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(1)Existing law provides that a provision of a memorandum of understanding reached between the state employer and a recognized employee organization representing state civil service employees that requires the expenditure of funds does not become effective unless approved by the Legislature in the annual Budget Act.

This bill would approve provisions of a memorandum of understanding entered into between the state employer and State Bargaining Unit 12, the International Union of Operating Engineers, that require the expenditure of funds and would provide that these provisions will become effective even if these provisions are approved by the Legislature in legislation other than the annual Budget Act.

This bill would provide that provisions of the memorandum of understanding approved by this bill that require the expenditure of funds will not take effect unless funds for those provisions are specifically appropriated by the Legislature and would authorize the state employer and the affected employee organization to meet and confer to renegotiate the affected provisions if funds for those provisions are not specifically appropriated by the Legislature. The bill would appropriate $45,419,000 in augmentation of certain items of the Budget Act of 2016, according to a specified schedule, for State Bargaining Unit 12 employee compensation for expenditure in the 201617 fiscal year. The bill would appropriate to the Controller from the General Fund, unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by the memorandum of understanding described above if the Budget Act is not enacted on or before July 1 in the 201617, 201718, or 201819 fiscal years, as specified.

(2)Existing law grants to an employee with permanent civil service status, or who previously had permanent status, and who, without a break in service, accepts an appointment to an exempt position, the right to reinstatement in his or her former position at the termination of the appointment, either by the employee or the appointing power, subject to certain conditions. Existing law prescribes different periods within which an employee is permitted to make a request for reinstatement in connection with different exempt appointments.

This bill would eliminate the various periods within which an employee is required to make a request for reinstatement, as described above, and eliminate language specifying that the termination be either by the employee or the appointing power. The bill would also make clarifying, conforming, and technical changes.

(3)Existing law grants certain civil service testing rights to an employee with reinstatement rights, as described above, within 4 years of termination in an exempt position, either by the employee or the appointing power, who has at least one year, but less than 3 years, of exempt service. In this regard, existing law requires that these employees be given the opportunity to obtain civil service list appointment eligibility, through examination, for any position offered by the appointing power that has a current eligible list and that has a salary range up to 2 salary steps higher than his or her former position. Existing law further requires that similarly situated employees who have more than 3 years of exempt service be given the opportunity to obtain appointment list eligibility in classes at least 2 salary steps below the employees exempt salary levels. Existing law also grants a right of reinstatement to an employee whose exempt appointment terminates, on or after January 1, 1987, and who has at least 10 years of state service, among other characteristics, to specified positions of the appointing power for which he or she has list eligibility. In the absence of list eligibility, existing law grants the employee the right to a deferred examination, as specified, or to his or her former position.

This bill would revise and recast these provisions to grant employees in exempt positions with reinstatement rights, as described above, who have at least 5 years of state service, a right to obtain civil service appointment list eligibility by taking a deferred examination for any class that has a current eligible list and for which the employee meets the minimum qualifications of the class.

(4)Existing law requires the Department of Human Resources to administer the Limited Examination and Appointment Program (LEAP) to provide an alternative to the traditional civil service examination and appointment process to facilitate the hiring of persons with disabilities in the state civil service. Existing law authorizes the department to conduct competitive examinations to determine eligibility for appointment under LEAP, which may include on-the-job-performance evaluation. A LEAP candidate who successfully completes a job examination period is qualified in the examination and may be appointed without further examination.

This bill would provide that a LEAP candidate who is appointed after successfully completing a job examination period, as described above, is not required to serve a probationary period.

(5)Existing law prescribes a process for recovering payments from employees when the state determines an overpayment has been made. Existing law prohibits a state administrative action to recover an overpayment unless the action is initiated within 3 years from the date of overpayment.

This bill, for purposes of an action to recover an overpayment involving leave credits, would establish the date that the overpayment occurs as the date that the employee receives compensation in exchange for the erroneously credited leave. The bill would state when leave hours are considered exchanged for compensation for these purposes.

(6)Existing law requires the Department of Human Resources to devise plans for, and cooperate with appointing powers and other supervising officials in the conduct of, employee training programs so that the quality of service rendered by persons in the state civil service may be continually improved. Existing law also requires the department to devise plans for, and cooperate with appointing powers in the conduct of, supervisorial employee training programs and prescribes training requirements in this regard.

This bill would require the department to analyze, design, develop, implement, and evaluate an integrated development strategy to continually advance employee skills and improve performance productivity and service. The bill would instead require the department to devise plans for, and cooperate with appointing powers in the conduct of, supervisor, manager, and career executive assignment employee training programs so that the quality of leadership services rendered by persons in those positions may be continually improved and succession planning supported. The bill would prescribe requirements for supervisor, manager, and career executive assignment employees in connection with this training.

(7)The Public Employees Retirement Law (PERL) creates the Public Employees Retirement System for the purpose of providing pension and other benefits to public employees, which are funded by employee and employer contributions and investment returns. PERL prescribes different normal rates for employee contributions depending on bargaining unit, employer, and inclusion of service in the federal Social Security system, among other factors.

This bill, on and after July 1, 2017, would raise the normal rates of contribution for specified judicial branch employees to 9% of compensation over $317 per month for state miscellaneous members whose service is not included in the federal system, 8% of compensation over $513 per month for state miscellaneous members whose service has been included in the federal system, and 11% of compensation over $238 for peace officer/firefighter members.

(8)The Public Employees Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees Retirement System, prescribes methods for calculating the state employer contribution for postemployment health care benefits for eligible retired public employees and their families and for the vesting of these benefits. PEMHCA requires the employer contribution for an employee or annuitant who is in employment or retired from state service to be adjusted by the Legislature in the annual Budget Act, as specified. PEMHCA prescribes different ways of calculating the employer contributions for employees and annuitants depending on date of hire, years of service, and bargaining unit.

This bill, for judicial branch employees and state employees represented by State Bargaining Unit 12 who are first employed and become state members of the retirement system on or after January 1, 2017, would limit the employer contribution for annuitants to 80% of the weighted average of the health benefit plan premiums for an active employee enrolled for self-alone, during the benefit year to which the formula is applied, for the 4 health benefit plans with the largest state civil service enrollment, as specified. The bill would similarly limit the employer contribution for an enrolled family member of an annuitant to 80% of the weighted average of the additional premiums required for enrollment of those family members during the benefit year to which the formula is applied and would provide the same limit on employer contributions for annuitants enrolled in Medicare health benefit plans.

(9)PEMHCA requires state employees to have a specified number of years of state service, depending on hiring date and other factors, before they may receive any portion of the employer contribution payable for annuitants for postretirement health benefits and increases the percentage they may receive based upon additional years of service.

This bill would prohibit judicial branch employees who are first employed and become state members of the retirement system on or after January 1, 2017, from receiving any portion of the employer contribution payable for annuitants unless the person is credited with at least 15 years of state service at the time of retirement. The bill would prescribe the percentage of the employer contribution payable for postretirement health benefits for these employees based on the number of completed years of credited state service at retirement, with 50% after 15 credited years of service and 100% after 25 or more years of service. The bill would except specified employees from this prohibition.

(10)PEMHCA generally requires that an employee or annuitant who is enrolled in, or whose family member is enrolled in, a Medicare health benefit plan be paid the amount of the Medicare Part B premiums, as specified, and prohibits this payment from exceeding the difference between the maximum employer contribution and the amount contributed by the employer toward the cost of premiums for the health benefit plan in which the employee or annuitant and his or her family members are enrolled. Existing law excepts specified state employees from this requirement.

This bill would also except from the requirement described above judicial branch employees and state employees represented by State Bargaining Unit 12 who are first employed and become state members of the retirement system on or after January 1, 2017.

(11)PEMHCA establishes the Public Employees Contingency Reserve Fund for the purpose of funding health benefits and funding administrative expenses. PEMHCA establishes the Annuitants Health Care Coverage Fund, which is continuously appropriated, for the purpose of prefunding health care coverage for annuitants, including administrative costs. PEMHCA defines prefunding for these purposes. Existing law requires the state and employees of State Bargaining Unit 6, 9, or 10 to prefund retiree health care with the goal of reaching a 50% cost sharing of normal costs, and prescribes schedules of contribution percentages in this regard.

