The people of the State of California do enact as follows:

SECTION 1.
The Legislature finds and declares all of the following:
(a) The State of California is committed to providing excellent educational opportunities to all of its pupils.
(b) There are 92 languages other than English spoken throughout the state, with the primary languages being Arabic, Armenian, Cantonese, Korean, Russian, Spanish, Tagalog, and Vietnamese.
(c) There is a growing body of academic research that shows the importance of culturally meaningful and relevant curriculum.
(d) Based on the National Education Association (NEA) publication, The Academic and Social Value of Ethnic Studies, the inclusion of ethnic studies in a curriculum has a positive impact on pupils of color.
(e) Ethnic studies benefit pupils in observable ways, such as pupils becoming more academically engaged, increasing their performance on academic tests, improving their graduation rates, and developing a sense of self-efficacy and personal empowerment.
(f) The state’s educational standards should be guided by core values of equity and inclusiveness, and should reflect universally high expectations.
(g) The state is committed to its efforts to provide all pupils with excellent educational opportunities, without regard to race, gender, ethnicity, nationality, income, sexual orientation, or disability.
(h) The state is committed to its obligation to ensure its youth are college prepared and career ready, while graduating 100 percent of its pupils.
(i) The implementation of various ethnic studies courses within California’s curriculum that are A-G approved, with the objective of preparing pupils to be global citizens with an appreciation for the contributions of multiple cultures, will close the achievement gap, reduce pupil truancy, increase pupil enrollment, reduce dropout rates, and increase graduation rates.
(j) The state should support efforts in recruiting and retaining teachers who have relevant experience and educational background in the study or teaching of ethnic studies.
SEC. 2.
Section 51226.7 is added to the Education Code, to read:
51226.7.
(a) The Superintendent shall oversee the development of, and the state board shall adopt, a model curriculum to ensure quality courses of study in ethnic studies through partnerships with universities with ethnic studies programs. The model curriculum shall meet the A-G approval requirements of the Regents of the University of California.
(b) On or before the beginning of the 2017–18 school year, the Instructional Quality Commission shall advise, assist, and make recommendations to the Superintendent regarding the development of the model curriculum pursuant to subdivision (a).
(c) Beginning the school year following the adoption of the model curriculum pursuant to subdivision (a), each school district maintaining grade 9 shall offer to all otherwise qualified pupils in that grade, as an elective in the social sciences, a course of study in ethnic studies based on the model curriculum.
SEC. 3.
If the Commission on State Mandates determines that this act contains costs mandated by the state, reimbursement to local agencies and school districts for those costs shall be made pursuant to Part 7 (commencing with Section 17500) of Division 4 of Title 2 of the Government Code.
SECTION 1.
The Legislature finds and declares all of the following:
(a)California has the eighth largest economy in the world, and its laws have a far-reaching impact on individuals, entities, and organizations within the state and throughout the world.
(b)Because of its extraordinary economic impact and leadership on timely issues, California’s statutory framework and legal structures have a national and global impact.
(c)Rapid technological and societal advances require the development of public policy in new and evolving areas.
(d)State government officials must make informed policy decisions about issues that have increasingly complex and interrelated legal components.
(e)California is home to some of the world’s most prestigious universities and law schools.
(f)California is currently facing one of the largest surpluses of recent law school graduates in the nation, and the unique education and training of these skilled graduates could greatly assist the state government in its work.
(g)Only approximately 5 percent of attorneys nationwide work for state governments, meaning that the nation’s state governments derive insufficient benefit from those attorneys’ legal training and expertise.
(h)Approximately 36 percent of attorneys working for the State of California are 55 years of age or older; therefore, California must encourage attorneys to enter public service to fill vacancies as those attorneys retire.
(i)The establishment of a law fellowship program in California will enable the state to capitalize on the experience of its law school graduates for the betterment of its government.
SEC. 2.
Chapter 1.5 (commencing with Section 8050) is added to Division 1 of Title 2 of the
Government Code
, to read:
1.5.
California Law Fellowship Program
8050.
(a)The California Law Fellowship Program is hereby established.
(b)The purpose of the program is to offer licensed attorneys and other qualifying law school graduates limited-term placements in public sector positions within state government.
(c)The program shall provide each California Law Fellow with the opportunity to work in the public sector and shall encourage each participant to seek permanent public-sector employment at the conclusion of the fellowship.
(d)The Legislature requests that The University of the Pacific McGeorge School of Law, in consultation with California law schools accredited by the American Bar Association, and with any other appropriate person or entity, do all of the following with respect to the California Law Fellowship Program:
(1)Create the program to provide law graduates a post-graduate educational experience and provide the Legislature and other governmental entities with legal assistance and advice.
(2)House and administer the program, including managing funding and processing applications.
(e)A California Law Fellow’s placement with a state agency shall be contingent on that agency’s acceptance of the fellow, according to criteria adopted by the participating state agency for purposes of the program.
