BILL NUMBER: SB 807	AMENDED
	BILL TEXT

	AMENDED IN SENATE  JUNE 13, 2011

INTRODUCED BY    Committee on Veterans Affairs 
 (   Senators Correa (Chair), Berryhill,
Calderon, Cannella, La Malfa, Negrete McLeod, and Rubio 
 )   Senators   Correa   and
Lieu 

                        FEBRUARY 18, 2011

    An act to amend Section 1636 of the Military and Veterans
Code, relating to the military.   An act to amend
Section 20636 of the Government Code, relating to retirement, and
declaring the urgency thereof, to take effect immediately. 


	LEGISLATIVE COUNSEL'S DIGEST


   SB 807, as amended,  Committee on Veterans Affairs
  Correa  .  National defense. 
 Retirement: compensation earnable.  
   The Public Employees' Retirement Law (PERL) establishes the Public
Employees' Retirement System, which is administered by its board of
administration, and which provides a defined benefit to its members
based on age at retirement, service credit, and final compensation.
PERL defines compensation earnable, for purposes of calculating a
member's retirement allowance, as the member's payrate and special
compensation. PERL specifically excludes from payrate and special
compensation for state members any compensation for additional
services outside regular duties, such as standby pay, callback pay,
court duty, allowance for automobiles, and bonuses for duties
performed after the member's regular work shift.  
   This bill would additionally exclude from payrate and special
compensation for state members any allowance for travel expenses or
housing.  
   This bill would declare that it is to take effect immediately as
an urgency statute.  
   Existing law for national defense provides for the Sabotage
Prevention Act of 1950 and includes definitions for terms therein,
including a definition for "defense preparation."  
   This bill would make a technical, nonsubstantive change to this
provision. 
   Vote:  majority   2/3  . Appropriation:
no. Fiscal committee:  no   yes  .
State-mandated local program: no.


THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS:

   SECTION 1.    Section 20636 of the  
Government Code   is amended to read: 
   20636.  (a) "Compensation earnable" by a member means the payrate
and special compensation of the member, as defined by subdivisions
(b), (c), and (g), and as limited by Section 21752.5.
   (b) (1) "Payrate" means the normal monthly rate of pay or base pay
of the member paid in cash to similarly situated members of the same
group or class of employment for services rendered on a full-time
basis during normal working hours, pursuant to publicly available pay
schedules. "Payrate," for a member who is not in a group or class,
means the monthly rate of pay or base pay of the member, paid in cash
and pursuant to publicly available pay schedules, for services
rendered on a full-time basis during normal working hours, subject to
the limitations of paragraph (2) of subdivision (e).
   (2) "Payrate" shall include an amount deducted from a member's
salary for any of the following:
   (A) Participation in a deferred compensation plan.
   (B) Payment for participation in a retirement plan that meets the
requirements of Section 401(k) of Title 26 of the United States Code.

