BILL NUMBER: AB 1681	AMENDED
	BILL TEXT

	AMENDED IN ASSEMBLY  MARCH 28, 2014

INTRODUCED BY   Assembly Member Allen

                        FEBRUARY 12, 2014

   An act to  amend Section 22942 of   add
Sections 3509.7 and 3523.4 to  the Government Code, relating to
public employees' benefits.



	LEGISLATIVE COUNSEL'S DIGEST


   AB 1681, as amended, Allen. Public employees: benefits.
   Existing law permits the Board of Administration of the Public
Employees' Retirement System to authorize an employer to participate
in the prefunding of health care coverage and other postemployment
benefits for annuitants.  Existing law provides certain
definitions of terms for purposes of this authority. 

   This bill would make a nonsubstantive change to that provision.
 
   This bill would require a memorandum of understanding or on the
topic of postemployment health care benefits between a public
employer or a state employer and employees to contain a plan to begin
the permanent prefunding of postemployment health care benefits. The
bill would provide that the plan may authorize any amount that
otherwise would be used to permanently increase employee compensation
to be used to permanently prefund members' postemployment healthcare
benefits. 
   Vote: majority. Appropriation: no. Fiscal committee:  no
  yes  . State-mandated local program: no.


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

   SECTION 1.    Section 3509.7 is added to the 
 Government Code   , to read:  
   3509.7.  (a) Notwithstanding any other law, a public agency shall
not enter into a memorandum of understanding or on the topic of
postemployment health care benefits with employees first hired on or
after January 1, 2015, unless it contains a plan to begin permanent
prefunding of postemployment health care benefits pursuant to Article
11 (commencing with Section 22940) of Chapter 1 or Part 5 of
Division 5 of Title 2. The plan may authorize any amount that
otherwise would be used to permanently increase employee compensation
to be used to permanently prefund members' postemployment health
care benefits.
   (b) If the provisions of this section are in conflict with the
provisions of a memorandum of understanding, the memorandum of
understanding shall be controlling, except that upon expiration of
the memorandum of understanding or other collective bargaining
agreement, this section shall be controlling and may not be
superseded by a subsequent memorandum of understanding or other
collective bargaining agreement. 
   SEC. 2.    Section 3523.4 is added to the  
Government Code   , to read:  
   3523.4.  (a) Notwithstanding any other law, the state employer
shall not enter into a memorandum of understanding on the topic of
postemployment health care benefits with employees first hired on or
after January 1, 2015, unless it contains a plan to begin permanent
prefunding of postemployment health care benefits pursuant to Article
11 (commencing with Section 22940) of Chapter 1 or Part 5 of
Division 5 of Title 2. The plan may authorize any amount that
otherwise would be used to permanently increase employee compensation
to be used to permanently prefund members' postemployment health
care benefits.
   (b) If the provisions of this section are in conflict with the
provisions of a memorandum of understanding, the memorandum of
understanding shall be controlling, except that upon expiration of
the memorandum of understanding, this section shall be controlling
and may not be superseded by a subsequent memorandum of understanding
or other collective bargaining agreement.  
  SECTION 1.    Section 22942 of the Government Code
is amended to read:
   22942.  For purposes of this article, the following definitions
shall apply:
   (a) "Annuitant" means any of the following:
   (1) An annuitant described in Section 22760.
   (2) A person who retires from employment with an employer
described in paragraph (2) of subdivision (c) and who receives
postemployment health care benefits or other postemployment benefits
from the prefunding plan provided by that employer.
   (3) A surviving family member who receives postemployment health
care benefits or other postemployment benefits as a beneficiary of a
deceased person described in paragraph (2).
   (b) "Employee" means an employee described in Section 22772.
"Employee" also means an officer or employee of an employer described
in paragraph (2) of subdivision (c).
   (c) "Employer" means either of the following:
   (1) An employer described in Section 22773.
   (2) An entity described in Section 22920 that has one or more
employees and provides postemployment health care benefits or other
postemployment benefits to annuitants.