. The bill would also codify existing standards for determining eligibility for compensation from the Subsequent Injuries Benefits Trust Fund and for calculating the amount of that compensation. To the extent this bill would change the eligibility requirements and calculation for payments made from the Subsequent Injuries Benefits Trust Fund, the bill would make an appropriation.

This bill would require, for purposes of determining eligibility for and the amount of an award of benefits from the Subsequent Injuries Benefit Trust Fund, the existence of the preexisting disability at the time of the subsequent compensable injury to be determined by substantial evidence based on prior medical records, prior testimony, and other prior evidence in existence prior to the subsequent compensable injury. The bill would make conforming changes.

This bill would exempt claims with a certain procedural status on or before June 1, 2026, or filed on or before July 1, 2020, from the above-described changes.This bill would make these provisions inoperative on July 1, 2031, and would repeal it as of January 1, 2032.

(5) Existing law requires the Workers’ Compensation Appeals Board to fix and award the amounts of special additional compensation to be paid and to direct the State Compensation Insurance Fund to pay the additional compensation awarded. Existing law authorizes the additional compensation to be paid only from funds appropriated for these purposes. Existing law authorizes the State Compensation Insurance Fund to reimburse itself for specified costs from this appropriation.

This bill would replace the State Compensation Insurance Fund with the Director of Industrial Relations, as trustee of the Subsequent Injuries Benefits Trust Fund, as the entity to pay the additional compensation awarded by the Workers’ Compensation Appeals Board. The bill would delete the State Compensation Insurance Fund’s authorization to reimburse itself for specified costs.

(6) Existing law requires certain workers’ compensation proceedings to be instituted before the appeals board and vests the appeals board with sole power, authority, and jurisdiction to finally determined specified matters before it. Existing law authorizes a petitioner, under specified circumstances, to petition the appeals board for reconsideration of any matters determined by the final order, decision, or award. Existing law, until July 1, 2026, provides that a petition for reconsideration is deemed denied by the board unless it is acted upon 60 days from the date the petition is transmitted to the board. Existing law, commencing July 1, 2026, provides that a petition is deemed denied unless it is acted upon within 60 days from the date of filing.

This bill would extend the above-described petition provisions indefinitely and would repeal the provisions effective July 1, 2026.

(7) Existing law establishes the California Workforce Development Board as the body responsible for assisting the Governor in the development, oversight, and continuous improvement of California’s workforce investment system and the alignment of the education and workforce investment systems to the needs of the 21st century economy and workforce. Existing law, as part of its responsibilities, requires the board to administer several grant programs through various initiatives, including funding preapprenticeship programs through the Road Maintenance and Rehabilitation Account, the Breaking Barriers to Employment Initiative, and the Prison to Employment program. Existing law requires the board to submit reports to the Legislature relating to each of the grant programs they administer.

This bill would align the reporting requirement timelines relating to the above-referenced grant programs, including requiring the California Workforce Development Board to produce and submit a report to the Legislature evaluating those grant programs by October 1 of every odd-numbered year, as provided. The bill would also establish new reporting requirements for the Breaking Barriers to Employment Initiative and the Prison to Employment program if additional grant funds are appropriated for the purpose of those programs, as provided.

(8) This bill would appropriate $1,000,000 from the General Fund to the Department of Finance for administrative costs, as specified, thereby making an appropriation.

(9) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Vote: MAJORITY Appropriation: YES Fiscal Committee: YES Local Program: NO

The people of the State of California do enact as follows:

SECTION 1.

Section 11553 of the Government Code is amended to read:

11553.

(a) Effective January 1, 1988, an annual salary of eighty-one thousand six hundred thirty-five dollars ($81,635) shall be paid to each of the following:

(1) Chairperson of the California Unemployment Insurance Appeals Board.

(2) Chairperson of the Agricultural Labor Relations Board.

(3) Chairperson of the Fair Political Practices Commission.

(4) Chairperson of the State Energy Resources Conservation and Development Commission.

(5) Chairperson of the Public Employment Relations Board.

(6) Chairperson of the Workers’ Compensation Appeals Board.

(7) Chairperson of the State Water Resources Control Board.

(8) Chairperson of the Cannabis Control Appeals Panel.

(b) (1) The annual compensation provided by this section shall be increased in any fiscal year in which a general salary increase is provided for state employees. The amount of the increase provided by this section shall be comparable to, but shall not exceed, the percentage of the general salary increases provided for state employees during that fiscal year.

(2) In addition to the annual increase provided in paragraph (1), the chairperson of the State Energy Resources Conservation and Development Commission shall receive an annual salary increase of 5 percent in each of the 2025–26, 2026–27, and 2027–28 fiscal years.

(c) Notwithstanding subdivision (b), any salary increase pursuant to paragraph (1) of subdivision (b) is subject to Section 11565.5.

(d) This section shall be operative on July 1, 2019.

SEC. 2.

Section 20825.21 is added to the Government Code, to read:

20825.21.

(a) (1) In addition to the appropriation required pursuant to Section 20814, the Legislature hereby appropriates three billion eighteen million dollars ($3,018,000,000) from the General Fund, for the purposes described in subclause (IV) of clause (ii) of subparagraph (B) of paragraph (1) of subdivision (c) of Section 20 of Article XVI of the California Constitution to supplement the state’s appropriation to the Public Employees’ Retirement Fund. The appropriation made by this section represents a portion of the amount identified in paragraph (3) of subdivision (d) of Section 35.50 of the Budget Act of 2026. The appropriation shall be consistent with the requirements of this section and at the direction of the Department of Finance. The Department of Finance shall provide to the Controller a schedule establishing the timing of specific transfers to be used as described in subdivision (b).

(2) The supplemental payment to the Public Employees’ Retirement Fund described in paragraph (1) shall be apportioned to the following state employee member categories, as directed by the Department of Finance, not to exceed the following amounts:

(A) One billion four hundred thirty-four million six hundred eighty-three thousand dollars ($1,434,683,000) to the state miscellaneous member category.

(B) Eighty-three million five hundred fifty-five thousand dollars ($83,555,000) to the state industrial member category.

(C) One hundred seventy-four million two hundred thirty-two thousand dollars ($174,232,000) to the state safety member category.

(D) One billion three hundred twenty-five million five hundred thirty thousand dollars ($1,325,530,000) to the state peace officer/firefighter member category.

(b) The appropriation made in paragraph (1) of subdivision (a) shall be applied to the unfunded state liabilities for the state employee member categories described in paragraph (2) of subdivision (a) that are in excess of the base amounts for the 2026–27 fiscal year.

SEC. 3.

Section 62.5 of the Labor Code is amended to read:

62.5.

(a) (1) The Workers’ Compensation Administration Revolving Fund is hereby created as a special account in the State Treasury. Money in the fund may be expended by the department, upon appropriation by the Legislature, for all of the following purposes, and may not be used or borrowed for any other purpose:

(A) For the administration of the workers’ compensation program set forth in this division and Division 4 (commencing with Section 3200), other than the activities financed pursuant to paragraph (2) of subdivision (a) of Section 3702.5.

(B) For the Return-to-Work Program set forth in Section 139.48.

(C) For the enforcement of the insurance coverage program established and maintained by the Labor Commissioner pursuant to Section 90.3.

(2) The fund shall consist of surcharges made pursuant to subparagraph (A) of paragraph (1) of subdivision (f).

