BILL NUMBER: AB 2176 CHAPTERED 09/07/00 CHAPTER 317 FILED WITH SECRETARY OF STATE SEPTEMBER 7, 2000 APPROVED BY GOVERNOR SEPTEMBER 4, 2000 PASSED THE ASSEMBLY AUGUST 10, 2000 PASSED THE SENATE JULY 6, 2000 AMENDED IN SENATE MAY 24, 2000 AMENDED IN ASSEMBLY MARCH 28, 2000 INTRODUCED BY Committee on Public Employees, Retirement and Social Security (Correa (Chair), Pescetti (Vice Chair), Briggs, Firebaugh, Honda, and Knox) FEBRUARY 23, 2000 An act to amend Sections 31625.3, 31720.6, 31722, and 31874.3 of the Government Code, relating to county employees' retirement. LEGISLATIVE COUNSEL'S DIGEST AB 2176, Committee on Public Employees, Retirement and Social Security. County employees' retirement: member contributions: cost-of-living increases. The County Employees Retirement Law of 1937 generally provides that contributions shall not be deducted from the salary of a member who has 30 years of service credit, if the member was a member on March 7, 1973. In 3 specified counties, the board of supervisors may elect to discontinue those deductions for any member who has 30 years of service credit. This bill would authorize the board of supervisors in any county subject to that law to elect to discontinue those deductions for any member who has 30 years of service credit. The County Employees Retirement Law of 1937 provides that the development of cancer by a safety member, a firefighter member, or a member in active law enforcement, as specified, shall be presumed to arise out of and in the course of employment. Existing law provides a definition of known carcinogen, for the purpose of the above provision, and provides that this presumption extends beyond the termination of services, as specified. Existing law requires that an application for disability retirement be made within 4 months after discontinuance of service. This bill would provide that, for the purposes of the above provision, a carcinogenic agent recognized by the Director of the Department of Industrial Relations shall satisfy the definition of a "known carcinogen." This bill would also extend the period for making an application for disability retirement when the presumption extends beyond the termination of service, as specified, and make other technical changes. The County Employees Retirement Law of 1937 authorizes counties to elect to provide supplemental increases to retirement and death allowances, subject to certain limitations, when the annual increase in the cost of living, as shown by a specified index, exceeds certain amounts. This bill would authorize those counties to elect to provide an alternative supplemental increase, on a prefunded basis, to retirement and death allowances in those circumstances, subject to specified limitations and conditions, and would make related technical changes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 31625.3 of the Government Code is amended to read: 31625.3. Notwithstanding any other provision of this chapter, contributions shall not be deducted from the salary of any member who was a member before or after March 7, 1973, of the retirement association, another county retirement system established under this chapter, or the Public Employees' Retirement System, and has total reciprocal service credit of not less than 30 years in the retirement association, or in the retirement association and another county retirement system established under this chapter, or the Public Employees' Retirement System, or a combination thereof. This section shall not apply in any county unless and until it is adopted by a majority vote of the board of supervisors. SEC. 2. Section 31720.6 of the Government Code is amended to read: 31720.6. (a) If a safety member, a firefighter, or a member in active law enforcement who has completed five years or more of service under a pension system established pursuant to Chapter 4 (commencing with Section 31900) or under a pension system established pursuant to Chapter 5 (commencing with Section 32200) or both or under this retirement system or under the Public Employees' Retirement System or under a retirement system established under this chapter in another county, and develops cancer, the cancer so developing or manifesting itself in those cases shall be presumed to arise out of and in the course of employment. The cancer so developing or manifesting itself in those cases shall in no case be attributed to any disease existing prior to that development or manifestation. (b) Notwithstanding the existence of nonindustrial predisposing or contributing factors, any safety member, firefighter member, or member active in law enforcement described in subdivision (a) permanently incapacitated for the performance of duty as a result of cancer shall receive a service-connected disability retirement if the member demonstrates that he or she was exposed to a known carcinogen as a result of performance of job duties. "Known carcinogen" for purposes of this section means those carcinogenic agents recognized by the International Agency for Research on Cancer, or the Director of the Department of Industrial Relations. (c) The presumption is disputable and may be controverted by evidence, that the carcinogen to which the member has demonstrated exposure is not reasonably linked to the disabling cancer, provided that the primary site of the cancer has been established. Unless so controverted, the board is bound to find in accordance with the presumption. This presumption shall be extended to a member following termination of service for a period of three calendar months for each full year of the requisite service, but not to exceed 60 months