First Regular Session H.B. 2562
PROPOSED AMENDMENT
SENATE AMENDMENTS TO H.B. 2562
(Reference to House engrossed bill)
Page 1, strike lines 2 through 13, insert:
"Section 1. Title 38, chapter 5, article 2, Arizona Revised Statutes, is amended by adding section 38-716, to read:
38-716. Employers' responsibilities under the system
In addition to any other requirements of this article or articles 2.1, 7 or 8 of this chapter, an employer of a member shall:
1. Ensure the proper enrollment of members in the system.
2. Submit any reports, data, paperwork or materials that are requested by ASRS and that are necessary to make eligibility determinations and for the proper administration of the plan.
3. Attend the ASRS annual training conference.
Sec. 2. Title 38, chapter 5, article 2, Arizona Revised Statutes, is amended by adding section 38-728, to read:
38-728. Eligibility determinations; employee enrollment
A. For an employee hired on or after the effective date of this section, if an employer disagrees with a determination made by the state social security section 218 administrator and application by ASRS of the employee's inclusion under agreements providing for the employee's coverage under the federal old age and survivors insurance system, the employer shall enroll the employee pursuant to section 38‑955 in the plan established by ASRS pursuant to section 38‑952 during the ASRS administrative appeals process. If the employee is determined:
1. To be eligible for ASRS, the employer shall enroll the employee in ASRS and section 38‑738 applies.
2. To be not eligible for ASRS and is participating pursuant to section 38‑955 in the plan established by ASRS pursuant to section 38‑952, the employee shall continue participation in that plan.
3. To be not eligible for ASRS and the employer has opted not to provide coverage under subsection B of this section, the retired employee is entitled to the assets in the employee's annuity account and earnings on those contributions are immediately vested.
B. For an employee who is hired on or after the effective date of this section, if an employer disagrees with a determination made by the state social security section 218 administrator and application by ASRS of the employee's inclusion under agreements providing for the employee's coverage under the federal old age and survivors insurance system and the employee is enrolled in ASRS, the following shall occur:
1. The employee's ASRS account shall be suspended, additional contributions shall not be collected or permitted and service credit shall not be applied during the ASRS administrative appeals process.
2. The employee shall be enrolled pursuant to section 38‑955 in the plan established by ASRS pursuant to section 38‑952.
3. If the employee is determined eligible for ASRS, the employee shall be enrolled in ASRS and section 38‑738 applies.
4. If the employee is determined ineligible for ASRS, the employee shall continue participation pursuant to section 38‑955 in the plan established by ASRS pursuant to section 38‑952."
Renumber to conform
Page 5, strike lines 36 through 45
Strike pages 6 through 12
Page 13, strike lines 1 through 34, insert:
"Sec. 5. Section 38-847, Arizona Revised Statutes, is amended to read:
38-847. Local boards
A. The administration of the system and responsibility for making the provisions of the system effective for each employer are vested in a local board. The department of public safety, the Arizona game and fish department, the department of emergency and military affairs, the university of Arizona, Arizona state university, northern Arizona university, each county sheriff's office, each county attorney's office, each county parks department, each municipal fire department, each eligible fire district, each community college district, each municipal police department, the department of law, the department of liquor licenses and control, the Arizona department of agriculture, the Arizona state parks board, each Indian reservation police agency and each Indian reservation fire fighting agency shall have a local board. A nonprofit corporation operating pursuant to sections 28‑8423 and 28‑8424 shall have one local board for all of its members. Each local board shall be constituted as follows:
1. For political subdivisions or Indian tribes, the mayor or chief elected official or a designee of the mayor or chief elected official approved by the respective governing body as chairman, two members elected by secret ballot by members employed by the appropriate employer and two citizens, one of whom shall be the head of the merit system, or the head's designee from among the other members of the merit system, if it exists for the group of members, appointed by the mayor or chief elected official and with the approval of the governing body of the city or the governing body of the employer. The appointed two citizens shall serve on both local boards in a city or Indian tribes where both fire and police department employees are members.
2. For state agencies and nonprofit corporations operating pursuant to sections 28‑8423 and 28‑8424, two members elected by secret ballot by the members employed by the appropriate employer and three citizens appointed by the governor. Each state agency local board shall elect a chairman.
3. For fire districts organized pursuant to section 48‑804, the secretary‑treasurer as chairman, two members elected by secret ballot by members employed by the fire district and two citizens appointed by the secretary‑treasurer, one of whom is a resident of the fire district and one of whom has experience in personnel administration but who is not required to be a resident of the fire district.
