California 2017-2018 Regular Session Status: Enacted

AB 1912 — Public employees' retirement: joint powers agreements: liability.

Last action — Chaptered by Secretary of State - Chapter 909, Statutes of 2018.

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  1. ✓
    Introduced
  2. ✓
    In Committee
  3. ✓
    Passed Assembly
  4. ✓
    Passed Senate
  5. ✓
    To Executive
  6. 6
    Enacted

This bill has been enacted into law. Introduced January 23, 2018. Enacted.

Prognosis

Likely to advance 70% · moderate confidence

Where this bill stands today.

Odds of enactment

High

How often bills like it became law.

  • Enacted

    Current position in the legislative process.

  • 1 sponsor

    1 primary, 0 co-sponsors signed on.

  • Cleared a recorded vote

    Passed 10 recorded votes so far.

Prognosis reads this bill's own signals — stage, sponsorship breadth, committee status, recorded votes and cross-state momentum. Odds come from a model trained on which bills have become law.

Summary

(1) Existing law establishes various public agency retirement systems, including, among others, the Public Employees' Retirement System, the State Teachers' Retirement System, the Judges' Retirement System II, and various county retirement systems pursuant to the County Employees Retirement Law of 1937. These systems provide defined pension benefits to public employees based on age, service credit, and amount of final compensation. Existing law authorizes a contracting agency, as defined, to terminate a contract under the Public Employees' Retirement System pursuant to specified procedures and authorizes the Board of Administration of the Public Employees' Retirement System to terminate a contract with a contracting agency under specified circumstances, including if a contracting agency fails to pay any installment of contributions into the Public Employees' Retirement Fund. The Joint Exercise of Powers Act generally authorizes 2 or more public agencies, by agreement, to jointly exercise any common power. Under the act, if an agency is not one or more of the parties to the agreement but is a public entity, commission, or board constituted pursuant to the agreement, the debts, liabilities, and obligations of the agency are the debts, liabilities, and obligations of the parties to the agreement, unless the agreement specifies otherwise. This bill would specify that the parties to the joint powers agreement may not specify otherwise with respect to retirement liabilities of the agency if the agency contracts with a public retirement system, and would eliminate an authorization for a party to a joint powers agreement to separately contract or assume responsibilities for specific debts, liabilities, or obligations of the agency. Existing law authorizes a contracting agency, as defined, to terminate a contract under the Public Employees' Retirement System pursuant to specified procedures and authorizes the Board of Administration of the Public Employees' Retirement System to terminate a contract with a contracting agency under specified circumstances, including if a contracting agency fails to pay an installment of contributions into the Public Employees' Retirement Fund. This bill would require member agencies of an agency established pursuant to a joint powers agreement that participates in, or contracts with, a public retirement system, prior to filing a notice of termination or upon notice of potential termination by the Board of Administration of the Public Employees' Retirement System, to mutually agree as to the apportionment of the agency's retirement obligations among themselves, provided that the agreement equals 100% of the retirement liability of the agency. If the member agencies are unable to mutually agree to the apportionment, the bill would require the board to apportion the retirement liability of the agency to each member agency, as specified, and would establish procedures allowing a member agency to challenge the board's determination through the arbitration process. The bill would also provide