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2017 Legislative Session: Updates & Notes

The 2017 Legislative Session began on January 9, 2017 with 23 freshman legislators and  Senator Steve Yarbrough (Chandler) filling the role of Senate President and J.D. Mesnard (Chandler) becoming the Speaker of the House. The ASRS proposed 6 legislative initiatives with 5 of them passing the legislature and receiving the Governor’s signature. 

Several additional items were proposed that may have had an impact on ASRS business. Particularly, HB2169 proposed a repeal of the 6-month waiting period for state employees prior to participation in the ASRS. Although the bill passed both the Senate and the House, the Governor vetoed the bill on May 22, 2017. The legislature adjourned sine die on May 10, 2017. Unless otherwise noted, bills will be effective August 9, 2017.

ASRS INITIATIVES

HB2166 ASRS; RETURN TO WORK (Sponsor: Livingston) – PASSED & SIGNED 

HB2166 makes changes to A.R.S. § 38-766.02 to ensure the language of the statute conforms to the original intent, that employers are paying an Alternate Contribution for all retirees of the Arizona State Retirement System (ASRS) who return to work for them in any capacity.   

Effective Date: August 9, 2017

HB2167 ASRS; ASRS; CONTRIBUTIONS; ADJUSTMENTS (Sponsor: Livingston) – PASSED & SIGNED

Establishes Internal Revenue Code conforming language to A.R.S. § 38-738 for the purposes of employer credits and contributions not withheld. Additionally, stipulates that a member who previously received a return of contribution may only receive an adjustment of employer contributions or service credits for qualifying employment and compensation occurring after the member’s most recent return of contributions.

Effective Date: August 9, 2017

HB2168 ASRS; REINSTATEMENT; CONTRIBUTION AMOUNT (Sponsor: Livingston) – PASSED & SIGNED

Clarifies language in A.R.S. § 38-742 relating to the reinstatement of forfeited service in a scenario where an individual’s prior distribution was split for the purposes of a domestic relations order.

Effective Date: August 9, 2017

SB1052 ASRS; OPTIONAL RETIREMENT BENEFITS; OVERPAYMENT (Sponsor: Kavanagh) – PASSED & SIGNED

Requires the ASRS to withhold any overpayments and federally required taxes from a member’s Partial Lump Sum distribution or return of contributions before distributing funds to the member.

Effective Date: August 9, 2017

SB1053 ASRS; BOARD DELEGATION; BENEFIT DETERMINATIONS (Sponsor: Kavanagh) – PASSED & SIGNED

Permits the ASRS Board of Trustees to establish a committee of the board for the purposes of delegating agency appealable action determinations relating to long-term disability and transfers. The committee will have the full legal authority of the Board relating to appeal decisions.

Effective Date: August 9, 2017

SB1178 ASRS; NONPARTICIPATING EMPLOYER; LIABILITY (Sponsor: Lesko) – FAILED TO PASS

Attempted to redefine what constitutes an Arizona State Retirement System (ASRS) nonparticipating employer under A.R.S. § 38-751 for the purposes of charging a nonparticipating employer a liability. Additionally, the bill clarified the calculation methodology for the liability.

BILLS IMPACTING ASRS

HB2010 ASRS; POLITICAL SUBDIVISION ENTITIES (Sponsor: Ugenti-Rita) – FAILED TO PASS

This bill was presented in both the 2013 and 2014 legislative sessions and failed to pass. Proposed to remove political subdivision entities from ASRS participation for all new employees of the entity.

HB2169 RETIREMENT; STATE RETIREMENT; WAITING PERIOD; REPEAL (Sponsor: Livingston) – PASSED, VETOED

Repealed the 2012 law requiring state employees to wait twenty-six weeks before becoming eligible for ASRS participation.

SB1072 ADMINISTRATIVE DECISIONS; SCOPE OF REVIEW (Sponsor: Petersen) – PASSED & SIGNED

Makes changes to laws relating to agency appealable actions and deals with payment of attorney’s fees for cases brought against a state agency. Requires the court to award fees and other expenses in a successful challenge to an agency decision where civil action is brought on the grounds that the agency decision is not authorized by statute, violates the United States Constitution or violates the Arizona Constitution.

SB 1078 ELECTRONIC; DIGITAL SIGNATURES; REQUIREMENTS; ADOA (Sponsor: Worsley) – PASSED & SIGNED

Requires agencies to treat electronic signatures the same as a physical signature and directs ADOA to adopt rules for accepting electronic and digital signatures.

Effective Date: March 27, 2017 (passed w/ emergency clause)

SB 1084: ELECTRONIC RECORDS; RETENTION; STORAGE (Sponsor: Worsley) – PASSED & SIGNED

Makes changes relating to electronic transactions and record retention and states that electronic records satisfy any law requiring a record to be retained.

Effective Date: August 9, 2017

SB1243 MISCONDUCT INVOLVING WEAPONS; PUBLIC PLACES (Sponsor: Kavanagh) – FAILED TO PASS

Proposed an exemption for holders of a Conceal Carry Weapons (CCW) permit, allowing them to enter public buildings without restrictions on their weapons. Current law lets each public building determine their weapons allowance consistent with A.R.S. § 13-3102.

SB 1437: AGENCIES; REVIEW; GRCC; OCCUPATIONAL REGULATION (Sponsor: Barto) – PASSED & SIGNED

Grants authority for individuals to petition GRRC to review an agency’s final rule, requires the Office of Administrative Hearings to include conclusions of law in any final administrative decisions, and requires an agency to submit a written letter with justification if the agency rejects or modifies the recommended decision from the Office of Administrative Hearings.

Effective Date: August 9, 2017

CORP PROPOSITION 

SB1442, & SCR1023 CORP MODIFICATIONS (Sponsor: Lesko) – PASSED & SIGNED          

Proposition will appear on the November 6, 2018 general election ballot.

Among the numerous CORP modifications, for employees hired on or after July 1, 2018 the bill creates a new DC plan for correctional officers and allows probation and security offices to opt-out of the DB plan in exchange for the DC plan, and removes the PBI in place of a more predictable COLA.

Effective Date: August 9, 2017 however actual changes in membership tiers don’t begin until July 1, 2018.

UPDATE ON SB1428 (PSPRS MODIFICATIONS) FROM THE 2016 LEGISLATIVE SESSION

It is the belief of PSPRS and the ASRS that the legislature created the 90-day waiting period for participation in PSPRS with the idea that employees would only be enrolled in PSPRS regardless of whether the employee met 20/20 requirements before becoming eligible for PSPRS participation. Consequently, we are directing employers that contributions should only be remitted to PSPRS. The ASRS should not receive contributions for Tier 3 PSPRS members.

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