BILL NUMBER: SB 1505 AMENDED BILL TEXT AMENDED IN ASSEMBLY AUGUST 7, 2000 AMENDED IN ASSEMBLY JUNE 14, 2000 AMENDED IN SENATE MAY 30, 2000 AMENDED IN SENATE MAY 16, 2000 AMENDED IN SENATE APRIL 13, 2000 INTRODUCED BY SenatorAlarconBurton(Principal coauthor: Assembly Member Correa)FEBRUARY 15, 2000An act to amend Sections 24216.5, 44386, 44395, 44396, 69532, 69612, 69612.5, 69613, 69613.1, 69613.5, 69613.6, 69614, 69615.4, and 69615.6 of, to amend and renumber Section 44397 of, to add Chapter 3.36 (commencing with Section 44735) and Chapter 3.44 (commencing with Section 44751) to Part 25 of, to add Article 21 (commencing with Section 70000) to Chapter 2 of Part 42 of, and to repeal Sections 69613.3 and 69613.55 of, the Education Code, relating to teachers, and declaring the urgency thereof, to take effect immediately.An act to amend Sections 22141, 24410.5, 24415, and 24417 of, and to add Section 24410.6 to, the Education Code, relating to state teachers' retirement. LEGISLATIVE COUNSEL'S DIGEST SB 1505, as amended,AlarconBurton .Teachers: recruitment and incentivesState Teachers' Retirement System: minimum benefits . The State Teachers' Retirement Law establishes minimum annual retirement allowance amounts that are payable to retired members, option beneficiaries, and surviving spouses who were receiving an allowance on January 1, 2000, and also provides for additional distributions to restore the purchasing power of retirement allowances to specified levels. This bill would additionally make those minimum allowance amounts applicable to retired members, option beneficiaries, and surviving spouses who are receiving an allowance on January 1, 2001, and who meet other specified criteria and provide that those benefits shall be initially paid on or before September 1, 2001, except as specified. The bill would also provide for additional distributions to restore the purchasing power of those minimum allowance amounts provided for in the bill and in existing law.(1) Existing law exempts a member of the State Teachers' Retirement System who is retired for service from certain limitations on the amount of compensation the member may earn for performing certain creditable activities without suffering a reduction in his or her retirement allowance if the member is employed to mitigate the effects of teacher shortages attributable to recent class size reduction legislation affecting kindergarten and grades 1 to 3, inclusive. This bill would instead, commencing in the 2000-01 school year, exempt a member who retired for service effective January 1, 2000, and is employed to provide direct classroom instruction to pupils in kindergarten or any of grades 1 to 12, inclusive, or to provide support to new teachers, individuals completing student teaching assignments or participating in the Pre-Internship Teaching Program, an alternative certification program, or the School Paraprofessional Teacher Training Program. (2) Existing law provides incentive grant funding to school districts and county offices of education that operate or propose to operate an alternative certification program and limits the amount of a grant to $1,500 per intern per year. This bill would increase the maximum amount of a grant to $2,500. (3) Existing law establishes the National Board for Professional Teaching Standards Certification Incentive Program to provide one-time $10,000 merit awards to teachers who are employed by school districts or charter schools, are assigned to teach in the public schools, and have attained certification from the National Board for Professional Teaching Standards. This bill would provide an additional $20,000 to the recipient if the teacher agrees to teaching for 4 years in a low-performing school and would define a low-performing school as one that is in the bottom half of all schools based on the Academic Performance Index. (4) Existing law requires the establishment and operation of a resource center that collects and maintains information regarding programs that encourage or assist military personnel, upon retirement, to enter the teaching profession. Existing law establishes the California School Paraprofessional Teacher Training Program to recruit paraprofessionals to participate in a program designed to encourage them to enroll in teacher training programs and to provide instructional service as teachers in the public schools. Existing law establishes the Science, Mathematics, and Technology Teacher Pipeline Program to identify, support, and assist elementary, secondary, and postsecondary students to become teachers of science, mathematics, or technology. Existing law establishes the California Center on Teaching Careers to recruit individuals into the teaching profession. This bill would establish the Teaching as a Priority Block Grant Program, to be administered by the State Department of Education, to award block grants to school districts to provide incentives to attract credentialed teachers to be employed and retained in low-performing schools. This bill would also establish the Teacher Recruitment Initiative Program, to be administered by the Sacramento County Office of Education. The Sacramento County Office of Education would award incentive grants, as specified, to qualifying school districts or county offices of education in amounts that total no more than $700 multiplied by