This bill would require the state and state employees in the judicial branch to make contributions to prefund retiree health care pursuant to a prescribed schedule of contribution percentages and would also require the state and employees in State Bargaining Unit 12 to prefund retiree health care pursuant to a separate prescribed schedule of contribution percentages, with the contributions to be deposited in the Annuitants Health Care Coverage Fund. By depositing new revenue in a continuously appropriated fund, this bill would make an appropriation.

(12)Existing law, the State Employees Dental Care Act, authorizes the state to enter into contracts, upon negotiations with employee organizations, with carriers for dental care plans for employees, annuitants, and eligible family members. Existing law permits these plans to include premiums to be paid by employees and annuitants and also authorizes the plans to be self-funded if an employer determines it to be cost effective. Existing law prohibits specified employees from receiving an employer contribution for these benefits for annuitants unless the person is credited with 10 or more years of state service, and inhibits other specified employees from receiving that contribution unless the person is credited with 15 or more years of state service, and prohibits other specified employees from receiving that contribution unless the person is credited with 15 or more years of state service.

This bill would prohibit judicial branch employees and state employees in State Bargaining Unit 12 who are first employed and become state members of the retirement system on or after January 1, 2017, from receiving an employer contribution for dental benefits, as described above, for annuitants unless the person is credited with 15 or more years of state service. The bill would prescribe the percentage of the employer contribution payable for these dental benefits for these employees based on the number of completed years of credited state service at retirement, with 50% after 15 credited years of service and 100% after 25 or more years of service. The bill would except specified employees from these provisions.

(13)Existing law authorizes the Legislature to prescribe compensation for judges of courts of record. Existing law specifies the salaries of justices and judges of the Supreme Court, the courts of appeal, and trial courts and provides for the annual increase of those salaries by the amount that is produced by multiplying the judges or justices current salary by the average percentage salary increase for the current fiscal year for California state employees, as provided.

This bill would state that, for purpose of calculating a judges or justices salary, the average percentage salary increases for California state employees shall be reduced by the average percentage salary decrease resulting from the furlough or enrollment in a personal leave program of California state employees in that current fiscal year and would exempt employees of the California State University system, judicial branch, and Legislature from the definition of California state employee for this purpose. The bill would prohibit a salary increase for justices and judges if the resulting percentage, including the reduction, is equal to or less than zero. The bill would also limit the award of interest on an order to pay unpaid salary or judicial retiree benefits based on these provisions to the rate of interest on the Pooled Money Investment Account.

(14)This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2016.

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The people of the State of California do enact as follows:SECTION 1.

The Legislature finds and declares that one of the purposes of this act is to approve the agreement entered into by the state employer and State Bargaining Unit 12 pursuant to Section 3517.5 of the Government Code.

SEC. 2.

The provisions of the memorandum of understanding prepared pursuant to Section 3517.5 of the Government Code and entered into by the state employer and State Bargaining Unit 12, dated May 26, 2016, and that require the expenditure of funds, are hereby approved for the purposes of subdivision (b) of Section 3517.6 of the Government Code.

SEC. 3.

The provisions of the memorandum of understanding approved in Section 2 of this act that require the expenditure of funds shall not take effect unless funds for these provisions are specifically appropriated by the Legislature. If funds for these provisions are not specifically appropriated by the Legislature, either the state employer or the affected employee organization may reopen negotiations on all or part of the memorandum of understanding.

SEC. 4.

Notwithstanding Section 3517.6 of the Government Code, the provisions of the memorandum of understanding included in Section 2 of this act that require the expenditure of funds shall become effective even if the provisions of the memorandum of understanding are approved by the Legislature in legislation other than the annual Budget Act.

SEC. 5.

The sum of forty-five million four hundred nineteen thousand dollars ($45,419,000) is hereby appropriated for State Bargaining Unit 12 for expenditure in the 201617 fiscal year in augmentation of, and for the purpose of, state employee compensation, as provided in Items 9800-001-0001, 9800-001-0494, and 9800-001-0988 of Section 2.00 of the Budget Act of 2016, in accordance with the following schedule:

(a)Fourteen million five hundred ninety-six thousand dollars ($14,596,000) from the General Fund in augmentation of Item 9800-001-0001.

(b)Twenty million six hundred fifty-one thousand dollars ($20,651,000) from unallocated special funds in augmentation of Item 9800-001-0494.

(c)Ten million one hundred seventy-two thousand dollars ($10,172,000) from other unallocated nongovernmental cost funds in augmentation of Item 9800-001-0988.

SEC. 6.Section 19141 of the Government Code is amended to read:19141.

(a)This section applies only to a permanent employee, or an employee in an exempt position who previously had permanent status and who, since that permanent status, has had no break in the continuity of his or her state service due to a permanent separation. in the civil service. As used in this section, former position is defined as in Section 18522, or, if the appointing power to which reinstatement is to be made and the employee agree, a vacant position in any department, commission, or state agency for which he or she is qualified and which is at substantially the same level. level as the employees former position.

(b)Within the periods of time specified below, an An employee who vacates a civil service position to accept an appointment to an exempt position shall be reinstated to his or her former position at the termination either by the employee or appointing power of the exempt appointment, provided he or she (1) accepted both of the following conditions are met:

(1)He or she accepted the appointment without a break in the continuity of state service, and (2) requests in writing reinstatement of the appointing power of his or her former position within 10 working days after the effective date of the termination. service.

(c)The reinstatement may be requested by the employee only within the following periods of time:

(1)At any time after the effective date of the exempt appointment if the employee was appointed under one of the following:

(A)Subdivision (a), (b), (c), (d), (e), (f), (g), or (m) of Section 4 of Article VII of the California Constitution.

(B)Section 2.1 of Article IX of the California Constitution.

(C)Section 22 of Article XX of the California Constitution.

(D)To an exempt position under the same appointing power as the former position even though a shorter period of time may be otherwise specified for that appointment.

(2)Within six months after the effective date of the exempt appointment if appointed under subdivision (h), (i), (k), or (l) of Section 4 of Article VII of the California Constitution.

(3)Within four years after the effective date of an exempt appointment if appointed under any other authority.

(2)Within 10 working days after the effective date of the termination, he or she makes a written request to the appointing power to be reinstated to his or her former position. If an employee accepts an appointment to an exempt position and seeks reinstatement to his or her former position more than 10 working days after the effective date of the termination of the exempt appointment, Section 19140 shall apply.

(d)

(c)An employee who vacates his or her civil service position to accept an assignment as a member, inmate, or patient helper under subdivision (j) of Section 4 of Article VII of the California Constitution shall not have a right to mandatory reinstatement.

(e)An employee who is serving under an exempt appointment retains a right of reinstatement when he or she accepts an extension of that exempt appointment or accepts a new exempt appointment, provided the extension or new appointment is made within the specified reinstatement time limit and there is no break in the continuity of state service. The period for which that right is retained is for the period applicable to the extended or new exempt appointment as if that appointment had been made on the date of the initial exempt appointment.

(d)If an employee in an exempt appointment accepts an extension of the exempt appointment or accepts a new exempt appointment with no break in the continuity of state service in an exempt appointment, subdivision (b) shall apply when the extension or new exempt appointment is terminated.

(f)When

(e)If an employee exercises his or her right of reinstatement and returns to his or her former position, the service while under an exempt appointment shall be deemed to be time served in the former position for the purpose of determining his or her seniority and eligibility for merit salary increases.

(g)

(f)If the termination of an exempt appointment is for a reason contained in Section 19997 and the employee does not have a right to mandatory reinstatement, he or she shall have his or her name placed on the departmental and general reemployment lists for the class of his or her former position.

SEC. 7.Section 19141.1 of the Government Code is amended to read:19141.1.

(a)This section only applies only to a permanent employee, or an employee who previously had permanent status, and who has a reinstatement right pursuant to to employees in an exempt position who have reinstatement rights to their former positions under Section 19141.

