(1) Existing law provides that a provision of a memorandum of understanding reached between the state employer and a recognized employee organization representing state civil service employees that requires the expenditure of funds does not become effective unless approved by the Legislature in the annual Budget Act.
Existing law requires the Department of Human Resources to provide a memorandum of understanding to the Legislative Analyst, who then has 10 calendar days from the date the tentative agreement is received to issue a fiscal analysis to the Legislature. Existing law prohibits the memorandum of understanding from being subject to legislative determination until either the Legislative Analyst has presented a fiscal analysis of the memorandum of understanding or until 10 calendar days have elapsed since the memorandum was received by the Legislative Analyst.
This bill, notwithstanding the above-described statutory provisions, would approve provisions of agreements entered into by the state employer and State Bargaining Units 1, 3, 4, 5, 11, 12, 13, 14, 15, 17, 19, 20, and 21. The bill would provide that the provisions of the agreements that require the expenditure of funds will not take effect unless funds for these provisions are specifically appropriated by the Legislature. The bill would authorize the state employer or those specified bargaining units to reopen negotiations if funds for these provisions are not specifically appropriated by the Legislature. The bill would require the provisions of the agreements that require the expenditure of funds to become effective even if the provisions approved by the Legislature in legislation other than the annual Budget Act.
Existing law, for the 2023–24 fiscal year, continuously appropriates to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by specified memoranda of understanding if the Budget Act of 2023 is not enacted by July 1, 2023.
This bill would also include, within these continuous appropriation provisions, the amount necessary for the payment of compensation and employee benefits to state employees covered by the memoranda of understanding for State Bargaining Unit 1 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 3 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 4 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 11 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 14 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 15 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 17 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 19 (effective July 2, 2023, to June 30, 2025, inclusive) , State Bargaining Unit 20 (effective July 1, 2023, to June 30, 2026, inclusive) , and State Bargaining Unit 21 (effective July 1, 2023, to June 30, 2026, inclusive) .
Existing law, for the 2024–25 fiscal year, continuously appropriates to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment and compensation and employee benefits to state employees covered by specified memoranda of understanding if the Budget Act of 2024 is not enacted by July 1, 2024.
This bill would also include, within these continuous appropriation provisions, the amount necessary for the payment of compensation and employee benefits to state employees covered by the memoranda of understanding for State Bargaining Unit 1 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 3 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 4 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 11 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 14 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 15 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 17 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 19 (effective July 2, 2023, to June 30, 2025, inclusive) , State Bargaining Unit 20 (effective July 1, 2023, to June 30, 2026, inclusive) , and State Bargaining Unit 21 (effective July 1, 2023, to June 30, 2026, inclusive) .
Existing law, for the 2025–26 fiscal year, continuously appropriates to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by a specified memorandum of understanding between the state employer and State Bargaining Unit 18, if the Budget Act of 2025 is not enacted by July 1, 2025.
This bill would also include, within these continuous appropriation provisions, the amount necessary for the payment of compensation and employee benefits to state employees covered by the memoranda of understanding for State Bargaining Unit 1 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 3 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 4 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 11 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 14 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 15 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 17 (effective July 1, 2023, to June 30, 2026, inclusive) , State Bargaining Unit 20 (effective July 1, 2023, to June 30, 2026, inclusive) , and State Bargaining Unit 21 (effective July 1, 2023, to June 30, 2026, inclusive) .
This bill, for the 2026–27 fiscal year, if the Budget Act of 2026 is not enacted by July 1, 2026, with respect to the memoranda of understanding for State Bargaining Units 1, 3, 4, 11, 12, 14, 15, 17, 20, and 21, as described above, would continuously appropriate to the Controller from the General Fund, unallocated special funds in the amount necessary for the payment of compensation and employee benefits to state employees covered by this memorandum of understanding until the Budget Act of 2026 in enacted, subject to certain conditions.
(2) Under existing law, an eligible employee is entitled to receive up to 6 weeks of benefits during a 12-month period for Nonindustrial Disability Insurance Family Care Leave. Existing law defines "eligible employee" for purposes of those provisions, and includes an employee enrolled in the annual leave program and represented by State Bargaining Unit 2 or 9 and for which a memorandum of understanding has been agreed to by the state employer and the recognized employee organization, as specified.
