(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.
This bill would approve provisions requiring the expenditure of funds in the memorandum of understanding entered into between the state employer and State Bargaining Unit 18-Psychiatric Technicians. The bill would provide that provisions of the memoranda of understanding described above and approved by this bill that require the expenditure of funds will not take effect unless funds for those provisions are specifically appropriated by the Legislature. The bill would authorize the state employer or State Bargaining Unit 18 to reopen negotiations if funds for those provisions are not specifically appropriated by the Legislature. The bill would require the provisions of these memoranda of understanding that require the expenditure of funds to become effective even if these provisions are approved by the Legislature in legislation other than the annual Budget Act.
The bill would appropriate to the Controller from the General Fund unallocated special funds, including federal funds and unallocated nongovernmental cost funds, and any other fund from which state employees are compensated, the amount necessary for the payment of compensation and employee benefits to state employees covered by the memorandum of understanding described above, if the Budget Act is not enacted by July 1, 2020.
(2) The Public Employees' Retirement Law (PERL) creates the Public Employees' Retirement System for the purpose of providing public employees pension and other benefits, which are funded by employee and employer contributions and investment returns. Contributions and investment returns are deposited in the Public Employees' Retirement Fund, which is continuously appropriated for the payment of benefits and administration of the system. 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.
This bill would adjust the normal rates of pension contributions for specified employees of State Bargaining Unit 18 (BU 18) . The bill would require, effective July 1, 2021, the state miscellaneous members or state industrial members contribution rate, or the rate for state safety members, be adjusted when both (a) the normal cost rate for the category in effect for the 2016–17 fiscal year has increased by 1%, and (b) 50% of that normal cost rate, rounded as specified, exceeds the normal established contribution rate, as specified. The bill would provide for adjustments each year thereafter, subject to certain limitations, including that the increase to the employee contribution in any given fiscal year not exceed 1%, and applicable at different compensation thresholds, depending on the member's inclusion in the federal social security system.
By increasing employee contributions into a continuously appropriated fund, this bill would make an appropriation. The bill would grant the Director of the Department of Human Resources the discretion to establish the normal rate of contribution for a related state employee or an officer or employee of the executive branch who is not a member of the civil service, consistent with other members identified in these provisions.
(3) 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. Existing law specifies the contribution rates that employees in BU 18 are required to make, subject to the state making a matching contribution, based on a specified schedule.
This bill would provide, after July 1, 2019, that the employer and employee contribution percentages would be adjusted based on actuarially determined total normal costs, in accordance with certain limits.
(4) PEMHCA requires the state and employees in specified State Bargaining Units to prefund retiree health care, with the goal of reaching a 50% cost sharing of actuarially determined normal costs for both employer and employees by July 1, 2020.
This bill would include employees in State Bargaining Unit 5 - Highway Patrol, in that cost-sharing requirement.
(5) The bill would appropriate the sum of $13,546,000 for BU 18 for expenditure in augmentation of, and for the purpose of, state employee compensation, in accordance with a specified schedule.
(6) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

Statutes affected:
03/16/20 - Amended Assembly: 19829.9848 GOV, 19829.9849 GOV, 22944.5 GOV