(b) (1) The Uninsured Employers Benefits Trust Fund is hereby created as a special trust fund account in the State Treasury, of which the director is trustee, and its sources of funds are as provided in subparagraph (A) of paragraph (1) of subdivision (f). Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated for the payment of nonadministrative expenses of the workers’ compensation program for workers injured while employed by uninsured employers in accordance with Article 2 (commencing with Section 3710) of Chapter 4 of Part 1 of Division 4, and shall not be used for any other purpose. All moneys collected shall be retained in the trust fund until paid as benefits to workers injured while employed by uninsured employers. Nonadministrative expenses include audits and reports of services prepared pursuant to subdivision (b) of Section 3716.1. The surcharge amount for this fund shall be stated separately.

(2) Notwithstanding any other provision of law, all references to the Uninsured Employers Fund shall mean the Uninsured Employers Benefits Trust Fund.

(3) Notwithstanding paragraph (1), in the event that budgetary restrictions or impasse prevent the timely payment of administrative expenses from the Workers’ Compensation Administration Revolving Fund, those expenses shall be advanced from the Uninsured Employers Benefits Trust Fund. Expense advances made pursuant to this paragraph shall be reimbursed in full to the Uninsured Employers Benefits Trust Fund upon enactment of the annual Budget Act.

(4) Any moneys from penalties collected pursuant to Section 3722 as a result of the insurance coverage program established under Section 90.3 shall be deposited in the State Treasury to the credit of the Workers’ Compensation Administration Revolving Fund created under this section, to cover expenses incurred by the director under the insurance coverage program. The amount of any penalties in excess of payment of administrative expenses incurred by the director for the insurance coverage program established under Section 90.3 shall be deposited in the State Treasury to the credit of the Uninsured Employers Benefits Trust Fund for nonadministrative expenses, as prescribed in paragraph (1), and notwithstanding paragraph (1), shall only be available upon appropriation by the Legislature.

(c) (1) The Subsequent Injuries Benefits Trust Fund is hereby created as a special trust fund account in the State Treasury, of which the director is trustee, and its sources of funds are as provided in subparagraph (A) of paragraph (1) of subdivision (f). Notwithstanding Section 13340 of the Government Code, the fund is continuously appropriated for the nonadministrative expenses of the workers’ compensation program for workers who have suffered serious injury and who are suffering from previous and serious permanent disabilities or physical impairments, in accordance with Article 5 (commencing with Section 4750) of Chapter 2 of Part 2 of Division 4, and Section 4 of Article XIV of the California Constitution, and shall not be used for any other purpose. All moneys collected shall be retained in the trust fund until paid as benefits to workers who have suffered serious injury and who are suffering from previous and serious permanent disabilities or physical impairments. Nonadministrative expenses include audits and reports of services pursuant to subdivision (c) of Section 4755. The surcharge amount for this fund shall be stated separately.

(2) Notwithstanding any other law, all references to the Subsequent Injuries Fund shall mean the Subsequent Injuries Benefits Trust Fund.

(3) Notwithstanding paragraph (1), in the event that budgetary restrictions or impasse prevent the timely payment of administrative expenses from the Workers’ Compensation Administration Revolving Fund, those expenses shall be advanced from the Subsequent Injuries Benefits Trust Fund. Expense advances made pursuant to this paragraph shall be reimbursed in full to the Subsequent Injuries Benefits Trust Fund upon enactment of the annual Budget Act.

(d) (1) The Occupational Safety and Health Fund is hereby created as a special account in the State Treasury. Moneys in the account may be expended by the department, upon appropriation by the Legislature, for support of the Division of Occupational Safety and Health, the Occupational Safety and Health Standards Board, and the Occupational Safety and Health Appeals Board, and the activities these entities perform as set forth in this division, and Division 5 (commencing with Section 6300).

(2) On and after the effective date of the act amending this section to add this paragraph in the 2013–14 Regular Session of the Legislature, any moneys in the Cal-OSHA Targeted Inspection and Consultation Fund and any assets, liabilities, revenues, expenditures, and encumbrances of that fund, less five million dollars ($5,000,000), shall be transferred to the Occupational Safety and Health Fund. On June 30, 2014, the remaining five million dollars ($5,000,000) in the Cal-OSHA Targeted Inspection and Consultation Fund, or any remaining balance in that fund, shall be transferred to, and become part of, the Occupational Safety and Health Fund.

(e) The Labor Enforcement and Compliance Fund is hereby created as a special account in the State Treasury. Moneys in the fund may be expended by the department, upon appropriation by the Legislature, for the support of the activities that the Division of Labor Standards Enforcement performs pursuant to this division and Division 2 (commencing with Section 200), Division 3 (commencing with Section 2700), and Division 4 (commencing with Section 3200).

(f) (1) (A) Separate surcharges shall be levied by the director upon all employers, as defined in Section 3300, for purposes of deposit in the Workers’ Compensation Administration Revolving Fund, the Uninsured Employers Benefits Trust Fund, the Subsequent Injuries Benefits Trust Fund, the Labor Enforcement and Compliance Fund, and the Occupational Safety and Health Fund. The total amount of the surcharges shall be allocated between self-insured employers and insured employers in proportion to payroll respectively paid in the most recent year for which payroll information is available. The director shall adopt reasonable regulations governing the manner of collection of the surcharges. The regulations shall require the surcharges to be paid by self-insurers to be expressed as a percentage of indemnity paid during the most recent year for which information is available, and the surcharges to be paid by insured employers to be expressed as a percentage of premium. In no event shall the surcharges paid by insured employers be considered a premium for computation of a gross premium tax or agents’ commission. In no event shall the total amount of the surcharges paid by insured and self-insured employers exceed the amounts reasonably necessary to carry out the purposes of this section.

(B) Assessments shall be levied by the director upon all employers, as defined in Section 3300, as necessary, to collect the aggregate amount determined by the Fraud Assessment Commission pursuant to Section 1872.83 of the Insurance Code. Revenues derived from the assessments shall be deposited in the Workers’ Compensation Fraud Account in the Insurance Fund and shall only be expended, upon appropriation by the Legislature, for the investigation and prosecution of workers’ compensation fraud and the willful failure to secure payment of workers’ compensation, as prescribed by Section 1872.83 of the Insurance Code. The total amount of the assessment shall be allocated between self-insured employers and insured employers in proportion to payroll respectively paid in the most recent year for which payroll information is available. The director shall promulgate reasonable rules and regulations governing the manner of collection of the assessment. The rules and regulations shall require the assessment to be paid by self-insurers to be expressed as a percentage of indemnity paid during the most recent year for which information is available, and the assessment to be paid by insured employers to be expressed as a percentage of premium. In no event shall the assessment paid by insured employers be considered a premium for computation of a gross premium tax or agents’ commission.

(C) Any employer or insurer on behalf of its insured employers who fails to timely or completely make payment as required by this section shall pay a penalty of 10 percent of the unpaid amount, unless it is shown that the failure to timely or completely make payment was for reasonable cause and was not the result of willful neglect, in which case the director may waive or reduce the penalty. The director may also waive or reduce the penalty if imposition of the penalty would otherwise be unjust. If the director waives or reduces the penalty, the director has the sole discretion to determine the terms and conditions under which the penalty is waived or reduced. The director shall return any penalty the director determines has been paid by mistake.

(D) (i) Any surcharges or assessments due by an employer or insurer on behalf of its insured employers under this section shall be paid by electronic funds transfer.

(ii) Any employer or insurer on behalf of its insured employers required to remit payment by electronic funds transfer pursuant to this section who makes payment by other means shall pay a penalty of 10 percent of the payment amount, unless it is shown that the failure to make payment by electronic funds transfer was for reasonable cause and was not the result of willful neglect, in which case the director may waive or reduce the penalty. The director may also waive or reduce the penalty if imposition of the penalty would otherwise be unjust. If the director waives or reduces the penalty, the director has the sole discretion to determine the terms and conditions under which the penalty is waived or reduced. The director shall return any penalty the director determines has been paid by mistake.

