BILL ANALYSIS AB 226 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 226 (Torrico) As Amended August 27, 2010 2/3 vote. Urgency ----------------------------------------------------------------- |ASSEMBLY: | |(June 1, 2009) |SENATE: |27-8 |(August 30, | | | | | | |2010) | ----------------------------------------------------------------- (vote not relevant) ------------------------------------------------------------------------ |COMMITTEE VOTE: |6-0 |(August 30, 2010) |RECOMMENDATION: |Concur | | | | | | | ------------------------------------------------------------------------ Original Committee Reference: NAT. RES. SUMMARY : Clarifies that compensation paid to a retiring member of a retirement system that was deferred based on concessions agreed to in a collective bargaining agreement will be considered compensation earnable, as specified, and implements the retirement provisions of a recently negotiated bargaining agreement between Sacramento County and the Sacramento County Deputy Sheriff's Association (SCDSA). The Senate amendments delete the Assembly version of the bill, and instead: 1)Provide that compensation paid to a retiring member of a retirement system established pursuant to the County Employees' Retirement Law of 1937 ('37 Act) to restore compensation the member would have been entitled to receive pursuant to a collective bargaining agreement executed on or before July 1, 2010, that was subsequently deferred or otherwise modified as a result of a concessionary amendment executed prior to September 1, 2010, must be considered pay rate or salary and not considered to have been paid for the purpose of enhancing a member's retirement benefits. 2)Allows the Sacramento County Board of Supervisors, as part of an approved memorandum of understanding, to require safety employees of that bargaining unit first hired after the approval of the AB 226 Page 2 resolution to be covered by the 3% at 55 retirement formula rather than the current 3% at 50 formula. The Board of Supervisors may also apply this provision to an unrepresented safety employee first hired after the approval of the resolution. 3)Allows the Sacramento County Board of Supervisors, by resolution as specified, to provide different retirement formulas for new members in one safety bargaining unit or other new unrepresented safety employees than is provided for new safety members of other bargaining units or unrepresented safety members. AS PASSED BY THE ASSEMBLY, this bill authorized the California Coastal Commission to administratively impose civil penalties in an enforcement case against anyone in violation of the Coastal Act of 1976. FISCAL EFFECT : Unknown COMMENTS : According to the sponsor, the Board of Supervisors of Sacramento County, AB 226 will assist in implementing provisions contained in recently negotiated labor agreements that will prevent layoffs without increasing pension obligations. The County points out that their Sheriff, John McGinness, also supports these changes. According to the sponsor, AB 226 will, "?enable Sacramento County to establish a new lower retirement tier for some of our new county law enforcement employees of 3% at age 55 with a three year highest compensation average, and a retiree Cost of Living Adjustment (COLA) not to exceed 2% annually. This new Safety Tier is part of a labor package the Board of Supervisors endorsed on August 12, 2010. It applies to bargaining units represented by both the Sacramento County Deputy Sheriffs' Association (SCDSA) and the Law Enforcement Management Association (LEMA). Both organizations support AB 226. Without this bill, implementation of the agreement would have to await agreement with all other Recognized Employee Organizations (REO's) that have safety employees. "The second change in the bill amends the 1937 Act and specifically applies to Sacramento County because of recent agreements reached between us and three of our REOs: SCDSA, LEMA, and AFSCME-Health Services Unit 008. In general, the County and these REOs have agreed to delay implementation of both a Cost of Living Adjustment (COLA) and an equity salary increase. Due to pending legislation AB 226 Page 3 that addresses the calculation of final compensation for retirement purposes (Assembly Bill 1987-Ma), our Sacramento County Retirement Administrator advised us that statutory clarification would be prudent to make it clear that these agreements will not increase the final compensation that will be calculated for their retirement benefit. AB 226 makes that necessary clarification." Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916) 319-3957 FN: 0006890