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REFERENCE TITLE: ASRS; administration |
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State of Arizona Senate Fiftieth Legislature Second Regular Session 2012
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SB 1117 |
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Introduced by Senators Yarbrough, McComish
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AN ACT
amending sections 38‑713 and 38‑715, Arizona Revised Statutes; amending title 38, CHAPTER 5, ARTICLE 2, Arizona Revised Statutes, by adding sections 38‑723, 38‑724, 38‑725, 38‑726, 38‑726.01, 38‑726.02 and 38‑726.03; amending section 38‑755, Arizona Revised Statutes; relating to the Arizona State Retirement System.
(TEXT OF BILL BEGINS ON NEXT PAGE)
Be it enacted by the Legislature of the State of Arizona:
Section 1. Section 38-713, Arizona Revised Statutes, is amended to read:
38-713. ASRS board; qualifications; term; compensation
A. The ASRS board is established consisting of the following nine members appointed by the governor pursuant to section 38‑211:
1. Five members from among the members of ASRS to represent the members of ASRS as follows:
(a) An educator.
(b) An employee of a political subdivision.
(c) A retired member.
(d) An employee of this state.
(e) An at large member who may represent any ASRS member group.
2. Four members who are not members of ASRS to represent the public.
B. Four of the members shall have at least ten years' substantial experience as any one or a combination of the following:
1. A portfolio manager acting in a fiduciary capacity.
2. A securities analyst.
3. An employee or principal of a trust institution, investment organization or endowment fund acting either in a management or an investment related capacity.
4. A chartered financial analyst in good standing as determined by the association for investment management and research CFA institute.
5. A professor at the university level teaching economics or investment related subjects.
6. An economist.
7. Any other professional engaged in the field of public or private finances.
C. Each member who represents an ASRS member group shall have not less than five years of administrative management experience.
D. The following persons are not eligible for membership on the board:
1. A person who is a stockbroker or bond broker and who is actively engaged in the profession of a stockbroker or bond broker.
2. A person who holds a real estate license pursuant to title 32, chapter 20.
E. A member may be reappointed. Vacancies occurring other than by expiration of a term shall be filled for the balance of the term in the same manner as for initial appointment. On the expiration of any term, the governor shall appoint a successor for a full term of three years that expires on the third Monday in January of the appropriate year.
F. Board members are eligible to receive compensation for performing their duties in an amount of fifty dollars a day, but not more than one thousand dollars in any one fiscal year, and are eligible for reimbursement of expenses pursuant to chapter 4, article 2 of this title.
Sec. 2. Section 38-715, Arizona Revised Statutes, is amended to read:
38-715. Director; powers and duties
A. The board shall appoint a director. The term of the director is one year and expires on June 30. On expiration of a director's term, the board may reappoint the director for another term. The board may remove the director at any time for cause.
B. The director shall appoint a deputy director and assistant directors with the approval of the board.
C. The director, under the supervision of the board, shall:
1. Administer this article, except the investment powers and duties of investment management.
2. Hire employees and services the director deems necessary and prescribe their duties.
3. Prescribe procedures to be followed by members and their beneficiaries in filing applications for benefits.
4. Prescribe procedures to be followed by employers for remitting data and monies to ASRS and for receiving data and monies from ASRS.
4. 5. Be responsible for:
(a) Income and the collection of income and the accuracy of all expenditures.
(b) Maintaining books and maintaining and processing records of ASRS.
(c) The investment of temporary surplus monies only in obligations of the United States government or agencies whose obligations are guaranteed by the United States government, commercial paper or banker's acceptances for a term of not more than fifteen days.
(d) Providing continuing education programs for the board to keep the board members informed of current issues and information needed to carry out their duties.
5. 6. Perform additional powers and duties as may be prescribed by the board and delegated to the director.
D. The director, under the supervision and approval of the board, may:
1. Delegate duties and responsibilities to such state departments as the director deems feasible and desirable to administer this article.
