Assemblymember Liz Ortega has introduced AB 1329, which proposes significant California injury fund reforms to California’s Subsequent Injuries Benefits Trust Fund (SIBTF). The bill seeks to rename the fund to the Second-Chance Employer’s Risk Reduction Trust Fund and aims to reduce costs while ensuring that benefits are awarded to eligible workers. Originally, the SIBTF encouraged employers to hire workers with pre-existing disabilities by providing supplemental benefits for those suffering a subsequent injury. With the proposed California injury fund reforms, workers who suffer a combined permanent disability rating of 70% or more qualify for these benefits.
Assemblymember Liz Ortega |
Photo courtesy of the California State Assembly
Key Reforms in AB 1329
1. Stricter Proof of Pre-Existing Disability
Starting January 1, 2026, claimants must submit substantial evidence of a prior permanent partial disability. This includes medical records, testimony, and other relevant documentation predating the subsequent injury. As a result, this change ensures more thorough vetting of claims.
2. Creation of a Qualified Medical Evaluator Database
The bill proposes that the Division of Workers’ Compensation create a database of qualified medical evaluators specializing in SIBTF claims. This will help streamline the evaluation process and provide more consistency in medical assessments, benefiting both claimants and employers.
3. Standardized Medical-Legal Evidence
To maintain fairness, medical-legal evidence will now be obtained under the same rules as other workers’ compensation cases. Additionally, payments will be limited according to the Medical-Legal Fee Schedule, ensuring transparency and consistency across all cases.
4. Direct Payment of Benefits
Under AB 1329, the Department of Industrial Relations will directly handle the payment of benefits. This shift will replace the role of the State Compensation Insurance Fund, simplifying the payment process and improving efficiency for workers and employers alike.
5. Clarification of “Permanent Disability” Definitions
The bill will clarify the definition of “permanent disability” for claims made before and after January 1, 2013. By codifying existing legal interpretations, this change ensures clearer and more consistent rulings on permanent disability claims.
Financial and Systemic Concerns
Rising Costs of the SIBTF
Over the years, SIBTF assessments on employers have sharply increased. They rose from $14 million in 2015 to $848 million in 2025. Clearly, this dramatic increase has raised concerns about the fund’s financial sustainability. If the current trajectory continues, the system may struggle to meet future demand.
Challenges in Tracking Liabilities
The elimination of required annual reports has made tracking liabilities more difficult. This lack of transparency complicates efforts to manage the fund’s finances and increases the risk of mismanagement.
Increasing Medical-Legal Expenses
According to a report by the Rand Corporation, benefit payments and medical-legal expenses have risen significantly. These increased costs are putting additional strain on the fund. Therefore, these reforms are essential to help stabilize the fund and reduce unnecessary expenditures.
Incentivized Use of the Fund
Changes in apportionment rules and permanent disability ratings have incentivized the use of the SIBTF. In particular, the Todd v. SIBTF WCAB decision made it easier for claimants to achieve a 100% disability rating. This, in turn, has further contributed to the financial strain on the fund.
Why AB 1329 Is Necessary
Ultimately, AB 1329 aims to address the growing costs of the SIBTF and ensure that only eligible workers benefit from it. By tightening evidence requirements, standardizing procedures, and providing clearer definitions, the bill seeks to prevent abuse of the system. These changes are critical for improving fairness and efficiency while ensuring the fund remains sustainable for the long term. The bill is currently under review by the Assembly Insurance Committee.
👉 For more details on California injury fund reforms, check the Injured Worker Guidebook from the California Department of Industrial Relations.