(b)Within four years of the termination of an appointment in an exempt position, either by the employee or the appointing power, an employee who has completed a minimum of five years of state service experience and at least one year but less than three years of exempt service shall be given an opportunity upon request to obtain civil service appointment eligibility, through list eligibility by taking a deferred examination, for any position offered by any appointing power in any class for which a current eligible list exists and which has a salary range up to two steps higher than the employees former position. If the employee has three or more years of exempt service, the opportunity shall be provided for any class at least two salary steps below the employees exempt salary level. examination for any class that has a current eligible list and for which the employee meets the minimum qualifications of the class.

(c)At the termination of an exempt appointment, either by the employee or the appointing power, on or after January 1, 1987, an employee who has at least 10 years of state service including five years of civil service experience and at least three consecutive years of exempt service under a single appointing power and who requests reinstatement in writing within 10 days of the termination, shall be reinstated upon request to (1) his or her former position or (2) any vacant position for which the employee has civil service eligibility under the appointing power where the three years of service were completed and which is at least two salary steps below the employees exempt salary level. In the absence of current list eligibility, an employee shall be entitled to a deferred examination for placement on a current eligible list for classes meeting the mandatory reinstatement criteria. If the employee obtains civil service appointment eligibility at any time within two years of the termination of the exempt appointment, and a vacant position in the appropriate class is not available, the employees name shall be placed on the appointing powers departmental or subdivisional reemployment for any classes and locations which would satisfy the employees reinstatement request. Departmental or subdivisional reemployment list eligibility granted under this section shall not result in placement on any general reemployment list.

If an employee cannot be placed in a vacant position pursuant to this section, the employee shall be reinstated to his or her former position.

SEC. 8.Section 19243 of the Government Code is amended to read:19243.

Upon successful completion of the job examination period, the candidate shall have qualified in the examination. With the approval of the department, the appointing power may appoint the candidate, without further examination, to an appropriate position where civil service status may accumulate. A candidate appointed in this way is not required to serve a probationary period.

SEC. 9.Section 19829.9844 is added to the Government Code, to read:19829.9844.

(a)Notwithstanding Section 13340, for the 201617 fiscal year, if the Budget Act of 2016 is not enacted by July 1, 2016, for the memorandum of understanding entered into between the state employer and State Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019, inclusive) there is hereby continuously appropriated to the Controller from the General Fund, unallocated special funds, including, but not limited to, federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by the above memorandum of understanding until the Budget Act of 2016 is enacted. The Controller may expend an amount no greater than necessary to enable the Controller to compensate state employees covered by the above memorandum of understanding for work performed between July 1, 2016, of the 201617 fiscal year and the enactment of the Budget Act of 2016.

(b)If the memorandum of understanding entered into between the state employer and State Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019, inclusive) is in effect and approved by the Legislature, the compensation and contribution for employee benefits for state employees represented by this bargaining unit shall be at a rate consistent with the applicable memorandum of understanding referenced above.

(c)Expenditures related to any warrant drawn pursuant to subdivision (a) are not augmentations to the expenditure authority of a department. Upon the enactment of the Budget Act of 2016, these expenditures shall be subsumed by the expenditure authority approved in the Budget Act of 2016 for each affected department.

(d)This section shall only apply to an employee covered by the term of the State Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019, inclusive) memorandum of understanding. Notwithstanding Section 3517.8, this section shall not apply after the term of the memorandum of understanding has expired. For purposes of this section, the memorandum of understanding for State Bargaining Unit 12 expires on July 1, 2019.

SEC. 10.Section 19829.9845 is added to the Government Code, to read:19829.9845.

(a)Notwithstanding Section 13340, for the 201718 fiscal year, if the Budget Act of 2017 is not enacted by July 1, 2017, for the memorandum of understanding entered into between the state employer and State Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019, inclusive) there is hereby continuously appropriated to the Controller from the General Fund, unallocated special funds, including, but not limited to, federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by the above memorandum of understanding until the Budget Act of 2017 is enacted. The Controller may expend an amount no greater than necessary to enable the Controller to compensate state employees covered by the above memorandum of understanding for work performed between July 1, 2017, of the 201718 fiscal year and the enactment of the Budget Act of 2017.

(c)Expenditures related to any warrant drawn pursuant to subdivision (a) are not augmentations to the expenditure authority of a department. Upon the enactment of the Budget Act of 2017, these expenditures shall be subsumed by the expenditure authority approved in the Budget Act of 2017 for each affected department.

SEC. 11.Section 19829.9846 is added to the Government Code, to read:19829.9846.

(a)Notwithstanding Section 13340, for the 201819 fiscal year, if the Budget Act of 2018 is not enacted by July 1, 2018, for the memorandum of understanding entered into between the state employer and State Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019, inclusive) there is hereby continuously appropriated to the Controller from the General Fund, unallocated special funds, including, but not limited to, federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by the above memorandum of understanding until the Budget Act of 2018 is enacted. The Controller may expend an amount no greater than necessary to enable the Controller to compensate state employees covered by the above memorandum of understanding for work performed between July 1, 2018, of the 201819 fiscal year and the enactment of the Budget Act of 2018.

(c)Expenditures related to any warrant drawn pursuant to subdivision (a) are not augmentations to the expenditure authority of a department. Upon the enactment of the Budget Act of 2018, these expenditures shall be subsumed by the expenditure authority approved in the Budget Act of 2018 for each affected department.

SEC. 12.Section 19838 of the Government Code is amended to read:19838.

(a)When the state determines an overpayment has been made to an employee, it shall notify the employee of the overpayment and afford the employee an opportunity to respond prior to commencing recoupment actions. Thereafter, reimbursement shall be made to the state through one of the following methods mutually agreed to by the employee and the state:

(1)Cash payment or payments.

(2)Installments through payroll deduction to cover at least the same number of pay periods in which the error occurred. When overpayments have continued for more than one year, full payment may be required by the state through payroll deductions over the period of one year.

(3)The adjustment of appropriate leave credits or compensating time off, provided that the overpayment involves the accrual or crediting of leave credits (e.g., vacation, annual leave, or holiday) or compensating time off. Any errors in sick leave balances may only be adjusted with sick leave credits.

Absent mutual agreement on a method of reimbursement, the state shall proceed with recoupment in the manner set forth in paragraph (2).

(b)An employee who is separated from employment prior to full repayment of the amount owed shall have withheld from any money owing the employee upon separation an amount sufficient to provide full repayment. If the amount of money owing upon separation is insufficient to provide full reimbursement to the state, the state shall have the right to exercise any and all other legal means to recover the additional amount owed.

(c)Amounts deducted from payment of salary or wages pursuant to the above provisions, except as provided in subdivision (b), shall in no event exceed 25 percent of the employees net disposable earnings.

(d)No An administrative action shall not be taken by the state pursuant to this section to recover an overpayment unless the action is initiated within three years from the date of overpayment. If an overpayment involves leave credits, the date of overpayment is the date that the employee receives compensation in exchange for leave erroneously credited to the employee. For purposes of this section, leave hours are considered exchanged for compensation in the order they were credited.

(e)If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.

SEC. 13.Section 19995.1 of the Government Code is amended to read:19995.1.

For the purpose of meeting the development needs of the state service for continuing employee educational development, the upgrading of employee skills, and improving productivity and quality service, the states workforce, the department shall analyze, design, develop, implement, and evaluate an integrated development strategy to continually advance employee skills and improve performance productivity and service. The department may prescribe regulations and conditions for the administration of this chapter. The conditions prescribed by the department may include, but not be limited to, the requirements that the training shall be cost-effective, cost effective, of value to the state, and relevant to the employees career development in state service. The department may further prescribe the conditions under which an employee may be required to reimburse the state for the costs of out-service training in the event he or she fails to remain in state service for a reasonable time after receiving the training.

If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.

SEC. 14.Section 19995.4 of the Government Code is amended to read:19995.4.

(a)The department shall devise plans for, and cooperate with appointing powers in the conduct of, supervisorial supervisor and career executive assignment employee training programs so that the quality of supervisorial leadership services rendered by persons in those positions may be continually improved. improved and succession planning supported.

