BILL NUMBER: AB 1166 CHAPTERED
BILL TEXT
CHAPTER 678
FILED WITH SECRETARY OF STATE SEPTEMBER 22, 1998
APPROVED BY GOVERNOR SEPTEMBER 21, 1998
PASSED THE ASSEMBLY AUGUST 28, 1998
PASSED THE SENATE AUGUST 27, 1998
AMENDED IN SENATE AUGUST 24, 1998
AMENDED IN SENATE JULY 27, 1998
AMENDED IN SENATE JUNE 4, 1998
AMENDED IN ASSEMBLY JANUARY 27, 1998
AMENDED IN ASSEMBLY JANUARY 16, 1998
AMENDED IN ASSEMBLY JANUARY 6, 1998
INTRODUCED BY Assembly Member House
FEBRUARY 28, 1997
An act to amend Section 22138.5, of and to repeal Section 22175
of, the Education Code, and to amend Sections 20200, 20201, 20322,
20398, 20403, 20575, 20578, 20636, 21493, 21752, 21757, 22013,
22013.1, 22013.3, 22013.4, 22013.6, 22013.7, 22013.75, 22013.76,
22013.8, 22013.82, 22013.85, 22013.9, 22013.95, 22013.955, 22013.96,
22013.97, 22013.10, 22013.11, 22014, 22014.1, and 22014.5 of, and to
add Section 20057.1 to, the Government Code, relating to public
employees.
LEGISLATIVE COUNSEL'S DIGEST
AB 1166, House. Public employees: retirement.
(1) The State Teachers' Retirement Law defines "full time" for
purposes of calculating benefits.
This bill would prescribe standards for purposes of determining
full time for specified adult education and community college
positions.
(2) The Public Employees' Retirement Law under various
circumstances requires opinions or rulings to be obtained from
federal agencies respecting compliance with federal law.
This bill would require any public agency applying to participate
in the Public Employees' Retirement System on and after January 1,
1999, to submit a specified opinion from the United States Department
of Labor.
(3) The Public Employees' Retirement Law establishes a loan
program to assist in the purchase of homes in this state.
This bill would authorize home loans throughout the United States.
(4) The Public Employees' Retirement Law excludes specified local
elected or appointed officers from membership in the system.
This bill would clarify the operative date of that exclusion.
(5) The Public Employees' Retirement Law prescribes state peace
officer/firefighter and state safety membership based upon employment
classifications.
This bill would clarify the membership category of specified
positions.
(6) The Public Employees' Retirement Law prescribes terms and
conditions for terminating agency contracts for participation in the
retirement system.
This bill would clarify certain termination provisions.
(7) The Public Employees' Retirement Law requires benefit
adjustments as a result of specified federal limitations.
This bill would revise those provisions to reflect changes in the
federal limitations.
(8) The bill would incorporate additional changes to Section
22013.7 of the Government Code to take effect if both bills are
enacted and this bill is enacted last.
THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:
SECTION 1. Section 22138.5 of the Education Code is amended to
read:
22138.5. (a) "Full time" means the days or hours of creditable
service the employer requires to be performed by a class of employees
in a school year in order to earn the compensation earnable as
defined in Section 22115 and specified under the terms of a
collective bargaining agreement or employment agreement. For the
purpose of crediting service under this part, "full time" shall not
be less than the minimum standards specified in this section.
(b) The minimum standard for full time in kindergarten through
grade 12 shall be:
(1) One hundred seventy-five days per year or 1,050 hours per year
except as provided in paragraphs (2) and (3).
(2) (A) One hundred ninety days per year or 1,520 hours per year
for all principals and program managers, including advisers,
coordinators, consultants, and developers or planners of curricula,
instructional materials, or programs, and for administrators except
as provided in subparagraph (B).
(B) Two hundred fifteen days per year or 1,720 hours per year
including school and legal holidays pursuant to the policy adopted by
the employer's governing board for administrators at a county office
of education.
(3) One thousand fifty hours per year for teachers in adult
education programs.
(c) The minimum standard for full time in community colleges shall
be:
(1) One hundred seventy-five days per year or 1,050 hours per year
except as provided in paragraphs (2), (3), (4), (5), and (6). Full
time shall include time for duties the employer requires to be
performed as part of the full time assignment for a particular class
of employees.
(2) One hundred ninety days per year or 1,520 hours per year for
all program managers and for administrators, except as provided in
paragraph (3).
(3) Two hundred fifteen days per year or 1,720 hours per year
including school and legal holidays pursuant to the policy adopted by
the employer's governing board for administrators at a district
office.
(4) One hundred seventy-five days per year or 1,050 hours per year
for all counselors and librarians.
(5) Five hundred twenty-five instructional hours per year for all
credit instructors employed on a part-time basis. If an instructor
receives compensation for office hours pursuant to Article 10
(commencing with Section 87880) of Chapter 3 of Part 51, then the
minimum standard established herein shall be increased appropriately
by the number of office hours required annually for the class of
employees.
(6) Eight hundred seventy-five instructional hours per year for
all adult education instructors. If an instructor receives
compensation for office hours pursuant to Article 10 (commencing with
Section 87880) of Chapter 3 of Part 51, then the minimum standard
established herein shall be increased appropriately by the number of
office hours required annually for the class of employees.
(d) The board shall have final authority to determine full time
for purposes of crediting service under this part if full time is not
otherwise specified herein.
SEC. 2. Section 22175 of the Education Code is repealed.
