BILL ANALYSIS Ó
AB 241
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Date of Hearing: April 21, 2015
ASSEMBLY COMMITTEE ON PRIVACY AND CONSUMER PROTECTION
Mike Gatto, Chair
AB 241
(Gordon) - As Introduced February 5, 2015
SUBJECT: Bankruptcy: retired employees: disclosure of names
and mailing addresses
SUMMARY: Requires a local public entity to provide the name and
mailing address of each retired employee to an organization
representing retired employees of the local public entity,
in certain instances leading up to and when a local public
entity files for bankruptcy. Specifically, this bill:
1)Requires, notwithstanding any other lawa local public entity
to provide the name and mailing address of each retired
employee, or his or her beneficiary receiving the retired
employee's retirement benefit, to any organization that is
incorporated as a California nonprofit mutual benefit
corporation, as specified, for the purpose of representing
retired employees of the local public entity, upon that
organization's request, if any of the following occur:
a) The local public entity began the process of
participating in a neutral evaluation process (which occurs
prior to a bankruptcy proceeding);
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b) The local public entity declared a fiscal emergency and
adopted a resolution by a majority of the governing board,
as specified; or,
c) The local public entity filed a petition pursuant to
applicable federal bankruptcy law.
2)Requires an organization receiving the name and mailing
address of a retired employee or his or her beneficiary
receiving the retired employee's retirement benefit to use
that information only for the purpose of representing the
retired employee or his or her beneficiary as a member of the
organization as an interested party in a neutral evaluation
process, the declaration of a fiscal emergency and adoption of
a resolution, or a bankruptcy proceeding.
3)Requires an unspecified civil penalty for an organization that
violates 2), above, under conditions that are not specified.
4)Makes various legislative findings.
EXISTING LAW:
1)Declares that people have the right of access to information
concerning the conduct of the people's business, and,
therefore, the meetings of public bodies and the writings of
public officials and agencies shall be open to public
scrutiny. (California Constitution (Cal. Const.) Article 1,
Section 3(b)(1).)
2)Requires that in order to ensure public access to the meetings
of public bodies and the writings of public officials
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agencies, each local agency is required to comply with the
California Public Records Act (PRA) and the Ralph M. Brown
Act, and with any subsequent statutory enactment amending
either act, enacting a successor act, or amending any
successor act that contains findings demonstrating that the
statutory enactment furthers the purposes
of this section of the Constitution. (Cal. Const. Art. 1, Sec.
3(b) (7).)
3)Specifies, pursuant to the PRA, that it does not require the
disclosure of personnel, medical, or similar files, if the
disclosure of which would constitute an unwarranted invasion
of personal privacy. (Government Code (GC) Section 6254(c).)
4)Provides, pursuant to the PRA, that information regarding
persons paid by the state to provide in-home supportive
services, as specified, is not subject to public disclosure
pursuant to the PRA, except as provided in 6), below. (GC
6253.2)
5)Requires copies of names, address, and telephone numbers of
persons described in 4), above, to be made available, upon
request, to an exclusive bargaining agent and to any labor
organization seeking representation rights, as specified, and
provides that this information shall not be used by the
receiving entity for any purpose other than the employee
organizing, representation, and assistance activities of the
labor organization. (GC 6253.2)
6)Allows a local public entity to initiate a neutral evaluation
process if the local public entity is or likely will become
unable to meet its financial obligations as and when those
obligations are due or become due and owing. (GC 53760.3)
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7)Allows a local public entity to file a petition and exercise
powers pursuant to applicable federal bankruptcy law (Chapter
9) if the local public entity declares a fiscal emergency and
adopts a resolution by a majority vote of the governing board
at a noticed public hearing that includes findings that the
financial state of the local public entity jeopardizes the
health, safety, or well-being of the residents of the local
public entity's jurisdiction or service area absent the
protections of Chapter 9. (GC 53760.5)
FISCAL EFFECT: Unknown
COMMENTS:
1)Purpose of this bill . This bill is intended to help retirees
organize as group in order to be properly represented as a
party in local government bankruptcy. This bill is sponsored
by the Retired Public Employees Association (RPEA).
2)Author's statement . According to the author, "When the City
of Stockton filed for bankruptcy, retirees from the city
organized as a group in order to become a party to the
bankruptcy. This group received approval as a labor
organization under the Internal Revenue Service's Code
501(c)(5). They were then able to obtain donations and hire
legal counsel to represent them in bankruptcy court. The
group then requested from the city, the names and addresses of
the city's retirees so they could notify them of their intent
to seek representation before the bankruptcy court. The city
refused. As a result, notifying retirees?was made
exponentially more difficult?Other creditors, active employee
organizations, and public agencies that have a claim in the
bankruptcy proceedings do not have the issue of organizing and
funding legal costs. Retirees do."
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3)The PRA and the exemption for personnel information . The PRA
is designed to give the public broad access to information
that public agencies hold. Any grounds for denying access to
public records must be found in the specific exemptions listed
in the PRA. This means a local agency must allow access to a
record unless it can identify an exemption within the PRA that
would justify nondisclosure. The PRA specifically exempts
from disclosure "personnel, medical, or similar files, the
disclosure of which would constitute an unwarranted invasion
of personal privacy." (GC 6254(c).)