(b)Each supervisorial employee, upon the employees initial appointment Upon the initial appointment of an employee to a designated supervisory position, the employee shall be provided a minimum of 80 hours of training, at least 40 hours of which shall be structured and be provided by a qualified instructor. as prescribed by the department. The training shall consist of address the role of the supervisor, techniques of supervision, planning, organizing, staffing and controlling, staffing, performance standards, performance appraisal, affirmative action, appraisals, discipline, labor relations, employment law relating to persons with disabilities, and grievances. equal employment opportunity principles, and affirmative action for persons with disabilities. Every supervisor shall have access to a copy of each bargaining agreement covering the employees he or she supervises. The additional 40 hours of training may be provided on-the-job by a qualified higher level supervisor or manager.

(c)The entire 80 required hours of training shall be supervisory training shall be successfully completed within the term of the probationary period or within 12 months of appointment to a supervisorial classification. The training shall be completed within the term of the probationary period unless it is demonstrated that to do so creates additional costs or that the training cannot be completed during the probationary period due to the limited availability of training courses. six months of the employees initial appointment, unless it is demonstrated that to do so creates additional costs or that the training cannot be completed during this time period due to limited availability of training courses. Upon completion of the initial appointment training, supervisory employees shall be provided biannually a minimum of 20 hours of leadership training and development, as prescribed by the department.

(d)Upon the initial appointment of an employee to a management position, the employee shall be provided a minimum of 40 hours of leadership training and development, as prescribed by the department, within 12 months of appointment. Thereafter, the employee shall be provided biannually a minimum of 20 hours of leadership training, as prescribed by the department.

(e)Upon the initial appointment of an employee to a career executive assignment position, the employee shall be provided a minimum of 20 hours of leadership training and development as prescribed by the department within 12 months of appointment. Thereafter, the employee shall be provided biannually a minimum of 20 hours of leadership training and development as prescribed by the department.

SEC. 15.Section 20683.3 is added to the Government Code, to read:20683.3.

Notwithstanding Sections 20677 and 20687, on and after July 1, 2017, the normal rate of contribution for an employee of the judicial branch who is not subject to Section 7522.30 shall be the following:

(a)For a state miscellaneous member:

(1)Nine percent of the compensation in excess of three hundred seventeen dollars ($317) per month paid to a member whose service is not included in the federal system.

(2)Eight percent of compensation in excess of five hundred thirteen dollars ($513) per month paid to that member whose service has been included in the federal system.

(b)For a peace officer/firefighter member, 11 percent of compensation in excess of two hundred thirty-eight dollars ($238) per month paid to that member.

SEC. 16.Section 22871.3 of the Government Code is amended to read:22871.3.

(a)The employer contribution for each annuitant enrolled in a basic plan shall be an amount equal to 80 percent of the weighted average of the health benefit plan premiums for an employee or annuitant enrolled for self-alone, during the benefit year to which the formula is applied, for the four health benefit plans that had the largest active state civil service enrollment, excluding family members, during the previous benefit year. For each annuitant with enrolled family members, the employer contribution shall be an amount equal to 80 percent of the weighted average of the additional premiums required for enrollment of those family members, during the benefit year to which the formula is applied, in the four health benefit plans that had the largest active state civil service enrollment, excluding family members, during the previous benefit year.

(b)The employer contribution for each annuitant enrolled in a Medicare health benefit plan in accordance with Section 22844 shall be an amount equal to 80 percent of the weighted average of the health benefit plan premiums for an annuitant enrolled in a Medicare health benefit plan for self-alone, during the benefit year to which the formula is applied, for the four Medicare health benefit plans that had the largest state annuitant enrollment, excluding family members, during the previous benefit year. For each annuitant with enrolled family members, the employer contribution shall be an amount equal to 80 percent of the weighted average of the additional premiums required for enrollment of those family members, during the benefit year to which the formula is applied, in the four Medicare health benefit plans that had the largest state annuitant enrollment, excluding family members, during the previous benefit year. If the annuitant is eligible for Medicare Part A, with or without cost, and Medicare Part B, regardless of whether the annuitant is actually enrolled in Medicare Part A or Part B, the employer contribution shall not exceed the amount calculated under this subdivision.

(c)This section applies to:

(1)A state employee who is first employed by the state and becomes a state member of the system on or after January 1, 2016, and who is represented by State Bargaining Unit 9 or 10.

(2)A state employee related to State Bargaining Unit 9 or 10 who is excepted from the definition of state employee in subdivision (c) of Section 3513 and first employed by the state and becomes a state member of the system on or after January 1, 2016.

(3)A state employee represented by State Bargaining Unit 6 or 12 who is first employed by the state and becomes a state member of the system on or after January 1, 2017.

(4)A state employee related to State Bargaining Unit 6 or 12 who is excepted from the definition of state employee in subdivision (c) of Section 3513 and first employed by the state and becomes a state member of the system on or after January 1, 2017.

(5)A judicial branch employee who is first employed by the state and becomes a state member of the system on or after January 1, 2017. This paragraph does not apply to a judge who is subject to Chapter 11 (commencing with Section 75000) or Chapter 11.5 (commencing with Section 75500) of Title 8.

(d)If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5 or Chapter 12 (commencing with Section 3560) of Division 4 of Title 1, the memorandum of understanding shall be controlling without further legislative action, except that if those provisions require the expenditure of funds, the provisions may not become effective unless approved by the Legislature.

SEC. 17.Section 22874.4 is added to the Government Code, to read:22874.4.

(a)Notwithstanding Sections 22870, 22871, and 22873, a judicial branch employee who is first employed by the state and becomes a state member of the system on or after January 1, 2017, shall not receive any portion of the employer contribution payable for annuitants unless the person is credited with 15 years of state service at the time of retirement.

(b)The percentage of the employer contribution payable for postretirement health benefits for an employee subject to this section shall be based on the completed years of credited state service at retirement as shown in the following table:

Credited Years of Service	Percentage of Employer Contribution
15	50
16	55
17	60
18	65
19	70
20	75
21	80
22	85
23	90
24	95
25 or more	100

(c)This section shall apply only to judicial branch employees who retire for service. For purposes of this section, state service means service rendered as an employee of the state or an appointed or elected officer of the state for compensation.

(d)This section does not apply to any of the following:

(1)Former state employees previously employed prior to January 1, 2017, who return to state employment on or after January 1, 2017.

(2)State employees on an approved leave of absence employed before January 1, 2017, who return to active employment on or after January 1, 2017.

(3)A judge who retires pursuant to Chapter 11 (commencing with Section 75000) or Chapter 11.5 (commencing with Section 75500) of Title 8.

SEC. 18.Section 22879 of the Government Code is amended to read:22879.

(a)The board shall pay monthly to an employee or annuitant who is enrolled in, or whose family member is enrolled in, a Medicare health benefit plan under this part the amount of the Medicare Part B premiums, exclusive of penalties, except as provided in Section 22831. This payment may not exceed the difference between the maximum employer contribution and the amount contributed by the employer toward the cost of premiums for the health benefit plan in which the employee or annuitant and his or her family members are enrolled. No payment may be made in any month if the difference is less than one dollar ($1).

(b)This section shall be applicable only to state employees, annuitants who retired while state employees, and the family members of those persons.

(c)With respect to an annuitant, the board shall pay to the annuitant the amount required by this section from the same source from which his or her allowance is paid. Those amounts are hereby appropriated monthly from the General Fund to reimburse the board for those payments.

(d)There is hereby appropriated from the appropriate funds the amounts required by this section to be paid to active state employees.

(e)This section does not apply to:

(1)A state employee who is first employed by the state and becomes a state member of the system on or after January 1, 2016, and who is represented by State Bargaining Unit 9 or 10.

(2)A state employee related to State Bargaining Unit 9 or 10 who is excepted from the definition of state employee in subdivision (c) of Section 3513 and is first employed by the state and becomes a state member of the system on or after January 1, 2016.

(3)A state employee who is first employed by the state and becomes a state member of the system on or after January 1, 2017, and who is represented by State Bargaining Unit 6. 6 or 12.

