BILL ANALYSIS �
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|SENATE RULES COMMITTEE | AB 822|
|Office of Senate Floor Analyses | |
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THIRD READING
Bill No: AB 822
Author: Hall (D)
Amended: 7/10/13 in Senate
Vote: 21
SENATE ELECTIONS & CONST. AMEND. COMM. : 4-0, 6/18/13
AYES: Hancock, Padilla, Yee, Torres
NO VOTE RECORDED: Anderson
SENATE GOVERNANCE & FINANCE COMMITTEE : 5-2, 7/3/13
AYES: Wolk, Beall, DeSaulnier, Hernandez, Liu
NOES: Knight, Emmerson
SENATE APPROPRIATIONS COMMITTEE : 5-2, 8/30/13
AYES: De Le�n, Hill, Lara, Padilla, Steinberg
NOES: Walters, Gaines
ASSEMBLY FLOOR : 52-19, 5/23/13 - See last page for vote
SUBJECT : Local government retirement plans
SOURCE : California Professional Firefighters
DIGEST : This bill requires an actuarial summary statement to
be included in the sample ballot for any local ordinance or
measure that alters the retirement benefit plan of employees of
a local government entity.
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ANALYSIS :
Existing law:
1.Requires a charter or charter amendment proposed by a charter
commission, whether elected or appointed by a governing body,
for a city or city and county to be submitted to the voters at
an established statewide general, statewide primary, or
regularly scheduled municipal election date, as specified,
provided that there are at least 95 days before the election.
2.Requires the following city or city and county charter
proposals to be submitted to the voters at an established
statewide general, statewide primary, or regularly scheduled
municipal election, as specified, provided that there are at
least 88 days before the election:
A. An amendment or repeal of a charter proposed by the
governing body of a city or a city and county on its own
motion.
B. An amendment or repeal of a city charter proposed by a
petition signed by 15% of the registered voters of the
city.
C. An amendment or repeal of a city and county charter
proposed by a petition signed by 10% of the registered
voters of the city and county.
D. A recodification of the charter proposed by the
governing body on its own motion, provided that the
recodification does not, in any manner, substantially
change the provisions of the charter.
1.Requires the Legislature and local legislative bodies (except
school districts or county offices of education) to secure the
services of an actuary to provide a statement of the actuarial
impact upon future annual costs, including normal cost and any
additional accrued liability, before authorizing changes in
public retirement plan benefits or other postemployment
benefits. Local agencies must make public at a public meeting
the future costs of changes in retirement benefits or other
post-employment benefits at least two weeks before the
adoption of any changes in public retirement plan benefits or
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other post-employment benefits, as specified.
This bill:
1.Requires the governing body of a local government entity
whenever a local ordinance or measure qualifies for the ballot
that proposes to alter, replace, or eliminate the retirement
benefit plan of employees of the local government entity,
whether by initiative or legislative action, comply with
existing law #3 above.
2.Requires, if the entire text of the measure is not printed on
the ballot, nor in the voter information portion of the sample
ballot, there to be printed immediately below the statement,
or summary of the specified statement required, in no less
than 10-point bold type, a legend substantially as follows:
"The above statement is an independent actuarial analysis of
Ordinance or Measure ____. If you desire a copy of the
ordinance or measure, or the actuarial statement, please call
the elections official's office at (insert telephone number)
and a copy will be mailed at no cost to you."
3.Requires the statement provided by an actuary or a summary of
the statement, prepared by the actuary and not to exceed 500
words in length, to be printed in the voter information
portion of the sample ballot preceding the arguments for and
against the measure, if any.
4.Applies this bill's requirements to a city including a charter
city; a county, including a charter county; a city or county,
including a charter city or county; a community college
district; or a special district.
5.Finds and declares that the security of public monies and the
fiscal integrity of local governmental entities in this state,
including charter cities and charter counties, have a direct
impact on the long-term well-being of all residents of this
state. Further, many local governments experiencing budgetary
crises have difficulty providing sufficient public safety
services and place additional burdens on resources of the
state. Accordingly, ensuring an informed electorate with
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respect to the statewide integrity and security of government
pension systems and ensuring the sufficiency of public safety
services are matters of statewide concern and not a municipal
affair, as that term is used in Section 5 of Article XI of the
California Constitution.