that if a judgment is rendered against an agency or a party to the agreement for a breach of its obligations to the retirement system, the time within which a claim for injury may be presented or an action commenced against the other party that is subject to the liability determined by the judgment begins to run when the judgment is rendered. The bill would specify that those provisions apply both retroactively to a member agency, or current and former member agency, that has an agreement with the board on or before January 1, 2019, and to new agreements with the board on or after that date. (2) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System (PERS) , which provides a defined benefit to members of the system, based on final compensation, credited service, and age at retirement, subject to certain variations. PERL vests management and control of PERS in its Board of Administration. Existing law requires the PERS board to enter into a specified agreement with the governing body of a terminating agency, upon request of that agency, to ensure that final compensation is calculated in the same manner as benefits of nonterminating agencies, and that related necessary adjustments in the employer's contribution rate are made and benefits adequately funded, including a lump-sum payment at termination, if agreed to by the terminating agency and the board. Existing law requires a terminating agency to notify the PERS board of its intention to enter into this agreement within a specified period of time. Existing law authorizes the PERS board to choose not to enter into an agreement to terminate if the board determines that it is not in the best interests of PERS. Existing law requires all plan assets and liabilities of a terminating agency to be deposited in a single pooled account, the terminated agency pool subaccount within the Public Employees' Retirement Fund, a continuously appropriated fund. This bill would also require the PERS board to enter into the above-described agreement upon request of a member agency of a terminating agency formed under the Joint Exercise of Powers Act and would provide that the member agencies of the terminating agency are liable to the system for inadequate funding of the benefits pursuant to the agreement. To the extent that the bill would increase any lump-sum payments made by a terminating agency and deposited into a subaccount within the Public Employees' Retirement Fund, the bill would make an appropriation. (3) Existing law makes a terminated agency liable to the system for any deficit in funding for earned benefits, interest, and for reasonable and necessary costs of collection, including attorney's fees. Existing law provides that the board has a lien on the assets of a terminated contracting agency, as specified, and that assets shall also be available to pay actual costs, including attorney's fees necessarily expended for collection on the lien. This bill would extend that liability and lien to all of the parties of a terminating agency that was formed under the Joint Exercise of Powers Act. To the extent that these changes would increase deposits in the Public Employees' Retirement Fund, the bill would make an appropriation. (4) Existing law authorizes the board of PERS to elect not to impose a reduction, or to impose a lesser reduction, on a terminated plan if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool. This bill would eliminate that provision. The bill would require the board, prior to exercising its authority to reduce benefits and to the extent consistent with its fiduciary duties, to consider and exhaust all options and necessary actions, including evaluating whether to bring a civil action against any member agencies to a terminated agency formed by an agreement under the Joint Exercise of Powers Act to compel payment of the terminated public agency's pension obligations. The bill would also specify that the board is entitled to reasonable attorney's fees in addition to other costs. The bill would also set forth related legislative findings.

