sb 822 amended pet rev, reynolds

8/13/2019 SB 822 Amended Pet Rev, Reynolds

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Verified Correct Copy of the Original 12/6/2013

IN THE SUPREME COURT OF THE STATE OF OREGONEVERICE MORO , TERRI DOMEN IGONI, CHAR LES CUSTER, JOHN

HAW KINS, MICHA EL ARKEN, EUGENE DITTER JOHN O'KIEF,SMITH, LANE JOHNSON, GREG CLOUSER, BRANDON SILENCNOZVICKERY, and JIN V OEK D e ~ti1~ ~ ~6~etrtioners, ~w , ~ v. .

STATE OF OREGON , STATE , OF O REG ON by and through the Department ofCorrections , LINN CO UNT Y, CITY OF PORT LAN D, CITY OF SALEM ,TUALATIN VALLEY FIRE & RESCUE, ESTACADA SCHOO L DISTRICT,

OREGO N CITY SCHOO L DISTRICT, ONTAR IO SCHOOL DISTRICT,BEAVERTO N SCHOO L DISTRICT, WEST LINN SCHOOL DISTRICT, BEND

SCHOO L DISTRICT, and PUBLIC EMPLOY EES RETIREMENT BOA RD,Respondents,

AndLEAGUE OF OREG ON CITIES; OREGO N SCHOO L BOARDS ASSOCIATION;

CENTRAL OREGO N IRRIGATION DISTRICT; and ASSOCIATION O FOREGO N COUNTIES,

Intervenors.S061452 (C ontrol)


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Petitioner,V .

PUBLIC EM PLOYE ES RETIREM ENT BO ARD , State of Oregon; and JOHN A .KITZH ABER , Governor, State of Oregon,Respondents

S061454

GEORGE A. RIEMER,Petitioner,

V.STATE OF OREGON, OREGON GOVERN OR JOHN KITZHABER, OREGON

ATTORNEY GENERA L ELLEN ROSENBLUM, OREGON PUBLICEMPLOYEES RETIREMENT BOARD, and OREGON PUBLIC EMPLOY EES

RETIREMENT SYSTEM,Respondents.S061475


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For Judicial Review o f Senate Bi11822 and did so w ithin 60 da ys of the effective dateof Senate B ill 822.

Pursuant to S enate Bill 861, 11, proceed ings for direct review challenging thevalidity of Senate Bill 861 may be filed in the Suprem e C ourt within 60 days of thebill's effective date. Petitioner Reynolds is filing this Amended Petition for JudicialRev iew, which includes a challenge to S enate Bi11861, w ithin 60 days of the effectivedate of Senate B ill 861.

The parties to the judicial review proceeding (consolidated) are set forth in thecaption and are incorporated by reference herein. The nam es, bar numbers, addresses,email addresses and telephone number o f the attorneys representing the parties, and ofthe parties who are appearing pro se, are as follows:Michael D. Reynolds, OSB#742694 (Inactive),W SB# 13058 (Active), Petitioner pro se8012 Sunnyside A ve N , Seattle, W A 98103mreynolds 14gcomcast.netTelephone: (206) 910-6568Anna M arie Joyce, OSB # 013112Anna. j oyce(kdo i. state. or.usSolicitor General400 Justice Building


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Edward H. Trompk e, OSB #843653ed.tompkena,j ordanramis. comJordan Ramis PCTwo Centerpointe Drive, 6 1 FloorLake Oswego, OR 97035Telephone: (503) 598-5532Attorney for Tualatin Valley Fire & RescueEugene J. Karandy II, OSB 972987karandykco.linn.or.us*Office of the County AttorneyLinn County Courthouse104 Fourth Avenue SW , Room 123PO Box 100Albany, OR 97321-0021

Telephone: (541) 967-3840Michael Eliason, OSB #085771meliasongaocweb.orgAssociation of Oregon C ounties1201 Court St NE Ste 300Salem, OR 97301Telephone: (971) 218-0945

Attorneys for Linn CountyHarry Auerbach, OSB #821830

.


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M iller Nash LLP111S.W. Fifth Ave, Ste 3400Portland, OR 97204-3699Telephone: (503) 205-2330Attorney for Beav erton School D istrictGeorge A. R iemer, Pro SeGeorge.riemerna,azbar.org1501 W . W ashington St., Ste 229Phoenix, AZ 85007Telephone: (623) 238-5039Wayne Stanley Jones, Pro Sewstandm -ga,gmail.com18 North Foxhill RoadNorth Salt Lake, U tah 84054Telephone: (801) 296-1552W . Michael Gillette, OSB #660458wm illettekschwabe.comLeora Coleman-Fire, OSB #113581lcoleman-firegschwabe.comSara Kobak, OS B #023495skobak(~,schwabe.comSchwabe, Williamson & Wyatt1211 SW 5' Ave, Ste 1900Portland, OR 97204