Background
Actuarial Analyses of Proposed Pension Changes and Previous
Legislation . The Public Employee Post-Employment Benefits
Commission (Commission) was established by Executive Order
S-25-06 to propose ways for addressing unfunded post-employment
benefits. In early January 2008, the Commission delivered its
final report to the Governor and the Legislature, which
contained 34 recommendations for improving the functioning of
public retirement systems and the delivery of other
post-employment benefits, and for controlling the costs of
public employee benefits.
SB 1123 (Wiggins, Chapter 371, Statutes of 2008) enacted several
of the Commission's recommendations, including a requirement for
local agencies to secure an actuary to provide an actuarial
impact statement of future annual costs before authorizing
changes in public retirement plan benefits or other
post-employment benefits. AB 822 extends this requirement to
local ballot measures that propose changes to local agency
employee retirement benefits. This provision applies to cities
and counties (including charter cities and charter counties),
school districts, community college districts, county boards of
education, and special districts.
FISCAL EFFECT : Appropriation: No Fiscal Com.: Yes
Local: Yes
According to the Senate Appropriations Committee:
Unknown, likely minor, reimbursable mandate costs to local
governments for procuring actuarial statements, depending on
the frequency of qualified measures (General).
Potentially $100,000 in reimbursable state mandate costs to
include the statement in the sample ballot (General).
The sample ballot cost estimate will apply to each measure that
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was placed on the ballot for each county.
SUPPORT : (Verified 9/3/13)
California Professional Firefighters (source)
American Federation of State, County and Municipal Employees
Association for Los Angeles Deputy Sheriffs
California Labor Federation
California Nurses Association
California School Employees Association, AFL-CIO
California State Association of Electrical Workers
California State Pipe Trades Council
Coalition of California Utility Employees
Glendale City Employees Association
Laborers' International Union of North America Local 777
Laborers' International Union of North America Local 792
Orange County Employees Association
Organization of SMUD Employees
Peace Officers Research Association of California
Public Employees Union, Local One
San Bernardino Public Employees Association
San Luis Obispo County Employees Association
Santa Rosa City Employees Association
Western States Council of Sheet Metal Workers
ARGUMENTS IN SUPPORT : According to the author's office:
Across California, there have been increased efforts to
make changes to city employee compensation packages
relative to pension benefits. The fiscal changes resulting
from these initiatives can have far-reaching impacts on the
retirement security of workers and their families as well
as dramatic and often unexpected impact on local budgets.
The availability of an actuarial impact report, prepared by
an expert actuary, provides public notice of an
initiative's fiscal impact and empowers voters to make
informed decisions at the ballot box.
Prior to a state or local government altering employee
retirement benefits, state law requires an independent
analysis and public hearing requirement to discuss the
proposed changes. However, this is not required in the
case of benefit changes considered by local ballot
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initiatives. In some instances, these initiatives can have
far reaching impacts on the retirement security of workers
and unexpected impacts on local budgets.
ASSEMBLY FLOOR : 52-19, 5/23/13
AYES: Achadjian, Alejo, Ammiano, Atkins, Bloom, Blumenfield,
Bocanegra, Bonilla, Bonta, Bradford, Brown, Buchanan, Ian
Calderon, Campos, Chau, Chesbro, Cooley, Daly, Dickinson,
Eggman, Fong, Fox, Frazier, Garcia, Gatto, Gomez, Gordon,
Hall, Roger Hern�ndez, Jones-Sawyer, Levine, Lowenthal,
Medina, Mitchell, Mullin, Muratsuchi, Nazarian, Pan, Perea, V.
Manuel P�rez, Quirk, Quirk-Silva, Rendon, Salas, Skinner,
Stone, Ting, Weber, Wieckowski, Williams, Yamada, John A.
P�rez
NOES: Allen, Bigelow, Ch�vez, Conway, Dahle, Donnelly, Beth
Gaines, Hagman, Harkey, Linder, Logue, Maienschein, Mansoor,
Melendez, Morrell, Nestande, Olsen, Patterson, Wagner
NO VOTE RECORDED: Gorell, Gray, Grove, Holden, Jones, Waldron,
Wilk, Vacancy, Vacancy
RM:ej 9/3/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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