1993 State Legislation



Intro 12/9/92
Investments (Arab Boycott) Expands provisions enacted last year, Chapter 1351/92 (AB-2251, Margolin) regarding the prohibition of state trust funds investing in companies that are complying with the Arab League’s economic boycott of Israel. Note: the CA Attorney General has concluded that this bill is pre-empted by federal law and therefore not subject to implementation by STRS. 439, effective 1/1/94; Position: OPPOSE
Intro 1/25/93
Investments (Foreign Government Bonds) Authorizes state or local retirement systems to invest in foreign government bonds or other evidences of indebtedness, a portion of which may be used to purchase rated or unrated bonds guaranteed by Israel, Canada or Mexico; permissive only. 440 (9/24/93), effective 1/1/94; Position: NONE
AB-407 *
Intro 2/10/93
Dual Membership Would have repealed the TRL provision that excludes a full-time member of another public retirement system from membership in STRS for part-time work under STRS. The Governor determined that this bill would increase the STRS’ unfunded liability thereby resulting in increased GF costs because of the requirements of the Elder Full Funding Act (costs not funded by the combined employer/employee contributions, approximately 1.2% of payroll); result in local mandated program costs; and, inappropriately divert money from the classroom. Governor Veto (10/4/93)
AB-447 *
Intro 2/11/93
Federal Compliance (Age 70-1/2 Minimum Distribution) 1) Adds the definition of “reinstatement” to the TRL; 2)requires STRS to comply with Federal law with regard to minimum distribution at age 70-1/2 and specifies various procedures pertaining to STRS’ inactive members; and 3) provides for STRS to prorate supplemental payments to the termination date of the allowance. 861 (10/5/93), effective 1/1/94; line item veto of $100,000 appropriation
Intro 2/11/93
Rule of 85 Would have established the “Rule of 85″ alternative retirement program. The Governor determined that this bill lacked several safeguards as proposed in the Legislative Analyst’s Office report. Specifically it did not require an audit over the life of the early retirement program to reflect that cost savings actually occurred; no specified time limit for districts to finance payments for the enhanced benefits; lacked flexibility for districts to determine a minimum retirement age; and there was no directive to keep the deleted classifications empty. Sponsored by CTA Governor Veto (10/9/93); Position: SUPPORT
AB-631 *
Intro 2/22/93
Modify TRL Definitions Clarifies the definition of “compensation” and “salary” for purposes of determining benefits and contributions. 468 (9/25/93), effective 1/1/94
AB-798 * (Sher) Intro 2/25/93 Benefit Payment Arrangements 1) Prohibits STRS/PERS from mailing a copy of benefit payment information to any member who has payment directly deposited if the member requests not to have the information sent; and 2) requires the Systems to inform members of their right not to have the information sent to them. 1083 (10/10/93), effective 1/1/94; Position: OPPOSE
Intro 2/25/93
Benefit Study Would have required STRS to conduct a study of the costs of: 1) a 2% at age 58 to 2.418% at and over age 61; and 2) a 2% at age 59 to 2.418% at and over age 62 formula for state employee STRS members. Sponsored by CSEA Dropped by author; agreed to conduct the study
Intro 3/1/93
Credit Enhancement For Local Government Bonds Would have required STRS/PERS, in consultation with the Treasurer, to study the feasibility of establishing under the Systems a credit enhancement program for local government bonds. The Governor determined that the bill was unnecessary since both STRS/PERS already have the authority to conduct such a study and to provide credit enhancement programs; particularly with STRS’ program for industrial development bonds. This program experience can be used as a general application for other credit enhancement programs. Governor Veto (10/11/93); Position: NEUTRAL
AB-1631 *
Intro 3/4/93
Survivor Benefits (SB-93) 1) Allows STRS to: 1) revise the current process of verifying the date of birth or death of a benefit recipient; 2) Specifies that a pre-retirement election of an option is automatically canceled if the option beneficiary predeceases the member; and 3) specifies the procedures to be taken when a designated beneficiary cannot be located. 920 (10/7/93), effective 1/1/94
AB-1796 *
Intro 3/5/93
TRL Recodification Recodifies the TRL; makes structural changes only. 893 (10/7/93), effective 1/1/94
AB-2278 *
Intro 3/5/93
STRS Technical Housekeeping Makes technical, corrective and clarifying changes in various TRL provisions. 1082 (10/10/93), effective 1/1/94
(L. Greene)
Intro 1/6/93
