Amended in Assembly August 8, 2016

Amended in Assembly May 25, 2016

Senate BillNo. 857


Introduced by Committee on Budget and Fiscal Review

January 7, 2016


begin deleteAn act relating to the Budget Act of 2016. end deletebegin insertAn 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

SB 857, as amended, Committee on Budget and Fiscal Review. begin deleteBudget Act of 2016. end deletebegin insertState 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 deleteno end deletebegin insertyesend insert. Fiscal committee: begin deleteno end deletebegin insertyesend insert. State-mandated local program: no.

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

P4    1begin insert

begin insertSECTION 1.end insert  

end insert
begin insert

The Legislature finds and declares that the
2purposes of this act is to approve the agreement entered into by
P5    1the state employer and State Bargaining Unit 7 pursuant to Section
23517.5 of the Government Code.

end insert
3begin insert

begin insertSEC. 2.end insert  

end insert
begin insert

The provisions of the memorandum of understanding
4prepared pursuant to Section 3517.5 of the Government Code and
5entered into by the state employer and State Bargaining Unit 7,
6dated June 9, 2016, and that require the expenditure of funds, are
7hereby approved for the purposes of subdivision (b) of Section
83517.6 of the Government Code.

end insert
9begin insert

begin insertSEC. 3.end insert  

end insert
begin insert

The provisions of the memorandum of understanding
10approved in Section 2 of this act that require the expenditure of
11funds shall not take effect unless funds for these provisions are
12specifically appropriated by the Legislature. If funds for these
13provisions are not specifically appropriated by the Legislature,
14either the state employer or the affected employee organization
15may reopen negotiations on all or part of the memorandum of
16understanding.

end insert
17begin insert

begin insertSEC. 4.end insert  

end insert
begin insert

Notwithstanding Section 3517.6 of the Government
18Code, the provisions of the memorandum of understanding included
19in Section 2 of this act that require the expenditure of funds shall
20become effective even if the provisions of the memorandum of
21understanding are approved by the Legislature in legislation other
22than the annual Budget Act.

end insert
23begin insert

begin insertSEC. 5.end insert  

end insert
begin insert

The sum of thirty-eight million six hundred eleven
24thousand dollars ($38,611,000) is hereby appropriated for State
25Bargaining Unit 7 for expenditure in the 2016-17 fiscal year in
26augmentation of, and for the purpose of, state employee
27compensation, as provided in Items 9800-001-0001,
289800-001-0494, and 9800-001-0988 of Section 2.00 of the Budget
29Act of 2016, in accordance with the following schedule:

end insert
begin insert

30
(a) Nine million six hundred sixty-seven thousand dollars
31($9,667,000) from the General Fund in augmentation of Item
329800-001-0001.

end insert
begin insert

33
(b) Nineteen million three hundred ninety-two thousand dollars
34($19,392,000) from unallocated special funds in augmentation of
35Item 9800-001-0494.

end insert
begin insert

36
(c) Nine million five hundred fifty-two thousand dollars
37($9,552,000) from other unallocated nongovernmental cost funds
38in augmentation of Item 9800-001-0988.

end insert
39begin insert

begin insertSEC. 6.end insert  

end insert

begin insertSection 19829.9845 of the end insertbegin insertGovernment Codeend insertbegin insert is
40amended to read:end insert

P6    1

19829.9845.  

(a) Notwithstanding Section 13340, for the
22017-18 fiscal year, if the Budget Act of 2017 is not enacted by
3July 1, 2017, for thebegin delete memorandumend deletebegin insert memorandaend insert of understanding
4entered into between the state employer andbegin insert State Bargaining Unit
57 (effective July 2, 2016, to July 1, 2019, inclusive) andend insert
State
6Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019,
7inclusive) there is hereby continuously appropriated to the
8Controller from the General Fund, unallocated special funds,
9including, but not limited to, federal funds and unallocated
10nongovernmental cost funds, and any other fund from which state
11employees are compensated, the amount necessary for the payment
12of compensation and employee benefits to state employees covered
13bybegin delete theend deletebegin insert anend insert above memorandum of understanding until the Budget
14Act of 2017 is enacted. The Controller may expend an amount no
15greater than necessary to enable the Controller to compensate state
16employees covered bybegin delete theend deletebegin insert anend insert above memorandum of understanding
17for work performed between July 1, 2017, of the 2017-18 fiscal
18year and the enactment of the Budget Act of 2017.

