BILL ANALYSIS Ó
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|SENATE RULES COMMITTEE | AB 241|
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THIRD READING
Bill No: AB 241
Author: Gordon (D)
Amended: 6/21/16 in Senate
Vote: 21
SENATE GOVERNANCE & FIN. COMMITTEE: 5-0, 6/8/16
AYES: Hertzberg, Beall, Hernandez, Lara, Pavley
NO VOTE RECORDED: Nguyen, Moorlach
SENATE APPROPRIATIONS COMMITTEE: Senate Rule 28.8
ASSEMBLY FLOOR: 61-14, 1/27/16 - See last page for vote
SUBJECT: Bankruptcy: retired employees: disclosure of names
and mailing addresses
SOURCE: Author
DIGEST: This bill requires a local public entity to provide
contact information for each of its retirement plan
beneficiaries to an organization representing the local public
entity's retired employees in certain situations related to the
public entity's efforts to seek municipal bankruptcy protection.
ANALYSIS:
Existing law:
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1)Requires, pursuant to the California Public Records Act (PRA),
that public records must be open to inspection during office
hours and gives every person a right to inspect public
records, with specific exceptions.
2)Exempts from disclosure "personnel, medical, or similar files,
the disclosure of which would constitute an unwarranted
invasion of personal privacy," but allows for disclosure of
some personnel information under specific circumstances.
This bill:
1)Requires a local public entity to provide a list of 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 pursuant to
state law and qualified pursuant to Section 501(c)(3),
501(c)(4), or 501(c)(5) of Title 26 of the Internal Revenue
Code 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 pursuant to a
specified statute.
b) The local public entity declared a fiscal emergency and
adopted a resolution by a majority vote of the governing
board pursuant to a specified statute.
c) The local public entity filed a petition pursuant to
applicable federal bankruptcy law.
2)Specifies that its requirements to disclose names and mailing
addresses apply to a local public entity notwithstanding any
other law, with one specified exception. Specifically, upon
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written request of any retired employee, or his or her
beneficiary receiving the retired employee's retirement
benefit, a local public entity must not disclose the name and
home address of the retired employee, or his or her
beneficiary receiving the retired employee's retirement
benefit, and must 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 the bill's disclosure requirements.
3)Requires that an organization receiving a list of the name and
mailing address of a retired employee or his or her
beneficiary receiving the retired employee's retirement
benefit must 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) A neutral evaluation process,
b) The declaration of a fiscal emergency and adoption of a
resolution, or
c) A bankruptcy proceeding.
4)Requires that an organization that misuses the list of names
and mailing addresses must be subject to a civil penalty in
the amount of twenty-five thousand dollars ($25,000).
5)Directs that it provisions must not affect or limit the
disclosure or nondisclosure of public records pursuant to any
other statute or decisional law.
Background
Federal bankruptcy law for public agencies (Chapter 9) gives
government debtors time to come up with repayment plans,
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providing them a breathing spell from creditors' collection
efforts. Only a municipality, which federal law defines as a
political subdivision, public agency, or instrumentality of a
state, can initiate a Chapter 9 proceeding. The municipality
must be insolvent and desire to effect a plan to adjust its
debts.
Unlike private bankruptcy law (Chapter 11), municipal bankruptcy
law must respect the states' sovereign powers. Consequently,
the states can control their local agencies' access to federal
bankruptcy protection. California state law allows a local
government to petition for bankruptcy protection only after it
either participates in a neutral evaluation process or declares
a fiscal emergency (AB 506, Wieckowski, Chapter 675 of the
Statutes of 2011).
The PRA requires public records to be open to inspection during
office hours and gives every person a right to inspect public
records, with specific exceptions. The PRA exempts from
disclosure "personnel, medical, or similar files, the disclosure
of which would constitute an unwarranted invasion of personal
privacy." However, state law also specifically allows for
disclosure of some personnel information under specific
circumstances. For example, although state law generally
prohibits public the public disclosure of information regarding
persons paid by the state to provide in-home supportive services
or personal care services, it does require that copies of names,
addresses, and telephone numbers of those service providers must
be made available, upon request, to an exclusive bargaining
agent and to any labor organization seeking representation
rights pursuant to state law (AB 515, Wright, Chapter 804,
Statutes of 1999).