Investments (Proration of Property Taxes) Requires for fiscal years 1992-93 and 1993-94 that, if a lessee of a STRS-owned property holds a possessory interest for less than a full fiscal year, the amount of the property tax shall be prorated according to the number of months the lessee holds the interest. 1187 (10/11/93), effective 1/1/94; Amended too late in Session for TRB to adopt position
(Appropriations Committee)
Intro 1/7/93
“Float” Suit As an urgency measure, makes a GF appropriation of $8.9 million to STRS and $7.5 million to PERS. These amounts represent the settlement of a lawsuit STRS/PERS filed against the State to recover the System’s investment earnings in the State’s Pooled Money Investment Account between 1984 and 1988. 699 (10/1/93), effective immediately; Position: SUPPORT
Intro 1/14/93
Golden Handshake Extension Would have removed the 1/1/94 sunset date of the Golden Handshake provisions, thereby continuing the program on a permanent basis. The Governor determined that this bill lacked several safeguards as proposed in the Legislative Analyst’s Office report. Specifically it did not require an audit over the life of the early retirement program to reflect that cost savings actually occurred, limit financing periods to four years, and authorize the executive to designate the eligible departments, programs, and position classifications; otherwise, he would be willing to sign. Sponsored by CTA Governor Veto (10/9/93); Position: SUPPORT
Intro 2/4/93
TSA Plan Would have required STRS to offer a TSA Plan to be operated under the direction of STRS; Investment Office or a third party administrator. The Governor recognized that the TRB was evaluating the effectiveness and future of the existing TSA plan; consequently, development of an additional or new plan would be premature prior to the complete evaluation and final disposition of the existing plan. Sponsored by CTA Governor Veto (9/24/93); Position: NEUTRAL
Intro 2/24/93
One Year Final Compensation Repayment (LAUSD) Would have provided for employers to pay for the one-year final compensation benefit as required by the TRB. The Governor determined that this bill would encourage school districts to borrow money to pay for increased retirement benefits without securing additional funding to cover the debt; the sponsor did not demonstrate any savings by school districts that have already extended this benefit, or that any savings would accrue from the financing option contained in the bill; and, the bill has the potential to divert money from the classroom. Sponsored by UTLA Governor Veto (9/21/93); Position: SUPPORT
SB-698 *
Intro 3/3/93
Salary Preservation Using 3 Non-consecutive Years For Final Compensation 1) Allows a member’s retirement allowance calculation to be based on the member’s highest earnable compensation during any three non-consecutive years of STRS membership if the member’s salary was reduced because of budget reductions; and 2) authorizes employers to elect to preserve members’ retirement benefits when salary reductions due to budget cuts have occurred. Co-sponsored with CFT 860 (10/5/93), effective 1/1/94; line item veto of $300,000 appropriation
Intro 3/3/93
Change of Options Allows a STRS retired member who retired under Option 2 or Option 3 before 1/1/91, to change Option 2 or 3 to Option 6 or 7, under specified conditions. Sponsored by CRTA 911 (10/7/93), effective 1/1/94; Position: SUPPORT
SB-857 *
(PE&R Committee)
Intro 3/4/93
Betts Cleanup; Long-term Health Care 1) Authorizes districts to grant a leave of absence to a certificated employee who has applied for either a disability retirement benefit or a disability allowance; 2) makes various technical and conforming changes related to implementation of the new Disability Retirement and Survivor Benefits programs; and 3) makes the PERS Long-Term Care Act provisions applicable to STRS members. 1144 (10/10/93), effective 1/1/94
Voucher/Parental Choice In Education (Proposition 174) - Would have allowed parents to exercise choice in the schools which their children attend by providing state educational “scholarships”, or vouchers, for CA students that would be redeemable by their parents at either private or public schools that have converted to independent scholarship-redeeming schools. The amount of the scholarship would be equal to at least 50% of the prior year’s public per-pupil spending; an estimated $2,600 per student. Note: any significant migration of teachers from the public schools as a result of the Initiative would have a negative impact on the funding period at STRS. Position: OPPOSE
NOTE: Unless otherwise noted in italicized lettering, or with an asterisk (*) indicating STRS sponsored, legislation was sponsored by the author(s) or committee introducing the bill. Also, refer to the “Legend” for an explanation of abbreviations used.

Decade of Legislation, 1993 State Updated: May 11, 2001