Verified Correct Copy of the Original 12/6/2013

IN THE SUPREME COURT OF THE STATE OF OREGON EVERICE MORO, TERRI DOMENIGONI, CHARLES CUSTER, JOHN HAWKINS, MICHAEL ARKEN, EUGENE DITTER JOHN O'KIEF, SMITH, LANE JOHNSON, GREG CLOUSER, BRANDON SILENCNOZ , ,D ~ti1~I VICKERY, and JIN VOEK e ~ ~6~ Petrtioners, ` ~. ,~~~

v.

..

STATE OF OREGON, STATE, OF OREGON by and through the Department of Corrections, LINN COUNTY, CITY OF PORTLAND, CITY OF SALEM, TUALATIN VALLEY FIRE & RESCUE, ESTACADA SCHOOL DISTRICT, OREGON CITY SCHOOL DISTRICT, ONTARIO SCHOOL DISTRICT, BEAVERTON SCHOOL DISTRICT, WEST LINN SCHOOL DISTRICT, BEND SCHOOL DISTRICT, and PUBLIC EMPLOYEES RETIREMENT BOARD, Respondents, And LEAGUE OF OREGON CITIES; OREGON SCHOOL BOARDS ASSOCIATION; CENTRAL OREGON IRRIGATION DISTRICT; and ASSOCIATION OF OREGON COUNTIES, Intervenors. S061452 (Control)

WAYNE STANLEY JONES, Petitioner,

V.

PUBLIC EMPLOYEES RETIREMENT BOARD, ELLEN ROSENBLUM, Attorney General and JOHN A. KITZHABER, Governor, Respondents.
S061431

MICHAEL D. REYNOLDS,

Petitioner,
V.

PUBLIC EMPLOYEES RETIREMENT BOARD, State of Oregon; and JOHN A. KITZHABER, Governor, State of Oregon, Respondents S061454

GEORGE A. RIEMER, Petitioner,

V.

STATE OF OREGON, OREGON GOVERNOR JOHN KITZHABER, OREGON ATTORNEY GENERAL ELLEN ROSENBLUM, OREGON PUBLIC EMPLOYEES RETIREMENT BOARD, and OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM, Respondents. S061475 AMENDED PETITION FOR JUDICIAL REVIEW (ORIGINAL PROCEEDING) Petitioner Reynolds petitions for judicial review of Oregon Laws 2013, Chapter 53 (Senate Bill 822) and Oregon Laws 2013, Chapter 2(Senate Bill 861). Senate Bill 822 had an effective date of May 5, 2013. Senate Bill 861 had an effective date of October 8, 2013. Pursuant to Senate Bill 822, 19, proceedings for direct review challenging the validity of Senate Bi11822 may be filed in the Supreme Court within 60 days of the bill's effective date. Pursuant to ORAP 12.05(2), a petition for judicial review is the proper means for challenging a legislative enactment when a statute provides for direct review in the Supreme Court. Petitioner Reynolds previously filed a Petition
2 Petition for Judicial Review

For Judicial Review of Senate Bi11822 and did so within 60 days of the effective date of Senate Bill 822. Pursuant to Senate Bill 861, 11, proceedings for direct review challenging the validity of Senate Bill 861 may be filed in the Supreme Court within 60 days of the bill's effective date. Petitioner Reynolds is filing this Amended Petition for Judicial Review, which includes a challenge to Senate Bi11861, within 60 days of the effective date of Senate Bill 861. The parties to the judicial review proceeding (consolidated) are set forth in the caption and are incorporated by reference herein. The names, bar numbers, addresses, email addresses and telephone number of the attorneys representing the parties, and of the parties who are appearing pro se, are as follows: Michael D. Reynolds, OSB#742694 (Inactive), WSB# 13058 (Active), Petitioner pro se 8012 Sunnyside Ave N, Seattle, WA 98103 mreynolds 14gcomcast.net Telephone: (206) 910-6568 Anna Marie Joyce, OSB # 013112 Anna. j oyce(kdo i. state. or.us Solicitor General 400 Justice Building 1162 Court St NE Salem, OR 97301-4096 Telephone: (503) 378-4402 Attorney for State of Oregon; Oregon Department of Corrections; Public Employees Retirement System; Public Employees Retirement Board; and Governor John Kitzhaber Gregory A. Hartman, OSB #741283 hartman@bennetthartman.com Aruna A. Masih, OSB #973241 masihakbennetthartman. com 210 SW Morrison St. Suite 500 Portland, OR 97204-3149 Telephone: (503) 227-4600 Attorneys for petitioners Moro; Domenigoni; Custer; Hawkins; Arken; Ditter; O'Kief; Smith; Johnson; Clouser; Silence; Vickery; and Voek.
3 Petition for Judicial Review

Edward H. Trompke, OSB #843653 ed.tompkena e,j ordanramis. com Jordan Ramis PC Two Centerpointe Drive, 6 1 Floor Lake Oswego, OR 97035 Telephone: (503) 598-5532 Attorney for Tualatin Valley Fire & Rescue Eugene J. Karandy II, OSB 972987 karandykco.linn.or.us *Office of the County Attorney Linn County Courthouse 104 Fourth Avenue SW, Room 123 PO Box 100 Albany, OR 97321-0021 Telephone: (541) 967-3840 Michael Eliason, OSB #085771 meliasongaocweb.org Association of Oregon Counties 1201 Court St NE Ste 300 Salem, OR 97301 Telephone: (971) 218-0945 Attorneys for Linn County Harry Auerbach, OSB #821830 Harry.auerbach(~ a,portlandoregon.gov Office of the City Attorney 1221 SW 41 Avenue, Suite 430 Portland, OR 97204-1991 Telephone: (503) 823-4047 Attorney for City of Portland Daniel B. Atchison, OSB #040424 datchison(~ a,cityofsalem.net Office of City Attorney 555 Liberty Street SE, Ste 205 Salem, OR 97301-3513 Telephone: (503) 588-6003 Attorney for City of Salem J. Michael Porter, OSB #003560 Mike.porterkmillernash.com
4 Petition for Judicial Review

Miller Nash LLP 111S.W. Fifth Ave, Ste 3400 Portland, OR 97204-3699 Telephone: (503) 205-2330 Attorney for Beaverton School District George A. Riemer, Pro Se George.riemerna e ,azbar.org 1501 W. Washington St., Ste 229 Phoenix, AZ 85007 Telephone: (623) 238-5039 Wayne Stanley Jones, Pro Se tgmail.com wstandm ga, -_ 18 North Foxhill Road North Salt Lake, Utah 84054 Telephone: (801) 296-1552 W. Michael Gillette, OSB #660458 wmgil lettekschwabe.com Leora Coleman-Fire, OSB #113581 lcoleman-firegschwabe.com Sara Kobak, OSB #023495 a,schwabe.com skobak(~ Schwabe, Williamson & Wyatt 1211 SW 5' Ave, Ste 1900 Portland, OR 97204 Telephone: (503) 222-9981 Attorneys for League of Oregon Cities, Intervenor Lisa M. Freiley, OSB #912763 lfreileygosba.org Oregon School Boards Assn 1201 Court St NE PO Box 1068 Salem, OR 97308 Telephone: (503) 588-2800 William F. Gary, OSB#770325 Sharon A. Rudnick, OSB #830835 Peter F. Simons, OSB #095632 Harrang Long Gary Rudnick, P.C. 360 E. lOth Ave Suite 300 Eugene, OR 97401-3273
5 Petition for Judicial Review

Attorneys for Oregon School Boards Assn., Intervenor; respondents Estacada School Dist.; Oregon City School District; Ontario School District; West Linn School District; Bend School District. Of attorneys for Association of Oregon Counties, Intervenor, and Linn County Kristian S. Roggendorf kra,roggendorf-law.com 5200 SW Meadows Road, Ste 150 Lake Oswego, OR 97035 Telephone: (503) 726-5927 Attorney for Central Oregon Irrigation District, Intervenor Petitioner submits that sections 11-16 of Senate Bi11822 unlawfully reduce the benefits of PERS members not residents or domiciliaries of the State of Oregon. First, the reduction in benefits either impairs the obligation of the PERS contract with some of its members, in violation of Article I, section 21 of the Oregon Constitution, or breaches the PERS contract. The reduction in benefits solely for non-resident, nondomiciliary PERS retirees would establish a benefit payment plan that paid a different level of benefits to retirees based solely on their residency after retirement. The basic premise of equal benefit payments regardless of a member's residency after retirement has been so firmly rooted in the PERS statutory scheme since its inception as to amount to a term of the PERS contract. No provision in the PERS statutory scheme permitted PERB, once petitioner retired, to reduce his promised retirement allowance solely for the reason that, following retirement, he chose to reside outside the State of Oregon. Whether an impairment of the obligation of contracts or a breach of contract, petitioner submits that the appropriate relief is for the court to declare sections 11-16 of Senate Bill 822 invalid, void and of no effect. Second, the reduction in benefits violates 4 USC 114(a) (prohibiting a state from imposing an income tax on the retirement income of a person who is not a resident or domiciliary of the state). Accordingly, petitioner submits that sections 1116 of Senate Bill 822 are invalid under Article VI, Clause 2 of the United States Constitution (Supremacy Clause).
6 Petition for ludicial Review

