Amended in Senate August 18, 2014

Amended in Assembly May 23, 2014

California Legislature—2013–14 Regular Session

Assembly Bill No. 1783

Introduced by Assembly Member Jones-Sawyer

February 18, 2014

begin delete An act to amend Section 19635 of the Government Code, relating to public employees. end delete begin insert An act to amend Section 7522.02 of the Government Code, relating to public employees’ retirement, and declaring the urgency thereof, to take effect immediately. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1783, as amended, Jones-Sawyer. begin delete Public employees: adverse actions. end delete begin insert Public employees’ retirement. end insert

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The California Public Employees’ Pension Reform Act of 2013 (PEPRA) requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan for employees first hired on or after January 1, 2013. PEPRA exempts from its provisions from its provisions public employees whose collective bargaining rights are subject to specified provisions of federal law until a specified federal district court decision on a certification by the United States Secretary of Labor, or until January 1, 2015, whichever is sooner.

end insert begin insert

This bill would extend that exemption with respect to the above-described date to January 1, 2016.

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This bill would declare that it is to take effect immediately as an urgency statute.

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Existing law requires notice of any adverse action against any state employee for any cause for discipline based on any civil service law to be served within 3 years after the cause for discipline, upon which the notice is based, first arose. Existing law provides that an adverse action based on fraud, embezzlement, or the falsification of records is valid if notice of the adverse action is served within 3 years after the discovery of the fraud, embezzlement, or falsification.

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This bill would, beginning January 1, 2016, require that notice of any adverse action for discipline, other than for fraud, embezzlement, or falsification of records, be served and the investigation completed within 2 years after the time the discovery of the cause for discipline arose.

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Vote:  begin delete majority end delete begin insert ²⁄₃ end insert . Appropriation: no. Fiscal committee: yes. State-mandated local program: no.

The people of the State of California do enact as follows:

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begin insert SECTION 1. end insert   

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begin insert Section 7522.02 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

7522.02.  

(a) (1) Notwithstanding any other law, except as
provided in this article, on and after January 1, 2013, this article
shall apply to all state and local public retirement systems and to
their participating employers, including the Public Employees’
Retirement System, the State Teachers’ Retirement System, the
Legislators’ Retirement System, the Judges’ Retirement System,
the Judges’ Retirement System II, county and district retirement
systems created pursuant to the County Employees Retirement
Law of begin delete 1937, end delete begin insert end insert begin insert 1937 (Chapter 3 (commencing with Section 31450)
of Part 3 of Division 4 of Title 3), end insert independent public retirement
systems, and to individual retirement plans offered by public
employers. However, this article shall be subject to the Internal
Revenue Code and Section 17 of Article XVI of the California
Constitution. The administration of the requirements of this article
shall comply with applicable provisions of the Internal Revenue
Code and the Revenue and Taxation Code.

(2) Notwithstanding paragraph (1), this article shall not apply
to the entities described in Section 9 of Article IX of, and Sections
4 and 5 of Article XI of, the California Constitution, except to the
extent that these entities continue to be participating employers in
any retirement system governed by state statute. Accordingly, any
retirement plan approved before January 1, 2013, by the voters of
any entity excluded from coverage by this section shall not be
affected by this article.

(3) (A) Notwithstanding paragraph (1), this article shall not
apply to a public employee whose interests are protected under
Section 5333(b) of Title 49 of the United States Code until a federal
district court rules that the United States Secretary of Labor, or
his or her designee, erred in determining that the application of
this article precludes certification under that section, or until
January 1, begin delete 2015, end delete begin insert 2016, end insert whichever is sooner.

(B) If a federal district court upholds the determination of the
United States Secretary of Labor, or his or her designee, that
application of this article precludes him or her from providing a
certification under Section 5333(b) of Title 49 of the United States
Code, this article shall not apply to a public employee specified
in subparagraph (A).

(4) Notwithstanding paragraph (1), this article shall not apply
to a multiemployer plan authorized by Section 302(c)(5) of the
begin insert federal end insert Taft-Hartley Act (29 U.S.C. Sec. 186(c)(5)) if the public
employer began participation in that plan prior to January 1, 2013,
and the plan is regulated by the begin insert federal end insert Employee Retirement
Income Security Act of 1974 begin insert (29 U.S.C. Sec. 1001 et seq.) end insert .