(f)(1)It is the intent of the Legislature that participation in the program by an attorney or other qualifying law school graduate, by a state agency, or by a public official within a state agency shall not constitute a gift of public money or thing of value for purposes of Section 6 of Article XVI of the California Constitution, a gift for purposes of the Political Reform Act of 1974 (Title 9 (commencing with Section 81000)), or a gift, bequest, or favor for purposes of the Code of Judicial Ethics adopted pursuant to subdivision (m) of Section 18 of Article VI of the California Constitution.
(2)To the extent feasible, the program shall be designed and administered to accomplish the Legislature’s intent as specified in this subdivision.
(g)State funds shall not be used to administer the program.
(h)For purposes of this section:
(1)“California Law Fellow” means a participant in the program.
(2)“Program” means the California Law Fellowship Program.
(3)“Qualifying law school graduate” means a recipient of a law degree from a law school accredited by the American Bar Association.
SEC. 3.
Section 8924.7 is added to the
Government Code
, to read:
8924.7.
(a)The Legislature finds and declares that the California Law Fellowship Program, established pursuant to Chapter 1.5 (commencing with Section 8050) of Division 1, establishes a formal fellowship program that provides substantial public benefits to the Legislature as a participating state agency.
(b)The services of a California Law Fellow, whose placement with the Legislature is duly authorized by the Senate Committee on Rules, the Assembly Committee on Rules, or the Joint Committee on Rules, as appropriate, are not compensation, a reward, or a gift to a Member of the Legislature for purposes of paragraph (4) of subdivision (b) of Section 8920.
(c)A California Law Fellow, whose placement with the Legislature is duly authorized by the Senate Committee on Rules, the Assembly Committee on Rules, or the Joint Committee on Rules, as appropriate, is not an employee of either house of the Legislature for purposes of this article.
(d)For purposes of this section, a California Law Fellow is “duly authorized by the Senate Committee on Rules, the Assembly Committee on Rules, or the Joint Committee on Rules” only if both of the following requirements are satisfied:
(1) The California Law Fellow has been selected according to criteria, and pursuant to a process, approved by the Senate Committee on Rules, the Assembly Committee on Rules, or the Joint Committee on Rules.
(2)The program has executed an agreement with the Senate Committee on Rules, the Assembly Committee on Rules, or the Joint Committee on Rules whereby the California Law Fellow is bound to abide by standards of conduct, economic interest disclosure requisites, and other requirements specified by the Senate Committee on Rules, the Assembly Committee on Rules, or the Joint Committee on Rules.

Summary: Existing law requires the adopted course of study for grades 7 to 12, inclusive, to include, among other subjects, the social sciences. Existing law requires the State Board of Education, with the assistance of the Superintendent of Public Instruction, to establish a list of textbooks and other instructional materials that highlight the contributions of minorities in the development of California and the United States. Existing law establishes the Instructional Quality Commission and requires the commission to, among other things, recommend curriculum frameworks to the state board. This bill would require the Superintendent to oversee the development of, and the state board to adopt, a model curriculum to ensure quality courses in ethnic studies. The bill would require the Instructional Quality Commission to advise, assist, and make recommendations to the Superintendent regarding the development of the model curriculum. The bill would, beginning the school year following the adoption of the model curriculum, require each school district maintaining grade 9 to offer to all otherwise qualified pupils in that grade, as an elective in the social sciences, a course of study in ethnic studies based on the model curriculum. By imposing additional duties on school districts, the bill would impose a state-mandated local program. The California Constitution requires the state to reimburse local agencies and school districts for certain costs mandated by the state. Statutory provisions establish procedures for making that reimbursement. This bill would provide that, if the Commission on State Mandates determines that the bill contains costs mandated by the state, reimbursement for those costs shall be made pursuant to these statutory provisions. Existing law authorizes certain internship and fellowship programs, as specified. This bill would establish the California Law Fellowship Program for the purpose of offering licensed attorneys and other qualifying law school graduates limited-term placements in public sector positions within state government as California Law Fellows, and encouraging each fellow to seek permanent public-sector employment at the conclusion of his or her fellowship, as specified. Existing law, commonly known as the Code of Ethics, prohibits a Member of the Legislature or an employee of either house of the Legislature from receiving or agreeing to receive, directly or indirectly, any compensation, reward, or gift from any source except the State of California for any service, advice, assistance, or other matter related to the legislative process, except for specified circumstances. This bill would provide that the services of a California Law Fellow are not compensation, a reward, or a gift to a Member of the Legislature for purposes of the so-called Code of Ethics. The bill would also provide that a participant in the program is not an employee of either house of the Legislature for purposes of the Code of Ethics.

An act to add Section 8924.7 to, and to add Chapter 1.5 (commencing with Section 8050) to Division 1 of Title 2 of, the Government Code, relating to state government.
An act to add Section 51226.7 to the Education Code, relating to pupil instruction.


The people of the State of California do enact as follows:

SECTION 1.
Section 17052 is added to the Revenue and Taxation Code, to read:
17052.
