BILL ANALYSIS Ó
SB 99
Page 1
(Without Reference to File)
SENATE THIRD READING
SB
99 (Committee on Budget and Fiscal Review)
As Amended September 10, 2015
Majority vote. Budget Bill Appropriation Takes Effect
Immediately
SENATE VOTE: Vote not relevant
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|Committee |Votes|Ayes |Noes |
| | | | |
| | | | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Budget |27-0 |Weber, Melendez, | |
| | |Travis Allen, | |
| | |Bigelow, Bloom, | |
| | |Bonta, Campos, | |
| | |Chávez, Chiu, Cooper, | |
| | |Gordon, Grove, Jones, | |
| | | | |
| | | | |
| | | | |
| | |Jones-Sawyer, Kim, | |
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| | |Lackey, McCarty, | |
| | |Mullin, Nazarian, | |
| | |Obernolte, O'Donnell, | |
| | |Patterson, Rodriguez, | |
| | |Thurmond, Ting, Wilk, | |
| | |Williams | |
| | | | |
|----------------+-----+----------------------+--------------------|
|Budget |14-9 |Weber, Bigelow, |Melendez, Travis |
| | |Bloom, Bonta, Campos, |Allen, Chávez, |
| | |Chiu, Gordon, |Jones, Kim, Lackey, |
| | | |Obernolte, |
| | | |Patterson, Wilk |
| | |Jones-Sawyer, Mullin, | |
| | |Nazarian, O'Donnell, | |
| | |Rodriguez, Thurmond, | |
| | |Ting | |
| | | | |
| | | | |
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SUMMARY: Makes necessary statutory and technical changes to
implement the Budget Act of 2015 related to Civil Service
improvement provisions. Additionally, provides legislative
ratification for the memoranda of understanding (MOU) agreed to
by the state and bargaining units (BUs) 9 and 10. Specifically,
this bill:
1)Provides legislative ratification for the memoranda of
understanding for the following state bargaining units:
a) BU 9 (Professional Engineers), represented exclusively
by Professional Engineers in California Government (PEGC),
and
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b) BU 10 (Professional Scientists), represented exclusively
by the California Association of Professional Scientists
(CAPS).
2)Updates and expands the definition of career executive to mean
an employee appointed from an employment list established for
the express purpose of providing a list of persons who are
eligible for career executive assignment (CEA) as specified
for persons employed by the Legislature, persons who served in
the United States (US) military, persons holding nonelected
exempt positions in the executive branch of government and
private sector employees.
3)Simplifies and streamlines the process for persons employed by
the Legislature, persons who served in the US military, and to
persons holding nonelected exempt positions in the executive
branch of government to obtain eligibility on a civil service
list by taking a promotional or CEA exam.
4)Clarifies the termination rights of CEAs who were, prior to
their CEA appointment, legislative employees or nonelected
exempt executive branch employees to state that he or she
shall have the right to request a deferred examination for any
promotional list that his or her appointment power has in
existence at the time of termination and for which he or she
meets the minimum 1 qualifications.
5)Repeals Government Code Section 19057 relating to the Rule of
Three Names for candidates who are eligible for promotion
within civil service.
6)Expands the list of eligible employees for the purpose of
hiring persons into civil service positions by making the Rule
of Three Ranks the default certification list.
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a) Allows appointing powers discretion to look at
candidates based on a full evaluation of their merit (shown
by results other than the exam results through a hiring
process).
7)Repeals Government Code Section 19057.2 relating to creating a
list of Six Ranks for the purpose of hiring managers.
8)Makes conforming changes to reflect repealing Government Code
Section 19057.
9)Repeals Government Code Section 19057.4 relating to the Rule
of One Rank.
10)Extends existing due process rights to private sector
employees when an appointment power terminates a career
executive assignment, specifically,
a) An employee who at the time of his or her appointment to
a CEA was employed by the state and had civil service
status shall be reinstated to a civil service position that
is i) not a CEA and ii) that is at least at the same salary
level as the last position that he or she held as a
permanent or probationary employee.
b) If an employee had completed a minimum of five years of
state service, he or she may return to a position that is
i) at substantially the same salary level as the last
position or ii) at a salary level that is at least two
steps lower than that of the CEA position from which he or
she is being terminated.
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c) Allows an employee who at the time of his or her
appointment to a CEA was from the outside civil service
shall have the right to request a deferred examination for
any open eligible list that his or her appointing power or
the Department has in existence at the time of termination.
d) Requires a request for a deferred examination to be made
not later than 10 days after the effective date of
termination of the CEA.
e) Requires the department or its designee to administer
the deferred examination within 30 days of the date of the
request.
11)Includes various technical clean up language.
12)Appropriates $300,000 to Department of Finance for the
posting on the department's Internet Web site of all budget
requests included as part of the Governor's Budget.
EXISTING LAW:
1) Establishes the Ralph C. Dills Act, which requires the
state to collectively bargain with official representatives
of employee groups (i.e. bargaining units) regardless of
wages and working conditions, and to define negotiated
agreements in MOUs.
