Text of CA AB 979 (2020)

CALIFORNIA LEGISLATURE— 2019–2020 REGULAR SESSION Assembly Bill No. 979 Introduced by Assembly Member Reyes February 21, 2019 An act to amend Sections 7522.30, 22760, 22814, 75506.7, 75521, 75522, 75523, 75553, 75570, 75571.5, 75590, 75601, and 75602 of, and to add Sections 75522.5 and 75591.5 to, the Government Code, relating to judges’ retirement, and making an appropriation therefor. LEGISLATIVE COUNSEL'S DIGEST AB 979, as introduced, Reyes. Judges’ Retirement System II: deferred retirement. (1) Existing law establishes the Judges’ Retirement System II, which the Board of Retirement of the Public Employees’ Retirement System administers. Existing law authorizes a judge who is a member of the system and who retires upon attaining both 65 years of age and 20 or more years of service, or upon attaining 70 years of age with a minimum of 5 years of service, to elect from specified retirement benefits including a monthly pension. Existing law requires a judge who leaves judicial office after accruing 5 or more years of service, but who has not reached the applicable age of retirement, to be paid a lump sum equal to monetary credits that accrued while in office, as specified. Existing law authorizes a judge who, among other things, separates from office after accruing 5 or more years of service and has not reached 65 years of age to continue health care benefits if the judge assumes certain payments. Existing law specifies benefits provided to a surviving spouse or other beneficiary in relation to these provisions. This bill would authorize a judge who is a member of the system to retire upon attaining both 63 years of age and 15 or more years of service, or when a judge who has accrued at least 5 years of service and who has not received specified discipline is defeated for reelection. The bill would authorize a judge who is not otherwise eligible to retire and who has either attained 60 years of age with a minimum of 5 years of service or accrued 15 or more years of service to leave the judge’s monetary credits on deposit with the system, to retire, and upon reaching retirement age, as specified, to receive a retirement allowance, as provided. The bill would prescribe procedures to apply if the judge fails to elect within 30 days of separation and would authorize the board to charge an administrative fee, as specified, to a judge who elects to apply these provisions. The bill would specify the monthly allowance provided to a surviving spouse or other beneficiary and would make other conforming changes in relation to these provisions. (2) Existing law establishes the Public Employees’ Medical and Hospital Care Act (PEMHCA) for the purpose of providing health care benefits to employees and annuitants, as defined. PEMHCA defines an annuitant for purposes of receiving postretirement health benefits as including, among others, a person who retires within 120 days of separation from public employment and a judge who receives the above-described lump sum payment of monetary credits. Contributions and premiums paid under PEMHCA are deposited in the Public Employees’ Contingency Reserve Fund, which is continuously appropriated. This bill would authorize a judge who elects to retire as described above, but is not yet receiving a retirement allowance, to continue health care benefits upon separation from office if the judge assumes specified payments. The bill would include these judges within the definition of annuitant upon commencement of the judge’s retirement allowance, thereby authorizing the judge to receive applicable postretirement health benefits. By authorizing the use of continuously appropriated funds for a new purpose, and by depositing additional amounts into a continuously appropriated fund, this bill would make an appropriation. (3) Existing law, the California Public Employees Pension Reform Act of 2013, requires, among other things, specified public employees to contribute at least 50% of the annual actuarially determined normal cost for the plan of retirement benefits provided to the member, as provided. This bill would require a judge who is a member of the Judges’ Retirement System II to contribute an unspecified percent of the judge’s monthly salary to the judge’s retirement, as provided. Digest Key Vote: MAJORITY Appropriation: YES Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. Section 7522.30 of the Government Code is amended to read: 7522.30. (a) This section shall apply to all public employers and to all new members. Equal sharing of normal costs between public employers and public employees shall be the standard. The standard shall be that employees pay at least 50 percent of normal costs and that employers not pay any of the required employee contribution. (b) The “normal cost rate” shall mean the annual actuarially determined normal cost for the plan of retirement benefits provided to the new member and shall be established based on the actuarial assumptions used to determine the liabilities and costs as part of the annual actuarial valuation. The plan of retirement benefits shall include any elements that would impact the actuarial determination of the normal cost, including, but not limited to, the retirement formula, eligibility and vesting criteria, ancillary benefit provisions, and any automatic cost-of-living adjustments as determined by the public retirement system. (c) New members employed by those public employers defined in paragraphs (2) and (3) of subdivision (i) of Section 7522.04, the Legislature, the California State University, and the judicial branch who participate in a defined benefit plan shall have an initial contribution rate of at least 50 percent of the normal cost rate for that defined benefit plan, rounded to the nearest quarter of 1 percent, unless a greater contribution rate has been agreed to pursuant to the requirements in subdivision (e). This contribution shall not be paid by the employer on the employee’s behalf. (d) Notwithstanding subdivision (c), once established, the employee contribution rate described in subdivision (c) shall not be adjusted on account of a change to the normal cost rate unless the normal cost rate increases or decreases by more than 1 percent of payroll above or below the normal cost rate in effect at the time the employee contribution rate is first established or, if later, the normal cost rate in effect at the time of the last adjustment to the employee contribution rate under this section. (e) Notwithstanding subdivision (c), employee contributions may be more than one-half of the normal cost rate if the increase has been agreed to through the collective bargaining process, subject to the following conditions: (1) The employer shall not contribute at a greater rate to the plan for nonrepresented, managerial, or supervisory employees than the employer contributes for other public employees, including represented employees, of the same employer who are in related retirement membership classifications. (2) The employer shall not increase an employee contribution rate in the absence of a memorandum of understanding that has been collectively bargained in accordance with applicable