While many programs in state government face steep budget cuts, funds for fighting workers’ compensation fraud have remained mostly intact.

Earlier this month, Insurance Commissioner Steve Poizner announced that $30 million would go to district attorneys’ offices throughout the state for the 2009-10 fiscal year starting July 1, an increase of $1 million from the previous fiscal year. The funds come from assessments levied on insurance carriers.

The workers’ compensation fraud assessment and grant program was set up in the mid-1990s after a wave of fake claim filings and fraud by employers resulting in underpayment or nonpayment. The program is viewed as a crucial tool in the battle to control workers’ compensation costs.

However, the L.A. County District Attorney’s Office is losing 4 percent from the current fiscal year’s $5.2 million as more money is being directed to other counties.

But district attorney officials said they are relieved the cutback wasn’t worse, given the state’s budget crisis.

“The figure they came up with was reasonable, all things considered,” said Scott Carbaugh, head deputy district attorney overseeing the fraud program.

Carbaugh said he was still reviewing possible cutbacks and that no decisions had been made regarding the 30 attorneys, investigators and support staff working under the grant program.

For the first nine months of the 2008-09 fiscal year, the unit had reviewed 770 claims, opened 126 investigations, and filed 54 cases or indictments. The latter two numbers were lower than in previous years because the office is focusing more on major felony cases, especially employer fraud.

Air Issue

SB 696, the bill by state Sen. Rod Wright that would restore an emission reduction credit bank set up by the South Coast Air Quality Management District, is not dead yet for this year, though it still faces long odds.

The bill failed to clear the state Senate by the deadline earlier this month and was referred back to committee. That would usually mean the bill is on hold until the following year. However, SB 696 was turned into an urgency bill, a designation that keeps it alive for this year and allows it to be enacted immediately upon passage. The catch: An urgency bill requires two-thirds approval in committees and on the Senate floor, which means it needs bipartisan support.

The bill passed the energy and utilities committee June 18 on a 6-3 vote and was referred to the environmental quality committee.

SB 696 was drafted in response to a court ruling last year that halted the air quality district’s program to distribute free or discounted emissions credits to small businesses and public agencies. Environmental groups had sued the AQMD over the practice of discounting emission credits because they believed the program was lenient on polluters.

But Wright said in introducing his bill that the freeze on these discounted credits was hurting small businesses and public agencies working on infrastructure projects that couldn’t afford market-rate prices for the credits. The AQMD, major business groups and labor unions support the bill.

Hot Stuff

The state’s drive to close loopholes in the four-year-old heat illness protection regulation hit a snag earlier this month when the Occupational Safety and Health Standards Board declined to vote on proposed changes and sent them back to Cal-OSHA staff for further revisions.

The tougher standards were proposed after state inspectors in April found eight farm labor contractors in the Central Valley had workers in fields for several hours with no access to shade.

The changes include more specific measures that employers must take for outdoor workers when the temperature hits 85 degrees. One example: There must be enough shade for 25 percent of the workers to use at any given point in time.

But board members said they were concerned that 85 degrees may not be the right outdoor temperature threshold to use. Dean Fryer, spokesman for the Department of Industrial Relations, which oversees Cal-OSHA, said staff would have to do more work to determine what temperature could be considered unsafe. He did not give a timetable for when the issue would be brought back to the board.

More Tax Inspections

The state Board of Equalization has sent letters to retailers in Malibu, Santa Monica, El Segundo, Manhattan Beach and North Hollywood warning them that agency inspectors will be canvassing stores in the next few weeks. The inspectors will be checking whether every retail business is properly registered and correctly reporting their sales and use taxes, as well as any fees they may owe.

The inspection program is part of the BOE’s effort to crack down on businesses that don’t properly report all sales and use taxes. The agency estimates that statewide, more than $2 billion in sales and use taxes goes uncollected each year.

Staff reporter Howard Fine can be reached at [email protected] or at (323) 549-5225, ext. 227.