BILL NUMBER: SB 987	CHAPTERED
	BILL TEXT

	CHAPTER  833
	FILED WITH SECRETARY OF STATE  SEPTEMBER 30, 2012
	APPROVED BY GOVERNOR  SEPTEMBER 30, 2012
	PASSED THE SENATE  AUGUST 27, 2012
	PASSED THE ASSEMBLY  AUGUST 22, 2012
	AMENDED IN ASSEMBLY  AUGUST 13, 2012
	AMENDED IN ASSEMBLY  JUNE 11, 2012
	AMENDED IN SENATE  MARCH 29, 2012
	AMENDED IN SENATE  MARCH 26, 2012

INTRODUCED BY   Senator Negrete McLeod

                        JANUARY 31, 2012

   An act to amend Sections 20199, 20235, 20969, 21002, 21004, 21221,
22772, and 75502 of, and to add Sections 9351.4, 20065.5, and
75004.5 to, the Government Code, relating to public employees'
retirement.



	LEGISLATIVE COUNSEL'S DIGEST


   SB 987, Negrete McLeod. Public employees' retirement.
   (1) The Public Employees' Retirement Law (PERL) creates the Public
Employees' Retirement System (PERS), which provides a defined
benefit to its members based on age at retirement, service credit,
and final compensation. Existing law also establishes the Judges'
Retirement System and the Judges' Retirement System II which provide
pension benefits to elected judges and the Legislators' Retirement
System which provides pension benefits to elective officers of the
state other than judges and to legislative statutory officers.
   This bill would provide that all references to "spouse,"
"surviving spouse," or "marriage" in these provisions apply equally
to a domestic partner or domestic partnership, as defined, and all
rights and responsibilities granted to a spouse or surviving spouse
shall be granted equally to a domestic partner, as specified.
   (2) PERL provides that credit for service generally is accrued
based upon service rendered and compensated in a fiscal year, and
that time during which a member is absent without compensation is not
allowed for computing service. Further, PERL provides that, when a
member is subject to mandatory furloughs, as defined, the member's
credits for service and compensation earnable are based on the
amounts that would have been credited had the employee not been
subject to mandatory furloughs.
   This bill would expand the definition of mandatory furlough to
include those employees subject to mandatory furloughs under a
specified provision.
   (3) PERL defines "leave of absence" to include absence from state
service because of illness that arose out of and in the course of
employment and for which the member received temporary disability
benefits during the absence and did not receive full compensation, as
specified. PERL authorizes a member who returns to active service
following an employer-approved uncompensated leave of absence because
of his or her serious illness to purchase service credit for that
period of absence, as specified.
   This bill would clarify that definition to include absence from
state service because of illness or injury that arose out of and in
the course of employment, and would authorize the purchase of service
credit following an employer-approved uncompensated leave of absence
because of the member's serious illness or injury.
   (4) Existing law directs the Board of Administration of PERS to
establish a building account from the retirement fund to use for
acquiring real property, and for building, remodeling, maintaining,
repairing, and improving that property.
   This bill would permit funds in the above-described building
account to be used for other necessary operational expenses.
   (5) Existing law requires the Board of Administration of PERS to
submit a quarterly review of the system's assets, as specified, to
the Legislature. This review must include information on the
time-weighted and dollar-weighted return on a 5-year, 3-year, 2-year,
and 1-year basis.
   This bill would eliminate the requirement that the quarterly
review described above include information on the time-weighted and
dollar-weighted return on a 2-year basis.
   (6) Existing law generally prohibits a person who has been retired
under PERS from serving without reinstatement from retirement,
except as specified. Existing law authorizes a retired person to
serve without reinstatement upon appointment to specified positions,
and prohibits those appointments from exceeding 960 hours in any
fiscal year. Under existing law, a retired annuitant cannot receive
any benefit, incentive, compensation in lieu of benefits, or any
other form of compensation in addition to the prescribed hourly pay
rate.
   This bill would clarify that the above-described work hour limits
and ban on additional benefits apply only to retired annuitants
working in a vacant position for a PERS contracting agency.
   (7) Existing law defines an employee for purposes of the Public
Employees' Medical and Hospital Care Act, which governs health care
coverage available to public employees. This definition includes an
employee who is employed by a contracting agency, including an
officer or official of a contracting agency, as defined, if that
officer or official participates in the employer's retirement system.