SEC. 3. Section 20057.1 is added to the Government Code, to read:
20057.1. To qualify as a "public agency" within the meaning of
this part, any organization that qualifies under amendments to the
definitions of "public agency" effective on or after January 1, 1999,
shall also obtain a written advisory opinion from the United States
Department of Labor stating that the participation of the officers
and employees of the organization in this system does not affect this
system's exemption as a governmental plan under Section 1001 et seq.
of Title 29 of the United States Code.
SEC. 4. Section 20200 of the Government Code is amended to read:
20200. (a) Notwithstanding any other provision of law, the board
may establish a program utilizing the retirement fund to assist
system members, through financing, to obtain homes throughout the
United States.
(b) For the purpose of this section, the term "member" means any
person who is receiving, or is entitled to receive, a retirement
allowance funded by this system, the Legislators' Retirement System,
the Judges' Retirement System, or the Judges' Retirement System II,
notwithstanding any vesting requirement and without regard to present
eligibility to retire.
(c) The board shall adopt regulations governing the program that
shall, among other things, provide:
(1) That home loans be made available to members for the purchase
of single-family dwellings, two-family dwellings, three-family
dwellings, four-family dwellings, single-family cooperative
apartments, and single-family condominiums.
(2) That private lending institutions throughout the United States
shall originate and service its home loans pursuant to agreements
entered into between those institutions and the board.
(3) That the recipients of the loans occupy the homes as their
permanent residences in accord with rules and regulations established
by the board.
(4) That its home loans shall be available only for the purchase
or refinancing of homes throughout the United States and that under
no condition shall a member have more than one outstanding loan.
(5) That the amount and length of the loans shall be pursuant to a
schedule periodically established by the board that shall provide a
loan-to-value ratio of: (A) for the first loan, except for
three-family dwellings and four-family dwellings, a maximum of 95
percent of the first loan; (B) for the first loan on three-family
dwellings and four-family dwellings, a maximum of 90 percent of the
first loan; and (C) for each additional loan, a maximum of 80 percent
of each additional loan. The portion of any loan exceeding 80
percent of value shall be insured by an admitted mortgage guaranty
insurer conforming to Chapter 2A (commencing with Section 12640.01)
of Part 6 of Division 2 of the Insurance Code, in an amount so that
the unguaranteed portion of the loan does not exceed 75 percent of
the market value of the property together with improvements thereon.
(6) That there may be prepayment penalties assessed on its loans
in accordance with rules and regulations established by the board.
(7) That the criteria and terms for its loans shall provide the
greatest benefit to members consistent with the financial integrity
of the program and the sound investment of the retirement fund.
(8) Any other terms and conditions as the board shall deem
appropriate.
(d) This section shall be known as, and may be cited as, the Dave
Elder Public Employees' Retirement System Member Home Loan Program
Act.
SEC. 5. Section 20201 of the Government Code is amended to read:
20201. (a) It is the intent of the Legislature that the
provisions of this section be available to assist members in
obtaining homes throughout the United States. The Legislature
intends that home loans made pursuant to Section 20200 and this
section shall be secured primarily by the property acquired except as
authorized pursuant to paragraph (1) of subdivision (b) and shall
not exceed the fair market value of the property acquired.
(b) The board shall include in any program established pursuant to
Section 20200 a procedure whereby a member may obtain 100-percent
financing for the purchase of a single-family dwelling unit in
accordance with the following criteria:
(1) The member shall obtain one loan with a loan-to-value ratio
not to exceed 95 percent secured by the purchased home and a second
personal loan with a loan-to-value ratio not to exceed 5 percent
secured by a portion of the accumulated contributions and vested
accrued benefits in the member's individual account. A member can
only have one outstanding personal loan.
(2) The loan secured by the purchased home shall be consistent
with the loan-to-value ratios specified in the schedules established
pursuant to Section 20200.
(3) The amount of a conforming loan on a single-family dwelling
unit shall not exceed 95 percent of the Federal National Mortgage
Association (FNMA) conforming loan limits. The amount shall be
adjusted annually as determined by the Federal National Mortgage
Association (FNMA). In no event, shall the loan amount exceed three
hundred fifty thousand dollars ($350,000).
(4) In no event may the personal loan secured by the accumulated
contributions and vested accrued benefits in the member's individual
account exceed 50 percent of the current value amount of the
accumulated contributions.
(5) The pledge of security under this section shall remain in
effect until the loan is paid in full.
(c) In the event of a default on the personal loan secured by the
member's contributions as authorized by this section, the board may
deduct an amount from the member's contributions on deposit and
adjust the member's accrued benefit, up to the amount pledged as
security, prior to making any disbursement of retirement benefits.
(d) The secured personal loan permitted under this section shall
be made available only to currently employed members who meet
eligibility criteria the board deems advisable.
(e) If the member is married at the time the home is purchased
with a personal loan secured by the member's contributions as
authorized by this section, then the member's spouse shall agree in
writing to the pledge of security, as to his or her community
interest in the amount pledged regardless of whether title to the
home is in joint tenancy.
(f) The pledge of security under this section shall take binding
effect, notwithstanding Section 21255. In the event of default, the
accumulated contributions in the member's account shall be reduced as
necessary to recover any outstanding loan balance, not to exceed the
pledged amount.
(g) Appropriate administrative costs of implementing this section
shall be paid by the members utilizing this section. Those costs may
be included in the loan amount.