(4)A state employee related to State Bargaining Unit 6 or 12 who is excepted from the definition of state employee in subdivision (c) of Section 3513 and is first employed by the state and becomes a state member of the system on or after January 1, 2017.

SEC. 19.Section 22944.5 of the Government Code is amended to read:22944.5.

(a) (1) The state and employees in State Bargaining Unit 9 or 10 9, 10, or 12 shall prefund retiree health care, with the goal of reaching a 50-percent cost sharing of actuarially determined normal costs for both employer and employees by July 1, 2019.

(2)The state and employees in State Bargaining Unit 6 shall prefund retiree health care, with the goal of reaching a 50-percent cost sharing of actuarially determined normal costs for both employer and employees by July 1, 2018.

(3)The state and employees in the judicial branch shall prefund retiree health care, with the goal of reaching a 50-percent cost sharing of actuarially determined normal costs for both employer and employees by July 1, 2017.

(b)(1)The employees in State Bargaining Unit 9 shall make contributions to prefund retiree health care based on the following schedule, and the state shall make a matching contribution:

(A)Effective July 1, 2017, 0.5 percent of pensionable compensation.

(B)Effective July 1, 2018, an additional 0.5 percent for a total employee contribution of 1.0 percent of pensionable compensation.

(C)Effective July 1, 2019, an additional 1.0 percent for a total employee contribution of 2.0 percent of pensionable compensation.

(2)The employees in State Bargaining Unit 10 shall make contributions to prefund retiree health care based on the following schedule, and the state shall make a matching contribution:

(A)Effective July 1, 2017, 0.7 percent of pensionable compensation.

(B)Effective July 1, 2018, an additional 0.7 percent for a total employee contribution of 1.4 percent of pensionable compensation.

(C)Effective July 1, 2019, an additional 1.4 percent for a total employee contribution of 2.8 percent of pensionable compensation.

(3)The employees in State Bargaining Unit 6 shall make contributions to prefund retiree health care based on the following schedule, and the state shall make a matching contribution:

(A)Effective July 1, 2016, 1.3 percent of pensionable compensation.

(B)Effective July 1, 2017, an additional 1.3 percent for a total employee contribution of 2.6 percent of pensionable compensation.

(C)Effective July 1, 2018, an additional 1.4 percent for a total employee contribution of 4.0 percent of pensionable compensation.

(4)The state employees in the judicial branch shall make contributions to prefund retiree health care based on the following schedule, and the state shall make a matching contribution:

(A)Effective July 1, 2016, 1.5 percent of pensionable compensation.

(B)Effective July 1, 2017, up to an additional 1.5 percent for a total employee contribution of up to 3.0 percent of pensionable compensation. The additional amount shall be determined by the Director of Finance no later than April 1, 2017, based on the actuarially determined normal costs identified in the state valuation.

(C)This paragraph does not apply to a judge who is subject to Chapter 11 (commencing with Section 75000) or Chapter 11.5 (commencing with Section 75500) of Title 8.

(5)The employees in State Bargaining Unit 12 shall make contributions to prefund retiree health care based on the following schedule, and the state shall make a matching contribution:

(A)Effective July 1, 2017, 1.9 percent of pensionable compensation.

(B)Effective July 1, 2018, an additional 1.4 percent for a total employee contribution of 3.3 percent of pensionable compensation.

(C)Effective July 1, 2019, an additional 1.3 percent for a total employee contribution of 4.6 percent of pensionable compensation.

(c)This section only applies to employees in State Bargaining Unit 6, 9, or 10 who are eligible for health benefits, including permanent intermittent employees.

(d)Contributions paid pursuant to this section shall be deposited in the Annuitants Health Care Coverage Fund and shall not be refundable under any circumstances to an employee in State Bargaining Unit 6, 9, or 10 or his or her beneficiary or survivor.

(e)If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if those provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.

(f)This section shall also apply to a state employee related to State Bargaining Unit 6, 9, or 10 a bargaining unit described in subdivision (a) who is excepted from the definition of state employee in subdivision (c) of Section 3513.

SEC. 20.Section 22958.1 of the Government Code is amended to read:22958.1.

(a)Notwithstanding Sections 22953, 22957, and 22958, the following employees shall not receive any portion of the employer contribution payable for annuitants unless the person is credited with 15 or more years of state service, as defined by this section, at the time of retirement:

(1)A state employee, as defined by subdivision (c) of Section 3513, who is first employed by the state and becomes a state member of the system on or after January 1, 2017, and is represented by State Bargaining Unit 6. 6 or 12.

(2)A state employee related to State Bargaining Unit 6 or 12 who is excepted from the definition of state employee in subdivision (c) of Section 3513 and is first employed by the state and becomes a state member of the system on or after January 1, 2017.

(b)The percentage of the employer contribution payable for postretirement dental care benefits for an employee subject to this section shall be based on the funding provision of the plan and the completed years of credited state service at retirement as shown in the following table:

Years of Service Contribution Credited Years of Service	Credited Years Percentage of Employer Contribution Percentage of Employer Contribution
15	50
16	55
17	60
18	65
19	70
20	75
21	80
22	85
23	90
24	95
25 or more	100

(c)This section shall apply only to state employees that retire for service. For purposes of this section, state service means service rendered as an employee of the state or an appointed or elected officer of the state for compensation.

(d)This section does not apply to:

(1)Former state employees previously employed before prior to January 1, 2017, who return to state employment on or after January 1, 2017.

(2)State employees hired prior to January 1, 2017, who become subject to representation by State Bargaining Unit 6 or 12 on or after January 1, 2017.

(3)State employees on an approved leave of absence employed before January 1, 2017, who return to active employment on or after January 1, 2017.

(4)State employees hired after January 1, 2017, who are first represented by a State Bargaining Unit other than Bargaining Unit 6, 6 or 12, who later become represented by State Bargaining Unit 6. 6 or 12.

(e)In those cases where the state has assumed from a public agency a function and the related personnel, service rendered by that personnel for compensation as employees or appointed or elected officers of that public agency may not be credited as state service for the purposes of this section unless the former employer has paid or agreed to pay the state the amount actuarially determined to equal the cost for any employee dental benefits that were vested at the time that the function and the related personnel were assumed by the state, and the Department of Finance finds that the contract contains a benefit factor sufficient to reimburse the state for the amount necessary to fully compensate for the postretirement dental benefit costs of those personnel. For noncontracting public agencies, the state agency that has assumed the function shall certify the completed years of public agency service to be credited to the employee as state service credit under this section.

SEC. 21.Section 22958.2 is added to the Government Code, to read:22958.2.

(a)Notwithstanding Sections 22953, 22957, and 22958, a judicial branch employee who is first employed by the state and becomes a state member of the system on or after January 1, 2017, shall not receive any portion of the employer contribution payable for annuitants unless the person is credited with 15 years of state service at the time of retirement.

Credited Years of Service	Percentage of Employer Contribution
15	50
16	55
17	60
18	65
19	70
20	75
21	80
22	85
23	90
24	95
25 or more	100

(d)This section does not apply to any of the following:

(1)Former state employees previously employed prior to January 1, 2017, who return to state employment on or after January 1, 2017.

(2)State employees on an approved leave of absence employed before January 1, 2017, who return to active employment on or after January 1, 2017.

(3)A judge who retires pursuant to Chapter 11 (commencing with Section 75000) or Chapter 11.5 (commencing with Section 75500) of Title 8.

SEC. 22.Section 68203 of the Government Code is amended to read:68203.

(a)On July 1, 1980, and on July 1 of each year thereafter, the salary of each justice and judge named in Sections 68200 to 68202, inclusive, and 68203.1 shall be increased by the amount that is produced by multiplying the then current salary of each justice or judge by the average percentage salary increase for the current fiscal year for California state employees; provided, that in any fiscal year in which the Legislature places a dollar limitation on salary increases for state employees the same limitation shall apply to judges in the same manner applicable to state employees in comparable wage categories.

