BILL ANALYSIS Ó
AB 241
Page 1
CONCURRENCE IN SENATE AMENDMENTS
AB
241 (Gordon)
As Amended June 21, 2016
Majority vote
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|ASSEMBLY: | |(January 27, |SENATE: |27-11 |(August 15, |
| |61-14 |2016) | | |2016) |
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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
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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.
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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.
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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
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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
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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