BILL NUMBER: AB 2383	AMENDED
	BILL TEXT

	AMENDED IN SENATE   JUNE 22, 2000
	AMENDED IN ASSEMBLY   MAY 26, 2000
	AMENDED IN ASSEMBLY   APRIL 6, 2000

INTRODUCED BY   Assembly  Member Keeley  
Members Keeley and Honda 

                        FEBRUARY 24, 2000

    An act to add and repeal Section 25200 of the Education
Code, and to amend Section 22754 of the Government Code, 
 An act to add and repeal Chapter 3 (commencing with Section
25200) of Part 13.5 of Division 1 of Title 1 of the Education Code,
and to add Article 10 (commencing with Section 22878) to Chapter 1 of
Part 5 of Division 5 of Title 2 of the Government Code, 
relating to benefits, and making an appropriation therefor.


	LEGISLATIVE COUNSEL'S DIGEST


   AB 2383, as amended, Keeley.  Public employee benefits:  covered
employees:  retiree health benefits.
    (1)  Existing law, the Public Employees' Medical and
Hospital Care Act, defines "employee" for purposes of eligibility for
benefits under the act and excludes from that definition specified
officers and employees who are employed less than half time.
Employee contributions under the act are deposited in the Public
Employees' Health Care Fund, a continuously appropriated fund.
   This bill would  authorize contracting agencies, as
defined, and school employers to include within that definition
certain employees who are employed less than half time or as
specified   make the provisions of that act applicable
to specified employees of a school or agency, as defined, at the
option of its governing body, and would authorize the State Teachers'
Retirement System to become a contracting agency for certain retired
members and classified employees.  The bill would define annuitants
for purposes of these provisions, and would prohibit a school or
agency from maintaining another health benefits plan unless it
complies with the provisions of the Public Employees' Medical and
Hospital Care Act and is equally available to its retired members,
its active employees, and their family members without discrimination
as to benefits, premiums, or employer contributions  .  By
expanding eligibility for benefits under the act, the bill would
increase the contributions to a continuously appropriated fund,
thereby making an appropriation.
    (2)  Existing law, the Teachers' Retirement Law,
provides that the State Teachers' Retirement System shall develop a
program to provide health care benefits for members, beneficiaries,
children, and dependent parents, as defined.  Under existing law,
employers contribute monthly to the Teachers' Retirement Fund 8% of
creditable compensation, as defined.
   This bill would require the Teachers' Retirement Board to 
calculate the actuarial cost of providing specified health benefits
to retired members of the Defined Benefit Program of the Teachers'
Retirement Plan; provide that   credit  each
employer  and employing agency  who provides  those
health  benefits to its retired members  shall
receive a credit   under the Defined Benefit Program of
the Teachers' Retirement Plan the sum of $120, adjusted annually, as
specified, for each retired member enrolled in one or more specified
programs, up to, but not exceeding, a total credit of $2,000,000,000,
 against its employer contributions to the system  ,
based on that actuarial cost, as specified; and allocate up to
$2,000,000,000 to offset those credits  .  
   The bill's  
   These  provisions  of the bill  would become
inoperative on July 1, 2011, and would be repealed January 1, 2012.
   Vote:  majority.  Appropriation:  yes.  Fiscal committee:  yes.
State-mandated local program:  no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

  
  SECTION 1.  Section 22754 of the Government Code  
  SECTION 1.  Chapter 3 (commencing with Section 25200) is added to
Part 13.5 of Division 1 of Title 1 of the Education Code, to read:

      CHAPTER  1.  RETIRED MEMBER CREDITS

   25200.  (a) In order to encourage employers and employing agencies
to provide health care benefits to retired members of the Defined
Benefit Program, the board shall credit an amount equal to a present
value of up to two billion dollars ($2,000,000,000), as specified in
subdivision (b), to employers and employing agencies that provide
health care benefits to retired members formerly employed by the
employer or employing agency.
   (b) Subject to subdivisions (d) and (e), commencing July 1, 2001,
the board shall credit each employer, against the amount contributed
pursuant to Section 22950, the sum of one hundred twenty dollars
($120), adjusted annually by the change in state employer
contributions for a single enrolled annuitant, as determined by
Section 22825.1 of the Government Code, for each retired member the
employer or employing agency has certified, in a manner required by
the board, is enrolled in one or more of the following programs
administered or sponsored by the employer or employing agency:
   (1) A catastrophic health care program for retired members who are
less than 65 years of age.
   (2) A Medicare supplement health care program.
   (3) A prescription drug program.
   (4) A health program provided pursuant to Part 5 (commencing with
Section 22751) of Division 5 of Title 2 of the Government Code.
   (c) The Teachers' Retirement Board shall establish by regulation
the services to be provided in a program specified in subdivision
(b).  The required services shall be comparable to those generally
available to participants of comparable programs made available by
other public employers in California.
   (d) The amount credited pursuant to subdivision (b) for each
retired member shall not exceed the employer's average costs of
health care benefits to retired members formerly employed by the
employer or employing agency.
   (e) No amount shall be credited pursuant to this section when the
present value of the total amount credited to all employers and
employing agencies is equal to or exceeds two billion dollars
($2,000,000,000).
   25201.  This chapter shall become inoperative on July 1, 2011,
and, as of January 1, 2012, is repealed, unless a later enacted
statute that is enacted before January 1, 2012, deletes or extends
the dates on which it becomes inoperative and is repealed.
  SEC. 2.  Article 10 (commencing with Section 22878) is added to
Chapter 1 of Part 5 of Division 5 of Title 2 of the Government Code,
to read:

      Article 10.  Optional Health Benefits

   22878.  The provisions of this part also apply to schools and
agencies, as specified in this article.  The purpose of this article
is to set forth optional provisions which may only be used by schools
and agencies.  If schools and agencies choose to follow the optional
provisions of this article, all conflicting provisions of this part
are superseded.  This article shall not apply to any other employer,
employee, annuitant, or family member who has, or elects to have,
health care coverage pursuant to this part.
   22878.1.  The definitions in this part shall govern the
interpretation of terms in this article, except that the following
definitions shall govern the interpretation of these specific terms
as used in this article:
   (a) "School" means any contracting agency that is a special
district, school district, county board of education, personnel
commission of a school district, a county superintendent of schools,
or a community college district.
   (b) "Agency" means any contracting agency, as defined in Section
20022, any county or special district subject to the County Employees
Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of
Part 3 of Division 4 of Title 3) and any contracting agency that is
a public body or agency within California not covered by the Public
Employees' Retirement System or subject to the County Employees
Retirement Law of 1937, that provides a retirement system for its
employees funded wholly or in part by public funds.
   22878.2.  (a) A school or agency may by resolution filed with the
board deem all permanent or regular employees, except members of the
State Teachers' Retirement System, who have an appointment of six
months or longer but who are employed on less than half-time basis,
to be employees subject to this part.
   (b) An agency or school with employees who are members of the
State Teachers' Retirement System may by resolution filed with the
board deem any of the following to be employees subject to this part:

   (1) Regular, permanent, probationary, or temporary employees who
have an appointment for a semester, for six months, or for half of
the school year or longer, but are employed on less than a half-time
basis.
   (2) Substitutes who have an appointment for a semester, for six
months, or for half of the school year or longer, but are employed on
less than a half-time basis.
   (3) Substitutes who have an appointment for 100 days or more in
the school year.
   22878.3.  The State Teachers' Retirement System may, by resolution
filed with the board, become a contracting agency subject to this
part only with respect to either or both of the following:
   (a) Retired members of the State Teachers' Retirement System
enrolled in both Parts A and B of Medicare whose former education
employer does not offer health care coverage for them, their eligible
family members, and surviving spouses.
   (b) Classified employees enrolled in both Parts A and B of
Medicare whose former education employer does not offer health care
coverage for them, their eligible family members, and surviving
spouses.
   22878.4.  All of the following shall be deemed to be "annuitants"
subject to this part:
   (a) A family member of a deceased retired member of the State
Teachers' Retirement System who retired within 120 days of separation
from employment, and who prior to his or her death, received a
retirement allowance that did not provide for a survivor allowance to
family members and who elects coverage as an annuitant prior to
January 1, 2003.  This subdivision shall not apply to any family
member of a retired member of the State Teachers' Retirement System
who retired on or after January 1, 2003 from a school contracting
under this part prior to January 1, 2001.
   (b) A retired member of the State Teachers' Retirement System who
retired within 120 days of separation from employment, and who
retired before the member's school elected to contract for health
benefit coverage under this part, and who elects coverage as an
annuitant within one calendar year from the date that the member's
school elected to contract for health benefit coverage under this
part.
   (c) A family member of a deceased retired member of the State
Teachers' Retirement System who retired within 120 days of separation
from employment, and who retired before the member's school elected
to contract for health benefit coverage under this part, and who
elects coverage as an annuitant within one calendar year from the
date that the member's school elected to contract for health benefit
coverage under this part.
   22878.5.  A school or agency may not maintain another health
benefits plan unless the plan complies with the requirements of this
part and is equally available to its retired employees, its active
employees, and their family members, without discrimination as to
benefits, premiums, or employer contributions.   is
amended to read:
   22754.  As used in this part the following definitions, unless the
context otherwise requires, shall govern the interpretation of
terms:
   (a) "Board" means the Board of Administration of the Public
Employees' Retirement System.
   (b) "Employee" means:
   (1) Any officer or employee of the State of California or of any
agency, department, authority, or instrumentality of the state
including the University of California, or any officer or employee
who is a local or school member of the Public Employees' Retirement
System employed by a contracting agency that has elected to be or
otherwise has become subject to this part, or who is a member or
retired member of the State Teachers' Retirement System employed by
an employer who has elected to become subject to this part, or who is
an employee or annuitant of a special district or county subject to
the County Employees Retirement Law of 1937 (Chapter 3 (commencing
with Section 31450) of Part 3 of Division 4 of Title 3) that has
elected to become subject to this part, or who is an employee or
annuitant of a special district, as defined in subdivision (i), that
has elected to become subject to this part, except persons employed
on an intermittent, irregular or less than half-time basis, or
employees similarly situated, or employees in respect to whom
contributions by the state for any type of plan or program offering
prepaid hospital and medical care are otherwise authorized by law.
   (2) Any officer or employee who participates in the retirement
system of a contracting agency as defined in paragraph (2) of
subdivision (g) that has elected to become subject to this part,
except persons employed less than half time or who are otherwise
determined to be ineligible.
   (3) Any annuitant of the Public Employees' Retirement System
employed by a contracting agency as defined in subdivision (g) that
has elected to become subject to this part who is a person retired
under Section 21228.
   (4) Notwithstanding paragraphs (1) and (2), a contracting agency
or school employer may, by resolution filed with the board, deem all
permanent employees, except members of the State Teachers' Retirement
System, who have an appointment of six months or longer, but who are
employed on less than a half-time basis, to be "employees" subject
to this part.
   (5) Notwithstanding paragraphs (1) and (2), a contracting agency
or school employer with employees who are members of the State
Teachers' Retirement System may, by resolution filed with the board,
deem the following to be "employees" subject to this part:
   (A) Regular employees who have an appointment of six months or
longer, but who are employed on less than a half-time basis.
   (B) Part-time faculty employees who are hired on a semester basis.