laws. (3) The employer shall not use impasse procedures to increase an employee contribution rate above the rate required by this section. (f) If the terms of a contract, including a memorandum of understanding, between a public employer and its public employees, that is in effect on January 1, 2013, would be impaired by any provision of this section, that provision shall not apply to the public employer and public employees subject to that contract until the expiration of that contract. A renewal, amendment, or any other extension of that contract shall be subject to the requirements of this section. (g) Subdivisions (a) and (c) shall not apply to a judge, as defined in Section 75502. SEC. 2. Section 22760 of the Government Code is amended to read: 22760. “Annuitant” means: (a) A person, other than a National Guard member defined in Section 20380.5, who has retired within 120 days of separation from employment and who receives a retirement allowance under any state or University of California retirement system to which the state was a contributing party. (b) A surviving family member receiving an allowance in place of an annuitant who has retired as provided in subdivision (a), or as the survivor of a deceased employee under Section 21541, 21546, 21547, or 21547.7, or similar provisions of any other state retirement system. (c) A person who has retired within 120 days of separation from employment with a contracting agency as defined in Section 22768 or, if applicable, consistent with the provisions of subdivision (b) of Section 22893, and who receives a retirement allowance from the retirement system provided by that employer, or a surviving family member who receives the retirement allowance in place of the deceased. (d) A judge who receives the benefits provided by subdivision (e) of Section 75522. 75522, or who retires pursuant to Section 75522.5 and is receiving a retirement allowance pursuant to that section. (e) A 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) A Member of the Legislature or an elective officer of the state whose office is provided by the California Constitution, who has at least eight years of credited service, and who meets the following conditions: (1) Permanently separates from state service on or after January 1, 1988, and not more than 10 years before or 10 years after his or her the minimum age for service retirement, or is an inactive member of the Legislators’ Retirement System pursuant to Section 9355.2. (2) Receives a retirement allowance under a state retirement system supported in whole or in part by state funds other than the University of California Retirement System. (g) An exempt employee who meets all of the following conditions: (1) Has at least 10 years of credited state service that includes at least 2 years of credited service while an exempt employee. (2) Permanently separates from state service on or after January 1, 1988, and not more than 10 years before or 10 years after his or her the minimum age for service retirement. (3) Receives a retirement allowance under a state retirement system supported in whole or in part by state funds other than the University of California Retirement System. (h) A person receiving a survivor allowance pursuant to Article 3 (commencing with Section 21570) of Chapter 14 of Part 3 provided that he or she the person was eligible to enroll in a health benefit plan on the date of the member’s death, on whose account the survivor allowance is payable. (i) (1) A family member of a deceased retired member of the State Teachers’ Retirement Plan, if the deceased member meets the following conditions: (A) Retired within 120 days of separation from employment. (B) Retired before the member’s school employer elected to contract for health benefit coverage under this part. (C) Prior to his or her the judge’s death, received a retirement allowance that did not provide for a survivor allowance to family members. (2) The family member shall elect coverage as an annuitant within one calendar year from the date that the deceased member’s school employer elected to contract for health benefit coverage under this part. (j) A person who reinstates benefits pursuant to subparagraph (ii) (B) of paragraph (2) of subdivision (d) of Section 7522.57. SEC. 3. Section 22814 of the Government Code is amended to read: 22814. (a) A judge who retires pursuant to Chapter 11 (commencing with Section 75000) of Title 8, but is not yet receiving a pension, may continue his or her coverage and the coverage of any family members for the duration of the leave of absence, upon his or her the judge’s application and upon assuming payment of the contributions otherwise required of the employer. (b) (1) A judge who leaves judicial office pursuant to subdivision (b) of Section 75521 and who has not attained 65 years of age may continue his or her coverage and the coverage of any family members upon assuming payment of the contributions otherwise required of the employer. The judge shall also pay an additional 2 percent of the premium amount to cover administrative expenses incurred by the system or the Department of Human Resources. (2) An election to continue coverage under this subdivision shall be made within 60 days of permanent separation. A retired judge who cancels that coverage may not reenroll. (3) Upon attaining 65 years of age, a retired judge who has continuous and uninterrupted coverage pursuant to this subdivision shall be entitled to the applicable employer contribution. (c) (1) A judge who retires pursuant to Section 75522.5, but is not yet receiving a retirement allowance, may continue coverage and the coverage of any family members upon assuming payment of all contributions, including those otherwise required of the employer. The judge shall also pay an additional 2 percent of the premium amount to cover administrative expenses incurred by the system or the Department of Human Resources. (2) Upon commencement of the judge’s retirement allowance, the judge shall become an annuitant, as defined in subdivision (d) of Section 22760, and thereupon the judge may continue current health plan enrollment, enroll in a health benefit plan within 60 days of the commencement of the judge’s retirement allowance, or enroll during any future open enrollment period, without discrimination as to premium rates or benefit coverage. SEC. 4. Section 75506.7 of the Government Code is amended to read: 75506.7. (a) A judge may receive service credit for the purposes of retirement under Section 75522 75522, 75522.5, or 75560, or for purposes of calculating survivor benefits under Section 75590, for the time during which he or she the judge was absent from his or her the position as a judge by reason of service with the uniformed services, if the judge returns to judicial office within six months of separation from an eligible period of service in the uniformed services, as prescribed in Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code, and the judge elects and satisfies the requirements of subdivision (b). (b) In order to receive service credit under subdivision (a) a judge shall contribute an amount equal to the member contributions that would have