Petitioner further submits that Senate Bill 861, section 1, together with Senate Bill 822, sections 1 and 3, impair the obligation of the PERS contract with PERS members who retired prior to the effective date of those bills (October 8, 2013, and May 5, 2013, respectively), or, alternatively, breach the PERS contract with PERS members. For PERS members like petitioner Reynolds who retired prior to May 5, 2013, ORS 238.360, at the time of their retirement, provided that PERB "shall" adjust a PERS member's annual benefit amount (a cost of living allowance, or "COLA") by a percentage amount determined by PERB and based on the Consumer Price Index for the Portland area, up to a maximum of 2.0%. The statute further provided that any amount in excess of 2.0% "shall be accumulated from year to year and included in the computation" of the COLA in succeeding years. ORS 238.360 and, specifically, the COLA benefits provided thereunder, are a term of the PERS contract with these PERS members. Senate Bill 822 and Senate Bi11861 amend ORS 238.360 to reduce the COLA percentage and delete the accumulation provision, thereby reducing the retirement benefits that these PERS member were promised at the time they retired from public service. In doing so, Senate Bill 822 and Senate Bill 861 impair an obligation of the PERS contract with its retired members, or breach that contract. Whether an impairment of the obligation of contracts or a breach of contract, petitioner submits that the appropriate relief is for the court to declare section 1 of Senate Bill 861 and sections 1 and 3 of Senate Bi11822 invalid, void and of no effect. As set forth in the attached affidavit, petitioner is or will be adversely affected by Senate Bill 822 and Senate Bill 861. Petitioner is a retired member of the Public Employees Retirement System (PERS), having achieved that status on March 1, 2003. He has since that date been and continues to be a resident of and domiciled in the State of Washington. Petitioner receives a monthly retirement benefit from PERS, a benefit which will be reduced as a direct result of the passage of Senate Bill 822 and Senate Bi11861. ORAP 4.15 (1)(d) requires a petitioners to state whether petitioner is willing to stipulate that the record before the agency may be shortened. Because petitioner's
7 Petition for

Judicial Review

challenge is to two legislative enactments, there is no agency record to shorten. This court previously ordered that a special master be appointed to take evidence and make recommended findings of fact regarding the challenges to Senate Bill 822. Pursuant to that order, the court appointed Judge Stephen Bushong to serve as special master in these consolidated proceedings. It is petitioner's position that the legal challenges to Senate Bill 861 and Senate Bill 822 should be heard and considered together, and therefore submits that the court's order appointing a special master should extend to the review of Senate Bi11861 as well. Copies of Senate Bi11822 and Senate Bill 861 are attached to this amended petition. DATED this J~- day of December, 2013.
0

/
ichael D. Reynolds, OSB#742694 (Inactive), WSB# 13058 (Active), Petitioner pro se 8012 Sunnyside Ave N, Seattle, WA 98103
206-910-6568

mreynolds 14gcomcast.net

CERTIFICATE OF SERVICE I certify that on December ~, 2013, I served a true copy of this petition for judicial review on: Public Employees Retirement Board State of Oregon 11410 SW W' Parkway Tigard, OR 97223 John Kitzhaber, Governor State of Oregon State Capitol Building 900 Court St NE Salem, Or 97301 Ellen Rosenblum Attorney General Office of the Solicitor 400 Justice Building 1162 Court St NE Salem, OR 97301-4096

8 Petition for Judicial Review

by the United States Postal Service, registered or certified mail, return receipt requested. I further certify that on December ly' , 2013 I served a true copy of this petition for judicial review on the following individuals by the United States Postal Service, first class mail: Anna Marie Joyce Solicitor General 400 Justice Building 1162 Court St NE Salem, OR 97301-4096 Gregory A. Hartman Aruna A. Masih 210 SW Morrison St. Suite 500 Portland, OR 97204-3149 Edward H. Trompke Jordan Ramis PC Two Centerpointe Drive, 6 1 Floor Lake Oswego, OR 97035 Eugene J. Karandy II Office of the County Attorney Linn County Courthouse 104 Fourth Avenue SW, Room 123 PO Box 100 Albany, OR 97321-0021 Michael Eliason Association of Oregon Counties 1201 Court St NE, Ste 300 Salem, OR 97301 Harry Auerbach *Office of the City Attorney City Hall, Suite 430 1221 SW 4th Avenue Portland, OR 97204-1991 Daniel B. Atchison Office of City Attorney
9 Petition for Judicial Review

City of Salem Legal Dept., Room 205 555 Liberty Street SE Salem, OR 97301-3513 J. Michael Porter Miller Nash LLP 3400 U.S. Bancorp Tower 111S.W. Fifth Ave Portland, OR 97204-3699 George A. Riemer, Pro Se 23206 N. Pedregosa Drive Sun City West, AZ 85375 Wayne Stanley Jones, Pro Se 18 North Foxhill Road North Salt Lake, Utah 84054 W. Michael Gillette Leora Coleman-Fire Sara Kobak Schwabe, Williamson & Wyatt 1211 SW 5t' Ave, Suite 1900 Portland, OR 97204 Lisa M. Freiley Oregon School Boards Assn 1201 Court St NE PO Box 1068 Salem, OR 97308 Kristian S. Roggendorf 5200 SW Meadows Road, Suite 150 Lake Oswego, OR 97035 William F. Gary Sharon A. Rudnick Peter F. Simons Harrang Long Gary Rudnick, P.C. 360 E. 10' Ave Suite 300 Eugene, OR 97401-3273 By United States Postal Service, registered or certified mail, return receipt requested.
10 Petition for Judicial Review

CERTIFICATE OF FILING I further certify that on December 42!~ , 2013, I filed the original of this petition for judicial review with the Appellate Court Administrator at this address: Appellate Court Administrator Appellate Court Records Section 1163 State Street Salem, OR 97301-2563 By United States Postal Service, registered or certified mail, return receipt requested.
~.

ichael D. Reynolds, Petitioner pro se

11 Petition for Judicial Review

IN THE SUPREME COURT OF THE STATE OF OREGON EVERICE MORO, TERRI DOMENIGONI, CHARLES CUSTER, JOHN HAWKINS, MICHAEL ARKEN, EUGENE DITTER JOHN O'KIEF, MICHAEL SMITH, LANE JOHNSON, GREG CLOUSER, BRANDON SILENCE, ALISON VICKERY, and JIN VOEK Petitioners,
V.

STATE OF OREGON, STATE OF OREGON by and through the Department of Corrections, LINN COUNTY, CITY OF PORTLAND, CITY OF SALEM, TUALATIN VALLEY FIRE & RESCUE, ESTACADA SCHOOL DISTRICT, OREGON CITY SCHOOL DISTRICT, ONTARIO SCHOOL DISTRICT, BEAVERTON SCHOOL DISTRICT, WEST LINN SCHOOL DISTRICT, BEND SCHOOL DISTRICT, and PUBLIC EMPLOYEES RETIREMENT BOARD, Respondents, And LEAGUE OF OREGON CITIES; OREGON SCHOOL BOARDS ASSOCIATION; CENTRAL OREGON IRRIGATION DISTRICT; and ASSOCIATION OF OREGON COUNTIES, Intervenors. S061452 (Control)

WAYNE STANLEY JONES, Petitioner,

V.

PUBLIC EMPLOYEES RETIREMENT BOARD, ELLEN ROSENBLUM, Attorney General and JOHN A. KITZHABER, Governor, Respondents. S061431

1- Affidavit

MICHAEL D. REYNOLDS, Petitioner,

V.

PUBLIC EMPLOYEES RETIREMENT BOARD, State of Oregon; and JOHN A. KITZHABER, Governor, State of Oregon, Respondents
S061454

GEORGE A. RIEMER, Petitioner,

V.

