BILL ANALYSIS Ó
-----------------------------------------------------------------
|SENATE RULES COMMITTEE | AB 1630|
|Office of Senate Floor Analyses | |
|(916) 651-1520 Fax: (916) | |
|327-4478 | |
-----------------------------------------------------------------
THIRD READING
Bill No: AB 1630
Author: Committee on Budget
Amended: 8/30/16 in Senate
Vote: 21
SENATE BUDGET & FISCAL REVIEW COMMITTEE: 14-1, 8/31/16
AYES: Leno, Nielsen, Allen, Anderson, Beall, Block, Hancock,
Mitchell, Monning, Pan, Pavley, Roth, Stone, Wolk
NOES: Moorlach
NO VOTE RECORDED: Glazer, Nguyen
ASSEMBLY FLOOR: Not relevant
SUBJECT: State employment
SOURCE: Author
DIGEST: This bill provides legislative ratification for the
memoranda of understanding (MOU) agreed to by the state and
Bargaining Unit (BU) 2, which includes attorneys and hearing
officers represented by California Attorneys, Administrative Law
Judges, and Hearing Officers in State Employment.
ANALYSIS: This bill ratifies the proposed BU 2 MOU provisions,
effective July 1, 2016 through July 1, 2019, and affect
approximately 3,890 full-time equivalent positions.
Specifically, this bill provides the following:
Health Benefits
1) Employer Contribution for Active State Employees. The
AB 1630
Page 2
state's monthly consolidated 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
adjusted as appropriate, pursuant to the formulas on January
1, 2017, January 1, 2018, and January 1, 2019.
2) 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.
3) Prefunding of Other Post-Employment Benefits. The state and
BU 2 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:
a) Effective July 1, 2017, 0.7 percent of pensionable
compensation.
b) Effective July 1, 2018, an additional 0.6 percent for
a total of 1.3 percent of pensionable compensation.
c) Effective July 1, 2019, an additional 0.7 percent for
a total of 2.0 percent of pensionable compensation.
AB 1630
Page 3
1) Post-Employment Health and Dental 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.
2) 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 a retiree health benefit
plan for Medicare Part B premiums.
Compensation
3) General Salary Increase (GSI).
a) Effective the first day of the pay period following
ratification, BU 2 employees shall receive a five percent
GSI.
b) Effective July 1, 2017, BU 2 employees shall receive a
five percent GSI.
c) Effective July 1, 2018, BU 2 employees shall receive a
four percent GSI.
Miscellaneous
1) Prohibits the implementation of a furlough program or a
mandatory personal leave program during the first year of the
agreement. Any furlough during the second or third year must
be authorized by the Legislature.
AB 1630
Page 4
2) Effective May 1, 2017, and depending on the availability of
departmental funds, the amount of leave that can be cashed
out each year increases from 20 hours to 80 hours.
3) Removes the requirement that a new employee must work two
years before receiving the full employer health contribution
for dependents.
4) Effective the first day of the pay period following
ratification, the lodging reimbursement rate shall increase
from $150 to $250 for San Francisco.
5) Incorporates the Wounded Warriors Transitional Leave Act (SB
221, Jackson, Chapter 794, Statutes of 2015), which provides
up to 96 hours of additional sick leave for an employee hired
on or after January 1, 2016, who is a military veteran with a
service-connected disability rated 30 percent.
6) Increases the pension contribution rates by one percent for
BU 2 excluded employees for the purpose of ensuring the same
contribution rate as BU 2 rank and file employees.
Other Provisions
7) Chief Sergeant-at-Arms. This bill also classifies the chief
sergeant-at-arms of the Assembly as a peace officer in
CalPERS for the purpose of ensuring that the Assembly chief
sergeant-at-arms and the rank and file sergeants are subject
to the same retirement benefit formulas. The chief
sergeant-at-arms of the Senate will continue to be excluded
from the peace officer classification in CalPERS.
This change is due to the passage of the Public Employees'
Pension Reform Act of 2013, which closed the Legislator's
Retirement System to new members and inadvertently resulted
in a new chief sergeant-at-arms (now classified as a
AB 1630
Page 5
"miscellaneous" member in CalPERS) receiving a retirement
benefit formula lower than that provided to rank and file
sergeants who are classified as peace officers in CalPERS.
FISCAL EFFECT: Appropriation: Yes Fiscal
Com.:YesLocal: No
According to the California Department of Human Resources
(CalHR), BU 2's MOU results in the following costs:
Fiscal Year 2016-17: $24.2 million ($6.6 million General
Fund)
Total Incremental: $109.1 million ($29.7 million General
Fund)
Total Budgetary: $309 million( $84.1 million General Fund)
In addition, according to CalHR, roughly $4 million General Fund
a year will be absorbed within departmental resources for costs
associated with leave cash out.
SUPPORT: (Verified 8/31/16)
None received
OPPOSITION: (Verified 8/31/16)
AB 1630
Page 6
None received
Prepared by:Anita Lee / B. & F.R. / (916) 651-4103
8/31/16 16:11:58
**** END ****