been made by the judge during the absence as required under Sections 75061 and 75602. The judge’s contributions shall be made prior to the judge’s retirement and shall be effective only if accompanied by a lump-sum payment of the contributions due for the period during which the judge was absent due to service with the uniformed services. The judge’s payment of contributions shall not exceed the amount the judge would have been required to contribute had the judge not served in the uniformed services and remained in judicial office continuously throughout the eligible period of service in the uniformed services. (c) Upon satisfaction of the requirements of subdivisions (a) and (b), the judge shall be credited with the service that would have accrued had the judge remained continuously employed and not undertaken service in the uniformed services. (d) Upon satisfaction of the requirements of subdivisions (a) and (b), the judge shall receive the monetary credits that would have accrued under Section 75520 if the member had not served in the uniformed services and had remained in judicial office continuously. (e) The system shall comply with Chapter 43 (commencing with Section 4301) of Title 38 of the United States Code, as that chapter may be amended from time to time. (f) For the purposes of this section: (1) “Uniformed services” means the Armed Forces, the Army National Guard and the Air National Guard when engaged in active duty for training, inactive duty training, or full-time National Guard duty, the commissioned corps of the Public Health Service, and any other category of persons designated by the President in time of war or national emergency. (2) “Service in the uniformed services” means the performance of duty on a voluntary or involuntary basis in a uniformed service under competent authority and includes: active duty, active duty for training, initial active duty for training, inactive duty training, full-time National Guard, or a period for which a person is absent from a position of employment for the purpose of an examination to determine the fitness of the employment for the purpose of performing funeral honors duty as provided in Section 12503 of Title 10 or Section 115 of Title 32 of the United States Code. SEC. 5. Section 75521 of the Government Code is amended to read: 75521. (a) A judge who leaves judicial office before accruing at least five years of service shall be paid the amount of his or her the judge’s contributions to the system, and no other amount. (b) A (1) Except as provided in paragraph (2), a judge who leaves judicial office after accruing five or more years of service and who is not eligible to elect to retire under Section 75522 shall be paid the amount of his or her the judge’s monetary credits determined pursuant to Section 75520, including the credits added under subdivision (b) of that section computed to the last day of the month preceding the date of distribution, and no other amount. (2) A judge who meets the requirements of Section 75522.5 and who is not otherwise eligible for retirement under Section 75522 may elect to leave the judge’s monetary credits on deposit with the system and retire under Section 75522.5. (c) Judges who leave office as described in subdivision (b) are “retired judges” for purposes of a concurrent retirement with respect to the benefits provided under Section 20639 and assignment pursuant to Article 2 (commencing with Section 68540.7) of Chapter 2 and are eligible for benefits provided under Section 22814. (d) After a judge has withdrawn his or her the judge’s accumulated contributions or the amount of his or her the judge’s monetary credits upon leaving judicial office, the service shall not count in the event he or she the judge later becomes a judge again, until he or she the judge pays into the Judges’ Retirement System II Fund the amount withdrawn, plus interest thereon at the rate of interest then being required to be paid by members of the Public Employees’ Retirement System under Section 20750 from the date of withdrawal to the date of payment. SEC. 6. Section 75522 of the Government Code is amended to read: 75522. (a) A judge is eligible to retire pursuant to this section upon attaining both 65 63 years of age and 20 15 or more years of service, or upon attaining 70 years of age with a minimum of five years of service. (b) The office of a judge who retires under this section becomes vacant on the date of the retirement. (c) A judge who retires pursuant to this section shall, within 30 days after the effective date of the retirement, elect to receive either the benefits provided by subdivision (d) or the benefits provided by subdivision (e). Under rules adopted by the board, the time for the election may be extended in cases of illness or other hardship, but once made, the election shall be final and irrevocable. (d) The judge may elect to receive for life a monthly retirement allowance equal to the benefit factor multiplied by the judge’s final compensation multiplied by the number of years of service credit. (1) The benefit factor for a judge eligible to retire pursuant to this section equals 3.75 percent per year of service. (2) In no event shall the retirement allowance at the time of retirement exceed 75 percent of the judge’s final compensation. (e) The judge may elect to receive the amount of his or her the judge's monetary credits determined pursuant to Section 75520, including the credits added under subdivision (b) of that section computed to the last day of the month preceding the date of distribution. Under rules adopted by the board, the judge may elect to receive that amount in a single payment, or may direct that it be paid in an annuity of actuarially equivalent value for the judge’s life or in one of the optional forms provided for in Section 75571 if the judge retires on or before December 31, 2017, or Section 75571.5 if the judge retires on or after January 1, 2018. (f) If a retired judge fails or refuses to make an election pursuant to subdivision (c) within the time allowed, he or she the retired judge shall be deemed to have elected to receive a monthly retirement allowance under subdivision (d). (g) Notwithstanding subdivision (a), a judge who has a minimum of five years of service, who is defeated for reelection, and who has not been disciplined by, or has any pending discipline with, the Commission on Judicial Performance shall be eligible to retire pursuant to this section. SEC. 7. Section 75522.5 is added to the Government Code, to read: 75522.5. (a) A judge who is not eligible to retire under Section 75522 and who has either attained 60 years of age with a minimum of 5 years of service or accrued 15 or more years of service may elect to retire subject to the requirements of this section. (b) (1) A judge who leaves judicial office after attaining 60 years of age and accruing 5 or more years of service may retire and leave the judge's monetary credits determined pursuant to Section 75520 on deposit with the system, including additional amounts credited to the judge’s account pursuant to subdivision (b) of that section, and upon attaining 65 years of age receive a retirement allowance