STATE OF OREGON, OREGON GOVERNOR JOHN KITZHABER, OREGON ATTORNEY GENERAL ELLEN ROSENBLUM, OREGON PUBLIC EMPLOYEES RETIREMENT BOARD, and OREGON PUBLIC EMPLOYEES RETIREMENT SYSTEM, Respondents.
S061475

AFFIDAVIT I, Michael D. Reynolds, petitioner in the above captioned matter, being first duly sworn, do depose and say: I am a member of the Oregon Public Employees Retirement System (PERS) having been actively employed by the State of Oregon continuously from 1976 until my retirement in March, 2003. Upon my retirement, I moved from Oregon and established my residence and domicile in the State of Washington, where I currently reside.

2 - Affidavit

Prior to retirement, I received from PERS an estimate of service retirement benefits. That estimate included a benefit increase equal to 5.6691 % pursuant to ORS 238.380 (2003, renumbered ORS 238.364 in 2011). For the past 10 years, the retirement benefit which I receive from PERS has included the benefit increase referenced in this estimate. Since my retirement I have received cost of living adjustments ("COLAs") pursuant to my contract with PERS. Senate Bi11822, sections 11-14, (Or Laws 2013, ch 53, 11-14), as applied to me, mandate that the Public Employees Retirement Board (PERB) reduce my retirement benefit by 5.6691 %. This reduction roughly approximates the amount of state income tax that I would pay on the portion of my retirement benefits earned between 1976 and 1991, if Oregon lawfully could tax those benefits. Senate Bi11861, section 1(Oregon Laws 2013, Chapter 2, 1) and Senate Bill 822, sections 1 and 3 reduce the maximum COLA to which I am entitled under the PERS contract and will, therefore, further reduce my PERS retirement benefit DATED this

~ !21day of December, 2013.

g 6 /'), ' ,- ~ CMichael D. Reynolds

/~ ~

SUBSCRIBED AND SWORN to before me this

3 day of December, 2013.

eoo'00 ~ 9040'1
~

Donald A. Mallett Notary Public in and for the State of Washington, residing at Seattl . My Commission Expires

rti
Ab O.>> ~

.~,~...\~\~'~'`

3 - Affidavit

Page 1 of 7

77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session

A-Engrossed

Senate Bill 861

Ordered by the Senate October 1 Including Senate Amendments dated October 1 Sponsored by JOINT COMMITI'EE ON SPECIAL SESSION

SUMMARY
The following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subject to consideration by the Legislative Assembly. It is an editor's brief statement of the essential features of the measure. Modifies cost-of-living adjustment under Public Employees Retirement System. Directs Public Employees Retirement Board to make annual supplementary payments to members or member's beneficiaries [with yearly allowance or yearly pension or benefit of $20,000 or less. Directs board to deoelop formula for determining whether it is reasonably prudent to rnake annual supplementary payments to members and member's benefi ciaries with yearly allotuance or yearly pension or beneftt of more than $20,000 and not more than $60,0001. [Directs board to report to Legislatiue Assembly with recommendations relating to cost-of-liuing adjustment and supplementaty payments.] Sunsets supplementary payments on December 31, 2019.

Directs board to report to Governor, President of Senate and Speaker of House of Representatives on recommendations relating to cost-of-living adjustment and supplementary payments.
Provides for expedited review by Supreme Court upon petition by adversely affected party. Declares emergency, effective on passage.

i
3

A BILL FOR AN ACT

provisions; amending ORS 238.360, 238.465 and 238A.210; and declaring an emergency.

2 Relating to cost-of-living adjustments under the Public Employees Retirement System; creating new

4 Be It Enacted by the People of the State of Oregon: 5

6

COST-OF-LIVING ADJUSTMENTS SECTION 1. ORS 238.360, as amended by sections 1 and 3, chapter 53, Oregon Laws 2013, is
238.360. (1) On July 1 of each year, the Public Employees Retirement Board shall increase the

7
8 9 amended to read: 10

11 yearly allowance that a member or member's beneficiary receives or is entitled to receive, as pro12 vided in [subsections (2) and (3)] subsection (2) of this section. The increase is first payable with
13

the allowance that the member or the member's beneficiary receives or is entitled to receive on

14 August 1. 15 16 17 18 19 20 21 (2)(a) If the member's or member's beneficiary's yearly allowance [for the preuious year totaled $20,0001 is $60,000 or less, the allowance shall be increased by [two] 1.25 percent. [(b) If the member's or member's benejiciary's yearly allowance for the preuious year totaled more than $20,000 but not more than $40,000, the allowance shall be increased by $400 plus 1.5 percent of the amount of the yearly allowance exceeding $20,000.1 [(c) If the member's or member's bene/ iciary's yearly allotvance for the ptpuious year totaled mot-e than $40,000 but not more than $60,000, the allowance shall be increased by $700 plus one percent of

NOTE: Matter in boldfaced type in an amended section is new; matter New sections are in boldfaaed type.

[italic and bracketed] is

existing law to be omitted.

LC 1

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Page 2 of 7

A-Eng. SB 861
1 the amount of the yearly allowance exceeding $40,000.1 2

[(d)] (b) If the member's or member's beneficiary's yearly allowance percent of the amount of the yearly allowance exceeding $60,000.

[for the preuious year

3 totaled] is more than $60,000, the allowance shall be increased by [$900 plus .25] $750 plus 0.15 4 5 [(3) If a mem.ber or member's beneficiary has been receiuing an allowance for less than 12 months

6 on July 1 of any year, the board shall calculate the increase under subsection (2) of this section on the 7 basis of the yearly allowance the member or member's beneficiary would haue receioed if the member 8 or member's beneficiary had receiued the monthly allowance for 12 months.] 9 10 11
12 13 14 15

[(4)] (3) Any increase in the allowance shall be paid from contributions of the public employer under ORS 238.225.
(4) As used in this section, "yearly allowance" means the monthly allowance that a member or member's beneficiary is entitled to on July 1 of the year in which the board is calculating the increase under subsection (1) of this section, multiplied by 12.

SECTION 2. The amendments to ORS 238.360 by section 1 of this 2013 special session Act
apply to all increases to allowances made under ORS 238.360 on and after July 1, 2014.

16 17 18 19 2o 21 22 23 24

SECTION 3. ORS 238A.210, as amended by sections 5 and 7, chapter 53, Oregon Laws 2013, is
amended to read: 238A.210. (1) On July 1 of each year, the board shall increase every pension payable under ORS 238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death benefit payable under ORS 238A.230 as provided in [subsections (2) and 01 subsection (2) of this section. The increase shall be made for the payments payable on August 1 and thereafter. (2)(a) If a person's yearly pension or benefit [for the preoious year totaled $20,0001 is $60,000 or less, the pension or benefit shall be increased by [two] 1.25 percent.

f(b) If a person's yearly pension or beneFt for the preuious year totaled more than $20,000 but not

25 more than $40,000, the pension or benefit shall be increased by $400 plus 1.5 percent of the amount of 26 the yearly pension or bene/` it exceeding $20,000.] 27 [(c) If a person's yearly pension or benefit for the preutous year totaled more than $40,000 but not

28 more than $60,000, the pension or benefit shall be increased by $700 plus one percent of the amount 29 of the yearly pension or benefit exceeding $40,000.1 30 31 32 33 [(d)] (b) If a person's yearly pension or benefit [for the preoious year totaled] is more than $60,000, the pension or benefit shall be increased by [$900 plus .251 $750 plus 0.15 percent of the

amount of the yearly pension or benefit exceeding $60,000.

[(3) If a person has been receiuing a pension or benefit for leas than 12 months on July 1 of any

34 year, the board shall calculate the inerease under subsection (2) of this section on the basis of the 35 yearly allowance the person would haoe received if the person had receiued the pension or benefit for 36 12 months.] 37
38

(3) As used in this section, "yearly pension or benefit ^ means the monthly pension or
benefit that a person is entitled to on July 1 of the year in which the board is calculating the increase under subsection (1) of this section, multiplied by 12.

39
40 41

SECTION 4. The amendments to ORS 238A.210 by section 3 of this 2013 special session
Act apply to all increases to pensions or benefits made under ORS 238A.210 on and after July 1, 2014.