This bill would delete the above-referenced bargaining units and would instead refer to an employee enrolled in the annual leave program and represented by a specific bargaining unit that has Nonindustrial Disability Insurance Family Care Leave language in a ratified memorandum of understanding approved by the Legislature.
(3) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System (PERS) for the purpose of providing public employees' pension and benefits to state employees and their beneficiaries. Under PERL, benefits are funded by investment income and employer and employee contributions, which are deposited into the Public Employees' Retirement Fund, a continuously appropriated trust fund administered by the system's board of administration. The PERL and labor agreements prescribe different normal rates of contribution for employees depending on bargaining unit, employer, and inclusion of service in the federal social security system, among other factors.
Existing law that prescribes these normal rates of contribution for certain categories of employees also authorizes the Director of the Department of Human Resources to exercise discretion in establishing the normal rate of contribution for a state employee who is excepted from a specific statutory definition of "state employee" or is an officer or employee of the executive branch of state government who is not a member of the civil service, subject to certain conditions.
Existing law adjusts the normal rate of contribution for state miscellaneous or state industrial members who are represented by State Bargaining Unit 12 by 11% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system and by 10% of compensation in excess of $513 per month paid to a member whose service has been included in the federal system.
This bill, effective July 1, 2024, would revise the normal contribution rate for state miscellaneous and industrial members represented by State Bargaining Unit 12 by 9.5% of compensation in excess of $513 per month paid to a member whose service has been included in the federal system and 10.5% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system. The bill, effective July 1, 2025, would revise the normal rate of contribution for state miscellaneous members represented by State Bargaining Unit 12 by 9% of compensation in excess of $513 per month paid to a member whose service has been included in the federal system and by 10% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system. The bill, effective July 1, 2025, would provide that the normal contribution rate for state industrial members represented by State Bargaining Unit 12 shall remain at 9.5% of compensation in excess of $513 per month paid to a member whose service has been in the federal system and 10.5% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system. The bill would provide that the above employee contribution rates would remain in effect beginning July 1, 2026, for those members unless the board makes certain determinations with respect to the normal cost rates, as specified.
Existing law, effective January 1, 2019, establishes the normal rate of contribution for state safety members represented by State Bargaining Unit 12 as 11% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system or in excess of $513 for a member whose service is included in the federal system, in accordance with certain provisions.
This bill, effective July 1, 2026, would require the normal rate of contribution for state safety members who are represented by State Bargaining Unit 12, as described, to remain in effect unless the board makes certain determinations with respect to increases or decreases in the normal cost rates, as specified.
Existing law establishes the normal contribution rate for state miscellaneous or state industrial members who are represented by State Bargaining Unit 19 as 11% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system or in excess of $513 for a member whose service is included in the federal system.
This bill, effective July 1, 2024, would instead require the normal contribution rate for state miscellaneous and industrial members who are represented by State Bargaining Unit 19 to be 9.5% of compensation in excess of $513 per month paid to a member whose service has been included in the federal system and 10.5% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system. The bill, effective July 1, 2025, would provide that the normal rate of contribution for state miscellaneous members who are represented by State Bargaining Unit 19 would be 9% of compensation in excess of $513 per month paid to a member whose service is included in the federal system and 10% of compensation in excess of $317 per month paid to a member whose service is included in the federal system.
The bill, effective July 1, 2025, would provide that the normal contribution rate for state industrial members represented by State Bargaining Unit 19 would remain at 9.5% of compensation in excess of $513 per month paid to a member whose service has been included in the federal system and 10.5% of compensation in excess of $317 per month paid to a member whose service is not included in the federal system. This bill, effective July 1, 2026, would require the normal rate of contribution for state safety members who are represented by State Bargaining Unit 19, as described above, to remain in effect unless the board makes certain determinations with respect to increases or decreases in the normal cost rates, as specified.
Existing law establishes the normal contribution rate for state safety members represented by State Bargaining Unit 19 at 11% percent of compensation in excess of $317 per month paid to a member whose service is not included in the federal system or in excess of $513 for one whose service is included in the federal system.
This bill, effective July 1, 2026, would require the normal rate of contribution for state safety members who are represented by State Bargaining Unit 19, as described, to remain in effect unless the board makes certain determinations with respect to increases or decreases in the normal cost rates, as specified.
The bill would also permit the Director of the Department of Human Resources, consistent with the above-described provisions, to exercise discretion in establishing normal contribution rates for related exempt state employees and executive branch officers or employees who are not civil service members, as specified.
