2004 Legislation
Print Friendly

SENATE BILL NO. 1256 – PERSI, employee, definition revised


View Bill Status

View Bill Text

View Statement of Purpose / Fiscal Impact

Text to be added within a bill has been marked with Bold and
Underline. Text to be removed has been marked with
Strikethrough and Italic. How these codes are actually displayed will
vary based on the browser software you are using.

This sentence is marked with bold and underline to show added text.

This sentence is marked with strikethrough and italic, indicating
text to be removed.

Bill Status

S1256.......................................by COMMERCE AND HUMAN RESOURCES
PUBLIC EMPLOYEE RETIREMENT SYSTEM - Amends existing law relating to the
Public Employee Retirement System to revise the definition of "employee."
01/30    Senate intro - 1st rdg - to printing
02/02    Rpt prt - to Com/HuRes
02/16    Rpt out - rec d/p - to 2nd rdg
02/17    2nd rdg - to 3rd rdg
02/24    3rd rdg - PASSED - 33-0-2
      AYES -- Andreason, Bailey, Brandt, Bunderson, Burkett, Burtenshaw,
      Calabretta, Cameron, Compton, Darrington, Davis, Gannon, Geddes,
      Goedde, Ingram, Kennedy, Keough, Little, Lodge, Malepeai, Marley,
      McKenzie, McWilliams, Noble, Noh, Pearce, Schroeder, Sorensen,
      Stegner, Stennett, Sweet, Werk, Williams
      NAYS -- None
      Absent and excused -- Hill, Richardson
    Floor Sponsor - Malepeai
    Title apvd - to House
02/25    House intro - 1st rdg - to Com/HuRes
03/10    Rpt out - rec d/p - to 2nd rdg
03/11    2nd rdg - to 3rd rdg
03/15    3rd rdg - PASSED - 59-0-11
      AYES -- Andersen, Barraclough, Barrett, Bauer, Bayer, Block, Boe,
      Bolz, Bradford, Campbell, Cannon, Clark, Collins, Cuddy, Deal,
      Denney, Douglas, Eberle, Edmunson, Ellsworth, Eskridge, Field(18),
      Field(23), Gagner, Garrett, Harwood, Henbest, Jones, Kellogg,
      Kulczyk, Lake, Langford, Langhorst, Martinez, McGeachin, McKague,
      Meyer, Miller, Mitchell, Naccarato, Nielsen, Pasley-Stuart, Ring,
      Ringo, Robison, Rydalch, Sali, Sayler, Schaefer, Shepherd, Shirley,
      Skippen, Smith(30), Smith(24), Smylie, Snodgrass, Trail, Wills, Wood
      NAYS -- None
      Absent and excused -- Bedke, Bell, Black, Crow, Jaquet, Moyle,
      Raybould, Ridinger, Roberts, Stevenson, Mr. Speaker
    Floor Sponsor - Martinez
    Title apvd - to Senate
03/16    To enrol
03/17    Rpt enrol - Pres signed
03/18    Sp signed
03/19    To Governor
03/24    Governor signed
         Session Law Chapter 294
         Effective: 07/01/04