the number of teachers to be hired. (5) Existing law establishes an Assumption Program of Loans for Education under which an applicant enrolled in a participating institution of postsecondary education, or an applicant who agrees to participate in a teacher trainee or teacher internship program, and who further agrees to obtain a teaching credential in subject areas that are designated as current or projected shortage areas or to provide classroom instruction in schools that serve large populations of pupils from low-income families, serve rural areas, or have a high percentage of teachers holding emergency permits, is eligible to receive a conditional warrant for loan assumption, to be redeemed pursuant to a prescribed procedure upon becoming employed as a teacher. Existing law requires an applicant to enroll in at least 10 semester units or the equivalent. Existing law sets aside 40% of the warrants for applicants who agree to obtain teaching credentials in any subject area and to teach in schools that serve large populations of pupils from low-income families and 60% of the warrants for applicants who agree to obtain a teaching credential in a subject area that is currently or is projected to be a shortage area. This bill would also make an applicant enrolled in a participating institution of postsecondary education or an applicant who agrees to participate in a teacher trainee or teacher internship program, and who further agrees to teach in a low-performing school, as defined, eligible for a warrant. The bill would require an applicant to be enrolled on at least a half-time basis rather than 10 semester units and would eliminate the set-asides. The bill would require the Student Aid Commission to reexamine its outreach and marketing strategies relative to the program. (6) Existing law requires the annual distribution of 500 warrants under the Assumption Program of Loans for Education for the recruitment of out-of-state teachers. This bill would instead authorize the distribution of warrants without reference to the number of warrants to be distributed. (7) Existing law requires the annual distribution of a minimum of 2,000 of the warrants under the Assumption Program of Loans for Education to applicants who agree to obtain a teaching credential in mathematics or science and 50 warrants to project centers of the Science, Mathematics, and Technology Teacher Pipeline Program for participants in that program. This bill would delete these provisions. (8) Existing law requires the distribution for the 1999-2000 school year of a maximum 5,500 student loans for participants of the Assumption Program of Loans for Education. Notwithstanding this maximum, existing law requires the issuing of warrants in a quantity determined by the Legislature in the annual Budget Act for the assumption of student loans for applicants who agree to teach in rural schools and schools with a high percentage of teachers holding emergency permits. This bill would increase the maximum number of student loans to 6,500 and would require the issuing of warrants in a quantity determined by the Governor and Legislature in the annual Budget Act for the assumption of student loans regardless of the eligibility category of the applicant, but would allow a set-aside of 100 warrants for applicants who agree to teach in school districts serving rural areas. (9) Existing law establishes Cal Grant T awards as a state educational opportunity grant program under which Cal Grant T awards are made to students who have completed a baccalaureate degree and are admitted to a program of professional teacher preparation for tuition and student fees for a maximum of one academic year of full-time attendance at a program of professional teacher preparation and the Assumption Program of Loans for Education described in paragraphs (6) to (9), inclusive, above. This bill would require the California Student Aid Commission to report, as specified, on the number of Cal Grant T award recipients that become public school teachers. The bill would also establish the Governor's Teaching Fellowship Program to be administered by the Chancellor's Office of the California State University and under which $20,000 nonrenewable graduate teaching fellowships would be awarded to graduate students who agree to teach at a low-performing school for 4 years. The fellowships would be used to defer tuition and living expenses for a teacher certification program at any accredited postsecondary institution in California. The bill would establish an intersegmental review committee to review all fellowship applications. (10) This bill would become operative only if SB 1330 is chaptered. (11) This bill would declare that it is to take effect immediately as an urgency statute.Vote:2/3majority . Appropriation: no. Fiscal committee: yes. State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:SECTION 1. (a) The Legislature finds and declares as follows:SECTION 1. Section 22141 of the Education Code is amended to read: 22141. Notwithstanding Section 22140, "improvement factor" means an increase of 2 percent in benefits provided under Sections 24408 and 24409 for each year commencing on September 1, 1981 , under Section 24410.5 for each year commencing on September 1, 2001, and under Section 24410.6 for each year commencing on September 1, 2002 . The factor shall not