(h) Appropriate interest rates shall be periodically reviewed and
adjusted to provide loans to members consistent with the financial
integrity of the member home loan program and the sound and prudent
investment of the retirement fund.
(i) The amendments to this section by Chapter 1094 of the Statutes
of 1994 shall be deemed to have become operative on November 1,
1993.
(j) The board shall administer this section under other terms and
conditions it deems appropriate and in keeping with the investment
standard set forth in Section 20151. The board may adopt procedural
guidelines as necessary for its administration of this section and to
assure compliance with applicable state and federal laws.
SEC. 6. Section 20322 of the Government Code is amended to read:
20322. (a) An elective officer is excluded from membership in
this system unless the officer files with the board an election in
writing to become a member. The officer may elect at any time, and
has the option of making contributions to this system in the amount
that the officer would have contributed had the officer not been
excluded, plus an amount equal to the interest, to the date or dates
of his or her payment, that would have been credited to those
contributions had he or she not been excluded. The contributions and
interest shall be paid to this system at times, in amounts, and in a
manner, fixed by the board. If the officer affirmatively exercises
the option:
(1) He or she shall receive credit for previous state service in
the same manner as if he or she had not been excluded, and
(2) His or her rate of contributions shall be based on the nearest
age at the time he or she first was excluded.
(b) As used in this part, "elective officer" includes any officer
of the Senate or Assembly who is elected by vote of the members of
either or both of the houses of the Legislature, and any appointive
officer of a city or county occupying a fixed term of office, as well
as officers of the state or contracting agencies elected by the
people, and persons elected to a city council or a county board of
supervisors.
(c) Notwithstanding any other provision of subdivision (a) or (b),
elected or appointed officers of a county superintendent of schools,
school district, or community college district, or of a contracting
agency, who serve on public commissions, boards, councils, or similar
legislative or administrative bodies are excluded from membership in
this system. This exclusion shall only apply to those elected or
appointed officers, other than city or county officers, who are first
elected or appointed to an office on or after July 1, 1994, or who
are elected or appointed to a term of office not consecutive with the
term of office held on June 30, 1994. For city or county elected or
appointed officers, this exclusion shall only apply to those
officers who are first elected or appointed to an office on or after
January 1, 1997, or who are elected or appointed to a term of office
not consecutive with the term of office held on December 31, 1996.
This exclusion shall not apply to persons elected to a city council
or county board of supervisors.
(d) Any person holding the office of city attorney or the office
of assistant city attorney, whether employed, appointed, or elected,
is excluded from the definition of "elective officer" as defined in
subdivision (b). This subdivision shall apply only to persons first
employed, elected, or appointed on or after July 1, 1994, or
following any break in state service while serving in the office if
the office was held on June 30, 1994.
(e) In accordance with Section 20125 the board shall be the sole
judge of which elected or appointed positions qualify the incumbent
as an "elective officer" in this system under this section.
(f) Notwithstanding any other provision of law, with respect to
elective officers of contracting agencies, payment by a contracting
agency of employer contributions and any other amounts for employer
paid benefits under this system shall not be construed as receipt of
salary or compensation by the elective officer for purposes of any
statutory salary or compensation limitation.
SEC. 7. Section 20398 of the Government Code is amended to read:
20398. "State peace officer/firefighter member" also includes:
(a) State officers and employees designated as peace officers as
defined in Sections 830.1, 830.2, 830.3, 830.38, 830.4, and 830.5 of
the Penal Code, except a patrol member, or a firefighter whose
principal duties consist of active firefighting/fire suppression, who
is either excluded from the definition of state employee in
subdivision (c) of Section 3513 or is a nonelected officer or
employee of the executive branch of government who is not a member of
the civil service, provided, that those officers and employees have
responsibility for the direct supervision of state peace
officer/firefighter personnel specified in Sections 20391, 20392,
20393, and 20395. The Department of Personnel Administration shall
annually determine which classes meet the above conditions and are
not classes specified in Sections 20391, 20392, 20393, and 20395, and
report its findings to the Legislature and to this system, to be
effective July 1 of each year.
(b) Members who are reclassified pursuant to this section may file
an irrevocable election to remain subject to their prior retirement
formula and the corresponding rate of contributions. The Director of
Corrections may, upon appointment to that office on or after January
1, 1999, file an irrevocable election to be subject to the
industrial formula and the corresponding rate of contributions. The
elections must be filed within 90 days of notification by the board.
Members who so elect shall be subject to the reduced benefit factor
specified in Section 21353 only for the service included in the
federal system.
