BILL NUMBER: AB 1013 CHAPTERED 09/21/99 CHAPTER 446 FILED WITH SECRETARY OF STATE SEPTEMBER 21, 1999 APPROVED BY GOVERNOR SEPTEMBER 21, 1999 PASSED THE SENATE SEPTEMBER 10, 1999 PASSED THE ASSEMBLY SEPTEMBER 10, 1999 AMENDED IN SENATE SEPTEMBER 9, 1999 AMENDED IN SENATE AUGUST 26, 1999 AMENDED IN SENATE AUGUST 24, 1999 AMENDED IN SENATE AUGUST 16, 1999 AMENDED IN SENATE JULY 12, 1999 AMENDED IN ASSEMBLY APRIL 27, 1999 AMENDED IN ASSEMBLY APRIL 15, 1999 INTRODUCED BY Assembly Member Scott FEBRUARY 25, 1999 An act to amend Section 1094.5 of, and to repeal Section 1094.7 of, the Code of Civil Procedure, to amend Sections 3517.6, 18523.1, 18670, 18903, 19056.5, 19141, 19142, 19170.1, 19572.1, 19574, 19582, 19582.1, 19582.6, 19702, 19786, 19798, 19815.41, 19816.2, 19817, 19818.7, 19818.11, 19826.1, 19829, 19832, 19834, 19835, 19836.1, 19841, 19853.1, 19854, 19994, 19994.1, 19994.2, 19997, 19997.3, 19997.4, 19997.5, 19997.6, 19997.7, 19997.8, 19997.11, 19997.13, 22754, and 22825.3 of, to add Sections 19995.5 and 20405.2 to, and to repeal Sections 3517.65, 18670.2, 18903.2, 19056.6, 19141.3, 19142.2, 19170.3, 19173.3, 19175.6, 19570.3, 19572.3, 19574.6, 19576.2, 19576.4, 19582.2, 19582.3, 19582.7, 19702.7, 19786.2, 19798.2, 19815.42, 19816.22, 19817.8, 19818.15, 19828.2, 19829.2, 19832.2, 19834.2, 19835.2, 19841.2, 19853.3, 19854.2, 19994.6, 19994.7, 19994.8, 19997.40, 19997.43, 19997.44, 19997.45, 19997.46, 19997.47, 19997.48, 19997.51, 19997.53, 22754.5, 22754.7, and 22754.11 of, the Government Code, relating to state employees, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST AB 1013, Scott. State employees. (1) Existing law contains various provisions relating to civil service and employer-employee relations between the state and its employees, and contains comparable provisions that apply to state employees in State Bargaining Unit 5, 6, 8, 16, or 19. This bill, among other things, would repeal certain of those provisions relating to minor discipline, layoffs, reinstatements, probationary periods, salary ranges and adjustments, holidays, transfers, application of the Administrative Procedure Act in the adoption of regulations, and demonstration projects as those provisions apply to State Bargaining Units 16 and 19, and would repeal certain of those provisions relating to broadbanding as those provisions apply to State Bargaining Unit 16. This bill would create in the State Treasury the State Employee Scholarship Fund, a continuously appropriated fund, to establish a program for career advancement to assist eligible state employees to participate in educational programs. The fund would be administered by the Department of Personnel Administration. The bill would provide that moneys in the fund shall be allocated from the amount negotiated in memoranda of understanding between the state and recognized employee organizations, and appropriated by the Legislature for the 2000-01 fiscal year. The fund would cease to exist on June 30, 2001, unless the existence of the fund is extended by statute and that statute is enacted and becomes effective prior to that date. (2) Existing provisions governing the Public Employees' Retirement System authorize certain state safety members to irrevocably elect to remain subject to the miscellaneous or industrial service benefit and contribution rate, as specified. The Public Employees' Retirement Fund is continuously appropriated for the payments required to be made to members of the system. This bill would specify that a member who made that election may elect to be subject to the state safety formula on or after January 1, 2000, as specified. Because the bill would enlarge the class of persons eligible for that formula, it would make an appropriation. (3) Existing provisions governing the Public Employees' Retirement System prohibits state employees, as specified, from receiving any portion of the employer's contribution with respect to health care benefits unless they are credited with 10 years of state service at retirement. This bill would revise the state employees to whom those provisions apply, and enact a similar restriction with respect to dental benefits, as specified. (4) Existing law, the Public Employees' Medical and Hospital Care Act, provides health benefits plan coverage to public employees and annuitants meeting the eligibility requirements prescribed by the Board of Administration of the Public Employees' Retirement System. Existing law revises the definition of "eligible employee" for the purposes of the act as it applies to state employees in State Bargaining Units 8 and 16, and revises the definition of "eligible family member" for the purposes of the act as it applies to state employees in State Bargaining Units 8, 16, and 19. This bill would repeal these revised definitions of "eligible employee" and "eligible family member." (5) Existing law provides that if any provision of a memorandum of understanding reached between the state employer and a recognized employee organization representing state civil service employees requires the expenditure of funds, those provisions of the memorandum of understanding shall not become effective unless approved by the Legislature in the annual Budget Act. This bill would approve provisions of specified memoranda of understanding entered into between the state employer and specified employee organizations, and would provide that the provisions of any memorandum of understanding 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. This bill would provide that any provision in a memorandum of understanding approved by any section of this bill, and which requires the expenditure of funds, shall not take effect unless funds for these provisions are specifically appropriated by the Legislature, and would provide that if funds for these provisions are not specifically appropriated by the Legislature, all or any part of the memorandum of understanding may be declared null and void by any affected employee organization. (6) This bill would appropriate $200,000 from the General Fund for transfer to the State Employee Scholarship Fund to provide for the establishment and administration of the state employee scholarship program. (7) The bill would declare that it is to take effect immediately as an urgency statute. Appropriation: yes. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 1094.5 of the Code of Civil Procedure is amended to read: 1094.5. (a) Where the writ is issued for the purpose of inquiring into the validity of any final administrative order or decision made as the result of a proceeding in which by law a hearing is required to be given, evidence is required to be taken, and discretion in the determination of facts is vested in the inferior tribunal, corporation, board, or officer, the case shall be heard by the court sitting without a jury. All or part of the record of the proceedings before the inferior tribunal, corporation, board, or officer may be filed with the petition, may be filed with respondent's points and authorities, or may be ordered to be filed by the court. Except when otherwise prescribed by statute, the cost of preparing the record shall be borne by the petitioner. Where the petitioner has proceeded pursuant to Section 68511.3 of the Government Code and the Rules of Court implementing that section and where the transcript is necessary to a proper review of the administrative proceedings, the cost of preparing the transcript shall be borne by the respondent. Where the party seeking the writ has proceeded pursuant to Section 1088.5, the administrative record shall be filed as expeditiously as possible, and may be filed with the petition, or by the respondent after payment of the costs by the petitioner, where required, or as otherwise directed by the court. If the expense of preparing all or any part of the record has been borne by the prevailing party, the expense shall be taxable as costs. (b) The inquiry in such a case shall extend to the questions whether the respondent has proceeded without, or in excess of jurisdiction; whether there was a fair trial; and whether there was any prejudicial abuse of discretion. Abuse of discretion is established if the respondent has not proceeded in the manner required by law, the order or decision is not supported by the findings, or the findings are not supported by the evidence. (c) Where it is claimed that the findings are not supported by the evidence, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, abuse of discretion is established if the court determines that the findings are not supported by the weight of the evidence. In all other cases, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record. (d) Notwithstanding subdivision (c), in cases arising from private hospital boards or boards of directors of districts organized pursuant to The Local Hospital District Law, Division 23 (commencing with Section 32000) of the Health and Safety Code or governing bodies of municipal hospitals formed pursuant to Article 7 (commencing with Section 37600) or Article 8 (commencing with Section 37650) of Chapter 5 of Division 3 of Title 4 of the Government Code, abuse of discretion is established if the court determines that the findings are not supported by substantial evidence in the light of the whole record. However, in all cases in which the petition alleges discriminatory actions prohibited by Section 1316 of the Health and Safety Code, and the plaintiff makes a preliminary showing of substantial evidence in support of that allegation, the court shall exercise its independent judgment on the evidence and abuse of discretion shall be established if the court determines that the findings are not supported by the weight of the evidence. (e) Where the court finds that there is relevant evidence that, in the exercise of reasonable diligence, could not have been produced or that was improperly excluded at the hearing before respondent, it may enter judgment as provided in subdivision (f) remanding the case to be reconsidered in the light of that evidence; or, in cases in which the court is authorized by law to exercise its independent judgment on the evidence, the court may admit the evidence at the hearing on the writ without remanding the case. (f) The court shall enter judgment either commanding respondent to set aside the order or decision, or denying the writ. Where the judgment commands that the order or decision be set aside, it may order the reconsideration of the case in the light of the court's opinion and judgment and may order respondent to take such further action as is specially enjoined upon it by law, but the judgment shall not limit or control in any way the discretion legally vested in the respondent. (g) Except as provided in subdivision (h), the court in which proceedings under this section are instituted may stay the operation of the administrative order or decision pending the judgment of the court, or until the filing of a notice of appeal from the judgment or until the expiration of the time for filing the notice, whichever occurs first. However, no such stay shall be imposed or continued if the court is satisfied that it is against the public interest. The application for the stay shall be accompanied by proof of service of a copy of the application on the respondent. Service shall be made in the manner provided by Title 5 (commencing with Section 405) of Part 2 or Chapter 5 (commencing with Section 1010) of Title 14 of Part 2. If an appeal is taken from a denial of the writ, the order or decision of the agency shall not be stayed except upon the order of the court to which the appeal is taken. However, in cases where a stay is in effect at the time of filing the notice of appeal, the stay shall be continued by operation of law for a period of 20 days from the filing of the notice. If an appeal is taken from the granting of the writ, the order or decision of the agency is stayed pending the determination of the appeal unless the court to which the appeal is taken shall otherwise order. Where any final administrative order or decision is the subject of proceedings under this section, if the petition shall have been filed while the penalty imposed is in full force and effect, the determination shall not be considered to have become moot in cases where the penalty imposed by the administrative agency has been completed or complied with during the pendency of the proceedings. (h) (1) The court in which proceedings under this section are instituted may stay the operation of the administrative order or decision of any licensed hospital or any state agency made after a hearing required by statute to be conducted under the Administrative Procedure Act, as set forth in Chapter 5 (commencing with Section 11500) of Part 1 of Division 3 of Title 2 of the Government Code, conducted by the agency itself or an administrative law judge on the staff of the Office of Administrative Hearings pending the judgment of the court, or until the filing of a notice of appeal from the judgment or until the expiration of the time for filing the notice, whichever occurs first. However, the stay shall not be imposed or continued unless the court is satisfied that the public interest will not suffer and that the licensed hospital or agency is unlikely to prevail ultimately on the merits. The application for the stay shall be accompanied by proof of service of a copy of the application on the