2. Appoint a custodian for the safekeeping of all investments owned by ASRS and register stocks, bonds and other investments in the name of a nominee.
3. Invest marketable securities owned by ASRS by entering into security loan agreements with one or more security lending entities. For the purpose of this paragraph:
(a) "Marketable securities" means securities that are freely and regularly traded on recognized exchanges or marketplaces.
(b) "Security loan agreement" means a written contract under which ASRS, as lender, agrees to lend specific marketable securities for a period of not more than one year. ASRS, under a security loan agreement, shall retain the right to collect from the borrower all dividends, interest, premiums and rights and any other distributions to which ASRS otherwise would have been entitled. During the term of a security loan agreement ASRS shall waive the right to vote the securities that are the subject of the agreement. A security loan agreement shall provide for termination by either party on terms mutually acceptable to the parties. The borrower shall deliver collateral to ASRS or its designated representative. At all times during the term of any security loan agreement the collateral shall be in an amount equal to at least one hundred per cent of the market value of the loaned securities. A security loan agreement shall provide for payment of additional collateral on a daily basis, or at such other less frequent intervals as the value of the loaned securities increases. A security loan agreement with a security lending entity shall contain the terms and conditions of the fees to be paid to a security lending entity for servicing the security loan agreement. ASRS shall pay the fees approved by the board to the security lending entity for servicing a security loan agreement from the revenues of the security lending program.
4. Establish one or more reserve holding accounts, into which the board shall close periodically the account balances of inactive accounts. If any person files a claim and furnishes proof of ownership of any amounts in any inactive account the claim shall be paid from the reserve holding account on the same basis as if no action had been taken under this paragraph. Interest and supplemental credits shall be allocated to each reserve holding account on June 30 of each year, as determined by the board. For the purposes of this paragraph, "inactive account" means an account to which contributions have not been paid for six months or more.
5. Make retirement under this article effective retroactively to on or after the day following the date employment is terminated if the member was unable to apply before the retroactive effective date through no fault of the member.
E. The director, under supervision of the governing committee for tax deferred annuity and deferred compensation plans, may hire and supervise employees and obtain services the director deems necessary to administer article 5 of this chapter. The tax deferred annuity and deferred compensation programs established pursuant to article 5 of this chapter shall bear the costs for these employees and services.
F. The director and all persons employed by the director are not subject to section 38‑611 or title 41, chapter 4, article 5 or 6.
Sec. 3. Title 38, chapter 5, article 2, Arizona Revised Statutes, is amended by adding sections 38-723, 38‑724, 38‑725, 38‑726, 38‑726.01, 38‑726.02 and 38‑726.03, to read:
38-723. Interrogatories to debtors; power to require information; violation; classification; recovery of collection costs; enforcement powers and duties; suit to recover monies due
A. The director may prepare interrogatories to be propounded to a debtor, with an oath or affirmation annexed, that the debtor shall fully answer.
B. Any person who knowingly makes a false answer to any proper question submitted to the person by the director or who knowingly fails to answer any question submitted, or to take or subscribe the oath or affirmation annexed to the question, is guilty of a class 2 misdemeanor.
C. The director may administer oaths or affirmations, issue subpoenas requiring attendance and testimony of witnesses, take evidence and require by subpoena duces tecum the production of books, papers and other documents that may be relevant to the collection of monies due to ASRS.
D. The director may hold hearings to obtain information deemed necessary to collect monies due to ASRS. The director shall hold hearings at a time and place and in the manner prescribed by the director. The director shall give notice of the hearing in the manner and form prescribed by the director.
E. In the case of refusal of the person to obey a subpoena issued by the director, the superior court, on application by the director, shall issue to the person an order requiring the person to appear before the court and to produce evidence if so ordered, or give testimony, or to appear before the court and show cause why the person should not be required to do so. The court may punish failure to obey the order of the court as contempt.