B. On the taking effect of this system for an employer, the appointments and elections of local board members shall take place with one elective and appointive local board member serving a term ending two years after the effective date of participation for the employer and other local board members serving a term ending four years after the effective date. Thereafter, every second year, and as a vacancy occurs, an office shall be filled for a term of four years in the same manner as previously provided.
C. Each local board shall be fully constituted pursuant to subsection A of this section within sixty days after the employer's effective date of participation in the system. If the deadline is not met, on the written request of any member who is covered by the local board or the employer to the board of trustees, the board of trustees may appoint all vacancies of the local board pursuant to subsection A of this section and designate whether each appointive position is for a two‑year or four‑year term. If the board of trustees cannot find individuals to serve on the local board who meet the requirements of subsection A of this section, the board of trustees may appoint individuals to serve as interim local board members until qualified individuals are appointed or elected. Each local board shall meet at least twice a year. Each member of a local board, within ten days after the member's appointment or election, shall take an oath of office that, so far as it devolves on the member, the member shall diligently and honestly administer the affairs of the local board and that the member shall not knowingly violate or willingly permit to be violated any of the provisions of law applicable to the system.
D. Except as limited by subsection E of this section, a local board shall have such powers as may be necessary to discharge the following duties:
1. To decide all questions of eligibility and for membership, service credits, benefits and determine the amount, manner and time of payment of any benefits under the system.
2. To prescribe procedures to be followed by claimants in filing applications for benefits.
3. To make a determination as to the right of any claimant to a benefit and to afford any claimant or the board of trustees, or both, a right to a rehearing on the original determination. Except as otherwise required by law, unless all parties involved in a matter presented to the local board for determination otherwise agree, the local board shall commence a hearing on the matter within ninety days after the date the matter is presented to the local board for determination. If a local board fails to commence a hearing as provided in this paragraph, on a matter presented to the local board for determination, the relief demanded by the party petitioning the local board is deemed granted and approved by the local board. The granting and approval of this relief is considered final and binding unless a timely request for rehearing or appeal is made as provided in this article, unless the board of trustees determines that granting the relief requested would violate the internal revenue code or threaten to impair the system's status as a qualified plan under the internal revenue code. If the board of trustees determines that granting the requested relief would violate the internal revenue code or threaten to impair the system's status as a qualified plan, the board of trustees may refuse to grant the relief by issuing a written determination to the local board and the party petitioning the local board for relief. The decision by the board of trustees is subject to judicial review pursuant to title 12, chapter 7, article 6.
4. To request and receive from the employers and from members such information as is necessary for the proper administration of the system and action on claims for eligibility for membership and benefits, and to forward such information to the board of trustees.
5. To distribute, in such manner as the local board determines to be appropriate, information explaining the system received from the board of trustees.
6. To furnish the employer, the board of trustees and the legislature, on request, with such annual reports with respect to the administration of the system as are reasonable and appropriate.
7. To receive and review the actuarial valuation of the system for its group of members.
8. To receive and review reports of the financial condition and of the receipts and disbursements of the fund from the board of trustees.
9. To appoint medical boards as provided in section 38‑859.
10. To sue and be sued to effectuate the duties and responsibilities set forth in this article.
E. A local board shall have no power to add to, subtract from, modify or waive any of the terms of the system, change or add to any benefits provided by the system or waive or fail to apply any requirement of eligibility for membership or benefits under the system. Notwithstanding any limitations periods imposed in this article, including subsection D, paragraph 3 and subsections G and H of this section, if the board of trustees determines a local board decision violates the internal revenue code or threatens to impair the system's status as a qualified plan under the internal revenue code, the local board's decision is not final and binding and the board of trustees may refrain from implementing or complying with the local board decision.
F. A local board, from time to time, shall establish and adopt such rules as it deems necessary or desirable for its administration. All rules and decisions of a local board shall be uniformly and consistently applied to all members in similar circumstances. If a claim or dispute is presented to a local board for determination but the local board has not yet adopted uniform rules of procedure for adjudication of the claim or dispute, the local board shall adopt and use the model uniform rules of local board procedure that are issued by the board of trustees' fiduciary counsel to adjudicate the claim or dispute.
G. Except as otherwise provided in this article, any action by a majority vote of the members of a local board that is not inconsistent with the provisions of the system and the internal revenue code shall be final, conclusive and binding on all persons affected by it unless a timely application for a rehearing or appeal is filed as provided in this article. No later than twenty days after taking action, the local board shall submit to the board of trustees the minutes from the local board meeting that include the name of the member affected by its decision, a description of the action taken and an explanation of the reasons and all documents submitted to the local board for the action taken, including the reports of a medical board. The board of trustees may not implement and comply with any local board action that does not comply with the internal revenue code or that threatens to jeopardize the system's status as a qualified plan under the internal revenue code.
