BILL NUMBER: AB 1844	CHAPTERED  09/27/08

	CHAPTER  369
	FILED WITH SECRETARY OF STATE  SEPTEMBER 27, 2008
	APPROVED BY GOVERNOR  SEPTEMBER 27, 2008
	PASSED THE SENATE  AUGUST 14, 2008
	PASSED THE ASSEMBLY  AUGUST 19, 2008
	AMENDED IN SENATE  AUGUST 12, 2008
	AMENDED IN SENATE  JUNE 11, 2008
	AMENDED IN ASSEMBLY  MAY 23, 2008
	AMENDED IN ASSEMBLY  MARCH 12, 2008

INTRODUCED BY   Assembly Member Hernandez
   (Principal coauthor: Senator Wiggins)

                        JANUARY 28, 2008

   An act to add Section 22010 to the Education Code, to amend
Section 7504 of, to add Section 31455.5 to, and to add Article 3
(commencing with Section 20085) to Chapter 1 of Part 3 of Division 5
of Title 2 of, the Government Code, to amend Section 1877.1 of, and
to add Section 1877.35 to, the Insurance Code, and to amend Section
1095 of the Unemployment Insurance Code, relating to public employee
benefits.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 1844, Hernandez. Public employee benefits.
   (1) Existing law provides that it is a crime to make a knowingly
false material statement or representation for the purpose of
obtaining workers' compensation, or supporting or denying a workers'
compensation claim. The Public Employees' Retirement Law, the
Teachers' Retirement Law, and the County Employees Retirement Law of
1937 prescribe the rights, benefits, and duties of members of the
retirement systems established by those laws.
   This bill would make it a crime for a person to make or present
false material statements and representations in connection with
those retirement systems' benefits and applications, as specified, or
to aid or abet someone in this regard. The bill would also make it a
crime for a person to knowingly accept, with the intent to keep for
personal benefit, a payment from any of those retirement systems with
the knowledge that he or she was not entitled to the benefit. The
bill would provide that a violation of these provisions is punishable
by up to one year in a county jail, or a fine, or both, and
restitution, as specified. The bill would require any restitution
order imposed to be satisfied before any criminal fine imposed may be
collected, and would further provide that its provisions are
cumulative. By creating a new crime or expanding an existing crime,
the bill would create a state-mandated local program.
   (2) Existing law requires an insurer, upon written request of an
authorized governmental agency, as defined, to release to the agency
all relevant information deemed important to the agency that the
insurer may possess relating to any specific workers' compensation
insurance fraud investigation.
   This bill would authorize the Public Employees' Retirement System
to obtain information from an insurer for purposes of determining the
eligibility of a member, or unlawful application or receipt of
benefits, under the Public Employees' Retirement System, and would
add the Public Employees' Retirement System to the list of authorized
governmental agencies to which an insurer is required to release
that information, as specified.
   (3) Existing law authorizes the Director of the Employment
Development Department to permit the use of information in his or her
possession for specified purposes.
   This bill would additionally authorize the director to release
specified information to the Public Employees' Retirement System. The
bill would also make nonsubstantive changes.
   (4) Existing law requires all state and local retirement systems
to secure, not less than triennially, the services of an enrolled
actuary, who is to perform a valuation of the system. Existing law
requires all state and local public retirement systems to secure the
services of a qualified person to perform an attest audit of the
system's financial statements and to provide reports in this regard
to the Controller. Existing law requires the Controller to review
these reports and requires the Controller to publish an annual report
on the financial condition of all state and local public retirement
systems, as specified.
   This bill would require the Controller's report to be published
within 12 months of the receipt of the information, and in no case
later than 18 months after the end of the fiscal year upon which the
information in the report is based.
   (5) The California Constitution requires the state to reimburse
local agencies and school districts for certain costs mandated by the
state. Statutory provisions establish procedures for making that
reimbursement.
   This bill would provide that no reimbursement is required by this
act for a specified reason.


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

  SECTION 1.  The Legislature finds and declares the following:
   (a) The Public Employee Post-Employment Benefits Commission was
jointly formed by the Governor and the Legislature to determine how
best to fund postemployment benefits for the employees and retirees
of California's state and local governments.