F. The remedies of this state provided for in this article are cumulative. No action taken by ASRS constitutes an election by this state to pursue any remedy to the exclusion of any other remedy provided by law.
G. A debtor who fails to pay any monies owed to ASRS is liable for all costs and expenses incurred by ASRS to collect the monies owed. ASRS may collect these expenses and costs at the time of collecting the monies owed to ASRS.
H. In performing its duties pursuant to this article ASRS may:
1. Examine any books, papers, records or memoranda bearing on the matters of the debt owed to ASRS.
2. Require the attendance of the debtor or of any other person having knowledge in the premises and for these purposes may:
(a) Take testimony.
(b) Require material proof for its information.
(c) Administer oaths.
3. Issue subpoenas and subpoenas duces tecum, signed by the director or his designee, to be served on any person for the purposes of this section.
I. ASRS may:
1. Bring an action in the name of this state to recover the amount of any monies due to ASRS that are unpaid. The department of law shall prosecute the action. In the action a writ of attachment may be issued and no bond or affidavit previous to issuing the attachment is required. In the action a certificate by ASRS showing the delinquency is prima facie evidence of the monies due, of the delinquency and of the compliance by ASRS with all the provisions of law relating to the computation of the debt.
2. Bring an appropriate action in any court of competent jurisdiction in the united states or any foreign country in the name of this state to recover the amount of any monies due to ASRS that are unpaid. The department of law shall prosecute the action.
38-724. Lien; release or subordination of lien; voluntary liens on property; priority of ASRS claim
A. If any monies owed by a debtor to ASRS are not paid by the debtor when due, the unpaid amounts constitute a lien on all property and rights to property, whether real or personal, belonging to the debtor or acquired by the debtor from the date the amounts are assessed until the liability for the assessed amounts is satisfied.
B. ASRS, at any time, may release any portion of the property subject to the lien from the lien or subordinate the lien to other liens if it determines that either:
1. The debt is sufficiently secured by a lien on other property of the debtor.
2. The release or subordination of the lien will not endanger or jeopardize the collection of the debt.
C. At any time, ASRS may withdraw a notice of lien that was recorded pursuant to this section if ASRS determines that any of the following conditions applies:
1. ASRS's interests are best served by withdrawing the notice.
2. Filing the lien was premature or otherwise in violation of ASRS's administrative procedures.
3. Withdrawing the notice will facilitate collecting the outstanding amount of the debt.
4. The debtor has entered into an installment payment agreement, unless the agreement provides otherwise.
D. If any lien imposed by this section has been satisfied, ASRS shall issue a release of the lien to the debtor against whom the lien was claimed.
E. ASRS may accept voluntary liens on real or personal property pledged by any debtor as security for any monies due to ASRS that is not paid by the debtor when due. A voluntary lien shall be perfected and treated in all respects the same as any other lien under this article.
F. The amounts required to be collected by ASRS shall be satisfied first in any of the following cases:
1. If the debtor is insolvent.
2. If the debtor makes a voluntary assignment of assets.
3. If the estate of the debtor in the hands of executors, administrators or heirs is insufficient to pay all debts due from the deceased.
4. If the estate and effects of an absconding, concealed or absent debtor required to pay any amount under this article are levied on by process of law.
38-725. Levy and distraint; definition
A. If a debtor neglects or refuses to pay the debt, ASRS may collect the debt and such other sums as are sufficient to cover the expenses of the levy, by levy on:
1. All property and rights to property, except property exempt under section 42-1204.
2. The accrued salary or wages of any officer, employee or elected official of this state or its political subdivisions, or any agency or instrumentality of this state or its political subdivisions, by serving a notice of levy on:
(a) The department of administration in the case of state wages or salaries.
(b) The chief disbursing officer of a political subdivision of this state in the case of wages or salaries paid by the political subdivision.
B. If any property or right to property on which a levy has been made under subsection a of this section is not sufficient to satisfy the claim of ASRS for which the levy is made, ASRS may proceed, as often as necessary, to levy in like manner on any other property liable to levy of the person against whom the claim exists, until the amount due, together with all expenses, is fully paid.