(a) (1) For each taxable year beginning on or after January 1, 2015, there shall be allowed against the “net tax,” as defined by Section 17039, an earned income tax credit in an amount equal to an amount determined in accordance with Section 32 of the Internal Revenue Code, relating to earned income, as applicable for federal income tax purposes for the taxable year, except as otherwise provided in this section.
(2) (A) The amount of the credit determined under Section 32 of the Internal Revenue Code, relating to earned income, as modified by this section, shall be multiplied by the earned income tax credit adjustment factor for the taxable year.
(B) Unless otherwise specified in the annual Budget Act, the earned income tax credit adjustment factor for a taxable year beginning on or after January 1, 2015, shall be zero percent.
(C) The earned income tax credit authorized by this section shall only be operative for taxable years for which resources are authorized in the annual Budget Act for the Franchise Tax Board to oversee and audit returns associated with the credit.
(b) (1) In lieu of the table prescribed in Section 32(b)(1) of the Internal Revenue Code, relating to percentages, the credit percentage and the phaseout percentage shall be determined as follows:
In the case of an eligible individual with:
The credit percentage is:
The phaseout percentage is:
No qualifying children
7.65%
7.65%
1 qualifying child
34%
34%
2 or more qualifying children
40%
40%
(2) (A) In lieu of the table prescribed in Section 32(b)(2)(A) of the Internal Revenue Code, the earned income amount and the phaseout amount shall be determined as follows:
In the case of an eligible individual with:
The earned income amount is:
The phaseout amount is:
No qualifying children
$3,290
$3,290
1 qualifying child
$4,940
$4,940
2 or more qualifying children
$6,935
$6,935
(B) Section 32(b)(2)(B) of the Internal Revenue Code, relating to joint returns, shall not apply.
(3) Section 32(b)(3)(A) of the Internal Revenue Code, relating to increased percentage for three or more qualifying children, is modified by substituting “the credit percentage and phaseout percentage is 45 percent” for “the credit percentage is 45 percent.”
(c) (1) Section 32(c)(1)(A)(ii)(I) of the Internal Revenue Code is modified by substituting “this state” for “the United States.”
(2) Section 32(c)(2)(A) of the Internal Revenue Code is modified as follows:
(A) Section 32(c)(2)(A)(i) of the Internal Revenue Code is modified by deleting “plus” and inserting in lieu thereof the following: “and only if such amounts are subject to withholding pursuant to Division 6 (commencing with Section 13000) of the Unemployment Insurance Code.”
(B) Section 32(c)(2)(A)(ii) of the Internal Revenue Code shall not apply.
(3) Section 32(c)(3)(C) of the Internal Revenue Code, relating to place of abode, is modified by substituting “this state” for “the United States.”
(d) Section 32(i)(1) of the Internal Revenue Code is modified by substituting “$3,400” for “$2,200.”
(e) In lieu of Section 32(j) of the Internal Revenue Code, relating to inflation adjustments, for taxable years beginning on or after January 1, 2016, the amounts specified in paragraph (2) of subdivision (b) and in subdivision (d) shall be recomputed annually in the same manner as the recomputation of income tax brackets under subdivision (h) of Section 17041.
(f) If the amount allowable as a credit under this section exceeds the tax liability computed under this part for the taxable year, the excess shall be credited against other amounts due, if any, and the balance, if any, shall be paid from the Tax Relief and Refund Account and refunded to the taxpayer.
(g) The Franchise Tax Board may prescribe rules, guidelines, or procedures necessary or appropriate to carry out the purposes of this section. Chapter 3.5 (commencing with Section 11340) of Part 1 of Division 3 of Title 2 of the Government Code shall not apply to any rule, guideline, or procedure prescribed by the Franchise Tax Board pursuant to this section.
(h) Notwithstanding any other law, amounts refunded pursuant to this section shall be treated in the same manner as the federal earned income refund for the purpose of determining eligibility to receive benefits under Division 9 (commencing with Section 10000) of the Welfare and Institutions Code or amounts of those benefits.
(i) (1) For the purpose of implementing the credit allowed by this section for the 2015 taxable year, the Franchise Tax Board shall be exempt from the following:
(A) Special Project Report requirements under State Administrative Manual Sections 4819.36, 4945, and 4945.2.
(B) Special Project Report requirements under Statewide Information Management Manual Section 30.
(C) Section 11.00 of the 2015 Budget Act.
(D) Sections 12101, 12101.5, 12102, and 12102.1 of the Public Contract Code.
(2) The Franchise Tax Board shall formally incorporate the scope, costs, and schedule changes associated with the implementation of the credit allowed by this section in its next anticipated Special Project Report for its Enterprise Data to Revenue Project.
(j) (1) In accordance with Section 41 of the Revenue and Taxation Code, the purpose of the California Earned Income Tax Credit is to reduce poverty among California’s poorest working families and individuals. To measure whether the credit achieves its intended purpose, the Franchise Tax Board shall annually prepare a written report on the following:
(A) The number of tax returns claiming the credit.
(B) The number of individuals represented on tax returns claiming the credit.
(C) The average credit amount on tax returns claiming the credit.
