BILL ANALYSIS                                                                                                                                                                                                    



                                                                  SB 1217
                                                                  Page  1

          Date of Hearing:   June 23, 2010

            ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL  
                                      SECURITY
                               Alberto Torrico, Chair
             SB 1217 (P.E.& R. Com.) - As Introduced:  February 18, 2010

           SENATE VOTE  :   33-0
           
          SUBJECT  :   State government: warrants: employee designees.

           SUMMARY  :   Allows an employee of the state to designate a  
          primary person and up to three contingent persons for receipt of  
          final pay warrants upon the employee's death.  In addition, it  
          clarifies that the employee could also designate a corporation,  
          trust, or the employee's estate as a recipient of those  
          warrants.  

           EXISTING LAW  authorizes an employee of the state to file with  
          his or her employer a designation naming the person who will  
          receive the employee's final pay warrants in the event of the  
          employee's death.  The employee may change the designation from  
          time to time and may name anyone as his or her designee.

          In addition, the designee has the right to claim the final  
          warrants, upon proof of identity, and to negotiate the warrants  
          as if he or she is the original payee.

           FISCAL EFFECT  :   According to the Senate Appropriations  
          Committee, pursuant to Senate Rule 28.8, negligible state costs.

           COMMENTS  :   Upon entering employment, an employee designates a  
          recipient for his or her final warrant.  In some cases, many  
          years go by between that initial designation and the employee's  
          death.  After a number of years have passed, an employee may not  
          think to change a designation or even remember having made a  
          designation in the first place.

          According to the State Controller's Office (SCO), this becomes a  
          problem because the final pay warrants of the decedent must then  
          be released under provisions of the Probate Code if the sole  
          designee is not eligible or cannot be located within 60 days of  
          the employee's death.

          According to the SCO, 42.6 death transactions occurred in the  








                                                                  SB 1217
                                                                  Page  2

          last six months.  Although incidences of a beneficiary  
          predeceasing the employee are rare, they do occur from time to  
          time.  This bill will enable the SCO to release a deceased  
          employee's final pay warrants to a contingent designee if the  
          primary designee is deceased, thereby minimizing financial  
          hardship to the deceased employee's family.

           






          REGISTERED SUPPORT / OPPOSITION  :

           Support 
           
          Office of the State Controller (Sponsor)
          California State Employees Association
           
            Opposition 
           
          None on file

           Analysis Prepared by  :    Karon Green / P.E., R. & S.S. / (916)  
          319-3957