Amended in Senate August 11, 2016

Amended in Assembly April 14, 2016

California Legislature—2015–16 Regular Session

Assembly Bill No. 1627

Introduced by Committee on Budget (Assembly Members Ting (Chair), begin delete Travis Allen, Bigelow, end delete Bloom, Bonta, Campos, begin delete Chávez, end delete Chiu, Cooper, Gordon, begin delete Grove, Harper, end delete Holden, Irwin, begin delete Kim, Lackey, end delete McCarty, begin delete Melendez, end delete Mullin, Nazarian, begin delete Obernolte, end delete O'Donnell, begin delete Patterson, end delete Rodriguez, Thurmond, begin delete Wilk, end delete and Williams)

January 7, 2016

begin delete An act relating to the Budget Act of 2016. end delete begin insert An act to amend Sections 19829.9845, 19829.9846, 22871.3, 22874.3, 22879, 22944.5, and 22958.1 of the Government Code, relating to state employment, and making an appropriation therefor, to take effect immediately, bill related to the budget. end insert

LEGISLATIVE COUNSEL’S DIGEST

AB 1627, as amended, Committee on Budget. begin delete Budget Act of 2016. end delete begin insert State employment: memorandum of understanding: Bargaining Unit 7. end insert

begin insert

(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.

end insert begin insert

This bill would approve provisions of a memorandum of understanding entered into between the state employer and State Bargaining Unit 7, the California Statewide Law Enforcement Association, 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.

end insert begin insert

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 $38,611,000 in augmentation of certain items of the Budget Act of 2016, according to a specified schedule, for State Bargaining Unit 7 employee compensation for expenditure in the 2016-17 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 2017-18 or 2018-19 fiscal years, as specified.

end insert begin insert

(2) 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.

end insert begin insert

This bill, for state employees who are first employed and become members of the retirement system on or after January 1, 2017, and are represented by State Bargaining Unit 7, as specified, 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.

end insert begin insert

(3) 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.

end insert begin insert

This bill would prohibit state employees who are first employed and become members of the retirement system on or after January 1, 2017, and are represented by State Bargaining Unit 7, as specified, 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.

end insert begin insert

(4) 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 from this requirement state employees who are first employed and become members of the retirement system on or after specified dates and are represented by specified state bargaining units.

end insert begin insert

This bill would also except from the requirement described above state employees who are first employed and become members of the retirement system on or after January 1, 2017, and are represented by State Bargaining Unit 7, as specified.

end insert begin insert

(5) 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 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 9, 10, or 12 to prefund retiree health care with the goal of reaching a 50% cost sharing of normal costs by July 1, 2019, and prescribes schedules of contribution percentages in this regard.

end insert begin insert

This bill would require the state and employees of State Bargaining Unit 7 to prefund retiree health care with the goal of reaching a 50% cost sharing of normal costs by July 1, 2019, and would prescribe a schedule of contribution percentages in this regard, 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.

end insert begin insert

(6) 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 or for other specified employees unless the person is credited with 15 or more years of state service.

end insert begin insert

This bill would prohibit state employees, as specified, who are first employed and become members of the retirement system on or after January 1, 2017, and are represented by State Bargaining Unit 7 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.

end insert begin insert

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

end insert begin delete

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

end delete

Vote: majority. Appropriation:  begin delete no end delete begin insert yes end insert . Fiscal committee:  begin delete no end delete begin insert yes end insert . State-mandated local program: no.

The people of the State of California do enact as follows:

begin insert

begin insert SECTION 1. end insert   

end insert begin insert

The Legislature finds and declares that the
purposes of this act is to approve the agreement entered into by
the state employer and State Bargaining Unit 7 pursuant to Section
3517.5 of the Government Code.

end insert

begin insert

begin insert SEC. 2. end insert   

end insert begin insert

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 7,
dated June 9, 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.

end insert

begin insert

begin insert SEC. 3. end insert   

end insert begin insert

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.

end insert

begin insert

begin insert SEC. 4. end insert   

end insert begin insert

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.