(iii) Any employer or insurer on behalf of its insured employers required to remit payment by electronic funds transfer pursuant to this section may request a waiver of the requirement from the director to allow for an alternate manner of payment. The director has the sole discretion to decide whether to grant a waiver and the sole discretion to determine the terms, conditions, and duration of a waiver.

(iv) For purposes of this section, “electronic funds transfer” has the same meaning as defined in Section 20027.5 of the Government Code, except any reference in that section to the board shall mean the director. “Electronic funds transfer” also includes transfers authorized under Section 11255 of the Government Code.

(E) Penalties collected under this section shall be deposited into the Workers’ Compensation Administration Revolving Fund, except for penalties collected from private self-insured employers, which shall be deposited into the Self-Insurance Plans Fund as provided in subdivision (b) of Section 3702.5.

(2) The surcharge levied by the director for the Occupational Safety and Health Fund, pursuant to subparagraph (A) of paragraph (1), shall not generate revenues in excess of fifty-seven million dollars ($57,000,000) on and after the 2013–14 fiscal year, adjusted for each fiscal year as appropriate to fund any increases in the appropriation as approved by the Legislature, and to reconcile any over/under assessments from previous fiscal years pursuant to Sections 15606 and 15609 of Title 8 of the California Code of Regulations. For the 2013–14 fiscal year only, the revenue cap established in this paragraph shall be reduced by an amount equivalent to the balance transferred from the Cal-OSHA Targeted Inspection and Consultation Fund established in Section 62.7, less any amount of that balance loaned to the State Public Works Enforcement Fund, to the Occupational Safety and Health Fund pursuant to subdivision (d).

(3) The surcharge levied by the director for the Labor Enforcement and Compliance Fund, pursuant to subparagraph (A) of paragraph (1), shall not exceed forty-six million dollars ($46,000,000) in the 2013–14 fiscal year, adjusted as appropriate to fund any increases in the appropriation as approved by the Legislature, and to reconcile any over/under assessments from previous fiscal years pursuant to Sections 15606 and 15609 of Title 8 of the California Code of Regulations.

(4) The regulations adopted pursuant to paragraph (1) to (3), inclusive, shall be exempt from the rulemaking provisions of the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

SEC. 4.

Section 138.1 of the Labor Code is amended to read:

138.1.

The administrative director shall be appointed by the Governor with the advice and consent of the Senate and shall hold office at the pleasure of the Governor.

SEC. 5.

Section 3702.9 of the Labor Code is amended to read:

3702.9.

(a) In addition to remedies and penalties otherwise provided for a failure to secure the payment of compensation, the director may, after a determination that an obligation created in this article has been violated, also enter an order against any self-insured employer, including employers who are no longer self-insured, but who are required to comply with Section 3702.8, directing compliance, restitution for any losses, and a civil penalty in an amount not to exceed the following:

(1) For a failure to file a complete or timely annual report, an amount up to 5 percent of the incurred liabilities in the last report or one thousand five hundred dollars ($1,500), whichever is less, for each 30 days or portion thereof during which there is a failure.

(2) For failure to deposit and maintain a security deposit, an amount up to 10 percent of the increase not timely filed or five thousand dollars ($5,000), whichever is less, for each 30 days or portion thereof during which there is a failure.

(3) For a failure to timely or completely pay an assessment or failure to make payment of an assessment by electronic funds transfer, an amount as determined pursuant to paragraph (1) of subdivision (f) of Section 62.5.

(4) Where the failure was by an employer which knew or reasonably should have known of the obligation, the director shall, in addition, award reimbursement for all expenditures and costs by the fund or any intervening party, including a reasonable attorney fee.

(5) Where the failure was malicious, fraudulent, in bad faith, or a repeated violation, the director may award, as an additional civil penalty, liquidated damages of up to double the amounts assessed under paragraphs (1) to (4), inclusive, for deposit in the General Fund.

(b) An employer may deposit and maintain a security deposit or pay an assessment, reserving its right to challenge the amount or liability therefor at a hearing. If the director or the appeals board or a court, upon appeal, concludes that the employer is not liable or the amounts are excessive, then the director may waive, release, compromise, refund, or otherwise remit amounts which had been paid or deposited by an employer. The director may condition the waiver, release, compromise, refund, or remittance upon the present and continued future compliance with the obligations of subdivision (a) of Section 3702.8 for a period up to two years.

(c) Notwithstanding subdivision (b), where a violation has occurred, the director may waive, release, compromise, or otherwise reduce any civil penalty otherwise due upon a showing that a violation occurred through the employer’s mistake, inadvertence, surprise, or excusable neglect. Neglect is not excusable within the meaning of this subdivision where the employer knew, or reasonably should have known, of the obligations. This subdivision does not apply to the penalty described in paragraph (3) of subdivision (a) or any penalty imposed pursuant to Section 62.5.

SEC. 6.

Section 4706.5 of the Labor Code is amended to read:

4706.5.

(a) Whenever any fatal injury is suffered by an employee under circumstances that would entitle the employee to compensation benefits, but for their death, and the employee does not leave surviving any person entitled to a dependency death benefit, the employer shall pay a sum to the Department of Industrial Relations equal to the total dependency death benefit that would be payable to a surviving spouse with no dependent minor children.

(b) When the deceased employee leaves no surviving dependent, personal representative, heir, or other person entitled to the accrued and unpaid compensation referred to in Section 4700, the accrued and unpaid compensation shall be paid by the employer to the Department of Industrial Relations.

(c) The payments to be made to the Department of Industrial Relations, as required by subdivisions (a) and (b), shall be deposited in the General Fund and shall be credited, as a reimbursement, to any appropriation to the Department of Industrial Relations for payment of the additional compensation for subsequent injury provided in Article 5 (commencing with Section 4750), in the fiscal year in which the Controller’s receipt is issued.

(d) The payments to be made to the Department of Industrial Relations, as required by subdivision (a), shall be paid to the department in a lump sum in the manner provided in subdivision (b) of Section 5101.

(e) The Department of Industrial Relations shall keep a record of all payments due the state under this section, and shall take any steps as may be necessary to collect those amounts.

(f) Each employer, or the employer’s insurance carrier, shall notify the administrative director, in any form as the administrative director may prescribe, of each employee death, except when the employer has actual knowledge or notice that the deceased employee left a surviving dependent.

(g) When, after a reasonable search, the employer concludes that the deceased employee left no one surviving who is entitled to a dependency death benefit, and concludes that the death was under circumstances that would entitle the employee to compensation benefits, the employer may voluntarily make the payment referred to in subdivision (a). Payments so made shall be construed as payments made pursuant to an appeals board findings and award. Thereafter, if the appeals board finds that the deceased employee did in fact leave a person surviving who is entitled to a dependency death benefit, upon that finding, all payments referred to in subdivision (a) that have been made shall be forthwith returned to the employer, or if insured, to the employer’s workers’ compensation carrier that indemnified the employer for the loss.

(h) This section does not apply where there is no surviving person entitled to a dependency death benefit or accrued and unpaid compensation if a death benefit is paid to any person under paragraph (6) of subdivision (a) of Section 4702.

SEC. 7.

Section 4750 is added to the Labor Code, to read:

4750.

For the purposes of this article, the following terms have the following meanings:

(a) “Administrative director” means the Administrative Director of the Division of Workers’ Compensation.

(b) “Combine,” “combined,” or “combination” means the incorporation of two or more values into a single value pursuant to the Multiple Disabilities Table or the Combined Values Chart in the Schedule for Rating Permanent Disabilities adopted in Section 9805 of Title 8 of the California Code of Regulations, pursuant to Sections 4660 and 4660.1.

(d) “Final determination” means final resolution by judicial determination, review, appeal, and writ.