respondent. Service shall be made in the manner provided by Title 5 (commencing with Section 405) of Part 2 or Chapter 5 (commencing with Section 1010) of Title 14 of Part 2. (2) The standard set forth in this subdivision for obtaining a stay shall apply to any administrative order or decision of an agency that issues licenses pursuant to Division 2 (commencing with Section 500) of the Business and Professions Code or pursuant to the Osteopathic Initiative Act or the Chiropractic Initiative Act. With respect to orders or decisions of other state agencies, the standard in this subdivision shall apply only when the agency has adopted the proposed decision of the administrative law judge in its entirety or has adopted the proposed decision but reduced the proposed penalty pursuant to subdivision (b) of Section 11517 of the Government Code; otherwise the standard in subdivision (g) shall apply. (3) If an appeal is taken from a denial of the writ, the order or decision of the hospital or agency shall not be stayed except upon the order of the court to which the appeal is taken. However, in cases where a stay is in effect at the time of filing the notice of appeal, the stay shall be continued by operation of law for a period of 20 days from the filing of the notice. If an appeal is taken from the granting of the writ, the order or decision of the hospital or agency is stayed pending the determination of the appeal unless the court to which the appeal is taken shall otherwise order. Where any final administrative order or decision is the subject of proceedings under this section, if the petition shall have been filed while the penalty imposed is in full force and effect, the determination shall not be considered to have become moot in cases where the penalty imposed by the administrative agency has been completed or complied with during the pendency of the proceedings. (i) Any administrative record received for filing by the clerk of the court may be disposed of as provided in Sections 1952, 1952.2, and 1952.3. (j) Effective January 1, 1996, this subdivision shall apply to state employees in State Bargaining Unit 5. This subdivision shall apply to state employees in State Bargaining Unit 8. For purposes of this section, the court is not authorized to review any disciplinary decisions reached pursuant to Section 19576.1 or 19576.5 of the Government Code. SEC. 2. Section 1094.7 of the Code of Civil Procedure is repealed. SEC. 3. Section 3517.6 of the Government Code is amended to read: 3517.6. (a) (1) In any case where the provisions of Section 70031 of the Education Code, or subdivision (i) of Section 3513, or Section 14876, 18714, 19080.5, 19100, 19143, 19261, 19818.16, 19819.1, 19820, 19822, 19824, 19826, 19827, 19828, 19829, 19830, 19831, 19832, 19833, 19834, 19835, 19836, 19837, 19838, 19839, 19840, 19841, 19842, 19843, 19844, 19845, 19846, 19847, 19848, 19849, 19849.1, 19849.4, 19850.1, 19850.2, 19850.3, 19850.4, 19850.5, 19850.6, 19851, 19853, 19854, 19856, 19856.1, 19858.1, 19858.2, 19859, 19860, 19861, 19862, 19862.1, 19863, 19863.1, 19864, 19866, 19869, 19870, 19871, 19871.1, 19872, 19873, 19874, 19875, 19876, 19877, 19877.1, 19878, 19879, 19880, 19880.1, 19881, 19882, 19883, 19884, 19885, 19887, 19887.1, 19887.2, 19888, 19990, 19991, 19991.1, 19991.2, 19991.3, 19991.4, 19991.5, 19991.6, 19991.7, 19992, 19992.1, 19992.2, 19992.3, 19992.4, 19993, 19994.1, 19994.2, 19994.3, 19994.4, 19995, 19995.1, 19995.2, 19995.3, 19996.1, 19996.2, 19998, 19998.1, 20796, 21600, 21602, 21604, 21605, 22825, or 22825.1 are in conflict with the provisions of a memorandum of understanding, the memorandum of understanding shall be controlling without further legislative action. (2) Notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 5. In any case where the provisions of Section 70031 of the Education Code, or subdivision (i) of Section 3513, or Section 14876, 18714, 19080.5, 19100, 19143, 19261, 19576.1, 19818.16, 19819.1, 19820, 19822, 19824, 19826, 19827, 19828, 19829, 19830, 19831, 19832, 19833, 19834, 19835, 19836, 19837, 19838, 19839, 19840, 19841, 19842, 19843, 19844, 19845, 19846, 19847, 19848, 19849, 19849.1, 19849.4, 19850.1, 19850.2, 19850.3, 19850.4, 19850.5, 19850.6, 19851, 19853, 19854, 19856, 19856.1, 19858.1, 19858.2, 19859, 19860, 19861, 19862, 19862.1, 19863, 19863.1, 19864, 19866, 19869, 19870, 19871, 19871.1, 19872, 19873, 19874, 19875, 19876, 19877, 19877.1, 19878, 19879, 19880, 19880.1, 19881, 19882, 19883, 19884, 19885, 19887, 19887.1, 19887.2, 19888, 19990, 19991, 19991.1, 19991.2, 19991.3, 19991.4, 19991.5, 19991.6, 19991.7, 19992, 19992.1, 19992.2, 19992.3, 19992.4, 19993, 19994.1, 19994.2, 19994.3, 19994.4, 19995, 19995.1, 19995.2, 19995.3, 19996.1, 19996.2, 19998, 19998.1, 20796, 21600, 21602, 21604, 21605, 22825, or 22825.1 are in conflict with the provisions of a memorandum of understanding, the memorandum of understanding shall be controlling without further legislative action. (3) Notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 8. In any case where the provisions of Section 70031 of the Education Code, or subdivision (i) of Section 3513, or Section 14876, 18714, 19080.5, 19100, 19143, 19261, 19576.1, 19582.1, 19175.1, 19818.16, 19819.1, 19820, 19822, 19824, 19826, 19827, 19828, 19829, 19830, 19831, 19832, 19833, 19834, 19835, 19836, 19837, 19838, 19839, 19840, 19841, 19842, 19843, 19844, 19845, 19846, 19847, 19848, 19849, 19849.1, 19849.4, 19850.1, 19850.2, 19850.3, 19850.4, 19850.5, 19850.6, 19851, 19853, 19854, 19856, 19856.1, 19858.1, 19858.2, 19859, 19860, 19861, 19862, 19862.1, 19863, 19863.1, 19864, 19866, 19869, 19870, 19871, 19871.1, 19872, 19873, 19874, 19875, 19876, 19877, 19877.1, 19878, 19879, 19880, 19880.1, 19881, 19882, 19883, 19884, 19885, 19887, 19887.1, 19887.2, 19888, 19990, 19991, 19991.1, 19991.2, 19991.3, 19991.4, 19991.5, 19991.6, 19991.7, 19992, 19992.1, 19992.2, 19992.3, 19992.4, 19993, 19994.1, 19994.2, 19994.3, 19994.4, 19995, 19995.1, 19995.2, 19995.3, 19996.1, 19996.2, 19998, 19998.1, 20796, 21600, 21602, 21604, 21605, 22825, or 22825.1 are in conflict with the provisions of a memorandum of understanding, the memorandum of understanding shall be controlling without further legislative action. (b) In any case where the provisions of Section 19997.2, 19997.3, 19997.8, 19997.9, 19997.10, 19997.11, 19997.12, 19997.13, or 19997.14 are in conflict with the provisions of a memorandum of understanding, the terms of the memorandum of understanding shall be controlling unless the State Personnel Board finds those terms to be inconsistent with merit employment principles as provided for by Article VII of the California Constitution. Where this finding is made, the provisions of the Government Code shall prevail until those affected sections of the memorandum of understanding are renegotiated to resolve the inconsistency. If any provision of the memorandum of understanding requires the expenditure of funds, those provisions of the memorandum of understanding shall not become effective unless approved by the Legislature in the annual Budget Act. If any provision of the memorandum of understanding requires legislative action to permit its implementation by amendment of any section not cited above, those provisions of the memorandum of understanding shall not become effective unless approved by the Legislature. SEC. 4. Section 3517.65 of the Government Code is repealed. SEC. 5. Section 18523.1 of the Government Code is amended to read: 18523.1. (a) Notwithstanding Section 18523, this section shall apply only to state employees in State Bargaining Unit 6. (b) "Class" means a group of positions sufficiently similar with respect to duties and responsibilities that the same title may reasonably and fairly be used to designate each position allocated to the class and that substantially the same tests of fitness may be used and that substantially the same minimum qualifications may be required and that the same schedule of compensation may be made to apply with equity. (c) The board may also establish "broadband" classes for which the same general title may be used to designate each position allocated to the class and which may include more than one level or more than one specialty area within the same general field or work. In addition to the minimum qualifications for each broadband class, other job-related qualifications may be required for particular positions within the class. When the board establishes a broadband class, these levels and specialty areas shall be described in the class specification, and the board shall specify any instances in which these levels and speciality areas are to be treated as separate classes for purposes of applying other provisions of law. SEC. 6. Section 18670 of the Government Code is amended to read: 18670. (a) The board may hold hearings and make investigations concerning all matters relating to the enforcement and effect of this part and rules prescribed hereunder. It may inspect any state institution, office, or other place of employment affected by this part to ascertain whether this part and the board rules are obeyed. The board shall make investigations and hold hearings at the direction of the Governor or the Legislature or upon the petition of an employee or a citizen concerning the enforcement and effect of this part and to enforce the observance of Article VII of the Constitution and of this part and the rules made under this part. (b) Effective January 1, 1996, this subdivision shall apply only to state employees in State Bargaining Unit 5. For purposes of subdivision (a), any discipline, as defined by Section 19576.1, is not subject to either a board investigation or hearing. Board review shall be limited to acceptance or rejection of discipline imposed pursuant to Section 19576.1. (c) This subdivision shall apply only to state employees in State Bargaining Unit 8. For the purposes of subdivision (a), any discipline, as defined by the memorandum of understanding or Section 19576.5, is not subject to either a board investigation or hearing. SEC. 7. Section 18670.2 of the Government Code is repealed. SEC. 8. Section 18903 of the Government Code is amended to read: 18903. (a) (1) For each class there shall be maintained a general reemployment list consisting of the names of all persons who have occupied positions with probationary or permanent status in the class and who have been legally laid off or demoted in lieu of layoff. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 6 or 8. For each entry level class there shall be maintained a general reemployment list consisting of the names of all persons who have occupied positions with probationary or permanent status in the class and who have been legally laid off, demoted in lieu of layoff, or transferred in lieu of layoff. (3) Notwithstanding paragraph (1), this paragraph shall only apply to state employees in State Bargaining Unit 5. For each class there shall be maintained a general reemployment list consisting of the names of all persons who have occupied positions with probationary or permanent status in the class and who have been legally laid off, demoted in lieu of layoff, or transferred in lieu of layoff. (b) Within one year from the date of his or her resignation in good standing, or his or her voluntary demotion, the name of an employee who had probationary or permanent status may be placed on the general reemployment list with the consent of the appointing power and the board. The general reemployment list may also contain the names of persons placed thereon by the board in accordance with other provisions of this part. SEC. 9. Section 18903.2 of the Government Code is repealed. SEC. 10. Section 19056.5 of the Government Code is amended to read: 19056.5. (a) Notwithstanding any other provision in this part and except as provided in subdivision (b), if the appointment is to be made from a general reemployment list, the names of the three persons with the highest standing on the list shall be certified to the appointing power. (b) Notwithstanding subdivision (a), this subdivision shall apply to state employees in State Bargaining Unit 6 or 8. If the appointment is to be made from a general reemployment list, the name of the person with the highest standing on the list shall be certified to the appointing power. SEC. 11. Section 19056.6 of the Government Code is repealed. SEC. 12. Section 19141 of the Government Code is amended to read: 19141. (a) This section applies only to a permanent employee, or an employee who previously had permanent status and who, since that permanent status, has had no break in the continuity of his or her state service due to a permanent separation. As used in this section, "former position" is defined as in Section 18522, or, if the appointing power to which reinstatement is to be made and the employee agree, a vacant position in any department, commission, or state agency for which he or she is qualified at substantially the same level. (b) Within the periods of time specified below, an employee who vacates a civil service position to accept an appointment to an exempt position shall be reinstated to his or her former position at the termination either by the employee or appointing power of the exempt appointment, provided he or she (1) accepted the appointment without a break in the continuity of state service, and (2) requests in writing reinstatement of the appointing power