SB-0888, As Passed Senate, June 12, 2018

HOUSE SUBSTITUTE FOR

SENATE BILL NO. 888

     A bill to amend 1980 PA 300, entitled

"The public school employees retirement act of 1979,"

by amending sections 5 and 124 (MCL 38.1305 and 38.1424), section 5

as amended by 2017 PA 92 and section 124 as amended by 2012 PA 300,

and by adding section 42a.

THE PEOPLE OF THE STATE OF MICHIGAN ENACT:

     Sec. 5. (1) "Member" means a public school employee, except

that member does not include any of the following:

     (a) An individual enrolled in a neighborhood youth corps

program operated with funds from the federal office of economic

opportunity or an individual enrolled in a comparable youth

training program designed to prevent high school dropouts and

rehabilitate high school dropouts operated by an intermediate

school district.

     (b) An individual enrolled in a transitional public employment

program and employed by a reporting unit.

     (c) An individual employed by a reporting unit while enrolled

as a full-time student in that same reporting unit.

     (d) An individual who elects to participate in the optional

retirement program under the optional retirement act of 1967, 1967

PA 156, MCL 38.381 to 38.388.

     (e) A retirant of this retirement system.

     (f) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit through a summer youth

employment program established under the Michigan youth corps act,

1983 PA 69, MCL 409.221 to 409.229.

     (g) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit to administer a program

described in subdivision (f), (h), (i), (j), or (k).

     (h) After September 30, 1983, an individual, not regularly

employed by a reporting unit, who is employed by a reporting unit

through participation in a program established under the former job

training partnership act, Public Law 97-300, 96 Stat 1322 or

beginning July 1, 2000, the workforce investment act of 1998,

Public Law 105-220, 112 Stat 936.

     (i) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit through participation in a

program established under the PATH program under section 57f of the

social welfare act, 1939 PA 280, MCL 400.57f.

     (j) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit through participation in a

program established under the Michigan community service corps

program, first established under sections 25 to 35 of 1983 PA 259.

     (k) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit through participation in a

program established under the older American community service

employment program under the older American community service

employment act, title V of the older Americans act of 1965, Public

Law 89-73, 42 USC 3056 to 3056p.

     (l) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit in a temporary, intermittent,

or irregular seasonal or athletic position and who is under the age

of 19 years.

     (m) An individual, not regularly employed by a reporting unit,

who is employed by a reporting unit only in a temporary position to

assist in the conduct of a school election.

     (n) A qualified participant who makes a valid election under

section 81d(1) to not become a member of Tier 1.

     (o) A qualified participant who is not a member of Tier 1

under section 81d(4).

     (p) Beginning with the effective date of the amendatory act

that added section 42a, an individual employed by a reporting unit

while enrolled as a student in that same reporting unit if the

student's services in the employ of the reporting unit are excepted

from employment as described in 26 CFR 31.3121(b)(10)-2. However,

an individual who, on the effective date of the amendatory act that

added section 42a, is a member and is employed by a reporting unit

while enrolled as a student in that same reporting unit and the

student's services in the employ of the reporting unit are excepted

from employment as described in 26 CFR 31.3121(b)(10)-2 will remain

a member while employed as described in this subdivision if the

individual elects to remain a member. The retirement system shall

determine a method of administering elections under this

subdivision.

     (2) "Membership service" means service performed after June

30, 1945.

     (3) "Noncontributory plan" means the plan which began between

July 1, 1974 and July 1, 1977, in which the reporting unit elected

to discontinue withholding contributions from employees'

compensation.

     (4) "Noncontributory service" means credited service rendered

under the noncontributory plan.

     (5) "Nonteacher" means an individual employed by a reporting

unit who is not a teacher as defined in section 8.

     Sec. 42a. (1) Not later than 60 days after the effective date

of the amendatory act that added this section, each reporting unit

that is a tax supported community or junior college shall submit a

report to the office of retirement services with the information

necessary for the retirement system to complete the report under

subsection (2), as determined by the retirement system.

     (2) Not later than 90 days after the effective date of the

amendatory act that added this section, the office of retirement

services shall submit a report to the senate and house of

representatives committees on education. The report required under

this subsection must include all of the following information,

based on information included in the reports submitted to the

retirement system under subsection (1), for each reporting unit

that is a tax supported community or junior college:

     (a) For each of the 4 school fiscal years preceding the state

fiscal year ending September 30, 2018, the number of individuals

employed by the tax supported community or junior college while

enrolled as a part-time student in that same tax supported

community or junior college.

     (b) For each of the 4 school fiscal years preceding the state

fiscal year ending September 30, 2018, the amount of reporting unit

contributions the tax supported community or junior college

contributed under section 42 associated with an individual employed

by the tax supported community or junior college while enrolled as

a part-time student in that same tax supported community or junior

college.

     (c) For each of the 4 school fiscal years preceding the state

fiscal year ending September 30, 2018, the amount of reporting unit

contributions the tax supported community or junior college failed

to contribute under section 42, if any, associated with an

individual employed by the tax supported community or junior

college while enrolled as a part-time student in that same tax

supported community or junior college.

     Sec. 124. (1) "Plan document" means the document that contains

the provisions and procedures of Tier 2 in conformity with this act

and the internal revenue code.

     (2) "Qualified participant" means an individual who is a

participant of Tier 2 and who is first employed and entered upon on

the payroll of his or her employer on or after July 1, 2010, and

who also was not employed by any employer before July 1, 2010,

except that beginning on the effective date of the amendatory act

that added section 42a, qualified participant does not include an

individual employed by a reporting unit while enrolled as a student

in that same reporting unit if the student's services in the employ

of the reporting unit are excepted from employment as described in

26 CFR 31.3121(b)(10)-2. However, an individual who, on the

effective date of the amendatory act that added section 42a, is a

qualified participant and is employed by a reporting unit while

enrolled as a student in that same reporting unit and the student's

services in the employ of the reporting unit are excepted from

employment as described in 26 CFR 31.3121(b)(10)-2 will remain a

qualified participant while employed and while enrolled as a

student in that same reporting unit and the student's services in

the employ of the reporting unit are excepted from employment as

described in 26 CFR 31.3121(b)(10)-2 if the individual elects to

remain a qualified participant. The retirement system shall

determine a method of administering elections under this

subsection.

     (3) "Refund beneficiary" means an individual nominated by a

qualified participant or a former qualified participant under

section 134 to receive a distribution of the participant's

accumulated balance in the manner prescribed in section 135.

     (4) "State treasurer" means the treasurer of this state.