Bill Text

  ]]]]              LEGISLATURE OF THE STATE OF IDAHO             ]]]]
 Fifty-seventh Legislature                 Second Regular Session - 2004
                                       IN THE SENATE
                                    SENATE BILL NO. 1256
  1                                        AN ACT
  4    Be It Enacted by the Legislature of the State of Idaho:
  5        SECTION  1.  That  Section 59-1302, Idaho Code, be, and the same is hereby
  6    amended to read as follows:
  7        59-1302.  DEFINITIONS. (1) As used in this  chapter,  each  of  the  terms
  8    defined  in this section shall have the meaning given in this section unless a
  9    different meaning is clearly required by the context.
 10        (2)  "Active member" means any employee who is not establishing the  right
 11    to  receive  benefits through his or her employer's participation in any other
 12    retirement system established for Idaho public employees, if  such  participa-
 13    tion  is  mandated by applicable Idaho statutes other than this chapter. In no
 14    case will an employee be entitled to any benefit under this chapter for public
 15    service if such employee is establishing retirement  benefit  entitlements  by
 16    other Idaho statutes or federal statutes other than military service or social
 17    security for that same service.
 18        (3)  "Accumulated contributions" means the sum of amounts contributed by a
 19    member of the system, together with regular interest credit thereon.
 20        (4)  "Actuarial equivalent" means a benefit equal in value to another ben-
 21    efit,  when computed upon the basis of the actuarial tables in use by the sys-
 22    tem.
 23        (5)  "Actuarial tables" means such tables as shall have  been  adopted  by
 24    the board in accordance with recommendations of the actuary.
 25        (5A)  "Alternate payee" means a spouse or former spouse of a member who is
 26    recognized  by  an approved domestic retirement order as having a right to all
 27    or a portion of the accrued benefits in the retirement system with respect  to
 28    such member.
 29        (5B)  "Approved  domestic  retirement  order"  means a domestic retirement
 30    order which creates or recognizes the existence of an alternate payee's  right
 31    or  assigns to an alternate payee the right to all or a portion of the accrued
 32    benefits of a member under the retirement system, which directs the system  to
 33    establish a segregated account or disburse benefits to an alternate payee, and
 34    which the executive director of the retirement system has determined meets the
 35    requirements of sections 59-1319 and 59-1320, Idaho Code.
 36        (5C)  "Average  monthly  salary"  means the member's average salary during
 37    the base period as calculated pursuant to  rules  adopted  by  the  retirement
 38    board.
 39        (5D)  (a) "Base  period"  means  the period of fifty-four (54) consecutive
 40        calendar months during which the member earned:
 41             (i)   The highest average salary; and
 42             (ii)  Membership service of at least one-half  (1/2)  the  number  of
 43             months in the period, excluding months of service attributable to:
  1                  A.  Military service;
  2                  B.  Service  qualifying  as  minimum benefit pursuant to section
  3                  59-1342(5), Idaho Code; and
  4                  C.  Worker's compensation income benefits.
  5        (b)  Effective October 1, 1993, the consecutive calendar months  shall  be
  6        forty-eight    (48).  Effective  October 1, 1994, the consecutive calendar
  7        months shall be forty-two (42).
  8        (c)  Entitlement to a base period shall not vest until the effective  date
  9        of  that  base  period. The retirement benefits shall be calculated on the
 10        amounts, terms and conditions in effect at the date of the final contribu-
 11        tion by the member.
 12        (d)  If no base period exists for a member, the member's  average  monthly
 13        salary  shall be determined by the board, using standards not inconsistent
 14        with those established in this subsection.
 15        (e)  To assure equitable treatment  for  all  members,  salary  increments
 16        inconsistent  with  usual  compensation  patterns may be disallowed by the
 17        board in determining average monthly salary and base period.
 18        (6)  "Beneficiary" means the person who is nominated by the written desig-
 19    nation of a member, duly executed and filed with the  board,  to  receive  the
 20    death benefit.
 21        (7)  "Calendar  year"  means twelve (12) calendar months commencing on the
 22    first day of January.
 23        (7A) "Contingent annuitant" means the person designated by a member  under
 24    certain  retirement  options to receive benefit payments upon the death of the
 25    member. The person so designated must be born and living on the effective date
 26    of retirement.
 27        (8)  "Credited service" means the aggregate of membership  service,  prior
 28    service and disabled service.
 29        (9)  "Date  of  establishment"  means July 1, 1965, or a later date estab-
 30    lished by the board or statute.
 31        (10) "Death benefit" means the amount, if any, payable upon the death of a
 32    member.
 33        (11) "Disability retirement allowance" means the periodic payment becoming
 34    payable upon an active member's ceasing to be an employee while  eligible  for
 35    disability retirement.
 36        (12) "Disabled" means:
 37        (a)  That  the  member  is  prevented  from  engaging in any occupation or
 38        employment for remuneration or profit as a result of bodily injury or dis-
 39        ease, either occupational or nonoccupational in cause, but excluding  dis-
 40        abilities  resulting  from  service in the armed forces of any country, or
 41        from an intentionally self-inflicted injury; and
 42        (b)  That the member will likely remain so disabled permanently  and  con-
 43        tinuously during the remainder of the member's life.
 44    It is not necessary that a person be absolutely helpless or entirely unable to
 45    do anything worthy of compensation to be considered disabled. If the person is
 46    so  disabled  that  substantially all the avenues of employment are reasonably
 47    closed to the person, that condition is within the meaning of  "disabled."  In
 48    evaluating  whether  a person is disabled, medical factors and nonmedical fac-
 49    tors including, but not limited to, education, economic  and  social  environ-
 50    ment, training and usable skills may be considered.
 51        Refusal to submit to a medical examination ordered by the board before the
 52    commencement  of  a  disability retirement allowance or at any reasonable time
 53    thereafter shall constitute proof that the member is not disabled.  The  board
 54    shall be empowered to select for such medical examination one (1) or more phy-
 55    sicians or surgeons who are licensed to practice medicine and perform surgery.
  1    The  fees  and expenses of such examination shall be paid from the administra-
  2    tion account of the fund. No member shall be required to undergo such examina-
  3    tion more often than once each year after he has received a disability retire-
  4    ment allowance continuously for two (2) years.
  5        (12A) "Disabled service" means the total number of  months  elapsing  from
  6    the  first day of the month next succeeding the final contribution of a member
  7    prior to receiving a disability retirement allowance to the first day  of  the
  8    month  following  the date of termination of such disability retirement allow-
  9    ance. During such period, the member shall remain classified in the membership
 10    category held during the month of final  contribution.  The  total  number  of
 11    months of disabled service credited for a person first becoming disabled after
 12    the  effective  date  of  this chapter shall not exceed the excess, if any, of
 13    three hundred sixty (360) over the total number of months of prior service and
 14    membership service.
 15        (12B) "Domestic retirement order" means any judgment,  decree,  or  order,
 16    including  approval  of  a  property settlement agreement which relates to the
 17    provision of marital property rights to a spouse or former spouse of a member,
 18    and is made pursuant to a domestic  relations  law,  including  the  community
 19    property law of the state of Idaho or of another state.
 20        (13) "Early retirement allowance" means the periodic payment becoming pay-
 21    able  upon  an  active  member's  ceasing to be an employee while eligible for
 22    early retirement.
 23        (14)  (A) "Employee" means:
 24        (a)  Any person who normally works twenty (20) hours or more per week  for
 25        an  employer  or  a  school  teacher  who  works  half-time or more for an
 26        employer and who receives salary for services rendered for such  employer;
 27        or
 28        (b)  Elected officials or appointed officials of an employer who receive a
 29        salary; or
 30        (c)  A  person  who is separated from service with less than five (5) con-
 31        secutive months of employment and who is reemployed or reinstated  by  the
 32        same employer within thirty (30) days.
 33        (B)  "Employee" does not include employment as:
 34        (a)  A person rendering service to an employer in the capacity of an inde-
 35        pendent business, trade or profession; or
 36        (b)  A  person  whose employment with any employer does not total five (5)
 37        consecutive months; or
 38        (c)  A person provided sheltered  employment  or  made-work  by  a  public
 39        employer in an employment or industries program maintained for the benefit
 40        of such person; or
 41        (d)  An  inmate of a state institution, whether or not receiving compensa-
 42        tion for services performed for the institution; or
 43        (e)  A student enrolled in an undergraduate,  graduate,  or  professional-
 44        technical  program  at and employed by a state college, university, commu-
 45        nity college or professional-technical  center  when  such  employment  is
 46        predicated on student status; or
 47        (f)  A person making contributions to the United States civil service com-
 48        mission under the United States Civil Service System Retirement Act except
 49        that  a  person who receives separate remuneration for work currently per-
 50        formed for an employer and the United States government may elect to be  a
 51        member of the retirement system in accordance with rules of the board; or
 52        (g)  A person occupying a position that does not exceed eight (8) consecu-
 53        tive  months  in  a  calendar  year with a city or county when the city or
 54        county has certified, in writing to the system, the position is  (i)  sea-
 55        sonal  or  casual;  and  (ii)  affected by weather and the growing season,