19(b) If thebegin delete memorandumend deletebegin insert memorandaend insert of understanding entered
20into between the state employer andbegin insert State Bargaining Unit 7
21(effective July 2, 2016, to July 1, 2019, inclusive) andend insert
State
22Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019,
23inclusive)begin delete isend deletebegin insert areend insert in effect and approved by the Legislature, the
24compensation and contribution for employee benefits for state
25employees represented bybegin delete thisend deletebegin insert theseend insert bargainingbegin delete unitend deletebegin insert unitsend insert shall be
26at a rate consistent with the applicable memorandum of
27understanding referenced above.

28(c) Expenditures related to any warrant drawn pursuant to
29subdivision (a) are not augmentations to the expenditure authority
30of a department. Upon the enactment of the Budget Act of 2017,
31these expenditures shall be subsumed by the expenditure authority
32approved in the Budget Act of 2017 for each affected department.

33(d) This section shall only apply to an employee covered by the
34begin delete termend deletebegin insert termsend insert of thebegin insert State Bargaining Unit 7 (effective July 2, 2016,
35to July 1, 2019, inclusive) andend insert
State Bargaining Unit 12 (effective
36July 1, 2015, to July 1, 2019, inclusive)begin delete memorandumend deletebegin insert memorandaend insert
37 of understanding. Notwithstanding Section 3517.8, this section
38shall not apply after thebegin delete termend deletebegin insert termsend insert of thebegin delete memorandumend delete
39begin insert memorandaend insert of understandingbegin delete hasend deletebegin insert haveend insert expired. For purposes of
40this section, thebegin delete memorandumend deletebegin insert memorandaend insert of understanding for
P7    1begin insert State Bargaining Unit 7 andend insert State Bargaining Unit 12begin delete expiresend delete
2begin insert expireend insert on July 1, 2019.

3begin insert

begin insertSEC. 7.end insert  

end insert

begin insertSection 19829.9846 of the end insertbegin insertGovernment Codeend insertbegin insert is
4amended to read:end insert

5

19829.9846.  

(a) Notwithstanding Section 13340, for the
62018-19 fiscal year, if the Budget Act of 2018 is not enacted by
7July 1, 2018, for thebegin delete memorandumend deletebegin insert memorandaend insert of understanding
8entered into between the state employer andbegin insert State Bargaining Unit
97 (effective July 2, 2016, to July 1, 2019, inclusive) andend insert
State
10Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019,
11inclusive) there is hereby continuously appropriated to the
12Controller from the General Fund, unallocated special funds,
13including, but not limited to, federal funds and unallocated
14nongovernmental cost funds, and any other fund from which state
15employees are compensated, the amount necessary for the payment
16of compensation and employee benefits to state employees covered
17bybegin delete theend deletebegin insert anend insert above memorandum of understanding until the Budget
18Act of 2018 is enacted. The Controller may expend an amount no
19greater than necessary to enable the Controller to compensate state
20employees covered bybegin delete theend deletebegin insert anend insert above memorandum of understanding
21for work performed between July 1, 2018, of the 2018-19 fiscal
22year and the enactment of the Budget Act of 2018.

23(b) If thebegin delete memorandumend deletebegin insert memorandaend insert of understanding entered
24into between the state employer andbegin insert State Bargaining Unit 7
25(effective July 2, 2016, to July 1, 2019, inclusive) andend insert
State
26Bargaining Unit 12 (effective July 1, 2015, to July 1, 2019,
27inclusive)begin delete isend deletebegin insert areend insert in effect and approved by the Legislature, the
28compensation and contribution for employee benefits for state
29employees represented bybegin delete thisend deletebegin insert theseend insert bargainingbegin delete unitend deletebegin insert unitsend insert shall be
30at a rate consistent with the applicable memorandum of
31understanding referenced above.

32(c) Expenditures related to any warrant drawn pursuant to
33subdivision (a) are not augmentations to the expenditure authority
34of a department. Upon the enactment of the Budget Act of 2018,
35these expenditures shall be subsumed by the expenditure authority
36approved in the Budget Act of 2018 for each affected department.