SEC. 8. Section 20403 of the Government Code is amended to read:
20403. "State safety member" shall also include officers and
employees in (a) the Department of Corrections employed to perform
the duties now performed in positions with the following class
titles: Deputy Director, Department of Corrections; Deputy Director,
Institutions, Camps and Program Services Division; Deputy Director,
Parole and Community Services; Warden; Warden--San Quentin;
Superintendent II and III, Department of Corrections; Deputy
Superintendent; Correctional Administrator; Program Administrator,
Correctional Institution; all classes of Correctional Program
Supervisor; Correctional Captain; Correctional Lieutenant;
Correctional Sergeant; Correctional Officer; all classes of Women's
Correctional Supervisor; Assistant Deputy Director, Parole and
Community Services; all classes of Parole Administrator, Adult
Parole; all classes of Parole Agent, Adult Parole; Assistant
Director, Investigations and Law Enforcement Liaison; Senior Special
Agent; Special Agent; all classes of Women's Parole Agent; Medical
Facility Superintendent; Superintendent, California Institution for
Women; all classes of Correctional Counselor; Chief and Assistant
Chief Transportation Officer, (b) the Department of the Youth
Authority employed to perform the duties now performed in positions
with the following class titles: Director, Department of the Youth
Authority; Chief, Division of Parole and Community Services; Deputy
Chief, Division of Parole and Community Services; Program
Administrator, Correctional School; Assistant Superintendent,
Correctional School; all classes of Superintendent, Correctional
School; Youth Authority Camp Superintendent; Assistant
Superintendent, Youth Authority Camp; Chief, Division of
Institutions; Treatment Team Supervisor; all classes of
Transportation Officers, Youth Authority; Security Officer; all
classes of Group Supervisors; all classes of Parole Agent, Youth
Authority; all classes of Youth Counselor; Supervisor Community
Treatment Programs; Correctional Casework Training Supervisor;
Correctional Casework Trainee; all classes of Correctional Counselor,
(c) the Board of Prison Terms employed to perform duties now
performed in positions with the following class titles: all classes
of Parole Agent; all classes of Correctional Counselor and the Chief
of Investigation, (d) the Youthful Offender Parole Board employed to
perform duties now performed in positions with the following class
titles: all classes of Parole Agent, and (e) the Prison Industry
Authority employed to perform duties now performed in positions with
the following class titles: General Manager; Assistant General
Manager, Administration and Marketing Branch; Chief, Industry
Implementation Division; and Activation Manager.
SEC. 9. Section 20575 of the Government Code is amended to read:
20575. Notwithstanding any other provision of this part to the
contrary, upon request of a terminating agency, the board shall enter
into an agreement with the governing body of a terminating agency in
order to ensure that (a) the final compensation used in the
calculation of benefits of its employees shall be calculated in the
same manner as the benefits of employees of agencies that are not
terminating, regardless of whether they retire directly from
employment with the terminating agency or continue in other public
service; and (b) related necessary adjustments in the employer's
contribution rate are made, from time to time, by the board prior to
the date of termination to ensure that benefits are adequately funded
or any other actuarially sound payment technique, including a
lump-sum payment at termination, is agreed to by the governing body
of the terminating agency and the board.
The terminating agency that will cease to exist shall notify the
board not sooner than three years nor later than one year prior to
its termination date of its intention to enter into agreement
pursuant to this section. The terms of the agreement shall be
reflected in an amendment to the agency's contract with the board.
If the board, itself, determines that it is not in the best
interests of the system, it may choose not to enter into an agreement
pursuant to this section.
SEC. 10. Section 20578 of the Government Code is amended to read:
20578. Notwithstanding any other provision of law, on and after
January 1, 1991, the rights and benefits of a former employee of a
contracting agency which terminated on or before January 1, 1991, or
of his or her beneficiary, shall be the same as if the agency had
continued as a contracting agency. Any monthly allowance of that
individual, or of his or her beneficiary, that was reduced pursuant
to Section 20577 because the contracting agency failed to pay the
board the amount of the difference, shall not be subject to continued
reduction on or after January 1, 1991. As of January 1, 1991,
benefits shall be paid at the level provided in the contract prior to
that reduction. However, if a former employee of a contracting
agency that terminated on or before January 1, 1991, becomes employed
by another covered employer after the date of termination, including
an employer subject to reciprocity, the benefits shall be calculated
by using the highest compensation earned by the individual.
In accordance with Section 20580, an individual who has withdrawn
his or her accumulated contributions from the terminated agency shall
not be permitted to redeposit any withdrawn contributions upon again
becoming a member of this system.
All assets and liabilities of contracting agencies which have
terminated shall be pooled into a single account to provide
exclusively for the payment of benefits. All benefits shall be
reduced proportionally pursuant to Section 20577 prior to the
transfer of assets to the pool if the amount of the terminating
agency's assets are less than the actuarial equivalent described in
clause (1) of Section 20576 and if the agency fails to pay the
difference.
SEC. 11. Section 20636 of the Government Code is amended to read:
20636. (a) "Compensation earnable" by a member means the payrate
and special compensation of the member, as defined by subdivisions
(b), (c), and (g), and as limited by Section 21752.5.
(b) (1) "Payrate" means the normal monthly rate of pay or base pay
of the member paid in cash to similarly situated members of the same
group or class of employment for services rendered on a full-time
basis during normal working hours. "Payrate" for a member who is not
in a group or class means the monthly rate of pay or base pay of the
member, paid in cash and pursuant to publicly available pay
schedules, for services rendered on a full-time basis during normal
working hours, subject to the limitations of paragraph (2) of
subdivision (e).
(2) The computation for any leave without pay of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence.
(3) The computation for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in state service.
(c) (1) Special compensation of a member includes any payment
received for special skills, knowledge, abilities, work assignment,
workdays or hours, or other work conditions.
(2) Special compensation shall be limited to that which is
received by a member pursuant to a labor policy or agreement or as
otherwise required by state or federal law, to similarly situated
members of a group or class of employment that is in addition to
payrate. If an individual is not part of a group or class, special
compensation shall be limited to that which the board determines is
received by similarly situated members in the closest related group
or class that is in addition to payrate, subject to the limitations
of paragraph (2) of subdivision (e).
(3) Special compensation shall be for services rendered during
normal working hours and, when reported to the board, the employer
shall identify the pay period in which the special compensation was
earned.