   (b) The Public Employee Post-Employment Benefits Commission
concluded that the best way to ensure that these benefits are
delivered as promised is to prefund them.
   (c) The Public Employee Post-Employment Benefits Commission
further concluded that in order to gain and maintain public support
for these benefits, the benefits should be adopted in well-noticed
public hearings, with their costs clearly and publicly reported
annually, and any fraud or abuse addressed directly.
  SEC. 2.  Section 22010 is added to the Education Code, to read:
   22010.  (a) It is unlawful for a person to do any of the
following:
   (1) Make, or cause to be made, any knowingly false material
statement or material representation, to knowingly fail to disclose a
material fact, or to otherwise provide false information with the
intent to use it, or allow it to be used, to obtain, receive,
continue, increase, deny, or reduce any benefit administered by this
system.
   (2) Present, or cause to be presented, any knowingly false
material statement or material representation for the purpose of
supporting or opposing an application for any benefit administered by
this system.
   (3) Knowingly accept or obtain payment from this system with
knowledge that the recipient is not entitled to the payment under the
provisions of this part or Part 14 (commencing with Section 2600)
and with the intent to retain the payment for personal use or
benefit.
   (4) Knowingly aid, abet, solicit, or conspire with any person to
do an act prohibited by this section.
   (b) For purposes of this section, "statement" includes, but is not
limited to, any oral or written application for benefits, report of
family relationship, report of injury or physical or mental
limitation, hospital records, test results, physician reports, or
other medical records, employment records, duty statements, reports
of compensation, or any other evidence material to the determination
of a person's initial or continued eligibility for a benefit or the
amount of a benefit administered by this system.
   (c) A person who violates any provision of this section is
punishable by imprisonment in a county jail not to exceed one year,
or by a fine of not more than five thousand dollars ($5,000), or by
both that imprisonment and fine.
   (d) A person violating any provision of this section may be
required by the court in a criminal action to make restitution to
this system, or to any other person determined by the court, for the
amount of the benefit unlawfully obtained, unless the court finds
that restitution, or a portion of it, is not in the interests of
justice. Any restitution order imposed pursuant to this section shall
be satisfied before any criminal fine imposed under this section may
be collected.
   (e) The provisions provided by this section are cumulative and
shall not be construed as restricting the application of any other
law.
  SEC. 3.  Section 7504 of the Government Code is amended to read:
   7504.  (a) All state and local public retirement systems shall,
not less than triennially, secure the services of an enrolled
actuary. An enrolled actuary, for the purposes of this section, means
an actuary enrolled under subtitle C of Title III of the federal
Employee Retirement Income Security Act of 1974 (Public Law 93-406)
and who has demonstrated experience in public retirement systems. The
actuary shall perform a valuation of the system utilizing actuarial
assumptions and techniques established by the agency that are, in the
aggregate, reasonably related to the experience and the actuary's
best estimate of anticipated experience under the system. Any
differences between the actuarial assumptions and techniques used by
the actuary that differ significantly from those established by the
agency shall be disclosed in the actuary's report and the effect of
the differences on the actuary's statement of costs and obligations
shall be shown.
   (b) All state and local public retirement systems shall secure the
services of a qualified person to perform an attest audit of the
system's financial statements. A qualified person means any of the
following:
   (1) A person who is licensed to practice as a certified public
accountant in this state by the California Board of Accountancy.
   (2) A person who is registered and entitled to practice as a
public accountant in this state by the California Board of
Accountancy.
   (3) A county auditor in any county subject to the County Employees
Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of
Part 3 of Division 4 of Title 3).
   (4) A county auditor in any county having a pension trust and
retirement plan established pursuant to Section 53216.
   (c) All state and local public retirement systems shall submit
audited financial statements to the State Controller at the earliest
practicable opportunity within six months of the close of each fiscal
year. However, the State Controller may delay the filing date for
reports due in the first year until the time as report forms have
been developed that, in his or her judgment, will satisfy the
requirements of this section. The financial statements shall be
prepared in accordance with generally accepted accounting principles
in the form and manner prescribed by the State Controller. The
penalty prescribed in Section 53895 shall be invoked for failure to
comply with this section. Upon a satisfactory showing of good cause,
the State Controller may waive the penalty for late filing provided
by this subdivision.