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Attorneys for Oregon Schoo l Boards Assn., Intervenor; respondents EstacadaSchool D ist.; Oregon C ity School District; Ontario School District; West Linn S choolDistrict; Bend Schoo l District.Of attorneys for Association of Oregon Counties, Intervenor, and Linn Co unty

Kristian S. Roggendorfkra,roggendorf-law.com5200 SW M eadows Road, Ste 150Lake Oswego, OR 97035Telephone: (503) 726-5927

Attorney for C entral Oregon Irrigation District, IntervenorPetitioner submits that sections 11-16 of S enate Bi11822 unlawfully reduce the

benefits of PERS mem bers not residents or domiciliaries of the State of O regon.First, the reduction in ben efits either impairs the obligation o f the PE RS contract withsome of its members, in v iolation of A rticle I, section 21 o f the Oregon Con stitution,or breaches the PE RS contract. The reduction in benefits solely for non-resident, non-domiciliary PE RS retirees would e stablish a bene fit payment plan that paid a differentlevel of benefits to retirees based solely on their residency after retirement. The basicpremise of equal benefit paymen ts regardless of a mem ber's residency after retiremen thas been so firmly rooted in the PE RS statutory scheme since its inception as toamount to a term of the PERS contract. No provision in the PERS statutory scheme


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Petitioner further submits that Se nate Bill 861, section 1, together with SenateBill 822, sections 1 and 3, impair the obligation of the PER S contract with PER Smem bers who retired prior to the effective date of those bills (October 8, 2013, andM ay 5, 2013, respectively), or, alternatively, breach the PER S contract with PER Smem bers. For PERS mem bers like petitioner Reynolds who retired prior to M ay 5,2013, OR S 238.360, at the time of their retirement, provided that PER B "shall" adjusta PER S m ember's annual benefit amoun t (a cost of living allowance, or "CO LA ") bya percentage amount determined by PER B and based on the Con sumer Price Index forthe Portland area, up to a maxim um of 2.0%. T he statute further provided that anyamount in excess o f 2.0% "shall be accumulated from year to year and included in thecomputation" of the CO LA in succeeding years. ORS 238.360 and, specifically, theCO LA benefits provided thereunder, are a term of the PER S contract with these PER Smem bers. Senate Bill 822 and Senate Bi11861 amend O RS 238.360 to reduce theCO LA percentage and delete the accumulation provision, thereby reducing theretirement bene fits that these PE RS mem ber were prom ised at the time they retiredfrom public service. In doing so, Senate Bill 822 and Senate Bill 861 impair anobligation o f the PER S con tract with its retired m embers, or breach that contract.W hether an impairment of the obligation of contracts or a breach of contract,


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challenge is to two legislative enactmen ts, there is no agen cy record to shorten. Thiscourt previously ordered that a special master be appointed to take ev idence and m akerecommended findings of fact regarding the challenges to Senate Bill 822. Pursuantto that order, the court appointed Judge Stephen B ushong to serve as special master inthese consolidated proceedings. It is petitioner's position that the legal challenges toSenate B ill 861 and S enate Bill 822 should be heard and considered together, andtherefore submits that the court 's order appo inting a special master should extend tothe review of Senate Bi11861 as well.

Copies of Senate Bi11822 and Senate Bill 861 are attached to this amendedpetition.

DAT ED this J~ day of Decem ber, 2013.0 /

ichael D. R eynolds, OSB #742694 (Inactive),WSB# 13058 (Active), Petitioner pro se8012 Sunnyside A ve N , Seattle, WA 98103206-910-6568mreynolds 14gcomcast.net

CERTIFICATE OF SERV ICE


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by the U nited States Postal Serv ice, registered or certified mail, return receiptrequested.I further certify that on Decem ber ly , 2013 I served a true copy of thispetition for judicial review on the following individuals by the U nited States PostalService, first class mail:

Anna M arie JoyceSolicitor General400 Justice Building1162 Court St NESalem, OR 97301-4096Gregory A. HartmanAruna A. M asih210 SW M orrison St.Suite 500Portland, OR 97204-3149Edward H. TrompkeJordan Ramis PCTwo Centerpointe Drive, 6 1 FloorLake Oswego, OR 97035

Eugene J. Karand y IIOffice of the County AttorneyLinn County Courthouse


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City of Salem Legal Dept., Roo m 205555 Liberty Street SESalem, OR 97301-3513J. M ichael PorterM iller Nash LLP3400 U.S. Bancorp Tower111S.W . Fifth AvePortland, OR 97204-3699

George A. R iemer, Pro Se23206 N. Pedregosa DriveSun City West, AZ 85375W ayne Stanley Jones, Pro Se18 North Foxhill RoadNorth Salt Lake, U tah 84054W . Michael GilletteLeora Coleman-FireSara KobakSchwabe, Williamson & Wyatt1211 SW 5t' Ave, Suite 1900Portland, OR 97204Lisa M . FreileyOregon School Boards Assn


