BILL ANALYSIS                                                                                                                                                                                                    

                                                                  SB 1217
                                                                  Page  1

          Date of Hearing:   June 30, 2010

                                Felipe Fuentes, Chair

              SB 1217 (Public Employment and Retirement Committee) - As  
                           Introduced:  February 18, 2010 

          Policy Committee:                             P.E.R. &  

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              


          This bill (a) allows a state employee to designate a primary  
          person and up to three contingent persons for receipt of final  
          pay warrants upon the employee's death, and (b) clarifies that  
          the employee can designate a corporation, trust, or the  
          employee's estate as a recipient of those warrants.

           FISCAL EFFECT

           Negligible cost to the state.

          1)Background  . Existing law authorizes a state employee 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 name anyone as his or  
            her designee, and may change the designation from time to  
            time. The designee is authorized to claim the final warrants,  
            upon proof of identity, and to negotiate the warrants as if he  
            or she were the original payee. 

           2)Rationale  . This bill is sponsored by the State Controller's  
            Office (SCO) to minimize the financial hardship on a deceased  
            employee's family in cases where the beneficiary has passed  
            away prior to the employee's death. The SCO indicates that  
            many years can go by between when an employee makes the  
            initial designation and when he or she dies. With the passage  
            of time, the employee may not think to change a designation or  
            even remember having made a designation in the first place.  


                                                                  SB 1217
                                                                  Page  2

            This can be a problem in cases where the designee has died. In  
            such circumstances, the final check must be released under  
            provisions of the Probate Code, resulting in a delay of  
            payment and potentially additional costs to the deceased  
            employee's family.

          Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081