37(d) This section shall only apply to an employee covered by the
38begin delete termend deletebegin insert termsend insert of thebegin insert State Bargaining Unit 7 (effective July 2, 2016,
39to July 1, 2019, inclusive) andend insert
State Bargaining Unit 12 (effective
40July 1, 2015, to July 1, 2019, inclusive)begin delete memorandumend deletebegin insert memorandaend insert
P8    1 of understanding. Notwithstanding Section 3517.8, this section
2shall not apply after thebegin delete termend deletebegin insert termsend insert of thebegin delete memorandumend delete
3begin insert memorandaend insert of understandingbegin delete hasend deletebegin insert haveend insert expired. For purposes of
4this section, thebegin delete memorandumend deletebegin insert memorandaend insert of understanding for
5begin insert State Bargaining Unit 7end insertbegin insert andend insert State Bargaining Unit 12begin delete expiresend delete
6begin insert expireend insert on July 1, 2019.

7begin insert

begin insertSEC. 8.end insert  

end insert

begin insertSection 22871.3 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
8to read:end insert

9

22871.3.  

(a) The employer contribution for each annuitant
10enrolled in a basic plan shall be an amount equal to 80 percent of
11the weighted average of the health benefit plan premiums for an
12employee or annuitant enrolled for self-alone, during the benefit
13year to which the formula is applied, for the four health benefit
14plans that had the largest active state civil service enrollment,
15excluding family members, during the previous benefit year. For
16each annuitant with enrolled family members, the employer
17contribution shall be an amount equal to 80 percent of the weighted
18average of the additional premiums required for enrollment of
19those family members, during the benefit year to which the formula
20is applied, in the four health benefit plans that had the largest active
21state civil service enrollment, excluding family members, during
22 the previous benefit year.

23(b) The employer contribution for each annuitant enrolled in a
24Medicare health benefit plan in accordance with Section 22844
25shall be an amount equal to 80 percent of the weighted average of
26the health benefit plan premiums for an annuitant enrolled in a
27Medicare health benefit plan for self-alone, during the benefit year
28to which the formula is applied, for the four Medicare health benefit
29plans that had the largest state annuitant enrollment, excluding
30family members, during the previous benefit year. For each
31annuitant with enrolled family members, the employer contribution
32shall be an amount equal to 80 percent of the weighted average of
33the additional premiums required for enrollment of those family
34members, during the benefit year to which the formula is applied,
35in the four Medicare health benefit plans that had the largest state
36annuitant enrollment, excluding family members, during the
37previous benefit year. If the annuitant is eligible for Medicare Part
38A, with or without cost, and Medicare Part B, regardless of whether
39the annuitant is actually enrolled in Medicare Part A or Part B, the
P9    1employer contribution shall not exceed the amount calculated
2under this subdivision.

3(c) This section applies to:

4(1) A state employee who is first employed by the state and
5becomes a state member of the system on or after January 1, 2016,
6and who is represented by State Bargaining Unit 9 or 10.

7(2) A state employee related to State Bargaining Unit 9 or 10
8who is excepted from the definition of “state employee” in
9subdivision (c) of Section 3513 and first employed by the state
10and becomes a state member of the system on or after January 1,
112016.

12(3) A state employee represented by State Bargaining Unitbegin delete 6end deletebegin insert 6,
137,end insert
or 12 who is first employed by the state and becomes a state
14member of the system on or after January 1, 2017.

15(4) A state employee related to State Bargaining Unitbegin delete 6end deletebegin insert 6, 7,end insert or
1612 who is excepted from the definition of “state employee” in
17subdivision (c) of Section 3513 and first employed by the state
18and becomes a state member of the system on or after January 1,
192017.

20(5) A judicial branch employee who is first employed by the
21state and becomes a state member of the system on or after January
221, 2017. This paragraph does not apply to a judge who is subject
23to Chapter 11 (commencing with Section 75000) or Chapter 11.5
24(commencing with Section 75500) of Title 8.

25(d) If the provisions of this section are in conflict with the
26provisions of a memorandum of understanding reached pursuant
27to Section 3517.5 or Chapter 12 (commencing with Section 3560)
28of Division 4 of Title 1, the memorandum of understanding shall
29be controlling without further legislative action, except that if those
30provisions require the expenditure of funds, the provisions may
31not become effective unless approved by the Legislature.