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CERTIFICATE OF FILINGI further certify that on December 42 ~ , 2013, I filed the o riginal of thispetition for judicial review with the A ppellate C ourt Adm inistrator at this address:Appellate Court A dministratorAppellate Court Records Se ction1163 State StreetSalem, OR 97301-2563

By U nited States Po stal Service, registered or certified mail, return receipt requested.~~

ichael D. Reyno lds, Petitioner pro se


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IN THE SUPREME COURT O F THE STATE OF OREGONEVERICE MOR O, TERRI DOMENIGONI, CHARLES CUSTER, JOHN HAW KINS,MICHAEL ARK EN, EUGENE DITTER JOHN O'KIEF, MICHAEL SM ITH, LANEJOHNSON, GREG CLO USER, BRANDON SILENCE, ALISON VICKERY, and JIN

VOEKPetitioners,

V .STATE OF OR EGON , STATE OF OR EGON by and through the Department of

Corrections, LINN COU NTY, CITY OF PORTL AND , CITY OF SALEM , TUAL ATINVALLEY FIRE & RESCUE , ESTACADA SCHOOL DISTRICT, OREGON CITYSCHOOL DISTRICT, ONTARIO SCHOOL DISTRICT, BEAVERTON SCH OOLDISTRICT, WEST LINN SCHOOL DISTRICT, BEND SCHOOL DISTRICT, and

PUBLIC EMPLOYEES RETIREMENT BOARD,Respondents,

AndLEAGUE O F OREGON C ITIES; OREGON SCHOOL BOARD S ASSOCIATION;

CENTRAL OREGON IRRIGATION DISTRICT; and ASSOCIATION OF OREGONCOUNTIES,Intervenors.


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MICHAEL D. REYNO LDS,Petitioner,V.

PUBLIC EM PLOYE ES RETIRE ME NT BOAR D, State of Oregon; and JOHN A.KITZH ABE R, Governor, State of Oregon,

RespondentsS061454

GEORGE A . RIEMER,Petitioner,

V.STATE OF OREGON, OREGON GOVERNO R JOHN KITZHABER, OREGON

ATTORNEY GENERA L ELLEN ROSENBLUM, OREGON PUBLIC EMPLOYEESRETIREMENT BOARD , and OREGON PUBLIC EMPLOYEES RETIREMENT

SYSTEM,


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Prior to retirement, I received from PERS an estimate of service retirementbenefits. That estimate included a benefit increase equal to 5.6691 % pursuan t to ORS238.380 (2003, renumbered O RS 238.364 in 2011). Fo r the past 10 years, the retirementbenefit which I receive from PE RS ha s included the benefit increase referenced in thisestimate.

Since my retirement I have received cost of living adjustments ("COLAs")pursuant to my contract with PERS.

Sena te Bi11822, sections 11-14, (Or La ws 2013, ch 53, 11-14), as applied tome, mandate that the Public Employees Retirement Board (PERB) reduce my retirementbenefit by 5.6691 %. This reduction roughly approximates the amount of state income taxthat I would pay on the portion of my retirement benefits earned between 1976 and 1991,if Oregon law fully could tax those benefits.

Senate Bi11861, section 1(Orego n Law s 2013, Chapter 2, 1) and Senate Bill 822,sections 1 and 3 reduce the maximum C OLA to which I am entitled under the PERScontract and w ill, therefore, further reduce my P ER S retirement benefit

DATE D this ~ 2 1 day of December, 2013./~~g ) , , - ~ C -M ichael D. Reynolds


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Page 1 of 7

77th OREGON LEGISLATIVE ASSEMBLY--2013 Special Session

A-EngrossedSenate Bill 861

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

SUMMARYThe following summary is not prepared by the sponsors of the measure and is not a part of the body thereof subjectto consideration by the Legislative Assembly. It is an editor's brief statement of the essential features of themeasure.

Modifies cost-of-living adjustment under Public Employees Retirement System.Directs Public Employees Retirement Board to make annual supplementary payments to mem-bers 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 annualsupplementary payments to members and member's benefi ciaries with yearly allotuance or yearly pen-sion 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-liuingadjustment and supplementaty payments.]Sunsets supplementary payments on December 31, 2019.Directs board to report to Governor, President of Senate and Speaker of House of Rep-resentatives on recommendations relating to cost-of-living adjustment and supplementarypayments.Provides for expedited review by Supreme Court upon petition by adversely affected party.Declares emergency, effective on passage.

i BILL FOR AN ACT2 Relating to cost-of-living adjustments under the Public Employees Retirement System; creating new3 rovisions; amending ORS 238.360, 238.465 and 238A.210; and declaring an emergency.4 Be It Enacted by the People of the State of Oregon:56 OST-OF-LIVING ADJUSTMENTS7