(D) The distribution of credits by number of dependents and income ranges. The income ranges shall encompass the phase-in and phaseout ranges of the credit.
(E) Using data from tax returns claiming the credit, including an estimate of the federal tax credit determined under Section 32 of the Internal Revenue Code, an estimate of the number of families who are lifted out of deep poverty by the credit and an estimate of the number of families who are lifted out of deep poverty by the combination of the credit and the federal tax credit. For the purposes of this subdivision, a family is in “deep poverty” if the income of the family is less than 50 percent of the federal poverty threshold.
(2) The Franchise Tax Board shall provide the written report to the Senate Committee on Budget and Fiscal Review, the Assembly Committee on Budget, the Senate and Assembly Committees on Appropriations, the Senate Committee on Governance and Finance, the Assembly Committee on Revenue and Taxation, and the Senate and Assembly Committees on Human Services.
(k) The tax credit allowed by this section shall be known as the California Earned Income Tax Credit.
SEC. 2.
Section 19136 of the Revenue and Taxation Code is amended to read:
19136.
(a) Section 6654 of the Internal Revenue Code, relating to failure by an individual to pay estimated income tax, shall apply, except as otherwise provided.
(b) Section 6654(a)(1) of the Internal Revenue Code is modified to refer to the rate determined under Section 19521 in lieu of Section 6621 of the Internal Revenue Code.
(c) (1) Section 6654(e)(1) of the Internal Revenue Code, relating to exceptions where the tax is a small amount, does not apply.
(2) No addition to the tax shall be imposed under this section if the tax imposed under Section 17041 or 17048 and the tax imposed under Section 17062 for the preceding taxable year, minus the sum of any credits against the tax provided by Part 10 (commencing with Section 17001) or this part, or the tax computed under Section 17041 or 17048 upon the estimated income for the taxable year, minus the sum of any credits against the tax provided by Part 10 (commencing with Section 17001) or this part, is less than five hundred dollars ($500), except in the case of a separate return filed by a married person the amount shall be less than two hundred fifty dollars ($250).
(d) Section 6654(f) of the Internal Revenue Code does not apply and for purposes of this section the term “tax” means the tax imposed under Section 17041 or 17048 and the tax imposed under Section 17062 less any credits against the tax provided by Part 10 (commencing with Section 17001) or this part, other than the credit provided by subdivision (a) of Section 19002.
(e) (1) The credit for tax withheld on wages, as specified in Section 6654(g) of the Internal Revenue Code, is the credit allowed under subdivision (a) of Section 19002.
(2) (A) Section 6654(g)(1) of the Internal Revenue Code is modified by substituting the phrase “the applicable percentage” for the phrase “an equal part.”
(B) For purposes of this paragraph, “applicable percentage” means the percentage amount prescribed under Section 6654(d)(1)(A) of the Internal Revenue Code, as modified by subdivision (a) of Section 19136.1.
(f) This section applies to a nonresident individual.
(g) (1) No addition to tax shall be imposed under this section to the extent that the underpayment was created or increased by
any law that is chaptered during and operative for the taxable year of the underpayment.
either of the following:
(A) Any law that is chaptered during and operative for the taxable year of the underpayment.
(B) If, for a taxable year prior to its repeal, the adjustment factor for the credit authorized by Section 17052 for the taxable year was less than the adjustment factor for that credit for the preceding taxable year.
(2)
(A)
Notwithstanding Section 18415,
this section
subparagraph (A) of paragraph (1)
applies to penalties imposed under this section on
and
or
after January 1, 2005.
(B) Notwithstanding Section 18415, subparagraph (B) of paragraph (1) applies to penalties imposed under this section on or after January 1, 2016.
(h) The amendments made to this section by Section 5 of Chapter 305 of the Statutes of 2008 apply to taxable years beginning on or after January 1, 2009.
(i) The amendments made to this section by
the act adding this subdivision
Section 3 of Chapter 15 of the fourth Extraordinary Session of the Statutes of 2009
apply to amounts withheld on wages beginning on or after January 1, 2009.
SEC. 3.
Section 19167 of the
Revenue and Taxation Code is amended to read:
19167.
A penalty shall be imposed under this section for any of the following:
(a) In accordance with Section 6695(a) of the Internal Revenue Code, for failure to furnish a copy of the return to the taxpayer, as required by Section 18625.
(b) In accordance with Section 6695(c) of the Internal Revenue Code, for failure to furnish an identifying number, as required by Section 18624.
(c) In accordance with Section 6695(d) of the Internal Revenue Code, for failure to retain a copy or list, as required by Section 18625 or for failure to retain an electronic filing declaration, as required by Section 18621.5.
(d) Failure to register as a tax preparer with the California Tax Education Council, as required by Section 22253 of the Business and Professions Code, unless it is shown that the failure was due to reasonable cause and not due to willful neglect.
(1) The amount of the penalty under this subdivision for the first failure to register is two thousand five hundred dollars ($2,500). This penalty shall be waived if proof of registration is provided to the Franchise Tax Board within 90 days from the date notice of the penalty is mailed to the tax preparer.