   This bill would revise that definition to include only those
employees who are employed by a contracting agency and participate in
a publicly funded retirement system provided by that agency, as well
as officers or officials of a contracting agency. The bill would
also revise that definition by including officers or officials of a
contracting agency regardless of whether those officers or officials
participate in the employer's retirement system.


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

  SECTION 1.  Section 9351.4 is added to the Government Code, to
read:
   9351.4.  All references to "spouse," "surviving spouse," or
"marriage" in this chapter apply equally to a domestic partner or
domestic partnership, as defined in Section 297 of the Family Code,
and all rights and responsibilities granted to a spouse or surviving
spouse shall be granted equally to a domestic partner to the extent
provided by Section 297.5 of the Family Code.
  SEC. 2.  Section 20065.5 is added to the Government Code, to read:
   20065.5.  All references to "spouse," "surviving spouse," or
"marriage" in this part apply equally to a domestic partner or
domestic partnership, as defined in Section 297 of the Family Code,
and all rights and responsibilities granted to a spouse or surviving
spouse shall be granted equally to a domestic partner to the extent
provided by Section 297.5 of the Family Code.
  SEC. 3.  Section 20199 of the Government Code is amended to read:
   20199.  The board shall establish a building account for the
transfer of money that is continuously appropriated for that purpose
from the retirement fund for the cost of the acquisition of real
property, the construction or remodeling of buildings and
improvements thereon, the maintenance, repair, and improvement
thereof, and for other necessary operational expenses.
   For accounting purposes the board shall pay to the building
account an amount sufficient to repay all costs for construction and
maintenance of space used by the board. Other amounts or
contributions received shall be deposited in the building account and
disbursed as provided in this section.
   The board may contract with the Department of General Services for
the purchase of insurance against loss of, or damage to, the
property or the loss of use or occupancy of the building, liability
insurance and other insurance as is customarily carried on state
office buildings. Premiums for the insurance shall be paid from the
building account.
   Money in the building account that is in excess of current needs
shall be paid into the retirement fund monthly. The land, building,
equipment, and improvements thereon, shall constitute an asset in the
retirement fund and shall be carried on the books thereof as such in
accordance with generally accepted accounting practices.
  SEC. 4.  Section 20235 of the Government Code is amended to read:
   20235.  (a) The board shall submit a review of this system's
assets to the Legislature on a quarterly basis. The report shall also
be made available to all contracting agencies. The report shall do
both of the following:
   (1) Discuss this system's portfolio and contain the following
information:
   (A) Concentration, current holdings at cost and market value, of
equities.
   (B) Concentration, current holdings at cost and market value, of
fixed income instruments.
   (C) Current holdings at cost and market value of real estate
equities.
   (D) Current holdings at cost and market value of mortgages.
   (E) Options and forward commitments.
   (F) Cash and cash equivalents.
   (2) Disclose the following information on the rate of return of
the fund by type of asset:
   (A) Time-weighted return on a five-year, three-year, and one-year
basis.
   (B) Dollar-weighted return on a five-year, three-year, and
one-year basis.
   (C) Summary of performance of an alternative theoretical portfolio
containing all investments and performance of comparable universes
and other indexes.
   (b) Upon written request from a contracting agency that does not
participate in a risk pool, the board shall submit additional
quarterly reports to the contracting agency as described in this
subdivision. For the first quarter of the fiscal year, the report
shall be submitted within 120 days after the end of the quarter and
shall contain the agency's beginning balance for the fiscal year. For
the second and third quarters of the fiscal year, the report shall
be submitted to the contracting agency within 90 days after the end
of the quarter. For the fourth quarter of the fiscal year, the report
shall be submitted within 180 days after the end of the quarter and
shall contain the agency's balance as of the end of the fiscal year.
The report shall include, but need not be limited to, the following:
   (1) All contributions made to the system by the contracting agency
and its employees. The contributions shall be reported as the
amounts paid and the amounts due from the contracting agency for both
employer contributions and employee contributions.
   (2) All benefits paid by the system to members of the contracting
agency and their survivors and beneficiaries, including payments on
account of pension, death, and disability benefits, and withdrawals