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A-Eng. SB 861

1 the amount of the yearly allowance exceeding $40,000.12 (d)] (b) If the member's or member's beneficiary's yearly allowance [for the preuious year3 totaled] is more than $60,000, the allowance sha ll be increased by [$900 plus .25] 750 plus 0.154 percent of the amount of the yearly allowance exceeding $60,000.5 (3) Ifa mem.ber or member's beneficiary has been receiuing an allowance for less than 12 months6 on July 1 of any year, the board shall calculate the increase under subsection (2) of this section on the7 basis of the yearly allowance the member or member's beneficiary would haue receioed if the member8 or member's beneficiary had receiued the monthly allowance for 12 months.]9 (4)] (3) Any increase in the allowance shall be paid from contributions of the public employer

10 under ORS 238.225.11 4) As used in this section, yearly allowance means the monthly allowance that a2 member or member's beneficiary is entitled to on July 1 of the year in which the board is3 calculating the increase under subsection (1) of this section, multiplied by 12.4 ECTION 2. The amendments to ORS 238.360 by section 1 of this 2013 special session Act5 apply to all increases to allowances made under ORS 238.360 on and after July 1, 2014.

16 ECTION 3. ORS 238A.210, as amended by sections 5 and 7, chapter 53, Oregon Laws 2013, is17 amended to read:18 38A.210. (1) On July 1 of each year, the board shall increase every pension payable under ORS19 238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every death ben-2o efit payable under ORS 238A.230 as provided in [subsections (2) and 01 subsection (2) of this sec-21 tion. The increase shall be made for the payments payable on August 1 and thereafter.22 2)(a) If a person's yearly pension o r benefit [for the preoious year totaled $20,0001 is 60,000 or23 ess, the pension or benefit shall be increased by [two] 1.25 percent.24 (b) If a person's yearly pension or beneFt for the preuious year totaled more than $20,000 but not25 more than 40,000, the pension or benefit shall be increased by 400 plus 1.5 percent of the amount of26 the yearly pension or bene/ t exceeding $20,000.]27 c) Ifa person's yearly pension or benefit for the preutous year totaled more than $40,000 but not28 more than 60,000, the pension or benefit shall be increased by 700 plus one percent of the amount29 of the yearly pension or benefit exceeding $40,000.1


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Page 3 of 7

A-Eng. SB 8611 date specified in subsection (1) of this section to enable the board, on and after the operative2 date specified in subsection (1) of this section, to exercise all the duties, functions and pow-3 ers conferred on the board by the amendments to ORS 238.360 and 238A.210 by sections 1 and4 3 of thia 2013 special session Act.5 ECTION 6. ORS 238.465 is amended to read:6 38.465. (1) Notwithstanding ORS 238.445 or any other provision of law, payments under this7 chapter or ORS chapter 238A of any pension, annuity, retirement allowance, disability benefit, death8 benefit, refund benefit or other benefit that would otherwise be m ade to a person entitled thereto9 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 of11 any judgment of annulment or dissolution of marriage or of separation, or the terms of any court12 order or court-approved property settlement agreement incident to any judgment of annulment or13 dissolution of marriage or of separation. [Notwithstanding any othei pnouisions of this section] Egcept14 as provided in subsection (5) of this section, the total value of benefits payable to a member and15 to an alternate payee under this section may not be greater than the value of the benefits the16 m ember would otherwise be eligible to receive. Any paym ent under this subsection to an alternate17 payee bars recovery by any other person.18 2) A judgment, order or settlement providing for payment to an alternate payee under sub-19 ection (1) of this section may also provide:20 a) That payments to the alternate payee may commence, at the election of the alternate payee,21 t any time after the earlier of:22 A) The earliest date the member would be eligible to receive retirement benefits if the member23 eparates from service; or24 B) The date the member actually separates from service due to death, disability, retirement or25 termination of employment.26 b) That the alternate payee may elect to receive paymen t in any form of pension, annuity, re-27 tirement allowance, disability benefit, death benefit, refund benefit or other benefit, except a benefit28 in the form of a joint and survivor annuity, that would be available to the member under this29 chapter or ORS chapter 238A, or that w ould be available to the member if the m ember retired or