of his or her former position within 10 working days after the effective date of the termination. (c) The reinstatement may be requested by the employee only within the following periods of time: (1) At any time after the effective date of the exempt appointment if the employee was appointed under one of the following: (A) Subdivision (a), (b), (c), (d), (e), (f), (g), or (m) of Section 4 of Article VII of the California Constitution. (B) Section 2.1 of Article IX of the California Constitution. (C) Section 22 of Article XX of the California Constitution. (D) To an exempt position under the same appointing power as the former position even though a shorter period of time may be otherwise specified for that appointment. (2) Within six months after the effective date of the exempt appointment if appointed under subdivision (h), (i), (k), or (l) of Section 4 of Article VII of the California Constitution. (3) (A) Within four years after the effective date of an exempt appointment if appointed under any other authority. (B) Within four years after the effective date of an exempt appointment if appointed under any other authority. Notwithstanding subparagraph (A), this subparagraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. (d) An employee who vacates his or her civil service position to accept an assignment as a member, inmate, or patient helper under subdivision (j) of Section 4 of Article VII of the California Constitution shall not have a right to reinstatement. (e) An employee who is serving under an exempt appointment retains a right of reinstatement when he or she accepts an extension of that exempt appointment or accepts a new exempt appointment, provided the extension or new appointment is made within the specified reinstatement time limit and there is no break in the continuity of state service. The period for which that right is retained is for the period applicable to the extended or new exempt appointment as if that appointment had been made on the date of the initial exempt appointment. (f) When an employee exercises his or her right of reinstatement and returns to his or her former position, the service while under an exempt appointment shall be deemed to be time served in the former position for the purpose of determining his or her eligibility for merit salary increases. (g) If the termination of an exempt appointment is for a reason contained in Section 19997 and the employee does not have a right to reinstatement, he or she shall have his or her name placed on the departmental and general reemployment lists for the class of his or her former position. SEC. 13. Section 19141.3 of the Government Code is repealed. SEC. 14. Section 19142 of the Government Code is amended to read: 19142. (a) Every person accepts and holds a position in the state civil service subject to mandatory reinstatement of another person. (b) (1) Upon reinstatement of a person any necessary separations are effected under the provisions of Section 19997.3 governing layoff and demotion except that (A) an employee who is not to be separated from state service need not receive advance notification as provided in Section 19997.13, and (B) seniority shall not be counted as provided in Section 19997.3 when this would result in the layoff of the person who has the reinstatement right. Under such a circumstance, qualifying service in classes at substantially the same or higher salary level is the only state service that shall be counted for purposes of determining who is to be separated. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. Upon reinstatement of a person any necessary separations are effected under Section 19997.3 governing layoff and demotion except that an employee who is not to be separated from state service need not receive advance notification as provided in Section 19997.13. SEC. 15. Section 19142.2 of the Government Code is repealed. SEC. 16. Section 19170.1 of the Government Code is amended to read: 19170.1. (a) Notwithstanding Section 19170 for state employees in State Bargaining Unit 5, 6, or 8, the board shall establish for each class the length of the probationary period. The probationary period that shall be served upon appointment shall be not less than six months nor more than two years. (b) The board may provide by rule: (1) for increasing the length of an individual probationary period by adding thereto periods of time during which an employee, while serving as a probationer, is absent from his or her position; or (2) for requiring an additional period not to exceed the length of the original probationary period when a probationary employee returns after an extended period of absence and the remainder of the probationary period is insufficient to evaluate his or her current performance. SEC. 17. Section 19170.3 of the Government Code is repealed. SEC. 18. Section 19173.3 of the Government Code is repealed. SEC. 19. Section 19175.6 of the Government Code is repealed. SEC. 20. Section 19570.3 of the Government Code is repealed. SEC. 21. Section 19572.1 of the Government Code is amended to read: 19572.1. (a) Notwithstanding Section 19572, this section shall apply to state employees in State Bargaining Unit 8. (b) Disciplinary actions pursuant to Section 19576.5 shall be for just cause or one or more of the following causes for discipline: (1) Fraud in securing appointment. (2) Incompetency. (3) Inefficiency. (4) Inexcusable neglect of duty. (5) Insubordination. (6) Dishonesty. (7) Drunkenness on duty. (8) Intemperance. (9) Addiction to the use of controlled substances. (10) Inexcusable absence without leave. (11) Conviction of a felony or conviction of a misdemeanor involving moral turpitude. A plea or verdict of guilty, or a conviction following a plea of nolo contendere, to a charge of a felony of any offense involving moral turpitude is deemed to be a conviction within the meaning of this section. (12) Immorality. (13) Discourteous treatment of the public or other employees. (14) Improper political activity. (15) Willful disobedience. (16) Misuse of state property. (17) Violation of this part or board rule. (18) Violation of the prohibitions set forth in accordance with Section 19990. (19) Refusal to take and subscribe any oath or affirmation that is required by law in connection with the employment. (20) Other failure of good behavior either during or outside of duty hours that is of such a nature that it causes discredit to the appointing authority of the person's employment. (21) Any negligence, recklessness, or intentional act that results in the death of a patient of a state hospital serving the mentally disabled or the developmentally disabled. (22) The use during duty hours, for training or target practice, of any material that is not authorized therefor by the appointing power. (23) Unlawful discrimination, including harassment, on the basis of race, religious creed, color, national origin, ancestry, disability, marital status, sex, or age, against the public or other employees while acting in the capacity of a state employee. (24) Unlawful retaliation against any other state officer or employee or member of the public who in good faith reports, discloses, divulges, or otherwise brings to the attention of, the Attorney General, or any other appropriate authority, any facts or information relative to actual or suspected violation of any law of this state or the United States occurring on the job or directly related thereto. (c) If 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 provision shall not become effective unless approved by the Legislature in the annual Budget Act. SEC. 22. Section 19572.3 of the Government Code is repealed. SEC. 23. Section 19574 of the Government Code is amended to read: 19574. (a) The appointing power, or its authorized representative, may take adverse action against an employee for one or more of the causes for discipline specified in this article. Adverse action is valid only if a written notice is served on the employee prior to the effective date of the action, as defined by board rule. The notice shall be served upon the employee either personally or by mail and shall include: (1) a statement of the nature of the adverse action; (2) the effective date of the action; (3) a statement of the reasons therefor in ordinary language; (4) a statement advising the employee of the right to answer the notice orally or in writing; and (5) a statement advising the employee of the time within which an appeal must be filed. The notice shall be filed with the board not later than 15 calendar days after the effective date of the adverse action. (b) Effective January 1, 1996, this subdivision shall apply only to state employees in State Bargaining Unit 5. This section shall not apply to discipline as defined by Section 19576.1. (c) This subdivision shall apply only to state employees in State Bargaining Unit 8. This section shall not apply to minor discipline, as defined by Section 19576.5 or a memorandum of understanding. SEC. 24. Section 19574.6 of the Government Code is repealed. SEC. 25. Section 19576.2 of the Government Code is repealed. SEC. 26. Section 19576.4 of the Government Code is repealed. SEC. 27. Section 19582 of the Government Code is amended to read: 19582. (a) Hearings may be held by the board, or by any authorized representative, but the board shall render the decision that in its judgment is just and proper. During a hearing, after the appointing authority has completed the opening statement or the presentation of evidence, the employee, without waiving his or her right to offer evidence in the event the motion is not granted, may move for a dismissal of the charges. If it appears that the evidence presented supports the granting of the motion as to some but not all of the issues involved in the action, the board or the authorized representative shall grant the motion as to those issues and the action shall proceed as to the issues remaining. Despite the granting of the motion, no judgment shall be entered prior to a final determination of the action on the remaining issues, and shall be subject to final review and approval by the board. (b) If a contested case is heard by an authorized representative, he or she shall prepare a proposed decision in a form that may be adopted as the decision in the case. A copy of the proposed decision shall be filed by the board as a public record and furnished to each party within 10 days after the proposed decision is filed with the board. The board itself may adopt the proposed decision in its entirety, may remand the proposed decision, or may reduce the adverse action set forth therein and adopt the balance of the proposed decision. (c) If the proposed decision is not remanded or adopted as provided in subdivision (b), each party shall be notified of the action, and the board itself may decide the case upon the record, including the transcript, with or without taking any additional evidence, or may refer the case to the same or another authorized representative to take additional evidence. If the case is so assigned to an authorized representative, he or she shall prepare a proposed decision as provided in subdivision (b) upon the additional evidence and the transcript and other papers that are part of the record of the prior hearing. A copy of the proposed decision shall be furnished to each party. The board itself shall decide no case provided for in this subdivision without affording the parties the opportunity to present oral and written argument before the board itself. If additional oral evidence is introduced before the board itself, no board member may vote unless he or she heard the additional oral evidence. (d) In arriving at a decision or a proposed decision, the board or its authorized representative may consider any prior suspension or suspensions of the appellant by authority of any appointing power, or any prior proceedings under this article. (e) The decision shall be in writing and contain findings of fact and the adverse action, if any. The findings may be stated in the language of the pleadings or by reference thereto. Copies of the decision shall be served on the parties personally or by mail. (f) This section shall not apply to minor discipline, as defined in a memorandum of understanding or by Section 19576.5 for state employees in State Bargaining Unit 8. SEC. 28. Section 19582.1 of the Government Code is amended to read: 19582.1. Notwithstanding Section 19582, this section shall apply to state employees in State Bargaining Unit 8. (a) The board's review of decisions of minor discipline, as defined by a memorandum of understanding or by Section 19576.5, shall be limited to either adopting the penalty of the proposed decision or revoking the disciplinary action in its entirety. (b) The board's review of decisions of discipline, including minor discipline, shall not impose any discipline against an employee that would jeopardize the employee's status under the federal Fair Labor Standards Act, as set forth pursuant to Section 13(a)(1) of The Fair Labor Standards Act of 1938, as amended (Title 29, Section 213(a)(1), United States Code) and in Part 54 of Title 29 of the Code of Federal Regulations, as defined and delimited on the effective date of this section and as those provisions maybe amended in the future. (c) If 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 such provisions of a memorandum of understanding