BILL ANALYSIS                                                                                                                                                                                                    



                                                                  ACA 17
                                                                  Page  1

          Date of Hearing:   May 5, 2009

                       ASSEMBLY COMMITTEE ON HIGHER EDUCATION
                              Anthony Portantino, Chair
                  ACA 17 (Nestande) - As Introduced:  March 25, 2009
           
          SUBJECT  :   University of California: severance and early  
          retirement incentives.

           SUMMARY  :   Prohibits any employee of the University of  
          California (UC) who receives any financial benefit greater than  
          $50,000 as part of a temporary voluntary separation program, as  
          defined, from UC from being employed by, or entering into a  
          personal services contract with, UC in any compensated capacity,  
          unless that person returns the entire financial benefit, as  
          defined, to UC.  

           EXISTING LAW  establishes UC as a public trust to be administered  
          by the UC Board of Regents with full powers of organization and  
          government, subject only to specified legislative control.

           FISCAL EFFECT  :   Unknown

           COMMENTS  :    Background  :  During January-June 2008, UC offered a  
          Voluntary Separation Program (VSP) to employees at the UC Office  
          of the President (UCOP), in an effort to reduce the spending and  
          workforce in its central administration while minimizing the  
          need for involuntary layoffs.  The VSP applied only to UCOP  
          employees, not to employees at UC campuses, laboratories,  
          medical centers, or other non-UCOP operations.  Later that year,  
          newspaper stories revealed that 16 of the 155 employees who  
          accepted the VSP found new positions elsewhere within the UC  
          system.  UC estimates that the VSP will save at least $5 million  
          per year in spending at UCOP on an ongoing basis after the first  
          year. 

           Purpose of this Constitutional amendment  :  According to the  
          author, this Constitutional amendment "will prohibit a  
          University of California employee - who takes a golden handshake  
          in excess of $50,000 - from thereafter being employed by or  
          entering into a contract with the university unless the entire  
          sum is returned."

           Future UC VSP policy  :  Effective April 6, 2009, UC enacted a new  
          policy for future VSPs that require the repayment of a buyout on  








                                                                  ACA 17
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          a pro rata basis for employees finding new work elsewhere within  
          UC, as follows: if reemployment is found between 1-12 months  
          after separation, the entire severance must be repaid; if  
          reemployment occurs within 13-24 months after separation, 50% of  
          the severance must be repaid; and if reemployment occurs within  
          25-36 months of separation, 25% of the severance must be repaid.  
           However, they also determined that the current VSP will remain  
          unchanged, since it constitutes a contract with employees who  
          accepted the VSP.  

           California Constitution  :  This Constitutional amendment will  
          place personnel policies in the State Constitution.  Is this an  
          appropriate place for such issues?

           REGISTERED SUPPORT / OPPOSITION  :   

           Support 
           
          None on file.

           Opposition 
           
          None on file.

           
          Analysis Prepared by  :    Sandra Fried / HIGHER ED. / (916)  
          319-3960