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A-Eng. SB 861

1 a) The creation of a separate account in the name of the alternate payee reflecting the2 judgment's, order's or agreement's distribution of the member's benefits under this chapter or ORS3 chapter 238A;4 b) The establishing of criteria to determine whether dom estic relations judgments, orders and5 agreements comply w ith this section; and6 c) The definitions and procedures for the administration of this section.7 4) An alternate payee may designate a beneficiary for the purposes of death benefits payable8 under ORS 238.390 and 238.395. Subject to ORS 238A.410 (2), an alternate payee may designate a9 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 and11 38.395, the benefits shall be paid as provided by ORS 238.390 (2). If the alternate payee fails to12 designate a beneficiary for the purposes of death benefits payable under ORS 238A.410, the benefits13 shall be paid as provided by ORS 238A.410 (3). If a judgment, order or agreement awards an interest14 to an alternate payee, and if the alternate payee predeceases the member before the alternate payee15 has commenced receiving benefits, the alternate payee shall be considered a member of the system16 who died before retiring for the purposes of the death benefits provided in ORS 238.390, 238.395,17 238A.230 and 238A.410, but for purposes of the death benefits provided in ORS 238.395, the alternate18 payee shall be considered a member of the system who died before retiring only if the member would19 have been eligible for death benefits under ORS 238.395 had the mem ber died at the same time as20 the alternate payee. Payment of the deatb benefits to the beneficiaries, estate or other persons en-21 titled to receive the benefits under ORS 238.390, 238.395, 238A.230 and 238A.410, shall constitute

- 2 payment in full of the alternate payee's interest under the judgment, order or agreement.23 5) Any increase in the retirement allowance provided to the member shall increase the amounts24 paid to the [spouse or former spouse oj the mem6er] alternate payee in the same proportion, except25 hat:26 a) An alternate payee is not entitled to receive cost-of-living adjustments under ORS 238.36027 or any other retirement allowance increase until benefits are first paid from the system on behalf28 of the member[.); and29 b) Cost-of-living adjustments under OR14 238.360 or 238A.210 to the retirement allowance

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A-Eng. SB 8611 this section. The board may not charge more than $300 for total administrative expenses and related2 costs incurred in obtaining data or making calculations that are necessary by reason of the pro-3 visions of this section. The board shall atlocate expenses and costs charged under the provisions of4 this subsection between the member and the alternate payee based on the fraction of the benefit5 received by the member or alternate payee.6 10) Unless otherwise provided by the judgment, order or agreement, a m ember has no interest7 in the benefit payable to an alternate payee under this section. Upon the death of an alternate8 payee, the board shall make such payment to the beneficiary designated by the alternate payee as9 may be required under the form of benefit elected by the alternate payee. If a death benefit is pay-

l0 able under ORS 238.390 or 238.395 by reason of the death of an alternate payee, payment of the11 death benefit shall be made to the beneficiary designated by the alternate payee under ORS 238.39012 (1), or as otherwise provided by ORS 238.390 and 238.395.13 11) As used in this section, court means any court of appropriate jurisdiction of this or any14 ther state or of the District of Columbia.1516 UPPLEMENTARY PAYMENTS1718 ECTION 7. Section 8 of this 2013 special session Act is added to and made a part of ORS19 chapter 238.20 ECTION S. (1) As used in this section:21 a) Yearly allowance has the meaning given that term in ORS 238.360.22 b) Yearly pension or benefit has the meaning given that term in ORS 238A.210.23 2) Each year, the Public Employees Retirement Board shall make a supplementary pay-24 ment to each member or member's beneficiary. The supplementary payment shall be equal25 to 0.25 percent of the member's or member's beneficiary's yearly allowance or yearly pension26 or benefit, but in no event may the supplementary payment egceed $150.27 3) In addition to the supplementary payment under subsection (2) of this section, the28 board shall make an additional supplementary payment each year to each member or29 member's beneficiary with a yearly allowance or yeariy pension or benefit of $20,000 or less.

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A-Eng. SB 8611 ees Retirement System;2 2) Recommendations relating to the continuation of supplementary payments to mem-3 bers and members beneficiaries under section 8 of this 2013 special session Act; and4 3) Recommendations on approaches to calculating cost-of-living adjustments under the5 system that take into consideration a retired member s years of creditable service.67 UNSETS9 ECTION 10. Sections 8 and 9 of this 2013 special session Act are repealed on December

10 1, 2019.1112 UDICIAL REVIEW1314 ECTION 11. (1) Jurisdiction is conferred on the Supreme Court to determine in the15 manner provided by this section whether this 2013 special session Act breaches any contract16 between members of the Public Employees Retirement System and their employers, violates17 any constitutional provision, including but not limited to impairment of contract rights of18 members of the Public Employees Retirement System under Article 1, section 21, of the19 Oregon Constitution, or Article I, section 10, clause 1, of the United States Constitution, or20 is invalid for any other reason.21 2) A person who is adversely affected by this 2013 special session Act or who will be22 adversely affected by this 2013 special session Act may institute a proceeding for review by23 filing with the Supreme Court a petition that meets the following requirements:24 a) The petition must be filed within 60 days after the effective date of this 2013 special25 session Act.26 b) The petition must include the following:27 A) A statement of the basis of the challenge; and28 B) A statement and supporting affidavit showing how the petitioner is adversely af-29 fected.

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A-Eng. SB 861

i MERGENCY CLAUSE

3 ECTION 13. This 2013 special session Act being necessary for the immediate preserva-4 tion of the public peace, health and safety, an emergency is declared to eszst, and this 20135 special session Act takes efPect on its passage.