require the expenditure of funds, the provision shall not become effective unless approved by the Legislature in the annual Budget Act. SEC. 29. Section 19582.2 of the Government Code is repealed. SEC. 30. Section 19582.3 of the Government Code is repealed. SEC. 31. Section 19582.6 of the Government Code is amended to read: 19582.6. (a) Notwithstanding Section 19582.5, this section shall apply only to state employees in State Bargaining Unit 8. (b) The board may designate certain of its decisions as precedents. Precedential decisions shall not be subject to Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3. The board may provide by rule for the reconsideration of a previously issued decision to determine whether or not it shall be designated as a precedent decision. All decisions designated as precedents shall be published in a manner determined by the board. (c) For the purpose of this section, a decision reached pursuant to Section 19576.2 is not subject to board precedential decision, and the board may not adopt that decision as a precedential decision. SEC. 32. Section 19582.7 of the Government Code is repealed. SEC. 33. Section 19702 of the Government Code is amended to read: 19702. (a) A person shall not be discriminated against under this part because of sex, race, religious creed, color, national origin, ancestry, marital status, physical disability, or mental disability. A person shall not be retaliated against because he or she has opposed any practice made an unlawful employment practice, or made a charge, testified, assisted, or participated in any manner in an investigation, proceeding, or hearing under this part. For purposes of this article, "discrimination" includes harassment. This subdivision is declaratory of existing law. (b) As used in this section, "physical disability" includes, but is not limited to, impairment of sight, hearing, or speech, or impairment of physical ability because of amputation or loss of function or coordination, or any other health impairment that requires special education or related services. (c) As used in this section, "mental disability" includes, but is not limited to, any mental or psychological disorder, such as mental retardation, organic brain syndrome, emotional or mental illness, and specific learning disabilities. (d) Notwithstanding subdivisions (b) and (c), if the definition of disability used in the Americans with Disabilities Act of 1990 (Public Law 101-336) would result in broader protection of the civil rights of individuals with a mental disability or physical disability, as defined in subdivision (b) or (c), then that broader protection shall be deemed incorporated by reference into, and shall prevail over conflicting provisions of, the definitions in subdivisions (b) and (c). The definitions of subdivisions (b) and (c) shall not be deemed to refer to or include conditions excluded from the federal definition of "disability" pursuant to Section 511 of the Americans with Disabilities Act of 1990 (42 U.S.C. Sec. 12211). (e) If the board finds that a person has engaged in discrimination under this part, and it appears that this practice consisted of acts described in Section 243.4, 261, 262, 286, 288, 288a, or 289 of the Penal Code, the board, with the consent of the complainant, shall provide the local district attorney's office with a copy of its decision and order. (f) (1) If the board finds that discrimination has occurred in violation of this part, the board shall issue and cause to be served on the appointing authority an order requiring the appointing authority to cause the discrimination to cease and desist and to take any action, including, but not limited to, hiring, reinstatement, or upgrading of employees, with or without backpay, and compensatory damages, which, in the judgment of the board, will effectuate the purposes of this part. Consistent with this authority, the board may establish rules governing the award of compensatory damages. The order shall include a requirement of reporting the manner of compliance. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 6 or 8. If the board finds that discrimination has occurred in violation of this part, the board shall issue and cause to be served on the appointing authority an order requiring the appointing authority to cause the discrimination to cease and desist and to take any action, including, but not limited to, hiring, reinstatement, or upgrading of employees, with or without backpay, adding additional seniority, and compensatory damages, which, in the judgment of the board, will effectuate the purposes of this part. Consistent with this authority, the board may establish rules governing the award of compensatory damages. The order shall include a requirement of reporting the manner of compliance. (g) Any person claiming discrimination within the state civil service may submit a complaint that shall be in writing and set forth the particulars of the alleged discrimination, the name of the appointing authority, the persons alleged to have committed the unlawful discrimination, and any other information that may be required by the board. The complaint shall be filed with the appointing authority or, in accordance with board rules, with the board itself. (h) (1) Complaints shall be filed within one year of the alleged unlawful discrimination or the refusal to act in accordance with this section, except that this period may be extended for not to exceed 90 days following the expiration of that year, if a person allegedly aggrieved by unlawful discrimination first obtained knowledge of the facts of the alleged unlawful discrimination after the expiration of one year from the date of its occurrence. Complaints of discrimination in adverse actions or rejections on probation shall be filed in accordance with Sections 19175 and 19575. (2) Notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 8. Complaints shall be filed within one year of the alleged unlawful discrimination or the refusal to act in accordance with this section, except that this period may be extended for not to exceed 90 days following the expiration of that year, if a person allegedly aggrieved by unlawful discrimination first obtained knowledge of the facts of the alleged unlawful discrimination after the expiration of one year from the date of its occurrence. Complaints of discrimination in disciplinary actions defined in Section 19576.5 shall be filed in accordance with that section. Complaints of discrimination in all other disciplinary actions shall be filed in accordance with Section 19575. Complaints of discrimination in rejections on probation shall be filed in accordance with Section 19175.3. (i) (1) When an employee of the appointing authority refuses, or threatens to refuse, to cooperate in the investigation of a complaint of discrimination, the appointing authority may seek assistance from the board. The board may provide for direct investigation or hearing of the complaint, the use of subpoenas, or any other action which will effect the purposes of this section. (2) This subdivision shall not apply to complaints of discrimination filed in accordance with Section 19576.2. SEC. 34. Section 19702.7 of the Government Code is repealed. SEC. 35. Section 19786 of the Government Code is amended to read: 19786. (a) When a civil service employee has been reinstated after military service in accordance with Section 19780, and any question arises relative to his or her ability or inability for any reason arising out of the military service to perform the duties of the position to which he or she has been reinstated, the board shall, upon the request of the appointing power or of the employee, hear the matter and may on its own motion or at the request of either party take any and all necessary testimony of every nature necessary to a decision on the question. (b) If the board finds that the employee is not able for any reason arising out of the military service to carry out the usual duties of the position he or she then holds, it shall order the employee placed in a position in which the board finds he or she is capable of performing the duties in the same class or a comparable class in the same or any other state department, bureau, board, commission, or office under this part and the rules of the board covering transfer of an employee from a position under the jurisdiction of one appointing power to a position under the jurisdiction of another appointing power, without the consent of the appointing powers, where a vacancy may be made available to him or her under this part and the rules of the board, but in no event shall the transfer constitute a promotion within the meaning of this part and the rules of the board. (c) (1) If a layoff is made necessary to place a civil service employee in a position in the same class or a comparable class in accordance with this section, the layoff shall be made under Section 19997.3, provided that no civil service employee who was employed prior to September 16, 1940, shall be laid off as a result of the placing of an employee in the same class or a comparable class under this section. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. If a layoff is made necessary to place a civil service employee in a position in the same class or a comparable class in accordance with this section, the layoff shall be made under Section 19997.3. (d) The board may order the civil service employee reinstated to the department, bureau, board, commission, or office from which he or she was transferred either upon request of the employee or the appointing power from which transferred. The reinstatement may be made after a hearing as provided in this section if the board finds that the employee is at the time of the hearing able to perform the duties of the position. SEC. 36. Section 19786.2 of the Government Code is repealed. SEC. 37. Section 19798 of the Government Code is amended to read: 19798. In establishing order and subdivisions of layoff and reemployment, the board, when it finds past discriminatory hiring practices, shall by rule, adopt a process that provides that the composition of the affected work force will be the same after the completion of a layoff, as it was before the layoff procedure was implemented. This section does not apply to state employees in State Bargaining Unit 5, 6, or 8. SEC. 38. Section 19798.2 of the Government Code is repealed. SEC. 39. Section 19815.41 of the Government Code is amended to read: 19815.41. (a) Notwithstanding subdivision (e) of Section 19815.4, this section shall apply to state employees in State Bargaining Unit 5, 6, or 8. (b) The director shall hold nonmerit statutory appeal hearings, subpoena witnesses, administer oaths, and conduct investigations in accordance with Department of Personnel Administration Rule 599.859 (b)(2). (c) The director may, at his or her discretion, hold hearings, subpoena witnesses, administer oaths, or conduct investigations or appeals concerning other matters relating to the department's jurisdiction. (d) 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 the 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. SEC. 40. Section 19815.42 of the Government Code is repealed. SEC. 41. Section 19816.2 of the Government Code is amended to read: 19816.2. Notwithstanding any other provision of this part, regulations and other provisions pertaining to the layoff or demotion in lieu of layoff of civil service employees that are established or agreed to by the department shall be subject to review by the State Personnel Board for consistency with merit employment principles as provided for by Article VII of the California Constitution. This section does not apply to state employees in State Bargaining Unit 5, 6, or 8. SEC. 42. Section 19816.22 of the Government Code is repealed. SEC. 43. Section 19817 of the Government Code is amended to read: 19817. This article applies only with respect to regulations that apply to state employees in State Bargaining Unit 5, 6, or 8. SEC. 44. Section 19817.8 of the Government Code is repealed. SEC. 45. Section 19818.7 of the Government Code is amended to read: 19818.7. (a) Notwithstanding Section 19818.6, this section shall apply only to state employees in State Bargaining Unit 6. (b) The department shall administer the Personnel Classification Plan of the State of California including the allocation of every position to the appropriate class in the classification plan. The allocation of a position to a class shall derive from and be determined by the ascertainment of the duties and responsibilities of the position and shall be based on the principle that all positions that meet the definition of a class pursuant to Section 18523.1 shall be included in the same class. (c) 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 the provisions of the memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act. (d) A broadband project may not change the terms and conditions of employment covered by a memorandum of understanding entered into pursuant to the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1), unless there is a written agreement with respect to the project between the department and the recognized employee organization representing the affected employees. SEC. 46. Section 19818.11 of the Government Code is amended to read: 19818.11. (a) This section shall apply only to state employees in State Bargaining