(2) The amount of the penalty under this subdivision for a failure to register, other than the first failure to register, is five thousand dollars ($5,000).
(e) The Franchise Tax Board shall not impose the penalties authorized by subdivision (d) until either one of the following has occurred:
(1) Commencing January 1, 2006, and continuing each year thereafter, there is an appropriation in the Franchise Tax Board’s annual budget to fund the costs associated with the penalty authorized by subdivision (d).
(2) (A) An agreement has been executed between the California Tax Education Council and the Franchise Tax Board that provides that an amount equal to all first year costs associated with the penalty authorized by subdivision (d) shall be received by the Franchise Tax Board. For purposes of this subparagraph, first year costs include, but are not limited to, costs associated with the development of processes or systems changes, if necessary, and labor.
(B) An agreement has been executed between the California Tax Education Council and the Franchise Tax Board that provides that the annual costs incurred by the Franchise Tax Board associated with the penalty authorized by subdivision (d) shall be reimbursed by the California Tax Education Council to the Franchise Tax Board.
(C) Pursuant to the agreement described in subparagraph (A), the Franchise Tax Board has received an amount equal to the first year costs described in that subparagraph.
(f) In accordance with Section 6695(g) of the Internal Revenue Code, for failure to be diligent in determining eligibility for earned income credit for returns required to be filed on or after the effective date of the act adding this subdivision.
SEC. 4.
In future years, it is the intent of the Legislature to enact legislation that would expand the California Earned Income Tax Credit allowed by Section 17052 of the Revenue and Taxation Code, as state budget conditions permit, to benefit a broader section of working poor Californians.
SEC. 5.
This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
SECTION 1.
It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2015.

Summary: The Personal Income Tax Law allows various credits against the taxes imposed by that law, including certain credits that are allowed in modified conformity to credits allowed by federal income tax laws. Federal income tax laws allow a refundable earned income tax credit for certain low-income individuals who have earned income and who meet certain other requirements. This bill, for taxable years beginning on or after January 1, 2015, in modified conformity with federal income tax laws, would allow an earned income credit against personal income tax, and a payment in excess of that amount, to an eligible individual that is equal to that portion of the earned income tax credit allowed by federal law as determined by the earned income tax credit adjustment factor as set forth in the annual Budget Act. Existing law requires any bill authorizing a new personal income tax credit to contain, among other things, specific goals, purposes, and objectives that the tax credit will achieve, detailed performance indicators, and data collection requirements, as provided. To measure whether the earned income credit achieves its intended purpose, this bill would require the Franchise Tax Board to annually prepare a specified written report and to provide that report to specified legislative committees. Existing law establishes the continuously appropriated Tax Relief and Refund Account, and provides that payments required to be made to taxpayers or other persons from the Personal Income Tax Fund are to be paid from that account. By authorizing new payments from that account for amounts in excess of personal income tax liabilities, this bill would make an appropriation. The Personal Income Tax Law imposes taxes based upon taxable income and also imposes interest and penalties with regard to those taxes under specified circumstances, including a penalty for the underpayment of estimated tax. Existing law provides no addition to tax shall be imposed to the extent that the underpayment was created or increased by any law that is chaptered during and operative for the taxable year of the underpayment. This bill would provide that addition to tax shall not be imposed if the applicable percentage for the earned income tax credit for the taxable year was less than the applicable percentage for that credit for the preceding taxable year and would impose a penalty, in conformity with federal law, for failure to be diligent in determining eligibility for the earned income tax credit, as specified. This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill. This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2015.

An act relating to the Budget Act of 2015.
An act to amend Sections 19136 and 19167 of, and to add Section 17052 to, the Revenue and Taxation Code, relating to taxation, and making an appropriation therefor, to take effect immediately, bill related to the budget.


The people of the State of California do enact as follows:

SECTION 1.
Section 13332.19 of the Government Code is amended to read:
13332.19.
(a) For the purposes of this section, the following definitions shall apply:
(1) “Design-build” means a construction procurement process in which both the design and construction of a project are procured from a single entity.
(2) “Design-build project” means a capital outlay project using the design-build construction procurement process.
(3) “Design-build entity” means a partnership, corporation, or other legal entity that is able to provide appropriately licensed contracting, architectural, and engineering services as needed.
(4) “Design-build solicitation package” means the performance criteria, any concept drawings, the form of contract, and all other documents and information that serve as the basis on which bids or proposals will be solicited from the design-build entities.
(5) “Design-build phase” means the period following the award of a contract to a design-build entity in which the design-build entity completes the design and construction activities necessary to fully complete the project in compliance with the terms of the contract.
(6) “Performance criteria” means the information that fully describes the scope of the proposed project and includes, but is not limited to, the size, type, and design character of the buildings and site; the required form, fit, function, operational requirements, and quality of design, materials, equipment, and workmanship; and any other information deemed necessary to sufficiently describe the state’s needs. Performance criteria may include concept drawings, which include any schematic drawings or architectural renderings that are prepared in the detail necessary to sufficiently describe the state’s needs.
