BILL ANALYSIS                                                                                                                                                                                                    



                                                                       



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          |SENATE RULES COMMITTEE            |                  SB 1217|
          |Office of Senate Floor Analyses   |                         |
          |1020 N Street, Suite 524          |                         |
          |(916) 651-1520         Fax: (916) |Version:                 |
          |327-4478                          |                         |
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                                    CONSENT


          Bill No:  SB 1217
          Author:   Senate Public Employment and Retirement Committee
          Amended:  As introduced
          Vote:     21

           
           SENATE PUBLIC EMP. & RET. COMMITTEE  :  6-0, 4/12/10
          AYES:  Correa, Ashburn, Corbett, Cox, Ducheny, Liu

           SENATE APPROPRIATIONS COMMITTEE  :  Senate Rule 28.8


           SUBJECT  :    State government:  warrants:  employee  
          designees

           SOURCE  :     Office of the State Controller


           DIGEST  :    This bill allows an employee of the State to  
          designate a primary person and up to three contingent  
          persons for receipt of final pay warrants upon the  
          employees death.  In addition, it clarifies that the  
          employee could also designate a corporation, trust, or the  
          employee's estate as a recipient of those warrants.

           ANALYSIS  :    Existing law authorizes an employee of the  
          State to file with his or her employer a designation naming  
          the person who will receive the employee's final pay  
          warrants in the event of the employee's death.  The  
          employee may change the designation from time to time and  
          may name anyone as his or her designee.

          In addition, the law gives the designee the right to claim  
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                                                               SB 1217
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          the final warrants, upon proof of identity, and to  
          negotiate the warrants as if he or she were the original  
          payee.

          This bill allows an employee to designate a primary  
          recipient and up to three additional recipients, in order,  
          to receive the final warrants in situations in which the  
          primary designee predeceases the employee.  Additionally,  
          this bill also specifies that the employee could name a  
          corporation, trust or the employee's estate as the  
          designee.

           Background

           Upon entering employment, an employee designates a  
          recipient for his or her final warrant.  In some cases,  
          many years go by between that initial designation and the  
          employee's death.  After a number of years have passed, an  
          employee may not think to change a designation or even  
          remember having made a designation in the first place.

          According to the State Controller's Office (SCO), this  
          becomes a problem because the final pay warrants of the  
          decedent must then be released under provisions of the  
          Probate Code if the sole designee is not eligible or cannot  
          be located within 60 days of the employee's death.

          According to the SCO, 42.6 death transactions occurred in  
          the last six months.  Although incidences of a beneficiary  
          predeceasing the employee are rare, they do occur from time  
          to time.  This bill will enable the SCO to release a  
          deceased employee's final pay warrants to a contingent  
          designee if the primary designee is deceased, thereby  
          minimizing financial hardship to the deceased employee's  
          family.

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

           SUPPORT  :   (Verified  4/26/10)

          Office of the State Controller (source)
          California State Employees Association 








                                                               SB 1217
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           OPPOSITION  :    (Verified  >)

          >

           ARGUMENTS IN SUPPORT  :    >

           ARGUMENTS IN OPPOSITION  :    >  
           

          CPM:cm  4/26/10   Senate Floor Analyses 

                         SUPPORT/OPPOSITION:  SEE ABOVE

                       SUPPORT/OPPOSITION:  NONE RECEIVED










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