BILL NUMBER: SB 1414	ENROLLED
	BILL TEXT

	PASSED THE SENATE  AUGUST 31, 2006
	PASSED THE ASSEMBLY  AUGUST 30, 2006
	AMENDED IN ASSEMBLY  AUGUST 10, 2006
	AMENDED IN SENATE  MAY 26, 2006
	AMENDED IN SENATE  MAY 11, 2006

INTRODUCED BY   Senator Migden

                        FEBRUARY 22, 2006

   An act to add Part 8.6 (commencing with Section 2100) to Division
2 of the Labor Code, and to add Chapter 8.9 (commencing with Section
14800) to Part 3 of Division 9 of the Welfare and Institutions Code,
relating to health care.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 1414, Migden  California Fair Share Health Care Act.
   Existing law generally regulates the conduct of employers and
employees in the state and gives the Department of Industrial
Relations various responsibilities in this regard, including levying
and collecting assessments from employers to provide revenue to fund
certain activities related to employment matters, such as workers'
compensation and occupational safety.
   Existing law establishes the federal Medicaid Program, which is
administered by each state. California's version of this program is
the Medi-Cal program, which is administered by the State Department
of Health Services and under which qualified low-income persons
receive health care benefits.
   Existing law provides for the Healthy Families Program,
administered by the Managed Risk Medical Insurance Board, to arrange
for the provision of health care services to children under 19 years
of age.
   Existing law establishes the Access for Infants and Mothers (AIM)
Program, administered by the Managed Risk Medical Insurance Board, to
provide health insurance coverage for certain eligible persons who
pay a subscriber contribution.
   This bill, the California Fair Share Health Care Act, would
require an employer with 10,000 or more employees in the state, who
does not elect to contribute, in support of the Medi-Cal program, the
difference between the amount the employer spent on health insurance
costs and an amount equal to a specified percentage of the total
wages paid to employees in the state in the immediately preceding
calendar year, to spend an amount equal to that specified percentage
on employee health insurance costs, as defined.
   This bill would impose civil penalties on an employer that fails
to provide information or make payments as required by the bill.
   The bill would create the California Fair Share Health Care Fund,
which would be expended by the State Department of Health Services
and the board, upon appropriation by the Legislature, for purposes of
funding the services and operations of the Medi-Cal, Healthy
Families, and AIM Programs. The fund would consist of payments,
including the prescribed penalties, made to the Director of
Industrial Relations by employers that fail to spend the amount
required by the bill on employee health insurance costs, as defined.
The bill would authorize the director to exempt an employer from the
requirement to pay into the fund under certain circumstances.
   This bill would require affected employers to file an annual
report with the Director of Industrial Relations, including the total
amount the employer spent on health insurance costs in the
immediately preceding calendar year, and the corresponding percentage
of nonexempt employee wages paid to employees that amount
represents. The bill would require this report to be accompanied by
an affidavit, signed under penalty of perjury, declaring that the
information provided is true and correct. By expanding the crime of
perjury, the bill would impose a state-mandated local program.
    The bill would require the Director of Industrial Relations to
adopt regulations to implement the bill, to annually contract for an
independent certified audit of the financial activities of the fund,
and to report the results of the audit to the Director of Health
Services and the Legislature.
  The California Constitution requires the state to reimburse local
agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:


  SECTION 1.  This act shall be known, and may be cited, as the
California Fair Share Health Care Act.
  SEC. 2.  Part 8.6 (commencing with Section 2100) is added to
Division 2 of the Labor Code, to read:

      PART 8.6.  CALIFORNIA FAIR SHARE EMPLOYER HEALTH CARE
ASSESSMENT

   2100.  For purposes of this division, the following terms shall
have the following meanings:
   (a) "Director" means the Director of Industrial Relations.
   (b) "Employee" means an individual who works for an employer, is
listed on the employer's payroll records, and is under the employer's
direction and control.
   (c) "Employer" means every person, including any corporation, that
has any natural person in service.  "Employer" does not include the
federal government, the state, any other state, or a political
subdivision of this state or any other state.
   (d) "Health insurance costs" means the amount paid by an employer
to provide health care or health insurance to employees and the
dependents of these employees in the state, to the extent deductible
by the employer under federal tax law. "Health insurance costs"
includes payments for medical care, prescription drugs, vision care,
medical savings accounts, and any other costs to provide health
benefits, as defined in Section 213(D) of the Internal Revenue Code.