H. A claimant or the board of trustees may apply for a rehearing before the local board within the time periods prescribed in this subsection, except that if a decision of a local board violates the internal revenue code or threatens to jeopardize the system's status as a qualified plan under the internal revenue code, no limitation period for the board of trustees to seek a rehearing of a local board decision applies. An application for a rehearing shall be filed in writing with a member of the local board or its secretary within sixty days after:
1. The applicant‑claimant receives notification of the local board's original action by certified mail, by attending the meeting at which the action is taken or by receiving benefits from the system pursuant to the local board's original action, whichever occurs first.
2. The applicant-board of trustees receives notification of the local board's original action as prescribed by subsection G of this section by certified mail.
I. A hearing before a local board on a matter remanded from the superior court is not subject to a rehearing before the local board.
J. Decisions of local boards are subject to judicial review pursuant to title 12, chapter 7, article 6.
K. When making a ruling, determination or calculation, the local board shall be entitled to rely on information furnished by the employer, a medical board, the board of trustees, independent legal counsel or the actuary for the system.
L. Each member of a local board is entitled to one vote. A majority is necessary for a decision by the members of a local board at any meeting of the local board.
M. The local board shall adopt such bylaws as it deems desirable. The local board shall elect a secretary who may, but need not, be a member of the local board. The secretary of the local board shall keep a record and prepare minutes of all meetings in compliance with chapter 3, article 3.1 of this title and forward the minutes and all necessary communications to the board of trustees as prescribed by subsection G of this section.
N. The fees of the medical board and of the local board's independent legal counsel and all other expenses of the local board necessary for the administration of the system shall be paid by the employer and not the board of trustees or system at such rates and in such amounts as the local board shall approve. Legal counsel that is employed by the local board is independent of the employer and any employee organization or member and owes its duty of loyalty only to the local board in connection with its representation of the local board.
O. The local board shall issue directions to the board of trustees concerning all benefits that are to be paid from the employer's account pursuant to the provisions of the fund. The local board shall keep on file, in such manner as it may deem convenient or proper, all reports from the board of trustees and the actuary.
P. The local board and the individual members of the local board shall be indemnified from the assets of the employer for any judgment against the local board or its members, including attorney fees and costs, arising from any act, or failure to act, made in good faith pursuant to the provisions of the system, including expenses reasonably incurred in the defense of any claim relating to the act or failure to act.
Sec. 6. Title 38, chapter 5, article 4, Arizona Revised Statutes, is amended by adding section 38-847.01, to read:
38-847.01. Membership in retirement plan; eligibility
A. Each employee of an eligible group shall participate in the plan on proper determination of eligibility for membership by the local board pursuant to section 38‑847, subsection D.
B. The employer shall provide to the local board all necessary information to render a decision on the employee's eligibility for membership. The information shall include:
1. The date the employee was hired or appointed to the position.
2. The employee's position title.
3. A description of the essential functions for the positions.
C. An employee receiving a pension from the plan is not subject to this section, but is subject to section 38‑849."
Renumber to conform
Page 14, line 21, after the period insert "Except as provided in subsection B of this section,"
Line 22, strike "who" insert "shall be enrolled in the plan established by ASRS pursuant to section 38‑952 if all of following apply:
1. The person is hired on or after the effective date of this section.
2. The employee"
Line 25, strike "and who" insert ".
3. The employee"
Line 27, strike ", but who" insert ".
4. The employee"
Lines 29 and 30, strike "shall be enrolled in the plan established by ASRS pursuant to section 38‑952"
Between lines 30 and 31, insert:
"B. A retired member of a statewide retirement system or plan pursuant to articles 3, 4, or 6 of this chapter who meets the requirements of subsection A of this section may be enrolled in the plan established by ASRS pursuant to section 38‑952 at the employer's option."
Reletter to conform
Strike page 15, insert:
"Sec. 10. Appropriation; ASRS; exemption
A. The following sums are appropriated from the Arizona state retirement system administration account fund in fiscal year 2013‑2014 to the Arizona state retirement system:
1. 1 FTE position and $72,400 for personal services.
2. $105,000 for professional services.
B. The appropriation made in subsection A, paragraph 2 of this section is exempt from the provisions of section 35‑190, Arizona Revised Statutes, relating to lapsing of appropriations."
Amend title to conform
STEVE YARBROUGH |