end insert

begin insert

begin insert SEC. 5. end insert   

end insert begin insert

The sum of thirty-eight million six hundred eleven
thousand dollars ($38,611,000) is hereby appropriated for State
Bargaining Unit 7 for expenditure in the 2016-17 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:

end insert begin insert

(a) Nine million six hundred sixty-seven thousand dollars
($9,667,000) from the General Fund in augmentation of Item
9800-001-0001.

end insert begin insert

(b) Nineteen million three hundred ninety-two thousand dollars
($19,392,000) from unallocated special funds in augmentation of
Item 9800-001-0494.

end insert begin insert

(c) Nine million five hundred fifty-two thousand dollars
($9,552,000) from other unallocated nongovernmental cost funds
in augmentation of Item 9800-001-0988.

end insert

begin insert

begin insert SEC. 6. end insert   

end insert

begin insert Section 19829.9845 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

19829.9845.  

(a) Notwithstanding Section 13340, for the
2017-18 fiscal year, if the Budget Act of 2017 is not enacted by
July 1, 2017, for the begin delete memorandum end delete begin insert memoranda end insert of understanding
entered into between the state employer and begin insert State Bargaining Unit
7 (effective July 2, 2016, to July 1, 2019, inclusive) and end insert 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 begin delete the end delete begin insert an end insert 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 begin delete the end delete begin insert an end insert above memorandum of understanding
for work performed between July 1, 2017, of the 2017-18 fiscal
year and the enactment of the Budget Act of 2017.

(b) If the begin delete memorandum end delete begin insert memoranda end insert of understanding entered
into between the state employer and begin insert State Bargaining Unit 7
(effective July 2, 2016, to July 1, 2019, inclusive) and end insert State
Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019,
inclusive) begin delete is end delete begin insert are end insert in effect and approved by the Legislature, the
compensation and contribution for employee benefits for state
employees represented by begin delete this end delete begin insert these end insert bargaining begin delete unit end delete begin insert units end insert 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 2017,
these expenditures shall be subsumed by the expenditure authority
approved in the Budget Act of 2017 for each affected department.

(d) This section shall only apply to an employee covered by the
begin delete term end delete begin insert terms end insert of the begin insert State Bargaining Unit 7 (effective July 2, 2016,
to July 1, 2019, inclusive) and end insert State Bargaining Unit 12 (effective
July 1, 2015, to July 1, 2019, inclusive) begin delete memorandum end delete begin insert memoranda end insert
of understanding. Notwithstanding Section 3517.8, this section
shall not apply after the begin delete term end delete begin insert terms end insert of the begin delete memorandum end delete
begin insert memoranda end insert of understanding begin delete has end delete begin insert have end insert expired. For purposes of
this section, the begin delete memorandum end delete begin insert memoranda end insert of understanding for
begin insert State Bargaining Unit 7 and end insert State Bargaining Unit 12 begin delete expires end delete
begin insert expire end insert on July 1, 2019.

begin insert

begin insert SEC. 7. end insert   

end insert

begin insert Section 19829.9846 of the end insert begin insert Government Code end insert begin insert is
amended to read: end insert

19829.9846.  

(a) Notwithstanding Section 13340, for the
2018-19 fiscal year, if the Budget Act of 2018 is not enacted by
July 1, 2018, for the begin delete memorandum end delete begin insert memoranda end insert of understanding
entered into between the state employer and begin insert State Bargaining Unit
7 (effective July 2, 2016, to July 1, 2019, inclusive) and end insert 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 begin delete the end delete begin insert an end insert 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 begin delete the end delete begin insert an end insert above memorandum of understanding
for work performed between July 1, 2018, of the 2018-19 fiscal
year and the enactment of the Budget Act of 2018.

(b) If the begin delete memorandum end delete begin insert memoranda end insert of understanding entered
into between the state employer and begin insert State Bargaining Unit 7
(effective July 2, 2016, to July 1, 2019, inclusive) and end insert State
Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019,
inclusive) begin delete is end delete begin insert are end insert in effect and approved by the Legislature, the
compensation and contribution for employee benefits for state
employees represented by begin delete this end delete begin insert these end insert bargaining begin delete unit end delete begin insert units end insert 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 2018,
these expenditures shall be subsumed by the expenditure authority
approved in the Budget Act of 2018 for each affected department.

