BILL ANALYSIS Ó AB 241 Page 1 CONCURRENCE IN SENATE AMENDMENTS AB 241 (Gordon) As Amended June 21, 2016 Majority vote -------------------------------------------------------------------- |ASSEMBLY: | |(January 27, |SENATE: |27-11 |(August 15, | | |61-14 |2016) | | |2016) | | | | | | | | | | | | | | | -------------------------------------------------------------------- Original Committee Reference: L. GOV. 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 specified instances leading up to and when a local public entity files for bankruptcy. The Senate amendments: 1)Provide that the bill's provisions shall not affect or limit the disclosure or nondisclosure of public records pursuant to any other statute or decisional law. 2)Make other minor, technical changes. AB 241 Page 2 EXISTING LAW: 1)Declares, pursuant to the California Constitution, 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. 2)Requires, as specified in the California Constitution Article I Section 3 subdivision (b) paragraph (7), that in order to ensure public access to the meetings of public bodies and the writings of public officials agencies, each local agency is required to comply with the California Public Records Act 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. 3)Provides, pursuant to the California Constitution Article XIII B, Section 6, that whenever the Legislature or any state agency mandates a new program or higher level of service on any local government, the state shall provide a subvention of funds to reimburse that local government for the costs of the program or increased level of service, except that the Legislature may, but need not, provide a subvention of funds for specified mandates, which include legislative mandates contained in statutes within the scope of Article I Section 3 subdivision (b) paragraph (7). 4)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. AB 241 Page 3 5)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. FISCAL EFFECT: According to the Senate Appropriations Committee, pursuant to Senate Rule 28.8, negligible state costs. COMMENTS: 1)Bill Summary. This 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 California nonprofit mutual benefit corporation and qualified pursuant to Internal Revenue Code (IRC) title 26 Sections 501(c)(3), 501(c)(4), or a 501(c)(5), 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; b) The local public entity declared a fiscal emergency and adopted a resolution by a majority vote of the governing board; or, c) The local public entity filed a petition pursuant to applicable federal bankruptcy law. AB 241 Page 4 This bill's requirements to disclose names and mailing addresses apply to a local public entity notwithstanding any other law, with one specified exception. Specifically, upon 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. The bill requires that an organization that misuses the list of names and mailing addresses must be subject to a civil penalty in the amount of $25,000. The bill also declares that the provisions shall not affect or limit the disclosure or nondisclosure of public records pursuant to any other statute or decisional law. 2)Author's Statement. According to the author, "When the City of Stockton filed for bankruptcy, retirees from the city attempted to organize to protect their interests in bankruptcy court. In the case of Stockton, the retirees were able to organize and incorporate a group to be a party to the bankruptcy of the City. This group received approval as a labor organization under IRC Section 501(c)(5). They were then able to obtain donations and hire legal counsel to represent the group in bankruptcy court. "The retiree forming the 501(c)(5) requested from the city, the names and addresses of retired persons from the city be provided to the organization that had been incorporated and approved under IRS Section 501(c)(5) status so they could notify the retirees of their intent to seek representation before the bankruptcy court. However, the City of Stockton, citing the California Public Records Act, refused the request of the 501(c)(5) to provide names and addresses of city AB 241 Page 5 retirees, making it very difficult for the retirees to organize and appear in the bankruptcy proceedings. "Although individual retired persons may appear, because they have an individual claim, the ability to make a significant argument in bankruptcy court to protect the retirees' interest requires competent legal counsel. Other creditors, active employee organizations, and public agencies that have a claim in the bankruptcy proceedings do not have the problem of organization and funding the legal costs. "A similar exception to the California Public Records Act allows the names, addresses, and telephone numbers of in home health care workers to be provided to labor organizations for the purpose of organization and representing these workers." 3)Proposition 42. Proposition 42 was passed by voters on June 3, 2014, and requires all local governments to comply with the California Public Records Act 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 California Public Records Act and the Ralph M. Brown Act. This bill, in Section 2, contains language that says that the Legislature finds and declares that Section 1 of the bill furthers the purpose of the California Constitution as it relates to the right of public access to the meetings of local public bodies or the writings of local public officials and local agencies. Pursuant to the Constitution Article I Section 3 subdivision (3) paragraph (7), the bill also includes a finding that says that "This act 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." Section 3 of the bill specifies that no reimbursement for local agencies to implement the bill's provisions is necessary because "the only AB 241 Page 6 costs that may be incurred by a local agency or school district?would result from a legislative mandate that is within the scope of California Constitution Article I Section 3 subdivision (3) paragraph (7)." 4)Arguments in Support. According to the sponsor, "Other creditors, employee organizations, and public agencies that have a claim in the bankruptcy proceedings do not have the issue of organization and funding legal costs. Retirees do. Organizing retired workers to be represented in a bankruptcy proceeding by their former employee should be an equivalent exemption." 5)Arguments in Opposition. None on file. Analysis Prepared by: Debbie Michel / L. GOV. / (916) 319-3958 FN: 0003696