BILL ANALYSIS                                                                                                                                                                                                    

          |SENATE RULES COMMITTEE            |                        AB 124|
          |Office of Senate Floor Analyses   |                              |
          |(916) 651-1520    Fax: (916)      |                              |
          |327-4478                          |                              |

                                   THIRD READING 

          Bill No:  AB 124
          Author:   Committee on Budget
          Amended:  6/16/15 in Senate
          Vote:     21  

           SENATE BUDGET & FISCAL REVIEW COMMITTEE:  10-5, 6/18/15
           AYES: Leno, Allen, Beall, Block, Hancock, Monning, Pan, Pavley,  
            Roth, Wolk
           NOES: Nielsen, Anderson, Moorlach, Nguyen, Stone
           NO VOTE RECORDED: Mitchell

          ASSEMBLY FLOOR: Not relevant

           SUBJECT:   State government

          SOURCE:    Author

          DIGEST:  This bill is necessary for the enactment of the 2015  
          Budget Act and makes various changes relating to retiree health  
          care and vacant positions. 

          ANALYSIS: This bill:

          1)Clarifies the definition of family to specifically exclude  
            former spouses and former domestic partners.

          2)Requires a state employee's or state annuitant's employer to  
            possess and maintain documentation verifying eligibility of an  
            employee's family members and to verify this information every  
            three years, or annually for children for whom the state  


                                                                     AB 124  
                                                                    Page  2

            employee or annuitant has assumed a parent-child relationship.

          3)Prohibits the Board of Administration of the Public Employees'  
            Retirement System (board) from granting further exceptions to  
            the rule against enrolling employees, annuitants, and their  
            family members who are eligible for Medicare, as specified, in  
            a basic health care plan. 

          4)Revise the entities to which the board is required to provide  
            notification of approval of proposed benefits and premium  
            readjustments to exclude the Legislature as a whole, and  
            instead requires provision of an initial estimate of the  
            proposed changes in writing to the Joint Legislative Budget  
            Committee, the chairpersons of the committee and subcommittees  
            in each house of the Legislature that consider the Public  
            Employees' Retirement System's budget and activities, the  
            State Controller, the Director of Finance, and the Legislative  

          5)Require the board to provide a detailed report to the  
            Legislature and the Director of Finance annually, on November  
            1, regarding the health benefit plans it provides. 

          6)Establish the Annuitants' Health Care Coverage Fund, which is  
            continuously appropriated for the purpose of prefunding health  
            care coverage for annuitants, including administrative costs. 

          7)Prohibit the use of state funds in the Annuitants' Health Care  
            Coverage Fund for the payment of benefits until the date the  
            funded ratio reaches at least 100 percent, or July 1, 2046.  

          8)Revise the definition of prefunding to include employee, as  
            well as, employer payments and to provide that payments may  
            fund the actuarially-determined normal costs of postemployment  
            health care benefits.


                                                                     AB 124  
                                                                    Page  3

          9)Repeals state law pertaining to vacant positions that requires  
            the Controller to abolish state positions that are vacant for  
            six consecutive months. 

          FISCAL EFFECT:   Appropriation:    Yes         Fiscal  
          Com.:YesLocal:   No

          SUPPORT:   (Verified6/18/15)

          None received

          OPPOSITION:   (Verified6/18/15)

          None received

          Prepared by:Farra Bracht / B. & F.R. / (916) 651-4103
          6/18/15 19:05:29

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