(4) Special compensation may include the full monetary value of
normal contributions paid to the board by the employer, on behalf of
the member and pursuant to Section 20691, provided that the employer'
s labor policy or agreement specifically provides for the inclusion
of the normal contribution payment in compensation earnable.
(5) The monetary value of any service or noncash advantage
furnished by the employer to the member, except as expressly and
specifically provided in this part, shall not be special compensation
unless regulations promulgated by the board specifically determine
that value to be "special compensation."
(6) The board shall promulgate regulations that delineate more
specifically and exclusively what constitutes "special compensation"
as used in this section. A uniform allowance, the monetary value of
employer-provided uniforms, holiday pay, and premium pay for hours
worked within the normally scheduled or regular working hours that
are in excess of the statutory maximum workweek or work period
applicable to the employee under Section 201 et seq. of Title 29 of
the United States Code shall be included as special compensation and
appropriately defined in those regulations.
(7) Special compensation does not include any of the following:
(A) Final settlement pay.
(B) Payments made for additional services rendered outside of
normal working hours, whether paid in lump sum or otherwise.
(C) Any other payments the board has not affirmatively determined
to be special compensation.
(d) Notwithstanding any other provision of law, payrate and
special compensation schedules, ordinances, or similar documents
shall be public records available for public scrutiny.
(e) (1) As used in this part, "group or class of employment" means
a number of employees considered together because they share
similarities in job duties, work location, collective bargaining
unit, or other logical work related grouping. Under no circumstances
shall one employee be considered a group or class.
(2) Increases in compensation earnable granted to any employee who
is not in a group or class shall be limited during the final
compensation period applicable to the employees, as well as the two
years immediately preceding the final compensation period, to the
average increase in compensation earnable during the same period
reported by the employer for all employees who are in the same
membership classification, except as may otherwise be determined
pursuant to regulations adopted by the board that establish
reasonable standards for granting exceptions.
(f) As used in this part, "final settlement pay" means any pay
or cash conversions of employee benefits that are in excess of
compensation earnable, that are granted or awarded to a member in
connection with or in anticipation of a separation from employment.
The board shall promulgate regulations that delineate more
specifically what constitutes final settlement pay.
(g) (1) Notwithstanding subdivision (a), "compensation earnable"
for state members means the average monthly compensation, as
determined by the board, upon the basis of the average time put in by
members in the same group or class of employment and at the same
rate of pay, and is composed of the payrate and special compensation
of the member. The computation for any absence of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence and that for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in that state service.
(2) Notwithstanding subdivision (b), "payrate" for state members
means the average monthly remuneration paid in cash out of funds paid
by the employer to similarly situated members of the same group or
class of employment, in payment for the member's services or for time
during which the member is excused from work because of holidays,
sick leave, vacation, compensating time off, or leave of absence.
"Payrate" for state members shall include:
(A) Any amount deducted from a member's salary for any of the
following:
(i) Participation in a deferred compensation plan established
pursuant to Chapter 4 (commencing with Section 19993) of Part 2.6.
(ii) Payment for participation in a retirement plan that meets the
requirements of Section 401(k) of Title 26 of the United States
Code.
(iii) Payment into a money purchase pension plan and trust that
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
(iv) Participation in a flexible benefits program.
(B) Any payment in cash by the member's employer to one other than
an employee for the purpose of purchasing an annuity contract for a
member under an annuity plan that meets the requirements of Section
403(b) of the Internal Revenue Code.
(C) Employer "pick up" of member contributions that meets the
requirements of Section 414(h)(2) of Title 26 of the United States
Code.
(D) Any disability or workers' compensation payments to safety
members in accordance with Section 4800 of the Labor Code.
(E) Temporary industrial disability payments pursuant to Article 4
(commencing with Section 19869) of Chapter 2.5 of Part 2.6.
(F) Any other payments the board may determine to be within
"payrate."
(3) Notwithstanding subdivision (c), "special compensation" for
state members shall mean all of the following:
(A) The monetary value, as determined by the board, of living
quarters, board, lodging, fuel, laundry, and other advantages of any
nature furnished a member by his or her employer in payment for the
member's services.
(B) Any compensation for performing normally required duties, such
as holiday pay, bonuses (for duties performed on regular work
shift), educational incentive pay, maintenance and noncash payments,
out-of-class pay, marksmanship pay, hazard pay, motorcycle pay,
paramedic pay, emergency medical technician pay, POST certificate
pay, and split shift differential.
(C) Compensation for uniforms, except as provided in Section
20632.
(D) Any other payments the board may determine to be within
"special compensation."
(4) Neither "payrate" nor "special compensation" for state members
shall include any of the following:
(A) The provision by the state employer of any medical or hospital
service or care plan or insurance plan for its employees (other than
the purchase of annuity contracts as described below in this
subdivision), any contribution by the employer to meet the premium or
charge for such a plan, or any payment into a private fund to
provide health and welfare benefits for employees.
(B) Any payment by the state employer of the employee portion of
taxes imposed by the Federal Insurance Contribution Act.
(C) Amounts not available for payment of salaries and that are
applied by the employer for the purchase of annuity contracts
including those that meet the requirements of Section 403(b) of the
Internal Revenue Code.
(D) Any benefits paid pursuant to Article 5 (commencing with
Section 19878) of Chapter 2.5 of Part 2.6.
(E) Employer payments that are to be credited as employee
contributions for benefits provided by this system, or employer
payments that are to be credited to employee accounts in deferred
compensation plans; provided, that the amounts deducted from a member'
s wages for participation in a deferred compensation plan shall not
be considered to be "employer payments."