This bill would require the disclosure only of the names and
mailing addresses of retired employees in the narrow instance
where the information is requested by an organization seeking
to represent retirees in a local government bankruptcy
proceeding. Specifically, the bill would require a local
public entity to provide the name and mailing address of each
retired employee, or his or her beneficiary receiving the
retired employee's retirement benefit, to any organization
that is incorporated as a 501(c)(5) (labor, agricultural or
horticultural organizations) for the purpose of representing
retired employees, upon the request of that organization, if
that local public entity has begun the process of
participating in a neutral evaluation, has declared a fiscal
emergency, or has filed a petition pursuant to applicable
federal bankruptcy law (known as Chapter 9).
4)Proposition 42 and PRA compliance . Proposition 42 was passed
by voters on June 3, 2014, and requires all local governments
to comply with the PRA and the Ralph M. Brown Act and with any
subsequent changes to those Acts. Proposition 42 also
eliminated reimbursement to local agencies for costs of
complying with the PRA and the Ralph M. Brown Act.
5)Fair Information Practice Principles . Fair Information
Practice Principles or "FIPPs" are a set of principles for
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protecting the privacy of personally identifiable information
(PII). FIPPs have helped shape privacy laws in the United
States, because they serve as a framework for thinking about
how to approach privacy and data protection. The eight FIPPs
are as follows:
a) Transparency : Provide notice to the individual
regarding its collection, use, dissemination, and
maintenance of PII.
b) Individual Participation : Involve the individual in
the process of using PII and, to the extent practicable,
seek individual consent for the collection, use,
dissemination, and maintenance of PII. Allow an
individual to access and correct PII on file.
c) Purpose Specification : Explain the authority that
permits the collection of PII and explain the purpose or
purposes for which the PII will be used.
d) Data Minimization : Only collect PII that is
directly relevant and necessary to accomplish the
specified purposes and only retain the information for as
long as is necessary.
e) Use Limitation : Only use PII for the purposes
specified in the notice. Any sharing of PII should be
compatible with the purpose for which the PII was
collected.
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f) Data Quality & Integrity : Use best efforts to
ensure that PII is accurate, relevant, timely, and
complete.
g) Security : Protect the confidentiality of PII
through appropriate security safeguards.
h) Accountability and Auditing : Be accountable by
providing training to employees and contractors who use
PII, and audit the actual use of PII to demonstrate
compliance with FIPPs and privacy laws.
Key FIPPs principles are also reflected in this bill. The
bill applies the FIPPs' "data minimization" principle by
permitting only the collection of names and mailing addresses,
rather than permitting the collection of more sensitive data
such as dates of birth, social security numbers, retirement
benefit amounts, etc. By requiring the 501(c)(5) organization
to reach out directly to each retiree, using the address
information received from the local government, the bill
ensures "data quality and integrity" as FIPPs requires.
The bill also meets the FIPPs "purpose specification" and "use
limitation" principle by strictly prohibiting a 501(c)(5) that
receives the name and mailing address of a retired employee
(or his or her beneficiary) from using that information for
any purpose other than representing the retired employee or
his or her beneficiary as a member of the organization as an
interested party in a bankruptcy proceeding. Finally, the
bill creates "accountability" by means of an enforcement
mechanism. The bill establishes an unspecified civil penalty
for a 501(c)(5) that violates using the information for any
other purpose beyond what is specified in the bill.
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1)Author's amendments . The author offers the following two
amendments:
a) Specify a civil penalty $25,000. The bill currently
contains an unspecified civil penalty.
On Page 3, line 18, after "in the amount of" insert: $25,000
b) Allow a retired employee to request removal of his or
her name and home address from any mailing list to be
provided under the bill.
Page 3, between lines 19 and 20 insert:
(3) Upon written request of any retired employee, or his or
her beneficiary receiving the retired employee's retirement
benefit, a local public entity shall not disclose the
retired employee's name and home address pursuant to
subdivision (a), and a local public entity shall remove the
retired employee, or his or her beneficiary receiving the
retired employee's retirement benefit from any mailing list
maintained by that local public entity in compliance with
subdivision (a).
2)Arguments in support . RPEA states in support of the bill,
"Normally the names and addresses of public employees are
exempted from the [PRA]; however, there is at least one
exception?that allows the names, addresses and telephone
numbers of in-home health care workers to be provided to labor
organizations for the purpose of organizing and representing
these workers?Organizing retired workers to be represented in
a bankruptcy proceeding by their former employer should be an
equivalent exception."
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3)Arguments in opposition . The American Federation of State,
County and Municipal Employees (AFSCME) opposes the bill on
the grounds that the bill is too narrow. AFSCME states in
opposition, that "While AFSCME fully supports the idea of
allowing retirees to organize, our view is that waiting until
a city has filed bankruptcy or an official fiscal emergency
has been declared to facilitate organizing is short-sighted.
Information on retired employees would be useful any time
unions are seeking to organize or represent retirees,
especially at the county level."
4)Double-referral . This bill was double-referred to the
Assembly Local Government Committee, where it was heard on
April 9, 2015, and passed on a 9-0 vote.
REGISTERED SUPPORT / OPPOSITION:
Support
Retired Public Employees Association (RPEA) (sponsor)
Opposition
American Federation of State, County and Municipal Employees
(AFSCME)
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Analysis Prepared by:Jennie Bretschneider / P. & C.P. / (916)
319-2200