calculated as described in subdivision (d) of Section 75522. (2) A judge who leaves judicial office after accruing 15 or more years of service may retire and leave the judge's monetary credits determined pursuant to Section 75520 on deposit with the system, including additional amounts credited to the judge’s account pursuant to subdivision (b) of that section, and upon attaining 63 years of age receive a retirement allowance calculated as described in subdivision (d) of Section 75522. (3) A judge who elects to retire under this section shall have the judge's monetary credits determined pursuant to Section 75520 on deposit with the system and shall continue to accrue interest as described in subdivision (b) of Section 75520 through the last day of the month preceding distribution of either the first monthly allowance payment or distribution of the monetary credits pursuant to Section 75591.5. (c) (1) An eligible judge who wishes to retire and receive a retirement allowance pursuant to this section shall make an election to do so within 30 days of separation. If an eligible judge fails or refuses to make an election within 30 days of separation, the judge shall receive the amount of the judge's monetary credits pursuant to paragraph (1) of subdivision (b) of Section 75521. (2) Under the rules adopted by the board, the time within which an election shall be made may be extended in cases of illness or other hardship, but once made, the election shall be final and irrevocable. (d) The board may charge a judge who elects to retire pursuant to this section a fee to cover the administrative costs to the system, including costs associated with health care coverage that a judge may elect pursuant to subdivision (c) of Section 22814. (e) A judge who elects to retire pursuant to this section shall not be considered to have received an enhancement to the judge's retirement formula or retirement benefit for purposes of Section 7522.44. SEC. 8. Section 75523 of the Government Code is amended to read: 75523. (a) The retirement allowance of retired judges who have elected to receive a monthly allowance under subdivision (d) of Section 75522 or who have retired for disability and are receiving an allowance under Section 75560.4 shall be adjusted effective in January of each year after a judge has been retired under this chapter for more than six months, months to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year. The United States city average of the “Consumer Price Index for all All Urban Consumers,” as published by the United States Bureau of Statistics, shall be used as the basis for determining changes in the cost of living. (b) The retirement allowance of a retired judge who has elected to retire under Section 75522.5 shall be adjusted effective in January of each year after the judge has received a retirement allowance under this chapter for more than six months to reflect any increase in the cost of living occurring after January 1 of the immediately preceding fiscal year. The United States city average of the “Consumer Price Index for All Urban Consumers,” as published by the United States Bureau of Labor Statistics, shall be used as the basis for determining changes in the cost of living. (b) (c) No adjustment shall be made unless the cost-of-living increase equals or exceeds 1 percent. The allowance shall not be increased more than 3 percent in a single year. Increases shall be compounded. (c) (d) The allowance shall not be decreased as a result of the cost-of-living adjustment. (d) (e) The board shall provide, by rule, any details needed for the implementation of this section. SEC. 9. Section 75553 of the Government Code is amended to read: 75553. (a) If a member leaves judicial office after a nonmember has received a share of the member’s contributions or a share of the member’s monetary credits pursuant to Section 75551, the member’s retirement fund rights shall be determined pursuant to this section. (b) If the member has redeposited the amount paid to the nonmember, with interest, pursuant to Section 75552, the payment to the nonmember shall be ignored and the member’s rights shall be determined as though the payment to the nonmember had not occurred; and subdivisions (c), (d), and (e) shall not apply. (c) If the member leaves judicial office before accruing at least five years of service, he or she the member shall be paid the dollar amount of his or her the member’s contributions to the system minus the amount paid to the nonmember, and no other amount. (d) If the member leaves office after accruing five or more years of service and either: (1) elects, pursuant to subdivision (e) of Section 75522, to receive the amount of his or her the member’s monetary credits; or (2) is entitled, pursuant to subdivision (b) or (c) of Section 75521 to receive only the amount of his or her the member’s monetary credits, the member shall be paid the amount of his or her the member’s monetary credits as provided in Section 75521 or subdivision (e) of Section 75522, reduced as provided in subdivision (d) of Section 75551. (e) If the member is eligible for retirement pursuant elects to Section 75522 retire and elects, receive a retirement allowance pursuant to either subdivision (d) of Section 75522, to receive a monthly allowance, 75522 or Section 75522.5, the judge’s monthly allowance shall equal the monthly allowance that would have been payable pursuant to subdivision (d) of Section 75522 based on the judge’s service and salary, multiplied by a fraction equal to: NMS S + 50% (MS) S where: _____ “S” _____ “MS” _____ “NMS” = = = the member’s total service the member’s service while married to the nonmember prior to their separation the member’s service while not married to the nonmember (f) If, notwithstanding paragraph (1) of subdivision (a) of Section 75551, the judgment did not specify the number of years of service that accrued during the marriage or other necessary facts, the system may make its own determination in order to make the computation in subdivision (e). SEC. 10. Section 75570 of the Government Code is amended to read: 75570. (a) In lieu of electing the unmodified allowance under subdivision (d) of Section 75522 for his or her the judge’s life alone, a judge who elects to retire with a monthly and receive a retirement allowance under either subdivision (d) of Section 75522 may or Section 75522.5 may, on or before the date of retirement, elect to have the actuarial equivalent of his or her the judge's retirement allowance as of the date of retirement applied to a lesser retirement allowance, in accordance with one of the optional settlements specified in Section 75571 if the judge retires on or before December 31, 2017, or Section 75571.5 if the judge retires on or after January 1, 2018. (b) That election, revocation, A revocation or change of election shall be made by a writing filed with the system within 30 calendar days after the making of the first payment on account of any retirement allowance. (c) If there is a spouse who would qualify for the survivor allowance under subdivision (b) or (c) of Section 75590, then the election, with respect to any optional settlement other than the