   (C) Long-term substitutes who are hired for at least one-half of
the school year.
   (c) "Carrier" means a private insurance company holding a valid
outstanding certificate of authority from the Insurance Commissioner
of the state, a medical society or other medical group, a nonprofit
hospital service plan qualifying under Chapter 11A (commencing with
Section 11491) of Part 2 of Division 2 of the Insurance Code, or
nonprofit membership corporation lawfully operating under Section
9200 or Section 9201 of the Corporations Code, or a health care
service plan as defined under subdivision (f) of Section 1345 of the
Health and Safety Code, or a health maintenance organization approved
under Title XIII of the federal Public Health Services Act, that is
lawfully engaged in providing, arranging, paying for, or reimbursing
the cost of personal health services under insurance policies or
contracts, medical and hospital service agreements, membership
contracts, or the like, in consideration of premiums or other
periodic charges payable to it.
   (d) "Health benefits plan" means any program or entity that
provides, arranges, pays for, or reimburses the cost of health
benefits.
   (e) "Annuitant" means:
   (1) Any person who has retired within 120 days of separation from
employment and who receives any retirement allowance under any state
or University of California retirement system to which the state was
a contributing party.
   (2) A family member receiving an allowance as the survivor of an
annuitant who has retired as provided in paragraph (1), or as the
survivor of a deceased employee under Section 21541, 21546, or 21547
or similar provisions of any other state retirement system.
   (3) Any employee who has retired under the retirement system
provided by a contracting agency as defined in paragraph (2) of
subdivision (g) and who receives a retirement allowance from that
retirement system, or a surviving family member who receives the
retirement allowance in place of the deceased.
   (4) Any person who was a state member for 30 years or more and
who, at the time of retirement, was a local member employed by a
contracting agency.
   (f) "Family member" means an employee's or annuitant's spouse and
any unmarried child (including an adopted child, a stepchild, or
recognized natural child who lives with the employee or annuitant in
a regular parent-child relationship).  The board shall, by
regulation, prescribe age limits and other conditions and limitations
pertaining to unmarried children.
   (g) "Contracting agency" means:
   (1) Any contracting agency as defined in Section 20022, any county
or special district subject to the County Employees Retirement Law
of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of
Division 4 of Title 3), and any special district, school district,
county board of education, personnel commission of a school district
or a county superintendent of schools.
   (2) Any public body or agency of, or within California not covered
by the Public Employees' Retirement System or subject to the County
Employees Retirement Law of 1937 (Chapter 3 (commencing with Section
31450) of Part 3 of Division 4 of Title 3), that provides a
retirement system for its employees funded wholly or in part by
public funds.
   (h) "Employer" means the state, any contracting agency employing
an employee, and any agency that has elected to become subject to
this part pursuant to Section 22856.
   (i) "Special district" means a nonprofit, self-governed public
agency, within the State of California and comprised solely of public
employees, performing a governmental rather than proprietary
function.
  SEC. 2.  Section 25200 is added to the Education Code, to read:
   25200.  (a) On or before March 31, 2001, the Teachers' Retirement
Board shall estimate the amount needed, up to two billion dollars
($2,000,000,000), for allocation by the board for the actuarial cost
of providing health care benefits to retired members of the Defined
Benefit Program, as described in subdivision (b), for each month a
member is expected to be retired during the next 10 years, based on
the actuarial assumptions adopted by the board and used in the
actuarial analysis of the Defined Benefit Program as of June 30,
1999.
   (b) Commencing July 1, 2001, the board shall credit each employer,
against the amount contributed pursuant to Section 22950, the amount
estimated pursuant to subdivision (a) for each retired member the
employer has certified, in a manner required by the board, is
enrolled in one or more of the following programs administered by the
employer:
   (1) A catastrophic health care program for retired members who are
less than 65 years of age.
   (2) A Medicare supplement health care program.
   (3) A prescription drug program.
   (c) The Teachers' Retirement Board shall establish by regulation
the services to be provided in a program specified in subdivision
(b).  The required services shall be comparable to those generally
available to participants of comparable programs made available by
other public employers in California.
   (d) The amount credited pursuant to subdivision (b) for each
retired member shall not exceed the employer's average costs of
health care benefits provided to retired members formerly employed by
the employer.
   (e) This section shall become inoperative on July 1, 2011, and, as
of January 1, 2012, is repealed, unless a later enacted statute that
is enacted before January 1, 2012, deletes or extends the dates on
which it becomes inoperative and is repealed. 
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