Amended in Senate September 6, 2013

Amended in Assembly May 1, 2013

California Legislature—2013–14 Regular Session

Assembly Bill No. 837

Introduced by Assembly Member begin delete Campos end delete begin insert Wieckowski end insert

(Coauthors: Assembly Members Fong and Fox)

February 21, 2013

An act begin delete to add Section 12096.4.9 to the Government Code, relating to economic development. end delete begin insert amend Section 7522.30 of the Government Code, relating to public employees’ retirement. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 837, as amended, begin delete Campos end delete   begin insert Wieckowski end insert . begin delete Economic development programs: reporting. end delete begin insert Public employees’ retirement benefits. end insert

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The California Public Employees’ Pension Reform Act of 2013 (PEPRA), on and after January 1, 2013, requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan, setting the maximum benefit allowable for employees first hired on or after January 1, 2013, as a formula commonly known as 2.5% at age 67 for nonsafety members, one of 3 formulas for safety members, 2% at age 57, 2.5% at age 57, or 2.7% at age 57, and 1.25% at age 67 for new state miscellaneous or industrial members who elect to be in Tier 2.

end insert begin insert

On and after January 1, 2013, PEPRA requires new employees of specified public employers, the California State University, and the judicial branch who participate in a defined benefit plan to have an initial contribution rate of at least 50% of the normal cost rate for that defined benefit plan, rounded to the nearest 1/4 of 1%, or the current contribution rate of similarly situated employees, whichever is greater.

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This bill would make that provision applicable to new members employed by those entities and new members employed by the Legislature. The bill would except from these provisions a judge who was elected to office prior to January 1, 2013, despite not assuming that office and becoming a member of the Judges’ Retirement System II for the first time until January 1, 2013, or after that date. The bill would also specify that this contribution rate for new members shall be 50% rounded to the nearest 1/4 of 1%, unless a greater contribution rate has been agreed to through the collective bargaining process. The bill would require that, for purposes of calculating the normal cost rate, the actuarial valuation of retirement benefits includes any elements that impact the actuarial determination of the normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit provisions, and any automatic cost-of-living adjustments.

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The Economic Revitalization Act establishes the Governor’s Office of Business and Economic Development, also known as “GO-Biz,” to serve the Governor as the lead entity for economic strategy and the marketing of California on issues relating to business development, private sector investment, and economic growth.

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This bill would require the State Chair of the California Small Business Development Center Leadership Council, established under a federal program, to report specific information to GO-Biz relating to any year that state funds are appropriated to support an Administrative Lead Center under that federal program, and would, in turn, require the director of GO-Biz to provide that report to the Legislature and post the report on the GO-Biz Internet Web site. This bill would also require the state chair, as a condition of accepting state funds, to allow access to other information about the program under certain conditions. This bill would make legislative findings and declarations in this regard.

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Vote: majority. Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

end insert

begin insert Section 7522.30 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

7522.30.  

(a) This section shall apply to all public employers
and to all new members. Equal sharing of normal costs between
public employers and public employees shall be the standard. The
standard shall be that employees pay at least 50 percent of normal
costs and that employers not pay any of the required employee
contribution.

(b) The “normal cost rate” shall mean the annual actuarially
determined normal cost for the begin delete defined benefit plan of an employer
expressed as a percentage of payroll. end delete begin insert plan of retirement benefits
provided to the new member and shall be established based on the
actuarial assumptions used to determine the liabilities and costs
as part of the annual actuarial valuation. The plan of retirement
benefits shall include any elements that would impact the actuarial
determination of the normal cost, including, but not limited to, the
retirement formula, eligibility and vesting criteria, ancillary benefit
provisions, and any automatic cost-of-living adjustments as
determined by the public retirement system. end insert

(c)  begin insert (1) end insert begin insert   end insert New begin delete employees employed on and after January 1, 2013, end delete
begin insert members employed end insert by those public employers defined in
paragraphs (2) and (3) of subdivision (i) of Section 7522.04, the
begin insert Legislature, the end insert California State University, and the judicial branch
who participate in a defined benefit plan shall have an initial
contribution rate of at least 50 percent of the normal cost rate for
that defined benefit plan, rounded to the nearest quarter of 1
percent, begin delete or the current contribution rate of similarly situated
employees, whichever is greater. end delete begin insert end insert begin insert unless a greater contribution
rate has been agreed to pursuant to the requirements in subdivision
(e). end insert This contribution shall not be paid by the employer on the
employee’s behalf.

begin insert

(2) For purposes of this subdivision, “new member” does not
include a member who is a judge who was elected to office prior
to January 1, 2013, despite assuming the office of judge, and
becoming a member of the Judges’ Retirement System II, for the
first time on or after that date.

end insert

(d) Notwithstanding subdivision (c), once established, the
employee contribution rate described in subdivision (c) shall not
be adjusted on account of a change to the normal cost rate unless
the normal cost rate increases or decreases by more than 1 percent
of payroll above or below the normal cost rate in effect at the time
the employee contribution rate is first established or, if later, the
normal cost rate in effect at the time of the last adjustment to the
employee contribution rate under this section.