optional settlement in subdivision (a) of Section 75571 or subdivision (b) of Section 75571.5, shall apply only to the portion of the retirement allowance that exceeds the amount of the allowance deemed payable to the surviving spouse. SEC. 11. Section 75571.5 of the Government Code is amended to read: 75571.5. This section shall apply to any judge who retires on or after January 1, 2018. (a) The unmodified allowance consists of the right to have the maximum retirement allowance paid to the judge for his or her the judge's life alone. A continuing allowance to the surviving spouse, other than the benefit provided in subdivision (b) or (c) of Section 75590, is not provided and there is not a return of unused accumulated contributions after the death of the judge. (b) The Return of Remaining Contributions Option 1 consists of the right to have a retirement allowance paid to the judge for his or her the judge's life alone and if he or she the judge dies before he or she receives receiving in annuity payments the amount of his or her the judge's accumulated contributions at retirement, to have the balance at death paid to his or her the judge's surviving spouse, or if none, to his or her the judge's estate. (c) (1) The 100 Percent Beneficiary Option 2 consists of the right to have a retirement allowance paid to the judge until his or her the judge's death and thereafter to have the same monthly allowance paid to his or her the judge's surviving spouse for life; provided that with respect to a judge subject to subdivision (b) or (c) of Section 75590, the surviving spouse shall receive that portion of the judge’s monthly allowance that exceeds the amount of the allowance deemed payable pursuant to subdivision (b) or (c) of Section 75590. (2) Upon the death of both the judge and the surviving spouse, any remaining balance of the judge’s accumulated contributions at retirement not used to fund the allowances paid to the judge and the surviving spouse pursuant to this subdivision will be paid in a lump sum to the estate of the deceased. (d) (1) The 100 Percent Beneficiary Option 2 with Benefit Allowance Increase consists of the right to have a retirement allowance paid to the judge until his or her the judge's death and thereafter to have the same monthly allowance paid to his or her the judge's surviving spouse for life; provided that with respect to a judge subject to subdivision (b) or (c) of Section 75590, the surviving spouse shall receive that portion of the judge’s monthly allowance that exceeds the amount of the allowance deemed payable pursuant to subdivision (b) or (c) of Section 75590. (2) If the judge’s spouse predeceases the judge and the judge elected this optional settlement, the judge’s allowance shall be adjusted effective the first day of the month following the death of the spouse to reflect the benefit that would have been paid had the judge not elected an optional settlement. (3) If the marriage of a retired judge is dissolved or a legal separation filed, and the judgment dividing the community property between the judge and the surviving spouse awards the total interest in this system to the retired judge, or the marriage is annulled and confirmed by a court, the retired judge’s allowance shall be adjusted effective the first day of the month following the filing of the judgment with the board to reflect the benefit that would have been paid had the judge not elected an optional settlement. (e) (1) The 50 Percent Beneficiary Option 3 consists of the right to have a retirement allowance paid to the judge until his or her the judge's death and thereafter to have one-half of the monthly allowance paid to his or her the judge's surviving spouse for life; provided that with respect to a judge subject to subdivision (b) or (c) of Section 75590, the surviving spouse shall receive one-half of that portion of the judge’s monthly allowance that exceeds the amount of the allowance deemed payable pursuant to subdivision (b) or (c) of Section 75590. (2) Upon the death of both the judge and the surviving spouse, any remaining balance of the judge’s accumulated contributions at retirement not used to fund the allowances paid to the judge and the surviving spouse pursuant to this subdivision will be paid in a lump sum to the estate of the deceased. (f) (1) The 50 Percent Beneficiary Option 3 with Benefit Allowance Increase consists of the right to have a retirement allowance paid to the judge until his or her the judge's death and thereafter to have one-half of the monthly allowance paid to his or her the judge's surviving spouse for life; provided that with respect to a judge subject to subdivision (b) or (c) of Section 75590, the surviving spouse shall receive one-half of that portion of the judge’s monthly allowance that exceeds the amount of the allowance deemed payable pursuant to subdivision (b) or (c) of Section 75590. (2) If the judge’s spouse predeceases the judge and the judge elected this optional settlement, the judge’s allowance shall be adjusted effective the first day of the month following the death of the spouse to reflect the benefit that would have been paid had the judge not elected an optional settlement. (3) If the marriage of a retired judge is dissolved or a legal separation filed, and the judgment dividing the community property between the judge and the surviving spouse awards the total interest in this system to the retired judge, or the marriage is annulled and confirmed by a court, the retired judge’s allowance shall be adjusted effective the first day of the month following the filing of the judgment with the board to reflect the benefit that would have been paid had the judge not elected an optional settlement. (g) The Flexible Beneficiary Option 4 consists of the right to have a retirement allowance paid to a judge until his or her the judge's death, and thereafter to have a monthly allowance paid to his or her the judge's surviving spouse for life. Subject to Section 75570.5, the judge may select the monthly allowance payable to the surviving spouse from the options below: (1) Specific Dollar Amount to a Surviving Spouse. The judge may specify that upon his or her the judge's death after retirement, a monthly allowance in an amount determined by the judge be paid to his or her the judge's surviving spouse for life. (2) Specific Percentage to a Surviving Spouse. The judge may specify that upon his or her the judge's death after retirement, a monthly allowance in an amount equivalent to a specified percentage of the judge’s allowance be paid to his or her the judge's surviving spouse for life. SEC. 12. Section 75590 of the Government Code is amended to read: 75590. (a) A surviving spouse of a judge who was eligible to retire pursuant to subdivision (a) of Section 75522 shall, within 90 days after the judge’s death, elect to receive either of the following: (1) A monthly retirement allowance equal to one-half of the judge’s benefit factor computed as stated in subdivision (d) of Section 75522 as of the date of death, multiplied by the judge’s final compensation multiplied by the number of years of service credit. This allowance shall be adjusted for changes in the