(4) The Public Employees' Medical and Hospital Care Act (PEMHCA) , which is administered by the Board of Administration of the Public Employees' Retirement System, prescribes methods for calculating the state employer contribution for postemployment health care benefits for eligible retired public employees and their families and for the vesting of these benefits. PEMHCA establishes the Annuitants' Health Care Coverage Fund, which is continuously appropriated, for the purpose of prefunding health care coverage for annuitants, including administrative costs.
PEMHCA establishes the normal rate of contribution with respect to employees in State Bargaining Units 1, 4, 11, 14, 15, 17, 20, and 21 in an amount equal to 80% of the weighted average of certain health benefit plan premium costs, as prescribed.
This bill would instead provide that the employer contribution for each employee in the above bargaining units would equal 80% of the weighted average of the basic health benefit plan premiums for active civil service employees enrolled in a specified plan and an additional 80% of the weighted average for enrolled family members, subject to certain conditions. The bill would also require the employer contribution to include an additional amount of up to $165 toward the monthly employer benefit contribution for each employee, effective no earlier than December 1, 2023, under specified circumstances.
PEMHCA requires the state and employees in specified bargaining units to prefund retiree health care costs, subject to certain conditions. This includes employees in State Bargaining Units 1, 3, 4, 11, 14, 15, 17, 20, and 21, as prescribed in a specified schedule, which includes an additional 1.2% for a total employee contribution of 3.5% of pensionable compensation effective July 1, 2020.
This bill, effective the first day of the pay period following ratification, would reduce that contribution percentage by .5%, for a total employee contribution of 3.0% of pensionable compensation. Effective July 1, 2024, and each July thereafter, the bill would require contribution percentages for the above-described bargaining units to be adjusted based on actuarially determined total normal costs.
(5) The California Public Employees' Pension Reform Act of 2013 (PEPRA) , on and after January 1, 2013, requires a public retirement system, as defined, to modify its plan or plans to comply with the act and, among other provisions, establishes new retirement formulas that may not be exceeded by a public employer offering a defined benefit pension plan. PEPRA defines "pensionable compensation" for a new member and excludes certain categories of compensation from this definition. Under PEPRA, the state employer is authorized to determine if excluded compensation shall apply to nonrepresented state employees who are aligned with state employees subject to a specified memorandum of understanding.
This bill would revise that provision on excluded compensation to authorize the state employer to determine if excluded compensation, as identified, would apply to nonrepresented state employees who are either excluded from the definition of state employee, as specified, or nonelected officers or employees of the executive branch of government who are not members of the civil service, under the above-described circumstances. The bill would also authorize the state employer to make certain related determinations regarding whether to designate a form of compensation as pensionable compensation for new members.
(6) The bill would appropriate the sum of $1,158,179,000 for State Bargaining Units 1, 3, 4, 11, 12, 13, 14, 15, 17, 19, 20, and 21, and employees excluded from collective bargaining, in accordance with a specified schedule.
(7) This bill would incorporate additional changes to Sections 19829.9851, 19829.9852, and 19829.9853 of the Government Code proposed by AB 151, SB 151, or both, to be operative only if this bill and either AB 151, SB 151, or both, are enacted and this bill is enacted last.
(8) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Statutes affected:
AB148: 7522.34 GOV, 7522.34 GOV, 19829.9851 GOV, 19829.9851 GOV, 19829.9851 GOV, 19829.9851 GOV, 19829.9852 GOV, 19829.9852 GOV, 19829.9852 GOV, 19829.9852 GOV, 19829.9853 GOV, 19829.9853 GOV, 19829.9853 GOV, 19829.9853 GOV, 19878.5 GOV, 19878.5 GOV, 22944.5 GOV, 22944.5 GOV
08/28/23 - Amended Senate: 7522.34 GOV, 7522.34 GOV, 19829.9851 GOV, 19829.9851 GOV, 19829.9851 GOV, 19829.9851 GOV, 19829.9852 GOV, 19829.9852 GOV, 19829.9852 GOV, 19829.9852 GOV, 19829.9853 GOV, 19829.9853 GOV, 19829.9853 GOV, 19829.9853 GOV, 19878.5 GOV, 19878.5 GOV, 22944.5 GOV, 22944.5 GOV