Bill Text

Action History

  1. Chaptered by Secretary of State - Chapter 909, Statutes of 2018.

  2. Approved by the Governor.

  3. Enrolled and presented to the Governor at 4:30 p.m.

  4. Senate amendments concurred in. To Engrossing and Enrolling. (Ayes 59. Noes 13.).

  5. In Assembly. Concurrence in Senate amendments pending.

  6. Read third time. Passed. Ordered to the Assembly. (Ayes 27. Noes 10. Page 6055.).

  7. Read second time. Ordered to third reading.

  8. Read third time and amended. Ordered to second reading.

  9. Read second time. Ordered to third reading.

  10. Read second time and amended. Ordered returned to second reading.

  11. From committee: Amend, and do pass as amended. (Ayes 5. Noes 2.) (August 16).

  12. In committee: Referred to APPR. suspense file.

  13. Read second time and amended. Re-referred to Com. on APPR.

  14. From committee: Amend, and do pass as amended and re-refer to Com. on APPR. (Ayes 5. Noes 1.) (June 26).

  15. From committee: Do pass and re-refer to Com. on JUD. (Ayes 3. Noes 1.) (June 25). Re-referred to Com. on JUD.

  16. From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on P.E. & R.

  17. In committee: Set, first hearing. Hearing canceled at the request of author.

  18. Referred to Coms. on P.E. & R. and JUD.

  19. In Senate. Read first time. To Com. on RLS. for assignment.

  20. Read third time. Passed. Ordered to the Senate. (Ayes 49. Noes 27. Page 5475.)

  21. Read second time. Ordered to third reading.

  22. From committee: Do pass. (Ayes 12. Noes 4.) (May 25).

  23. In committee: Set, first hearing. Referred to APPR. suspense file.

  24. Re-referred to Com. on APPR.

  25. From committee chair, with author's amendments: Amend, and re-refer to Com. on APPR. Read second time and amended.

  26. From committee: Do pass and re-refer to Com. on APPR. (Ayes 7. Noes 2.) (April 24). Re-referred to Com. on APPR.

  27. Re-referred to Com. on JUD.

  28. Read second time and amended.

  29. From committee: Amend, and do pass as amended and re-refer to Com. on JUD. (Ayes 5. Noes 0.) (April 18).

  30. Re-referred to Com. on P.E., R., & S.S.

  31. From committee chair, with author's amendments: Amend, and re-refer to Com. on P.E., R., & S.S. Read second time and amended.

  32. Referred to Coms. on P.E., R., & S.S. and JUD.

  33. From printer. May be heard in committee February 23.

  34. Read first time. To print.

Sponsors

  • Rodriguez · Primary

Sponsorship breakdown

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1 sponsors · 0 co-sponsors · 121 not signed on · 11 voted No

Sponsors (1)

  • Rodriguez

Co-sponsors (0)

None.

Not signed on (121)

121 members have not signed on to this bill.

Show all 121 →

"Not signed on" means a member has not sponsored or co-sponsored this bill — it does not imply opposition. Members flagged Voted No have a recorded No vote on this bill.

Whip count is in markup. Polling the chamber and every recorded vote this session. Only the first open is slow. It’s instant for you after this. Calling the roll · Tallying · Engrossing

Votes

AB 1912 RODRIGUEZ Concurrence in Senate Amendments

Passed 59 Yea · 13 Nay · 8 Other
Party YeaNayPresentNot Voting
Unaffiliated 411106
Democratic 16000
Republican 2202
Total 591308
% of votes cast 74%16%0%10%
How each member voted (80)
Member Party Vote
Acosta — Not Voting
Baker — Yea
Bigelow — Yea
Bloom — Yea
Brough — Nay
Harper — Nay
Jones-Sawyer — Yea
Kiley — Nay
Maienschein — Yea
Melendez — Nay
Mullin — Not Voting
O'Donnell — Yea
Rodriguez — Yea
Thurmond — Yea
Waldron — Yea
Chau — Yea
Eggman — Yea
Gonzalez Fletcher — Yea
Friedman — Yea
Salas — Yea
Burke — Yea
Gray — Yea
Gloria — Yea
Rubio — Yea
Rivas — Yea
Holden — Yea
Kamlager-Dove — Yea
Levine — Yea
Low — Yea
Mayes — Nay
McCarty — Yea
Fong — Not Voting
Chiu — Yea
Chu — Yea
Chávez — Nay
Cooley — Yea
Cooper — Yea
Medina — Yea
Nazarian — Yea
Obernolte — Nay
Quirk — Yea
Rendon — Yea
Santiago — Yea
Steinorth — Nay
Ting — Yea
Voepel — Not Voting
Weber — Yea
Wood — Yea
Mathis — Not Voting
Cunningham — Nay
Daly — Yea
Frazier — Nay
Cristina Garcia — Yea
Eduardo Garcia — Yea
Jim Patterson — Not Voting
Mark Stone — Yea
Travis Allen — Nay
Wendy Carrillo — Yea
Aguiar-Curry, Cecilia M. Democratic Yea
Arambula, Joaquin Democratic Yea
Berman, Marc Democratic Yea
Bonta, Mia Democratic Yea
Caballero, Anna M. Democratic Yea
Calderon, Lisa Democratic Yea
Cervantes, Sabrina Democratic Yea
Gabriel, Jesse Democratic Yea
Gipson, Mike A. Democratic Yea
Grayson, Timothy S. Democratic Yea
Irwin, Jacqui Democratic Yea
Kalra, Ash Democratic Yea
Limón, Monique Democratic Yea
Muratsuchi, Al Democratic Yea
Quirk-Silva, Sharon Democratic Yea
Reyes, Eloise Gómez Democratic Yea
Chen, Phillip Republican Nay
Choi, Steven S. Republican Not Voting
Dahle, Megan Republican Yea
Flora, Heath Republican Not Voting
Gallagher, James Republican Yea
Lackey, Tom Republican Nay