cost of living as provided in Section 75523. (2) The judge’s monetary credits determined pursuant to Section 75520, including the credits added under subdivision (b) of that section computed to the last day of the month preceding the date of distribution. (b) A surviving spouse of a retired judge who elected to receive a monthly allowance under subdivision (d) of Section 75522 or who was retired for disability and receiving an allowance under Section 75560.4 shall receive a monthly allowance equal to 50 percent of the deceased judge’s last unmodified monthly retirement allowance. This allowance shall be adjusted for changes in the cost of living in the same manner as provided in Section 75523. (c) (1) A surviving spouse of a retired judge who was receiving a retirement allowance under Section 75522.5 shall receive a monthly allowance equal to 50 percent of the deceased judge’s unmodified monthly retirement allowance. This allowance shall be adjusted for changes in the cost of living as provided in Section 75523. (2) A surviving spouse of a judge who elected to retire and receive a retirement allowance under Section 75522.5, but who died before receiving the retirement allowance, shall receive a monthly allowance equal to 50 percent of the unmodified monthly retirement allowance the deceased judge would have received had the judge been living and receiving the retirement allowance, beginning the date the judge would have been eligible to receive benefits under Section 75522.5. This allowance shall be adjusted for changes in the cost of living as provided in Section 75523. (c) (d) (1) Notwithstanding any other provision of this article to the contrary, the surviving spouse of a judge who (A) died in office, (B) had attained the minimum age for service retirement applicable to the judge preceding his or her death, with a minimum of 20 years of service, and (C) was eligible to receive an allowance pursuant to Section 75522, shall receive an allowance that is equal to the amount that the judge would have received if the judge had been retired from service on the date of death and had elected the optional settlement specified in subdivision (b) of Section 75571 and in Section 75573. (2) A surviving spouse receiving an allowance pursuant to this subdivision shall have no other claim to benefits with respect to the Judges’ Retirement Fund or with respect to any other provision of the Judges’ Retirement System II Law. (3) The benefits provided by this subdivision are only payable to the surviving spouse of a judge who elects to come within this subdivision. That election may be made at any time while the judge is in office and, once made, the election is irrevocable. (d) (e) A Except as provided in paragraph (2) of subdivision (c), a monthly allowance payable to a surviving spouse pursuant to this section is payable commencing upon the death of the judge and continuing until the death of the surviving spouse. SEC. 13. Section 75591.5 is added to the Government Code, to read: 75591.5. If a judge who retired pursuant to Section 75522.5 dies before receiving the judge's retirement allowance, and there is no retirement allowance payable to a surviving spouse, the judge’s monetary credits on deposit, including interest accrued through the last day of the month preceding the date of distribution, shall be paid pursuant to the following order: (a) To the beneficiary designated by the judge. (b) To the estate of the deceased judge. The payment to the estate shall be paid to either the estate of the deceased judge or to the duly authorized representative or representatives of the estate when the system receives a court order appointing an executor, administrator, or personal representative. (c) If the estate does not require probate and the deceased has a trust, the monetary credits on deposit, including interest accrued through the last day of the month preceding the date of distribution, may be paid, in the judgment of the board, to the successor trustee named in the trust. (d) To the surviving next of kin of the deceased judge pursuant to the order of distribution specified in Section 21493. SEC. 14. Section 75601 of the Government Code is amended to read: 75601. (a) Except as provided in Section 75605, the Controller shall at the end of each month deduct 8 percent from the monthly salary, not including the additional compensation pursuant to Section 68203.1, of each justice of the Supreme Court and of the courts of appeal and of the portion paid by the state of the monthly salary of each judge of the superior court and shall cause this amount to be paid into the Judges’ Retirement System II Fund. (b) For a new member, as defined in Section 7522.04, who is subject to this chapter and was subject to Section 7522.30, and for new judges hired thereafter, the Controller shall at the end of each month deduct ______ percent from the monthly salary, not including the additional compensation pursuant to Section 68203.1, of each justice of the Supreme Court and of the courts of appeal and of the portion paid by the state of the monthly salary of each judge of the superior court and shall cause this amount to be paid into the Judges’ Retirement System II Fund. SEC. 15. Section 75602 of the Government Code is amended to read: 75602. (a) Except as provided in Section 75605, the Controller or the auditor of each county shall deduct 8 percent from the portion paid by a county, or the Controller and the auditor, if appropriate, of the monthly salary, not including the additional compensation pursuant to Section 68203.1, of each judge of the superior court and cause this amount to be paid into the Judges’ Retirement System II Fund. (b) For a new member, as defined in Section 7522.04, who is subject to this chapter and was subject to Section 7522.30, and for new judges hired thereafter, the Controller or the auditor of each county shall deduct ______ percent from the portion paid by a county, or the Controller and the auditor, if appropriate, of the monthly salary, not including the additional compensation pursuant to Section 68203.1, of each judge of the superior court and cause this amount to be paid into the Judges’ Retirement System II Fund.