   (C) Payment into a money purchase pension plan and trust that
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
   (D) Participation in a flexible benefits program.
   (3) The computation for a leave without pay of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence.
   (4) The computation for time prior to entering state service shall
be based on the compensation earnable by him or her in the position
first held by him or her in state service.
   (c) (1) Special compensation of a member includes a payment
received for special skills, knowledge, abilities, work assignment,
workdays or hours, or other work conditions.
   (2) Special compensation shall be limited to that which is
received by a member pursuant to a labor policy or agreement or as
otherwise required by state or federal law, to similarly situated
members of a group or class of employment that is in addition to
payrate. If an individual is not part of a group or class, special
compensation shall be limited to that which the board determines is
received by similarly situated members in the closest related group
or class that is in addition to payrate, subject to the limitations
of paragraph (2) of subdivision (e).
   (3) Special compensation shall be for services rendered during
normal working hours and, when reported to the board, the employer
shall identify the pay period in which the special compensation was
earned.
   (4) Special compensation may include the full monetary value of
normal contributions paid to the board by the employer, on behalf of
the member and pursuant to Section 20691, if the employer's labor
policy or agreement specifically provides for the inclusion of the
normal contribution payment in compensation earnable.
   (5) The monetary value of a service or noncash advantage furnished
by the employer to the member, except as expressly and specifically
provided in this part, is not special compensation unless regulations
promulgated by the board specifically determine that value to be
"special compensation."
   (6) The board shall promulgate regulations that delineate more
specifically and exclusively what constitutes "special compensation"
as used in this section. A uniform allowance, the monetary value of
employer-provided uniforms, holiday pay, and premium pay for hours
worked within the normally scheduled or regular working hours that
are in excess of the statutory maximum workweek or work period
applicable to the employee under Section 201 et seq. of Title 29 of
the United States Code shall be included as special compensation and
appropriately defined in those regulations.
   (7) Special compensation does not include any of the following:
   (A) Final settlement pay.
   (B) Payments made for additional services rendered outside of
normal working hours, whether paid in lump sum or otherwise.
   (C) Other payments the board has not affirmatively determined to
be special compensation.
   (d) Notwithstanding any other provision of law, payrate and
special compensation schedules, ordinances, or similar documents
shall be public records available for public scrutiny.
   (e) (1) As used in this part, "group or class of employment" means
a number of employees considered together because they share
similarities in job duties, work location, collective bargaining
unit, or other logical work-related grouping. One employee may not be
considered a group or class.
   (2) Increases in compensation earnable granted to an employee who
is not in a group or class shall be limited during the final
compensation period applicable to the employees, as well as the two
years immediately preceding the final compensation period, to the
average increase in compensation earnable during the same period
reported by the employer for all employees who are in the same
membership classification, except as may otherwise be determined
pursuant to regulations adopted by the board that establish
reasonable standards for granting exceptions.
   (f) As used in this part, "final settlement pay" means pay or cash
conversions of employee benefits that are in excess of compensation
earnable, that are granted or awarded to a member in connection with,
or in anticipation of, a separation from employment. The board shall
promulgate regulations that delineate more specifically what
constitutes final settlement pay.
   (g) (1) Notwithstanding subdivision (a), "compensation earnable"
for state members means the average monthly compensation, as
determined by the board, upon the basis of the average time put in by
members in the same group or class of employment and at the same
rate of pay, and is composed of the payrate and special compensation
of the member. The computation for an absence of a member shall be
based on the compensation earnable by him or her at the beginning of
the absence and for time prior to entering state service shall be
based on the compensation earnable by him or her in the position
first held by him or her in that state service.
   (2) Notwithstanding subdivision (b), "payrate" for state members
means the average monthly remuneration paid in cash out of funds paid
by the employer to similarly situated members of the same group or
class of employment, in payment for the member's services or for time
during which the member is excused from work because of holidays,
sick leave, vacation, compensating time off, or leave of absence.
"Payrate" for state members shall include:
   (A) An amount deducted from a member's salary for any of the
following:
   (i) Participation in a deferred compensation plan established
pursuant to Chapter 4 (commencing with Section 19993) of Part 2.6.
   (ii) Payment for participation in a retirement plan that meets the
requirements of Section 401(k) of Title 26 of the United States
Code.
   (iii) Payment into a money purchase pension plan and trust that
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
   (iv) Participation in a flexible benefits program.
   (B) A payment in cash by the member's employer to one other than
an employee for the purpose of purchasing an annuity contract for a
member under an annuity plan that meets the requirements of Section
403(b) of Title 26 of the United States Code.
   (C) Employer "pick up" of member contributions that meets the
requirements of Section 414(h)(2) of Title 26 of the United States
Code.
   (D) Disability or workers' compensation payments to safety members
in accordance with Section 4800 of the Labor Code.
   (E) Temporary industrial disability payments pursuant to Article 4
(commencing with Section 19869) of Chapter 2.5 of Part 2.6.
   (F) Other payments the board may determine to be within "payrate."

   (3) Notwithstanding subdivision (c), "special compensation" for
state members shall mean all of the following:
   (A) The monetary value, as determined by the board, of living
quarters, board, lodging, fuel, laundry, and other advantages of any
nature furnished to a member by his or her employer in payment for
the member's services.
   (B) Compensation for performing normally required duties, such as
holiday pay, bonuses (for duties performed on regular work shift),
educational incentive pay, maintenance and noncash payments,
out-of-class pay, marksmanship pay, hazard pay, motorcycle pay,
paramedic pay, emergency medical technician pay, Peace Officer
Standards and Training (POST) certificate pay, and split shift
differential.
   (C) Compensation for uniforms, except as provided in Section
20632.
   (D) Other payments the board may determine to be within "special
compensation."
   (4) "Payrate" and "special compensation" for state members do not
include any of the following:
   (A) The provision by the state employer of a medical or hospital
service or care plan or insurance plan for its employees (other than
the purchase of annuity contracts as described below in this
subdivision), a contribution by the employer to meet the premium or
charge for that plan, or a payment into a private fund to provide
health and welfare benefits for employees.
   (B) A payment by the state employer of the employee portion of
taxes imposed by the Federal Insurance Contribution Act.
   (C) Amounts not available for payment of salaries and that are
applied by the employer for the purchase of annuity contracts
including those that meet the requirements of Section 403(b) of Title
26 of the United States Code.
   (D) Benefits paid pursuant to Article 5 (commencing with Section
19878) of Chapter 2.5 of Part 2.6.
   (E) Employer payments that are to be credited as employee
contributions for benefits provided by this system, or employer
payments that are to be credited to employee accounts in deferred
compensation plans. The amounts deducted from a member's wages for
participation in a deferred compensation plan may not be considered
to be "employer payments."
   (F) Payments for unused vacation, annual leave, personal leave,
sick leave, or compensating time off, whether paid in lump sum or
otherwise.
   (G) Final settlement pay.
   (H) Payments for overtime, including pay in lieu of vacation or
holiday.
   (I) Compensation for additional services outside regular duties,
such as standby pay, callback pay, court duty, allowance for
automobiles  or any   travel expenses  , and
bonuses for duties performed after the member's regular work shift.
   (J) Amounts not available for payment of salaries and that are
applied by the employer for any of the following:
   (i) The purchase of a retirement plan that meets the requirements
of Section 401(k) of Title 26 of the United States Code.
   (ii) Payment into a money purchase pension plan and trust that
meets the requirements of Section 401(a) of Title 26 of the United
States Code.
   (K) Payments made by the employer to or on behalf of its employees
who have elected to be covered by a flexible benefits program, where
those payments reflect amounts that exceed the employee's salary.

