BILL ANALYSIS
AB 1523
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Date of Hearing: April 18, 2007
ASSEMBLY COMMITTEE ON PUBLIC EMPLOYEES, RETIREMENT AND SOCIAL
SECURITY
Ed Hernandez, O.D., Chair
AB 1523 (Soto) - As Introduced: February 23, 2007
SUBJECT : State employees: compensation.
SUMMARY : Appropriates, in a continuous manner, from the
General Fund and other specified funds, an amount necessary to
pay state employees in accordance with current memoranda of
understanding in the event a state budget has not been enacted
on or after July 1 of a fiscal year. Specifically, this bill :
1)Requires, in any fiscal year in which the budget is not
enacted by July 1, an amount to be continuously appropriated
from the General Fund and other specified funds necessary to
pay state employee compensation and benefits.
2)Specifies that if there is a memorandum of understanding (MOU)
in effect, compensation and contribution for employee benefits
will be consistent with the provisions of the MOU.
3)Specifies that for excluded state employees compensation and
contribution will be at the rate approved by the Department of
Personnel Administration (DPA) in the prior fiscal year.
4)Specifies that if no MOU is in effect and if DPA has not
approved a compensation package for excluded employees, the
compensation and benefit contribution required by this bill
will be at the rate that was in effect the prior fiscal year.
5)Authorizes the Department of Finance to reduce the appropriate
budget act allocations by the amount of warrants drawn once
the budget is enacted without action having to be taken by the
Legislature or the Governor.
EXISTING LAW provides that no state officer or employee will be
deemed to have a break in service or to have terminated his or
her employment, for any purpose, not to have incurred any change
in his or her authority, status, or jurisdiction or in his or
her salary or other conditions of employment, solely because of
the failure to enact a budget act for a fiscal year prior to the
beginning of that fiscal year.
AB 1523
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The California Constitution requires the Legislature to pass a
budget bill by June 15 of each year for the fiscal year
commencing on July 1. Under the California Constitution, money
may be drawn from the Treasury only through an appropriation
made by law and upon a Controller's duly drawn warrant.
FISCAL EFFECT : Unknown
COMMENTS : According to supporters, "A unanimous ruling of the
California Supreme Court upheld the appellate court decision in
White v. Davis , 54 P. 3d 774, 125 Cal. Rpt. 2d 660. White v.
Davis held that state workers who are paid by the hour, and
don't work overtime in a particular pay period, are entitled
only to the federal minimum wage if the state enters a new
fiscal year (July 1) without a budget. Although the employees
would be paid in full retroactively once a budget passed, the
ruling raises the possibility that state employees would have to
live on drastically reduced income for weeks or even months."
Supporters go on to state, "Then State Controller Steve Westly
opined that the decision left him with the authority to decide
how much to pay state employees. The Controller argued that
because decisions on overtime can't be made in advance, he would
have to pay all workers in full or risk violating the law.
Therefore, in the event that a State Budget is not enacted on
time, state employees are only entitled to minimum wage pay."
This bill seeks to ensure that state employees receive their
full salary in the event a budget is not enacted in a timely
manner.
REGISTERED SUPPORT / OPPOSITION :
Support
California Association of Professional Scientists (Sponsor)
American Federation of State, County and Municipal Employees
CDF Firefighters
California School Employees Association
California State Employees Association
Service Employees International Union Local 1000
Opposition
AB 1523
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None on file
Analysis Prepared by : Karon Green / P.E., R. & S.S. / (916)
319-3957