C. The effect of a levy on salary or wages payable to or received by a debtor is continuous from the date the levy is first made until the liability out of which the levy arose is satisfied or becomes unenforceable.
D. With respect to a levy described in subsection C of this section, ASRS shall promptly release the levy when the liability out of which the levy arose is satisfied or becomes unenforceable and shall promptly notify the debtor on whom the levy was made that the levy has been released.
E. If a levy has been made or is about to be made on any property, or right to property, any person having custody or control of any books or records containing evidence or statements relating to the property or right to property subject to levy, on demand of ASRS, shall exhibit the books or records to ASRS.
F. Except as otherwise provided in subsection c or d of this section, a levy extends only to property possessed and obligations existing at the time of the levy or within twenty-one days after the date of the levy. In any case in which ASRS may levy on property or rights to property, ASRS may seize and sell the property or rights to the property, whether real or personal, tangible or intangible.
G. For the purposes of this section, "levy" includes the power of distraint and seizure by any means.
38-726. Surrender of property subject to levy; production of books; definitions
A. Except as otherwise provided in subsection B of this section, any person in possession of, or obligated with respect to, property or rights to property subject to levy on which a levy has been made shall, on demand of ASRS, surrender the property or rights to property or discharge the obligation to ASRS, except the part of the property or rights to property as is, at the time of the demand, subject to an attachment or execution under any judicial process.
B. A levy on an organization with respect to a life insurance or endowment contract issued by the organization, without necessity for the surrender of the contract document, constitutes a demand by ASRS for payment of the amount described in this section and the exercise of the right of the debtor to the advance of the amount. The organization shall pay over the amount within ninety days after service of notice of levy. The notice shall include a certification by ASRS that a copy of the notice has been mailed to the debtor at the debtor's last known address. The levy is deemed to be satisfied if the organization pays over to ASRS the amount that the debtor could have received from the organization on the date prescribed in this section for the satisfaction of the levy, increased by the amount of any advance, including contractual interest, made to the debtor on or after the date the organization had actual notice or knowledge of the existence of the lien with respect to which the levy is made, other than an advance, including contractual interest, made automatically to maintain the contract in force under an agreement entered into before the organization has the notice or knowledge. The satisfaction of a levy under this section is without prejudice to any civil action for the enforcement of any lien imposed by this article with respect to the contract.
C. A person who fails or refuses to surrender any property or rights to property, subject to levy, on demand by ASRS, is liable in person and estate to this state in a sum equal to the value of the property or rights to property not so surrendered, but not exceeding the amount of debt for the collection of which the levy has been made, with costs and interest on the sum at the interest rate determined by the board from the date of the levy or, in the case of a levy described in section 38-725, subsection C or D, from the date the person would otherwise have been obligated to pay the amounts to the debtor. Any amount, other than costs, recovered under this subsection shall be credited against the liability for the collection of which the levy was made.
D. A person in possession of or obligated with respect to property or rights to property subject to levy on which a levy has been made who, on demand by ASRS, surrenders the property or rights to property, or discharges the obligation, to ASRS or who pays a liability under subsection C of this section is discharged from any obligation or liability to the person with respect to the property or rights to property arising from the surrender or payment. In the case of a levy that is satisfied pursuant to subsection B of this section, the organization is also discharged from any obligation or liability to any beneficiary arising from the surrender or payment.
E. For the purposes of this section:
1. "levy" includes the power of distraint and seizure by any means.
2. "person" includes an officer or employee of a corporation, an officer, employee or elected official of this state or its political subdivisions or any agency or instrumentality of this state or its political subdivisions, or a member or employee of a partnership, who as such officer, employee, elected official or member is under a duty to surrender the property or rights to property or to discharge the obligation.