Because a local government's bankruptcy has the potential to
alter the benefits that the local government provides to its
retirees, those retirees' have an interest in being represented
as stakeholders in the local government's bankruptcy process.
Advocates for retired public employees want to help retirees
organize as a group to ensure that they are properly represented
as a party in a local government bankruptcy. They want the
Legislature to require that a local government that has taken
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steps towards a municipal bankruptcy must provide contact
information for its retirement beneficiaries to an organization
that is formed for the purpose of representing the local
government's retired employees.
Comments
Purpose of the bill. This bill responds to a problem
experienced by retirees from the City of Stockton during that
city's municipal bankruptcy process. When the City of Stockton
filed for bankruptcy in 2012, 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 Code. They were then able to obtain donations
and hire legal counsel to represent them in bankruptcy court.
However, they were unable to obtain, 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. This bill strikes a balance between retiree
organizations' legitimate interests in being effective advocates
for their members and individual retiree's fundamental interests
in protecting the privacy of their personal information. This
bill is modelled on a narrow exception in state law that allows
contact information for in-home care service providers to be
provided to labor organizations for specified purposes. This
bill protects individual privacy rights by allowing individual
retirees to request that their information not be disclosed and
by imposing a penalty for the unauthorized use of a list of the
contact information.
Who pays? The Legislative Counsel's Office says that this bill
imposes a state-mandated local program because it requires local
government officials to perform additional duties related to
producing a list of contact information for retirees. The
California Constitution generally requires the state government
to reimburse the costs of new or expanded state mandated local
programs. However, on June 3, 2014, California voters approved
Proposition 42, which amended the California Constitution to
require local agencies to comply with the PRA. Proposition 42
also requires local agencies to comply with any subsequent
statutory enactment amending the PRA that contains specified
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findings that the newly enacted statute furthers specified
constitutional provisions guaranteeing public access to public
agency meetings and records. This bill contains legislative
findings that the bill furthers the purpose of Section 3 of
Article I of the California Constitution because it "ensures
that public retirees and their beneficiaries have the
opportunity to meaningfully participate in the legal processes
of a local public entity filing a petition and exercising powers
pursuant to applicable federal bankruptcy law." As a result,
this bill disclaims the state's responsibility for reimbursing
local governments' costs of complying with the bill's
requirements.
FISCAL EFFECT: Appropriation: No Fiscal
Com.:YesLocal: Yes
SUPPORT: (Verified8/1/16)
California Alliance for Retired Americans
California State Retirees
Retired Public Employees Association of California
OPPOSITION: (Verified8/1/16)
None received
ASSEMBLY FLOOR: 61-14, 1/27/16
AYES: Achadjian, Alejo, Baker, Bloom, Bonilla, Bonta, Brown,
Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper,
Dababneh, Daly, Dodd, Eggman, Frazier, Cristina Garcia,
Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray,
Roger Hernández, Holden, Irwin, Jones-Sawyer, Kim, Lackey,
Levine, Linder, Lopez, Low, Maienschein, McCarty, Medina,
Mullin, Nazarian, O'Donnell, Olsen, Quirk, Rendon,
Ridley-Thomas, Rodriguez, Salas, Santiago, Steinorth, Mark
Stone, Thurmond, Ting, Waldron, Weber, Wilk, Williams, Wood,
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Atkins
NOES: Travis Allen, Bigelow, Brough, Chávez, Dahle, Beth
Gaines, Gallagher, Grove, Harper, Jones, Mathis, Melendez,
Obernolte, Wagner
NO VOTE RECORDED: Chang, Hadley, Mayes, Patterson
Prepared by:Brian Weinberger / GOV. & F. / (916) 651-4119
8/3/16 18:43:09
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