32begin insert

begin insertSEC. 9.end insert  

end insert

begin insertSection 22874.3 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
33to read:end insert

34

22874.3.  

(a) Notwithstanding Sections 22870, 22871, 22873,
35andbegin delete 22874end deletebegin insert 22874,end insert a state employee, defined by subdivision (c) of
36Section 3513, who is first employed by the state and becomes a
37state member of the system on or after January 1, 2017, and who
38is represented by State Bargaining Unitbegin delete 6,end deletebegin insert 6 or 7end insert shall not receive
39any portion of the employer contribution payable for annuitants
P10   1unless the person is credited with 15 years of state service at the
2time of retirement.

3(b) The percentage of the employer contribution payable for
4postretirement health benefits for an employee subject to this
5section shall be based on the completed years of credited state
6service at retirement as shown in the following table:


7

 

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

P10  23

 

24(c) This section shall apply only to state employees that retire
25for service. For purposes of this section, “state service” means
26service rendered as an employee of the state or an appointed or
27elected officer of the state for compensation.

28(d) This section does not apply to:

29(1) Former state employees previously employed before January
301, 2017, who return to state employment on or after January 1,
312017.

32(2) State employees hired prior to January 1, 2017, who become
33subject to representation by State Bargaining Unit 6begin insert or 7end insert on or
34after January 1, 2017.

35(3) State employees on an approved leave of absence employed
36before January 1, 2017, who return to active employment on or
37after January 1, 2017.

38(4) State employees hired after January 1, 2017, who are first
39represented by a State Bargaining Unit other than Bargaining Unit
P11   1begin delete 6,end deletebegin insert 6 or 7,end insert who later become represented by State Bargaining Unit
2
begin delete 6.end deletebegin insert 6 or 7.end insert

3(e) Notwithstanding Section 22875, this section shall also apply
4to a related state employee who is excepted from the definition of
5“state employee” in subdivision (c) of Section 3513 and is first
6employed by the state and becomes a state member of the system
7on or after January 1, 2017.

8begin insert

begin insertSEC. 10.end insert  

end insert

begin insertSection 22879 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
9to read:end insert

10

22879.  

(a) The board shall pay monthly to an employee or
11annuitant who is enrolled in, or whose family member is enrolled
12in, a Medicare health benefit plan under this part the amount of
13the Medicare Part B premiums, exclusive of penalties, except as
14provided in Section 22831. This payment may not exceed the
15difference between the maximum employer contribution and the
16amount contributed by the employer toward the cost of premiums
17for the health benefit plan in which the employee or annuitant and
18his or her family members are enrolled. No payment may be made
19in any month if the difference is less than one dollar ($1).

20(b) This section shall be applicable only to state employees,
21annuitants who retired while state employees, and the family
22members of those persons.

23(c) With respect to an annuitant, the board shall pay to the
24annuitant the amount required by this section from the same source
25from which his or her allowance is paid. Those amounts are hereby
26appropriated monthly from the General Fund to reimburse the
27board for those payments.

28(d) There is hereby appropriated from the appropriate funds the
29amounts required by this section to be paid to active state
30employees.

31(e) This section does not apply to:

32(1) A state employee who is first employed by the state and
33becomes a state member of the system on or after January 1, 2016,
34and who is represented by State Bargaining Unit 9 or 10.

35(2) A state employee related to State Bargaining Unit 9 or 10
36who is excepted from the definition of “state employee” in
37subdivision (c) of Section 3513 and is first employed by the state
38and becomes a state member of the system on or after January 1,
392016.

P12   1(3) A state employee who is first employed by the state and
2becomes a state member of the system on or after January 1, 2017,
3and who is represented by State Bargaining Unitbegin delete 6end deletebegin insert 6, 7,end insert or 12.

4(4) A state employee related to State Bargaining Unitbegin delete 6end deletebegin insert 6, 7,end insert or
512 who is excepted from the definition of “state employee” in
6 subdivision (c) of Section 3513 and is first employed by the state
7and becomes a state member of the system on or after January 1,
82017.

9(5) A judicial branch employee who is first employed by the
10state and becomes a state member of the system on or after January
111, 2017. This paragraph does not apply to a judge who is subject
12to Chapter 11 (commencing with Section 75000) or Chapter 11.5
13(commencing with Section 75500) of Title 8.