(d) This section shall only apply to an employee covered by the
begin delete term end delete begin insert terms end insert of the begin insert State Bargaining Unit 7 (effective July 2, 2016,
to July 1, 2019, inclusive) and end insert State Bargaining Unit 12 (effective
July 1, 2015, to July 1, 2019, inclusive) begin delete memorandum end delete begin insert memoranda end insert
of understanding. Notwithstanding Section 3517.8, this section
shall not apply after the begin delete term end delete begin insert terms end insert of the begin delete memorandum end delete
begin insert memoranda end insert of understanding begin delete has end delete begin insert have end insert expired. For purposes of
this section, the begin delete memorandum end delete begin insert memoranda end insert of understanding for
begin insert State Bargaining Unit 7 end insert begin insert and end insert State Bargaining Unit 12 begin delete expires end delete
begin insert expire end insert on July 1, 2019.

begin insert

begin insert SEC. 8. end insert   

end insert

begin insert Section 22871.3 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

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 begin delete 6 end delete begin insert 6,
7, end insert 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 begin delete 6 end delete begin insert 6, 7, end insert 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.

begin insert

begin insert SEC. 9. end insert   

end insert

begin insert Section 22874.3 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

22874.3.  

(a) Notwithstanding Sections 22870, 22871, 22873,
and begin delete 22874 end delete begin insert 22874, end insert a state employee, 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 who
is represented by State Bargaining Unit begin delete 6, end delete begin insert 6 or 7 end insert 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:

 

begin delete Years of Service Contribution end delete begin insert Credited Years of Service end insert	begin delete Credited Years Percentage of Employer Contribution end delete begin insert Percentage of Employer Contribution end insert
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 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 begin insert or 7 end insert 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
begin delete 6, end delete begin insert 6 or 7, end insert who later become represented by State Bargaining Unit

begin delete 6. end delete begin insert 6 or 7. end insert

(e) Notwithstanding Section 22875, this section shall also apply
to a related state employee 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.

begin insert

begin insert SEC. 10. end insert   

end insert

begin insert Section 22879 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

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 begin delete 6 end delete begin insert 6, 7, end insert or 12.

(4) A state employee related to State Bargaining Unit begin delete 6 end delete begin insert 6, 7, end insert 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.

(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.

begin insert

begin insert SEC. 11. end insert   

end insert

begin insert Section 22944.5 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

22944.5.  

(a)  begin delete (1) end delete begin delete   end delete begin delete The end delete begin insert (1) end insert begin insert   end insert begin insert The end insert state and employees in State
Bargaining Unit begin insert 7, end insert 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.

begin insert

(6) The employees in State Bargaining Unit 7 shall make
contributions to prefund retiree health care based on the following
schedule, and the state shall make a matching contribution:

end insert begin insert

(A) Effective July 1, 2017, 1.3 percent of pensionable
compensation.

end insert begin insert

(B) Effective July 1, 2018, an additional 1.4 percent for a total
employee contribution of 2.7 percent of pensionable compensation.

end insert begin insert

(C) Effective July 1, 2019, an additional 1.3 percent for a total
employee contribution of 4.0 percent of pensionable compensation.

end insert

(c) This section only applies to employees 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 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
a bargaining unit described in subdivision (a) who is excepted
from the definition of “state employee” in subdivision (c) of
Section 3513.

begin insert

begin insert SEC. 12. end insert   

end insert

begin insert Section 22958.1 of the end insert begin insert Government Code end insert begin insert is amended
to read: end insert

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 begin delete 6 end delete begin insert 6, 7, end insert or 12.

(2) A state employee related to State Bargaining Unit begin delete 6 end delete begin insert 6, 7, end insert 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:

 

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 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 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 begin delete 6 end delete begin insert 6, 7, end insert 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
begin delete 6 end delete begin insert 6, 7, end insert or 12, who later become represented by State Bargaining
Unit begin delete 6 end delete begin insert 6, 7, end insert 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.

begin insert

begin insert SEC. 13. end insert   

end insert begin insert

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.

end insert

begin delete

SECTION 1.  

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

end delete