42 43
44 45

SECTION 5. (1) The amendments to OBS 238.360 and 238A.210 by sections 1 and 3 of this
2013 special session Act become operative on July 1, 2014. (2) The Public Employees Retirement Board may take any action before the operative

[2]

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Page 3 of 7

A-Eng. SB 861
1

date specified in subsection (1) of this section to enable the board, on and after the operative

2 date specified in subsection (1) of this section, to exercise all the duties, functions and pow3 ers conferred on the board by the amendments to ORS 238.360 and 238A.210 by sections 1 and 4 3 of thia 2013 special session Act. 5
6

SECTION 6. ORS 238.465 is amended to read:

238.465. (1) Notwithstanding ORS 238.445 or any other provision of law, payments under this

7 chapter or ORS chapter 238A of any pension, annuity, retirement allowance, disability benefit, death 8 benefit, refund benefit or other benefit that would otherwise be made to a person entitled thereto 9 under this chapter or ORS chapter 238A shall be paid, in whole or in part, by the Public Employees 10 Retirement Board to an alternate payee if and to the extent expressly provided for in the terms of
11

any judgment of annulment or dissolution of marriage or of separation, or the terms of any court

12 order or court-approved property settlement agreement incident to any judgment of annulment or 13 dissolution of marriage or of separation. [Notwithstanding any othei pnouisions of this section] Egcept 14 as provided in subsection (5) of this section, the total value of benefits payable to a member and 15 to an alternate payee under this section may not be greater than the value of the benefits the 16 member would otherwise be eligible to receive. Any payment under this subsection to an alternate 17 payee bars recovery by any other person.
18

(2) A judgment, order or settlement providing for payment to an alternate payee under subsection (1) of this section may also provide: (a) That payments to the alternate payee may commence, at the election of the alternate payee, at any time after the earlier of: (A) The earliest date the member would be eligible to receive retirement benefits if the member separates from service; or (B) The date the member actually separates from service due to death, disability, retirement or (b) That the alternate payee may elect to receive payment in any form of pension, annuity, re-

19
20

21 22 23 24
26

25 termination of employment.

27 tirement allowance, disability benefit, death benefit, refund benefit or other benefit, except a benefit 28 in the form of a joint and survivor annuity, that would be available to the member under this 29 chapter or ORS chapter 238A, or that would be available to the member if the member retired or 30 separated from service at the time of election by the alternate payee, without regard to the form 31 of benefit elected by the member. 32 (c) That the alternate payee's life is the measuring life for the purpose of ineasuring payments

33 to the alternate payee under the form of benefiit selected by the alternate payee and for the purpose 34 of determining necessary employer reserves.
35 36

(d) Except as provided in ORS 238.305 (10) and 238.325 (7), that any person designated by the member as a beneficiary under ORS 238.300, 238.305, 238.325, 238A.190 or 238A.400 be changed, even

37 though the member has retired and has begun receiving a retirement allowance or pension. If a 38 change of beneficiary is ordered under this paragraph, the board shall adjust the anticipated benefits 39 that would be payable to the member and the beneficiary to ensure that the cost to the system of 40 providing benefits to the member and the new beneficiary does not exceed the cost that the system 41 would have incurred to provide benefits to the member and the original beneficiary. The judgment, 42 order or settlement may not provide for any change to the option selected by the retired member 43 under ORS 238.300, 238.305, 238.320, 238.325, 238A.190 or 238A.400 as to the form of the retirement 44 45 benefit. (3) The board shall adopt rules that provide for:

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A-Eng. SB 861 1 (a) The creation of a separate account in the name of the alternate payee reflecting the chapter 238A; (b) The establishing of criteria to determine whether domestic relations judgments, orders and agreements comply with this section; and (c) The definitions and procedures for the administration of this section. (4) An alternate payee may designate a beneficiary for the purposes of death benefits payable under ORS 238.390 and 238.395. Subject to ORS 238A.410 (2), an alternate payee may designate a

2 judgment's, order's or agreement's distribution of the member's benefits under this chapter or ORS
3

4
5

6
7 8

9 beneficiary for the purposes of death benefits payable under ORS 238A.410. If the alternate payee 10 fails to designate a beneficiary for the purposes of death benefits payable under ORS 238.390 and 11
12 13

238.395, the benefits shall be paid as provided by ORS 238.390 (2). If the alternate payee fails to designate a beneficiary for the purposes of death benefits payable under ORS 238A.410, the benefits shall be paid as provided by ORS 238A.410 (3). If a judgment, order or agreement awards an interest

14 to an alternate payee, and if the alternate payee predeceases the member before the alternate payee 15 has commenced receiving benefits, the alternate payee shall be considered a member of the system 16 who died before retiring for the purposes of the death benefits provided in ORS 238.390, 238.395,
17 18 19 20 21 22 23 24 25 26 27 28

238A.230 and 238A.410, but for purposes of the death benefits provided in ORS 238.395, the alternate payee shall be considered a member of the system who died before retiring only if the member would have been eligible for death benefits under ORS 238.395 had the member died at the same time as the alternate payee. Payment of the deatb benefits to the beneficiaries, estate or other persons entitled to receive the benefits under ORS 238.390, 238.395, 238A.230 and 238A.410, shall constitute payment in full of the alternate payee's interest under the judgment, order or agreement. (5) Any increase in the retirement allowance provided to the member shall increase the amounts paid to the [spouse or former spouse oj the mem6er] alternate payee in the same proportion, except that: (a) An alternate payee is not entitled to receive cost-of-living adjustments under ORS 238.360 or any other retirement allowance increase until benefits are first paid from the system on behalf of the member[.); and
(b) Cost-of-living adjustments under OR14 238.360 or 238A.210 to the retirement allowance

29

30 paid to an alternate payee shall be calculated on the basis of the amount of the alternate 31 payee's yearly allowance or yearly pension or benefit, as those terms are de5ned in ORS
32 33 34 35 36 37 38 39

238.860 and 238A.210.

(6) An alternate payee under this section is not eligible to receive the benefits provided under ORS 238.410, 238.415, 238.420 and 238.440 by reason of the provisions of this section. (7) An alternate payee who elects to begin receiving payments under subsection (1) of this section before the member's effective date of retirement is not eligible to receive any additional payment by reason of credit in the system acquired by the member after the alternate payee begins to receive payments. (8) Subsection (1) of this section applies only to payments made by the board after the date of

40 receipt by the board of written notice of the judgment, order or agreement and such additional in41 formation and documentation as the board may prescribe. 42 (9) Whenever the board is required to make payment to an alternate payee under the provisions alternate payee actual and reasonable administrative expenses and related costs incurred by the board in obtaining data and making calculations that are necessary by reason of the provisions of 43 of this section, the board shall charge and crollect out of the benefits payable to the member and the
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this section. The board may not charge more than $300 for total administrative expenses and related visions of this section. The board shall atlocate expenses and costs charged under the provisions of this subsection between the member and the alternate payee based on the fraction of the benefit received by the member or alternate payee.
(10) Unless otherwise provided by the judgment, order or agreement, a member has no interest

2 costs incurred in obtaining data or making calculations that are necessary by reason of the pro3 4 5 6 7 8 9 l0 11

in the benefit payable to an alternate payee under this section. Upon the death of an alternate payee, the board shall make such payment to the beneficiary designated by the alternate payee as may be required under the form of benefit elected by the alternate payee. If a death benefit is payable under ORS 238.390 or 238.395 by reason of the death of an alternate payee, payment of the death benefit shall be made to the beneficiary designated by the alternate payee under ORS 238.390
(11) As used in this section, "court" means any court of appropriate jurisdiction of this or any

12 (1), or as otherwise provided by ORS 238.390 and 238.395. 13 14 15 16 17 18 19

20 21 22 23 24 25 26 27 28 29 30 31 32

other state or of the District of Columbia.

SUPPLEMENTARY PAYMENTS

SECTION 7. Section 8 of this 2013 special session Act is added to and made a part of ORS
chapter 238.

SECTION S. (1) As used in this section:

(a) "Yearly allowance" has the meaning given that term in ORS 238.360. (b) "Yearly pension or benefit" has the meaning given that term in ORS 238A.210. (2) Each year, the Public Employees Retirement Board shall make a supplementary payment to each member or member's beneficiary. The supplementary payment shall be equal to 0.25 percent of the member's or member's beneficiary's yearly allowance or yearly pension or benefit, but in no event may the supplementary payment egceed $150. (3) In addition to the supplementary payment under subsection (2) of this section, the board shall make an additional supplementary payment each year to each member or member's beneficiary with a yearly allowance or yeariy pension or benefit of $20,000 or less. A supplementary payment made under this subsection shall be equal to 0.25 percent of the member's or member's beneficiary's yearly allowance or yearly pension or benefit.
(4) The board shall make the first supplementary payments under subsections (2) and (3)

33
34 35 36 37 38

of this section in 2014. (5) A supplementary payment made under this section may not be included in a member's or member's beneficiary's yearly allowance or yearly pension or benefit for purposes of calculating cost-of-living adjustments under ORS 238.360, 238.575 or 238A.210. (6) The board shall pay supplementary payments under this section out of the reserve account established under ORS 238.670 (1).