2) Establishes the California Department of Human Resources
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(CalHR) as the official representative of the Governor in
all matters related to collective bargaining.
3) Requires that any MOU between the state and an official
representative must be ratified by the Legislature.
4) Requires that an addendum to a ratified MOU must be
submitted to the Joint Legislative Budget Committee (JLBC)
for analysis, and, if so required by the JLBC, must also be
approved by the Legislature.
5) Establishes the California Public Employees' Retirement
System (CalPERS), which provides health and retirement
benefits for the state employees.
6) Requires the Legislative Analyst's Office (LAO) to
analyze all state MOUs and to provide analyses of the MOUs
and their fiscal impact to the Legislature within 10 days
of receipt of the MOUs from CalHR.
7) Establishes comprehensive public employee pension reform
through enactment of the Public Employees' Pension Reform
Act of 2013 (PEPRA) that apply to all public employee and
public pension plans on and after January 1, 2013,
excluding the University of California and charter cities
and counties that do not participate in a retirement system
governed by the state statute.
8) Provides that State BU 5 (Highway Patrol) make
prefunding contributions under its contract and that the
contributions are made by the State in lieu of salary
increases that BU 5 employees bargained in order to divert
the funds to prefunding their retiree health care
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obligations.
9) Provides that fully vested state retirees (i.e. with 20
or more years of state employment) are entitled to an
employer contribution for retiree health care equal to 100%
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% 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. Currently, there is no formula based
solely on the most highly utilized Medicare- coordinated
health plans
10) 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.
11) Provides that most state employees (those hired after
1985 or 1989, depending on class) must work for 10 years to
receive 50% of the 100/90 formula. They then add 5% per
year of service until, after 20 years, they are vested to
receive 100% 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.
BU 12 (Operating Engineers - Craft and Maintenance), agreed
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via collective bargaining, beginning in 2011, to be subject
to a 15/25 year vesting schedule.
FISCAL EFFECT: The bill would appropriate $300,000 one-time
General Fund for the Department of Finance to post all budget
requests included as part of the Governor's budget on its Web
site.
COMMENTS:
MOUs: The following information summarizing the general
provisions of the MOUs was provided by CalHR:
Number of Employees:
The BU 9 agreement affects approximately 10,815 full-time
equivalents.
The BU 10 agreement affects approximately 2,861 full-time
equivalents.
Retiree Health Benefit Reforms:
1)Prefunding of Other Post-Employment Benefit: Applicability to
all BU 9 and BU 10 employees, including related excluded and
exempt
a) The State and all Unit 9 members will prefund retiree
healthcare with the goal of each reaching 50% 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:
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i) Effective July 1, 2017, 0.5% of pensionable
compensation.
ii) Effective July 1, 2018, an additional 0.5% for a
total of 1% of pensionable compensation.
iii) Effective July 1, 2019, an additional 1% for a total
of 2% of pensionable compensation.
b) The State and all Unit 10 members will prefund retiree
healthcare with the goal of each reaching 50% 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:
i) Effective July 1, 2017, 0.7% of pensionable
compensation.
ii) Effective July 1, 2018, an additional 0.7% for a
total of 1.4% of pensionable compensation.
iii) Effective July 1, 2019, an additional 1.4% for a
total of 2.8% of pensionable compensation
2)All employees eligible for health care benefits shall
contribute in proportion to their working time-base.
3)Any contributions made by the employee shall not be
recoverable under any circumstances by the employee or the
employee's beneficiary or survivor (e.g., if the employee
should retire, die, or separate from service before becoming
eligible for a health care benefit).
4)Employer Contribution for Future Retirees' Health Care: 80/80
Formula Applicability to all new BU 9 and BU 10 employees
first hired on or after January 1, 2016, including related
excluded and exempt.
a) For non-Medicare-eligible retirees, the employer
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contribution for retiree health benefits shall not exceed
80% of the weighted average premiums of the four health
benefit plans most highly utilized by active state
employees.
i) The employer contribution for a
non-Medicare-eligible retiree's dependent shall be no
more than 80% of the weighted average of the additional
premiums required for enrollment of those family members
during the benefit year in which the formula is applied.
b) For Medicare-eligible retirees, the employer
contribution for retiree health benefits shall not exceed
80% of the weighted average premiums of the four
Medicare-coordinated plans most highly utilized by Medicare
eligible retirees.
i) The employer contribution for a Medicare -eligible
retiree's dependent shall be no more than 80% of the
weighted average of the additional premiums required for
enrollment of those family members during the benefit
year in which the formula is applied.
(a) The contribution for a Medicare-eligible
retiree shall not exceed the formula whether or not
the individual actually is enrolled in Medicare.
c) A retiree shall not be able to use any portion of the
employer's retiree health care contribution toward the
payment of Medicare Part B premiums.