of contributions. The benefits shall be reported as the total monthly
allowances paid to retirees, survivors, and beneficiaries; the
amount of total refunds paid; and the amount of any other lump sums
paid.
   (3) An amount that represents any miscellaneous adjustments,
including transfers in and out.
   (4) That quarter's portion of the agency's estimated share of the
system's administrative costs that shall be assessed at the end of
the fiscal year.
   (5) The rate of return for the system during the quarter as
reported to the board by the investment committee.
   (6) The estimated interest applied to the agency's account as
determined by the system. For purposes of this paragraph, the
"estimated interest applied" means the estimate of the annual net
earnings, as defined in Section 20052, and is subject to adjustment
at the end of the fiscal year based on the actual dollar-weighted
amount of investment return that shall be credited to the agency's
account for the fiscal year. The report for the fourth quarter of the
fiscal year shall also include the actual dollar-weighted amount of
investment return for the fiscal year that shall be credited to the
contracting agency's account.
   (c) Upon written request from a contracting agency that
participates in a risk pool, the board shall submit to the
contracting agency quarterly reports that reflect the total
contributions made to the system by agencies in the risk pool, the
total benefits paid by the system with respect to the risk pool, the
total estimated share of administrative costs for the risk pool, and
the total estimated share of investment returns for the risk pool.
   (d) A contracting agency requesting quarterly reports pursuant to
subdivision (b) or (c) shall pay a fee, in an amount determined by
the board, not to exceed one thousand five hundred dollars ($1,500)
quarterly per agency while the manual process of collecting the
information is in use.
   (e) Any report received by a contracting agency pursuant to this
section shall be made available by the agency to any employee
organization that represents the agency's employees and that requests
a copy of the report.
  SEC. 5.  Section 20969 of the Government Code is amended to read:
   20969.  (a) For all retirement purposes, including benefit
eligibility and calculations of retirement allowances for members
employed by the state that are subject to mandatory furloughs, credit
for service and compensation earnable shall be based on the amount
that would have been credited had the employee not been subject to
mandatory furloughs.
   (b) For the purposes of this section, "mandatory furloughs" means
time during which a member is directed to be absent from work without
pay, pursuant to Section 19849, or during which a member identified
below is directed to be absent from work without pay as a consequence
of an Executive order in the 2008-09, 2009-10, and 2010-11 fiscal
years:
   (1) A state employee subject to an Executive order requiring a
mandatory furlough for state employees.
   (2) A person who is excepted from the definition of "state
employee" in subdivision (c) of Section 3513, or who is an officer or
employee of the executive branch of state government who is not a
member of the civil service, and who is subject to an Executive order
requiring a mandatory furlough for state employees.
   (3) A state employee, a person who is excepted from the definition
of "state employee" in subdivision (c) of Section 3513, or a person
who is an officer or employee of the executive branch of state
government who is not a member of the civil service, and whose
employer is not under the direct executive authority of the Governor,
and who is subject to a mandatory furlough imposed by his or her
employer in response to encouragement in an Executive order.
   (c) An employer of an employee identified in subdivision (b) shall
notify the board of the terms and conditions of any mandatory
furlough, including, but not limited to, the amount of mandatory
furlough time imposed on employees during a reporting period and the
date on which the mandatory furlough ends. The employer and the
Controller shall provide any additional information as the board may
require to implement this section.
  SEC. 6.  Section 21002 of the Government Code is amended to read:
   21002.  A member who returns to active service following an
employer-approved uncompensated leave of absence because of his or
her serious illness or injury may purchase service credit for that
period of absence upon the payment of contributions as specified in
Sections 21050 and 21052. The purchase of additional service credit
pursuant to this section shall not reduce the amount of service
credit that the member is eligible to purchase pursuant to this
chapter. A member may purchase service credit pursuant to this
section for a leave of absence that occurred either before or after
the effective date of these provisions.
  SEC. 7.  Section 21004 of the Government Code is amended to read:
   21004.  "Leave of absence" also means absence from state service
because of illness or injury that arose out of and in the course of
employment and for which the member received temporary disability