Assembly Bill No. 979 CHAPTER 316 An act to amend Section 301.3 of, and to add Sections 301.4 and 2115.6 to, the Corporations Code, relating to corporations. [ Approved by Governor September 30, 2020. Filed with Secretary of State September 30, 2020. ] LEGISLATIVE COUNSEL'S DIGEST AB 979, Holden. Corporations: boards of directors: underrepresented communities. Existing law, no later than the close of the 2019 calendar year, requires a publicly held domestic or foreign corporation whose principal executive office is located in California to have a minimum of one female director on its board. Existing law, no later than the close of the 2021 calendar year, additionally requires such a corporation with 5 directors to have a minimum of 2 female directors and such a corporation with 6 or more directors to have a minimum of 3 female directors. Existing law authorizes the Secretary of State to impose fines for violations of these provisions, as specified, and requires the moneys from these fines to be available, upon appropriation, to offset the cost of administering these requirements. This bill would require, no later than the close of the 2021 calendar year, such a corporation to have a minimum of one director from an underrepresented community, as defined. The bill would require, no later than the close of the 2022 calendar year, such a corporation with more than 4 but fewer than 9 directors to have a minimum of 2 directors from underrepresented communities, and such a corporation with 9 or more directors to have a minimum of 3 directors from underrepresented communities. Existing law requires, on or before specified dates, the Secretary of State to publish various reports on its internet website documenting, among other things, the number of corporations in compliance with these provisions. This bill would require, on or before specified dates, the Secretary of State to include in those reports certain information, including, among other things, the number of corporations in compliance with the bill’s provisions. The bill would authorize the Secretary of State to impose fines for violations of the bill’s provisions, as specified, and would require the moneys from these fines to be available, upon appropriation, to offset the cost of administering these requirements. This bill would make related findings and declarations. Digest Key Vote: MAJORITY Appropriation: NO Fiscal Committee: YES Local Program: NO Bill Text The people of the State of California do enact as follows: SECTION 1. The Legislature finds and declares as follows: (a) According to the United States Bureau of Labor Statistics, only 31 percent of African Americans and 22 percent of Latinos worked in management, professional, and related occupations while 54 percent of Asians and 41 percent of Whites worked in the same occupation. (b) According to 2018 data from Deloitte and the Alliance for Board Diversity, the percentages of Fortune 500 company board seats held by people identified as African American/Black, Hispanic/Latino(a), and Asian/Pacific Islander were 8.6 percent, 3.8 percent, and 3.7 percent, respectively. (c) The United States Bureau of Labor Statistics also reported that in the year 2019, 90 percent of chief executives were White. (d) According to the Latino Corporate Directors Association, there are 662 publicly traded companies headquartered in California. Two hundred thirty-three of these companies have all White boards of directors as of this year. (e) Data from the Latino Corporate Directors Association also shows that in the boards of these 662 publicly traded companies, only 13 percent have at least one Latino board member, 16 percent have at least one African American board member, 42 percent have at least one Asian board member, and 6 percent have at least one non-White or Other board member as of May 2020. In contrast, 100 percent of these boards have at least one White board member. (f) According to United States Equal Employment Opportunity Commission (EEOC), “employment in computer science and engineering is growing at twice the rate of the national average. These jobs tend to provide higher pay and better benefits, and they have been more resilient to economic downturns than other private sector industries over the past decade. In addition, jobs in the high tech industry have a strong potential for growth.” (g) The commission also found that the high tech sector employs about one-fourth of United States professionals and about 5 to 6 percent of the total labor force. (h) Analysis has shown that highly ranked universities graduate African American and Latino computer science and computer engineering majors at twice the rate that leading technology companies hire them. (i) The EEOC study shows that compared to overall private industry, the high tech sector employed a larger share of Whites (63.5 percent to 68.5 percent), Asian Americans (5.8 percent to 14 percent), and a smaller share of African Americans (14.4 percent to 7.4 percent), Hispanics (13.9 percent to 8 percent). (j) The study also showed that in the tech sector nationwide, Whites are represented at a higher rate in the executives category, which typically encompasses the highest level jobs in the organization. (k) According to a study by the EEOC, fewer than 1 percent of Silicon Valley executives and managers are African American. (l) According to a report by the Ascend Foundation, Asian Americans were the least likely to be promoted to manager or executive positions in California. (m) According to a report by McKinsey and Company, for every 10 percent increase in racial and ethnic diversity on the senior-executive team, earnings before interest and taxes rise 0.8 percent. (n) A study by Dalberg Global Development Advisors found that the high tech industry could generate an additional $300 billion to $370 billion each year if the racial or ethnic diversity of tech companies’ workforces reflected that of the talent pool. (o) In 2018, the California Legislature addressed gender inequity on corporate boards in the state and passed Senate Bill 826. Since the enactment of Senate Bill 826, data shows that out of 511 director seats filled by women in California publicly traded companies, 77.9 percent are White. In comparison, 3.3 percent of female directors hired are Latina, 5.3 percent are African American, and 11.5 percent are Asian. (p) Studies have shown that chief executive officers stand to gain from nondiverse boards. Studies have shown that culturally homogenous boards pay chief executive officers more than a culturally diverse board. (q) Experts argue that affirmative action plans to increase the representation of women and minorities in historically unrepresented fields and occupations further the legislative goals of the Civil Rights Act of 1964. In the Civil Rights Act of 1964, it is clear that Title VII of the act does all of the following: (1) Directly permits the imposition of affirmative action plans to address past discrimination and patterns of discrimination. (2) Permits state actors to create affirmative action plans designed to increase representation of women and minorities in job positions in which they are historically underrepresented, so long as such plans are moderate, temporary, and designed and intended to attain a balanced workforce. (3) Does not forbid private actors from voluntarily creating action plans to increase representation of women and minorities, so long as those plans are temporary and do not create an absolute bar to White or male employees. (r) More racially and gender diverse boards further the goals of the Sarbanes-Oxley Act of 2002, which pushed for more independent boards that decrease the likelihood of corporate fraud. (s) Directors that hold numerous board seats exert considerable influence over United States corporations and broader society. As directors gain seats on more boards, they gain influence over the creation of policy in more companies and rise in corporate status amongst the corporate elite, which in turn enhances their influence on the creation of policy. (t) Therefore, it is the intent of the Legislature to require, by January 2023, every publicly held corporation