   (d) The State Controller shall compile and publish a report
annually on the financial condition of all state and local public
retirement systems containing, but not limited to, the data required
in Section 7502. The report shall be published within 12 months of
the receipt of the information, and in no case later than 18 months
after the end of the fiscal year upon which the information in the
report is based.
  SEC. 4.  Article 3 (commencing with Section 20085) is added to
Chapter 1 of Part 3 of Division 5 of Title 2 of the Government Code,
to read:

      Article 3.  Penalties


   20085.  (a) It is unlawful for a person to do any of the
following:
   (1) Make, or cause to be made, any knowingly false material
statement or material representation, to knowingly fail to disclose a
material fact, or to otherwise provide false information with the
intent to use it, or allow it to be used, to obtain, receive,
continue, increase, deny, or reduce any benefit administered by this
system.
   (2) Present, or cause to be presented, any knowingly false
material statement or material representation for the purpose of
supporting or opposing an application for any benefit administered by
this system.
   (3) Knowingly accept or obtain payment from this system with
knowledge that the recipient is not entitled to the payment under the
provisions of this part and with the intent to retain the payment
for personal use or benefit.
   (4) Knowingly aid, abet, solicit, or conspire with any person to
do an act prohibited by this section.
   (b) For purposes of this section, "statement" includes, but is not
limited to, any oral or written application for benefits, report of
family relationship, report of injury or physical or mental
limitation, hospital records, test results, physician reports, or
other medical records, employment records, duty statements, reports
of compensation, or any other evidence material to the determination
of a person's initial or continued eligibility for a benefit or the
amount of a benefit administered by this system.
   (c) A person who violates any provision of this section is
punishable by imprisonment in a county jail not to exceed one year,
or by a fine of not more than five thousand dollars ($5,000), or by
both that imprisonment and fine.
   (d) A person violating any provision of this section may be
required by the court in a criminal action to make restitution to
this system, or to any other person determined by the court, for the
amount of the benefit unlawfully obtained, unless the court finds
that restitution, or a portion of it, is not in the interests of
justice. Any restitution order imposed pursuant to this section shall
be satisfied before any criminal fine imposed under this section may
be collected.
   (e) The provisions provided by this section are cumulative and
shall not be construed as restricting the application of any other
law.
  SEC. 5.  Section 31455.5 is added to the Government Code, to read:
   31455.5.  (a) It is unlawful for a person to do any of the
following:
   (1) Make, or cause to be made, any knowingly false material
statement or material representation, to knowingly fail to disclose a
material fact, or to otherwise provide false information with the
intent to use it, or allow it to be used, to obtain, receive,
continue, increase, deny, or reduce any benefit accrued or accruing
to a person under this chapter.
   (2) Present, or cause to be presented, any knowingly false
material statement or material representation for the purpose of
supporting or opposing an application for any benefit accrued or
accruing to a person under this chapter.
   (3) Knowingly accept or obtain payment from a retirement system
with knowledge that the recipient is not entitled to the payment
under the provisions of this chapter and with the intent to retain
the payment for personal use or benefit.
   (4) Knowingly aid, abet, solicit, or conspire with any person to
do an act prohibited by this section.
   (b) For purposes of this section, "statement" includes, but is not
limited to, any oral or written application for benefits, report of
family relationship, report of injury or physical or mental
limitation, hospital records, test results, physician reports, or
other medical records, employment records, duty statements, reports
of compensation, or any other evidence material to the determination
of a person's initial or continued eligibility for a benefit or the
amount of a benefit accrued or accruing to a person under this
chapter.
   (c) A person who violates any provision of this section is
punishable by imprisonment in a county jail not to exceed one year,
or by a fine of not more than five thousand dollars ($5,000), or by
both that imprisonment and fine.