  1        including parks and golf course positions; or
  2        (h)  A person in a position that (i) is eligible for participation  in  an
  3        optional  retirement program established under section 33-107A or 33-107B,
  4        Idaho Code, or (ii) would be eligible for  participation  in  an  optional
  5        retirement  program  established  under  section 33-107A or 33-107B, Idaho
  6        Code, if the person was not working  less  than  half-time  or  less  than
  7        twenty (20) hours per week.
  8        (15) "Employer"  means the state of Idaho, or any political subdivision or
  9    governmental entity, provided such subdivision or entity has elected  to  come
 10    into  the system. Governmental entity means any organization composed of units
 11    of government of Idaho or organizations funded only by government or  employee
 12    contributions  or organizations who discharge governmental responsibilities or
 13    proprietary responsibilities that would otherwise be performed by  government.
 14    All governmental entities are deemed to be political subdivisions for the pur-
 15    pose of this chapter.
 16        (15A) "Final  contribution"  means the final contribution made by a member
 17    pursuant to sections 59-1331 through 59-1334, Idaho Code.
 18        (16) "Firefighter" means an employee, including paid firefighters hired on
 19    or after October 1, 1980, whose primary occupation is that of  preventing  and
 20    extinguishing fires as determined by the rules of the board.
 21        (17) "Fiscal  year"  means  the period beginning on July 1 in any year and
 22    ending on June 30 of the next succeeding year.
 23        (18) "Fund" means the public employee retirement fund established by  this
 24    chapter.
 25        (19) "Funding  agent" means any bank or banks, trust company or trust com-
 26    panies, legal reserve life insurance company or legal reserve  life  insurance
 27    companies,  or combinations thereof, any thrift institution or credit union or
 28    any  investment management firm or individual investment manager  selected  by
 29    the  board to hold and/or invest the employers' and members' contributions and
 30    pay certain benefits granted under this chapter.
 31        (20) "Inactive member" means a former active member who is not an employee
 32    and is not receiving any form of retirement allowance, but for whom a  separa-
 33    tion benefit has not become payable.
 34        (20A) "Lifetime  annuity" means periodic monthly payments of income by the
 35    retirement system to an alternate payee.
 36        (20B) "Lump sum distribution" means a payment by the retirement system  of
 37    the  entire balance in the alternate payee's segregated account, together with
 38    regular interest credited thereon.
 39        (21) "Member" means an active member, inactive member or a retired member.
 40        (22) "Membership service" means military service which  occurs  after  the
 41    commencement  of contributions payable under sections 59-1331 through 59-1334,
 42    Idaho Code, and service with respect to which contributions are payable  under
 43    sections 59-1331 through 59-1334, Idaho Code, which, except for benefit calcu-
 44    lations  described  in sections 59-1342 and 59-1353, Idaho Code, includes ser-
 45    vice transferred to a segregated account under an approved domestic retirement
 46    order.
 47        (23) "Military service" means active duty service in the armed  forces  of
 48    the  United States including the national guard and reserves, under the provi-
 49    sions of title 10, title 32, and title 37, United States code. Provided,  how-
 50    ever, for the purposes of this chapter, military service SHALL NOT include:
 51        (a)  Any  period  ended by dishonorable discharge or during which termina-
 52        tion of such service is available but not accepted;
 53        (b)  Any period which commences more than ninety (90) days after the  per-
 54        son ceases to be an employee or ends more than ninety (90) days before the
 55        person  again becomes an employee unless such ninety (90) day requirements
  1        are waived by the board due  to circumstances beyond the  employee's  con-
  2        trol; or
  3        (c)  Any  active duty service in excess of five (5) years if at the conve-
  4        nience of the United States government, or in excess of four (4) years  if
  5        not at the convenience of the United States government.
  6        (24)  (a) "Police  officer" for retirement purposes shall be as defined in
  7        section 59-1303, Idaho Code.
  8        (b)  "POST" means the Idaho peace officer standards and  training  council
  9        established in chapter 51, title 19, Idaho Code.
 10        (25) "Prior  service"  means any period prior to July 1, 1965, of military
 11    service or of employment for the state of Idaho or any  political  subdivision
 12    or other employer of each employee who is an active member or in military ser-
 13    vice  or  on leave of absence on the date of establishment, provided, however,
 14    an employee who was not an active member or in military service or on leave of
 15    absence on the date of establishment shall receive  credit  for  the  member's
 16    service  prior  to July 1, 1965, on the basis of recognizing two (2) months of
 17    such service for each month of membership service. For the purpose of  comput-
 18    ing  such  service,  no  deduction  shall be made for any continuous period of
 19    absence from service or military service of six (6) months or less.