   (e) "Wages" has the same meaning as that term is defined in
Section 200.
   2102.  This division applies to an employer with 10,000 or more
employees in the state.
   2103.  (a) An employer organized as a nonprofit organization,
unless it elects otherwise under Section 2106, shall spend at least 6
percent of the total wages paid to employees in the state in the
immediately preceding calendar year on employee health insurance
costs.
   (b) An employer not organized as a nonprofit organization, unless
it elects otherwise under Section 2106, shall spend at least 8
percent of the total wages paid to employees in the state in the
immediately preceding calendar year on employee health insurance
costs.
   2104.  (a) An employer shall submit a report, on a form and in a
manner approved by the director, that includes the following
information:
   (1) The total amount spent by the employer in the immediately
preceding calendar year on health insurance costs in the state.
   (2) The percentage of payroll spent by the employer in the
immediately preceding calendar year on health insurance costs in the
state.
   (b) The director shall adopt regulations that specify the
documentation an employer shall be required to submit in support of
the information provided pursuant to subdivision (a).
   (c) The report required by this section shall be signed by the
employer's principal executive officer, or person performing a
similar function, and shall be accompanied by an affidavit, signed
under penalty of perjury, declaring that the information provided
pursuant to this section was reviewed by the signing officer, and is
true and correct, to the best of the signing officer's knowledge,
information, and belief.
   (d) When calculating the percentage of payroll for purposes of
subdivision (a), an employer may exempt both of the following:
   (1) Wages paid to any employee in excess of the amount taxable for
federal social security purposes.
   (2) Wages paid to any employee who is enrolled in, or who is
eligible for, Medicare.
   2106.  (a) (1) An employer organized as a nonprofit organization
may elect to spend less than the amount otherwise required by
subdivision (a) of Section 2103 and instead pay the director an
amount equal to the difference between the amount the employer spent
on health insurance costs and an amount equal to 6 percent of the
total wages paid to employees in the state in the immediately
preceding calendar year.
   (2) The director may exempt an employer from the requirements of
paragraph (1) if the director finds that the amount spent by the
employer in the immediately preceding calendar year on health
insurance costs per employee equals or exceeds the average amount
necessary to provide coverage, based on applicable surveys of
employer coverage.
   (b) (1) An employer not organized as a nonprofit organization that
spends less than the amount required by subdivision (b) of Section
2103 shall pay to the director an amount equal to the difference
between the amount the employer spent on health insurance costs and
an amount equal to 8 percent of the total wages paid to employees in
the state in the immediately preceding calendar year.
   (2) The director may exempt an employer from the requirements of
paragraph (1) if the director finds that the amount spent by the
employer in the immediately preceding calendar year on health
insurance costs per employee equals or exceeds the average amount
necessary to provide coverage, based on applicable surveys of
employer coverage.
   (c) An employer shall not deduct any amount made pursuant to this
section from the wages of any employee.
   (d) The employer shall make the payments required by this section
on a periodic basis, as determined by the director.
   2108.  (a) If an employer fails to make the report required by
Section 2104, the director shall impose a civil penalty of two
hundred fifty dollars ($250) for each day that the report is not
submitted in a timely manner.
   (b) If an employer fails to make the payments under an election
described in Section 2106, the director shall impose a civil penalty
of two hundred fifty thousand dollars ($250,000).
   2110.  The director shall do all of the following to implement
this part:
   (a) Annually verify which employers in the state have 10,000 or
more employees.
   (b) Ensure that all employers identified in subdivision (a) have
submitted the report required by Section 2104.
   (c) Adopt regulations to implement this part.
   (d) Pay the amounts collected pursuant to this part into the
California Fair Share Health Care Fund, created by Section 14800 of
the Welfare and Institutions Code.
  SEC. 3.  Chapter 8.9 (commencing with Section 14800) is added to
Part 3 of Division 9 of the Welfare and Institutions Code, to read:
      CHAPTER 8.9.  California Fair Share Health Care Fund

   14800.  (a) The California Fair Share Health Care Fund is hereby
created as a special account in the State Treasury.
   (b) Money in the fund shall consist of both of the following:
   (1) All payments and penalties collected from employers pursuant
to Part 8.6 (commencing with Section 2100) of Division 2 of the Labor
Code.
   (2) Any other money from any other source accepted for the benefit
of the fund.
   (c) Upon appropriation by the Legislature, money in the fund may
be expended by the department and the Managed Risk Medical Insurance
Board, only for the purpose of funding services and operations of the
Medi-Cal program set forth in Chapter 7 and following (commencing
with Section 14000), the Healthy Families Program set forth in Part
6.2 (commencing with Section 12693) of Division 2 of the Insurance
Code, and the Access for Infants and Mothers Program set forth in
Part 6.3 (commencing with Section 12695) of Division 2 of the
Insurance Code.
   (d) The Treasurer shall invest money contained in the fund not
needed to meet current obligations in the same manner as other public
funds are invested. Interest that accrues from the investments shall
be credited to the fund.
   (e) The Director of Industrial Relations shall annually contract
for an independent certified audit of the financial activities of the
fund. An annual report on the financial status of the fund as of
June 30 shall be submitted to the Director of Health Services and the
Legislature.
  SEC. 4.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.