39 40 41
42 43

REPORT TO LEGISLATURE

SECTION 9. On or before September 30, 2018, the Public Employees Retirement Board
shall report to the Governor, the President of the Senate and the Speaker of the House of Representatives on: (1) Recommendations relating to the cost-of-living adjustment under the Public Employ-

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ees Retirement System;

(2) Recommendations relating to the continuation of supplementary payments to mem-

bers and members' beneficiaries under section 8 of this 2013 special session Act; and
(3) Recommendations on approaches to calculating cost-of-living adjustments under the

system that take into consideration a retired member's years of creditable service. SUNSET

SECTION 10. Sections 8 and 9 of this 2013 special session Act are repealed on December
31, 2019.

JUDICIAL REVIEW

SECTION 11. (1) Jurisdiction is conferred on the Supreme Court to determine in the
between members of the Public Employees Retirement System and their employers, violates
any constitutional provision, including but not limited to impairment of contract rights of

15 manner provided by this section whether this 2013 special session Act breaches any contract
16 17 18 19 20 21 22 23 24 25 26 27 28 29 30 31 32 33 34 35 36 37 38 39 40 41 42 43 44 45

members of the Public Employees Retirement System under Article 1, section 21, of the
Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or

is invalid for any other reason. (2) A person who is adversely affected by this 2013 special session Act or who will be adversely affected by this 2013 special session Act may institute a proceeding for review by filing with the Supreme Court a petition that meets the following requirements: (a) The petition must be filed within 60 days after the effective date of this 2013 special session Act.
(b) The petition must include the following: (A) A statement of the basis of the challenge; and

(B) A statement and supporting affidavit showing how the petitioner is adversely affected. (3) The petitioner shall serve a copy of the petition by registered or certified mail upon the Public Employees Retirement Board, the Attorney General and the Governor. (4) Proceedings for review under this section shall be given priority over all other matters before the Supreme Court. (5) The Supreme Court shall allow public employers participating in the Public Employees Retirement System to intervene in any proceeding under this section.
(6) In the event the Supreme Court determines that there are factual issues in the peti-

tion, the Supreme Court may appoint a special master to hear evidence and to prepare recommended findings of fact. CAPTIONS

SECTION 12. The unit captions used in this 2013 special session Act are provided only for
the convenience of the reader and do not become part of the statutory law of this state or egpress any legislative intent in the enactment of this 2013 special session Act.

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EMERGENCY CLAUSE

SECTION 13. This 2013 special session Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to eszst, and this 2013 special session Act takes efPect on its passage.

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77th OREGON LEGISLATIVE ASSEMBLY-2013 Regular Session

Enrolled

Senate Bill 822

Sponsored by Senator DEVLIN, Representative BUCKLEY
CHAPTER

AN ACT

Relating to public employee retirement; creating new provisions; amending ORS 237.635, 237.637, 238.360, 238.372, 238.374, 238.376, 238.378, 238.575, 238A.210 and 314.840; limiting expenditures; and declaring an emergency. Be It Enacted by the People of the State of Oregon:

COST-OF-LIVING ADJUSTMENT

SECTION 1. ORS 238.360 is amended to read:

238.360. (1) As soon as practicable after January 1 each year, the Public Employees Retirement Board shall detennine the percentage increase or decrease in the cost-of-living for the previous calendar year, based on the Consumer Price Index (Portland area-all items) as published by the Bureau of Labor Statistics of the. U.S. Department of Labor for the Portland, Oregon, area. Prior to July 1 each year the allowance which the member or the member's beneficiary is receiving or is entitled to receive on August 1 for the month of July shall be multiplied by the percentage figure determined, and the allowance for the next 12 months beginning July 1 adjusted to the resultant amount. (2) Such increase or decrease shall not exceed [two] 1.5 percent of any monthly retirement allowance in any year and no allowance shall be adjusted to an amount less than the amount to which the recipient would be entitled if no cost-of-living adjustment were authorized. (3) The amount of any cost-of-living increase or decrease in any year in excess of the maximum annual retirement allowance adjustment of [two] 1.5 percent shall be accumulated from year to year and included in the computation of increases or decreases in succeeding years. (4) Any increase in the allowance shall be paid from contnbutions of the public employer under ORS 238.225. Any decrease in the allowance shall be returned to the employer in the fonn of a credit against contributions of the employer under OR.S 238.225. SECTION 2. The amendments to ORS 238.360 by section 1 of this 2013 Act apply to all adjustments to allowances made under ORS 238.360 on and after July 1, 2013, and before July 1, 2014. SECTION 3. ORS 238.360, as amended by section 1 of this 2013 Act, is amended to read: 238.360. [(1) As soon as practicable after January 1 each year, the Public Employees Retirement Board shall determine the percerctage increase or decrease in the cost-of-living for the previous calendar year, based on the Consumer Price Indez (Portland area-all items) as published by the Bureau of Labor Statistics of the U.S. Departmerzt of Labor for the Portland, Oregoa, area. Prior to July 1 each year the allowance which the member or the member's beneficiary is receivirsg or is entitled to receive on
Enrolled Senate Bill 822 (SB 822-A) Page 1

August 1 for the month of July shall be multiplied by the percentage figure deterrnined, and the allowance for the next 12 months beginning July 1 adjusted to the resultant amount.] On Jnly 1 of each

year, the Public Employees Retirement Board shall increase the yearly allowance that a member or member's beneficiary receives or is entitled to receive, as provided in subsections (2) and (3) of this section. The increase is first payable with the allowance that the member or the member's beneficiary receives or is entitled to receive on August 1.
[(2) ,Such increase or decrease shall not ezceed 1.5 percent of any monthly retirement allowance in any year and no allowance shall be adjusted to an amount less than the amount to which the recipient would be entitled if no cost-of-living adjustment were authorized.] [(3) The amount of any cost-of-liuing increase or decrease in any year in excess of the maximum annual retirement allowance adjustment of 1.5 percent sha11 be accumulated from year to year and included in the computation of increases or decreases in succeeding years.]

(2)(a) If the member's or member's beneficiary's yearly allowance for the previous year totaled $20,000 or less, the allowance shall be increased by two percent. (b) If the member's or member's beneficiary's yearly allowance for the previous year totaled more than $20,000 but not more than $40,000, the allowance shall be increased by $400 plus 1.5 percent of the amount of the yearly allowance exceeding $20,000. (c) If the member's or member's beneficiary's yearly allowance for the previous year totaled more than $40,000 but not more than $60,000, the a.11owance shall be increased by $700 plus one percent of the amount of the yearly allowance exceeding $40,000. (d) If the member's or member's bene5ciary's yearly allowance for the previous year totaled more than $60,000, the allowance shall be increased by $900 plus .25 percent of the amount of the yearly allowance egceeding $60,000. (3) If a member or member's beneficiary has been receiving an allowance for less than 12 months on July 1 of any year, the board shall calculate the increa,se under subsection (2) of this section on the basis of the yearly allowance the member or member's beneSiciary would have received if the member or member's beneficiary had received the monthly allowance for 12 months. (4) Any increase in the allowance shall be paid from contributions of the public employer under ORS 238.225. [Any decrease in the allowance shall be returned to the employer in the form of a credit
against contributi.ons of the employer under ORS 238.225.1

SECTION 4. The amendments to ORS 238.360 by section 3 of this 2013 Act apply to all increases to allowances made under ORS 238.360 on and after July 1, 2014. SECTION 5. ORS 238A.210 is amended to read: 238A.210. (1) As soon as practicable after January 1 each year, the Public Employees Retirement Board shall determine the percentage increase or decrease in the cost of living for the previous calendar year, based on the Portland-Salem, OR-WA, Consumer Price Index for All Urban Consumers for All Items, as published by the Bureau of Labor Statistics of the United States Department of Labor. Before July 1 each year, the board shall adjust every pension payable under ORS 238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death benefit payable under ORS 238A.230 by multiplying the monthly payment by the percentage figure determined by the board. If a person has been receiving a pension or benefit for less than 12 months on July 1 of a calendar year, the board shall make a pro rata reduction of the adjustment based on the number of months that the pension or benefit was received before July 1 of the year. The adjustment shall be made for the payments payable on August 1 and thereafter. (2) An increase or decrease in the benefit payments under this section may not exceed [two] 1.5 percent in any year. A pension or death benefit may not be adjusted to an amount that is less than the amount that would have been payable if no cost-of-living adjustment had been made since the pension or death benefit first became payable. SECTION 6. The amendments to ORS 238A,210 by section 5 of this 2013 Act apply to all adjustments to pensions or benefits made under OR.S 238A.210 on and after July 1, 2013, and before July 1, 2014.
Enrolled Senate Bill 822 (SB 822-A) Page 2

SECTION 7. ORS 238A.210, as amended by section 4 of this 2013 Act, is amended to read: 238A-210. [(1) As soon as practicable after January 1 each year, the Public Employees Reti.rement
Board shall determine the percentage increase or decrease in the cost of living for the previous calendar year, based on the Portland-Salem, OR-BVA, Consum.er Price Index for All Urban Consumers for Al1 Items, as published by the Bureau of Labor Statistics of the United States Department of Labor. Before July 1 each year, the board shall adjust every pensaon payable under ORS 238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death benefit payable under ORS 238A.230 by multiplying the monthly paym.ent by the percentage fcgure determzned by the board. If a person has been receiving a pension or benefat fvr less than 12 months on July 1 of a calendar year, the board shall make a pro rata reduction of the adjustment based on the number of months that the pension or benefit was received before July 1 of the year. The adjustment shall be made for the payments payable on August 1 and therea}ler.] [(2) An increase or decrease in the benefit payments under this section may not exceed 1.5 percent in any year. A pension or death benefit may not be adjusted to an amount that is less than the amount that would have been payable if no cost-of-living adjustment had been made since the pension or death benefit first became payable.]

