BILL ANALYSIS                                                                                                                                                                                                    



                                                                       


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          |SENATE RULES COMMITTEE            |                  AB 1509|
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                                 THIRD READING
                                        

          Bill No:  AB 1509
          Author:   Machado (D)
          Amended:  6/19/00 in Senate
          Vote:     21

            
           ASSEMBLY FLOOR  :  Not relevant
           

           SUBJECT  :    STRS:  2% for tax-deferred savings

           SOURCE  :     Author

           
           DIGEST  :    This bill creates the Defined Benefit Supplement  
          Program for K-12 teachers and community college instructors  
          that diverts 25 percent of the State Teachers' Retirement  
          system, or two percent of payroll, into a tax deferred  
          account that will be available to the teacher upon  
          retirement in a lump sum payment or as an annuity.

          NOTE:  The language of this bill is also in SB 1645.

           ANALYSIS  :    Present law provides for the Defined Benefit  
          Program in the State Teachers' Retirement System.  The bill  
          establishes the Defined Benefit Supplement Program to  
          provide supplemental benefits for certain members of the  
          Defined Benefit Program. 

          Members of the plan is defined as a member of the Defined  
          Benefit Program who holds a preliminary or professional  
          clear credential, as determined by the Commission on  
          Teacher Credentialing, or who is an instructor in a  
          community college.
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                                                               AB 1509
                                                                Page  
          2


          According to the Assembly Third Reading analysis, the  
          interest rates for the defined benefit supplement program  
          will be set by the STRS board prior to the beginning of  
          each plan year.

           FISCAL EFFECT  :    Appropriation:  No   Fiscal Com.:  Yes    
          Local:  No

          According to the Assembly Third Reading analysis, no  
          General Fund effect and no effect to the solvency of STRS,  
          the STRS surplus will absorb the cost of the Defined  
          Benefit Supplement Program.



          TSM:cm  6/16/00   Senate Floor Analyses 

                       SUPPORT/OPPOSITION:  NONE RECEIVED

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