State employment: State Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21.

(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 memoranda of understanding entered into between the state employer and State Bargaining Unit 1, Professional, Administrative, Financial, and Staff Services, State Bargaining Unit 2, Attorneys and Hearing Officers, State Bargaining Unit 3, Professional Educators and Librarians, State Bargaining Unit 4, Office and Allied, State Bargaining Unit 5, Highway Patrol, State Bargaining Unit 7, Protective Services and Public Safety, State Bargaining Unit 11, Engineering and Scientific Technicians, State Bargaining Unit 13, Stationary Engineers, State Bargaining Unit 14, Printing and Allied Trades, State Bargaining Unit 15, Allied Services, State Bargaining Unit 17, Registered Nurses, State Bargaining Unit 20, Medical and Social Services, and State Bargaining Unit 21, Educational Consultants and Library. This 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 and State Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21 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 memoranda of understanding described above if the Budget Act is not enacted on or before July 1 in the 2020–21, 2021–22, or 2022–23 fiscal year, as specified. The bill would prescribe qualifications on the application of these moneys, provide that they are not augmentations to the expenditure authority of affected departments, as specified, and would prohibit these provisions from applying beyond the term of the memorandum of understanding. (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 normal rates of pension contribution for specified employees of State Bargaining Unit 1 (BU 1) , State Bargaining Unit 3 (BU 3) , State Bargaining Unit 4 (BU 4) , State Bargaining Unit 11 (BU 11) , State Bargaining Unit 14 (BU 14) , State Bargaining Unit 15 (BU 15) , State Bargaining Unit 17 (BU 17) , State Bargaining Unit 20 (BU 20) , and State Bargaining Unit 21 (BU 21) . The bill would require, effective July 1, 2023, that state miscellaneous members of BU 1, BU 3, BU 4, BU 11, BU 14, BU 15, BU 17, BU 20, and BU 21 contribute 8.5% and 9.5% of compensation, as specified, respectively, depending on the member's inclusion in the federal Social Security system. The bill would require that state industrial members of BU 1, BU 3, BU 4, BU 11, BU 14, BU 15, BU 17, and BU 20 contribute 9.5% and 10.5% of compensation, as specified, respectively, depending on the member's inclusion in the federal Social Security system. The bill would require, effective July 1, 2023, that state industrial members of BU 21 contribute 8.5% and 9.5% of compensation, as specified, respectively, depending on the member's inclusion in the federal Social Security system. The bill would require, effective July 1, 2023, that state safety members represented by BU 1, BU 3, BU 4, BU 11, BU 14, BU 15, BU 17, BU 20, and BU 21 contribute 11.5% of compensation, applicable at different compensation thresholds, depending on the member's inclusion in the federal Social Security system. The bill would adjust normal rates of pension contribution for specified employees of State Bargaining Unit 2 (BU 2) . The bill would require, effective July 1, 2020, that state safety members of BU 2 contribute 11.5% of compensation, applicable at different compensation thresholds, depending on the member's inclusion in the federal Social Security system. The bill would adjust normal rates of pension contribution for specified employees of State Bargaining Unit 5 (BU 5) . The bill would require, effective July 1, 2020, that patrol members of BU 5 contribute as provided, subject to specified conditions, and applicable to compensation above a certain threshold. The bill would require, effective July 1, 2020, that state miscellaneous members of BU 5 contribute at a rate as provided, subject to specified conditions, and applicable at different compensation thresholds, depending on the member's inclusion in the federal Social Security system. The bill would adjust normal rates of pension contribution for specified employees of State Bargaining Unit 7 (BU 7) . The bill would require, effective July 1, 2023, that state miscellaneous or state industrial members of BU 7 contribute 8.5% and 9.5% of compensation, as specified, respectively, depending on the member's inclusion in the federal Social Security system. Effective July 1, 2022, the bill would require, that state peace officer/firefighter members of BU 7 contribute 14% of compensation, as specified, and effective July 1, 2023, this would increase to 15% of compensation, as specified. Effective July 1, 2023, the bill would require that state safety members of BU 7 contribute 11.5% of compensation, as specified. The bill would adjust normal rates of pension contribution for specified employees of State Bargaining Unit 13 (BU 13) . The bill would require, effective July 1, 2022, that state safety members of BU 13 contribute 11.5% of compensation, 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) PERL provides for an annual adjustment of the state's contribution in the budget and quarterly appropriations to the Public Employees' Retirement Fund from the General Fund and other funds that are responsible for payment of the employer contribution. PERL appropriates $265,000,000 from the General Fund for the 2020–21 fiscal year, $200,000,000 in General Fund moneys in the 2021–22 fiscal year, and $35,000,000 in General Fund moneys in the 2022–23 fiscal year to be transferred to the Public Employees' Retirement Fund, consistent with a schedule of payments that the Department of Finance is required to provide to the Controller to establish the