BILL ANALYSIS Ó
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UNFINISHED BUSINESS
Bill No: SB 39
Author: De León (D) and John A. Pérez (D)
Amended: 9/10/13
Vote: 27 - Urgency
PRIOR VOTES NOT RELEVANT
ASSEMBLY FLOOR : Not available
SUBJECT : Local agencies: public officers: claims and
liability
SOURCE : Author
DIGEST : This bill requires an elected or appointed local
public officer, as defined, to forfeit any contract or similar
claim for retirement or pension benefits, other than those
accrued benefits which he/she may be entitled to under the
applicable public retirement system, if he/she has been
convicted of specified felonies under state or federal law.
Assembly Amendments delete the prior version of the bill and
instead add the current language.
ANALYSIS :
Existing law:
1.Provides that if an elected public officer after January 1,
2006, is convicted during or after holding office of any
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felony involving accepting or giving, or offering to give, any
bribe, the embezzlement of public money, extortion or theft of
public money, perjury, or conspiracy to commit any of those
crimes arising directly out of his/her official duties as an
elected public officer, he/she shall forfeit all rights and
benefits under, and membership in, any public retirement
system in which he/she is a member, effective on the date of
final conviction.
2.Provides that if a public employee or a person elected or
appointed to public office is convicted by a state or federal
trial court of any felony under state or federal law for
conduct arising out of or in the performance of his/her
official duties, in pursuit of the office or appointment, or
in connection with obtaining salary, disability retirement,
service retirement, or other benefits, then the following
applies:
A. Prohibits him/her from accruing further benefits in any
public retirement system in which he/she is a member,
effective on the date of the conviction.
1.Requires he/she to forfeit all rights and benefits earned or
accrued from the earliest date of the commission of the felony
to the date of conviction, inclusive. Further requires the
retirement benefits to remain forfeited notwithstanding any
reduction in sentence or expungement of the conviction
following the date of conviction, but prohibits those
retirement benefits attributable to service performed prior to
the date of the first commission of the felony for which
he/she was convicted from being forfeited.
This bill:
1.Provides that a local public officer, as defined, who is
convicted by a state or federal trial court of any felony
under state or federal law for conduct arising out of or in
the performance of his/her official duties shall forfeit any
contract right or other common law, statutory or
constitutional claim against a local public agency employer to
retirement or pension rights or benefits, however those
benefits may be characterized, including lost compensation,
other than the accrued rights and benefits to which he/she may
be entitled under any public retirement system in which he/she
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is a member.
2.Specifies that the forfeiture provided by this act shall be in
addition to and independent of any forfeiture of public
retirement system rights and benefits pursuant to specified
Government Code Sections.
3.Defines "local public officer" to mean a person, either
elected or appointed, who exercised discretionary, executive
authority in his/her employment.
4.Requires the prosecuting agency and the local public officer,
upon conviction, to notify the public employer who employed
the local public officer at the time of the commission of the
felony within 60 days of the felony conviction regarding the
fact of conviction. Provides that the operation of this
section is not dependent upon the performance of the
notification obligations, as specified.
5.Finds and declares that local public agencies need protection
from disgraced and avaricious public officials who, following
conviction for crimes arising out of the performance of their
official duties, continue to seek unfair benefits at public
expense by asserting a claim that their former employers owe
them the value of pension benefits, including benefits that
the public retirement systems charged with administration of
those benefits have rightfully disallowed.
Comments
According to the author, this bill is needed to ensure that
local public officers who are convicted of a felony in the
course of performing their official duties - such as theft,
fraud and misappropriation of public funds - bear appropriate
additional consequences for that illegal conduct by forfeiting
any contract right or similar claim for retirement or pension
benefits against the public employer, other than those accrued
benefits that they may be entitled to under the applicable
public retirement system. Among other examples, the bill is
particularly needed, the author contends, in light of several
widely reported cases, including the Southern California Cities
of Vernon and Bell, where local public officers allegedly took
actions to boost their compensation and retirement or pension
benefits and otherwise misused their office for personal
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benefit, among other wrongdoing.
Some of these officials, such as Bruce Malkenhorst, the former
City Manager of Vernon, and five former members of the Bell City
Council, were actually convicted of misappropriation and
corruption charges. In the wake of these events, CalPERS
administrators conducted investigations in which they determined
that these officials were not entitled to the hefty pension
amounts they claimed.
This bill provides that a local public officer, as defined, who
is convicted by a state or federal trial court of any felony
under state or federal law for conduct arising out of or in the
performance of his/her official duties shall suffer the loss of
any alleged contract right or similar claim against a local
public agency employer to retirement or pension rights or
benefits, other than the accrued rights and benefits to which
he/she may be entitled under any public retirement system in
which he/she is a member. In other words, this bill establishes
an additional consequence for local public officials who have
been convicted of wrongdoing in the course of their official
duties. As a result, they shall forfeit any contract or similar
claim for retirement or pension benefits against the public
employer, however those benefits may be characterized,
including, but not limited to, lost compensation.
The loss of an asserted contract right to retirement benefits as
a penalty for conviction of a felony committed in the course of
a public officer's duties is consistent with existing law.
Public employees and public officials who are convicted of
specified felonies currently suffer loss of CalPERS and
analogous benefits that might otherwise be due under a public
retirement system. This bill would modestly expand that rule to
the loss of correlative contract and related claims that do not
relate to the public officer's membership in a public retirement
system. The forfeiture of such rights as a consequence for
wrongdoing in office is also consistent with contract principles
that provide for the loss of contract benefits when one is in
breach of contract, such as would unquestionably be true of a
public officer who commits a felony on the job.
Importantly, this bill does not attempt to strip or deny all
pension benefits to the public officer. The bill allows the
public officer to retain the accrued rights and benefits to
which he/she may be lawfully entitled to under the applicable
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public retirement system, but requires the civil forfeiture of
any contract right or other claim to additional retirement or
pension rights or benefits outside of or beyond that amount to
which the officer may be entitled under that system.
The forfeiture provisions of this bill apply only to "local
public officers," which is defined as only those persons, either
elected or appointed, who exercised discretionary, executive
authority in their employment. Accordingly, the bill does not
apply to most public employees, few of whom in any event are
convicted of felonies arising out of the performance of their
official duties. In addition, the bill applies to any claim
filed prior to the effective date of this bill, and still
pending on that date, and any claim commenced after that date.
FISCAL EFFECT : Appropriation: No Fiscal Com.: No Local:
No
SUPPORT : (Verified 9/11/13)
California City Management Foundation
City of Vernon
JL:ejm 9/12/13 Senate Floor Analyses
SUPPORT/OPPOSITION: SEE ABOVE
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