   (d) A person violating any provision of this section may be
required by the court in a criminal action to make restitution to the
retirement system, or to any other person determined by the court,
for the amount of the benefit unlawfully obtained, unless the court
finds that restitution, or a portion of it, is not in the interests
of justice. Any restitution order imposed pursuant to this section
shall be satisfied before any criminal fine imposed under this
section may be collected.
   (e) The provisions provided by this section are cumulative and
shall not be construed as restricting the application of any other
law.
  SEC. 6.  Section 1877.1 of the Insurance Code is amended to read:
   1877.1.  The following definitions govern the construction of this
article, unless the context requires otherwise:
   (a) "Authorized governmental agency" means the district attorney
of any county, any city attorney whose duties include criminal
prosecutions, any law enforcement agency investigating workers'
compensation fraud, the office of the Attorney General, the
Department of Insurance, the Department of Industrial Relations, the
Employment Development Department, the Department of Corrections and
Rehabilitation, the Public Employees' Retirement System, and any
licensing agency governed by the Business and Professions Code.
   (b) "Relevant" means having a tendency to make the existence of
any fact that is of consequence to the investigation or determination
of an issue more probable or less probable than it would be without
the information.
   (c) "Insurer" means an insurer admitted to transact workers'
compensation insurance in this state, the State Compensation
Insurance Fund, an employer that has secured a certificate of consent
to self-insure pursuant to subdivision (b) or (c) of Section 3700 of
the Labor Code, or a third-party administrator that has secured a
certificate pursuant to Section 3702.1 of the Labor Code.
   (d) "Licensed rating organization" means a rating organization
licensed by the Insurance Commissioner pursuant to Section 11750.1.
   (e) Information shall be deemed important if, within the sole
discretion of the authorized governmental agency, that information is
requested by that authorized governmental agency.
  SEC. 7.  Section 1877.35 is added to the Insurance Code, to read:
   1877.35.  (a) The Public Employees' Retirement System may request
information from an insurer for any specific investigation of
eligibility for, and unlawful application or receipt of, benefits
provided under Part 3 (commencing with Section 20000) of Division 5
of Title 2 of the Government Code.
   (b) Information received by the Public Employees' Retirement
System pursuant to this article may be used for purposes of
determining eligibility for, and unlawful application or receipt of,
benefits provided under Part 3 (commencing with Section 20000) of
Division 5 of Title 2 of the Government Code.
  SEC. 8.  Section 1095 of the Unemployment Insurance Code is amended
to read:
   1095.  The director shall permit the use of any information in his
or her possession to the extent necessary for any of the following
purposes and may require reimbursement for all direct costs incurred
in providing any and all information specified in this section,
except information specified in subdivisions (a) to (e), inclusive:
   (a) To enable the director or his or her representative to carry
out his or her responsibilities under this code.
   (b) To properly present a claim for benefits.
   (c) To acquaint a worker or his or her authorized agent with his
or her existing or prospective right to benefits.
   (d) To furnish an employer or his or her authorized agent with
information to enable him or her to fully discharge his or her
obligations or safeguard his or her rights under this division or
Division 3 (commencing with Section 9000).
   (e) To enable an employer to receive a reduction in contribution
rate.
   (f) To enable federal, state, or local government departments or
agencies, subject to federal law, to verify or determine the
eligibility or entitlement of an applicant for, or a recipient of,
public social services provided pursuant to Division 9 (commencing
with Section 10000) of the Welfare and Institutions Code, or Part A
of Title IV of the Social Security Act, where the verification or
determination is directly connected with, and limited to, the
administration of public social services.
   (g) To enable county administrators of general relief or
assistance, or their representatives, to determine entitlement to
locally provided general relief or assistance, where the
determination is directly connected with, and limited to, the
administration of general relief or assistance.
   (h) To enable state or local governmental departments or agencies
to seek criminal, civil, or administrative remedies in connection
with the unlawful application for, or receipt of, relief provided
under Division 9 (commencing with Section 10000) of the Welfare and
Institutions Code or to enable the collection of expenditures for
medical assistance services pursuant to Part 5 (commencing with
Section 17000) of Division 9 of the Welfare and Institutions Code.