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77th OREGON LEGISLATIVE ASSEMBLY-2013 Regular Session

EnrolledSenate 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 ADJUSTMENTSECTION 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 previouscalendar year, based on the Consumer Price Index (Portland area-all items) as published by theBureau of Labor Statistics of the. U.S. Department of Labor for the Portland, Oregon, area. Prior toJuly 1 each year the allowance w hich the member o r the member's beneficiary is receiving or isentitled to receive on August 1 for the mon th of July shall be multiplied by the percentage figuredetermined, and the allowance for the next 12 m onths beginning July 1 adjusted to the resultantamount.


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August 1 for the month of July shall be multiplied by the percentage figure deterrnined, and the al-lowance for the next 12 months beginning July 1 adjusted to the resultant amount.] On Jnly 1 of eachyear, the Public Employees Retirement Board shall increase the yearly allowance that amember 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 memberor 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 inany year and no allowance shall be adjusted to an amount less than the amount to which the recipientwould 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 maximumannual retirement allowance adjustment of 1.5 percent sha11 be accumulated from year to year and in-cluded 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 yeartotaled 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 400plus 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 yeartotaled more than 40,000 but not more than 60,000, the a.11owance shall be increased by 700plus 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 yeartotaled more than 60,000, the allowance shall be increased by 900 plus .25 percent of theamount of the yearly allowance egceeding 60,000.

3) If a member or member's beneficiary has been receiving an allowance for less than12 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 beneSiciarywould have received if the member or member's beneficiary had received the monthly al-lowance for 12 months.

(4) Any increase in the allowance shall be paid from contributions of the public employer underORS 238.225. [Any decrease in the allowance shall be returned to the employer in the form of a creditagainst 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 allincreases to allowances made under ORS 238.360 on and after July 1, 2014.SECTION 5. ORS 238A.210 is amended to read:


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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 calen-dar year, based on the Portland-Salem, OR-BVA, Consum.er Price Index for All Urban Consumers forAl1 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.185and 238A.190, every disability benefit under ORS 238A.235 and every death benefit payable under ORS238A.230 by multiplying the monthly paym.ent by the percentage fcgure determzned by the board. If aperson 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 thepension or benefit was received before July 1 of the year. The adjustment shall be made for the pay-ments payable on August 1 and therea}ler.]

[(2) An increase or decrease in the benefit payments under this section may not exceed 1.5 percentin any year. A pension or death benefit may not be adjusted to an amount that is less than the amountthat would have been payable if no cost-of-living adjustment had been made since the pension or deathbenefit first became payable.]

(1) On July 1 of each year, the board shall increase every pension payable under ORS238A.180, 238A.185 and 238A.190, every disability benefit under ORS 238A.235 and every deathbenefit payable under ORS 238A.230 as provided in subsections (2) and (3) of this section. Theincrease 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 20,000but not more than 40,000, the pension or benefit shall be increased by 400 plus 1.5 percentof 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 40,000but not more than 60,000, the pension or benefit shall be increased by 700 phus one percentof 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 yearlypension or benefit ezceeding 60,000.

(3) If a person has been receiving a pension or benefit for less than 12 months on July 1of any year, the board shall calculate the increase under subsection (2) of this section on thebasis of the yearly allowance the person would have received if the person had received the


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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 RetirementBoard 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 thatthe payments made to the person under this chapter are no t subject to Oregon personal income taxunder 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 ef-

fective 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 238.384has no right or claim to the increased benefit provided by chapter 796, Oregon Laws 1991, orchapter 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 statementto the Public Employees Retirement Board that indicates whether the payments will be subject toOregon personal income tax under ORS 316.127 (9). ff the person fails to provide the statement re-quired by this subsection, or the statement indicates that the payments will not be subject to Oregonpersonal 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 underchapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, by reason of the provisionsof subsection (1) of this section, and thereafter the payments become subject to Oregon personalincome tax under ORS1 316.127 9), the person shall promptly notify the Public Employees Retire-ment Board by written statement that the payments are subject to Oregon personal income taxnnder ORS 316.127 9).


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(2) If a person is receiving payments under this chapter that have been reduced [under the pro-uisions of subsection (1) of this section] because the payments are not subject to Oregon personalincome tag under OftS 316.127 (9), and thereafter the payments become subject to Oregon personalincome tax under 088 316.127 (9), the person shall promptly notify the board by written statementthat 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 pro-uisions of subsectioa (1) of this section] becanse the payments are not subject to Oregon personalincome tag under ORS 316.127 (9), and the board receives notice under subsection (2) of this sec-tion that payments to the person under this chapter are once again subject to Oregon personal in-come tax under ORS 316.127 (9), or determines under ORS 238.378 that payments to the personunder 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, OregonLaws 1991, or chapter 569, Oregon Laws 1995. The increase in benefits becomes effective on thefirst 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 shallprovide to the Department of Revenue information identifying persons to whom payments have beenmade under this chapter. The Department of Revenue shall provide to the board such informationon Oregon personal income tax returns as the board deems necessary to determine whether thepayments made to the person under this chapter are subject to Oregon personal income tax underORS 316.127 (9).