(e) (1) “Labor disabling” means one of the following that resulted in a loss of earnings, interfered with the employee’s work activity in the occupation or occupations in which the employee was employed, or otherwise had a demonstrable impact on the employee’s ability to perform work activity:

(A) An impairment that resulted in an award of permanent partial disability.

(B) A nonindustrial impairment that could support an award of permanent partial disability.

(2) A preexisting disability is not labor disabling if treatable by medication or the use of a medical device so that the employee engaged in employment without incapacity to do work.

(3) Notwithstanding Ferguson v. Industrial Accident Commission (1958) 50 Cal.2d 469, and its progeny, the Legislature intends, by revising the definition of “labor disabling” in Section 4750 of the Labor Code as added by this act, to restore the Subsequent Injuries Benefits Trust Fund to its original intent.

(f) (1) “Opposite” means the other hand, arm, foot, leg, or eye that sustained the industrial injury and resulting disability subsequent to the already-disabled identical opposing member.

(2) For the purposes of determining the identical opposing member, “arm” includes the wrist, elbow, and shoulder, but not the hand.

(3) For the purposes of determining the identical opposing member, “leg” includes the ankle, knee, and hip, but not the foot.

(g) “Preexisting disability” or “preexisting disability or impairment” means a disability that meets both the following criteria:

(1) Existed prior to the subsequent industrial injury.

(2) Was labor disabling at the time of the subsequent industrial injury.

(h) “SIBTF” means the Subsequent Injuries Benefits Trust Fund.

(i) “SIBTF benefits” means additional permanent disability payments due to an eligible employee under this article.

(j) “Subsequent industrial injury” or “subsequent compensable injury” means a compensable industrial injury that is asserted as the basis for a claim for SIBTF benefits.

(k) “Whole person impairment percentage” means the whole person impairment rating, also referred to as the impairment standard, as determined in accordance with the American Medical Association Guides to the Evaluation of Permanent Impairment, Fifth Edition, without adjustment for diminished future earning capacity, occupation or age of the employee, or any other factor, and without multiplication by the 1.4 adjustment factor referred to in subdivision (b) of Section 4660.1.

SEC. 8.

Section 4751 of the Labor Code is amended to read:

4751.

(a) If an employee who is permanently partially disabled receives a subsequent compensable injury resulting in additional permanent partial disability so that the degree of disability caused by the combination of both disabilities is greater than that which would have resulted from the subsequent injury alone, and the combined effect of the last injury and the preexisting disability or impairment is a permanent disability equal to 70 percent or more of total, the employee shall be paid in addition to the compensation due under this code for the permanent partial disability caused by the last injury compensation for the remainder of the combined permanent disability existing after the last injury as provided in this article, provided that one of the following circumstances exist:

(1) The preexisting disability or impairment was to a hand, an arm, a foot, a leg, or an eye, and the whole person impairment percentage resulting from the subsequent injury is to the opposite hand, arm, foot, leg, or eye, and the latter whole person impairment percentage, when considered alone, after apportionment, is equal to 5 percent or more of total.

(2) The whole person impairment percentage resulting from the subsequent injury, when considered alone, after apportionment, is equal to 35 percent or more of total.

(b) An employee who sustains an industrial injury that results in 100 percent permanent total disability is not entitled to additional compensation from SIBTF.

(c) An employee who receives an award of additional permanent disability payments from SIBTF based on 100 percent combined permanent disability shall not apply to SIBTF again for additional permanent disability payments.

(d) An employee shall provide the director with all documentation and any other information as may be required by the director, in their discretion, to determine the employee’s eligibility for SIBTF benefits.

(e) Liability by SIBTF for any additional permanent disability benefits under this article shall commence upon a final determination of SIBTF liability and after any reduction pursuant to Section 4753. Any payments by SIBTF under this article shall commence within 30 days of the final determination of SIBTF liability.

SEC. 9.

Section 4753 of the Labor Code is amended to read:

4753.

(a) (1) SIBTF benefits are not in addition to but shall be reduced to the extent of any monetary payments received by the employee, from any source whatsoever, for or on account of the preexisting disability or impairment.

(2) Paragraph (1) does not apply to any of the following:

(A) Payments being made to the employee or to which the employee is entitled as a pension or other compensation for disability incurred in service in the armed forces of the United States.

(B) Payments being made to the employee or to which the employee is entitled as assistance under the provisions of Chapter 2 (commencing with Section 11200), Chapter 3 (commencing with Section 12000), Chapter 4 (commencing with Section 12500), Chapter 5 (commencing with Section 13000), or Chapter 6 (commencing with Section 13500) of Part 3, or Part 5 (commencing with Section 17000), of Division 9 of the Welfare and Institutions Code.

(C) A sum equal to all sums reasonably and necessarily expended by the employee for or on account of attorney’s fees, costs, and expenses incidental to the recovery of monetary payments for the employee’s preexisting disability.

(b) An employee applying for SIBTF benefits shall provide the director with documentation and other information about any monetary payments they receive for or on account of a preexisting disability or impairment requested by the director. No issue relating to a dispute over any monetary payments received by the employee for or on account of a preexisting disability or impairment may be the subject of a declaration of readiness to proceed unless the director has first been provided with the documentation or other information requested by the director.

SEC. 10.

Section 4753.5 of the Labor Code is amended to read:

4753.5.

In any hearing, investigation, or proceeding, the state shall be represented by the Attorney General, or the attorneys of the Department of Industrial Relations, as appointed by the director. Expenses incident to representation, including costs for investigation, medical examinations, other expert reports, fees for witnesses, and other necessary and proper expenses, but excluding the salary of any of the Attorney General’s deputies, shall be reimbursed from the Workers’ Compensation Administration Revolving Fund. No witness fees or fees for medical or medical-legal services shall exceed those fees for the same services prescribed by the appeals board or the administrative director by rule or regulation. Reimbursement pursuant to this section shall be in addition to, and in augmentation of, any other appropriations made or funds available for the use or support of the legal representation.

SEC. 11.

Section 4754 of the Labor Code is amended to read:

4754.

(a) The appeals board shall fix and award the amounts of SIBTF benefits to be paid under this article, and shall direct the director, as trustee or administrator of SIBTF, to pay the additional compensation awarded.

(b) For the purposes of determining eligibility for SIBTF benefits and the amount of an award of SIBTF benefits, all of the following shall apply:

(1) The preexisting disability or impairment’s existence and effect on the employee’s ability to engage in work shall be found by a medical evaluator in a medical-legal report that constitutes substantial evidence and documented in medical evidence in existence prior to the subsequent industrial injury. The evidentiary presumption established in subdivision (b) of Section 4664 does not apply.

(2) The degree of prior permanent partial disability shall be rated as the disability is determined to have existed on the date of the subsequent compensable injury.

(3) For purposes of determining whether the degree of permanent disability caused by the subsequent compensable injury meets the threshold requirements for an award of SIBTF benefits as set forth in subdivision (a) of Section 4751, whole person impairment percentage ratings for multiple body parts shall not be added, but shall be combined with the subsequent compensable injury.

SEC. 12.

Section 4754.1 is added to the Labor Code, to read:

4754.1.

(a) This section shall apply to all compensable subsequent injuries for which there has not been a final determination of SIBTF liability as of the date this section is operative.

(b) For purposes of determining eligibility for, and the amount of an award of, SIBTF benefits to be paid under this article, the existence of preexisting permanent partial disability that existed at the time of the subsequent compensable injury shall be determined by substantial evidence based on medical records, testimony, and other evidence in existence at the time of the subsequent industrial injury. A preexisting disability or impairment shall not be established by a retroactive prophylactic work restriction.