   (i) To provide any law enforcement agency with the name, address,
telephone number, birth date, social security number, physical
description, and names and addresses of present and past employers,
of any victim, suspect, missing person, potential witness, or person
for whom a felony arrest warrant has been issued, when a request for
this information is made by any investigator or peace officer as
defined by Sections 830.1 and 830.2 of the Penal Code, or by any
federal law enforcement officer to whom the Attorney General has
delegated authority to enforce federal search warrants, as defined
under Sections 60.2 and 60.3 of Title 28 of the Code of Federal
Regulations, as amended, and when the requesting officer has been
designated by the head of the law enforcement agency and requests
this information in the course of and as a part of an investigation
into the commission of a crime when there is a reasonable suspicion
that the crime is a felony and that the information would lead to
relevant evidence. The information provided pursuant to this
subdivision shall be provided to the extent permitted by federal law
and regulations, and to the extent the information is available and
accessible within the constraints and configurations of existing
department records. Any person who receives any information under
this subdivision shall make a written report of the information to
the law enforcement agency that employs him or her, for filing under
the normal procedures of that agency.
   (1) This subdivision shall not be construed to authorize the
release to any law enforcement agency of a general list identifying
individuals applying for or receiving benefits.
   (2) The department shall maintain records pursuant to this
subdivision only for periods required under regulations or statutes
enacted for the administration of its programs.
   (3) This subdivision shall not be construed as limiting the
information provided to law enforcement agencies to that pertaining
only to applicants for, or recipients of, benefits.
   (4) The department shall notify all applicants for benefits that
release of confidential information from their records will not be
protected should there be a felony arrest warrant issued against the
applicant or in the event of an investigation by a law enforcement
agency into the commission of a felony.
   (j) To provide public employee retirement systems in California
with information relating to the earnings of any person who has
applied for or is receiving a disability income, disability
allowance, or disability retirement allowance, from a public employee
retirement system. The earnings information shall be released only
upon written request from the governing board specifying that the
person has applied for or is receiving a disability allowance or
disability retirement allowance from its retirement system. The
request may be made by the chief executive officer of the system or
by an employee of the system so authorized and identified by name and
title by the chief executive officer in writing.
   (k) To enable the Division of Labor Standards Enforcement in the
Department of Industrial Relations to seek criminal, civil, or
administrative remedies in connection with the failure to pay, or the
unlawful payment of, wages pursuant to Chapter 1 (commencing with
Section 200) of Part 1 of Division 2 of, and Chapter 1 (commencing
with Section 1720) of Part 7 of Division 2 of, the Labor Code.
   () To enable federal, state, or local governmental departments or
agencies to administer child support enforcement programs under Title
IV of the Social Security Act (42 U.S.C. Sec. 651 et seq.).
   (m) To provide federal, state, or local governmental departments
or agencies with wage and claim information in its possession that
will assist those departments and agencies in the administration of
the Victims of Crime Program or in the location of victims of crime
who, by state mandate or court order, are entitled to restitution
that has been or can be recovered.
   (n) To provide federal, state, or local governmental departments
or agencies with information concerning any individuals who are or
have been:
   (1) Directed by state mandate or court order to pay restitution,
fines, penalties, assessments, or fees as a result of a violation of
law.
   (2) Delinquent or in default on guaranteed student loans or who
owe repayment of funds received through other financial assistance
programs administered by those agencies. The information released by
the director for the purposes of this paragraph shall not include
unemployment insurance benefit information.
   (o) To provide an authorized governmental agency with any or all
relevant information that relates to any specific workers'
compensation insurance fraud investigation. The information shall be
provided to the extent permitted by federal law and regulations. For
the purposes of this subdivision, "authorized governmental agency"
means the district attorney of any county, the office of the Attorney
General, the Department of Industrial Relations, and the Department
of Insurance. An authorized governmental agency may disclose this
information to the State Bar, the Medical Board of California, or any
other licensing board or department whose licensee is the subject of
a workers' compensation insurance fraud investigation. This
subdivision shall not prevent any authorized governmental agency from
reporting to any board or department the suspected misconduct of any
licensee of that body.