benefits under the Labor Code during the absence and did not receive
full compensation as distinguished from the disability benefits for
the period of absence.
  SEC. 8.  Section 21221 of the Government Code is amended to read:
   21221.  A retired person may serve without reinstatement from
retirement or loss or interruption of benefits provided by this
system, as follows:
   (a) As a member of any board, commission, or advisory committee,
upon appointment by the Governor, the Speaker of the Assembly, the
President pro Tempore of the Senate, director of a state department,
or the governing board of the contracting agency. However, the
appointment shall not be deemed employment within the meaning of
Division 4 (commencing with Section 3200) and Division 4.5
(commencing with Section 6100) of the Labor Code, and shall not
provide a basis for the payment of workers' compensation to a retired
state employee or to his or her dependents.
   (b) As a school crossing guard.
   (c) As a juror or election officer.
   (d) As an elective officer on and after September 15, 1961.
However, all rights and immunities which may have accrued under
Section 21229 as it read prior to that section's repeal during the
1969 Regular Session of the Legislature are hereby preserved.
   (e) As an appointive member of the governing body of a contracting
agency. However, the compensation for that office shall not exceed
one hundred dollars ($100) per month.
   (f) Upon appointment by the Legislature, or either house, or a
legislative committee to a position deemed by the appointing power to
be temporary in nature.
   (g) Upon employment by a contracting agency to a position found by
the governing body, by resolution, to be available because of a
leave of absence granted to a person on payroll status for a period
not to exceed one year and found by the governing body to require
specialized skills. The temporary employment shall be terminated at
the end of the leave of absence. Appointments under this section
shall be reported to the board and shall be accompanied by the
resolution adopted by the governing body.
   (h) Upon interim appointment by the governing body of a
contracting agency to a vacant position during recruitment for a
permanent appointment and deemed by the governing body to require
specialized skills or during an emergency to prevent stoppage of
public business. A retired person shall only be appointed once to
this vacant position. These appointments, including any made
concurrently pursuant to Section 21224 or 21229, shall not exceed a
combined total of 960 hours for all employers each fiscal year. The
compensation for the interim appointment shall not exceed the maximum
monthly base salary paid to other employees performing comparable
duties as listed on a publicly available pay schedule for the vacant
position divided by 173.333 to equal an hourly rate. A retired person
appointed to a vacant position pursuant to this subdivision shall
not receive any benefits, incentives, compensation in lieu of
benefits, or any other forms of compensation in addition to the
hourly rate. A retired annuitant appointed pursuant to this
subdivision shall not work more than 960 hours each fiscal year
regardless of whether he or she works for one or more employers.
   (i) Upon appointment by the Administrative Director of the Courts
to the position of Court Security Coordinator, a position deemed
temporary in nature and requiring the specialized skills and
experience of a retired professional peace officer.
  SEC. 9.  Section 22772 of the Government Code is amended to read:
   22772.  (a) "Employee" means:
   (1) An officer or employee of the state or of any agency,
department, authority, or instrumentality of the state, including the
University of California.
   (2) An employee who is employed by a contracting agency and
participates in a publicly funded retirement system provided by the
contracting agency, or an officer or official of a contracting
agency.
   (3) An annuitant receiving a retirement allowance pursuant to
Section 21228 who is employed by a contracting agency.
   (4) A teaching associate, lecturer, coach, or interpreter employed
by the California State University who is appointed to work in an
academic year classification for at least six weighted teaching units
for one semester, or for at least six weighted teaching units for
two or more consecutive quarter terms. This paragraph does not apply
to a state member employed by the California State University, unless
provided for in a memorandum of understanding reached pursuant to
Chapter 12 (commencing with Section 3560) of Division 4 of Title 1 or
authorized by the Trustees of the California State University for
employees excluded from collective bargaining.
   (5) All employees in job classes specified in subdivision (a) of
Section 14876.
   (b) Except as otherwise provided by this part, "employee" does not
include any of the following:
   (1) A person employed on an intermittent, irregular, or less than
half-time basis, or an employee similarly situated.
   (2) A National Guard member described in Section 20380.5.
  SEC. 10.  Section 75004.5 is added to the Government Code, to read:

   75004.5.  All references to "spouse," "surviving spouse," or
"marriage" in this chapter apply equally to a domestic partner or
domestic partnership, as defined in Section 297 of the Family Code,
and all rights and responsibilities granted to a spouse or surviving
spouse shall be granted equally to a domestic partner to the extent
provided by Section 297.5 of the Family Code.
  SEC. 11.  Section 75502 of the Government Code is amended to read:
   75502.  (a) "Judge" means a justice of the Supreme Court or of a
court of appeal, or a judge of a superior court, municipal court, or
justice court who is first elected or appointed to judicial office on
or after November 9, 1994, and is not a member of the Judges'
Retirement System pursuant to Chapter 11 (commencing with Section
75000). A retired judge does not acquire status as a judge for the
purposes of this chapter by reason of designation as a temporary
judge of, or assignment by the Chairperson of the Judicial Council
to, any of these courts.
   A former member of the Judges' Retirement System under Section
75002 who withdrew his or her contributions upon leaving office, and
who takes judicial office on or after November 9, 1994, becomes a
member of the system existing under Chapter 11 (commencing with
Section 75000) and does not become a member of the Judges' Retirement
System II. No person shall be a member of the Judges' Retirement
System II who is or ever has been a member of the Judges' Retirement
System pursuant to Chapter 11 (commencing with Section 75000).
   (b) "System" means the Judges' Retirement System II established by
this chapter.
   (c) "Service" means the period of time a judge received a salary
and made contributions to the system by reason of holding office as a
judge of any one or more of the courts of this state specified in
subdivision (a), computed in years and fractions of years.
   (d) "Final compensation" means the average monthly salary of a
judge during the 12 months immediately preceding his or her
retirement from or otherwise leaving judicial office and as limited
by Section 75572.
   (e) "Benefit factor" means the percentage used in calculating a
judge's monthly retirement allowance under Section 75522.
   (f) "Contributions" means the accumulated deductions from the
judge's salary under Sections 75601 and 75602. References to payment
to a judge of his or her contributions or to the determination of a
judge's and spouse's shares in the contributions include both the
contributions and interest thereon at the rates determined by the
Board of Administration of the Public Employees' Retirement System.
   (g) "Salary" means the compensation received by a judge as the
emolument of the office of judge, but does not include any additional
compensation received by reason of designation as a temporary judge
or assignment by the Chairperson of the Judicial Council or the
additional compensation pursuant to Section 68203.1.
   (h) "Board" means the Board of Administration of the Public
Employees' Retirement System.
   (i) "Fund" or "retirement fund" means the Judges' Retirement
System II Fund established pursuant to Section 75600.
   (j) All references to "spouse," "surviving spouse," or "marriage"
in this chapter apply equally to a domestic partner or domestic
partnership, as defined in Section 297 of the Family Code, and all
rights and responsibilities granted to a spouse or surviving spouse
shall be granted equally to a domestic partner to the extent provided
by Section 297.5 of the Family Code.