38-726.01. Notice and sale of seized property
A. Except as otherwise provided in this section, the notice of sale and sale of property seized by ASRS under this article shall be conducted in the manner and the time provided in title 12, chapter 9, article 7, relating to the sale of property under execution.
B. Real property may be redeemed in the manner provided by title 12, chapter 8, article 11.
C. ASRS shall notify the debtor of the date, time and location of the sale of the debtor's property or right to property with a description of the property or right to property to be sold. ASRS shall give the notice in person, left at the dwelling or usual place of business of the debtor or shall send by first class mail to the debtor's last known address, not less than ten days before the day of the sale. If the property or right to property is perishable, ASRS shall give notice of the sale to the debtor in the manner and within the time limits as are reasonable considering the character and condition of the property.
38-726.02. Authority to release levy and return property
A. ASRS may release the levy on all or part of the property or rights to property levied on if ASRS determines that the action will facilitate the collection of the liability. The release shall not operate to prevent any subsequent levy.
B. If ASRS determines that property has been wrongfully levied on, ASRS may return:
1. The specific property levied on.
2. An amount of money equal to the amount of money levied on.
3. An amount of money equal to the amount of money received by this state from a sale of the property.
C. ASRS may return property at any time. An amount equal to the amount of money levied on or received from the sale may be returned at any time before the expiration of nine months from the date of the levy.
D. At any time, ASRS may release a levy or return property levied on if ASRS determines that any of the following conditions applies:
1. The levy was premature or otherwise in violation of ASRS's administrative procedures.
2. The debtor has entered into an installment payment agreement, unless the agreement provides otherwise.
3. ASRS's interests are best served by the release or return.
38-726.03. Financial institutions data match; prohibited disclosure; civil liability; fee; definition
A. ASRS may enter into agreements with financial institutions that conduct business in this state to develop and operate a data match system to assist ASRS in the collection of monies owed. The data match system shall use automated data exchange procedures to the maximum extent possible.
B. Any data exchanges between financial institutions and ASRS under an agreement pursuant to subsection A of this section shall occur quarterly. The data exchanges shall include the name, address of record, social security number and any other identifying information for each person who maintains an account at the institution and who owes money as identified by ASRS by name and social security number.
C. ASRS or it's agent may only disclose a debtor's financial record under this section in order to enforce the collection of the money the debtor owes to ASRS.
D. An ASRS employee who knowingly or negligently discloses a debtor's financial records in violation of subsection C of this section is subject to civil liability in an amount equal to the greater of either:
1. One thousand dollars for each act of unauthorized disclosure of a financial record with respect to which the ASRS employee is found liable.
2. The sum of the actual damages sustained by the plaintiff as a result of the unauthorized disclosure and, in the case of a wilful disclosure or a disclosure that is the result of gross negligence, punitive damages, including costs and attorney fees.
E. ASRS may pay a reasonable fee to a financial institution for conducting a data match. The fee shall not exceed the actual costs incurred by the financial institution.
F. For the purposes of this section, "financial institution" means state and federally chartered banks, trust companies, federal and state savings and loan associations, federal and state credit unions, consumer lenders, international banking facilities and financial institution holding companies, insurance companies, benefit associations, safe deposit companies, money market mutual funds and similar institutions authorized to do business in this state and any party affiliated with these financial institutions.
Sec. 4. Section 38-755, Arizona Revised Statutes, is amended to read:
38-755. Information as to member's status; spousal notification
A. Subject to rules prescribed by the board, on application of a member, the board shall furnish information concerning the member's status. In addition, the board shall annually furnish to each member an account, statement that may be electronic or online, showing the status of the member's account including the name of the member's beneficiary as last listed with the board.
B. The member may change the member's beneficiary at any time pursuant to rules adopted by the board and on forms furnished by the board in a manner established by ASRS.
C. A member shall notify the member's current spouse before the member names a beneficiary other than the member's current spouse or before the member changes the member's beneficiary if the member's current spouse is the beneficiary at the time of the change.