(c) Medical-legal evidence in a claim for SIBTF benefits pursuant to this article shall be obtained in the manner set forth in Article 2 (commencing with Section 4060) of Chapter 7 of Part 1. A claim for SIBTF benefits pursuant to this article shall be supported only by medical-legal evidence obtained in the course of the claim for the subsequent industrial injury, unless no evidence exists or the evaluator who opined in the claim for the subsequent industrial injury is no longer serving as an evaluator.

(d) Any new medical-legal evidence in a claim for SIBTF benefits pursuant to this article shall not be used to establish liability for a subsequent industrial injury or the level of the subsequent injury disability. The underlying claim for regular benefits shall not be relitigated in the claim for SIBTF benefits.

(e) Vocational rehabilitation reports, or other vocational evidence, obtained solely for a proceeding pursuant to this article that were not obtained for use as evidence in the proceeding for compensation for the subsequent compensable injury are not admissible, and the costs of those reports shall not be reimbursable in proceedings under this article.

(f) The director may issue regulations as necessary for the implementation and orderly and effective administration of this article.

SEC. 13.

Section 4754.2 is added to the Labor Code, to read:

4754.2.

An application for SIBTF benefits under this article shall be made five years from the date of the subsequent industrial injury described in subdivision (a) of Section 4751 or six months from a resolution of the issue of permanent disability in the subsequent injury claim whether by compromise and release, stipulations with request for award, or findings and award, whichever date is later. Section 3202 shall not be applied to extend the time for filing an application for SIBTF benefits beyond the limitations period established by this section.

SEC. 14.

Section 4754.3 is added to the Labor Code, to read:

4754.3.

(a) SIBTF shall not be liable for the payment of interest on any awards or order for payment of attorney’s fees.

(b) SIBTF shall not be liable for any penalties.

(c) The director, as administrator and trustee, shall pay the claimant only those benefits as allowed under this article.

SEC. 15.

Section 4755 of the Labor Code is amended to read:

4755.

(a) The director may draw from the State Treasury out of the Subsequent Injuries Benefits Trust Fund for the purposes specified in Section 4751, without at the time presenting vouchers and itemized statements, a sum not to exceed in the aggregate fifty thousand dollars ($50,000), to be used as a cash revolving fund. The revolving fund shall be deposited in any banks and under any conditions as the Department of Finance determines. The Controller shall draw their warrants in favor of the director for the amounts so withdrawn and the Treasurer shall pay these warrants.

(b) Expenditures made from the revolving fund in payments on claims for any additional compensation and for adjusting services are exempted from the operation of Section 16003 of the Government Code. Reimbursement of the revolving fund for these expenditures shall be made upon presentation to the Controller of an abstract or statement of the expenditures. The abstract or statement shall be in any form as the Controller requires.

(c) The director shall assign claims adjustment services and legal representation services respecting matters concerning subsequent injuries. The director or their representative may make these service assignments within the department, or they may contract for these services with the State Compensation Insurance Fund or outside vendors, for a fee in addition to that authorized by Section 4754, except insofar as these matters might conflict with the interests of the State Compensation Insurance Fund. The administrative costs associated with these services shall be reimbursed from the Workers’ Compensation Administration Revolving Fund, except when a budget impasse requires advances as provided in subdivision (d) of Section 62.5. To the extent permitted by state law, the director may contract for audits or reports of services under this section.

SEC. 16.

Section 4756 of the Labor Code is amended to read:

4756.

(a) The Legislature finds and declares that it is in the best interest of the State of California to provide a person, regardless of their citizenship or immigration status, with the benefits provided pursuant to this article, and therefore enacts this section pursuant to Section 1621(d) of Title 8 of the United States Code.

(b) A person shall not be prohibited from receiving compensation paid or payable from the Subsequent Injuries Benefits Trust Fund solely because of their citizenship or immigration status.

(c) It is the intent of the Legislature to override Section 15740 of Article 1 of Subchapter 2.1.1 of Chapter 8 of Division 1 of Title 8 of the California Code of Regulations.

(d) The provisions of this section are declaratory of existing law.

SEC. 17.

Section 4757 is added to the Labor Code, to read:

4757.

(a) The Legislature finds and declares that the changes made by the act that added this section are procedural and shall apply to all claims for SIBTF benefits, as defined in Section 4750 of the Labor Code, for which there is not a final determination as of the date this section is operative.

(b) Subdivision (a) does not apply to Section 4754.2 of the Labor Code as added by the act that added this section.

SEC. 18.

Section 4758 is added to the Labor Code, to read:

4758.

(a) This section applies to a claim for SIBTF benefits that meets any of the following criteria:

(1) Prior to June 1, 2026, the Workers’ Compensation Appeals Board district office set a date for the trial regarding the claim for SIBTF benefits.

(2) Prior to June 1, 2026, a pretrial conference statement regarding the claim for SIBTF benefits was signed by counsel for the applicant or the applicant if unrepresented and by counsel for the director and filed with the Workers’ Compensation Appeals Board district office.

(3) (A) On or prior to June 1, 2026, a declaration of readiness to proceed requesting a mandatory settlement conference was filed with the Workers’ Compensation Appeals Board district office indicating that the SIBTF claim was ready to proceed to trial.

(B) Notwithstanding subparagraph (A), this section does not apply to a declaration of readiness to proceed requesting a mandatory settlement conference filed with the Workers’ Compensation Appeals Board district office on or prior to June 1, 2026, indicating that the SIBTF claim was ready to proceed to trial that was continued or taken off calendar because the claim was not ready to proceed to trial.

(C) A claim described in subparagraph (A) where the mandatory settlement conference is continued or taken off calendar because the parties have reached a settlement is subject to this section.

(4) The application for SIBTF benefits was filed with the Workers’ Compensation Appeals Board district office on or before July 1, 2020.

(b) For claims described in subdivision (a), all of the following provisions shall apply in lieu of Sections 4751, 4753, 4753.5, and 4754, as those sections were amended by the act that added this section:

(1) If an employee who is permanently partially disabled receives a subsequent compensable injury resulting in additional permanent partial disability so that the degree of disability caused by the combination of both disabilities is greater than that which would have resulted from the subsequent injury alone, and the combined effect of the last injury and the previous disability or impairment is a permanent disability equal to 70 percent or more of total, they shall be paid in addition to the compensation due under this code for the permanent partial disability caused by the last injury compensation for the remainder of the combined permanent disability existing after the last injury as provided in this article; provided, that either (a) the previous disability or impairment affected a hand, an arm, a foot, a leg, or an eye, and the permanent disability resulting from the subsequent injury affects the opposite and corresponding member, and such latter permanent disability, when considered alone and without regard to, or adjustment for, the occupation or age of the employee, is equal to 5 percent or more of total, or (b) the permanent disability resulting from the subsequent injury, when considered alone and without regard to or adjustment for the occupation or the age of the employee, is equal to 35 percent or more of total.

(2) Such additional compensation is not in addition to but shall be reduced to the extent of any monetary payments received by the employee, from any source whatsoever, for or on account of such preexisting disability or impairment, except as to payments being made to the employee or to which they are entitled as a pension or other compensation for disability incurred in service in the Armed Forces of the United States, and except as to payments being made to the employee or to which the employee is entitled as assistance under the provisions of Chapter 2 (commencing with Section 11200), Chapter 3 (commencing with Section 12000), Chapter 4 (commencing with Section 12500), Chapter 5 (commencing with Section 13000), or Chapter 6 (commencing with Section 13500) of Part 3, or Part 5 (commencing with Section 17000), of Division 9 of the Welfare and Institutions Code, and excluding from such monetary payments received by the employee for or on account of such preexisting disability or impairment a sum equal to all sums reasonably and necessarily expended by the employee for or on account of attorney’s fees, costs, and expenses incidental to the recovery of such monetary payments.