   (L) Any allowance for housing.  
   (L) 
    (M)  Other payments the board may determine are not
"payrate" or "special compensation."
   (5) If the provisions of this subdivision, including the board's
determinations pursuant to subparagraph (F) of paragraph (2) and
subparagraph (D) of paragraph (3), are in conflict with the
provisions of a memorandum of understanding reached pursuant to
Section 3517.5 or 3560, 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, those provisions may not become effective unless approved
by the Legislature in the annual Budget Act. No memorandum of
understanding reached pursuant to Section 3517.5 or 3560 may exclude
from the definition of either "payrate" or "special compensation" a
member's base salary payments or payments for time during which the
member is excused from work because of holidays, sick leave,
vacation, compensating time off, or leave of absence. If items of
compensation earnable are included by memorandum of understanding as
"payrate" or "special compensation" for retirement purposes for
represented and higher education employees pursuant to this
paragraph, the Department of Personnel Administration or the Trustees
of the California State University shall obtain approval from the
board for that inclusion.
   (6) (A) Subparagraph (B) of paragraph (3) prescribes that
compensation earnable includes compensation for performing normally
required duties, such as holiday pay, bonuses (for duties performed
on regular work shift), educational incentive pay, maintenance and
noncash payments, out-of-class pay, marksmanship pay, hazard pay,
motorcycle pay, paramedic pay, emergency medical technician pay, POST
certificate pay, and split shift differential; and includes
compensation for uniforms, except as provided in Section 20632; and
subparagraph (I) of paragraph (4) excludes from compensation earnable
compensation for additional services outside regular duties, such as
standby pay, callback pay, court duty, allowance for automobile, and
bonuses for duties performed after regular work shift.
   (B) Notwithstanding subparagraph (A), the Department of Personnel
Administration shall determine which payments and allowances that are
paid by the state employer shall be considered compensation for
retirement purposes for an employee who either is excluded from the
definition of state employee in Section 3513, or is a nonelected
officer or employee of the executive branch of government who is not
a member of the civil service.
   (C) Notwithstanding subparagraph (A), the Trustees of the
California State University shall determine which payments and
allowances that are paid by the trustees shall be considered
compensation for retirement purposes for a managerial employee, as
defined in Section 3562, or supervisory employee as defined in
Section 3580.3.
  SEC. 2.    This act is an urgency statute necessary
for the immediate preservation of the public peace, health, or safety
within the meaning of Article IV of the Constitution and shall go
into immediate effect. The facts constituting the necessity are:
 
   Travel and housing allowances have been improperly included as
compensation in calculating the retirement benefits for certain state
employees, resulting in increased benefit payments for those
employees. Due to the state's severe fiscal crisis, and the fiduciary
responsibility to taxpayers, it is imperative to eliminate these
inflated retirement benefits at the earliest possible time. 

  SECTION 1.    Section 1636 of the Military and
Veterans Code is amended to read:
   1636.  "Defense preparation" means any of the following:
   (a) The manufacture, transportation, or storage of any product to
be used in the preparation of the United States or any of the states
for defense or for war or in the prosecution of war by the United
States or in the rendering of assistance by the United States to any
other nation in connection with that nation's defense.
   (b) The manufacture, transportation, distribution, or storage of
gas, oil, coal, electricity, or water.
   (c) The operation of any public utility.