   (p) To enable the Director of the Bureau for Private Postsecondary
and Vocational Education, or his or her representatives, to access
unemployment insurance quarterly wage data on a case-by-case basis to
verify information on school administrators, school staff, and
students provided by those schools who are being investigated for
possible violations of Chapter 7 (commencing with Section 94700) of
Part 59 of the Education Code.
   (q) To provide employment tax information to the tax officials of
Mexico, if a reciprocal agreement exists. For purposes of this
subdivision, "reciprocal agreement" means a formal agreement to
exchange information between national taxing officials of Mexico and
taxing authorities of the State Board of Equalization, the Franchise
Tax Board, and the Employment Development Department. Furthermore,
the reciprocal agreement shall be limited to the exchange of
information that is essential for tax administration purposes only.
Taxing authorities of the State of California shall be granted tax
information only on California residents. Taxing authorities of
Mexico shall be granted tax information only on Mexican nationals.
   (r) To enable city and county planning agencies to develop
economic forecasts for planning purposes. The information shall be
limited to businesses within the jurisdiction of the city or county
whose planning agency is requesting the information, and shall not
include information regarding individual employees.
   (s) To provide the State Department of Developmental Services with
wage and employer information that will assist in the collection of
moneys owed by the recipient, parent, or any other legally liable
individual for services and supports provided pursuant to Chapter 9
(commencing with Section 4775) of Division 4.5 of, and Chapter 2
(commencing with Section 7200) and Chapter 3 (commencing with Section
7500) of Division 7 of, the Welfare and Institutions Code.
   (t) Nothing in this section shall be construed to authorize or
permit the use of information obtained in the administration of this
code by any private collection agency.
   (u) The disclosure of the name and address of an individual or
business entity that was issued an assessment that included penalties
under Section 1128 or 1128.1 shall not be in violation of Section
1094 if the assessment is final. The disclosure may also include any
of the following:
   (1) The total amount of the assessment.
   (2) The amount of the penalty imposed under Section 1128 or 1128.1
that is included in the assessment.
   (3) The facts that resulted in the charging of the penalty under
Section 1128 or 1128.1.
   (v) To enable the Contractors' State License Board to verify the
employment history of an individual applying for licensure pursuant
to Section 7068 of the Business and Professions Code.
   (w) To provide any peace officer with the Division of
Investigation in the Department of Consumer Affairs information
pursuant to subdivision (i) when the requesting peace officer has
been designated by the Chief of the Division of Investigation and
requests this information in the course of and as part of an
investigation into the commission of a crime or other unlawful act
when there is reasonable suspicion to believe that the crime or act
may be connected to the information requested and would lead to
relevant information regarding the crime or unlawful act.
   (x) To enable the Labor Commissioner of the Division of Labor
Standards Enforcement in the Department of Industrial Relations to
identify, pursuant to Section 90.3 of the Labor Code, unlawfully
uninsured employers. The information shall be provided to the extent
permitted by federal law and regulations.
   (y) To enable the Chancellor of the California Community Colleges,
in accordance with the requirements of Section 84754.5 of the
Education Code, to obtain quarterly wage data, commencing January 1,
1993, on students who have attended one or more community colleges,
to assess the impact of education on the employment and earnings of
students, to conduct the annual evaluation of district-level and
individual college performance in achieving priority educational
outcomes, and to submit the required reports to the Legislature and
the Governor. The information shall be provided to the extent
permitted by federal statutes and regulations.
   (z) To enable the Public Employees' Retirement System to seek
criminal, civil, or administrative remedies in connection with the
unlawful application for, or receipt of, benefits provided under Part
3 (commencing with Section 20000) of Division 5 of Title 2 of the
Government Code.
  SEC. 9.  No reimbursement is required by this act pursuant to
Section 6 of Article XIII B of the California Constitution because
the only costs that may be incurred by a local agency or school
district will be incurred because this act creates a new crime or
infraction, eliminates a crime or infraction, or changes the penalty
for a crime or infraction, within the meaning of Section 17556 of the
Government Code, or changes the definition of a crime within the
meaning of Section 6 of Article XIII B of the California
Constitution.