ENGROSSED HOUSE
BILL NO. 3111	By:	Hickman and Enns of the House

				and

		Brown of the Senate

An Act relating to public finance; amending 62 O.S. 2011, Section 34.70, which relates to payroll deductions; modifying certain payroll deductions; modifying administrative costs of processing payroll deductions; providing exemption; modifying collection of charges; amending 70 O.S. 2011, Section 5-139, which relates to certain payroll deductions for school employees; prohibiting application of administrative costs for processing certain payroll deductions; modifying procedure for collection of charges; and providing an effective date.

BE IT ENACTED BY THE PEOPLE OF THE STATE OF OKLAHOMA:
SECTION 1.     AMENDATORY     62 O.S. 2011, Section 34.70, is amended to read as follows:
Section 34.70  A.  1.  Upon the request of a state employee, a state agency shall make voluntary payroll deductions for the employee to any credit union, bank, or savings association having an office in this state.
2.  If the governing body of any county, municipality, or school district provides for voluntary payroll deductions to a credit union serving the employees of the county, municipality, or school district, it shall provide voluntary payroll deductions to any credit union, bank, or savings association having an office in this state which has a minimum participation of twenty percent (20%) of the employees of the county, municipality, or school district.
B.  Upon the request of a state employee or a school district employee and pursuant to procedures established by the Administrator of the Office of Personnel Management, a state agency or school district shall make payroll deductions for:
1.  The payment of any insurance premiums due a private insurance organization with a minimum participation of five hundred (500) state employees for life, accident, and health insurance which is supplemental to that provided for by the state;
2.  The payment of any insurance premiums due a private insurance organization or service company which is regulated by the State Insurance Commissioner and with a minimum participation of five hundred (500) state employees for legal services;
3.  Premiums or payments for retirement plans with a minimum participation of five hundred (500) state employees for retirement plans which are supplemental to that provided for by the state;
4.  Salary adjustment agreements included in a flexible benefits plan as authorized by the State Employees Flexible Benefits Act;
5.  Membership dues utilized for benefits, goods or services provided by the Oklahoma Public Employees Association to the organization’s membership or any other statewide association limited to state employee membership with a minimum membership of two thousand (2,000) one thousand five hundred (1,500) dues-paying members.  For purposes of this paragraph, state agencies shall accept online or electronically submitted forms from the Oklahoma Public Employees Association and other state employee associations.  The Office of Personnel Management shall develop and implement a verification process for online or electronically submitted forms which may include the use of electronic signature technology or other process as determined appropriate;
6.  Contributions to any foundation organized pursuant to 26 U.S.C., Section 501(c)(3) of the Oklahoma Public Employees Association or any other statewide association limited to state employee membership with a minimum membership of two thousand (2,000) one thousand five hundred (1,500) dues-paying members;
7.  Payments to a college savings account administered under the Oklahoma College Savings Plan Act pursuant to Section 3970.1 et seq. of Title 70 of the Oklahoma Statutes;
8.  Subscriptions to the Oklahoma Today magazine published by the State of Oklahoma through the Oklahoma Tourism and Recreation Department; and
9.  The payment of any insurance premiums due a private insurance organization, which is regulated by the State Insurance Commission, for an Oklahoma Long-Term Care Partnership Program approved policy pursuant to the Oklahoma Long-Term Care Partnership Act.
C.  The 1.  Except as otherwise provided by paragraph 2 of this subsection, the administrative costs of processing payroll deductions or administering any salary adjustment agreements for insurance premiums as provided for in subsection B of this section in any state agency or school district shall be a charge of two percent (2%) of the gross annual premiums for insurance plans revenue of the payroll deduction.  The administrative costs of processing payroll deductions or administering salary adjustment agreements for payments for retirement plans as provided for in subsection B of this section shall be one percent (1%) of the gross annual payments for retirement plans 
2.  None of the administrative costs otherwise authorized by paragraph 1 of this subsection shall apply to the following:
a.	contributions to charitable organizations established under Section 501(c)(3) of the Internal Revenue Code,
b.	salary adjustment agreements included as part of the employer-sponsored Section 125 premium-only plan, health flexible spending account, or dependent day care account pursuant to the Internal Revenue Code of 1986, as amended,
c.	payroll deductions for employer-sponsored group supplemental disability, life, accident and health plans which are otherwise not eligible for payment outside payroll deduction, or
d.	salary reduction agreements for employer-sponsored retirement plans as defined in Section 403(b) of the Internal Revenue Code of 1986, as amended.  
3.  These charges shall be collected monthly from the private insurance or retirement plan organization by the Office of Personnel Management State Finance or local school district and shall be deposited to the credit of the General Revenue Fund or the general fund of the local school district.  Provided, that these costs shall not be collected from state employees, school district employees, local school districts, or state agencies unless otherwise directed in the Oklahoma State Finance Act.
D.  Any statewide association granted a payroll deduction prior to January 1, 2008, shall be exempt from the minimum state employee membership requirement.
E.  Approval of a payroll deduction or salary adjustment agreement for any insurance organization, line of coverage or policy shall not be construed as an assumption of liability, for the term of policy or the performance of the insurance organization, by this state, or any of its agencies or any officer or employee thereof.  Contracts for such insurance shall be in all respects subject to the insurance laws of this state, and shall be enforceable solely pursuant to such laws.
F.  The Oklahoma Employment Security Commission is authorized to deduct from the wages or salary of its employees the employees' contribution to the Oklahoma Employment Security Commission Retirement Plan.
G.  Payroll deductions shall be made for premium payments for group insurance for retired members or beneficiaries of any state-supported retirement system upon proper authorization given by the member or beneficiary to the board from which the member or beneficiary is currently receiving retirement benefits.
H.  Upon request of instructional personnel employed at either the Oklahoma School for the Blind or the Oklahoma School for the Deaf and pursuant to procedures established by the Administrator of the Office of Personnel Management, the Commission for Rehabilitation Services shall make payroll deductions for membership dues in any statewide educational employee organization or association.
I.  Upon the request of a state employee of the Department of Corrections, the Department shall make voluntary payroll deductions for the employee to the Correctional Peace Officer Foundation.
SECTION 2.     AMENDATORY     70 O.S. 2011, Section 5-139, is amended to read as follows:
Section 5-139.  A.  School districts shall make payroll deductions for either or both professional organization dues and political contributions upon the request of any school employee and shall transmit deducted funds to the organization designated by the school district employee.  Such deductions shall be on a ten-month basis unless otherwise designated by the employee organization.  However, a school employee may request in writing at any time for the school district to immediately terminate or initiate payroll deductions to a professional organization.  Upon receipt of a request the school district shall within five (5) business days or by the next pay period, whichever is earlier, terminate or initiate any future payroll deductions of the requesting school employee to a professional organization.  Upon receipt of a request the school district shall notify the professional organization of the initiation or termination of payroll deductions within fifteen (15) business days.  If the request is to terminate a deduction, the school district shall not make any advance payments to any professional organization of any future dues on behalf of the school employee.
B.  The administrative costs of processing payroll deductions agreements as provided for in subsection A of this section shall be a charge of two percent (2%) of the gross revenue of the payroll deduction.  Contributions to charitable organizations established under Section 501(c)(3) of the Internal Revenue Code shall be exempt from paying administrative costs.  These charges shall be collected monthly by the local school district and shall be deposited to the credit of the district's general fund.
SECTION 3.  This act shall become effective November 1, 2012.
Passed the House of Representatives the 7th day of March, 2012.

	
Presiding Officer of the House of
	Representatives

Passed the Senate the ____ day of __________, 2012.

	
Presiding Officer of the Senate