in any circumstance, commencing with the last date actually worked in the specified capacity. (d) "Firefighter," for purposes of this section, includes a member engaged in active fire suppression who is not classified as a safety member. (e) "Member in active law enforcement," for purposes of this section, includes a member engaged in active law enforcement who is not classified as a safety member. SEC. 3. Section 31722 of the Government Code is amended to read: 31722. The application shall be made while the member is in service, within four months after his or her discontinuance of service, within four months after the expiration of any period during which a presumption is extended beyond his or her discontinuance of service, or while, from the date of discontinuance of service to the time of the application, he or she is continuously physically or mentally incapacitated to perform his or her duties. SEC. 4. Section 31874.3 of the Government Code is amended to read: 31874.3. (a) (1) Whenever the percentage of annual increase in the cost of living as of January 1 of each year as shown by the Bureau of Labor Statistics Consumer Price Index for All Urban Consumers exceeds the maximum benefit increase provided in Section 31870, 31870.1, 31870.2, or 31870.3, whichever is applicable, the board of retirement may provide that all or part of the excess percentage increase shall be applied to the retirement allowances, optional death allowances, or annual death allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3. The board shall determine the amount of the excess to be applied, which amount shall not exceed an amount that can be paid from earnings of the retirement fund that are in excess of the total interest credited to contributions and reserves plus 1 percent of the total assets of the retirement fund. (2) The supplemental increases in excess of the increases applied to the retirement allowances, optional death allowances, or annual death allowances pursuant to Section 31870, 31870.1, 31870.2, or 31870.3 shall not become a part of the retirement allowances, optional death allowances, or annual death allowances to be increased by subsequent increases under Section 31870, 31870.1, 31870.2, or 31870.3. (3) This subdivision shall be operative in any county that has elected by a majority vote of the board of supervisors to make either Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that county. (b) (1) The board of retirement may, instead of taking action pursuant to subdivision (a), provide supplemental cost-of-living increases, effective on a date to be determined by the board, to the retirement allowances, optional death allowances, or annual death allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3; provided however, that only those members shall be eligible for this increase whose accumulations established by Section 31870, 31870.1, 31870.2, or 31870.3 shall equal or exceed 20 percent as of January 1 of the year in which the board of retirement adopts an increase under this subdivision. (2) The supplemental increases to the retirement allowances, optional death allowances or annual death allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3 shall not become a part of the retirement allowances, optional death allowances or annual death allowances to be increased by subsequent increases under Section 31870, 31870.1, 31870.2, or 31870.3. (3) This subdivision shall be operative in any county that has elected by a majority vote of the board of supervisors to make either Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that county. (c) (1) The board of retirement may, instead of taking action pursuant to subdivision (a) or (b), provide supplemental cost-of-living increases, on a prefunded basis and effective on a date to be determined by the board, to the retirement allowances, optional death allowances, or annual death allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3; provided however, only those members shall be eligible for this increase whose accumulations established by Section 31870, 31870.1, 31870.2, or 31870.3 equal or exceed 20 percent as of January 1 of the year in which the board of retirement takes action pursuant to this subdivision. (2) The supplemental increases to the retirement allowances, optional death allowances, or annual death allowances increased in Section 31870, 31870.1, 31870.2, or 31870.3 shall become a part of the retirement allowances, optional death allowances, or annual death allowances and shall serve to reduce the accumulations established by Section 31870, 31870.1, 31870.2, or 31870.3, as applicable, by the same percentage as the payment that is made pursuant to this section. (3) Before the board of retirement provides benefits pursuant to this subdivision, the costs of the benefits shall be determined by a qualified actuary and the board of retirement shall, with the advice of the actuary, provide for the full funding of the benefits utilizing funds in the reserve against deficiencies established pursuant to Section 31592.2, using surplus earnings that exceed 1 percent of the total assets of the retirement system. (4) This subdivision shall be operative in any county that has elected by a majority vote of the board of supervisors to make either Section 31870, 31870.1, 31870.2, or 31870.3 applicable in that county. (d) Upon adoption by any county providing benefits pursuant to this section, of Article 5.5 (commencing with Section 31610) of this chapter, the board of retirement shall, instead, pay those benefits from the Supplemental Retiree Benefit Reserve established pursuant to Section 31618.