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First Substitute H.B. 97

Representative Paul Ray proposes the following substitute bill:


             1     
RETIREMENT COST-OF-LIVING

             2     
ADJUSTMENT FOR PUBLIC SAFETY

             3     
2002 GENERAL SESSION

             4     
STATE OF UTAH

             5     
Sponsor: Paul Ray

             6      This act modifies the Utah State Retirement Act to increase the cost-of-living allowance for
             7      members of the public safety retirement systems. This act redistributes certain insurance
             8      premium tax revenues. This act takes effect on January 1, 2003.
             9      This act affects sections of Utah Code Annotated 1953 as follows:
             10      AMENDS:
             11          49-4-601, as last amended by Chapter 31, Laws of Utah 1997
             12          49-4a-601, as enacted by Chapter 260, Laws of Utah 1989
             13          49-5-301, as last amended by Chapters 131 and 292, Laws of Utah 1999
             14      ENACTS:
             15          49-1-306, Utah Code Annotated 1953
             16      Be it enacted by the Legislature of the state of Utah:
             17          Section 1. Section 49-1-306 is enacted to read:
             18          49-1-306. Insurance premium taxes -- deposits.
             19          (1) There shall be paid to the Firefighters' Retirement Trust Fund 50% of the annual tax
             20      for each year that is levied, assessed, and collected under Title 59, Chapter 9, Taxation of Admitted
             21      Insurers, upon property insurance premiums, as defined by Section 31A-1-301 , and as applied to
             22      fire and allied lines insurance collected by insurance companies within the state.
             23          (2) (a) There shall be paid to the Public Safety Retirement Trust Fund and the Public
             24      Safety Noncontributory Retirement Trust Fund 10% of all money assessed and collected under
             25      Title 59, Chapter 9, Taxation of Admitted Insurers, upon life insurance premiums within the state.


             26          (b) The board shall divide the money described under Subsection (2)(a) between the trust
             27      funds based upon the respective membership and liabilities of the Public Safety Retirement System
             28      and the Public Safety Noncontributory Retirement System.
             29          Section 2. Section 49-4-601 is amended to read:
             30           49-4-601. Annual cost-of-living adjustment.
             31          (1) The retirement office shall compute and pay, upon approval by the board, an annual
             32      cost-of-living adjustment to all retired members after the members have been retired one year. The
             33      adjustment shall be equal to the decrease in the purchasing power of the dollar during the
             34      preceding year, as measured by the Consumer Price Index, U.S. City Average, prepared by the
             35      United States Bureau of Labor Statistics, and shall be limited to a maximum of [2.5%] 4% of the
             36      retirant's or beneficiary's retirement allowance at the time of retirement. Decreases in the
             37      purchasing power of the dollar exceeding [2.5%] 4% annually shall be accumulated and used in
             38      subsequent allowances when the cost-of-living adjustment is less than [2.5%] 4%.
             39          (2) The cost-of-living adjustment shall be reduced if the index shows a decline of 4% or
             40      more during any period of more than one year. These reductions may not exceed 2% per year
             41      based upon the original retirement allowance. Payments made under this section shall be a part
             42      of the retired member's allowance. Payments and adjustments for the retirant shall also apply to
             43      the beneficiary.
             44          Section 3. Section 49-4a-601 is amended to read:
             45           49-4a-601. Annual cost-of-living adjustment.
             46          (1) The retirement office shall compute and pay, upon approval by the board, an annual
             47      cost-of-living adjustment to all retired members after the members have been retired one year. The
             48      adjustment shall be equal to the decrease in the purchasing power of the dollar during the
             49      preceding year, as measured by the Consumer Price Index, U.S. City Average, prepared by the
             50      United States Bureau of Labor Statistics, and shall be limited to a maximum of [2.5%] 4% of the
             51      retirant's or beneficiary's retirement allowance at the time of retirement. Decreases in the
             52      purchasing power of the dollar exceeding [2.5%] 4% annually shall be accumulated and used in
             53      subsequent allowances when the cost-of-living adjustment is less than [2.5%] 4%.
             54          (2) The cost-of-living adjustment shall be reduced if the index shows a decline of 4% or
             55      more during any period of more than one year. These reductions may not exceed 2% per year
             56      based upon the original retirement allowance. Payments made under this section shall be a part


             57      of the retired member's allowance. Payments and adjustments for the retirant shall also apply to
             58      the beneficiary.
             59          Section 4. Section 49-5-301 is amended to read:
             60           49-5-301. Contributions of members.
             61          (1) The system shall be maintained on a financially and actuarially sound basis by means
             62      of contributions made by the state, the employing units, and the active members of the system. For
             63      purposes of determining contribution rates and benefits, the system is divided into two divisions
             64      according to social security coverage. Firefighters with on-the-job social security coverage are
             65      Division A, and firefighters without on-the-job social security coverage are Division B.
             66          (2) Any city, town, special district, or county may elect to pay all or part of its members'
             67      required contributions, in addition to the required employer contributions. Any amount contributed
             68      by a city, town, or county under this subsection shall vest to the member's credit as though the
             69      member had made the contribution. The member's required contribution shall be reduced by the
             70      amount that is paid by the employer.
             71          (3) All contributions are credited to the account of the individual and held in trust for the
             72      payment of benefits to the member or the member's beneficiaries. All member contributions are
             73      100% vested and nonforfeitable.
             74          (4) Each member is considered to consent to monthly deductions. The payment of
             75      compensation less retirement payroll deductions is considered to be full payment of the salary of
             76      the employee.
             77          (5) The board shall report to the governor, the Legislature, and each employing unit under
             78      Division A or B the contribution rates and any adjustments necessary to maintain the system on
             79      a financially and actuarially sound basis, and the employer and employee shall pay the certified
             80      contribution rates.
             81          [(6) In addition, there shall be paid to the Firefighters' Retirement Trust Fund:]
             82          [(a) 50% of the annual tax for each year that is levied, assessed, and collected under Title
             83      59, Chapter 9, Taxation of Admitted Insurers, upon property insurance premiums, as defined by
             84      Section 31A-1-301 , and as applied to fire and allied lines insurance collected by insurance
             85      companies within the state; and]
             86          [(b) 10% of all money assessed and collected under Title 59, Chapter 9, Taxation of
             87      Admitted Insurers, upon life insurance premiums within the state. Payments to the fund shall be


             88      made annually until the service liability is liquidated, after which the tax revenue provided in this
             89      subsection for the Firefighters' Retirement Trust Fund ceases.]
             90          Section 5. Effective date.
             91          This act takes effect on January 1, 2003.


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