Labor.

Appropriates $3,018,000,000 from the General Fund to supplement the state's appropriation to the Public Employees' Retirement Fund, allocated as: $1,434,683,000 to state miscellaneous members, $83,555,000 to state industrial members, $174,232,000 to state safety members, and $1,325,530,000 to state peace officer/firefighter members. The appropriation applies to unfunded liabilities in excess of base amounts for fiscal year 2026-27.

Appropriates $1,000,000 from the General Fund to the Department of Finance for administrative costs.

Raises the combined permanent disability threshold for Subsequent Injuries Benefits Trust Fund eligibility from 35% or more of total (for the subsequent injury alone) to 70% or more of total combined disability, with an alternative path requiring a 5% whole person impairment to the opposite corresponding member. This substantially narrows who qualifies for additional benefits.

Exempts from the new SIBTF eligibility changes any claims with a certain procedural status on or before June 1, 2026, or filed on or before July 1, 2020, preserving prior law for those cases.

Adds a new statutory definition of 'labor disabling' in Labor Code Section 4750, requiring that a preexisting impairment resulted in loss of earnings, interfered with work activity in the employee's occupation, or otherwise had a demonstrable impact on ability to perform work. A preexisting disability is not labor disabling if treatable by medication or medical device so the employee worked without incapacity.

Requires surcharges and assessments for workers' compensation funds to be paid by electronic funds transfer, with a 10% penalty on untimely or unpaid amounts and for failure to pay by EFT. Penalties are deposited in the Workers' Compensation Administration Revolving Fund.

Requires that for SIBTF eligibility determinations, the existence of preexisting disability at the time of the subsequent injury must be established by substantial evidence based on prior medical records, prior testimony, and other prior evidence in existence before the subsequent compensable injury.

Requires the California Workforce Development Board to submit reports to the Legislature evaluating grant programs (Road Maintenance and Rehabilitation Account preapprenticeship, Breaking Barriers to Employment Initiative, Prison to Employment) by October 1 of every odd-numbered year, with additional reporting if new funds are appropriated.

Changes the entity responsible for paying additional compensation awarded by the Workers' Compensation Appeals Board from the State Compensation Insurance Fund to the Director of Industrial Relations as trustee of the Subsequent Injuries Benefits Trust Fund, and deletes the SCIF's authorization to reimburse itself for costs.

Clarifies that an employee has 5 years from the date of the subsequent compensable injury or 6 months from resolution of permanent disability in the subsequent injury claim, whichever is later, to file a claim for SIBTF benefits. Makes these SIBTF reform provisions inoperative on July 1, 2031, and repealed as of January 1, 2032.

Removes the Administrative Director of the Division of Workers' Compensation from the fixed $81,635 salary schedule in Government Code Section 11553 and instead references the general state employee compensation chapter.

Extends indefinitely the Workers' Compensation Appeals Board petition for reconsideration provisions that would otherwise have changed from a 60-day deemed denial period measured from transmission to one measured from filing on July 1, 2026.

Excludes adjustment for future earning capacity and the 1.4 adjustment factor (from Section 4660.1(b)) when determining whether an employee qualifies for SIBTF benefits, using whole person impairment percentage without those adjustments.

The bill title was changed from 'An act relating to the Budget Act of 2025. An act to amend...' to simply 'An act to amend...', removing the reference to the Budget Act of 2025.

Paragraph (9) of the legislative digest, which expressed the Legislature's intent to enact statutory changes relating to the Budget Act of 2025, was removed.

The digest header changed from 'Budget Act of 2025. Labor.' to just 'Labor.', and the vote/fiscal committee/state-mandated local program lines were replaced with a single 'Appropriation: yes.' line.

In Section 62.5(c)(1), a cross-reference was corrected from 'Article 5 (commencing with Section 4751) 4750)' to 'Article 5 (commencing with Section 4750)', fixing an apparent drafting error in the amended assembly version.

Header changed from Senate Bill signature format to authenticated electronic legal material format with Chapter 83 designation and approval date of July 13, 2026.

Page headers and line breaks reformatted throughout the document to match the chaptered law layout (e.g., 'SB 171' replaced with 'Ch. 83').