(3) In any hearing, investigation, or proceeding, the state shall be represented by the Attorney General, or the attorneys of the Department of Industrial Relations, as appointed by the director. Expenses incident to representation, including costs for investigation, medical examinations, other expert reports, fees for witnesses, and other necessary and proper expenses, but excluding the salary of any of the Attorney General’s deputies, shall be reimbursed from the Workers’ Compensation Administration Revolving Fund. No witness fees or fees for medical services shall exceed those fees prescribed by the appeals board for the same services in those cases where the appeals board, by rule, has prescribed fees. Reimbursement pursuant to this section shall be in addition to, and in augmentation of, any other appropriations made or funds available for the use or support of the legal representation.

(4) The appeals board shall fix and award the amounts of special additional compensation to be paid under this article, and shall direct the director, as trustee or administrator of SIBTF, to pay the additional compensation so awarded. Such additional compensation may be paid only from funds appropriated for such purpose. Out of any such appropriation the fund may reimburse itself for the cost of service rendered in payment of compensation awards pursuant to this article and maintenance of accounts and records pertaining thereto, which cost shall not exceed 5 percent of the amount of award paid.

(c) Sections 4750, 4754.1, 4754.2, 4754.3, and 4757, as amended by the act that added this section, shall not apply to claims described in subdivision (a).

(d) This section shall become inoperative on July 1, 2031, and, as of January 1, 2032, is repealed.

SEC. 19.

Section 5909 of the Labor Code, as amended by Section 27 of Chapter 52 of the Statutes of 2024, is amended to read:

5909.

(a) A petition for reconsideration is deemed to have been denied by the appeals board unless it is acted upon within 60 days from the date a trial judge transmits a case to the appeals board.

(b) (1) When a trial judge transmits a case to the appeals board, the trial judge shall provide notice to the parties of the case and the appeals board.

(2) For purposes of paragraph (1), service of the accompanying report, pursuant to subdivision (b) of Section 5900, shall constitute providing notice.

SEC. 20.

Section 5909 of the Labor Code, as added by Section 28 of Chapter 52 of the Statutes of 2024, is repealed.

SEC. 21.

Section 2038 of the Streets and Highways Code is amended to read:

2038.

(a) The California Workforce Development Board shall develop guidelines for public agencies receiving Road Maintenance and Rehabilitation Account funds to participate in, invest in, or partner with, new or existing preapprenticeship training programs established pursuant to subdivision (e) of Section 14230 of the Unemployment Insurance Code. The department and local agencies that receive Road Maintenance and Rehabilitation Account funds pursuant to this chapter shall, not later than July 1, 2023, follow the guidelines set forth by the board. The board shall also establish a preapprenticeship development and training grant program, beginning January 1, 2019, pursuant to subdivision (e) of Section 14230 of the Unemployment Insurance Code. Local public agencies that receive Road Maintenance and Rehabilitation Account funds pursuant to this chapter are eligible to compete for such grants and may apply in partnership with other agencies and entities, including those with existing preapprenticeship programs. Successful grant applicants shall, to the extent feasible:

(1) Follow the multicraft core curriculum implemented by the State Department of Education for its pilot project with the California Partnership Academies and by the California Workforce Development Board and local boards.

(2) Include a plan for outreach to and retention of women participants in the preapprenticeship program to help increase the representation of women in the building and construction trades.

(3) Include a plan for outreach to and retention of minority participants and underrepresented subgroups in the preapprenticeship program to help increase their representation in the building and construction trades.

(4) Include a plan for outreach to and retention of disadvantaged youth participants in the preapprenticeship program to help increase their employment opportunities in the building and construction trades.

(5) Include a plan for outreach to individuals in the local labor market area and to formerly incarcerated individuals to provide pathways to employment and training.

(6) Coordinate with local state-approved apprenticeship programs, local building trade councils, and to the extent possible the California Conservation Corps and certified community conservation corps, so individuals who have completed these programs have a pathway to continued employment.

(b) As a condition of receiving a grant, grantees shall collect demographic data from participants and shall report this data to the California Workforce Development Board. The California Workforce Development Board shall provide technical assistance to grantees on the manner in which to collect this data. The California Workforce Development Board shall report this demographic data to the Legislature, detailing the racial, ethnic, and gender makeup of participants in the grant program, including demographic data on participation, completion, and placement on the timeline prescribed in subdivision (t) of Section 14013 of the Unemployment Insurance Code.

SEC. 22.

Section 14013 of the Unemployment Insurance Code is amended to read:

14013.

The board shall assist the Governor in the following:

(a) Promoting the development of a well-educated and highly skilled 21st century workforce, and the development of a high road economy that offers an educated and skilled workforce with fair compensation and treatment in the workplace.

(b) Developing, implementing, and modifying the State Plan. The State Plan shall serve as the comprehensive framework and coordinated plan for the aligned investment of all federal and state workforce training and employment services funding streams and programs. To the extent feasible and when appropriate, the State Plan should reinforce and work with adult education and career technical education efforts that are responsive to labor market trends, as well as economic trends that impact the labor market and workforce, including, but not limited to, climate change, automation of work, and employment.

(c) The review and technical assistance of statewide policies, of statewide programs, and of recommendations on actions that should be taken by the state to align workforce, education, training, and employment funding programs in the state in a manner that supports a comprehensive, high-quality, and streamlined workforce development system in the state, including the review and provision of comments on the State Plan, if any, for programs and activities of one-stop partners that are not core programs.

(d) Developing and continuously improving the statewide workforce investment system, including:

(1) The identification of barriers and means for removing barriers to better coordinate, align, and avoid duplication among the programs and activities carried out through the system.

(2) The development, promotion, and implementation of strategies, as well as the administration of, an field assistance for, programs to advance the use of career pathways for the purpose of providing individuals, including low-skilled adults, youth, and individuals with barriers to employment, and including individuals with disabilities, with workforce investment activities, education, and supportive services to enter or retain high-quality employment. To the extent permissible under state and federal laws, these policies and strategies should support linkages between kindergarten and grades 1 to 12, inclusive, and community college educational systems in order to help secure educational and career advancement. These policies and strategies may be implemented using a sector strategies framework and should ultimately lead to placement in a job providing economic security or job placement in an entry-level job that has a well-articulated career pathway or career ladder to a job providing economic security.

(3) The development, promotion, and implementation of strategies for providing effective outreach to and improved access for individuals and employers who could benefit from services provided through the workforce development system.

(4) The development, promotion, and implementation of strategies, as well as the administration of, and field assistance for, programs that meet the needs of employers, workers, and jobseekers, particularly through industry or sector partnerships related to in-demand industry sectors and occupations, including policies targeting resources to competitive and emerging industry sectors and industry clusters that provide economic security and are either high-growth sectors or critical to California’s economy, or both. These industry sectors and clusters shall have significant economic impacts on the state and its regional and workforce development needs, including, but not limited to, California’s transition to a carbon neutral economy, and have documented career opportunities.

(5) Consistent with the definitions in Section 14005, developing standards, procedures, and criteria for defining high road employers, high road jobs, high road workforce development, and high road training partnerships in California, in accordance with lessons learned from the board’s ongoing high road workforce development initiatives.

(6) The administration, promotion, and expansions of, as well as field assistance for, high road training partnerships, as defined in Section 14005.

(7) The administration, promotion, and expansion of, as well as field assistance for, high road construction careers, as defined in Section 14005.

(8) Recommending adult and dislocated worker training policies and investments that offer a variety of career opportunities while upgrading the skills of California’s workforce. These may include training policies and investments pertaining to any of the following:

(A) Occupational skills training, including training for nontraditional employment.

(B) On-the-job training.