(1) On July 1 of each year, the board shall increase every pension payable under ORS 238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death benefit payable under ORS 238A.230 as provided in subsections (2) and (3) of this section. The increase shall be made for the payments payable on August 1 and thereafter. (2)(a) If a person's yearly pension or benefit for the previous year totaled $20,000 or less, the pension or benefit shall be increased by two percent. (b) If a person's yearly pension or benefit for the previous year totaled more than $20,000 but not more than $40,000, the pension or benefit shall be increased by $400 plus 1.5 percent of the amount of the yearly pension or benefit egceeding $20,000. (c) If a person's yearly pension or benefit for the previous year totaled more than $40,000 but not more than $60,000, the pension or benefit shall be increased by $700 phus one percent of the amount of the yearly pension or benefit egceeding $40,000. (d) If a person's yearly pension or benefit for the previous year totaled more than $60,000, the pension or benefit shall be increased by $900 plus .25 percent of the amount of the yearly pension or benefit ezceeding $60,000. (3) If a person has been receiving a pension or benefit for less than 12 months on July 1 of any year, the board shall calculate the increase under subsection (2) of this section on the basis of the yearly allowance the person would have received if the person had received the pension or benefit for 12 months. SECTION 8. The amendments to OHS 238A.210 by section 7 of this 2013 Act apply to all increases to pensions or beneFits made under ORS 238A.210 on and after July 1, 2014. SECTION 9. (1) The amendments to ORS 238.360 and 238A.210 by sections 3 and 7 of this 2013 Act become operative on July 1, 2014. (2) The Public Employees Retirement Board may take any action befiore the operative date specified in subsection (1) of this section to enable the board, on and after the operative date specified in subsection (1) of this section, to exercise ali the duties, functions and powers conferred on the board by the amendments to ORS 238.360 and 238A210 by sections 3 and 7 of this 2013 Act. SECTION 10. ORS 238.575 is amended to read: 238.575. (1) Every monthly retirement allowance or pension payable to a judge member or surviving spouse of a judge member under ORS 238.500 to 238.585 shall be adjusted annually [to reflect the percentage increase or decrease in the cost of 1i.ving] as provided in ORS 238.360. (2) ORS 238.368 applies to judge members, and for that purpose the monthly retirement allowance referred to in ORS 238.368 shall be the monthly retirement allowance payable to a judge member or the monthly pension payable to the surviving spouse of a judge member under ORS 238.565 (3)(a).
Enrolled Senate Bill 822 (SB 822-A) Page 3

TA%ATION OF OIIT-OF-STATE RETIBEES

SECTION 11. ORS 238.372 is amended to read:

238.372. (1) Except as provided in ORS 238.372 to 238.384, the Public Employees Retirement Board may not pay the increased [benefit] benefits provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, if the board receives notice under ORS 238.372 to 238.384 that the payments made to the person under this chapter are not subject to Oregon personal income tax under ORS 316.127 (9). [(2) The prouisions of ORS 238.372 to 238.384 do not apply to:]
[(a) A retired member of the system who is receiving payments under this chapter and whose effective date of retirement is before January 1, 2012;1 [(b) A person who is receiving payments under this chapter by reason of the retirement of a member whose effective date of retirement is before January 1, 2012; and] [(c) Any other person who receives payments under this chapter that began before January 1, 2012.] [(3)] (2) The'board shall give written notification of the provisions of ORS 238.372 to 238.384 to

all persons applying for or receiving payments under this chapter. [(4)] (3) A person receiving payments under this chapter that are not increased under chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, by reason of ORS 238.372 to 238.384 has no right or claim to the increased benefit provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, except as provided in ORS 238.372 to 238.384. SECTION 12. ORS 238.374 is amended to read: 238.374. (1) A person applying for payments under this chapter shall give a written statement to the Public Employees Retirement Board that indicates whether the payments will be subject to Oregon personal income tax under ORS 316.127 (9). ff the person fails to provide the statement required by this subsection, or the statement indicates that the payments will not be subject to Oregon personal income tax under ORS 316.127 (9), the board may not pay the person the increased [benefit] benefits provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995. (2) If a person is receiving payments under this chapter that have not been increased under chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, by reason of the provisions of subsection (1) of this section, and thereafter the payments become subject to Oregon personal income tax under ORS1 316.127 (9), the person shall promptly notify the Public Employees Retirement Board by written statement that the payments are subject to Oregon personal income tax nnder ORS 316.127 (9). (3) If a person is receiving payments under this chapter that have not been increased under chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, by reason of the provisions of subsection (1) of this section, and the board receives notice under subsection (2) of this section that payments to the person under this chapter are subject to Oregon personal income tax nnder OIiS 316.127 (9), or determines under ORS 238.378 that payments to the person under this chapter are subject to Oregon personal income tax under Ol[iS 316.127 (9), the board shall initiate payment of the increased [benefit] benefits provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995. The increase in benefits becomes effective on the first day of the calendar year following receipt of notice by the board. SECTION 13. ORS 238.376 is amended to read: 238.376. (1) If a person is receiving payments under this chapter, and afker the payments commence the payments cease to be subject to Oregon personal income tax under ORS 316.127 (9), the person shall promptly notify the Public Employees Retirement Board by written statement that the payments are no longer subject to Oregon personal income tax nnder ORS 316.127 (9). The board shall reduce any benefits payable to the person by the amount by which the benefits were increased under chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995. The reduction in benefits becomes effective on the first day of the calendar year following receipt of notice by the board.
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(2) If a person is receiving payments under this chapter that have been reduced [under the prouisions of subsection (1) of this section] because the payments are not subject to Oregon personal income tag under OftS 316.127 (9), and thereafter the payments become subject to Oregon personal income tax under 088 316.127 (9), the person shall promptly notify the board by written statement that the payments are once again subject to Oregon personal income tax under ORS 316.129 (9). (3) If a person is receiving payments under this chapter that have been reduced [under the prouisions of subsectioa (1) of this section] becanse the payments are not subject to Oregon personal income tag under ORS 316.127 (9), and the board receives notice under subsection (2) of this section that payments to the person under this chapter are once again subject to Oregon personal income tax under ORS 316.127 (9), or determines under ORS 238.378 that payments to the person under this chapter are once again subject to Oregon personal income taa under ORS 316.127 (9), the board shall resume payment of the increased [benef"it] benefits provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995. The increase in benefits becomes effective on the first day of the calendar year following receipt of notice by the board. SECTION 14. ORS 238.378 is amended to read: 238.378. (1) Not less than once each calendar year, the Public Employees Retirement Board shall provide to the Department of Revenue information identifying persons to whom payments have been made under this chapter. The Department of Revenue shall provide to the board such information on Oregon personal income tax returns as the board deems necessary to determine whether the payments made to the person under this chapter are subject to Oregon personal income tax under ORS 316.127 (9). (2) If the board determines that the payments made to a person under this chapter are not subject to Oregon personal income tax under ORS 316.127 (9) based on information provided by the Department of Revenue under this section, and the person is receiving the increased benefit provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, the board shall reduce the benefits payable to the person as provided in ORS 238.376 (1). (3) If the board determines that the payments made to a person under this chapter are subject to Oregon personal income tax under ORS 316.127 (9) based on information provided by the Department of Revenue under this section, and the person is not receiving the increased benefit provided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, the board shall increase the benefits payable to the person as provided in ORS 238.374 (3) or 238.376 (3). SECTION 15. ORS 237.635 is amended to read: 237.635. (1) Any public employer that provides retirement benefits to its police officers and firefighters other than by participation in the Public Employees Retirement System pursuant to the provisions of ORS 237.620 shall provide increases to the police officers and firefighters of the public employer, both active and retired, that are equal to the increases in retirement benefits that are provided for in this 1991 Act for active and retired police officers or firefighters who are members of the Public Employees Retirement System, or shall provide to those police of$cers and firefighters increases in retirement benefits that are the actuarial equivalent of the increases in retirement benefits that are provided for in this 1991 Act for police officers or firefighters who are members of the Public Employees Retirement System. No other retirement benefit or other benefit provided by those public employers shall be decreased by the employer by reason of the increases mandated by this section. (2) The increased benefits provided for in this section apply only to police officers or firefighters who establish membership before July 14, 1995, in a retirement plan or system offered by a public employer in lieu of inembership in the Public Employees Retirement System pursuant to the provisions of ORS 237.620. (3) A public employer that is subject to the requirements of this section shall cease paying increased retirement benefits under this section if the payments made to the person are not subject to Oregon personal income tag under OB.S 316.127 (9). A public employer that is subject to the requirements of this section shall adopt procedures similar to those described in ORS 238.372 to 238.384 for the purpose of implementing this subsection. The DeEnrolled Senate Bill 822 (SB 822-A) Page 5