(b) (1) Except as otherwise specified in subparagraphs (A) to (D), inclusive, of paragraph (2) funds appropriated for a design-build project shall not be expended by any state agency, including, but not limited to, the University of California, the California State University, the California Community Colleges, and the Judicial Council, until the Department of Finance and the State Public Works Board have approved performance criteria.
(2) This section shall not apply to any of the following:
(A) Amounts for acquisition of real property, in fee or any lesser interest.
(B) Amounts for equipment or minor capital outlay projects.
(C) Amounts appropriated for performance criteria.
(D) Amounts appropriated for preliminary plans, if the appropriation was made prior to January 1, 2005.
(c) Any appropriated amounts for the design-build phase of a design-build project, where funds have been expended on the design-build phase by any state agency prior to the approval of the performance criteria by the State Public Works Board, and all amounts not approved by the board under this section shall be reverted to the fund from which the appropriation was made. A design-build project for which a capital outlay appropriation is made shall not be put out to design-build solicitation until the bid package has been approved by the Department of Finance. A substantial change shall not be made to the performance criteria as approved by the board and the Department of Finance without written approval by the Department of Finance. The Department of Finance shall approve any proposed bid or proposal alternates set forth in the design-build solicitation package.
(d) The State Public Works Board may augment a design-build project in an amount of up to 20 percent of the capital outlay appropriations for the project, irrespective of whether any such appropriation has reverted. For projects authorized through multiple fund sources, including, but not limited to, general obligation bonds and lease-revenue bonds, to the extent permissible, the Department of Finance shall have full authority to determine which of the fund sources will bear all or part of an augmentation. The board shall defer all augmentations in excess of 20 percent of the amount appropriated for each design-build project until the Legislature makes additional funds available for the specific project.
(e) In addition to the powers provided by Section 15849.6, the State Public Works Board may further increase the additional amount in Section 15849.6 to include a reasonable construction reserve within the construction fund for any capital outlay project without augmenting the project. The amount of the construction reserve shall be within the 20 percent augmentation limitation. The board may use this amount to augment the project, when and if necessary, after the lease-revenue bonds are sold to ensure completion of the project.
(f) Any augmentation in excess of 10 percent of the amounts appropriated for each design-build project shall be reported to the Chairperson of the Joint Legislative Budget Committee, or his or her designee, 20 days prior to board approval, or not sooner than whatever lesser time the chairperson, or his or her designee, may in each instance determine.
(g) (1) The Department of Finance may change the administratively or legislatively approved scope for major design-build projects.
(2) If the Department of Finance changes the approved scope pursuant to paragraph (1), the department shall report the changes and associated cost implications to the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the respective fiscal committees, and the legislative members of the State Public Works Board 20 days prior to the proposed board action to recognize the scope change.
(h) The Department of Finance shall report to the Chairperson of the Joint Legislative Budget Committee, the chairpersons of the respective fiscal committees, and the legislative members of the State Public Works Board 20 days prior to the proposed board approval of performance criteria for any project when it is determined that the estimated cost of the total design-build project is in excess of 20 percent of the amount recognized by the Legislature.
SEC. 2.
Section 15770.5 of the Government Code is repealed.
SEC. 3.
Section 15816 of the Government Code is amended to read:
15816.
(a) When any public building has been acquired or constructed by the board, and the revenues, rentals, or receipts from the operation of the public building are no longer required or pledged for the payment of principal or interest on any of the certificates or revenue bonds of the board undertaken under this part, the public building shall be under the jurisdiction of, and operated and maintained by, the state agency that had jurisdiction of the property prior to the board’s financing of the public building.
(b) If at any time funds are available by law to retire any certificates or revenue bonds issued to defray the cost of any public building, these funds shall be applied to the redemption of certificates or revenue bonds secured by the rentals and revenues from that public building.
SEC. 4.
Section 15817.1 of the Government Code is amended to read:
15817.1.
(a) Exclusively for the purpose of facilitating the financing of public buildings pursuant to this part through the issuance of revenue bonds, notes, or certificates by the board, and notwithstanding any other law, the board may acquire by lease from any state agency public buildings identified by, and under the jurisdiction or control of, the state agency, and, in that connection, the board may then lease those public buildings back to the state agency and may pledge the revenues, rentals, or receipts to the lease to secure the repayment of revenue bonds, notes, or certificates issued by the board. The board is not required to apply the proceeds of the board’s bonds, notes, or certificates to acquire, design, construct, or otherwise improve the same public buildings that are leased pursuant to this section. In each case, the lease shall provide rental provisions, term, payment, security, default, remedy, and other terms or provisions as may be specified in the lease or other agreement or agreements between the board and the state agency and may provide for the substitution of other public buildings for the public buildings initially leased by the board and the state agency pursuant to this section. The public buildings that are leased pursuant to this section may be existing public buildings, as determined by the board and the state agency, and which the board and the state agency also determine to have both of the following:
(1) A fair rental value that is consistent with the principal amount of the bonds, notes, or certificates of the board authorized to be issued for the purpose of providing the financing of public buildings pursuant to this part.
