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TO: Board of Supervisors 1.70
n. E
FROM: Phil Batchelor, County Administrator
DATE: May 31, 1989
ST't COU- "
SUBJECT: LEGISLATION: SB 875 (Russell)
Specific Request(s) or Recommendations(s) & Background & Justification
RECOMMENDATION:
Adopt aposition in SUPPORT of SB 875 by Senator Russell which will insure that the Retirement System will retain
its tax-exempt status under federal income tax laws.
BACKGROUND:
Existing provisions of the federal income tax law provide special benefit limitations for public retirement plans.
Public retirement plans risk loss of their federal tax-exempt status unless they elect to be bound by specified benefit
payment limitations. A public retirement plan may elect to exempt members who became plan participants prior
to January 1, 1990 from these limitations if the plan also elects to be bound by these limitations for all members who
join on or after January 1, 1990.
Senator Russell has introduced SB 875,which as amended May 3, 1989,conforms the retirement plans of 1937 Act
counties to those provisions of the federal income tax law,except for the County of Los Angeles. County Counsel
recommends that the Board of Supervisors support SB 875. The Retirement Board also voted to support SB 875
in concept because at that time they had not seen the May 3 amendments. We believe that the passage of SB 875
is essential in order to preserve the tax exempt status of the employer contributions to the Retirement System and
therefore recommend that the Board of Supervisors indicate its support of SB 875.
SB 875 has passed the Senate and is currently on referral to the Assembly Committee on Public Employees,
Retirement and Social Security.
CONTINUED ON ATTACHMENT: NO SIGNATURE: z tAA 571,�
Recommendation of County Administrator Recommendation of Board Committee
Approve Other:
Signature(s):
Action of Board on: June 6, 1989 Approved as Recommended Other
Vote of Supervisors
I HEREBY CERTIFY THAT THIS IS A TRUE AND
Unanimous(Absent ) CORRECT COPY OF AN ACTION TAKEN AND
Ayes: Noes: ENTERED ON HE MINUTES OF THE BOARD
Absent: Abstain: OF SUPERVISORS ON DATE SHOWN.
cc: County Administrator ATTESTED JUN 6 1989
Retirement Administrator PHIL BATCHELOR,CLERK OF THE BOARD
County Counsel SUPERVISORS AND COUNTY ADMINISTRATOR
Treasurer-Tax Collector
Auditor-Controller BY: / Deputy Clerk
clvm:eh(ab875bo)