(b)(1)For the purposes of this section, average percentage salary increases for California state employees shall be those increases as reported by the Department of Human Resources. Resources to the State Controller in a pay letter.

(2)For purposes of this section the average percentage salary increase for the current fiscal year for California state employees shall be reduced by the average percentage salary decrease resulting from the furlough or enrollment in a personal leave program of California state employees in that current fiscal year, as determined by the Department of Human Resources, in consultation with the Department of Finance.

(3)If the reduction required pursuant to paragraph (2) results in a percentage that is equal to or less than zero, the salary of each justice and judge named in Sections 68200 to 68202, inclusive, and 68203.1 shall not be increased.

(4)Persons working for the California State University system, the judicial branch, or the Legislature are not considered California state employees for purposes of this subdivision.

(c)The salary increase for judges and justices made on July 1, 1980, for the 198081 fiscal year, shall in no case exceed 5 percent.

(d)On January 1, 2001, the salary of the justices and judges named in Sections 68200 to 68202, inclusive, shall be increased by the amount that is produced by multiplying the salary of each justice and judge as of December 31, 2000, by 8¹/₂ percent.

(e)On January 1, 2007, the salary of the justices and judges identified in Sections 68200 to 68202, inclusive, and 68203.1 shall also be increased by the amount that is produced by multiplying the salary of each justice and judge as of December 31, 2006, by 8.5 percent.

(f)Notwithstanding Article 2 (commencing with Section 3287) of Chapter 1 of Title 2 of Part 1 of Division 4 of the Civil Code, Chapter 5 (commencing with Section 685.010) of Division 1 of Title 9 of Part 2 of the Code of Civil Procedure, any other law, or any court judgment that has not been finally determined upon appeal as of the date this subdivision is enacted, any award of interest on an order to pay unpaid salary or judicial retiree benefits pursuant to this section shall not exceed the rate of interest accrued on moneys in the Pooled Money Investment Account.

SEC. 23.

By amending Section 68203 of the Government Code in this act, the Legislature does not intend to create an inference about the legal effect of the statute prior to the enactment of this act.

SEC. 24.

This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

SECTION 1.

It is the intent of the Legislature to enact statutory changes relating to the 2016 Budget Act.

HeadingLines 1, 2, 3, 4, and 5.

Date	Status
Apr 28, 2016	In Senate. Read first time. To Com. on RLS. for assignment.
Aug 23, 2016	Ordered to inactive file at the request of Senator Leno.
Jun 14, 2016	Read second time. Ordered to third reading.
Jun 13, 2016	From committee: Do pass. (Ayes 14. Noes 1.) (June 13).
Jun 13, 2016	From committee chair, with author's amendments: Amend, and re-refer to committee. Read second time, amended, and re-referred to Com. on B. & F.R.
May 5, 2016	Referred to Com. on B. & F.R.
Apr 28, 2016	Read third time. Passed. Ordered to the Senate. (Ayes 51. Noes 26.)
Apr 28, 2016	Read third time. Passed. Ordered to the Senate. (Ayes 51. Noes 26. Page 4580.)
Apr 28, 2016	Read third time. Passed. Ordered to the Senate.
Jan 7, 2016	Read first time. To print.
Apr 25, 2016	Withdrawn from committee.
Apr 25, 2016	Ordered to third reading.
Apr 25, 2016	Assembly Rule 96 suspended. (Ayes 49. Noes 25.)
Apr 25, 2016	Assembly Rule 96 suspended. (Ayes 49. Noes 25. Page 4488.)
Apr 18, 2016	Re-referred to Com. on BUDGET.
Apr 14, 2016	From committee chair, with author's amendments: Amend, and re-refer to Com. on BUDGET. Read second time and amended.
Feb 1, 2016	Referred to Com. on BUDGET.
Jan 8, 2016	From printer. May be heard in committee February 7.

Date	Description	Location	Votes
Jun 13, 2016	Do pass	Senate Standing Committee on Budget and Fiscal Review	14 1 2 Passed
Apr 28, 2016	AB 1620 BUDGET Assembly Third Reading By TING	Assembly Floor	51 26 3 Passed

Key

Pro

Against

Did Not Vote

SENATE RULES COMMITTEE

Office of Senate Floor Analyses

(916) 651-1520 Fax: (916) 327-4478

THIRD READING

Bill No: AB 1620

Author:

Vote:

SENATE BUDGET & FISCAL REVIEW COMMITTEE: 14-1, 6/13/16

AYES: Leno, Nielsen, Anderson, Beall, Block, Hancock, Mitchell, Monning, Nguyen, Pan, Pavley, Roth, Stone, Wolk

NOES: Moorlach

NO VOTE RECORDED: Allen, Glazer

ASSEMBLY FLOOR: Not relevant

SUBJECT:

SOURCE: Author

DIGEST: This bill makes necessary statutory and technical changes to the labor-related provisions of the Budget Act of 2016. Additionally, provides legislative ratification for the memoranda of understanding (MOU) agreed to by the state and bargaining unit (BU) 12 represented exclusively by the International Union of Operating Engineers.

ANALYSIS:

BU 12 MOU — The following information summarizes the general provisions of the MOU:

Number of Employees: The BU 12 agreement affects approximately 10,778 full-time equivalents, and includes the following agreements:

Health Benefits

Employer Contribution for Active State Employees. Effective the pay period following ratification, the state’s monthly health benefit contribution for each employee shall continue to be a flat dollar amount equal to 80 percent of the weighted average of the basic health benefit plan premiums of the four largest enrolled basic health plans. For each employee with enrolled family members, the employer shall continue to contribute an additional flat dollar amount equal to 80 percent of the weighted average of the additional premiums. The flat dollar amounts shall be increased as appropriate, pursuant to the formulas on January 1, 2017, January 1, 2018, and January 1, 2019.
Employer Contribution for Future Retirees. Employees first hired on or after January 1, 2017, will receive an employer contribution for retiree health benefits based on an “80/80” formula. Retirees and their dependents enrolled in a basic health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest basic health benefit plans based on state active employee enrollment. Retirees and their dependents enrolled in a Medicare health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest Medicare health benefit plans based on state retiree enrollment.
Prefunding of Other Post-Employment Benefits. The state and BU 12 members will prefund retiree healthcare with the goal of reaching 50 percent cost-sharing of actuarially determined total normal cost for employer and employees by July 1, 2019. The state and employees will each make the following contributions:
1. Effective July 1, 2017, 1.4 percent for a total of 1.9 percent of pensionable compensation.
2. Effective July 1, 2018, an additional 1.4 percent for a total of 3.3 percent of pensionable compensation.
3. Effective July 1, 2019, an additional 1.3 percent for a total of 4.06 percent of pensionable compensation.
Post-Employment Health and Dental Benefit Vesting Schedule. All employees first employed by the state on or after January 1, 2017, will be subject to an extended vesting schedule providing 50 percent of the employer contribution upon completion of 15 years of state service, increasing five percent for each additional year of service, until the employee is 100 percent vested at 25 years of state service.
Medicare Part B Supplemental Benefit. All employees first hired on or after January 1, 2017, will no longer be eligible to use the employer contribution for retiree health benefits for Medicare Part B premiums.

Compensation

General Salary Increase (GSI)
1. Effective July 1, 2016, BU 12 employees shall receive a three percent GSI.
2. Effective July 1, 2017, all BU 12 employees shall receive a four percent GSI.
3. Effective July 1, 2018, all BU 12 employees shall receive a three percent GSI.
Special Salary Adjustments
1. Effective July 1, 2016 and 2017, BU 12 employees in specified heavy equipment mechanic classifications shall receive a special salary adjustment of five percent.
2. Effective July 1, 2016, BU 12 employees in specified electrician classifications shall receive a special salary adjustment of five percent.
3. Effective July 1, 2016, and 2017, BU 12 employees in specified telecommunications technician classifications shall receive a special salary adjustment of five percent.
Uniform Allowance
1. Increases the uniform reimbursement from $470 to $670 for full-time employees that work for the Department of Parks and Recreation, or the Department of Forestry and Fire Protection.
2. Provides an annual footwear allowance of $82 for specified permanent full-time employees that work for the Department of Corrections and Rehabilitation or the California Highway Patrol.

