BILL ANALYSIS Ó ----------------------------------------------------------------- |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 Analyst. 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 **** END ****