BILL ANALYSIS                                                                                                                                                                                                    




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          |SENATE RULES COMMITTEE            |                         SB 99|
          |Office of Senate Floor Analyses   |                              |
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                                UNFINISHED BUSINESS 


          Bill No:  SB 99
          Author:   Committee on Budget and Fiscal Review  
          Amended:  9/10/15  
          Vote:     21  

           SENATE FLOOR:  Not relevant  
            
           ASSEMBLY FLOOR:  Not available

           SUBJECT:   State civil service


          SOURCE:    Author

          DIGEST:   This bill provides legislative ratification for  
          memoranda of understanding (MOU) agreements between the state  
          and various state bargaining units (BU), and provides for  
          statutory changes to the state civil service system.

          Assembly Amendments delete the prior version of the bill and  
          insert the current language.

          ANALYSIS:   This bill provides legislative approval of the MOUs  
          between the state and BU 9 (Professional Engineers) on August  
          31, 2015; and, the state and BU 10 (Professional Scientists) on  
          September 4, 2015. The BU 9 MOU will be effective from July 2,  
          2015, through June 30, 2018. The BU 10 MOU will be effective  
          from July 2, 2015 through July 1, 2018. 

          Retiree Health Benefit Reforms

           1) Requires the state and employees to prefund other  
             post-employment benefits. This requirement applies to all BU  
             9 and BU 10 employees. 









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           2) Provides the following structure for the state and all BU 9  
             members to prefund retiree healthcare with the goal of each  
             reaching 50 percent cost-sharing of actuarially-determined  
             total normal cost for employer and employees by July 1, 2019:  


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


              b)    Effective July 1, 2018, an additional 0.5 percent for  
                a total of 1.0 percent of pensionable compensation. 


              c)    Effective July 1, 2019, an additional 1.0 percent for  
                a total of 2.0 percent of pensionable compensation.


           3) Provides the following structure for the state and all BU 10  
             members with the goal of each reaching 50 percent  
             cost-sharing of actuarially-determined total normal cost for  
             employer and employees by July 1, 2019:

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


              b)    Effective July 1, 2018, an additional 0.7 percent for  
                a total of 1.4 percent of pensionable compensation. 


              c)    Effective July 1, 2019, an additional 1.4 percent for  
                a total of 2.8 percent of pensionable compensation.


           4) Requires all employees who are eligible for health care  
             benefits to contribute in proportion to their working  
             time-base. Specifically, if an employee makes any  
             contributions, it 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  








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             care benefit).

          Employer Contribution for Future Retirees' Health Care

           5) Specifies an 80/80 formula that applies to all new BU 9 and  
             BU 10 employees hired on or after January 1, 2016. Specifies  
             the following employer contribution amounts for retiree  
             health benefits:

              a)    For non-Medicare-eligible retirees, the employer  
                contribution shall be an amount equal to 80 percent of the  
                weighted average premiums of the four health benefit plans  
                most highly utilized by active state employees.

              b)    For a dependent of a non-Medicare-eligible retiree,  
                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 in which the formula is applied.

              c)    For Medicare-eligible retirees, the employer  
                contribution shall be an amount equal to 80 percent of the  
                weighted average premiums of the four Medicare-coordinated  
                plans most highly utilized by Medicare eligible retirees.

              d)    For a dependent of a Medicare -eligible retiree, 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 in which the formula is applied.

              e)    The contribution for a Medicare-eligible retiree must  
                not exceed the formula whether or not the individual is  
                enrolled in Medicare.

              f)    A retiree shall not use any portion of the employer's  
                retiree health care contribution toward the payment of  
                Medicare Part B premiums.

          Post-Employment Health Benefit Vesting Schedule

           6) Specifies BU 9 and BU 10 employees first hired into state  








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             employment on or after January 1, 2016, will be subject to an  
             extended vesting schedule for retiree health benefits.  
             Specifically:

              a)    Retirees first hired into state employment on or after  
                January 1, 2016, will receive 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 vested for 100 percent of  
                the employee contribution after 25 years of state service.  


          Civil Service Reform

           7) Makes the following statutory changes to laws governing the  
             civil service system: (a) the competitive ranking of state  
             civil service employees and applicants, and (b) eligibility  
             and hiring of state employees in "Career Executive  
             Assignments (CEA). 

           8) Eliminates the "Rule of Three Names," which requires hiring  
             managers to consider only the top three individuals on  
             promotional hiring eligibility lists whose examination scores  
             result in them being in the top three names.

           9) Eliminates the "Rule of Six Ranks," which requires all  
             managerial hiring eligibility lists to be organized into six  
             ranks, depending on the scores applicants receive on the  
             classification's exam, and limits a department's hiring  
             manager to only consider applicants whose examination scores  
             result in them being in the top three ranks. 

           10)Eliminates the "Rule of One Rank," which requires  
             departmental hiring managers to only consider individuals  
             whose examination scores result in them being in the first  
             rank for supervisory positions. 

           11)Consolidates various hiring eligibility list requirements  
             into a single process, the "Rule of Three Ranks", which would  
             apply to all promotional or open state jobs. This change will  
             allow hiring managers to consider eligible persons whose  
             examination scores result in them being in the top three  








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             ranks for rank and file and managerial lists, as specified.

           12)Eliminates the requirement that a former legislative or  
             non-elected exempt employee be separated from employment for  
             no more than 12 months prior to applying for the CEA  
             position. 

           13)Expands the pool of eligible candidates that can be  
             appointed to a CEA position to include individuals from the  
             private sector who meet the requirements of the applicable  
             position. 

           14)Provides terminated CEAs hired from outside state civil  
             service the right to appeal to the State Personnel Board for  
             restoration of their assignment. 

           15)Clarifies that terminated CEAs who were previously employed  
             by the state and had permanent civil service status, have  
             return rights to a (non-CEA) civil service position, with at  
             least the same salary level as the last position they held.  
             If the employee had a minimum of five years of state service,  
             he or she may return to a position that has the same salary  
             level as the last position or at least the same salary level  
             that is at least two steps lower than the CEA position from  
             which the employee is being terminated. These provisions are  
             consistent with existing law.

           16)Authorizes terminated CEAs, hired from outside civil  
             service, to be eligible for deferred examination for any open  
             position at the department they were previously employed and  
             meet the minimum qualifications.

           17)Eliminates rules prohibiting a CEA applicant from competing  
             in multiple civil service promotional exams at more than one  
             department in the same class. 

           18)Provide one-time $300,000 General Fund for the Department of  
             Finance (DOF) to post all budget requests included as a part  
             of the Governor's Budget on DOF's website. The funds will be  
             used to purchase high-speed industrial scanners and  
             additional software programming. 









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


          SUPPORT:   (Verified9/10/15)


          None received


          OPPOSITION:   (Verified9/10/15)


          None received



          Prepared by:Anita Lee / B. & F.R. / (916) 651-4103
          9/11/15 17:29:36


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