Miscellaneous

Leave Cash Out, Additional Sick Leave, Overtime Meal Allowance, Monthly Payroll Cycle
1. Increases the amount of leave that can be cashed out annually from 20 hours to 80 hours, depending on the available department funds effective May 1, 2017.
2. Incorporates the Wounded Warriors Transitional Leave Act to provide up to 96 hours of additional sick leave for employees hired after January 1, 2016, who are military veterans and have a service connected disability rated 30 percent.
3. Increases the Overtime Meal Allowance from $6.00 to $8.00, effective approximately three months after ratification, for employees that work for the Department of Transportation (Caltrans).
4. Converts all Caltrans employees to a monthly payroll cycle and provides a one-time supplemental payment equivalent to the employee’s existing semi-monthly gross salary, not to exceed $1,200 effective approximately three months after ratification.

Duration

July 1, 2015 through July 1, 2019.

Judicial Branch Employee Benefits

Post-Employment Health and Dental Benefit Vesting Schedule. A judicial branch employee first employed by the state on or after January 1, 2017, will be subject to a vesting schedule providing 50 percent of the employer contribution upon completion of 15 years of state service, increasing five percent for each additional year of service, until the employee is 100 percent vested at 25 years of state service.
Employer Contribution for Future Retirees. Employees first hired on or after January 1, 2017, will receive an employer contribution for retiree health benefits based on an “80/80” formula. Retirees and their dependents enrolled in a basic health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest basic health benefit plans based on state active employee enrollment. Retirees and their dependents enrolled in a Medicare health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest Medicare health benefit plans based on state retiree enrollment.
Prefunding of Other Post-Employment Benefits. The state and state employees in the judicial branch will prefund retiree healthcare with the goal of reaching 50 percent cost-sharing of actuarially determined total normal cost for employer and employees by July 1, 2019. The state and employees will each make the following contributions:
1. Effective July 1, 2016, 1.4 percent of pensionable compensation.
2. Effective July 1, 2017, up to an additional 1.5 percent for a total employee contribution of up to three percent of pensionable compensation. The additional amount shall be determined by the Director of Finance no later than April 1, 2017.
Medicare Part B Supplemental Benefit. All employees first hired on or after January 1, 2017, will no longer be eligible to use the employer contribution for retiree health benefits for Medicare Part B premiums.
Employee Pension Contribution. Increases the employee pension contribution on or after July 1, 2017, from five percent to eight percent.
Judges Salary Survey. Clarifies the statutory methodology used to calculate the annual salary adjustment for state judges and justices to include both salary increases and decreases to be considered when calculating the average state wage growth for purposes of adjusting salaries of judges and justices.

Civil Service Improvement

Exempt Employee Reinstatement. Simplifies the exempt appointee reinstatement guidelines by consolidating various periods which an employee is required to make a request for reinstatement. The new guidelines require no break in state service, and submittal of a request within 10 working days after the effective date of termination, regardless of exempt appointment type. If an employee seeks reinstatement after more than 10 working days after the effective date of termination, reinstatement is at the discretion of the appointing power. Provides exempt appointees who have at least five years of state service, within four years of termination, a right to obtain civil service appointment list eligibility by taking a deferred examination for any class that has a current eligible list and for which the employee meets the minimum qualifications of the class.
Leave Credit. Specifies that an overpayment of leave credits to state employees occurs when the employee receives compensation in exchange for leave erroneously credited to the employee for the purposes of an action to recover overpayment.
Training. Specifies managers, supervisors and career executive assignment employees will be required to complete various leadership training and development as prescribed by the department.

FISCAL EFFECT: Appropriation: Yes Fiscal Com.: Yes Local: No

The Senate Budget and Fiscal Review Committee writes:

According to the California Department of Human Resources (CalHR), BU 12’s MOU results in the following costs:

Fiscal Year 2016-17: $37.9 million ($12.4 million General Fund)
Total Incremental Cost: $139.5 million ($44.3 million General Fund)
Total Budgetary Cost: $396.9 million ($126.5 million General Fund)

In addition, according to CalHR roughly $5 million General Fund a year will be absorbed within departmental resources for costs associated with leave cash out.

Judicial Branch Employee Benefits will result in $9.9 million General Fund costs.

SUPPORT: (Verified 6/14/16)

None received

OPPOSITION: (Verified 6/14/16)

None received

ASSEMBLY FLOOR: 51-26, 4/28/16

AYES: Alejo, Arambula, Atkins, Bloom, Bonilla, Bonta, Brown, Burke, Calderon, Campos, Chau, Chiu, Chu, Cooley, Cooper, Dababneh, Dodd, Eggman, Frazier, Cristina Garcia, Eduardo Garcia, Gatto, Gipson, Gomez, Gonzalez, Gordon, Gray, Roger Hernández, Holden, Irwin, Jones-Sawyer, Levine, Lopez, Low, McCarty, Medina, Mullin, Nazarian, O'Donnell, Quirk, Ridley-Thomas, Rodriguez, Salas, Santiago, Mark Stone, Thurmond, Ting, Weber, Williams, Wood, Rendon

NOES: Achadjian, Travis Allen, Baker, Bigelow, Brough, Chang, Chávez, Dahle, Beth Gaines, Gallagher, Grove, Harper, Jones, Kim, Lackey, Linder, Maienschein, Mayes, Melendez, Obernolte, Olsen, Patterson, Steinorth, Wagner, Waldron, Wilk

NO VOTE RECORDED: Daly, Hadley, Mathis

Prepared by:

6/17/16 14:58:04

**** END ****

Senator Mark Leno, Chair

2015 - 2016 Regular

Bill No: Hearing Date: June 13, 2016

Author:	Committee on Budget
Version:	As amended
Urgency:		Fiscal:
Consultant:

Subject: State Employment

Summary:

Makes necessary statutory and technical changes to the labor-related provisions of the Budget Act of 2016. Additionally, provides legislative ratification for the memoranda of understanding (MOU) agreed to by the state and bargaining unit (BU) 12 represented exclusively by International Union of Operating Engineers (IUOE).

Existing Law:

Establishes the Ralph C. Dills Act, which requires the state to collectively bargain with the exclusive representatives of employee groups (i.e. bargaining units) regarding wages and working conditions, and to define negotiated agreements in MOUs.
Establishes the California Department of Human Resources (CalHR) as the official representative of the Governor in all matters related to collective bargaining with state employees.
Requires that any MOU between the state and an exclusive representative must be ratified by the Legislature.
Establishes the California Public Employees' Retirement System (CalPERS), which administers health and retirement benefits for state employees.
Requires the Legislative Analyst's Office (LAO) to analyze all state MOUs and to provide analyses of an MOU and its fiscal impact to the Legislature within 10 days of receipt of an MOU from CalHR.
Provides that fully vested state retirees (e.g., with 20 or more years of state employment) are entitled to an employer contribution for retiree health care equal to 100 percent of the weighted average premium of the four health plans most highly utilized by all members. Dependents are eligible for a contribution based on 90 percent of the average additional premiums paid for dependents during the benefit year in which the formula is applied. This is referred to as the 100/90 formula.
Requires that Medicare-eligible retirees enroll in Medicare and choose a Medicare-coordinated health plan. Since these plans may be cheaper than non-Medicare (or "Basic" plans), thus resulting in some portion of the employer contribution going unused, current law requires that any unused portion of the 100/90 formula contributions may be applied to reimburse retirees for the costs of Medicare Part B premiums. These reimbursements are made in the form of an additional payment to the retiree on the retirement warrant up to the cost of the Part B premium. Whether or not a retiree receives the Medicare Part B reimbursement in full or in part depends upon the cost of that retiree's health plan.
Provides that most state employees (those hired after 1985 or 1989, depending on class) must work for 10 years to receive 50 percent of the 100/90 formula, with an additional 5 percent per year of service until, after 20 years, they are vested to receive 100 percent of the 100/90 formula. Individuals hired prior to 1985 or 1989 could be subject to either 5 year or 10 year vesting for full coverage of the 100/90 formula.
Provides that retirees who were covered in certain bargaining units while actively employed will receive an employer retiree health contribution based on the 80/80 formula (i.e., 80 percent of the weighted average premium of the four health plans most highly utilized by all members).
Provides that the employer contribution for active state employee health care shall be determined through collective bargaining. In its MOU effective 2013 to 2015, BU 12 (IUOE) agreed to a flat dollar amount, as specified.