(D) Programs that combine workplace training with related instruction, which may include cooperative education programs.

(E) Training programs operated by the private sector.

(F) Skill upgrading and retraining.

(G) Entrepreneurial training.

(H) Transitional jobs in accordance with Section 3174(d)(5) of Title 29 of the United States Code.

(I) Job readiness training provided in combination with any of the services described in subparagraphs (A) to (H), inclusive.

(J) Adult education and literacy activities provided in combination with any of the services described in subparagraphs (A) to (G), inclusive.

(K) Customized training conducted with a commitment by an employer or group of employers to employ an individual upon successful completion of the training.

(e) The identification of regions, including planning regions, for the purposes of Section 3121(a) of Title 29 of the United States Code, and the designation of local areas under Section 3121 of Title 29 of the United States Code, after consultation with local boards and chief elected officials.

(f) The development and continuous improvement of the one-stop delivery system in local areas, including providing assistance to local boards, one-stop operators, one-stop partners, and providers with planning and delivering services, including training services and supportive services, to support effective delivery of services to workers, job seekers, and employers.

(g) Recommending strategies to the Governor for strategic training investments of the Governor’s 15-percent discretionary funds.

(h) Developing strategies to support staff training and awareness across programs supported under the workforce development system.

(i) The development and updating of comprehensive state performance accountability measures, including state-adjusted levels of performance, to assess the effectiveness of the core programs in the state as required under Section 3141(b) of Title 29 of the United States Code. As part of this process the board shall do all of the following:

(1) Develop a workforce metrics dashboard, to be updated annually, that measures the state’s human capital investments in workforce development to better understand the collective impact of these investments on the labor market. The board shall determine the approach for measuring labor market impacts, provided that, to the extent feasible, the board uses statistically rigorous methodologies to estimate, assess, and isolate the impact of programs on participant outcomes. The workforce metrics dashboard shall be produced, to the extent feasible, using existing available data and resources that are currently collected and accessible to state agencies. The board shall convene workforce program partners to develop a standardized set of inputs and outputs for the workforce metrics dashboard. The workforce metrics dashboard shall do all of the following:

(A) Provide a status report on credential attainment, training completion, degree attainment, and participant earnings from workforce education and training programs. The board shall publish and distribute the final report.

(B) Provide demographic breakdowns, including, to the extent possible, race, ethnicity, age, gender, veteran status, wage and credential or degree outcomes, and information on workforce outcomes in different industry sectors.

(C) Measure, at a minimum and to the extent feasible with existing resources, the performance of the following workforce programs: community college career technical education, the Employment Training Panel, Title I and Title II of the federal Workforce Investment Act of 1998 (Public Law 105-220), Title I and Title II of the federal Workforce Innovation and Opportunity Act of 2014 (Public Law 113-128), Trade Adjustment Assistance, and state apprenticeship programs.

(D) Measure participant earnings in California, and to the extent feasible, in other states. The Employment Development Department shall assist the board by calculating aggregated participant earnings using unemployment insurance wage records, without violating any applicable confidentiality requirements.

(2) The State Department of Education is hereby authorized to collect the social security numbers of adults participating in adult education programs so that accurate participation in those programs can be represented in the workforce metrics dashboard. However, an individual shall not be denied program participation if the individual refuses to provide a social security number. The State Department of Education shall keep this information confidential, except, the State Department of Education is authorized to share this information, unless prohibited by federal law, with the Employment Development Department, the board, or the board’s designee, who shall keep the information confidential and use it only to track the labor market and other outcomes described in subparagraph (A) of paragraph (1) of program participants in compliance with all applicable state and federal laws and mandates, including all performance reporting requirements under the Workforce Innovation and Opportunity Act.

(3) (A) Participating workforce programs, including, but not limited to, those specified in subparagraph (C) of paragraph (1), shall provide participant data in a standardized format to the Employment Development Department, the board, or the board’s designee.

(B) The Employment Development Department, the board, or the board’s designee, shall aggregate data provided by participating workforce programs and shall report the data, organized by demographics, earnings, and industry of employment, to the board to assist the board in producing the annual workforce metrics dashboard.

(4) The board shall ensure that a designee has the technical and operational capability of meeting appropriate privacy and security requirements.

(j) The identification and dissemination of information on best practices, including best practices for all of the following:

(1) The effective operation of one-stop centers, relating to the use of business outreach, partnerships, and service delivery strategies, including strategies for serving individuals with barriers to employment.

(2) The development of effective local boards, which may include information on factors that contribute to enabling local boards to exceed negotiated local levels of performance, sustain fiscal integrity, and achieve other measures of effectiveness.

(3) Effective training programs that respond to real-time labor market analysis, that effectively use direct assessment and prior learning assessment to measure an individual’s prior knowledge, skills, competencies, and experiences, and that evaluate such skills, and competencies for adaptability, to support efficient placement into employment or career pathways.

(k) The development and review of statewide policies affecting the coordinated provision of services through the state’s one-stop delivery system described in Section 3151(e) of Title 29 of the United States Code, including the development of all of the following:

(1) Objective criteria and procedures for use by local boards in assessing the effectiveness and continuous improvement of one-stop centers described in Section 3151(e) of Title 29 of the United States Code.

(2) Guidance for the allocation of one-stop center infrastructure funds under Section 3151(h) of Title 29 of the United States Code.

(3) Policies relating to the appropriate roles and contributions of entities carrying out one-stop partner programs within the one-stop delivery system, including approaches to facilitating equitable and efficient cost allocation in such a system.

(l) The development of strategies for technological improvements to facilitate access to, and improve the quality of, services and activities provided through the one-stop delivery system, including such improvements to all of the following:

(1) Enhance digital literacy skills, as defined in Section 9101 of Title 20 of the United States Code, referred to in this division as “digital literacy skills.”

(2) Accelerate the acquisition of skills and recognized postsecondary credentials by participants.

(3) Strengthen the professional development of providers and workforce professionals.

(4) Ensure the technology is accessible to individuals with disabilities and individuals residing in remote areas.

(m) The development of strategies for aligning technology and data systems across one-stop partner programs to enhance service delivery and improve efficiencies in reporting on performance accountability measures, including the design and implementation of common intake, data collection, case management information, and performance accountability measurement and reporting processes and the incorporation of local input into such design and implementation, to improve coordination of services across one-stop partner programs.

(n) The development of allocation formulas for the distribution of funds for employment and training activities for adults, and youth workforce investment activities, to local areas as permitted under Sections 3163(b)(3) and 3173(b)(3) of Title 29 of the United States Code.

(o) The preparation of the annual reports described in paragraphs (1) and (2) of Section 3141(d) of Title 29 of the United States Code.

(p) The development of the statewide workforce and labor market information system described in Section 49l–2(e) of Title 29 of the United States Code.

(q) By July 1, 2020, the development, in conjunction with the Employment Development Department and with input from local workforce development boards, of a policy regarding mutual aid agreements between and among local workforce development boards to enable them to effectively respond to disasters and that is consistent with applicable state and federal law.

(r) The development of other policies as may promote statewide objectives for, and enhance the performance of, the workforce development system in the state.

(s) Helping individuals with barriers to employment, including low-skill, low-wage workers, the long-term unemployed, and members of single-parent households, achieve economic security and upward mobility by implementing policies that encourage the attainment of marketable skills relevant to current labor market trends.

(t) (1) Evaluating program outcomes, including program participant outcomes for all grant programs administered by the California Workforce Development Board, regardless of funding source.

(2) The California Workforce Development Board shall produce and submit a report to the Legislature, in compliance with Section 9795 of the Government Code, evaluating its grant programs by October 1 of every odd-numbered year. The evaluation report shall include both quantitative and qualitative analyses of any grant programs established on or after July 1, 2025, for which the board administers funding, as well as the following existing programs:

(A) High road workforce programs, as described in Section 14014.