Official roll call →

3rd Reading AB1912 Rodriguez By Portantino

Passed 27 Yea · 10 Nay · 3 Other
Party YeaNayPresentNot Voting
Unaffiliated 231002
Democratic 4001
Total 271003
% of votes cast 68%25%0%8%
How each member voted (40)
Member Party Vote
Anderson — Nay
Beall — Yea
Hernandez — Yea
Lara — Yea
Morrell — Nay
Pan — Yea
Skinner — Yea
Vidak — Yea
Cannella — Nay
Galgiani — Yea
Chang — Nay
Portantino — Yea
Allen — Yea
Glazer — Yea
De León — Yea
Hertzberg — Yea
Mitchell — Yea
Atkins — Yea
Delgado — Yea
Hill — Yea
Hueso — Yea
Dodd — Yea
Bates — Nay
Bradford — Yea
Leyva — Yea
Monning — Yea
Moorlach — Not Voting
Nielsen — Nay
Roth — Yea
Wieckowski — Yea
Wilk — Nay
Fuller — Nay
Beth Gaines — Nay
Bill Berryhill — Not Voting
Mark Stone — Nay
Jackson, Corey A. Democratic Yea
McGuire, Mike Democratic Yea
Nguyen, Stephanie Democratic Not Voting
Stern, Henry I. Democratic Yea
Wiener, Scott D. Democratic Yea

Official roll call →

Do pass as amended

Passed 5 Yea · 2 Nay
Party YeaNayPresentNot Voting
Unaffiliated 4200
Democratic 1000
Total 5200
% of votes cast 71%29%0%0%
How each member voted (7)
Member Party Vote
Bates — Nay
Bradford — Yea
Hill — Yea
Nielsen — Nay
Portantino — Yea
Beall — Yea
Wiener, Scott D. Democratic Yea

Official roll call →

Placed on suspense file

Passed 7 Yea · 0 Nay
Party YeaNayPresentNot Voting
Unaffiliated 6000
Democratic 1000
Total 7000
% of votes cast 100%0%0%0%
How each member voted (7)
Member Party Vote
Bates — Yea
Bradford — Yea
Hill — Yea
Portantino — Yea
Nielsen — Yea
Beall — Yea
Wiener, Scott D. Democratic Yea

