BILL NUMBER: SB 24	CHAPTERED
	BILL TEXT

	CHAPTER  531
	FILED WITH SECRETARY OF STATE  SEPTEMBER 23, 2016
	APPROVED BY GOVERNOR  SEPTEMBER 23, 2016
	PASSED THE SENATE  AUGUST 25, 2016
	PASSED THE ASSEMBLY  AUGUST 23, 2016
	AMENDED IN ASSEMBLY  AUGUST 18, 2016
	AMENDED IN SENATE  JANUARY 5, 2016
	AMENDED IN SENATE  JUNE 1, 2015
	AMENDED IN SENATE  APRIL 21, 2015
	AMENDED IN SENATE  APRIL 6, 2015

INTRODUCED BY   Senator Hill
   (Coauthor: Assembly Member Mullin)

                        DECEMBER 1, 2014

   An act to amend Section 7522.02 of the Government Code, relating
to public employees' retirement.


	LEGISLATIVE COUNSEL'S DIGEST


   SB 24, Hill. California Public Employees' Pension Reform Act of
2013: joint powers authority: employees.
   The California Public Employees' Pension Reform Act of 2013
(PEPRA) requires a public retirement system, as defined, to modify
its plan or plans to comply with the act and, among other provisions,
establishes new retirement formulas that may not be exceeded by a
public employer offering a defined benefit pension plan for employees
first hired on or after January 1, 2013. Existing law, the Joint
Exercise of Powers Act, generally authorizes 2 or more public
agencies, by agreement, to jointly exercise any common power, which
may include hiring employees and establishing retirement systems.
PEPRA authorizes a joint powers authority formed by the Cities of
Brea and Fullerton on or after January 1, 2013, to provide its
employees the defined benefit plan or formula that those employees
received from their respective employers prior to the exercise of a
common power, to which the employee is associated, by the joint
powers authority to any employee of specified cities who is not a new
member and subsequently is employed by the joint powers authority
within 180 days of the city providing for the exercise of a common
power, to which the employee was associated, by the joint powers
authority.
   This bill would authorize a joint powers authority formed by the
Belmont Fire Protection District, the Estero Municipal Improvement
District, and the City of San Mateo on or after January 1, 2013, to
provide employees who are not new members under PEPRA with the
defined benefit plan or formula that was received by those employees
from their respective employers on December 31, 2012, if they are
employed by the joint powers authority within 180 days of the agency
providing for the exercise of a common power, to which the employee
was associated, by the joint powers authority. The bill would
prohibit the formation of a joint powers authority on or after
January 1, 2013, in a manner that would exempt a new employee or a
new member from the requirements of PEPRA.
   This bill would make legislative findings and declarations as to
the necessity of a special statute for the Belmont Fire Protection
District, the Estero Municipal Improvement District, and the City of
San Mateo.