(F) Payments for unused vacation, annual leave, personal leave,
sick leave, or compensating time off, whether paid in lump sum or
otherwise.
(G) Final settlement pay.
(H) Payments for overtime, including pay in lieu of vacation or
holiday.
(I) Compensation for additional services outside regular duties,
such as standby pay, callback pay, court duty, allowance for
automobiles, and bonuses for duties performed after the member's
regular work shift.
(J) Amounts not available for payment of salaries and which are
applied by the employer for any of the following:
(i) The purchase of a retirement plan which meets the requirements
of Section 401(k) of Title 26 of the United States Code.
(ii) Payment into a money purchase pension plan and trust which
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
(K) Payments made by the employer to or on behalf of its employees
who have elected to be covered by a flexible benefits program, where
those payments reflect amounts that exceed the employee's salary.
(L) Any other payments the board may determine are not "payrate"
or "special compensation."
(5) If the provisions of this subdivision, including the board's
determinations pursuant to subparagraph (F) of paragraph (2) and
subparagraph (D) of paragraph (3), are in conflict with the
provisions of a memorandum of understanding reached pursuant to
Section 3517.5 or 3560, the memorandum of understanding shall be
controlling without further legislative action, except that if the
provisions of a memorandum of understanding require the expenditure
of funds, those provisions shall not become effective unless approved
by the Legislature in the annual Budget Act. No memorandum of
understanding reached pursuant to Section 3517.5 or 3560 may exclude
from the definition of either "payrate" or "special compensation" a
member's base salary payments or payments for time during which the
member is excused from work because of holidays, sick leave,
vacation, compensating time off, or leave of absence. If any items
of compensation earnable are included by memorandum of understanding
as "payrate" or "special compensation" for retirement purposes for
represented and higher education employees pursuant to this
paragraph, the Department of Personnel Administration or the Trustees
of the California State University shall obtain approval from the
board for that inclusion.
(6) (A) Subparagraph (B) of paragraph (3) of this subdivision
prescribes that compensation earnable includes any compensation for
performing normally required duties, such as holiday pay, bonuses
(for duties performed on regular work shift), educational incentive
pay, maintenance and noncash payments, out-of-class pay, marksmanship
pay, hazard pay, motorcycle pay, paramedic pay, emergency medical
technician pay, POST certificate pay, and split shift differential;
and includes compensation for uniforms, except as provided in Section
20632; and subparagraph (I) of paragraph (4) excludes from
compensation earnable compensation for additional services outside
regular duties, such as standby pay, callback pay, court duty,
allowance for automobile, and bonuses for duties performed after
regular work shift.
(B) Notwithstanding subparagraph (A) of this paragraph, the
Department of Personnel Administration shall determine which payments
and allowances that are paid by the state employer shall be
considered compensation for retirement purposes for any employee who
either is excluded from the definition of state employee in
subdivision (c) of Section 3513, or is a nonelected officer or
employee of the executive branch of government who is not a member of
the civil service.
(C) Notwithstanding subparagraph (A) of this paragraph, the
Trustees of the California State University shall determine which
payments and allowances that are paid by the trustees shall be
considered compensation for retirement purposes for any managerial
employee, as defined in subdivision (l) of Section 3562, or
supervisory employee as defined in Section 3580.3.
SEC. 12. Section 21493 of the Government Code is amended to read:
21493. (a) If a person had no beneficiary designation in effect
on the date of death, any benefit payable shall be paid to the
survivors of the person in the following order:
(1) The decedent's spouse.
(2) The decedent's natural or adopted children, including a
natural child adopted by another who meets the following criteria:
(A) The natural parent and adopted child lived together at any
time as parent and child or the natural parent was married to or was
cohabiting with the other natural parent at the time the child was
conceived and died before the birth of the child; and
(B) The child was adopted by the spouse of either of the natural
parents or after the death of either of the natural parents or the
child is a natural child adopted by another as that phrase is defined
or construed by the Probate Code.
(3) The decedent's parents.
(4) The decedent's brothers and sisters.
(b) If a deceased person had no effective beneficiary designation
and there are no survivors in the groups specified in subdivision (a)
who are entitled to the benefit under this section, the benefit
shall be paid to the estate of the decedent, if the estate is either
probated or subject to probate. Any benefit payable by this system
may be paid either to the estate or to the duly authorized
representative or representatives of the estate upon receipt by this
system of a court order appointing an executor, administrator, or
personal representative.
(c) If there are no survivors in the groups specified in
subdivision (a) and the estate of the person described in subdivision
(b) does not require probate, irrespective of whether probate is
filed, the benefit shall be paid directly to the decedent's trust.
(d) If there are no survivors in the groups specified in
subdivision (a) and the estate of the person described by subdivision
(b) does not require probate, irrespective of whether probate is
filed, and the decedent has not established a trust as described by
subdivision (c), the benefit shall be paid directly to the surviving
next of kin in the following order.
(1) Stepchildren.
(2) Grandchildren, including stepgrandchildren.
(3) Nieces and nephews.
(4) Great grandchildren.
(5) Cousins.
(e) For purposes of determining the application of subdivisions
(b), (c), and (d) the amount of the benefit payable from this system
shall not be included in calculating the worth of the estate.
(f) For purposes of this section, the term "stepchild" shall mean
a person who had a regular parent-child relationship with the
deceased person.