Official roll call →

AB 1912 RODRIGUEZ Assembly Third Reading

Passed 49 Yea · 27 Nay · 2 Other
Party YeaNayPresentNot Voting
Unaffiliated 342102
Democratic 14100
Republican 1500
Total 492702
% of votes cast 63%35%0%3%
How each member voted (78)
Member Party Vote
Acosta — Nay
Baker — Nay
Bigelow — Nay
Bloom — Yea
Brough — Nay
Jones-Sawyer — Yea
Kiley — Nay
Levine — Nay
Melendez — Nay
Nazarian — Yea
Obernolte — Nay
Rodriguez — Yea
Ting — Yea
Voepel — Nay
Waldron — Nay
Chu — Yea
Gonzalez Fletcher — Yea
Frazier — Yea
Gloria — Yea
Salas — Yea
Burke — Yea
Gray — Yea
Holden — Yea
Rubio — Yea
Kamlager-Dove — Yea
Low — Yea
Fong — Nay
Mathis — Nay
Mayes — Nay
McCarty — Yea
Medina — Yea
Chau — Yea
Chiu — Yea
Cooley — Yea
Cooper — Yea
Mullin — Nay
O'Donnell — Yea
Quirk — Yea
Rendon — Yea
Santiago — Yea
Thurmond — Yea
Weber — Yea
Wood — Yea
Chávez — Nay
Daly — Not Voting
Friedman — Not Voting
Harper — Nay
Maienschein — Nay
Steinorth — Nay
Eggman — Yea
Cunningham — Nay
Cristina Garcia — Yea
Eduardo Garcia — Yea
Jim Patterson — Nay
Mark Stone — Yea
Travis Allen — Nay
Wendy Carrillo — Yea
Aguiar-Curry, Cecilia M. Democratic Yea
Arambula, Joaquin Democratic Yea
Berman, Marc Democratic Yea
Bonta, Mia Democratic Yea
Caballero, Anna M. Democratic Yea
Calderon, Lisa Democratic Yea
Cervantes, Sabrina Democratic Yea
Gipson, Mike A. Democratic Yea
Grayson, Timothy S. Democratic Nay
Irwin, Jacqui Democratic Yea
Kalra, Ash Democratic Yea
Limón, Monique Democratic Yea
Muratsuchi, Al Democratic Yea
Quirk-Silva, Sharon Democratic Yea
Reyes, Eloise Gómez Democratic Yea
Chen, Phillip Republican Nay
Choi, Steven S. Republican Nay
Dahle, Megan Republican Nay
Flora, Heath Republican Nay
Gallagher, James Republican Yea
Lackey, Tom Republican Nay

Official roll call →

Do pass.

Passed 12 Yea · 4 Nay · 1 Other
Party YeaNayPresentNot Voting
Unaffiliated 9301
Democratic 3000
Republican 0100
Total 12401
% of votes cast 71%24%0%6%
How each member voted (17)
Member Party Vote
Bigelow — Nay
Bloom — Yea
Brough — Not Voting
Friedman — Yea
Gonzalez Fletcher — Yea
Fong — Nay
Nazarian — Yea
Obernolte — Nay
Chau — Yea
Quirk — Yea
Eggman — Yea
Eduardo Garcia — Yea
Wendy Carrillo — Yea
Bonta, Mia Democratic Yea
Calderon, Lisa Democratic Yea
Reyes, Eloise Gómez Democratic Yea
Gallagher, James Republican Nay

Official roll call →

Subjects

public-safety finance labor
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Frequently asked questions

