(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 the agreement entered into by the state employer and State Bargaining Unit 9 and State Bargaining Unit 12. The bill would provide that the provisions of the agreement 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 State Bargaining Unit 9 or State Bargaining Unit 12 to reopen negotiations if funds for these provisions are not specifically appropriated by the Legislature. The bill would require the provisions of the agreement that require the expenditure of funds to become effective even if the provisions are approved by the Legislature in legislation other than the annual Budget Act.

(2) 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 specified memoranda of understanding if the Budget Act of 2025 is not enacted by July 1, 2025. Existing law includes within these continuous appropriation provisions a memorandum of understanding for State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2026, inclusive).

This bill would, instead, include the memorandum of understanding for State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2027, inclusive) and would additionally include the memorandum of understanding for State Bargaining Unit 9 (effective July 1, 2025, to June 30, 2028, inclusive).

Existing law, for the 2026–27 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 2026 is not enacted by July 1, 2026. Existing law includes within these continuous appropriation provisions a memorandum of understanding for State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2026, inclusive).

This bill would, instead, include the memorandum of understanding for State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2027, inclusive) and would additionally include the memorandum of understanding for State Bargaining Unit 9 (effective July 1, 2025, to June 30, 2028, inclusive). The bill would also make technical changes by deleting provisions regarding specified memoranda of understanding from these provisions that expire before the commencement of the 2026–27 fiscal year.

Existing law, for the 2027–28 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 2027 is not enacted by July 1, 2027.

This bill would additionally include the memoranda of understanding for State Bargaining Unit 9 (effective July 1, 2025, to June 30, 2028, inclusive), and for State Bargaining Unit 12 (effective July 1, 2023, to June 30, 2027, inclusive).

(3) Existing law states that it is the policy of the state that the workweek of the state employee shall be 40 hours, and the workday of state employees 8 hours, except that workweeks and workdays of a different number of hours may be established in order to meet the varying needs of the different state agencies. Notwithstanding that policy, existing law required a state employee, except as specified, to participate in the Personal Leave Program 2020 (PLP 2020 Program), either as required by an applicable memorandum of understanding reached or by the direction of the department for excluded employees, under which each employee would receive a reduction in pay not greater than 10% in exchange for up to 16 hours of PLP 2020 Program leave credits per month.

This bill would require a state employee in Bargaining Unit 9 or 12, for the period from July 1, 2025, to June 30, 2027, to participate in the Personal Leave Program 2025 (PLP 2025), as required by an applicable memorandum of understanding reached, under which each employee in Bargaining Unit 9 or 12 would receive a 3% reduction in pay in exchange for 5 hours of PLP 2025 leave credits on the first day of each monthly pay period, except as provided.

(4) Existing law, 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.

This bill would suspend the employer’s monthly contribution for prefunding other postemployment benefits for the 2025–26 and 2026–27 fiscal years, as specified. For the 2027–28 fiscal years, the bill would require employees to contribute a specified percentage of pensionable compensation. For the 2028–29, 2029–30, and 2030–31 fiscal years, the bill would establish prescribed percentages pertaining to the total employee contribution of pensionable compensation, as provided.

(5) The Budget Act of 2025 makes various appropriations for the purpose of employee compensation.

This bill would provide for the reduction of specified Budget Act item appropriations pursuant to agreements reached between the state employer and State Bargaining Units 9 and 12 in accordance with a specified schedule.

This bill would provide that the provisions of the memoranda of understanding or addenda, or both, prepared pursuant to a specified provision of law and entered into by the state employer and a state bargaining unit no later than June 30, 2025, and that may require the expenditure of funds, are ratified if the memoranda of understanding or addenda include savings measures that contribute to meeting the budgeted reductions in a specified provision of the Budget Act of 2025, and are approved.

(6) This bill would incorporate additional changes to Sections 19829.9853, 19829.9854, 19829.9855, 19851, and 22944.5 of the Government Code, proposed by AB 140, SB 140, or both, to be operative only if this bill and AB 140, SB 140, or both, are enacted and this bill is enacted last.

(7) This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.