SEC. 13. Section 21752 of the Government Code is amended to read:
21752. (a) (1) In accordance with Section 21756, a member's
annual retirement benefits, adjusted to the actuarial equivalent of a
straight-life annuity if payable in a form other than a
straight-life annuity or a qualified joint and survivor annuity as
provided under Section 21460, and determined without regard to any
employee contributions or rollover contributions, as defined in
Sections 402(a)(5), 403(a)(4), and 408(d)(3)) of Title 26 of the
United States Code, otherwise payable to the member under Part 3
(commencing with Section 20000) and under any other defined benefit
plan maintained by the employer that is subject to Section 415 of
Title 26 of the United States Code, shall not exceed, in the
aggregate, the dollar limit applicable pursuant to Section 415(b)(1)
(A) of Title 26 of the United States Code; as appropriately modified
by Section 415(b)(2)(F) and (G) of Title 26 the United States Code.
(2) However, the annual retirement benefit payable to a member
shall be deemed not to exceed the limitations prescribed in paragraph
(1) if the benefit does not exceed ten thousand dollars ($10,000)
and the member has at no time participated in a tax qualified defined
contribution plan maintained by the employer.
(b) These limitations shall be applied pursuant to Section 415(b)
(10) of the Title 26 of the United States Code.
(c) Part 3 (commencing with Section 20000) shall be construed as
if it included this section.
SEC. 14. Section 21757 of the Government Code is amended to read:
21757. (a) If the retirement benefits of any member or his or her
survivors or beneficiaries would be limited by Section 415 of Title
26 of the United States Code, the board shall adjust the payment of
benefits pursuant to Part 3 (commencing with Section 20000),
including, but not limited to, cost-of-living adjustments,
cost-of-living banks, temporary annuities, survivor continuance
benefits or any combinations thereof in order to maximize benefits
within the limits of Section 415.
(b) The board shall establish a program of replacement benefits
for members and any survivors or beneficiaries whose retirement
benefits are limited by Section 415 and cannot be fully maximized
pursuant to Part 3. The benefits provided by that program may
consist of deferred compensation, cash payments, health benefits, or
supplemental disability benefits, as shall be determined by the board
to give effect to the purpose of this part. The factors the board
may take into consideration in making its determination shall
include, but not be limited to, the following: legal constraints,
administrative feasibility, and cost-effectiveness. The board may
periodically modify the replacement benefits program and may add or
eliminate any type of replacement benefits, as necessary, to carry
out the purpose of this part. The administrative costs of the
replacement benefits program shall be satisfied out of funds credited
to the accounts of the participant members, and shall not be paid
from the retirement fund or the retirement trust fund of a
participating agency.
(c) The application of Section 415 to benefits provided under Part
3 and this part shall not be taken into account for purposes of
determining employers' or employees' contribution rates, until
replacement benefits are implemented pursuant to Section 21758.
(d) Under no circumstances shall the replacement benefit program
result in increased benefit costs to an employer, member, or
annuitant.
SEC. 15. Section 22013 of the Government Code is amended to read:
22013. "Policeman" as used in this part includes members of the
California Highway Patrol, state safety members of the Public
Employees' Retirement System employed by the Department of Justice,
sheriffs, undersheriffs, deputy sheriffs, marshals and deputy
marshals, and any other employee of a public agency other than the
state or University of California in a position designated as a
policeman's position by the board for the purposes of Section 218(d)
(5)(A) of the Social Security Act.
SEC. 16. Section 22013.1 of the Government Code is amended to
read:
22013.1. "Policeman" as used in this part also includes persons
employed in the Department of Fish and Game in connection with its
warden service, whose principal duties consist of active law
enforcement service, including immediate supervision by persons
employed to perform the duties now performed under the titles of
chief and assistant chief of warden service, and captain of patrol
boats for the purposes of Section 218(d)(5)(A) of the Social Security
Act.
SEC. 17. Section 22013.3 of the Government Code is amended to
read:
22013.3. "Policeman" as used in this part also includes persons
employed in positions set forth in Section 20403 for the purposes of
Section 218(d)(5)(A) of the Social Security Act.
SEC. 18. Section 22013.4 of the Government Code is amended to
read:
22013.4. "Policeman" as used in this part also includes persons
designated by Section 31470.6 as persons whose principal duties
consist of "active law enforcement" for the purposes of Section 218
(d)(5)(A) of the Social Security Act.
SEC. 19. Section 22013.6 of the Government Code is amended to
read:
22013.6. "Policeman" as used in this part also includes persons
employed in positions set forth in Sections 20438 and 31469.4 for the
purposes of Section 218(d)(5)(A) of the Social Security Act.
This section shall be operative only in counties which elect to
terminate the social security coverage of county probation officers
and juvenile hall employees in that county and elect to include such
officers and employees within the safety membership retirement
category.
SEC. 20. Section 22013.7 of the Government Code is amended to
read:
22013.7. "Policeman" or "fireman," as used in this part, also
includes persons employed in positions set forth in Section 20414 for
the purposes of Section 218(d)(5)(A) of the Social Security Act (42
U.S.C. Sec. 418(d)(5)(A)).
SEC. 20.5. Section 22013.7 of the Government Code is amended to
read:
22013.7. "Policeman" or "fireman," as used in this part, also
includes persons employed in positions set forth in Sections 20403.5
and 20414 for the purposes of Section 218(d)(5)(A) of the Social
Security Act (42 U.S.C. Sec. 418(d)(5)(A)).