What does AB 1912 do?
(1) Existing law establishes various public agency retirement systems, including, among others, the Public Employees' Retirement System, the State Teachers' Retirement System, the Judges' Retirement System II, and various county retirement systems pursuant to the County Employees Retirement Law of 1937. These systems provide defined pension benefits to public employees based on age, service credit, and amount of final compensation. Existing law authorizes a contracting agency, as defined, to terminate a contract under the Public Employees' Retirement System pursuant to specified procedures and authorizes the Board of Administration of the Public Employees' Retirement System to terminate a contract with a contracting agency under specified circumstances, including if a contracting agency fails to pay any installment of contributions into the Public Employees' Retirement Fund. The Joint Exercise of Powers Act generally authorizes 2 or more public agencies, by agreement, to jointly exercise any common power. Under the act, if an agency is not one or more of the parties to the agreement but is a public entity, commission, or board constituted pursuant to the agreement, the debts, liabilities, and obligations of the agency are the debts, liabilities, and obligations of the parties to the agreement, unless the agreement specifies otherwise. This bill would specify that the parties to the joint powers agreement may not specify otherwise with respect to retirement liabilities of the agency if the agency contracts with a public retirement system, and would eliminate an authorization for a party to a joint powers agreement to separately contract or assume responsibilities for specific debts, liabilities, or obligations of the agency. Existing law authorizes a contracting agency, as defined, to terminate a contract under the Public Employees' Retirement System pursuant to specified procedures and authorizes the Board of Administration of the Public Employees' Retirement System to terminate a contract with a contracting agency under specified circumstances, including if a contracting agency fails to pay an installment of contributions into the Public Employees' Retirement Fund. This bill would require member agencies of an agency established pursuant to a joint powers agreement that participates in, or contracts with, a public retirement system, prior to filing a notice of termination or upon notice of potential termination by the Board of Administration of the Public Employees' Retirement System, to mutually agree as to the apportionment of the agency's retirement obligations among themselves, provided that the agreement equals 100% of the retirement liability of the agency. If the member agencies are unable to mutually agree to the apportionment, the bill would require the board to apportion the retirement liability of the agency to each member agency, as specified, and would establish procedures allowing a member agency to challenge the board's determination through the arbitration process. The bill would also provide that if a judgment is rendered against an agency or a party to the agreement for a breach of its obligations to the retirement system, the time within which a claim for injury may be presented or an action commenced against the other party that is subject to the liability determined by the judgment begins to run when the judgment is rendered. The bill would specify that those provisions apply both retroactively to a member agency, or current and former member agency, that has an agreement with the board on or before January 1, 2019, and to new agreements with the board on or after that date. (2) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System (PERS) , which provides a defined benefit to members of the system, based on final compensation, credited service, and age at retirement, subject to certain variations. PERL vests management and control of PERS in its Board of Administration. Existing law requires the PERS board to enter into a specified agreement with the governing body of a terminating agency, upon request of that agency, to ensure that final compensation is calculated in the same manner as benefits of nonterminating agencies, and that related necessary adjustments in the employer's contribution rate are made and benefits adequately funded, including a lump-sum payment at termination, if agreed to by the terminating agency and the board. Existing law requires a terminating agency to notify the PERS board of its intention to enter into this agreement within a specified period of time. Existing law authorizes the PERS board to choose not to enter into an agreement to terminate if the board determines that it is not in the best interests of PERS. Existing law requires all plan assets and liabilities of a terminating agency to be deposited in a single pooled account, the terminated agency pool subaccount within the Public Employees' Retirement Fund, a continuously appropriated fund. This bill would also require the PERS board to enter into the above-described agreement upon request of a member agency of a terminating agency formed under the Joint Exercise of Powers Act and would provide that the member agencies of the terminating agency are liable to the system for inadequate funding of the benefits pursuant to the agreement. To the extent that the bill would increase any lump-sum payments made by a terminating agency and deposited into a subaccount within the Public Employees' Retirement Fund, the bill would make an appropriation. (3) Existing law makes a terminated agency liable to the system for any deficit in funding for earned benefits, interest, and for reasonable and necessary costs of collection, including attorney's fees. Existing law provides that the board has a lien on the assets of a terminated contracting agency, as specified, and that assets shall also be available to pay actual costs, including attorney's fees necessarily expended for collection on the lien. This bill would extend that liability and lien to all of the parties of a terminating agency that was formed under the Joint Exercise of Powers Act. To the extent that these changes would increase deposits in the Public Employees' Retirement Fund, the bill would make an appropriation. (4) Existing law authorizes the board of PERS to elect not to impose a reduction, or to impose a lesser reduction, on a terminated plan if the board has made all reasonable efforts to collect the amount necessary to fully fund the liabilities of the plan and the board finds that not reducing the benefits, or imposing a lesser reduction, will not impact the actuarial soundness of the terminated agency pool. This bill would eliminate that provision. The bill would require the board, prior to exercising its authority to reduce benefits and to the extent consistent with its fiduciary duties, to consider and exhaust all options and necessary actions, including evaluating whether to bring a civil action against any member agencies to a terminated agency formed by an agreement under the Joint Exercise of Powers Act to compel payment of the terminated public agency's pension obligations. The bill would also specify that the board is entitled to reasonable attorney's fees in addition to other costs. The bill would also set forth related legislative findings.
Who sponsors AB 1912?
AB 1912 is sponsored by Rodriguez.
What is the current status of AB 1912?
This bill has been enacted into law. Introduced January 23, 2018. Enacted.
Where can I track AB 1912?
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