be compounded nor shall it be applicable to annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions. The Legislature reserves the right to adjust the amount of the improvement factor up or down as the economic conditions dictate. No adjustments of the improvement factor shall reduce the monthly retirement allowance or benefit below that which would be payable to the recipient under this part had this section not been enacted. SEC. 2. Section 24410.5 of the Education Code is amended to read: 24410.5. (a) Notwithstanding any provision of this part, including, but not limited to, subdivision (e) of Section 22664, the annual allowance payable on the effective date of this section to a retired member, an option beneficiary, or a surviving spouse receiving an allowance pursuant to either Section 23805 or 23855 shall not be less than the amount identified in the following schedule for the number of years of the member's credited service under the Defined Benefit Program at the time of the member's retirement, disability, or death, excluding service credited pursuant to Sections 22714, 22715, 22717 , and 22826, after the application of all allowances and allowance increases authorized by this part, including those specified in Sections 24412 and 24415, as those sections read on December 31, 1999, excluding annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions, and excluding those provided pursuant to Section 24410.7: 20 years of credited service .............. $15,000 21 years of credited service .............. $15,500 22 years of credited service .............. $16,000 23 years of credited service .............. $16,500 24 years of credited service .............. $17,000 25 years of credited service .............. $17,500 26 years of credited service .............. $18,000 27 years of credited service .............. $18,500 28 years of credited service .............. $19,000 29 years of credited service .............. $19,500 30 years or more of credited service ...... $20,000 (b) Notwithstanding subdivision (a), the amount identified in the schedule in subdivision (a) shall be reduced: (1) By 50 percent for a beneficiary receiving an allowance under Option 3 or Option 7. (2) By one-third for an option beneficiary receiving an allowance under Option 4 after the death of the member or for a member receiving an allowance under Option 4 after the death of the option beneficiary. (3) By 50 percent for an option beneficiary receiving an allowance under Option 5 after the death of the member or for a member receiving an allowance under Option 5 after the death of the option beneficiary. (4) By a percentage equal to 100 percent minus the percentage of the member's modified allowance received by the option beneficiary for each option beneficiary receiving an allowance under Option 8. (5) By 60 percent for a surviving spouse receiving an allowance pursuant to subdivision (a) of Section 23805. (6) By 50 percent for a surviving spouse receiving an allowance pursuant to subdivision (c) of Section 23805 or Section 23855. (c) A member to whom a disability allowance is payable on January 1, 2000, who subsequently receives a service retirement allowance pursuant to Section 24213 shall, upon the retirement for service, receive an increase in the service retirement allowance pursuant to this section. (d) A member, beneficiary, or surviving spouse may receive an allowance pursuant to this section only if the member was an active member at the time of the member's retirement, or death and, for those members who retired for service, the member retired on or after age 55, unless the member's allowance was not subject to a reduction due to retirement prior to an age specified in this part. (e) A retired member, option beneficiary, or surviving spouse subject to this section shall receive the annual minimum allowance pursuant to this section unless the system receives in writing, on a form prescribed by the system, notification from the member, option beneficiary, or surviving spouse before May 1, 2000, of his or her election not to receive the increase provided under this section. (f) Benefits payable under this section shall be initially paid by the system on July 1, 2000. SEC. 3. Section 24410.6 is added to the Education Code, to read: 24410.6. (a) Notwithstanding any provision of this part, including, but not limited to, subdivision (e) of Section 22664, and except as provided in subdivisions (b) and (c), the annual allowance payable on the effective date of this section to a retired member, an option beneficiary, or a surviving spouse receiving an allowance pursuant to either Section 23805 or 23855 shall not be less than the amount identified in the following schedule for the number of years of the member's credited service under the Defined Benefit Program at the time of the member's retirement, disability, or death, excluding service credited pursuant to Sections 22714, 22715, 22717, and 22826, after the application of all allowances and allowance increases authorized by this part, including those specified in Sections 24412 and 24415, as those sections read on December 31, 2000, excluding annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions: 20 years of credited service .............. $15,000 21 years of credited service .............. $15,500 22 years of credited service .............. $16,000 