14begin insert

begin insertSEC. 11.end insert  

end insert

begin insertSection 22944.5 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
15to read:end insert

16

22944.5.  

(a) begin delete (1)end deletebegin deleteend deletebegin delete The end deletebegin insert(1)end insertbegin insertend insertbegin insertTheend insert state and employees in State
17Bargaining Unitbegin insert 7,end insert 9, 10, or 12 shall prefund retiree health care,
18with the goal of reaching a 50-percent cost sharing of actuarially
19determined normal costs for both employer and employees by July
201, 2019.

21(2) The state and employees in State Bargaining Unit 6 shall
22prefund retiree health care, with the goal of reaching a 50-percent
23cost sharing of actuarially determined normal costs for both
24employer and employees by July 1, 2018.

25(3) The state and employees in the judicial branch shall prefund
26retiree health care, with the goal of reaching a 50-percent cost
27sharing of actuarially determined normal costs for both employer
28and employees by July 1, 2017.

29(b) (1) The employees in State Bargaining Unit 9 shall make
30contributions to prefund retiree health care based on the following
31schedule, and the state shall make a matching contribution:

32(A) Effective July 1, 2017, 0.5 percent of pensionable
33compensation.

34(B) Effective July 1, 2018, an additional 0.5 percent for a total
35employee contribution of 1.0 percent of pensionable compensation.

36(C) Effective July 1, 2019, an additional 1.0 percent for a total
37employee contribution of 2.0 percent of pensionable compensation.

38(2) The employees in State Bargaining Unit 10 shall make
39contributions to prefund retiree health care based on the following
40schedule, and the state shall make a matching contribution:

P13   1(A) Effective July 1, 2017, 0.7 percent of pensionable
2compensation.

3(B) Effective July 1, 2018, an additional 0.7 percent for a total
4employee contribution of 1.4 percent of pensionable compensation.

5(C) Effective July 1, 2019, an additional 1.4 percent for a total
6employee contribution of 2.8 percent of pensionable compensation.

7(3) The employees in State Bargaining Unit 6 shall make
8contributions to prefund retiree health care based on the following
9schedule, and the state shall make a matching contribution:

10(A) Effective July 1, 2016, 1.3 percent of pensionable
11compensation.

12(B) Effective July 1, 2017, an additional 1.3 percent for a total
13employee contribution of 2.6 percent of pensionable compensation.

14(C) Effective July 1, 2018, an additional 1.4 percent for a total
15employee contribution of 4.0 percent of pensionable compensation.

16(4) The state employees in the judicial branch shall make
17contributions to prefund retiree health care based on the following
18schedule, and the state shall make a matching contribution:

19(A) Effective July 1, 2016, 1.5 percent of pensionable
20compensation.

21(B) Effective July 1, 2017, up to an additional 1.5 percent for
22a total employee contribution of up to 3.0 percent of pensionable
23compensation. The additional amount shall be determined by the
24Director of Finance no later than April 1, 2017, based on the
25actuarially determined normal costs identified in the state valuation.

26(C) This paragraph does not apply to a judge who is subject to
27Chapter 11 (commencing with Section 75000) or Chapter 11.5
28(commencing with Section 75500) of Title 8.

29(5) The employees in State Bargaining Unit 12 shall make
30contributions to prefund retiree health care based on the following
31schedule, and the state shall make a matching contribution:

32(A) Effective July 1, 2017, 1.9 percent of pensionable
33compensation.

34(B) Effective July 1, 2018, an additional 1.4 percent for a total
35employee contribution of 3.3 percent of pensionable compensation.

36(C) Effective July 1, 2019, an additional 1.3 percent for a total
37employee contribution of 4.6 percent of pensionable compensation.

begin insert

38
(6) The employees in State Bargaining Unit 7 shall make
39contributions to prefund retiree health care based on the following
40schedule, and the state shall make a matching contribution:

end insert
begin insert

P14   1
(A) Effective July 1, 2017, 1.3 percent of pensionable
2compensation.

end insert
begin insert

3
(B) Effective July 1, 2018, an additional 1.4 percent for a total
4employee contribution of 2.7 percent of pensionable compensation.

end insert
begin insert

5
(C) Effective July 1, 2019, an additional 1.3 percent for a total
6employee contribution of 4.0 percent of pensionable compensation.

end insert

7(c) This section only applies to employees who are eligible for
8health benefits, including permanent intermittent employees.

