BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



           ------------------------------------------------------------ 
          |SENATE RULES COMMITTEE            |                  AB 1844|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |                         |
          |327-4478                          |                         |
           ------------------------------------------------------------ 
           
                                         
                                 THIRD READING


          Bill No:  AB 1844
          Author:   Hernandez (D)
          Amended:  8/12/08 in Senate
          Vote:     21

           
           SENATE PUBLIC EMP. & RET. COMMITTEE  :  4-0, 6/23/08
          AYES:  Wiggins, Ashburn, Migden, Negrete McLeod
          NO VOTE RECORDED:  McClintock
           
          SENATE APPROPRIATIONS COMMITTEE  :  15-0, 8/7/08
          AYES:  Torlakson, Cox, Aanestad, Ashburn, Cedillo, Corbett,  
            Dutton, Florez, Kuehl, Oropeza, Ridley-Thomas, Runner,  
            Simitian, Wyland, Yee
           
          ASSEMBLY FLOOR  :  79-0, 5/28/08 - See last page for vote


           SUBJECT  :    Public employee benefits

           SOURCE  :     Governors Public Employee Post-Employment  
          Benefits 
                      Commission


           DIGEST  :    This bill implements various recommendations  
          made by the Governors Public Employee Post-Employment  
          Benefits Commission. 

           ANALYSIS  :    

          Existing law: 

                                                           CONTINUED





                                                               AB 1844
                                                                Page  
          2

          1. Provides that it is a crime to knowingly make a false  
             statement or representation for the purpose of obtaining  
             a workers' compensation benefit or making such a false  
             statement for the purposes of supporting or denying a  
             workers' compensation benefit. 

          2. Requires all state and local public retirement systems  
             to: 

             A.    Not less than triennially, hire an actuary to  
                perform a valuation of the system.

             B.    Hire a qualified person to perform an audit of the  
                system's financial statements.

             C.    Submit audited financial statements to the State  
                Controller within six months of the close of each  
                fiscal year. 

          3. Requires, the State Controller to compile and publish a  
             report annually on the fiscal condition of state and  
             local public retirement systems. 

          This bill:

          1. Establishes a definition of, and penalties for, fraud  
             when done so in connection with benefits, or an  
             application for benefits, administered by the Public  
             Employees' Retirement System (PERS), the State Teachers'  
             Retirement System (STRS) or a retirement system  
             established under the County Employees' Retirement Law  
             of 1937 ('37 Act). 

          2. Requires that workers' compensation insurers and the  
             Director of the Employment Development Department (EDD)  
             provide PERS investigators with information they deem  
             necessary when investigating someone concerning the  
             application for, or the receipt of, PERS benefits. 

          3. Requires the State Controller to devise a cost-efficient  
             procedure for collecting the required other  
             post-employment benefits data and posting it on the  
             State Controller's web site. 








                                                               AB 1844
                                                                Page  
          3

          4. Requires the State Controller to publish the currently  
             required annual report on the financial condition of  
             California's public retirement systems within 12 months  
             of the receipt of the information, and in no case later  
             than 18 months after end of the fiscal year upon which  
             the information in the report is based. 

          5. Authorizes PERS to request information from the Director  
             of EDD and from any workers' compensation insurer as  
             part of an investigation of unlawful application for, or  
             receipt of, benefits provided by that retirement system.  


           Comments
           
          Governor Arnold Schwarzenegger established the Governor's  
          Public Employee Post-Employment Benefits Commission in  
          December 2006, to "identify the extent of unfunded  
          liabilities" in public sector pension and retiree health  
          care obligations, review and analyze options for addressing  
          them and recommend a plan to the Legislature and Governor. 

          The 12-member Commission, chaired by former University of  
          California Board of Regents President Gerald Parsky, was  
          charged with the tasks of identifying the size of the  
          public sector's unfunded other post-employment benefits  
          liability, comparing various approaches for addressing that  
          unfunded liability, considering the advantages to the state  
          of providing post-employment benefits, and proposing a  
          plan(s) for addressing unfunded other post-employment  
          benefits liabilities.  After conducting more than a dozen  
          public hearings around the state, the Commission produced  
          its final report in January 2008.  That report contains 34  
          recommendations for improving the functioning of retirement  
          systems and the delivery of other post-employment benefits,  
          and for controlling employer benefit costs, seven of which  
          require legislative implementation. 

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  Yes

          According to the Senate Appropriations Committee:

                          Fiscal Impact (in thousands)







                                                               AB 1844
                                                                Page  
          4


             Major Provisions                2008-09     2009-10     
             2010-11               Fund  

            State Controller              $95       $51        
            $51General

            EDD                 $50, reimbursed by requestorSpecial

            Agency report to              unknown, probably not  
            significant         General
            State Controller

           SUPPORT  :   (Verified  8/12/08)

          Governor's Public Employee Post-Employment Benefits  
            Commission (source)
          Amalgamated Transit Union
          Association of California Healthcare Districts
          Association of California Water Agencies
          California Association of Joint Powers Authorities
          California Conference of machinists
          California Faculty Association
          California Federation of Teachers 
          California School Employees Association 
          California Special Districts Association
          California State Association of Counties
          California State Employees Association
          California Teachers Association
          California Teamsters Public Affairs Council
          Department of Personnel Administration 
          Engineers and Scientists of California 
          Glendale City Employees Association
          Howard Jarvis Taxpayers Association
          IFPTE Local 21
          Organization of SMUD Employees 
          Peace Officers Research Association of California
          PERS Board of Administration
          PERS Retirement Betterment Committee Inc.
          Professional Engineers in California Government
          Regional Council of Rural Counties
          San Bernardino Public Employees Association
          San Diego County Court Employees Association
          San Luis Obispo County Employees Association







                                                               AB 1844
                                                                Page  
          5

          Santa Rosa City Employees Association
          Service Employees International Union, Local 1000
          Strategic Committee of Public Employees, Laborers'  
            International Union of North America
          STRS Board of Administration


           ARGUMENTS IN SUPPORT  :    According to the author, "This  
          bill will help increase transparency with regard to public  
          employee benefits through enhanced reporting requirements  
          and will also help to curb fraud in the various public  
          retirement systems by providing those systems with the  
          tools they need to detect and prosecute fraudulent  
          actions." 


           ASSEMBLY FLOOR  :
          AYES:  Adams, Aghazarian, Anderson, Arambula, Beall,  
            Benoit, Berg, Berryhill, Blakeslee, Brownley, Caballero,  
            Charles Calderon, Carter, Cook, Coto, Davis, De La Torre,  
            De Leon, DeSaulnier, DeVore, Duvall, Dymally, Emmerson,  
            Eng, Evans, Feuer, Fuentes, Fuller, Furutani, Gaines,  
            Galgiani, Garcia, Garrick, Hancock, Hayashi, Hernandez,  
            Horton, Houston, Huff, Huffman, Jeffries, Jones,  
            Karnette, Keene, Krekorian, La Malfa, Laird, Leno,  
            Levine, Lieber, Lieu, Ma, Maze, Mendoza, Mullin,  
            Nakanishi, Nava, Niello, Nunez, Parra, Plescia,  
            Portantino, Price, Sharon Runner, Ruskin, Salas, Saldana,  
            Silva, Smyth, Solorio, Spitzer, Strickland, Swanson,  
            Torrico, Tran, Villines, Walters, Wolk, Bass
          NO VOTE RECORDED:  Soto


          JJA:mw  8/12/08   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                                ****  END  ****