23 years of credited service .............. $16,500 24 years of credited service .............. $17,000 25 years of credited service .............. $17,500 26 years of credited service .............. $18,000 27 years of credited service .............. $18,500 28 years of credited service .............. $19,000 29 years of credited service .............. $19,500 30 years or more of credited service ...... $20,000 (b) Notwithstanding subdivision (a), the amount identified in the schedule in subdivision (a) shall be reduced: (1) By 50 percent for a beneficiary receiving an allowance under Option 3 or Option 7. (2) By one-third for an option beneficiary receiving an allowance under Option 4 after the death of the member or for a member receiving an allowance under Option 4 after the death of the option beneficiary. (3) By 50 percent for an option beneficiary receiving an allowance under Option 5 after the death of the member or for a member receiving an allowance under Option 5 after the death of the option beneficiary. (4) By a percentage equal to 100 percent minus the percentage of the member's modified allowance received by the option beneficiary for each option beneficiary receiving an allowance under Option 8. (5) By 60 percent for a surviving spouse receiving an allowance pursuant to subdivision (a) of Section 23805. (6) By 50 percent for a surviving spouse receiving an allowance pursuant to subdivision (c) of Section 23805 or Section 23855. (c) A benefit shall be paid pursuant to this section only if both of the following apply: (1) The retired member, the option beneficiary, or the surviving spouse had an allowance payable on January 1, 2000, and was not eligible to receive a benefit pursuant to Section 24410.5. (2) The retired member or the member whose service was the basis of the allowance payable to the option beneficiary or surviving spouse was one of the following: (A) A member who retired prior to the age of 55 years, provided the minimum allowance specified in subdivision (a) shall be reduced to an amount equal to that minimum allowance multiplied by the ratio of the percentage of final compensation per year of credited service on which the member's initial allowance was based to 1.4. (B) A member who was paid a retirement allowance pursuant to Section 24213, if the member's credited service, excluding service credited pursuant to Sections 22714, 22715, 22717, and 22826, was less than 20 years but whose projected service to normal retirement age, excluding service credited pursuant to Sections 22714, 22715, 22717, and 22826, was equal to or greater than 20 years, provided that the minimum allowance payable shall be based on 20 years of credited service. (C) A member who retired as an inactive member. (D) A member who retired prior to March 21, 1974, with 19.5 years or more of credited service, provided that the minimum allowance payable shall be based on 20 years of credited service. (E) A member who retired on or after March 21, 1974, and prior to January 1, 2000, and whose credited service, excluding service credited pursuant to Sections 22714, 22715, 22717, and 22826, was less than 20 years, but whose credited service, excluding service credited pursuant to Sections 22714, 22715, and 22826, but including service credited pursuant to Section 22717, was equal to or greater than 20 years, provided that the minimum allowance payable shall be based on 20 years of credited service. (d) A retired member, option beneficiary, or surviving spouse subject to this section shall receive the annual minimum allowance pursuant to this section unless the system receives in writing, on a form prescribed by the system, notification from the member, option beneficiary, or surviving spouse of his or her election not to receive the increase provided under this section. (e) Benefits payable under this section shall be initially paid by the system on or before September 1, 2001. SEC. 4. Section 24415 of the Education Code is amended to read: 24415. (a) The proceeds of the Supplemental Benefit Maintenance Account shall be distributed annually in quarterly supplemental payments commencing on September 1, 1990, to retired members, disabled members, and beneficiaries. The amount available for distribution in any fiscal year shall not exceed the amount necessary to restore purchasing power up to 75 percent of the purchasing power of the initial monthly allowance after the application of all allowance increases authorized by this part, including those specified in Section 24412 , but excluding those provided pursuant Sections 22410.5 and 24410.6 . (b) The net revenues to be distributed shall be allocated among those retired members, disabled members, and beneficiaries whose allowances, after sequentially applying the annual improvement factor as defined in Sections 22140 and 22141, and the annual supplemental payment as defined in Section 24412, have the lowest purchasing power percentage. The purchasing power calculation for each individual shall be based on the change in the All Urban California Consumer Price Index between June of the calendar year of retirement and June of the fiscal year preceding the fiscal year of distribution. In any year in which the purchasing power of the allowances of all retired members, disabled members, and beneficiaries equals not less than 75 percent and