Unit 6. The department may, directly or through agreement or contract with one or more agencies, conduct demonstration classification, compensation, and related projects. "Demonstration project", for the purposes of this section, means a project that uses alternative classification, compensation, and other personnel management policies and procedures to determine if a change would result in cost savings, improved efficiency, or both cost savings and improved efficiency in the existing personnel management system. (b) Nothing in this section shall infringe upon or conflict with the merit principles as embodied in Article VII of the California Constitution. (c) The establishment of a demonstration project shall not be limited by the lack of specific authority in this division or by the existence of any statute or regulation that is inconsistent with actions to be taken in the demonstration project. (d) Prior to implementation of a demonstration project, the department shall adopt regulations specifying the impact of the project on employee status, compensation, benefits, and rights with regard to transfer, layoff, promotion, and demotion. These regulations are not subject to the Administrative Procedure Act (Chapter 3.5 (commencing with Section 11340), Chapter 4 (commencing with Section 11370), Chapter 4.5 (commencing with Section 11400), and Chapter 5 (commencing with Section 11500) of Part 1 of Division 3), and shall automatically expire after five years from the date of adoption or at the end of the demonstration project, whichever is earlier. Nothing in this section shall affect the rights of employees included within demonstration projects, except those rights directly pertaining to the subject matter of the demonstration project. (e) The department shall notify each house of the Legislature when a demonstration project is undertaken. The department shall also evaluate each project at its conclusion and notwithstanding Section 7550.5, shall prepare and submit a summary of the evaluation to each house of the Legislature that includes a discussion of the following: (1) The purpose of the demonstration project that specifically states the goals or objectives of the project. (2) The cost projections and methods by which savings, if any, may be calculated. (3) A definitive mechanism by which the value and success, if any, of the demonstration project may be quantified as feasible. This mechanism shall include specific numerical objectives that must be met or exceeded if a demonstration project is to be judged successful. (f) A demonstration project may not change the terms and conditions of employment covered by a memorandum of understanding entered into pursuant to the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512) of Division 4 of Title 1), unless there is a written agreement with respect to the project between the department and the recognized employee organization representing the affected employees. (g) Any demonstration project implemented under this section shall not include the adoption or waiver of regulations or statutes that are administered or enforced by the State Personnel Board without the express approval of the State Personnel Board. SEC. 47. Section 19818.15 of the Government Code is repealed. SEC. 48. Section 19826.1 of the Government Code is amended to read: 19826.1. Notwithstanding Section 19826, effective January 1, 1999, this section shall only apply to state employees in State Bargaining Unit 6. (a) The department shall establish and adjust salary ranges or rates for each class of position in the state civil service subject to any merit limits contained in Article VII of the California Constitution. The salary range or rate shall be based on the principle that like salaries shall be paid for comparable duties and responsibilities. In establishing or changing these ranges or rates, consideration shall be given to the prevailing rates for comparable service in other public employment and in private business. The department shall make no adjustments that require expenditures in excess of existing appropriations that may be used for salary increase purposes. The department may make a change in salary range or rate retroactive to the date of application for the change. (b) Notwithstanding any other provision of law, the department shall not establish, adjust, or recommend a salary range or rate for any employees in an appropriate unit where an employee organization has been chosen as the exclusive representative pursuant to Section 3520.5. (c) Notwithstanding Section 7550.5, on or before January 10 of each year, the department shall prepare and submit to the parties meeting and conferring pursuant to Section 3517 and to the Legislature, a report containing the department's findings relating to the salaries of employees in comparable occupations in private industry and other governmental agencies. (d) 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 the 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. SEC. 49. Section 19828.2 of the Government Code is repealed. SEC. 50. Section 19829 of the Government Code is amended to read: 19829. (a) (1) Salary ranges shall consist of minimum and maximum salary limits. The department shall provide for intermediate steps within these limits to govern the extent of the salary adjustment that an employee may receive at any one time; provided, that in classes and positions with unusual conditions or hours of work or where necessary to meet the provisions of state law recognizing differential statutory qualifications within a profession or prevailing rates and practices for comparable services in other public employment and in private business, the department may establish more than one salary range or rate or method of compensation within a class. (2) Effective October 1, 1995, notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 5. Salary ranges shall consist of minimum and maximum salary limits. Except where otherwise provided by law, the appointing power or designee may authorize payment at any salary rate within these limits to govern the extent of a salary adjustment that an employee may receive for situations including, but not limited to, recruitment and retention, extraordinary qualifications, and successful job performance or promotion. Only those employees who are performing successfully as determined by the appointing power or designee shall receive periodic salary increases until the maximum of the salary range is reached to recognize continuous successful performance or value to the organization. Adjustments within the salary range authorized in this paragraph may be either temporary or permanent. The department may establish more than one salary range or rate or method of compensation within a class. (3) Effective January 1, 1999, notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 8. Salary ranges shall consist of minimum and maximum salary limits. Except where otherwise provided by law, the appointing power or designee, consistent with the regulations of the department, shall determine the employee's salary rate upon appointment and may authorize subsequent increases in these rates based on considerations including, but not limited to, recruitment and retention, extraordinary qualifications, and successful job performance or promotion. Only those employees who are performing successfully as determined by the appointing power or designee shall receive periodic performance salary adjustments until the maximum of the salary range is reached to recognize continuous successful performance or value to the organization. Adjustments within the salary range authorized in this section may be either temporary or permanent. The department may establish more than one salary range or rate or method of compensation within a class. (b) 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 the 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. SEC. 51. Section 19829.2 of the Government Code is repealed. SEC. 52. Section 19832 of the Government Code is amended to read: 19832. (a) (1) After completion of the first year in a position, each employee shall receive a merit salary adjustment equivalent to one of the intermediate steps during each year when he or she meets the standards of efficiency as the department by rule shall prescribe. (2) Effective October 1, 1995, notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 5. Employees whose salary is not at the maximum of the salary range shall receive a salary review and be considered for a salary adjustment at least annually. Only those employees who are performing successfully, as determined by the appointing power, shall receive salary increases until the maximum of the salary range is reached to recognize continuous successful performance. The employee' s salary rate may not exceed the maximum of the salary range or fall below the minimum of the salary range except where otherwise provided by law or department rules. (3) Effective January 1, 1999, notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 8. Employees whose salary is not at the maximum of the salary range shall be considered for a performance salary adjustment at least annually. Only those employees who are performing successfully as determined by the appointing power shall receive performance salary adjustments until the maximum of the salary range is reached to recognize continuous successful performance. The employee's salary rate may not exceed the maximum of the salary range or fall below the minimum of the salary range except where otherwise provided by law or department rules. (b) 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 the 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. SEC. 53. Section 19832.2 of the Government Code is repealed. SEC. 54. Section 19834 of the Government Code is amended to read: 19834. (a) Automatic salary adjustments shall be made for employees in the state civil service in accordance with this chapter and department rule adopted pursuant hereto, notwithstanding the power now or hereafter conferred on any officer to fix or approve the fixing of salaries, unless there is not sufficient money available for the purpose in the appropriation from which the salary shall be paid and the director shall so certify. (b) 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 the 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. (c) Effective October 1, 1995, this section shall not apply to state employees in State Bargaining Unit 5. (d) Effective January 1, 1999, this section shall not apply to state employees in State Bargaining Unit 8. SEC. 55. Section 19834.2 of the Government Code is repealed. SEC. 56. Section 19835 of the Government Code is amended to read: 19835. (a) The right of an employee to automatic salary adjustments is cumulative for a period not to exceed two years and he or she shall not, in the event of an insufficiency of appropriation, lose his or her right to these adjustments for the intermediate steps to which he or she may be entitled for this period. (b) 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 the 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. (c) Effective October 1, 1995, this section shall not apply to state employees in State Bargaining Unit 5. (d) Effective January 1, 1999, this section shall not apply to state employees in State Bargaining Unit 8. SEC. 57. Section 19835.2 of the Government Code is repealed. SEC. 58. Section 19836.1 of the Government Code is amended to read: 19836.1. Effective January 1, 1999, notwithstanding Section 19836, this section shall apply only to state employees in State Bargaining Unit 8. (a) The appointing power or designee with the approval of the department may authorize payment at any step above the minimum salary limit to classes or positions in order to correct salary inequities. (b) 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 such 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. SEC. 59. Section 19841 of the Government Code is amended to read: 19841. (a) Notwithstanding Section 11030, whenever a state officer or employee is required by the appointing power because of a change in assignment, promotion, or other reason related to his or her duties to change his or her place of residence, the officer, agent, or employee shall receive his or her actual and necessary moving, traveling, lodging, and meal expenses incurred by him or her both before and after and by reason of the change of residence. The maximum allowances for these expenses shall be as follows: the costs of packing, transporting, and unpacking 11,000 pounds of household effects, traveling, lodging, and meal expenses for 60 days while locating a permanent residence, storage of household effects for 60 days, and additional miscellaneous allowances not in excess of two hundred dollars ($200). The maximum allowances may be exceeded where the director determines that the change of residence will result in unusual and unavoidable hardship for the officer or employee, and in those cases the director shall determine the maximum allowances to be received by the officer or employee. (b) If a change of residence reasonably requires the sale of a residence or the settlement of an unexpired lease, the officer or employee may be reimbursed for any of the following expenses: (1) The settlement of the unexpired lease to a maximum of one year. Upon the date of