(2) An economic useful life that is not shorter than the final maturity of the bonds, notes, or certificates of the board authorized to be issued for the purpose of providing the financing of public buildings pursuant to this part.
(b) These determinations by the board and the state agency pursuant to subdivision (a) shall be final and conclusive.
(c) A lease made pursuant to this section does not require the approval of the Director of General Services.
(d) The board or a state agency may utilize subdivision (a) in connection with the issuance of any revenue bonds, notes, or certificates previously authorized but not issued, or any revenue bonds, notes, or certificates authorized subsequent to the effective date of the act adding this subdivision.
(e) On or before June 30, 2017, the Department of Finance shall report to the fiscal committees of the Legislature the following regarding the removal of the July 1, 2015, inoperative date from the asset transfer authority of the board. The report shall include, but is not limited to, all of the following:
(1) The number of times the asset transfer authority has been invoked.
(2) The aggregate amount of financing secured through asset transfers.
(3) An estimate of the financing savings realized through the use of asset transfers.
SEC. 5.
Section 15820.903 of the Government Code is amended to read:
15820.903.
(a) The SPWB may issue up to three hundred forty million eight hundred sixty-six thousand dollars ($340,866,000) in revenue bonds, notes, or bond anticipation notes, pursuant to Chapter 5 of Part 10b of Division 3 of Title 2 (commencing with Section 15830) to finance the acquisition, design, or construction, and a reasonable construction reserve, of approved local jail facilities described in Section 15820.901, and any additional amount authorized under Section 15849.6 to pay for the cost of financing.
(b) Proceeds from the revenue bonds, notes, or bond anticipation notes may be utilized to reimburse a participating county for the costs of acquisition, preliminary plans, working drawings, and construction for approved projects.
(c) Notwithstanding Section 13340, funds derived pursuant to this section and Section 15820.902 are continuously appropriated for purposes of this chapter.
(d) This section shall become inoperative on June 30, 2017, and no project may be commenced after that date; however, projects that have already commenced by that date may be completed and financed with bonds issued pursuant to this chapter.
SEC. 6.
Section 15820.913 of the Government Code is amended to read:
15820.913.
(a) The SPWB may issue up to eight hundred seventy million seventy-four thousand dollars ($870,074,000) in revenue bonds, notes, or bond anticipation notes, pursuant to Chapter 5 of Part 10b of Division 3 of Title 2 (commencing with Section 15830) to finance the acquisition, design, or construction, and a reasonable construction reserve, of approved local jail facilities described in Section 15820.911, and any additional amount authorized under Section 15849.6 to pay for the cost of financing.
(b) Proceeds from the revenue bonds, notes, or bond anticipation notes may be used to reimburse a participating county for the costs of acquisition, preliminary plans, working drawings, and construction for approved projects.
(c) Notwithstanding Section 13340, funds derived pursuant to this section and Section 15820.912 are continuously appropriated for purposes of this chapter.
SEC. 7.
Section 15820.922 of the Government Code is amended to read:
15820.922.
(a) The board may issue up to five hundred nine million sixty thousand dollars ($509,060,000) in revenue bonds, notes, or bond anticipation notes, pursuant to Chapter 5 (commencing with Section 15830) to finance the acquisition, design, and construction, including, without limitation, renovation, and a reasonable construction reserve, of approved adult local criminal justice facilities described in Section 15820.92, and any additional amount authorized under Section 15849.6 to pay for the cost of financing.
(b) Proceeds from the revenue bonds, notes, or bond anticipation notes may be used to reimburse a participating county for the costs of acquisition, design, and construction, including, without limitation, renovation, for approved adult local criminal justice facilities.
(c) Notwithstanding Section 13340, funds derived pursuant to this section and Section 15820.921 are continuously appropriated for purposes of this chapter.
SEC. 8.
Section 15831 of the Government Code is amended to read:
15831.
All bonds issued under this part shall bear the facsimile signature of the Governor and the facsimile countersignature of the Controller and the Treasurer, and the bonds shall be signed, countersigned, and endorsed by the officers who shall be in office on the date of issuance thereof, and each of the bonds shall bear an impress of the Great Seal of the State of California. The bonds so signed, countersigned, endorsed, and sealed, when sold, are valid although the sale thereof be made at a date or dates upon which the officers having signed, countersigned, and endorsed the bonds, or any or either of the officers, shall have ceased to be the incumbents of the offices held by them at the time of signing, countersigning, or endorsing the bonds. Each bond issued under this part, if subject to call or redemption prior to maturity, shall contain a recital to that effect.
The rate of interest to be borne by the bonds need not be uniform for all bonds of the same issue or series or maturity and a “not to exceed” interest rate may be determined and fixed by the board by resolution adopted prior to or after the sale of the bonds. The Treasurer, when authorized by resolution of the board, may sell bonds above, below, or at their par or face value.
SEC. 9.
Section 15832 of the Government Code is amended to read:
15832.