9(d) Contributions paid pursuant to this section shall be deposited
10in the Annuitants’ Health Care Coverage Fund and shall not be
11refundable under any circumstances to an employee or his or her
12beneficiary or survivor.

13(e) If the provisions of this section are in conflict with the
14 provisions of a memorandum of understanding reached pursuant
15to Section 3517.5, the memorandum of understanding shall be
16controlling without further legislative action, except that if those
17provisions of a memorandum of understanding require the
18expenditure of funds, the provisions shall not become effective
19unless approved by the Legislature in the annual Budget Act.

20(f) This section shall also apply to a state employee related to
21a bargaining unit described in subdivision (a) who is excepted
22from the definition of “state employee” in subdivision (c) of
23Section 3513.

24begin insert

begin insertSEC. 12.end insert  

end insert

begin insertSection 22958.1 of the end insertbegin insertGovernment Codeend insertbegin insert is amended
25to read:end insert

26

22958.1.  

(a) Notwithstanding Sections 22953, 22957, and
2722958, the following employees shall not receive any portion of
28the employer contribution payable for annuitants unless the person
29is credited with 15 or more years of state service, as defined by
30this section, at the time of retirement:

31(1) A state employee, as defined by subdivision (c) of Section
323513, who is first employed by the state and becomes a state
33member of the system on or after January 1, 2017, and is
34represented by State Bargaining Unitbegin delete 6end deletebegin insert 6, 7,end insert or 12.

35(2) A state employee related to State Bargaining Unitbegin delete 6end deletebegin insert 6, 7,end insert or
3612 who is excepted from the definition of “state employee” in
37subdivision (c) of Section 3513 and is first employed by the state
38and becomes a state member of the system on or after January 1,
392017.

P15   1(b) The percentage of the employer contribution payable for
2postretirement dental care benefits for an employee subject to this
3section shall be based on the funding provision of the plan and the
4completed years of credited state service at retirement as shown
5in the following table:


6

 

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

P15  20

 

21(c) This section shall apply only to state employees that retire
22for service. For purposes of this section, “state service” means
23service rendered as an employee of the state or an appointed or
24elected officer of the state for compensation.

25(d) This section does not apply to:

26(1) Former state employees previously employed prior to
27January 1, 2017, who return to state employment on or after
28January 1, 2017.

29(2) State employees hired prior to January 1, 2017, who become
30subject to representation by State Bargaining Unitbegin delete 6end deletebegin insert 6, 7,end insert or 12 on
31or after January 1, 2017.

32(3) State employees on an approved leave of absence employed
33before January 1, 2017, who return to active employment on or
34after January 1, 2017.

35(4) State employees hired after January 1, 2017, who are first
36represented by a State Bargaining Unit other than Bargaining Unit
37begin delete 6end deletebegin insert 6, 7,end insert or 12, who later become represented by State Bargaining
38Unitbegin delete 6end deletebegin insert 6, 7,end insert or 12.

39(e) In those cases where the state has assumed from a public
40agency a function and the related personnel, service rendered by
P16   1that personnel for compensation as employees or appointed or
2elected officers of that public agency may not be credited as state
3service for the purposes of this section unless the former employer
4has paid or agreed to pay the state the amount actuarially
5determined to equal the cost for any employee dental benefits that
6were vested at the time that the function and the related personnel
7were assumed by the state, and the Department of Finance finds
8that the contract contains a benefit factor sufficient to reimburse
9the state for the amount necessary to fully compensate for the
10postretirement dental benefit costs of those personnel. For
11noncontracting public agencies, the state agency that has assumed
12the function shall certify the completed years of public agency
13service to be credited to the employee as state service credit under
14this section.

15begin insert

begin insertSEC. 13.end insert  

end insert
begin insert

This act is a bill providing for appropriations related
16to the Budget Bill within the meaning of subdivision (e) of Section
1712 of Article IV of the California Constitution, has been identified
18as related to the budget in the Budget Bill, and shall take effect
19immediately.

end insert
begin delete
20

SECTION 1.  

It is the intent of the Legislature to enact statutory
21changes, relating to the Budget Act of 2016.

end delete


O

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