surrender of the premises by the employee who is the lessee, the rights and obligations of the parties to the lease shall be as determined by Section 1951.2 of the Civil Code. The state shall be absolved of responsibility for an unexpired lease if the department determines the employee knew or reasonably should have known that a transfer involving a physical move was imminent before entering into the lease agreement. (2) In the event of residence sale, reimbursement for brokerage and other related selling fees or charges, as determined by regulations of the department, customarily charged for like services in the locality where the residence is located. (c) This subdivision shall apply to state employees in State Bargaining Unit 5, 6, or 8. If the change of residence is caused by a layoff, the application of this section shall be at the discretion of the department based upon the recommendation of the appointing power. (d) 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 the 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. SEC. 60. Section 19841.2 of the Government Code is repealed. SEC. 61. Section 19853.1 of the Government Code is amended to read: 19853.1. (a) Notwithstanding Section 19853, this section shall apply to state employees in State Bargaining Unit 5. (b) Except as provided in subdivision (c), all employees shall be entitled to the following holidays: January 1, the third Monday in January, the third Monday in February, the last Monday in May, July 4, the first Monday in September, November 11, the day after Thanksgiving, December 25, and every day appointed by the Governor of this state for a public fast, Thanksgiving, or holiday. If a day listed in this subdivision falls on a Sunday, the following Monday shall be deemed to be the holiday in lieu of the day observed. If November 11 falls upon a Saturday, the preceding Friday shall be deemed to be the holiday in lieu of the day observed. Any employee who may be required to work on any of the holidays included in this section and who does work on any of these holidays shall be entitled to be paid compensation or given compensating time off for that work in accordance with his or her classification's assigned workweek group. (c) If the provisions of subdivision (b) 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 the 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. (d) Any employee who either is excluded from the definition of state employee in subdivision (c) of Section 3513, or is a nonelected officer or employee of the executive branch of government who is not a member of the civil service, is entitled to the following holidays, with pay, in addition to any official state holiday appointed by the Governor: (1) January 1, the third Monday in January, the third Monday in February, the last Monday in May, July 4, the first Monday in September, November 11, Thanksgiving Day, the day after Thanksgiving, December 25. (2) When November 11 falls on a Saturday, employees shall be entitled to the preceding Friday as a holiday with pay. (3) When a holiday, other than a personal holiday, falls on a Saturday, an employee shall, regardless of whether he or she works on the holiday, accrue only an additional eight hours of personal holiday credit per fiscal year for the holiday. The holiday credit shall be accrued on the actual date of the holiday and shall be used within the same fiscal year. (4) When a holiday other than a personal holiday falls on Sunday, employees shall be entitled to the following Monday as a holiday with pay. (5) Employees who are required to work on a holiday shall be entitled to pay or compensating time off for this work in accordance with their classification's assigned workweek group. (6) Persons employed on less than a full-time basis shall receive holidays in accordance with the Department of Personnel Administration rules. (e) Any employee, as defined in subdivision (c) of Section 3513, may elect to use eight hours of vacation, annual leave, or compensating time off consistent with departmental operational needs and collective bargaining agreements for March 31, known as "Cesar Chavez Day." (f) Any employee, as defined in subdivision (c) of Section 3513, may elect to use eight hours of vacation, annual leave, or compensating time off consistent with departmental operational needs and collective bargaining agreements for the fourth Friday in September, known as "Native American Day." (g) This section shall become effective only when the Department of Personnel Administration notifies the Legislature that the language contained in this section has been agreed to by all the parties, and the necessary statutes are amended to reflect this change for employees excluded from the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512), Division 4, Title 1). SEC. 62. Section 19853.3 of the Government Code is repealed. SEC. 63. Section 19854 of the Government Code is amended to read: 19854. (a) Every employee, upon completion of six months of his or her initial probationary period in state service, shall be entitled to one personal holiday per fiscal year. The personal holiday shall be credited to each full-time employee on the first day of July. No employee shall lose a personal holiday credit because of the change from calendar to fiscal year crediting. The department head or designee may require the employee to provide five working days' advance notice before a personal holiday is taken, and may deny use subject to operational needs. The department may provide by rule for the granting of this holiday for employees. (b) 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 the 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. (c) This section does not apply to state employees in State Bargaining Unit 5. (d) Subdivision (c) shall become effective only when the Department of Personnel Administration notifies the Legislature that the language contained in that subdivision has been agreed to by all the parties, and the necessary statutes are amended to reflect this change for employees excluded from the Ralph C. Dills Act (Chapter 10.3 (commencing with Section 3512), Division 4, Title 1). SEC. 64. Section 19854.2 of the Government Code is repealed. SEC. 65. Section 19994 of the Government Code is amended to read: 19994. (a) (1) When the state takes over and there is transferred to it a function from any other public agency, the department may determine the extent, if any, to which the employees employed by the other public agency on the date of transfer are entitled to have credited to them in the state civil service, seniority credits, accumulated sick leave, and accumulated vacation because of service with the former agency. Granting of seniority credit under this section is subject to review by the State Personnel Board pursuant to Section 19816.2. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. When the state takes over and there is transferred to it a function from any other public agency, the department may determine the extent, if any, to which the employees employed by the other public agency on the date of transfer are entitled to have credited to them in the state civil service, seniority credits, accumulated sick leave, and accumulated vacation because of service with the former agency. (b) The department shall limit that determination to the time any transferred employees were employed in the specific function or a function substantially similar while in the former agency and the seniority credits and accumulated sick leave and accumulated vacation shall not exceed that to which each employee would be entitled if he or she had been continuously employed by the State of California. This section is applicable to any function heretofore transferred to the state, whether by state action or otherwise, as well as to any future transfers of a function to the state, whether by state action or otherwise. SEC. 66. Section 19994.1 of the Government Code is amended to read: 19994.1. (a) An appointing power may transfer any employee under his or her jurisdiction: (1) to another position in the same class; or (2) from one location to another whether in the same position, or in a different position as specified above in (1) or in Section 19050.5. (b) (1) When a transfer under this section or Section 19050.5 reasonably requires an employee to change his or her place of residence, the appointing power shall give the employee, unless the employee waives this right, a written notice of transfer 60 days in advance of the effective date of the transfer. Unless the employee waives this right, the appointing power shall provide to the employee 60 days prior to the effective date of the transfer a written notice setting forth in clear and concise language the reasons why the employee is being transferred. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. When a transfer under this section or Section 19050.5 reasonably requires an employee to change his or her place of residence, the appointing power shall give the employee, unless the employee waives this right, a written notice of transfer 60 days in advance of the effective date of the transfer unless the transfer is in lieu of layoff, in which case the notice shall be 30 days in advance of the effective date of the transfer. Unless the employee waives this right, the written notice shall set forth in clear and concise language the reasons why the employee is being transferred. (c) If this section is in conflict with a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the memorandum of understanding requires the expenditure of funds, it shall not become effective unless approved by the Legislature in the annual Budget Act. SEC. 67. Section 19994.2 of the Government Code is amended to read: 19994.2. (a) (1) When there are two or more employees in a class and an involuntary transfer is required to a position in the same class, or an appropriate class as designated by the State Personnel Board, in a location that reasonably requires an employee to change his or her place of residence, the department may determine the methods by which employees in the class or classes involved are to be selected for transfer. These methods may include seniority and other considerations. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. When there are two or more employees in a class and an involuntary transfer is required to a position in the same class, or an appropriate class as designated by the State Personnel Board, in a location that reasonably requires an employee to change his or her place of residence, the department may determine the methods by which employees in the class or classes involved are to be selected for transfer. These methods may include seniority and other considerations, including special skills. (b) 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 the 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. SEC. 68. Section 19994.6 of the Government Code is repealed. SEC. 69. Section 19994.7 of the Government Code is repealed. SEC. 70. Section 19994.8 of the Government Code is repealed. SEC. 71. Section 19995.5 is added to the Government Code, to read: 19995.5. (a) There is hereby created in the State Treasury, the State Employee Scholarship Fund to which funds shall be allocated from the amount negotiated in memoranda of understanding between the state and recognized employee organizations, as defined in Section 3513, and appropriated by the Legislature for the 2000-01 fiscal year. (b) The fund shall be used to establish a program for career advancement to assist eligible state employees to participate in educational programs that will enhance the personal growth and career development of employees in state government. (c) The fund shall be administered by the Department of Personnel Administration. The amounts to be allocated and expended from funds available for compensation shall be determined by the department. (d) Notwithstanding Section 13340, moneys in the fund shall be available for expenditure without regard to fiscal years through June 30, 2001. As of June 30, 2001, the fund shall cease to exist unless the existence of the fund is extended by statute and that statute is enacted prior to June 30, 2001. SEC. 72. Section 19997 of the Government Code is amended to read: 19997. (a) Whenever it is necessary because of lack of work or funds, or whenever it is advisable in the interests of economy, to reduce the staff of any state agency, the appointing power may lay off employees pursuant to this article and department rule. All layoff provisions and procedures established or agreed to under this article shall be subject to State Personnel Board review pursuant to Section 19816.2. (b) Notwithstanding subdivision (a), this subdivision shall apply to state employees in State Bargaining Unit 5, 6, or 8. Whenever it is necessary because of lack of work or funds, or whenever it is advisable in the interests of economy, to reduce the staff of any state agency, the appointing power may lay off employees pursuant to this article and department rule. SEC. 73. Section 19997.3 of the Government Code is amended to read: 19997.3. (a) (1) Layoff shall be made in accordance with the relative seniority of the employees in the class of layoff. In determining seniority scores, one point shall be allowed for each complete month of full-time state service regardless of when the service occurred. Department rules shall establish all of the following: (A) The extent to which seniority credits may be granted for less than full-time service. (B) The seniority credit to be granted for service in a class that has been abolished, combined, divided, or otherwise altered under the authority of Section 18802. (C) The basis for determining the sequence of layoff whenever the class and subdivision of layoff includes employees whose service is less than full time. (D) Any other matters as are necessary or advisable to the operation of this chapter. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. Layoff shall be made in accordance with the relative seniority of the employees in the class of layoff. In determining seniority scores, one point shall be allowed for each complete month of full-time state service regardless of when the service occurred. Department rules shall establish all of the following: (A) The extent to which seniority credits may be granted for less than full-time service. (B) The basis for determining the sequence of layoff whenever the class and subdivision of layoff includes employees whose service is less than full time. (C) Any other matters as are necessary or advisable to the operation of this chapter. (3) For state employees in State Bargaining Unit 8, less than full-time service shall be prorated. (b) For professional, scientific, administrative, management, and executive classes, the department shall prescribe standards and methods by rule whereby employee efficiency shall be combined with seniority in determining the order of layoffs and the order of names on reemployment lists. These standards and methods may vary for different classes, and shall take into consideration the needs of state service and practice in private industry and other public employment. (c) For state employees in State Bargaining Unit 8, prior to laying off, transferring, or demoting permanent or probationary employees, employment for other employees who did not formerly have permanent status shall be terminated in the following sequence: student assistants, retired annuitants, temporary intermittent, limited term, and permanent intermittent appointments. No distinction shall be made between a probationary and permanent employee or between full-time and part-time employees when making layoffs. For layoff purposes employees on leaves of absences shall be treated the same as other employees. (d) 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 the provisions of a memorandum of understanding incurs either present or future costs, or requires the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act. SEC. 74. Section 19997.4 of the Government Code is amended to read: 19997.4. (a) For the purposes of determining seniority pursuant to paragraph (1) of subdivision (a) of Section 19997.3, the term "state service" shall include all service that is exempt from state civil service. (b) Notwithstanding subdivision (a), this subdivision shall apply only to state employees in State Bargaining Unit 5. For the purposes of determining seniority pursuant to paragraph (2) of subdivision (a) of Section 19997.3, the term "state service" shall include service that is exempted from state civil service by subdivisions (e), (f), (g), (i), and (m) of Section 4 of Article VII of the California Constitution. (c) Notwithstanding subdivision (a), this subdivision shall apply to state employees in State Bargaining Unit 6 or 8. For the purposes of determining seniority pursuant to paragraph (2) of subdivision (a) of Section 19997.3, the term "state service" shall include service that is exempted from the state civil service by any of the following: (1) Subdivision (e), (f), (g), (i), or (m) of Section 4 of Article VII of the California Constitution. (2) Subdivision (a) of Section 4 of Article VII of the California Constitution if an employee provides to the appointing power a copy of his or her official employment history record by July 1, 1999, or within six months of appointment to the state civil service. SEC. 75. Section 19997.5 of the Government Code is amended to read: 19997.5. (a) Separations that are necessary by reason of reinstatement of an employee or employees after recognized military service as provided for in Section 19780 shall be made by layoff. In making these separations, the regular method of determining the order of layoff shall be used unless this would result in the layoff of an employee who has been reinstated in the class and subdivision of layoff under Section 19780, and in the retention of an employee who was appointed in the class and subdivision of layoff during the time that a reinstated employee was on military leave. Under these circumstances, seniority shall not be counted as provided in Section 19997.3. Instead, service in the subdivision of layoff that qualifies under Section 19997.3 for credit is the only state service that shall be counted. Whenever such a layoff results in the demotion to a lower class of an employee who has been reinstated after recognized military service as provided in Section 19780, the resulting layoff, if any, in the lower class shall be made as though that reinstated employee had been in that lower class at the time he or she went on military leave. Any layoff occurring within one year after reinstatement of an employee after recognized military service shall be presumed to have been necessary by reason of reinstatement of an employee or employees under Section 19780 unless the department determines that the reason for layoff is clearly not related to the reinstatement. (b) Notwithstanding subdivision (a), this subdivision shall apply to state employees in State Bargaining Unit 5, 6, or 8. Separations that are necessary by reason of reinstatement of an employee or employees after recognized military service as provided for in Section 19780 shall be made by layoff. In making these separations, the regular method of determining the order of layoff shall be used. SEC. 76. Section 19997.6 of the Government Code is amended to read: 19997.6. (a) A veteran, except a veteran who was reinstated from military leave, shall in the event of layoff receive seniority credit for recognized military service if the veteran entered the state service after discharge, the end of the national emergency, or the end of the state military emergency. (b) Seniority credit for recognized military service shall be computed as if it were service in the class to which the employee was first given permanent civil service or exempt appointment after his or her entry into the state service following recognized military service. (c) Seniority credit for recognized military service shall not exceed one year's credit if the veteran had no state service prior to entering the military service. (d) This section shall become operative on July 1, 1993. (e) Notwithstanding subdivisions (a), (c), and (d), this subdivision shall apply to state employees in State Bargaining Unit 5, 6 or 8. A veteran, except a veteran who was reinstated from military leave, shall in the event of layoff receive a maximum of one year's seniority credit for recognized military service if the veteran entered the state service after discharge, the end of the national emergency, or the end of the state military emergency. For purposes of this subdivision, "recognized military service" means service in a military campaign or expedition for which a medal was authorized by the government of the United States in accordance with Section 300.1 of Title 12 of the California Code of Regulations. SEC. 77. Section 19997.7 of the Government Code is amended to read: 19997.7. (a) Employees in the class under consideration, up to the number of positions to be abolished or discontinued, shall be laid off in the order as determined under this part. As between two or more of these employees who have the same score, veterans shall have preference in retention. Other ties shall be resolved according to department rule that shall take into consideration other matters of record before names are drawn by lot. (b) Notwithstanding subdivision (a), this subdivision shall apply to state employees in State Bargaining Unit 5, 6, or 8. Employees in the class under consideration, up to the number of positions to be abolished or discontinued, shall be laid off in the order as determined under this part. As between two or more employees who have the same score, veterans shall have preference in retention. Other ties shall be determined by lot. SEC. 78. Section 19997.8 of the Government Code is amended to read: 19997.8. (a) (1) In lieu of being laid off an employee may elect demotion to: (A) any class with substantially the same or a lower maximum salary in which he or she had served under permanent or probationary status, or (B) a class in the same line of work as the class of layoff, but of lesser responsibility, if such a class is designated by the department. Whenever a demotion requires a layoff in the elected class, the seniority score for the demoted employee shall be recomputed in that class. The appointing power shall inform the employee in the notice of layoff of the classes to which he or she has the right to demote. To be considered for demotion in lieu of layoff an employee must notify his or her appointing power in writing of his or her election not later than five calendar days after receiving notice of layoff. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. In lieu of being laid off an employee may elect demotion to: (A) any class with substantially the same or a lower maximum salary in which he or she had served under permanent or probationary status, or (B) a class in the same class series as the class of layoff, but of lesser responsibility, or (C) a class in a related line of work as the class of layoff, but of lesser responsibility, if such a class is designated by the department. Whenever a demotion requires a layoff in the elected class, the seniority score for the demoted employee shall be recomputed in that class if necessary. The appointing power shall inform the employee in the notice of layoff of the classes to which he or she has the right to demote. To be considered for demotion in lieu of layoff an employee must notify his or her appointing power in writing of his or her election not later than five calendar days after receiving notice of layoff. (b) Demotions in lieu of layoff, and layoffs resulting therefrom, shall be governed by this article and shall be made within the subdivisions approved by the department for this purpose. These subdivisions need not be the same as those used to determine the area of layoff under Section 19997.2. (c) 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 the 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. SEC. 79. Section 19997.11 of the Government Code is amended to read: 19997.11. (a) (1) The names of employees to be laid off or demoted shall be placed upon the reemployment list for the subdivision, if such a subdivision was designated, upon the departmental reemployment list and upon the general reemployment list, for the class from which the employees were laid off or demoted. The department may also place these names upon the general reemployment list for any other appropriate classes as the department determines. (2) Notwithstanding paragraph (1), this paragraph shall apply only to state employees in State Bargaining Unit 5. The names of employees to be laid off, demoted in lieu of layoff, or transferred in lieu of layoff shall be placed upon the reemployment list for the subdivision, if such a subdivision was designated, upon the departmental reemployment list and upon the general reemployment list, for the class from which the employees were laid off, demoted in lieu of layoff, or transferred in lieu of layoff. The department may also place these names upon the general reemployment list for any other appropriate classes as the department determines. (3) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 6 or 8. The names of employees to be laid off, demoted in lieu of layoff, or transferred in lieu of layoff shall be placed upon the reemployment list for the subdivision, if such a subdivision was designated and upon the departmental reemployment list, for the class from which the employees were laid off, demoted in lieu of layoff, or transferred in lieu of layoff. The department shall also place these names upon the general reemployment list only for the entry level class within the employee's primary demotional pattern. This general reemployment list shall be a rule of one name. (b) 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 the 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. SEC. 80. Section 19997.13 of the Government Code is amended to read: 19997.13. (a) (1) An employee compensated on a monthly basis shall be notified that he or she is to be laid off 30 days prior to the effective date of layoff and not more than 60 days after the date of the seniority computation. The notice of layoff shall be in writing and shall contain the reason or reasons for the layoff. An employee to be laid off may elect to accept this layoff prior to the effective date thereof. (2) Notwithstanding paragraph (1), this paragraph shall apply to state employees in State Bargaining Unit 5, 6, or 8. An employee compensated on a monthly basis shall be notified that he or she is to be laid off 30 days prior to the effective date of