(B) The Breaking Barriers to Employment Initiative, as specified in Article 3 (commencing with Section 14030).

(D) Preapprenticeship training programs utilized by public agencies receiving funding from the Road Maintenance and Rehabilitation Account, as described in Section 2038 of the Streets and Highways Code.

SEC. 23.

Section 14014 of the Unemployment Insurance Code is amended to read:

14014.

(a) Consistent with the intent of paragraph (3) of subdivision (b) of Section 14000, the California Workforce Development Board shall collect and report program and outcome data for its high road workforce programs.

(b) Pursuant to subdivision (a), all of the following shall apply:

(1) The Employment Development Department shall make available to the board any and all wage and employment data necessary to evaluate all relevant high road programs and grants.

(2) All grant applicants and program beneficiaries participating in a high road training partnership program shall provide any and all necessary information to the state to facilitate public transparency, accountability, and grant and program performance evaluation, including any relevant data needed to determine the outcomes and benefits of programing and grants funded for program participants, high road training partnerships, industry, and the workforce system.

(3) All high road grants and programming shall be evaluated using criteria, metrics, and data that include, but are not limited to, information pertaining to the ability of grantees and program administrators to conduct and complete relevant programming as demonstrated through appropriate quantitative and qualitative analysis, including the use of appropriate outcome metrics.

(4) For funds and grants providing direct high road workforce, training, and education services to individuals, the board shall report all of the following:

(A) Who is receiving the services, including data on the demographics of the individuals receiving services.

(B) The nature of the services received collected at the individual level.

(i) The employment rates of individuals served to measure initial job placement and retention over time.

(ii) The wages and wage growth of individuals served during and after program participation.

(5) Recognizing that the outcome data specified in this section frequently lags program implementation activities, a quantitative report consistent with the requirements of this section shall be provided to the Legislature by the board, after it receives and administers funding under the relevant budget allocations, by October 1 of even-numbered years utilizing whatever program participant and outcome data is available. The report shall also include, but not be limited to, the number of grants awarded, the average award amounts, geographic distribution of awards, and types of industries awarded.

(6) Evaluation reports for all high road grants and programs as required by subdivision (t) of Section 14013 shall be provided to the Legislature after all available labor market outcome data specified in this section becomes available on the timeline prescribed in subdivision (t) of Section 14013.

SEC. 24.

Section 14033 of the Unemployment Insurance Code is amended to read:

14033.

(a) The purpose of the initiative shall be to provide individuals with barriers to employment the services they need to enter, participate in, and complete broader workforce preparation, training and education programs, and, ultimately, to obtain and retain employment. Specifically, the program should strive to address racial and ethnic exclusion and inequity in the labor force and enhance racial and economic justice. Projects should create pipelines to quality jobs, upward mobility, and income security for workers historically excluded from quality jobs and economic prosperity. Special emphasis shall be given to applications that integrate individuals from target populations into career pathway programs aligned with regional labor market needs.

(b) Grants shall be evaluated using the following criteria:

(1) Ability to provide the services proposed in the grant to the number of individuals specified in the grant as evidenced by, among other things, whether the grantee completed the work proposed.

(2) Ability of individuals to successfully complete relevant programming funded under the grant as demonstrated by relevant measures directly related to the purpose of the program.

(3) Ability of individuals to transition into or be integrated into the broader workforce and education system as evidenced by employment and enrollment in relevant programs.

(4) Ability of individuals to succeed in both the broader workforce and education system and labor market once they transition into the broader system. This may be measured by tracking these individuals utilizing the existing performance monitoring systems and metrics governing relevant programs and outcomes once they transition into the broader system.

(5) Ability for program participants to inform programming on an ongoing basis and evaluate program performance and success.

(6) The degree to which program activities acknowledge and address historic racial inequity and socioeconomic barriers to labor force participation for targeted population groups.

(7) The degree to which leadership at the executive level of the lead applicant organization reflects the target populations in Section 14034.

(8) The degree to which at least 25 percent of the lead applicant organization’s staff reflects the target populations in Section 14034.

(c) Grant applicants shall provide all necessary information to the California Workforce Development Board, or the board’s designee, to facilitate grant performance evaluation.

(d) Grant applicants and partners may be required to participate in technical assistance activities, including, but not limited to, the convening of communities of practice to identify and help replicate evidence-based practices and to help facilitate an assessment and evaluation of grant performance and initiative success.

(e) The California Workforce Development Board shall issue a final report to be posted on its internet website. The final report shall be posted no later than one year following the completion of the program. The reports shall include, but not be limited to, the programmatic impact on the target populations, the fiscal savings associated with the program, key conclusions, the benefits conferred or realized using quantitative and qualitative data, demographic data, and data on the languages spoken by the populations served by the grant.

(f) If additional grant funds are appropriated to the California Workforce Development Board for the Breaking Barriers to Employment Initiative on or after July 1, 2025, the California Workforce Development Board shall produce a report evaluating grant program outcomes on the timeline prescribed in subdivision (t) of Section 14013.

SEC. 25.

Section 14042 of the Unemployment Insurance Code is amended to read:

14042.

(a) Prior to awarding grants pursuant to Section 14041, the board shall develop and adopt guidelines and policies for the program, including, but not limited to, required regional plan content, required and optional regional plan partners, required activities of the regional partnerships, and guidelines for the allocation of grants, including planning guidance, timelines, and selection criteria for the distribution and evaluation of grant awards. The board shall consider factors including, but not limited to, the need for workforce services for the formerly incarcerated and justice-involved individuals in each region, the size of post-release populations, and the recidivism rate in each region.

(b) The board shall ensure that the guidelines developed pursuant to subdivision (a) are consistent with paragraph (7) of subdivision (b) of Section 1234.2 of, and subdivision (b) and paragraph (1) of subdivision (e) of Section 1234.3 of, the Penal Code, and Section 14031 of, and paragraph (4) of subdivision (c) and paragraphs (3) and (4) of subdivision (d) of Section 14032 of, this code.

(c) Grants made pursuant to this article shall be evaluated using criteria consistent with those set forth in subdivisions (b) to (d), inclusive, of Sections 14033. The board may utilize additional criteria to evaluate these grants. If additional grant funds are appropriated to the California Workforce Development Board for the Prison to Employment program on or after July 1, 2025, the California Workforce Development Board shall produce a report evaluating grant program outcomes on the timeline prescribed in subdivision (t) of Section 14013.

(d) (1) The criteria guidelines, and policies shall be exempt from the rulemaking provisions of the Administrative Procedures Act (Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code).

(2) The board shall make the criteria, guidelines, and policies available to the public.

SEC. 26.

The sum of one million dollars ($1,000,000) is hereby appropriated from the state General Fund to the Department of Finance for administrative costs to implement the Fair Share from Big Corporations Act as enacted by Assembly Bill 177 or Senate Bill 177. Notwithstanding any other law, any contracts entered into pursuant to this provision, and any amendments to such contracts, shall not be subject to the review, consent, or approval of the Department of General Services or any other state department or agency and shall not be subject to the requirements under the State Contracting Manual, the Public Contract Code, the state contracts register requirements of Chapter 6 (commencing with Section 14825) of Part 5.5 of Division 3 of Title 2 of the Government Code, the personal services contracting requirements of Article 4 (commencing with Section 19130) of Chapter 5 of Part 2 of Division 5 of Title 2 of the Government Code, or any other law that otherwise would apply. Contracts entered pursuant to this provision may include those terms and conditions that the director finds, in their sole discretion, to be in the state’s best interest.

SEC. 27.

This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

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