Workers’ compensation: uninsured employer: transfer of real property.

Senator Reyes's workers' compensation reform proposal targets property transfers by uninsured employers who attempt to evade payment of workers' compensation claims. The legislation authorizes the Director of Workers' Compensation to determine when real property transfers create "resulting trusts" that can be subject to liens, specifically addressing transfers made after a workplace injury but before official liens are recorded.

Under the proposed framework, the Director can make preliminary findings that property transfers resulted in beneficial trusts when certain conditions exist. These conditions include deeds indicating gifts or unpaid transfer taxes, or evidence of intent to hinder collections, such as transfers to associates, continued use of the property by the transferor, absence of proper closing procedures, or transfers at below-market value. When such determinations are made, the Director must notify all parties and can attach liens to the property as if no transfer had occurred.

The bill establishes an appeals process for parties contesting these determinations. Aggrieved parties may request administrative hearings within 20 days, followed by potential superior court review through writs of mandate. The legislation explicitly preserves the rights of bona fide purchasers and encumbrancers, ensuring their interests remain protected from any resulting trust determinations or subsequent liens.