(b) The benefit plan required by this article shall apply to public
employees who are new members as defined in Section 7522.04.

(c) (1) Individuals who were employed by any public employer
before January 1, 2013, and who became employed by a subsequent
public employer for the first time on or after January 1, 2013, shall
be subject to the retirement plan that would have been available
to employees of the subsequent employer who were first employed
by the subsequent employer on or before December 31, 2012, if
the individual was subject to concurrent membership for which
creditable service was performed in the previous six months or
reciprocity established under any of the following provisions:

(A) Article 5 (commencing with Section 20350) of Chapter 3
of Part 3 of Division 5 of Title 2.

(B) Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3.

(C) Any agreement between public retirement systems to provide
reciprocity to members of the systems.

(D) Section 22115.2 of the Education Code.

(2) An individual who was employed before January 1, 2013,
and who, without a separation from employment, changed
employment positions and became subject to a different defined
benefit plan in a different public retirement system offered by his
or her employer shall be subject to that defined benefit plan as it
would have been available to employees who were first employed
on or before December 31, 2012.

(d) If a public employer, before January 1, 2013, offers a defined
benefit pension plan that provides a defined benefit formula with
a lower benefit factor at normal retirement age and results in a
lower normal cost than the defined benefit formula required by
this article, that employer may continue to offer that defined benefit
formula instead of the defined benefit formula required by this
article, and shall not be subject to the requirements of Section
7522.10 for pensionable compensation subject to that formula.
However, if the employer adopts a new defined benefit formula
on or after January 1, 2013, that formula must conform to the
requirements of this article or must be determined and certified by
the retirement system’s chief actuary and the retirement board to
have no greater risk and no greater cost to the employer than the
defined benefit formula required by this article and must be
approved by the Legislature. New members of the defined benefit
plan may only participate in the lower cost defined benefit formula
that was in place before January 1, 2013, or a defined benefit
formula that conforms to the requirements of this article or is
approved by the Legislature as provided in this subdivision.

(e) If a public employer, before January 1, 2013, offers a
retirement benefit plan that consists solely of a defined contribution
plan, that employer may continue to offer that plan instead of the
defined benefit pension plan required by this article. However, if
the employer adopts a new defined benefit pension plan or defined
benefit formula on or after January 1, 2013, that plan or formula
must conform to the requirements of this article or must be
determined and certified by the retirement system’s chief actuary
and the system’s board to have no greater risk and no greater cost
to the employer than the defined benefit formula required by this
article and must be approved by the Legislature. New members of
the employer’s plan may only participate in the defined
contribution plan that was in place before January 1, 2013, or a
defined contribution plan or defined benefit formula that conforms
to the requirements of this article. This subdivision shall not be
construed to prohibit an employer from offering a defined
contribution plan on or after January 1, 2013, either with or without
a defined benefit plan, whether or not the employer offered a
defined contribution plan prior to that date.

(f) The Judges’ Retirement System and the Judges’ Retirement
System II shall not be required to adopt the defined benefit formula
required by Section 7522.20 or 7522.25 or the compensation
limitations defined in Section 7522.10.

(g) This article shall not be construed to provide membership
in any public retirement system for an individual who would not
otherwise be eligible for membership under that system’s
applicable rules or laws.

(h) On and after January 1, 2013, each public retirement system
shall modify its plan or plans to comply with the requirements of
this article and may adopt regulations or resolutions for this
purpose.

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begin insert SEC. 2. end insert   

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This act is an urgency statute necessary for the
immediate preservation of the public peace, health, or safety within
the meaning of Article IV of the Constitution and shall go into
immediate effect. The facts constituting the necessity are:

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In order to remain eligible for federal transportation funds that
would be forfeited if transit employees are not exempt from PEPRA,
it is necessary for this act to go into effect immediately.

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SECTION 1.  

Section 19635 of the Government Code is
amended to read:

19635.  

(a) Except as otherwise provided in subdivision (b),
no adverse action shall be valid against any state employee for any
cause for discipline based on any civil service law of this state,
unless notice of the adverse action is served and the investigation
is completed within two years after the discovery of the cause for
discipline arose.

(b) Adverse action based on fraud, embezzlement, or the
falsification of records shall be valid, if notice of the adverse action
is served within three years after the discovery of the fraud,
embezzlement, or falsification.

SEC. 2.  

This act shall become operative on January 1, 2016.

end delete