in California to achieve diversity on its board of directors by having a minimum of directors from underrepresented communities on its board, as specified in this measure. SEC. 2. Section 301.3 of the Corporations Code is amended to read: 301.3. (a) No later than the close of the 2019 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one female director on its board. A corporation may increase the number of directors on its board to comply with this section. (b) No later than the close of the 2021 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall comply with the following: (1) If its number of directors is six or more, the corporation shall have a minimum of three female directors. (2) If its number of directors is five, the corporation shall have a minimum of two female directors. (3) If its number of directors is four or fewer, the corporation shall have a minimum of one female director. (c) No later than July 1, 2019, the Secretary of State shall publish a report on its internet website documenting the number of domestic and foreign corporations whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California and who have at least one female director. (d) No later than March 1, 2020, and annually thereafter, the Secretary of State shall publish a report on its internet website regarding, at a minimum, information required by subdivision (c) of Section 301.4 and all of the following: (1) The number of corporations subject to this section that were in compliance with the requirements of this section during at least one point during the preceding calendar year. (2) The number of publicly held corporations that moved their United States headquarters to California from another state or out of California into another state during the preceding calendar year. (3) The number of publicly held corporations that were subject to this section during the preceding year, but are no longer publicly traded. (e) (1) The Secretary of State may adopt regulations to implement this section. The Secretary of State may impose fines for violations of this section as follows: (A) For failure to timely file board member information with the Secretary of State pursuant to a regulation adopted pursuant to this paragraph, the amount of one hundred thousand dollars ($100,000). (B) For a first violation, the amount of one hundred thousand dollars ($100,000). (C) For a second or subsequent violation, the amount of three hundred thousand dollars ($300,000). (2) For the purposes of this subdivision, each director seat required by this section to be held by a female, which is not held by a female during at least a portion of a calendar year, shall count as a violation. (3) For purposes of this subdivision, a female director having held a seat for at least a portion of the year shall not be a violation. (4) Fines collected pursuant to this section shall be available, upon appropriation by the Legislature, for use by the Secretary of State to offset the cost of administering this section. (f) For purposes of this section, the following definitions apply: (1) “Female” means an individual who self-identifies her gender as a woman, without regard to the individual’s designated sex at birth. (2) “Publicly held corporation” means a corporation with outstanding shares listed on a major United States stock exchange. SEC. 3. Section 301.4 is added to the Corporations Code, to read: 301.4. (a) No later than the close of the 2021 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall have a minimum of one director from an underrepresented community on its board. A corporation may increase the number of directors on its board to comply with this section. (b) No later than the close of the 2022 calendar year, a publicly held domestic or foreign corporation whose principal executive offices, according to the corporation’s SEC 10-K form, are located in California shall comply with the following: (1) If its number of directors is nine or more, the corporation shall have a minimum of three directors from underrepresented communities. (2) If its number of directors is more than four but fewer than nine, the corporation shall have a minimum of two directors from underrepresented communities. (3) If its number of directors is four or fewer, the corporation shall have a minimum of one director from an underrepresented community. (c) No later than March 1, 2022, and annually thereafter, the Secretary of State shall include in its report required by subdivision (d) of Section 301.3, at a minimum, all of the following: (1) The number of corporations subject to this section that were in compliance with the requirements of this section during at least one point during the preceding calendar year. (2) The number of publicly held corporations that moved their United States headquarters to California from another state or out of California into another state during the preceding calendar year. (3) The number of publicly held corporations that were subject to this section during the preceding year, but are no longer publicly traded. (d) (1)   The Secretary of State may adopt regulations to implement this section. The Secretary of State may impose fines for violations of this section as follows: (A) For failure to timely file board member information with the Secretary of State pursuant to a regulation adopted pursuant to this paragraph, the amount of one hundred thousand dollars ($100,000). (B) For a first violation, as described in paragraph (2), the amount of one hundred thousand dollars ($100,000). (C) For a second or subsequent violation, as described in paragraph (2), the amount of three hundred thousand dollars ($300,000). (2) For the purposes of this subdivision, both of the following apply: (A) Each director seat required by this section to be held by a director from an underrepresented community, which is not held by a director from an underrepresented community during at least a portion of a calendar year, shall count as a violation. (B) A director from an underrepresented community having held a seat for at least a portion of the year shall not be a violation. (3) Fines collected pursuant to this section shall be available, upon appropriation by the Legislature, for use by the Secretary of State to offset the cost of administering this section. (e) For purposes of this section, the following definitions apply: (1) “Director from an underrepresented community” means an individual who self-identifies as Black, African American, Hispanic, Latino, Asian, Pacific Islander, Native American, Native Hawaiian, or Alaska Native, or who self-identifies as gay, lesbian, bisexual, or transgender. (2) “Publicly held corporation” means a corporation with outstanding shares listed on a major United States stock exchange. SEC. 4. Section 2115.6 is added to the Corporations Code, to read: 2115.6. (a) Section 301.4 shall apply to a foreign corporation that is a publicly held corporation to the exclusion of the law of the jurisdiction in which the foreign corporation is incorporated. (b) For purposes of this section, a “publicly held corporation” means a foreign corporation with outstanding shares listed on a major United States stock exchange.