partment of Revenue shall provide to a public employer that is subject to the reqnirements of this section the information regarding Oregon personal income taz returns that the public employer deems necessary to deterntine whether the retirement benefcts paid to the person by the public employer are subject to Oregon personal income tax under ORS 316.127 (9). SECTION 16. ORS 237.637 is amended to read: 237.637. (1) Any public employer that provides retirement benefits to its police officers and firefighters other than by participation in the Public Employees Retirement System pursuant to the provisions of ORS 237.620 shall provide inereases to the police officers and firefighters of the public employer, both active and retired, that are equal to the increases in retirement benefits that are provided for in chapter 569, Oregon Laws 1995, for active and retired police officers or firefighters who are members of the Public Employees Retirement System, or the public employer shall provide to those police officers and firefighters increases in retirement benefits that are the actuarial equivalent of the increases in retirement benefits that are provided for in chapter 569, Oregon Laws 1995, for police officers or firefighters who are members of the Public Employees Retirement System. Increases provided under this section shall be reduced by the amount of any benefit increase provided by ORS 237.635 in the same manner that increases in retirement benefits that are provided for in chapter 569, Oregon Laws 1995, for active and retired police officers or firefighters who are members of the Public Employees Retirement System are reduced to reflect amounts paid to those members under the provisions of chapter 796, Oregon Laws 1991. No other retirement benefit or other benefit provided by those public employers shall be decreased by the employer by reason of the increases mandated by this section. (2) A public employer that is subject to the requirements of this section shall cease paying increased retirement benefits under this section if the payments made to the person are not subject to Oregon personal income tag under OR.S 316.127 (9). A public employer that is subject to the requirements of this section shall adopt procedures similar to those described in ORS 238.372 to 238.384 for the purpose of implementing this subsection. The Department of Revenue shall provide to a public employer that is subject to the requirements of this section [such] the information regarding Oregon personal income tax returns [as] that the public employer deems necessary to determine whether the retirement benefits paid to the person by the public employer are subject to Oregon personal income tax under ORS 316.127 (9). [(3) The provisions of subsection (2) of this section do not apply to:]

[(a) A retired police officer or firefighter who is receiving payments under the public employer's plan and whose ef)ective date of retirement is before January 1, 2012;] [(b) A person who is receiving payments under the public employer's plan by reason of the retirement of a police officer or farefighter whose efj`ective date of retirement is before January 1, 2012; and] [(c) Any other person who receives payments under the public employer's plan that began before January 1, 2012.1 SECTION 17. ORS 314.840, as amended by section 11, chapter 107, Oregon Laws 2012, is amended to read: 314.840. (1) The Department of Revenue may: (a) Furnish any taxpayer, representative authorized to represent the taxpayer under ORS 305.230 or person designated by the taapayer under ORS 305.193, upon request of the tagpayer, representative or designee, with a copy of the taxpayer's income tax return filed with the department for any year, or with a copy of any report filed by the taxpayer in connection with the return, or with any other information the department considers necessary. (b) Publish lists of taxpayers who are entitled to unclaimed tax refunds. (c) Publish statistics so classified as to prevent the identification of income or any particulars contained in any report or return. (d) Disclose a taxpayer's name, address, telephone number, refund amount, amount due, Social Security number, employer identification number or other taxpayer identification number to the extent necessary in connection with collection activities or the processing and mailing of correspondEnrolled Senate Bill 822 (SB 822-A) Page 6

ence or of forms for any report, return or claim required in the administration of ORS 310.630 to 310.706, any local tax under ORS 305.620, or any law imposing a tax upon or measured by net income. (2) The department also may disclose and give access to information described in ORS 314.835 to: (a) The Governor of the State of Oregon or the authorized representative of the Governor: (A) With respect to an individual who is designated as being under consideration for appointment or reappointment to an office or for employment in the office of the Governor. The information disclosed shall be confined to whether the individual: (i) Has filed returns with respect to the taxes imposed by ORS chapter 316 for those of not more than the three immediately preceding years for which the individual was required to file an Oregon individual income tax return. (ii) Has failed to pay any tax within 30 days from the date of mailing of a deficiency notice or otherwise respond to a deficiency notice within 30 days of its mailing. (iii) Has been assessed any penalty under the Oregon personal income tax laws and the nature of the penalty. (iv) Has been or is under investigation for possible criminal offenses under the Oregon personal income tax laws. Information disclosed pursuant to this paragraph shall be used only for the purpose of making the appointment, reappointment or decision to employ or not to employ the individual in the office of the Governor. (B) For use by an officer or employee of the Oregon Department of Administrative Services duly authorized or employed to prepare revenue estimates, or a person contracting with the Oregon Department of Administrative Services to prepare revenue estimates, in the preparation of revenue estimates required for the Governor's budget under ORS 291.201 to 291.226, or required for submission to the Emergency Board or the Joint Interim Committee on Ways and Means, or if the Legislative Assembly is in session, to the Joint Committee on Ways and Means, and to the Legislative Revenue Officer or Legislative Fiscal Officer under ORS 291.342, 291.348 and 291.445. The Department of Revenue shall disclose and give access to the information described in ORS 314.835 for the purposes of this subparagraph only if: (i) The request for information is made in writing, specifies the purposes for which the request is made and is signed by an authorized representative of the Oregon Department of Administrative Services. The form for request for information shall be prescribed by the Oregon Department of Administrative Services and approved by the Director of the Department of Revenue. (ii) The officer, employee or person receiving the information does not remove from the premises of the Department of Revenue any materials that would reveal the identity of a personal or corporate taapayer. (b) The Commissioner of Internal Revenue or authorized representative, for tax administration and compliance purposes only. (c) For tax administration and compliance purposes, the proper officer or authorized representative of any of the following entities that has or is governed by a provision of law that meets the requirements of any applicable provision of the Internal Revenue Code as to confidentiality: (A) A state; (B) A city, county or other political subdivision of a state; (C) The District of Columbia; or (D) An association established exclusively to provide services to federal, state or local taxing authorities. (d) The Multistate Tax Commission or its authorized representatives, for tax administration and compliance purposes only. The Multistate Tax Commission may make the information available to the Commissioner of Internal Revenue or the proper officer or authorized representative of any governmental entity described in and meeting the qualifications of paragraph (c) of this subsection. (e) The Attorney General, assistants and employees in the Department of Justice, or other legal representative of the State of Oregon, to the extent the department deems disclosure or access Enrolled Senate Bill 822 (SB 822-A) Page 7