5)Post-Employment Health Benefit Vesting Schedule
a) Applicability to all new BU 9 and BU 10 employees first
hired on or after January 1, 2016, including related
excluded and exempt
b) All BU 9 and BU 10 employees first hired into state
employment on or after January 1, 2016, will be subject to
an extended vesting schedule for retiree health benefits.
c) A BU 9 and BU 10 retiree will receive 50% of the
employer contribution upon completion of 15 years of state
service, increasing 5% for each additional year of service,
until the employee is vested for 100% of the employee
contribution after 25 years of state service.
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Compensation BU 9:
1)General Salary Increases (GSI)
a) Effective July 1, 2016, all Unit 9 represented
classifications shall receive 5% GSI.
b) Effective July 1, 2017, all Unit 9 represented
classifications shall receive a 2% GSI. (This GSI offsets
the increased contributions employees will be making toward
retiree healthcare prefunding)
2)First Night (Evening) Shift Differential: BU 9
a) Effective July 1, 2016, the first night (evening) shift
pay differential shall increase from $0.80 per hour to
$1.80 per hour for employees when four or more hours of the
regularly scheduled work shift falls between 6 p.m. and
midnight
3)Second Night (Night) Shift Differential: BU 9
a) Effective July 1, 2016, the second night (night) shift
pay differential shall increase from $1.00 per hour to
$2.00 per hour for employees where four or more hours of
the regularly scheduled work shift falls between midnight
and 6 a.m.
4)Employer Contribution: BU 9: The employer contribution for
active member health care increases to maintain the
statutorily required 80/80 formula. The increases are as
follows:
a) Five hundred twenty six dollars increasing to $557 for
an individual
b) One thousand twenty three dollars increasing to $1083
for an individual and one dependent
c) One thousand nineteen dollars increasing to $1401 for an
individual and 2 or more dependents
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5)Employer contribution for dental care for BU 9 drops as
follows:
a) Forty dollars and seventy one cents dropping to $36.64
for an individual
b) Seventy two dollars and thirty six cents dropping to
$63.97 for an individual and one dependent
c) One hundred five dollars and thirty six cents dropping
to $92.46 for an individual and 2 or more dependents
Compensation BU 10:
1)General Salary Increases (GSI)
a) BU 10 employees will receive a 5% GSI on July 1, 2016,
July 1, 2017, and July 1, 2018, for a total of 15% over
three years.
2)Pay Differentials: BU 10
a) Effective July 1, 2016, Staff Specialist Compensation
Differential Pay is extended for up to nine additional
state scientists per department. Employees who are
designated as a "primary state titled scientist" will
receive a one-step (i.e., 5%) salary increase.
3)Employer Contribution: BU 10: The employer contribution for
active member health care increases to maintain the
statutorily required 80/80 formula. The increases are as
follows:
a) Five hundred twenty six dollars increasing to $557 for
an individual
b) One thousand twenty three dollars increasing to $1083
for an individual and one dependent
c) One thousand three hundred nineteen dollars increasing
to $1401 for an individual and 2 or more dependents
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4)Employer contribution for dental care for BU 10 drops as
follows:
a) Forty dollars and seventy one cents dropping to $36.64
for an individual
b) Seventy two dollars and thirty six cents dropping to
$63.97 for an individual and one dependent
c) One hundred five dollars and thirty six cents dropping
to $92.46 for an individual and 2 or more dependents
Miscellaneous BU 9 and 10:
1)Business and Travel
a) Effective July 1, 2016, the state agrees to increase
lodging rate for Alameda, San Mateo, and Santa Clara
counties from $125 to $140
b) Private Aircraft Mileage Reimbursement Rate: Effective
July 1, 2016, the state agrees to increase the
reimbursement rate from $0.50 to $1.29.
2)Time off for Organ and Bone Marrow Donation
a) Employees will be allowed up to 30 days of paid leave
for organ donation and five days of paid leave for bone
marrow donation. Employees must exhaust their own accrued
sick leave before using the benefit.
3)Furlough/Mandatory Personal Leave Program Protection
a) The state agrees to not implement a furlough program or
a mandatory Personal Leave Program during the first two
years of the agreement. Any furlough during the third year
must be authorized pursuant to an act of the Legislature.
4)80-Hour Vacation/Annual Leave Cash Out
a) Effective June 1, 2016, and depending on the
availability of departmental funds, the state agrees to
permit cash out of leave up to 80 hours per year.
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b) The agreement also establishes a joint labor-management
committee to provide recommendations on reducing excessive
leave balances.
Duration:
BU 9 - Three years - July 2, 2015 to June 30, 2018
BU 10 - Three years - July 2, 2015 to July 1, 2018
Civil Service Improvement Comments:
1) According to the Department of Finance, this trailer
bill includes the first round of Civil Service Improvement
proposals aimed at simplifying the state's outdated
processes. These specific proposals will make modest
improvements to streamline the state's existing hiring
process and broaden the pool of eligible candidates for
Rank and File or Managerial appointments within state civil
service. Additionally, this proposal will increase state
resource transparency by requiring the Department of
Finance to make all budgetary requests available
electronically on its website.
Support: None on file
Opposition: None on file
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Analysis Prepared by:
Genevieve Morelos / BUDGET /916-319-2099 FN:
0002414