layoff. The notice of layoff shall be in writing and shall contain the reason or reasons for the layoff. An employee to be laid off may elect to accept this layoff prior to the effective date thereof. (b) 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 the 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. SEC. 81. Section 19997.40 of the Government Code is repealed. SEC. 82. Section 19997.43 of the Government Code is repealed. SEC. 83. Section 19997.44 of the Government Code is repealed. SEC. 84. Section 19997.45 of the Government Code is repealed. SEC. 85. Section 19997.46 of the Government Code is repealed. SEC. 86. Section 19997.47 of the Government Code is repealed. SEC. 87. Section 19997.48 of the Government Code is repealed. SEC. 88. Section 19997.51 of the Government Code is repealed. SEC. 89. Section 19997.53 of the Government Code is repealed. SEC. 90. Section 20405.2 is added to the Government Code, to read: 20405.2. A member who made the election to remain under the miscellaneous or industrial retirement benefit, as provided in Section 20405.1, may elect to be subject to the state safety formula within 90 days of notification by the board. The election, which shall be provided by the board on and after January 1, 2000, shall be filed with the board. Past service that would have been credited as a safety member, but for the member's election to remain under the miscellaneous or industrial formula, shall be credited under the safety formula. This section shall apply to state employees in state bargaining units that have agreed to this provision in a memorandum of understanding, or authorized by the Director of the Department of Personnel Administration for classifications of state employees that are excluded from the definition of state employee by paragraph (c) of Section 3513 of the Government Code. SEC. 91. Section 22754 of the Government Code is amended to read: 22754. As used in this part the following definitions, unless the context otherwise requires, shall govern the interpretation of terms: (a) "Board" means the Board of Administration of the Public Employees' Retirement System. (b) "Employee" means: (1) Any officer or employee of the State of California or of any agency, department, authority, or instrumentality of the state including the University of California, or any officer or employee who is a local or school member of the Public Employees' Retirement System employed by a contracting agency that has elected to be or otherwise has become subject to this part, or who is a member or retirant of the State Teachers' Retirement System employed by an employer who has elected to become subject to this part, or who is an employee or annuitant of a special district or county subject to the County Employees Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3) that has elected to become subject to this part, or who is an employee or annuitant of a special district, as defined in subdivision (i), that has elected to become subject to this part, except persons employed on an intermittent, irregular or less than half-time basis, or employees similarly situated, or employees in respect to whom contributions by the state for any type of plan or program offering prepaid hospital and medical care are otherwise authorized by law. (2) Any officer or employee who participates in the retirement system of a contracting agency as defined in paragraph (2) of subdivision (g) that has elected to become subject to this part, except persons employed less than half time or who are otherwise determined to be ineligible. (3) Any annuitant of the Public Employees' Retirement System employed by a contracting agency as defined in subdivision (g) that has elected to become subject to this part who is a person retired under Section 21228. (c) "Carrier" means a private insurance company holding a valid outstanding certificate of authority from the Insurance Commissioner of the state, a medical society or other medical group, a nonprofit hospital service plan qualifying under Chapter 11A (commencing with Section 11491) of Part 2 of Division 2 of the Insurance Code, or nonprofit membership corporation lawfully operating under Section 9200 or Section 9201 of the Corporations Code, or a health care service plan as defined under subdivision (f) of Section 1345 of the Health and Safety Code, or a health maintenance organization approved under Title XIII of the federal Public Health Services Act, that is lawfully engaged in providing, arranging, paying for, or reimbursing the cost of personal health services under insurance policies or contracts, medical and hospital service agreements, membership contracts, or the like, in consideration of premiums or other periodic charges payable to it. (d) "Health benefits plan" means any program or entity that provides, arranges, pays for, or reimburses the cost of health benefits. (e) "Annuitant" means: (1) Any person who has retired within 120 days of separation from employment and who receives any retirement allowance under any state or University of California retirement system to which the state was a contributing party. (2) A family member receiving an allowance as the survivor of an annuitant who has retired as provided in paragraph (1), or as the survivor of a deceased employee under Section 21541, 21545, 21546, or 21547 or similar provisions of any other state retirement system. (3) Any employee who has retired under the retirement system provided by a contracting agency as defined in paragraph (2) of subdivision (g) and who receives a retirement allowance from that retirement system, or a surviving family member who receives the retirement allowance in place of the deceased. (4) Any person who was a state member for 30 years or more and who, at the time of retirement, was a local member employed by a contracting agency. (f) (1) "Family member" means an employee's or annuitant's spouse and any unmarried child (including an adopted child, a stepchild, or recognized natural child who lives with the employee or annuitant in a regular parent-child relationship). The board shall, by regulation, prescribe age limits and other conditions and limitations pertaining to unmarried children. (2) Notwithstanding paragraph (1), this paragraph shall apply only to state employees, as defined in Section 19815, that are in State Bargaining Unit 5. "Family member" only means an employee's legal spouse and any unmarried child, adopted child, stepchild, recognized natural child, or legal ward living with the employee in a regular parent-child relationship. (g) "Contracting agency" means: (1) Any contracting agency as defined in Section 20022, any county or special district subject to the County Employees Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3), and any special district, school district, county board of education, personnel commission of a school district or a county superintendent of schools. (2) Any public body or agency of, or within California not covered by the Public Employees' Retirement System or subject to the County Employees Retirement Law of 1937 (Chapter 3 (commencing with Section 31450) of Part 3 of Division 4 of Title 3), that provides a retirement system for its employees funded wholly or in part by public funds. (h) "Employer" means the state, any contracting agency employing an employee, and any agency that has elected to become subject to this part pursuant to Section 22856. (i) "Special district" means a nonprofit, self-governed public agency, within the State of California and comprised solely of public employees, performing a governmental rather than proprietary function. SEC. 92. Section 22754.5 of the Government Code is repealed. SEC. 93. Section 22754.7 of the Government Code is repealed. SEC. 94. Section 22754.11 of the Government Code is repealed. SEC. 95. Section 22825.3 of the Government Code is amended to read: 22825.3. (a) Notwithstanding Sections 22825, 22825.1, and 22825.2, state employees who become state members of the Public Employees' Retirement System after January 1, 1989, and who are included in the definition of state employee in subdivision (c) of Section 3513 shall not receive any portion of the employer's contribution payable for annuitants, pursuant to Section 22825.1, unless these employees are credited with 10 years of state service as defined by this section, at the time of retirement. (b) Notwithstanding Sections 22825, 22825.1, and 22825.2, a state employee who became a state member of the Public Employees' Retirement System after January 1, 1990, and is either (1) excluded from the definition of state employee in subdivision (c) of Section 3513; or (2) a nonelected officer or employee of the executive branch of government who is not a member of the civil service, shall not receive any portion of the employer's contribution payable for annuitants, pursuant to Section 22825.1, unless the employee is credited with 10 years of state service as defined by this section, at the time of retirement. (c) The percentage of employer contribution payable for postretirement health benefits for an employee subject to this section shall be based on the member's completed years of credited state service at retirement as shown in the following table: Percentage Credited Years of Employer of Service Contribution 10 ................................ 50 11 ................................ 55 12 ................................ 60 13 ................................ 65 14 ................................ 70 15 ................................ 75 16 ................................ 80 17 ................................ 85 18 ................................ 90 19 ................................ 95 20 or more ........................ 100 (d) This section shall apply only to state employees who retire for service. (e) Benefits provided to an employee subject to this section shall be applicable to all future state service. (f) For the purposes of this section, "state service" shall mean service rendered as an employee or an appointed or elected officer of the state for compensation. In those cases where the state assumes or has assumed from a local public agency a function and the related personnel, service rendered by that personnel for compensation as employees or appointed or elected officers of that local public agency shall not be credited, at retirement, as state service for the purposes of this section, unless the former employer has paid or agreed to pay the state agency the amount actuarially determined to equal the cost for any employee health benefits which were vested at the time that the function and the related personnel were assumed by the state. For noncontracting local public agencies the state department shall certify the completed years of local agency service to be credited to the employee to the Public Employees' Retirement System at the time of separation for retirement. (g) Whenever the state contracts to assume a local public agency function, completed years of service rendered by the personnel for compensation as employees or appointed or elected officers of that local public agency shall be credited as state service only upon a finding by the Department of Finance that the contract contains a benefit factor sufficient to reimburse the state for the amount necessary to fully compensate the state for postretirement health benefit costs for those personnel. (h) This section shall not apply to employees of the California State University or the Legislature. SEC. 96. The provisions of the following memoranda of understanding prepared pursuant to Section 3517.5 of the Government Code and entered into by the state employer and the following employee organizations in 1999, which require the expenditure of funds, are hereby approved for the purposes of Section 3517.6 of the Government Code: (a) Unit 16--Union of American Physicians and Dentists. (b) Unit 17--California State Employees Association. (c) Unit 18--California Association of Psychiatric Technicians. (d) Unit 19--American Federation of State, County and Municipal Employees. SEC. 97. Notwithstanding Section 3517.6 of the Government Code, the provisions of any memorandum of understanding 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. SEC. 98. Any provision in a memorandum of understanding approved by any section of this act that requires the expenditure of funds shall not take effect unless funds for these provisions are appropriated by the Legislature. If funds for these provisions are not appropriated by the Legislature, all or any part of the memorandum of understanding may be declared null and void by any affected employee organization. SEC. 99. The sum of two hundred thousand dollars ($200,000) is hereby appropriated from the General Fund for transfer to the State Employee Scholarship Fund, as created by Section 19995.5 of the Government Code, to provide for the establishment and administration of the state employee scholarship program. Any additional funds for subsequent fiscal years shall be transferred from the amount appropriated in the annual Budget Act for employee compensation. SEC. 100. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order for the provisions of this act to be applicable as soon as possible in the 1999-2000 fiscal year and thereby facilitate the orderly administration of state government at the earliest possible time, it is necessary for this act to take effect immediately.