 20        (26) "Regular interest" means interest at the rate set from time  to  time
 21    by the board.
 22        (27) "Retired  member" means a former active member receiving a retirement
 23    allowance.
 24        (28) "Retirement" means the acceptance of  a  retirement  allowance  under
 25    this chapter upon termination of employment.
 26        (29) "Retirement  board"  or  "board" means the board provided for in sec-
 27    tions 59-1304 and 59-1305, Idaho Code, to administer the retirement system.
 28        (30) "Retirement system" or "system" means the public employee  retirement
 29    system of Idaho.
 30        (31) (A) "Salary" means:
 31        (a)  The  total  salary or wages paid to a person who meets the definition
 32        of employee by an employer for  personal services performed  and  reported
 33        by  the  employer for income tax purposes, including the cash value of all
 34        remuneration in any medium other than cash.
 35        (b)  The total amount of any voluntary reduction in salary  agreed  to  by
 36        the member and employer where the reduction is used as an alternative form
 37        of remuneration to the member.
 38        (B)  Salary in excess of the compensation limitations set forth in section
 39    401(a)(17)  of  the  Internal Revenue Code shall be disregarded for any person
 40    who becomes a member of the system on or after July 1, 1996. The system had no
 41    limitations on compensation in effect on July 1, 1993. The compensation  limi-
 42    tations set forth in section 401(a)(17) of the Internal Revenue Code shall not
 43    apply  for  an "eligible employee." For purposes of this subsection, "eligible
 44    employee" is an individual who was a member of the system before July 1, 1996.
 45        (C)  "Salary" does not include:
 46        (a)  Contributions by employers to employee held medical savings accounts,
 47        as those accounts are defined in section 63-3022K, Idaho Code.
 48        (b)  Lump sum payments inconsistent with usual compensation patterns  made
 49        by the employer to the employee only upon termination from service includ-
 50        ing,  but  not  limited  to,  vacation  payoffs, sick leave payoffs, early
 51        retirement incentive payments and bonuses.
 52        (31A) "Segregated account" means the account established by the retirement
 53    system for the alternate payee of a member who is not  a  retired  member.  It
 54    shall  include  the  months  of credited service and accumulated contributions
 55    transferred from the member's account.
  1        (32) "Separation benefit" means the amount, if any, payable upon or subse-
  2    quent to separation from service.
  3        (33) "Service" means being shown on an employer's payroll as  an  employee
  4    receiving  a  salary. For each calendar month, service is credited only when a
  5    member is an employee as defined in subsection (14)(A) of this section and  is
  6    employed  for  fifteen (15) days or more during the calendar month. Employment
  7    of fourteen (14) days or less during any calendar month shall not be credited.
  8    No more than one (1) month of service shall be credited for all service in any
  9    month.
 10        (34) "Service retirement allowance" means the  periodic  payment  becoming
 11    payable  upon  an active member's ceasing to be an employee while eligible for
 12    service retirement.
 13        (35) "State" means the state of Idaho.
 14        (36) "Vested member" means an active or inactive member who has  at  least
 15    five  (5)  years of credited service, except that a member, who at the time of
 16    his separation from service:
 17        (a)  Held an office to which he had been elected by popular vote or having
 18        a term fixed by the constitution, statute or charter or was  appointed  to
 19        such office by an elected official; or
 20        (b)  Was the head or director of a department, division, agency, statutory
 21        section or bureau of the state; or
 22        (c)  Was  employed on or after July 1, 1965, by an elected official of the
 23        state of Idaho and occupied a position exempt from the provisions of chap-
 24        ter 53, title 67, Idaho Code; and
 25        (d)  Was not covered by a merit system  for  employees  of  the  state  of
 26        Idaho,
 27    is vested without regard to the length of credited service.
 28        (37) The masculine pronoun, wherever used, shall include the feminine pro-
 29    noun.

Statement of Purpose / Fiscal Impact

                     STATEMENT  OF  PURPOSE
                            RS 13464
This bill clarifies an eligibility issue created by the interplay
between PERSI and the Optional Retirement Plans (ORPs) of
universities.  Because of the way "employee" is defined in Idaho
Code 59-1302(14), it is possible for ORP covered employment to be
counted toward PERSI eligibility in cases of dual employment.  This
means that a person could be eligible for PERSI with one employer
even if they work less than 20 hours for that employer.  This
creates administrative problems because there is no practical way
for that employer to track hours with the ORP covered employer. 

This bill would amend PERSI section 59-1302(14) to clarify that ORP
covered employment cannot be considered in reaching eligibility
requirements for PERSI covered employment.

                         FISCAL  IMPACT

Name:     Alan H. Winkle
Agency:   Public Employees Retirement System
Phone:    334-2455

Statement of Purpose/Fiscal Impact                    S 1256