timing of specific transfers. Existing law requires those supplemental payments to be apportioned among the state employee member categories, as directed by the Department of Finance, in proportion to the amount of estimated General Fund moneys appropriated to make required contributions to each state employee member category for the fiscal year that the supplemental payment is transferred. This bill would require $243,000,000 of the supplemental payment for the 2020–21 fiscal year to be apportioned to the state patrol member category, as directed by the Department of Finance. The bill would require $22,000,000 of the supplemental payment to the Public Employees' Retirement Fund for the 2020–21 fiscal year to be apportioned among the state employee member categories, as directed by the Department of Finance, in proportion to the amount of estimated General Fund moneys appropriated to make required contributions to each state employee member category for the 2020–21 fiscal year. The bill would appropriate $25,000,000 from the Motor Vehicle Account for each of the 2019–20, 2020–21, 2021–22, and 2022–23 fiscal years to be transferred to the Public Employees' Retirement Fund, consistent with a schedule of payments that the Department of Finance would be required to provide to the Controller to establish the timing of specific transfers. The bill would subject payments in the 2021–22 and 2022–23 fiscal years to certain conditions. The bill would require this supplemental payment to be apportioned to the state patrol member plan, and applied to the unfunded liabilities for the state patrol member plan. (4) This bill would appropriate the sum of $142,900,000 for State Bargaining Units 1, 2, 3, 4, 5, 7, 11, 13, 14, 15, 17, 20, and 21 for expenditure in the 2019–20 fiscal year, in augmentation of, and for the purpose of, state employee compensation, in accordance with a specified schedule. (5) 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 requires the employer contribution for each annuitant enrolled in a basic plan for health benefits to equal 80% of the weighted average of the health benefit plan premiums for an active employee enrolled for self-alone, during the benefit year to which the formula is applied, for the 4 health benefit plans with the largest state civil service enrollment. Existing law similarly provides that the employer contribution for an enrolled family member of an annuitant is an amount equal to 80% of the weighted average of the additional premiums required for enrollment of those family members during the benefit year to which the formula is applied and provides the same limit on employer contributions for annuitants enrolled in Medicare health benefit plans. Under existing law, these provisions apply to state employees represented by various bargaining units and judicial branch employees, as specified. Under existing law, if these provisions conflict with the provisions of a memorandum of understanding, the memorandum of understanding is controlling without further legislative action, except that if those provisions require the expenditure of funds, the provisions do not become effective unless approved by the Legislature. This bill would extend these provisions to a state employee represented by BU 5 who is first employed by the state and becomes a state member of the system on or after January 1, 2020, and to certain other state employees related to State Bargaining Unit 5 who are first employed by the state and become a state member of the system on or after January 1, 2020. The bill would prohibit state employees who are first employed and become members of the retirement system on or after January 1, 2020, and are represented by, or related to, BU 5, from receiving any portion of the employer contribution payable for annuitants unless the person is credited with at least 15 years of state service at the time of retirement. The bill would prescribe the percentage of the employer contribution payable for postretirement health benefits for these employees based on the number of completed years of credited state service at retirement, with 50% after 15 credited years of service and 100% after 25 or more years of service. (6) PEMHCA generally requires that an employee or annuitant who is enrolled in, or whose family member is enrolled in, a Medicare health benefit plan be paid the amount of the Medicare Part B premiums, as specified, and prohibits this payment from exceeding the difference between the maximum employer contribution and the amount contributed by the employer toward the cost of premiums for the health benefit plan in which the employee or annuitant and the employee's or annuitant's family members are enrolled. Existing law excepts from this requirement state employees who are first employed and become members of the retirement system on or after specified dates and are represented by, or related to, specified state bargaining units. This bill would also except from the requirement described above state employees who are first employed and become members of the retirement system on or after January 1, 2020, as specified, and are represented by, or related to, BU 5. (7) PEMHCA establishes the Public Employees' Contingency Reserve Fund for the purpose of funding health benefits and funding administrative expenses. 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 defines "prefunding" for these purposes. This bill would require the state and employees in BU 5 to prefund retiree health care, with the goal of reaching a 50% cost sharing of normal costs by July 1, 2020, and establish contribution percentages in this regard. (8) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.