(2) If the board determines that the payments made to a person under this chapter are notsubject to Oregon personal income tax under ORS 316.127 (9) based on information provided by theDepartment of Revenue under this section, and the person is receiving the increased benefit pro-vided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, the board shall re-duce 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 subjectto Oregon personal income tax under ORS 316.127 (9) based on information provided by the De-partment of Revenue under this section, and the person is not receiving the increased benefit pro-vided by chapter 796, Oregon Laws 1991, or chapter 569, Oregon Laws 1995, the board shallincrease 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 andfirefighters other than by participation in the Public Employees Retirement System pursuant to the


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partment of Revenue shall provide to a public employer that is subject to the reqnirementsof this section the information regarding Oregon personal income taz returns that the publicemployer deems necessary to deterntine whether the retirement benefcts paid to the personby 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 p rovides retirement benefits to its police officers andfirefighters other than by participation in the Public Employees Retirement System pursuant to theprovisions of ORS 237.620 shall provide inereases to the police officers and firefighters of the publicemployer, both active and retired, that are equal to the increases in retirement benefits that areprovided for in chapter 569, Oregon Laws 1995, for active and retired police officers or firefighterswho are members of the Public Employees Retirement System, or the public employer shall provideto those police officers and firefighters increases in retirement benefits that are the actuarialequivalent of the increases in retirement benefits that are provided for in chapter 569, Oregon Laws1995, 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 pro-vided by ORS 237.635 in the same manner that increases in retirement benefits that are provided forin chapter 569, Oregon Laws 1995, for active and retired police officers or firefighters who aremembers of the Public Employees Retirement System are reduced to reflect amounts paid to thosemembers under the provisions of chapter 796, Oregon Laws 1991. No other retirement benefit orother benefit provided by those public employers shall be decreased by the employer by reason ofthe increases mandated by this section.(2) A public employer that is subject to the requirements of this section shall cease paying in-creased retirement benefits under this section if the payments made to the person are not subjectto Oregon personal income tag under OR.S 316.127 (9). A public employer that is subject to the re-quirements of this section shall adopt procedures similar to those described in ORS 238.372 to238.384 for the purpose of implementing this subsection. The Department of Revenue shall provideto a public employer that is subject to the requirements of this section [such] the information re-garding Oregon personal income tax returns [as] that the public employer deems necessary to de-termine whether the retirement benefits paid to the person by the public employer are subject toOregon 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 retire-

a police officer or farefighter whose efj ective date of retirement is before January 1, 2012;


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ence or of forms for any report, return or claim required in the administration of ORS 310.630 to310.706, any local tax under ORS 305.620, or any law imposing a tax upon or measured by net in-come.(2) The department also may disclose and give access to information described in ORS 314.835to:

(a) The Governor of the State o f Oregon or the authorized representative of the Governor:(A) With respect to an individual who is designated as being under consideration for appoint-

ment or reappointment to an office or for employment in the office of the Governor. The informationdisclosed 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 morethan the three imm ediately preceding years for wh ich the individual was required to file an Oregonindividual income tax return.

(ii) Has failed to pay any tax within 30 days from the date of mailing of a deficiency notice orotherwise 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 purposeof making the appointment, reappointment or decision to employ or not to em ploy the individual inthe office of the Governor.

(B) For use by an officer or employee of the Oregon Department of Administrative Services dulyauthorized or employed to prepare revenue estimates, or a person contracting with the Oregon De-partment of Administrative Services to prepare revenue estimates, in the preparation of revenueestimates required for the Governor's budget under ORS 291.201 to 291.226, or required for sub-mission to the Emergency Board or the Joint Interim Committee on Ways and Means, or if theLegislative Assembly is in session, to the Joint Committee on W ays and Means, and to the Legis-lative Revenue Officer or Legislative Fiscal Officer under ORS 291.342, 291.348 and 291.445. TheDepartment of Revenue shall disclose and give access to the information described in ORS 314.835for the purposes of this subparagraph only if:

(i) The request for information is made in writing, specifies the purposes for which the requestis made and is signed by an authorized representative of the Oregon Department of AdministrativeServices. The form for request for information shall be prescribed by the Oregon Department o fAdministrative 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


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necessary for the performance of the duties of advising or representing the department pursuant toORS 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 Departmentof Justice, to the extent the department deems disclosure or access necessary for such employeesto perform their duties under contracts or agreements between the department and any other de-partment, agency or subdivision of the State of Oregon, in the department's administration of thetax laws.

(g) Other persons, partnerships, corporations and other legal entities, and their employees, tothe 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 thedepartment's administration of the tax laws.

