BILL ANALYSIS Ó
SB 24
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Date of Hearing: June 29, 2016
ASSEMBLY COMMITTEE ON APPROPRIATIONS
Lorena Gonzalez, Chair
SB 24
(Hill) - As Amended January 5, 2016
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|Policy |Public Employees, |Vote:|6 - 0 |
|Committee: |Retirement/Soc Sec | | |
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Urgency: No State Mandated Local Program: NoReimbursable: No
SUMMARY:
This bill allows a joint powers authority (JPA), formed by the
Cities of Belmont, Foster City, and San Mateo, to provide
existing employees the retirement benefit they received from
their respective employer prior to the JPA's formation rather
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than the benefit required under the California Public Employees'
Pension Reform Act of 2013 (PEPRA).
FISCAL EFFECT:
One-time special fund costs to the California Public Employees'
Retirement System (CalPERS) of approximately $200,000 for
implementation and systems changes.
COMMENTS:
1)JPA and PEPRA. A JPA is the authority created by an agreement
between multiple public agencies to exercise powers common to
each of them for the purpose of accomplishing specific common
goals. A JPA can be used by agencies to share regional
responsibilities, such as fire services.
Under PEPRA, new public agencies formed after January 1, 2013,
must use the new pension formulas for their employees. As a
result, current employees cannot be transferred into a JPA
without losing their benefits, even if no lapse in public
service or change in duties and responsibilities occur.
2)Purpose. This bill is intended to allow local agencies to
leverage the cost benefits and efficiency advantages a JPA can
offer without prejudice to existing employee pensions.
Specifically, the author contends that SB 23 will remove an
obstacle that prevents the cities of San Mateo, Belmont, and
Foster City from completing their Joint Powers Agreement for
shared fire service.
3)Related legislation. SB 1203 (Hertzberg) of 2016, currently
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pending in this committee, creates a blanket authorization for
JPAs to provide existing employees the retirement benefit they
were receiving prior to the formation of a JPA. Unlike SB 24,
SB 1203 is not specific to any city or group of cities.
Analysis Prepared by:Luke Reidenbach / APPR. / (916)
319-2081