BILL ANALYSIS                                                                                                                                                                                                    Ó



                                                                    SB 1203  


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          Date of Hearing:  June 29, 2016


                        ASSEMBLY COMMITTEE ON APPROPRIATIONS


                               Lorena Gonzalez, Chair


          SB 1203  
          (Hertzberg) - As Amended April 13, 2016


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          Urgency:  No  State Mandated Local Program:  NoReimbursable:  No


          SUMMARY:


          This bill authorizes a joint powers authority (JPA) formed on or  
          after January 1, 2013, to provide employees who transfer to the  
          JPA the same defined benefit plan or formula that they received  
          from their respective employer prior to the JPA's formation  








                                                                    SB 1203  


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          rather 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 JPAs can  
            offer without prejudice to existing employee pensions.  


          3)Related legislation. SB 24 (Hill) of 2016, currently in this  
            committee, authorizes a JPA formed by the Cities of Belmont,  
            Foster City, and San Mateo to provide the JPA employees a  
            defined benefit plan or formula that those employees received  
            as classic CalPERS members from their employment with the  








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            cities.   





          Analysis Prepared by:Luke Reidenbach / APPR. / (916)  
          319-2081