additional funds remain from the allocation authorized by this section, those funds shall remain in the Supplemental Benefit Maintenance Account for allocation in future years. (c) The allowance increase shall not be applicable to annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions. (d) The benefits provided by subdivision (b) are not cumulative, not part of the base allowance, and will be payable only to the extent that funds are available from the Supplemental Benefit Maintenance Account. The board shall inform each recipient of the contents of this subdivision. (e) The adjustments authorized by this section are vested only up to the amount payable as a result of the annual appropriation made pursuant to Section 22954 and shall not be included in the base allowance for purposes of calculating the annual improvement defined by Sections 22140 and 22141. (f) Notwithstanding subdivision (b), for purposes of restoring the purchasing power of benefits provided pursuant to Section 24410.5 for members and beneficiaries receiving benefits pursuant to subdivision (b), the purchasing power calculation shall be based on 75 percent of the change in the All Urban California Consumer Price Index between January 2000, and June of the fiscal year preceding the fiscal year of distribution, after the application of increases authorized by Section 24412 that are made to those benefits. (g) Notwithstanding subdivision (b), for purposes of restoring the purchasing power of benefits provided pursuant to Section 24410.6 for members and beneficiaries receiving benefits pursuant to subdivision (b), the purchasing power calculation shall be based on 75 percent of the change in the All Urban California Consumer Price Index between January 2001, and June of the fiscal year preceding the fiscal year of distribution, after the application of increases authorized by Section 24412 that are made to those benefits. SEC. 5. Section 24417 of the Education Code is amended to read: 24417. (a) The proceeds of an auxiliary Supplemental Benefit Maintenance Account shall be distributed annually in quarterly supplemental payments, commencing when funds in the Supplemental Benefit Maintenance Account are insufficient to support 75 percent, to retired members, disabled members, and beneficiaries. The amount available for distribution in any fiscal year shall not exceed the amount necessary to restore purchasing power up to 75 percent of the purchasing power of the initial monthly allowance after the application of all allowance increases authorized by this part, including those specified in Section 24412 and Section 24415 , and excluding those provided pursuant to Section 24410 . (b) The net revenues to be distributed shall be allocated among those retired members, disabled members, and beneficiaries whose allowances, after sequentially applying the annual improvement factor as defined in Sections 22140 and 22141, and the annual supplemental payment as defined in Section 24412 and Section 24415, have the lowest purchasing power percentage. The purchasing power calculation for each individual shall be based on the change in the All Urban California Consumer Price Index between June of the calendar year of benefit effective date and June of the fiscal year preceding the fiscal year of distribution. (c) The allowance increase shall not be applicable to annuities payable from the accumulated annuity deposit contributions or the accumulated tax-sheltered annuity contributions. (d) The benefits provided by subdivision (b) are not cumulative, nor part of the base allowance, and will be payable only to the extent that funds are available from the Supplemental Benefit Maintenance Account and the auxiliary Supplemental Benefit Maintenance Account. The board shall inform each recipient of the contents of this subdivision. (e) The distributions authorized by this section are vested only up to the amount payable as a result of the annual appropriation made pursuant to Section 22954 and shall not be included in the base allowance for purposes of calculating the annual improvement defined by Section 22140 and 22141. (f) Notwithstanding subdivision (b), for purposes of restoring the purchasing power of benefits provided pursuant to Section 24410.5 for members and beneficiaries receiving benefits pursuant to subdivision (b), the purchasing power calculation shall be based on 75 percent of the change in the All Urban California Consumer Price Index between January 2000, and June of the fiscal year preceding the fiscal year of distribution, after the application of increases authorized by Section 24412 that are made to those benefits. (g) Notwithstanding subdivision (b), for purposes of restoring the purchasing power of benefits provided pursuant to Section 24410.6 for members and beneficiaries receiving benefits pursuant to subdivision (b), the purchasing power calculation shall be based on 75 percent of the change in the All Urban California Consumer Price Index between January 2001, and June of the fiscal year preceding the fiscal year of distribution, after the application of increases authorized by Section 24412 that are made to those benefits. _____________________________________ All matter omitted in this version of the bill appears in the bill as amended in the Assembly, June 14, 2000 (JR 11) ____________________________________