SEC. 21. Section 22013.75 of the Government Code is amended to
read:
22013.75. "Policeman," as used in this part, also includes
persons employed in positions identified in Section 20407 for the
purposes of Section 218(d)(5)(A) of the Social Security Act (42
U.S.C. Sec. 418(d)(5)(A)).
SEC. 22. Section 22013.76 of the Government Code is amended to
read:
22013.76. "Policeman," as used in this part, also includes
persons employed in positions identified in Section 20408 for the
purposes of Section 218(d)(5)(A) of the Social Security Act (42
U.S.C. Sec. 418(d)(5)(A)).
SEC. 23. Section 22013.8 of the Government Code, as amended by
Chapter 88 of the Statutes of 1998, is amended to read:
22013.8. "Policeman" as used in this part also includes persons
employed in classifications listed in Sections 20405 and 20405.1, for
the purposes of Section 218(d)(5)(A) of the Social Security Act (42
U.S.C. Sec. 418(d)(5)(A)).
SEC. 24. Section 22013.82 of the Government Code, as added by
Chapter 91 of the Statutes of 1998, is amended to read:
22013.82. "Policeman" as used in this part also includes persons
employed in classifications listed in Section 20405.3, for the
purposes of Section 218(d)(5)(A) of the Social Security Act (42
U.S.C. Sec. 418(d)(5)(A)).
SEC. 25. Section 22013.85 of the Government Code is amended to
read:
22013.85. "Policeman" as used in this part also includes persons
employed in the classification listing in Section 20411 for the
purposes of Section 218(d)(5)(A) of the Social Security Act.
SEC. 26. Section 22013.9 of the Government Code is amended to
read:
22013.9. "Policeman" as used in this part also includes persons
employed in positions set forth in Section 20406 for the purposes of
Section 218(d)(5)(A) of the Social Security Act.
SEC. 27. Section 22013.95 of the Government Code is amended to
read:
22013.95. "Policeman" or "fireman," as used in this part, also
includes persons employed in positions set forth in Section 20393 for
the purposes of Section 218(d)(5) (A) of the Social Security Act (42
U.S.C. Sec. 418(d)(5)(A)).
SEC. 28. Section 22013.955 of the Government Code is amended to
read:
22013.955. "Policeman" as used in this part also includes persons
employed in the classifications set forth in Section 20397 for the
purposes of Section 218(d)(5)(A) of the Social Security Act.
SEC. 29. Section 22013.96 of the Government Code is amended to
read:
22013.96. "Policeman" or "fireman," as used in this part, also
includes persons employed in positions set forth in Section 20395, as
amended in 1984 for the purposes of Section 218(d)(5)(A) of the
Social Security Act (42 U.S.C. Sec. 418(d)(5)(A)).
SEC. 30. Section 22013.97 of the Government Code is amended to
read:
22013.97. "Policeman" or "fireman," as used in this part, also
includes persons employed in positions set forth in Sections 20398
for the purposes of Section 218(d)(5)(A) of the Social Security Act
(42 U.S.C. Sec. 418(d)(5)(A)).
SEC. 31. Section 22013.10 of the Government Code is amended to
read:
22013.10. "Policeman" as used in this part, also includes persons
employed in positions set forth in Section 20415 for the purposes of
Section 218(d)(5)(A) of the Social Security Act (42 U.S.C. Sec. 418
(d)(5)(A)).
SEC. 32. Section 22013.11 of the Government Code is amended to
read:
22013.11. "Policeman" or "fireman," as used in this part, also
includes persons employed in positions set forth in Sections 20409
and 20410 for the purposes of Section 218(d)(5)(A) of the Social
Security Act (42 U.S.C. Sec. 418(d)(5)(A)).
SEC. 33. Section 22014 of the Government Code is amended to read:
22014. "Fireman" as used in this part means any employee of the
Division of Forestry, Department of Conservation, employed to perform
duties now performed under the following titles: State Forester;
all classes of rangers; all classes of deputy state foresters; all
classes of fire prevention and law enforcement officers; all classes
of foresters; all classes of forestry foreman; all classes of
forestry trainees; all classes of forestry equipment and civil
engineers; forestry superintendent, conservation camps; forest
firetruck driver; forestry fireman; forest firefighter; equipment
maintenance foreman or forestry equipment operator; or employed in
any other position the principal duties of which consist of active
fire suppression, and any employee of a public agency other than the
state or University of California in a position designated as a
fireman's position by the board for the purposes of Section 218(d)(5)
(A) of the Social Security Act.
SEC. 34. Section 22014.1 of the Government Code is amended to
read:
22014.1. "Fireman" as used in this part also means any officer or
employee of a county having a population in excess of 5,000,000 who
is employed by the forestry division of the county fire department
and whose principal duties consist of active fire suppression for the
purposes of Section 218(d)(5)(A) of the Social Security Act.
SEC. 35. Section 22014.5 of the Government Code is amended to
read:
22014.5. "Fireman" as used in this part includes persons employed
as "campus firefighter" and other persons employed in positions
described in Section 20412 for the purposes of Section 218(d)(5)(A)
of the Social Security Act.
SEC. 36. Section 20.5 of this bill incorporates amendments to
Section 22013.7 of the Government Code proposed by both this bill and
AB 1596. It shall only become operative if (1) both bills are
enacted and become effective on or before January 1, 1999, (2) each
bill amends Section 22013.7 of the Government Code, and (3) this bill
is enacted after AB 1596, in which case Section 20 of this bill
shall not become operative.