BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                     AB 241


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          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.








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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