Proposed Law:

Bargaining Unit 12 Memorandum of Understanding: the following information summarizing the general provisions of the MOU was provided by CalHR.

Number of Employees: The BU 12 agreement affects approximately 10,778 full-time equivalents, and includes the following agreements.

HEALTH BENEFITS

Employer Contribution for Active State Employees. Effective the pay period following ratification, the state’s monthly health benefit contribution for each employee shall continue to be a flat dollar amount equal to 80 percent of the weighted average of the basic health benefit plan premiums of the four largest enrolled basic health plans. For each employee with enrolled family members, the employer shall continue to contribute an additional flat dollar amount equal to 80 percent of the weighted average of the additional premiums. The flat dollar amounts shall be increased as appropriate, pursuant to the formulas on January 1, 2017, January 1, 2018, and January 1, 2019.
Employer Contribution for Future Retirees. Employees first hired on or after January 1, 2017, will receive an employer contribution for retiree health benefits based on an “80/80” formula. Retirees and their dependents enrolled in a basic health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest basic health benefit plans based on state active employee enrollment. Retirees and their dependents enrolled in a Medicare health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest Medicare health benefit plans based on state retiree enrollment.
Prefunding of Other Post-Employment Benefits. The state and Bargaining Unit 12 members will prefund retiree healthcare with the goal of reaching 50 percent cost- sharing of actuarially determined total normal cost for employer and employees by July 1, 2019. The state and employees will each make the following contributions:
1. Effective July 1, 2017, 1.4 percent for a total of 1.9 percent of pensionable compensation.
2. Effective July 1, 2018, an additional 1.4 percent for a total of 3.3 percent of pensionable compensation.
3. Effective July 1, 2019, an additional 1.3 percent for a total of 4.06 percent of pensionable compensation.
Post-Employment Health and Dental Benefit Vesting Schedule. All employees first employed by the state on or after January 1, 2017, will be subject to an extended vesting schedule providing 50 percent of the employer contribution upon completion of 15 years of state service, increasing five percent for each additional year of service, until the employee is 100 percent vested at 25 years of state service.
Medicare Part B Supplemental Benefit. All employees first hired on or after January 1, 2017, will no longer be eligible to use the employer contribution for retiree health benefits for Medicare Part B premiums.

COMPENSATION

General Salary Increase (GSI)
1. Effective July 1, 2016, Unit 12 employees shall receive a three percent GSI.
2. Effective July 1, 2017, all Unit 12 employees shall receive a four percent GSI.
3. Effective July 1, 2018, all Unit 12 employees shall receive a three percent GSI.
Special Salary Adjustments
1. Effective July 1, 2016 and 2017, Unit 12 employees in specified heavy equipment mechanic classifications shall receive a special salary adjustment of five percent.
2. Effective July 1, 2016, Unit 12 employees in specified electrician classifications shall receive a special salary adjustment of five percent.
3. Effective July 1, 2016, and 2017, Unit 12 employees in specified telecommunications technician classifications shall receive a special salary adjustment of five percent.
Uniform Allowance
1. Increases the uniform reimbursement from $470 to $670 for full-time employees that work for the Department of Parks and Recreation, or the Department of Forestry and Fire Protection.
2. Provides an annual footwear allowance of $82 for specified permanent full-time employees that work for the Department of Corrections and Rehabilitation or the California Highway Patrol.

MISCELLANEOUS

Leave Cash Out, Additional Sick Leave, Overtime Meal Allowance, Monthly Payroll Cycle
1. Increases the amount of leave that can be cashed out annually from 20 hours to 80 hours, depending on the available department funds effective May 1, 2017.
2. Incorporates the Wounded Warriors Transitional Leave Act to provide up to 96 hours of additional sick leave for employees hired after January 1, 2016, who are military veterans and have a service connected disability rated 30 percent.
3. Increases the Overtime Meal Allowance from $6.00 to $8.00, effective approximately three months after ratification, for employees that work for Caltrans.
4. Converts all Caltrans employees to a monthly payroll cycle and provides a one-time supplemental payment equivalent to the employee’s existing semi-monthly gross salary, not to exceed $1,200 effective approximately three months after ratification.

DURATION

July 1, 2015 through July 1, 2019.

JUDICIAL BRANCH EMPLOYEE BENEFITS

Post-Employment Health and Dental Benefit Vesting Schedule. A judicial branch employee first employed by the state on or after January 1, 2017, will be subject to a vesting schedule providing 50 percent of the employer contribution upon completion of 15 years of state service, increasing five percent for each additional year of service, until the employee is 100 percent vested at 25 years of state service.
Employer Contribution for Future Retirees. Employees first hired on or after January 1, 2017, will receive an employer contribution for retiree health benefits based on an “80/80” formula. Retirees and their dependents enrolled in a basic health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest basic health benefit plans based on state active employee enrollment. Retirees and their dependents enrolled in a Medicare health benefit plan will receive an employer contribution equal to 80 percent of the weighted average premium of the four largest Medicare health benefit plans based on state retiree enrollment.
Prefunding of Other Post-Employment Benefits. The state and state employees in the judicial branch will prefund retiree healthcare with the goal of reaching 50 percent cost-sharing of actuarially determined total normal cost for employer and employees by July 1, 2019. The state and employees will each make the following contributions:
1. Effective July 1, 2016, 1.4 percent of pensionable compensation.
2. Effective July 1, 2017, up to an additional 1.5 percent for a total employee contribution of up to three percent of pensionable compensation. The additional amount shall be determined by the Director of Finance no later than April 1, 2017.
Medicare Part B Supplemental Benefit. All employees first hired on or after January 1, 2017, will no longer be eligible to use the employer contribution for retiree health benefits for Medicare Part B premiums.
Employee Pension Contribution. Increases the employee pension contribution on or after July 1, 2017, from five percent to eight percent.
Judges Salary Survey. Clarifies the statutory methodology used to calculate the annual salary adjustment for state judges and justices to include both salary increases and decreases to be considered when calculating the average state wage growth for purposes of adjusting salaries of judges and justices.

CIVIL SERVICE IMPROVEMENT

Exempt Employee Reinstatement. Simplify the exempt appointee reinstatement guidelines by consolidating various periods which an employee is required to make a request for reinstatement. The new guidelines require no break in state service, and submittal of a request within 10 working days after the effective date of termination, regardless of exempt appointment type. If an employee seeks reinstatement after more than 10 working days after the effective date of termination, reinstatement is at the discretion of the appointing power. Provides exempt appointees who have at least five years of state service, within four years of termination, a right to obtain civil service appointment list eligibility by taking a deferred examination for any class that has a current eligible list and for which the employee meets the minimum qualifications of the class.
Leave Credit. Specifies that an overpayment of leave credits to state employees occurs when the employee receives compensation in exchange for leave erroneously credited to the employee for the purposes of an action to recover overpayment.
Training. Specifies managers, supervisors and career executive assignment (CEAs) employees will be required to complete various leadership training and development as prescribed by the department.

Fiscal Effect:

According to CalHR, BU 12’s MOU results in the following costs:

Fiscal Year 2016-17: $37.9 million ($12.4 million General Fund)
Total Incremental Cost: $139.5 million ($44.3 million General Fund)
Total Budgetary Cost: $396.9 million ($126.5 million General Fund)

In addition, according to CalHR roughly $5 million General Fund a year will be absorbed within departmental resources for costs associated with leave cash out.

Judicial Branch Employee Benefits will result in $9.9 million General Fund costs.

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Discussed in Hearing

7MIN

Senate Standing Committee on Budget and Fiscal Review

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Authors shown for version:
Amended Senate (6/13/2016)