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

  SECTION 1.  Section 7522.02 of the Government Code is amended to
read:
   7522.02.  (a) (1) Notwithstanding any other law, except as
provided in this article, on and after January 1, 2013, this article
shall apply to all state and local public retirement systems and to
their participating employers, including the Public Employees'
Retirement System, the State Teachers' Retirement System, the
Legislators' Retirement System, the Judges' Retirement System, the
Judges' Retirement System II, county and district retirement systems
created pursuant to the County Employees Retirement Law of 1937
(Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of
Title 3), independent public retirement systems, and to individual
retirement plans offered by public employers. However, this article
shall be subject to the Internal Revenue Code and Section 17 of
Article XVI of the California Constitution. The administration of the
requirements of this article shall comply with applicable provisions
of the Internal Revenue Code and the Revenue and Taxation Code.
   (2) Notwithstanding paragraph (1), this article shall not apply to
the entities described in Section 9 of Article IX of, and Sections 4
and 5 of Article XI of, the California Constitution, except to the
extent that these entities continue to be participating employers in
any retirement system governed by state statute. Accordingly, any
retirement plan approved before January 1, 2013, by the voters of any
entity excluded from coverage by this section shall not be affected
by this article.
   (3) (A) Notwithstanding paragraph (1), this article shall not
apply to a public employee whose interests are protected under
Section 5333(b) of Title 49 of the United States Code until a federal
district court rules that the United States Secretary of Labor, or
his or her designee, erred in determining that the application of
this article precludes certification under that section, or until
January 1, 2016, whichever is sooner.
   (B) If a federal district court upholds the determination of the
United States Secretary of Labor, or his or her designee, that
application of this article precludes him or her from providing a
certification under Section 5333(b) of Title 49 of the United States
Code, this article shall not apply to a public employee specified in
subparagraph (A).
   (4) Notwithstanding paragraph (1), this article shall not apply to
a multiemployer plan authorized by Section 302(c)(5) of the federal
Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public employer
began participation in that plan prior to January 1, 2013, and the
plan is regulated by the federal Employee Retirement Income Security
Act of 1974 (29 U.S.C. Sec. 1001 et seq.).
   (b) The benefit plan required by this article shall apply to
public employees who are new members as defined in Section 7522.04.
   (c) (1) Individuals who were employed by any public employer
before January 1, 2013, and who became employed by a subsequent
public employer for the first time on or after January 1, 2013, shall
be subject to the retirement plan that would have been available to
employees of the subsequent employer who were first employed by the
subsequent employer on or before December 31, 2012, if the individual
was subject to concurrent membership for which creditable service
was performed in the previous six months or reciprocity established
under any of the following provisions:
   (A) Article 5 (commencing with Section 20350) of Chapter 3 of Part
3 of Division 5 of Title 2.
   (B) Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3.
   (C) Any agreement between public retirement systems to provide
reciprocity to members of the systems.
   (D) Section 22115.2 of the Education Code.
   (2) An individual who was employed before January 1, 2013, and
who, without a separation from employment, changed employment
positions and became subject to a different defined benefit plan in a
different public retirement system offered by his or her employer
shall be subject to that defined benefit plan as it would have been
available to employees who were first employed on or before December
31, 2012.
   (d) If a public employer, before January 1, 2013, offers a defined
benefit pension plan that provides a defined benefit formula with a
lower benefit factor at normal retirement age and results in a lower
normal cost than the defined benefit formula required by this
article, that employer may continue to offer that defined benefit
formula instead of the defined benefit formula required by this
article, and shall not be subject to the requirements of Section
7522.10 for pensionable compensation subject to that formula.
However, if the employer adopts a new defined benefit formula on or
after January 1, 2013, that formula must conform to the requirements
of this article or must be determined and certified by the retirement
system's chief actuary and the retirement board to have no greater
risk and no greater cost to the employer than the defined benefit
formula required by this article and must be approved by the
Legislature. New members of the defined benefit plan may only
participate in the lower cost defined benefit formula that was in
place before January 1, 2013, or a defined benefit formula that
conforms to the requirements of this article or is approved by the
Legislature as provided in this subdivision.
   (e) If a public employer, before January 1, 2013, offers a
retirement benefit plan that consists solely of a defined
contribution plan, that employer may continue to offer that plan
instead of the defined benefit pension plan required by this article.
However, if the employer adopts a new defined benefit pension plan
or defined benefit formula on or after January 1, 2013, that plan or
formula must conform to the requirements of this article or must be
determined and certified by the retirement system's chief actuary and
the system's board to have no greater risk and no greater cost to
the employer than the defined benefit formula required by this
article and must be approved by the Legislature. New members of the
employer's plan may only participate in the defined contribution plan
that was in place before January 1, 2013, or a defined contribution
plan or defined benefit formula that conforms to the requirements of
this article. This subdivision shall not be construed to prohibit an
employer from offering a defined contribution plan on or after
January 1, 2013, either with or without a defined benefit plan,
whether or not the employer offered a defined contribution plan prior
to that date.
   (f) (1) If, on or after January 1, 2013, the Cities of Brea and
Fullerton form a joint powers authority pursuant to the provisions of
the Joint Exercise of Powers Act (Article 1 (commencing with Section
6500) of Chapter 5), that joint powers authority may provide
employees the defined benefit plan or formula that those employees
received from their respective employers prior to the exercise of a
common power, to which the employee is associated, by the joint
powers authority to any employee of the City of Brea, the City of
Fullerton, or a city described in paragraph (2) who is not a new
member and subsequently is employed by the joint powers authority
within 180 days of the city providing for the exercise of a common
power, to which the employee was associated, by the joint powers
authority.
   (2) On or before January 1, 2017, a city in Orange County that is
contiguous to the City of Brea or the City of Fullerton may join the
joint powers authority described in paragraph (1) but not more than
three cities shall be permitted to join.
   (3) The formation of a joint powers authority on or after January
1, 2013, shall not act in a manner as to exempt a new employee or a
new member, as defined by Section 7522.04, from the requirements of
this article. New members may only participate in a defined benefit
plan or formula that conforms to the requirements of this article.
   (g) (1) If, on or after January 1, 2013, the Belmont Fire
Protection District, the Estero Municipal Improvement District, and
the City of San Mateo form a joint powers authority pursuant to the
provisions of the Joint Exercise of Powers Act (Article 1 (commencing
with Section 6500) of Chapter 5), that joint powers authority may
provide employees the defined benefit plan or formula that those
employees received from their respective employers prior to the
exercise of a common power, to which the employee is associated, by
the joint powers authority to any employee of the Belmont Fire
Protection District, the Estero Municipal Improvement District, and
the City of San Mateo who is not a new member and subsequently is
employed by the joint powers authority within 180 days of the agency
providing for the exercise of a common power, to which the employee
was associated, by the joint powers authority.
   (2) The formation of a joint powers authority on or after January
1, 2013, shall not act in a manner as to exempt a new employee or a
new member, as defined by Section 7522.04, from the requirements of
this article. New members may only participate in a defined benefit
plan or formula that conforms to the requirements of this article.
   (h) The Judges' Retirement System and the Judges' Retirement
System II shall not be required to adopt the defined benefit formula
required by Section 7522.20 or 7522.25 or the compensation
limitations defined in Section 7522.10.
   (i) This article shall not be construed to provide membership in
any public retirement system for an individual who would not
otherwise be eligible for membership under that system's applicable
rules or laws.
   (j) On and after January 1, 2013, each public retirement system
shall modify its plan or plans to comply with the requirements of
this article and may adopt regulations or resolutions for this
purpose.
  SEC. 2.  The Legislature finds and declares that a special law is
necessary and that a general law cannot be made applicable within the
meaning of Section 16 of Article IV of the California Constitution
because of the need to clarify the benefit eligibility rules under
the California Public Employees' Pension Reform Act of 2013 and
maintain the integrity of that act and further its purpose.