(e) Notwithstanding subdivision (c), employee contributions
may be more than one-half of the normal cost rate if the increase
has been agreed to through the collective bargaining process,
subject to the following conditions:

(1) The employer shall not contribute at a greater rate to the
plan for nonrepresented, managerial, or supervisory employees
than the employer contributes for other public employees, including
represented employees, of the same employer who are in related
retirement membership classifications.

(2) The employer shall not increase an employee contribution
rate in the absence of a memorandum of understanding that has
been collectively bargained in accordance with applicable laws.

(3) The employer shall not use impasse procedures to increase
an employee contribution rate above the rate required by this
section.

(f) If the terms of a contract, including a memorandum of
understanding, between a public employer and its public
employees, that is in effect on January 1, 2013, would be impaired
by any provision of this section, that provision shall not apply to
the public employer and public employees subject to that contract
until the expiration of that contract. A renewal, amendment, or
any other extension of that contract shall be subject to the
requirements of this section.

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SECTION 1.  

The Legislature finds and declares all of the
following:

(a) The California Small Business Development Center Program,
a part of the federal Small Business Development Center Program,
plays a primary role in providing technical assistance to the state’s
small businesses and provides verified positive outcomes to the
state’s economy.

(b) Within the state, the California Small Business Development
Center Program is administered through six Regional Small
Business Development Center Networks, as follows: Northern
California, Northeastern California, Central California, Orange
County/Inland Empire, Los Angeles, and San Diego. Each regional
network is managed by an Administrative Lead Center, designated
by the federal Small Business Administration through a cooperative
agreement, and affiliated with one public institution of higher
education. The centers are responsible for securing required
one-to-one matching funds to draw down federal appropriations,
according to a population-based formula determined by the United
States Census, and the regional networks are held accountable for
their productivity and required to submit regular performance
reports to the Office of Small Business Development Centers,
within the federal Small Business Administration.

(c) Throughout the six regional networks there are more than
30 full-time Small Business Development Centers, with multiple
additional outreach locations serving small businesses in this state.
These centers provide assistance to existing businesses in the areas
of financing, government contracting, business planning and
management, marketing, international trade, energy efficiency and
sustainability, and disaster preparedness. The centers also provide
expert advice to technology companies in the areas of business
and financial plan preparation, angel and venture capital
presentation preparation, funding strategies, product positioning,
market launch strategies, applications for federal grants, technology
transfers with research universities, intellectual property issues,
and strategic partnerships. The centers work in collaboration with
various partners to provide these services, including, but not limited
to, the federal Small Business Administration, the United States
Department of Commerce, the United States Department of
Agriculture, the Governor’s Office of Business and Economic
Development, the California Innovation Hub Program, the
California Community Colleges, the California State University,
the University of California, local workforce investment boards,
economic developers, cities, counties, and chambers of commerce.

(d) The California Small Business Development Center
Leadership Council is comprised of the directors of the six
Administrative Lead Centers that coordinate the regional networks
of small business development centers. The council is the statewide
entity tasked with negotiating partnerships on behalf of the
California Small Business Development Center Program,
leveraging operational and technical assistance for best practices
across the six regions, and working with the state government to
maximize the economic impact of the federal Small Business
Development Center Program within the state.

SEC. 2.  

Section 12096.4.9 is added to the Government Code,
to read:

12096.4.9.  

(a) On or before August 30 following any year that
state funds are appropriated to an Administrative Lead Center for
the support of the California Small Business Development Center
Program, the State Chair of the California Small Business
Development Center Leadership Council shall provide a written
report to the office consistent with the requirements of this section.

(b) Each Administrative Lead Center accepts the reporting
requirement in this section as a condition of receiving state funds.
As a further condition for receiving state funds, the State Chair of
the California Small Business Development Center Leadership
Council shall arrange to provide the office with access to similar
information, in both a similar timeframe and format, that an
Administrative Lead Center may provide to the federal Small
Business Administration on client services and the economic
impact of the California Small Business Development Center
Program. Information provided to the office shall meet applicable
privacy standards and shall not disclose the name of an individual
business.

(c) A report prepared pursuant to subdivision (a) shall include,
but not be limited to, all of the following data:

(1) Number of businesses assisted.

(2) Number of employees employed by those businesses at the
time those businesses were assisted.

(3) Number of jobs created.

(4) Number of jobs retained.

(5) Estimated amount of state tax dollars generated from those
businesses.

(6) Industry sectors of the businesses assisted, as reported by
the assisted businesses.

(7) Increase in sales reported by businesses assisted as a result
of the program.

(8) The amount of capitol infusion, in both debt and equity,
obtained by assisted businesses.

(9) Total amount of federal funds allocated to the region during
the reporting period.

(d) The director shall submit a copy of the report required
pursuant to subdivision (a) to the Legislature in compliance with
Section 9795 and post the report on the office’s Internet Web site
no later than 30 days after the office receives the report.

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