necessary for the performance of the duties of advising or representing the department pursuant to ORS 180.010 to 180.240 and the tax laws of this state. (f) Employees of the State of Oregon, other than of the Department of Revenue or Department of Justice, to the extent the department deems disclosure or access necessary for such employees to perform their duties under contracts or agreements between the department and any other department, agency or subdivision of the State of Oregon, in the department's administration of the tax laws. (g) Other persons, partnerships, corporations and other legal entities, and their employees, to the extent the department deems disclosure or access necessary for the performance of such others' duties under contracts or agreements between the department and such legal entities, in the department's administration of the tax laws. (h) The Legislative Revenue Officer or authorized representatives upon compliance with ORS 173.850. Such officer or representative shall not remove from the premises of the department any materials that would reveal the identity of any taxpayer or any other person. (i) The Department of Consumer and Business Services, to the extent the department requires such information to determine whether it is appropriate to adjust those workers' compensation benefits the amount of which is based pursuant to ORS chapter 656 on the amount of wages or earned income received by an individual. (j) Any agency of the State of Oregon, or any person, or any officer or employee of such agency or person to whom disclosure or access is given by state law and not otherwise referred to in this section, including but not limited to the Secretary of State as Auditor of Public Accounts under section 2, Article VI of the Oregon Constitution; the Department of Human Services pursuant to ORS 314.860 and 412.094; the Division of Child Support of the Department of Justice and district attorney regarding cases for which they are providing support enforcement services under ORS 25.080; the State Board of Tax Practitioners, pursuant to ORS 673.710; and the Oregon Board of Accountancy, pursuant to ORS 673.415. (k) The Director of the Department of Consumer and Business Services to determine that a person complies with ORS chapter 656 and the Director of the Employment Department to determine that a person complies with ORS chapter 657, the following employer information: (A) Identification numbers. (B) Names and addresses. (C) Inception date as employer. (D) Nature of business. (E) Entity changes. (F) Date of last payroll. (L) The Director of Human Services to determine that a person has the ability to pay for care that includes services provided by the Eastern Oregon Training Center or the Department of Human Services to collect any unpaid cost of care as provided by ORS chapter 179. (m) The Director of the Oregon Health Authority to determine that a person has the ability to pay for care that includes services provided by the Blue Mountain Recovery Center or the Oregon State Hospital or the Oregon Health Authority to collect any unpaid cost of care as provided by ORS chapter 179. (n) Employees of the Employment Department to the extent the Department of Revenue deems disclosure or access to information on a combined tax report filed under ORS 316.168 is necessary to performance of their duties in administering the tax imposed by ORS chapter 657. (o) The State Fire Marshal to assist the State Fire Marshal in carrying out duties, functions and powers under ORS 453.307 to 453_414, the employer or agent name, address, telephone number and standard industrial classification, if available. (p) Employees of the Department of State Lands for the purposes of identifying, locating and publishing lists of taxpayers entitled to unclaimed refunds as required by the provisions of chapter 694, Oregon Laws 1993. The information shall be limited to the taxpayer's name, address and the refund amount. Enrolled Senate Bill 822 SB 822-FO
(I

Page 8

(q) In addition to the disclosure allowed under ORS 305.225, state or local law enforcement agencies to assist in the investigation or prosecution of the following criminal activities: (A) Mail theft of a check, in which case the information that may be disclosed shall be limited to the stolen document, the name, address and taxpayer identification number of the payee, the amount of the check and the date printed on the check. (B) The counterfeiting, forging or altering of a check submitted by a taxpayer to the Department of Revenue or issued by the Department of R.evenue to a taxpayer, in which case the information that may be disclosed shall be limited to the counterfeit, forged or altered document, the name, address and taxpayer identification number of the payee, the amount of the check, the date printed on the check and the altered name and address. (r) The United States Postal Inspection Service or a federal law enforcement agency, including but not limited to the United States Department of Justice, to assist in the investigation of the following criminal activities: (A) Mail theft of a check, in which case the information that may be disclosed shall be limited to the stolen document, the name, address and taxpayer identification number of the payee, the amount of the check and the date printed on the check. (B) The counterfeiting, forging or altering of a check submitted by a taxpayer to the Department of Revenue or issued by the Department of Revenue to a taxpayer, in which case the information that may be disclosed shall be limited to the counterfeit, forged or altered document, the name, address and taxpayer identification number of the payee, tfie amount of the check, the date printed on the check and the altered name and address. (s) The United States Financial Management Service, for purposes of facilitating the offsets described in ORS 305.612. (t) A municipal corporation of this state for purposes of assisting the municipal corporation in the administration of a tax of the mnnicipal corporation that is imposed on or measured by income, wages or net earnings from self-employment. Any disclosure under this paragraph may be made only pursuant to a written agreement between the Department of Revenue and the municipal corporation that ensures the confidentiality of the information disclosed. (u) A consumer reporting agency, to the extent necessary' to carry out the purposes of ORS 314.843. (v) The Public Employees Retirement Board, to the extent necessary to carry out the purposes of ORS 238.372 to 238.384, and to any public employer, to the extent necessary to carry out the purposes of ORS 237.636 (3) and 237.637 (2). (3)(a) Each officer or employee of the department and each person described or referred to in subsection (2)(a), (e) to (k) or (n) to (q) of this section to whom disclosure or access to the tax information is given under subsection (2) of this section or any other provision of state law, prior to beginning employment or the performance of duties involving such disclosure or access, shall be advised in writing of the provisions of ORS 314.835 and 314.991, relating to penalties for the violation of ORS 314.835, and shall as a condition of employment or performance of duties execute a certificate for the department, in a form prescribed by the department, stating in substance that the person has read these provisions of law, that the person has had them explained and that the person is aware of the penalties for the violation of ORS 314.835. (b) The disclosure authorized in subsection (2)(r) of this section shall be made only after a written agreement has been entered into between the Department of Revenue and the person described in subsection (2)(r) of this section to whom disclosure or access to the tax information is given, providing that: (A) Any information described in ORS 314.835 that is received by the person pursuant to subsection (2)(r) of this section is confidential information that may not be disclosed, except to the extent necessary to investigate or prosecute the criminal activities described in subsection (2)(r) of this section; (B) The information shall be protected as confidential under applicable federal and state laws; and Enrolled Senate Bill 822 (SB 822-A) Page 9

(C) The United States Postal Inspection Service or the federal law enforcement agency shall give notice to the Department of Revenue of any request received under the federal Freedom of Information Act, 5 U.S.C. 552, or other federal law relating to the disclosure of information. (4) The Department of Revenue may recover the costs of furnishing the information described in subsection (2)(k) to (m) and (o) to (q) of this section from the respective agencies. EMPLOYEB. CONTBIBUTION RATES

SECTION 18. (1) As soon as possible after the effective date of this 2013 Act, the Public Employees Retirement Board shall recalculate the contribution rates of all employers, pursuant to OBS 238.225, to reflect the provisions of this 2013 Act. (2) The board shall issue corrected contribution rate orders to employers affected by recalculated rates under this section within 90 days after the effective date of this 2013 Act. The corrected rates are effective July 1, 2013.
JUDICIAL B.EVIEW

SECTION 19. (1) Jurisdiction is c:onferred on the Supreme Court to determine in the manner provided by this section whether this 2013 Act breaches any contract between members of the Public Employees Betirement System and their employers, violates any constitutional provision, including but not limited to impairment of contract rights of inembers of the Public Employees Setirement System under Article I, section 21, of the Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or is invalid for any other reason. (2) A person who is adversely affected by this 2013 Act or who will be adversely affected by this 2013 Act may institute a proceeding for review by filing with the Supreme Court a petition that meets the following requirements: (a) The petition must be filed within 60 days after the effective date of this 2013 Act. (b) The petition must include the following: (A) A statement of the bas'vs of the challenge; and (B) A statement and supporting afiidavit showing how the petitioner is adversely affected. (3) The petitioner shall serve a copy of the petition by registered or certified mail upon the Public Employees Retirement Board, the Attorney General and the Governor. (4) Proceedings for review under this section shall be given priority over all other matters before the Supreme Court. (5) The Supreme Court shall allow public employers participating in the Public Employees Retirement System to intervene in any proceeding under thius section. (6) In the event the Supreme Court determines that there are factual issues in the petition, the Supreme Court may appoint a special master to hear evidence and to prepare recommended findings of fact.
E%PENDITURE LIMITATION

SECTION 20. Notwithstanding any other law limiting eapenditures, the amount of $1,008,151 is established for the biennium begiinning July 1, 2013, as the magimum limit for payment of egpenses from fees, moneys or other revenues, including Mfscellaneous R.eceipts, but escluding lottery funds and federal funds, collected or received by the Public Employees Retirement System for administrative and operating egpenses incurred in implementing the provi.sions of this 2013 Act.
CAPTIONS

Enrolled Senate Bill 822 (SB 822-A)

Page 10

SECTION 21. The unit captions used in this 2013 Act are provided only for the convenience of the reader and do not become part of the statutory law of this state or ezpress any legislative intent in the enactment of this 2013 Act.
EMEB.GENCY CLAUSE

SECTION 22. This 2013 Act being necessary for the immediate preservation of the public peace, health and safety, an emergency is declared to egist, and this 2013 Act takes effect on its passage.

Passed by Senate Apn1 11, 2013

Received by Governor.
..................... ...M ............................................................ 2013

---------------------------------------------- -----------------------....

Robert Taylor, Secretary of Senate

APpraved: ........................
M ........................................................... , 2013

........................................................----.....----------- --

Peter Courtney, President of Senate

..

............................................

Pas.sed by House April 24, 2013

John Kitzhaber, Governor Filed in O~'ice of Secretary of Statee

Tina Kotek, Speaker of House

...

.....................M-.----------.............---------------............... , 2013

............. ........... ........................................................

Kate Brown, Secretary of State

Enrolled Senate Bill 822 (SB 822-A)

Page 11

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