(h) The Legislative Revenue Officer or authorized representatives upon compliance with ORS173.850. Such officer or representative shall not remove from the premises of the department anymaterials 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 requiressuch information to determine whether it is appropriate to adjust those workers compensationbenefits the amount of which is based pursuant to ORS chapter 656 on the amount of wages orearned income rece ived by an individual.

(j) Any agency of the State of Oregon, or any person, or any officer or employee of such agencyor person to w hom disclosure or access is given by state law and not otherwise referred to in thissection, including but not limited to the Secretary of State as Auditor of Public Accounts undersection 2, Article VI of the Oregon Constitution; the Department of Human Services pursuant toORS 314.860 and 412.094; the Division of Child Support of the Department of Justice and districtattorney regarding cases for which they are providing support enforcemen t services under ORS25.080; the State Board of Tax Practitioners, pursuant to ORS 673.710; and the Oregon Board ofAccountancy, pursuant to ORS 673.415.

(k) The Director of the Department of Consumer and Business Services to determine that aperson complies with ORS chapter 656 and the Director of the Employment Department to determinethat a person complies with ORS chapter 657, the following employer information:

(A) Identification numbers.(B) Names and addresses.(C) Inception date as em ployer.(D) Nature of business.(E) Entity changes.(F) Date of last payroll.


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(q) In addition to the disclosure allowed under ORS 305.225, state or local law enforcementagencies 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 limitedto the stolen document, the name, address and taxpayer identification number of the payee, theamount 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 informationthat may be disclosed shall be limited to the counterfeit, forged or altered document, the nam e, ad-dress and taxpayer identification number of the payee, the amount of the check, the date printedon the check and the altered name and address.

(r) The United States Postal Inspection Service or a federal law enforcemen t agency, includingbut not limited to the United States Department of Justice, to assist in the investigation of the fol-lowing criminal activities:(A) Mail theft of a check, in which case the information that may be disclosed shall be limitedto the stolen document, the name, address and taxpayer identification number of the payee, theamount 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 Departmentof Revenue or issued by the Department of Revenue to a taxpayer, in which case the informationthat may be disclosed shall be limited to the counterfeit, forged or altered document, the nam e, ad-dress and taxpayer identification number of the payee, tfie amount of the check, the date printedon the check and the altered name and address.

(s) The United States Financial Management Service, for purposes of facilitating the offsets de-scribed in ORS 305.612.

(t) A municipal corporation of this state for purposes of assisting the municipal corporation inthe administration of a tax of the mnnicipal corporation that is imposed on or m easured by income,wages or net earnings from self-employment. Any disclosure under this paragraph may be made onlypursuant to a written agreement between the Department of Revenue and the municipal corporationthat ensures the confidentiality of the information disclosed.

(u) A consumer reporting agency, to the extent necessary to carry out the purposes of ORS314.843.

(v) The Public Employees Retirement Board, to the extent necessary to carry out the purposesof ORS 238.372 to 238.384, and to any public employer, to the extent necessary to carry out thepurposes 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


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(C) The United States Postal Inspection Service or the federal law enforcement agency shallgive notice to the Department of Revenue of any request received under the federal Freedom ofInformation 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 describedin subsection (2)(k) to (m) and (o) to (q) of this section from the respective agencies.

EMPLOYEB. CONTBIBUTION RATESSECTION 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, pur-suant 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 re-calculated 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.EVIEWSECTION 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 betweenmembers of the Public Employees Betirement System and their employers, violates anyconstitutional provision, including but not limited to impairment of contract rights of inem-bers of the Public Employees Setirement System under Article I, section 21, of the OregonConstitution, or Article I, section 10, clause 1, of the United States Constitution, or is invalidfor any other reason.(2) A person who is adversely affected by this 2013 Act or who will be adversely affectedby this 2013 Act may institute a proceeding for review by filing with the Supreme Court apetition 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; andB) A statement and supporting afiidavit showing how the petitioner is adversely af-

fected.(3) The petitioner shall serve a copy of the petition by registered or certified mail uponthe Public Employees Retirement Board, the Attorney General and the Governor.


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SECTION 21. The unit captions used in this 2013 Act are provided only for the conven-ience of the reader and do not become part of the statutory law of this state or ezpress anylegislative intent in the enactment of this 2013 Act.

EMEB.GENCY CLAUSESECTION 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 effecton its passage.

Passed by Senate Apn1 11, 2013

---------------------------------------------- -----------------------....Robert Taylor, Secretary of Senate

........................................................----.....----------- --Peter Courtney, President of Senate

Pas.sed by House April 24, 2013

Tina Kotek, Speaker of House

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

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

............................................John Kitzhaber, Governor

Filed in O~ ice of Secretary of Statee

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

............. ........... ........................................................Kate Brown, Secretary of State


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sb 822 amended pet rev, reynolds

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