BILL ANALYSIS                                                                                                                                                                                                    



                                                                  AB 232
                                                                  Page  1

             Date of Hearing:   April 22, 2009

                        ASSEMBLY COMMITTEE ON APPROPRIATIONS
                                Kevin De Leon, Chair

                     AB 232 (Hill) - As Amended:  April 16, 2009 

          Policy Committee:                              P.E.R. &  
          S.S.Vote:    6-0

          Urgency:     No                   State Mandated Local Program:  
          No     Reimbursable:              

           SUMMARY  

          This bill allows the California State Teachers' Retirement  
          System (CalSTRS) to (a) prescribe the form for accepting  
          electronically signed documents and (b) to no longer mail a copy  
          of benefit payment information when payments are made by  
          electronic funds transfer.  The bill also requires CalSTRS to:  

          1)Make the payment information available to members  
            electronically.

          2)Mail payment information when there is an adjustment in the  
            allowance or a change in an amount deducted from the  
            allowance.

          3)Notify members that they may receive monthly benefit  
            information by mail upon a written request to CalSTRS.

           FISCAL EFFECT
           
          Administrative savings of about $1 million to CalSTRS,  
          including:  $300,000 savings from the provision allowing  
          acceptance of electronic signatures, and $700,000 from the  
          provision allowing CalSTRS to no longer mail copies of benefit  
          payment information to individuals electing direct deposit.

           COMMENTS
           
           1)Background.   Existing law requires that when CalSTRS makes a  
            payment to a benefit recipient using direct deposit, a copy of  
            the payment information must be mailed to the recipients,  
            unless the recipient informs CalSTRS that they do not want to  








                                                                  AB 232
                                                                  Page  2

            receive the payment information.  Also, individuals submitting  
            signed forms are generally required to do so through the mail,  
            as state regulations limit the circumstances under which  
            CalSTRS may accept electronic signatures.

           2)Rationale  . This bill is sponsored by CalSTRS, and is intended  
            to streamline services and reduce costs associated with the  
            delivery of retirement-related benefits.  Members electing  
            direct deposit would receive mailed copies of payment  
            information at least once each year when annual inflation  
            adjustments are made. Members could also continue to receive  
            monthly mailed copies of payment information upon written  
            request to CalSTRS.  

           Analysis Prepared by  :    Brad Williams / APPR. / (916) 319-2081