Upon receipt of a resolution of the board authorizing the issuance of bonds, the Treasurer shall provide for their preparation in accordance with the resolution. The bonds authorized to be issued shall be sold by the Treasurer, at public sale or at private sale, as directed by the board. In the case of public sale, (1) the bonds shall be sold by the Treasurer, at such time as may be fixed by him or her, and upon such notice as he or she may deem advisable, upon bids submitted to the Treasurer in the form and by the means specified by the Treasurer, to the bidder whose bid will result in the lowest interest cost on account of such bonds, and (2) if no bids are received, or if the Treasurer determines that the bids are not satisfactory, the Treasurer may reject all bids received, if any, and either readvertise or sell the bonds at private sale. For purposes of this chapter, the method for determining the lowest interest cost bid shall be determined by the Treasurer and shall be limited to either the net interest cost method or the true interest cost method determined by the bids as submitted in accordance with the notice of sale. The net interest cost of each bid shall be determined by ascertaining the total amount of interest that the state would be required to pay under that bid, from the date of the bonds to the respective maturity dates of the bonds then offered for sale, at the interest rate or rates specified in the bid, less the total amount of the premium, if any, or plus the total amount of the discount, if any, offered by the bid. The bid under which the amount ascertained is the least shall be deemed to be the bid resulting in the lowest net interest cost. Under the true interest cost method, the bonds shall be awarded to the bidder submitting the lowest interest rate bid determined by the nominal interest rate that, when compounded semiannually and used to discount the debt service payments on the bonds to the date of the bonds, results in an amount equal to the price bid for the bonds, excluding interest accrued to the date of delivery.
Temporary or interim bonds, certificates, or receipts of any denomination whatever, to be signed by the Treasurer, may be issued and delivered until the definitive bonds are executed and available for delivery. Signature of the Treasurer may be by signature stamp.
SEC. 10.
Section 15848 of the Government Code is amended to read:
15848.
Notwithstanding Section 13340 or any other provision of law, the amount as may be necessary to pay the rent of any agency occupying space in a facility authorized to be acquired or constructed under the State Building Construction Act of 1955 or a facility leased by a state agency pursuant to a joint powers agreement in accordance with Chapter 5 (commencing with Section 6500) of Division 7 of Title 1 is hereby appropriated each fiscal year payable from the fund in the State Treasury from which that agency derives its appropriation for support and shall become available only if the rental payments are due during a period that the state is operating without funds appropriated by the Budget Act for that fiscal year or if the amount required to pay the rental payments has not been included in the Budget Act for that fiscal year and the Department of Finance certifies to the Controller that sufficient funds are available for the support of the agency for that portion of the facility that has been provided for its use and the facility or portion thereof is available for the use and occupancy of the agency. This appropriation shall be inoperative as to any facility for which jurisdiction has been transferred pursuant to Section 15816.
SEC. 11.
This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

Summary: Existing law, except as specified, prohibits any state agency from expending funds appropriated for design-build projects until the Department of Finance and the State Public Works Board have approved performance criteria or performance criteria and concept drawings for the project. Existing law, for these purposes, defines the term “performance criteria” to mean the information that fully describes the scope of the proposed project, as specified. Existing law, for these purposes, defines the term “concept drawings” to mean any schematic drawings or architectural renderings that are prepared, in addition to performance criteria, in the detail necessary to sufficiently describe the state’s needs. This bill would revise the definition of “performance criteria,” for these purposes, to include concept drawings, as specified. The bill would additionally make conforming changes. Existing law establishes the State Public Works Board which consists of the Director of Finance, the Director of Transportation, and the Director of General Services. Existing law authorizes the Director of Transportation and the Director of General Services to appoint a deputy or assistant director in their respective departments to act in their place on the board, as specified. This bill would repeal that authorization. Existing law requires the State Public Works Board to notify the Department of General Services whenever the revenues, rentals, or receipts from the operation of a public building that was acquired or constructed by the board are no longer required or pledged for the payment of principal or interest on any of the certificates or revenue bonds of the board. Existing law provides that thereafter, that public building is under the jurisdiction of, and operated and maintained by, the Department of General Services. This bill would repeal this notification requirement and instead require those buildings to return to the jurisdiction of, and be operated and managed by, the state agency that had jurisdiction of the property prior to the board’s financing of the public building. The bill would additionally make conforming changes. Existing law exempts from these provisions any public buildings that are acquired by lease by the board from a state agency, for the purposes of leasing the public building back to the state agency, as specified, and public buildings constructed for lease purchase to the University of California, the Trustees of the California State University, the Board of Governors of the California Maritime Academy, or any community college district. Existing law provides that when the revenues, rentals, or receipts from the operation of any public facility or public building are no longer required or pledged for the payment of principal or interest on the certificates or revenue bonds of the board, title to the public building vests in the Regents of the University of California, the Trustees of the California State University, the Board of Governors of the California Maritime Academy, or the community college district. This bill would repeal these exemption and vesting provisions. Existing law, until July 1, 2015, authorizes the State Public Works Board to acquire public buildings by lease from any state agency, and to lease those public buildings back to the state agency and pledge the revenues, rentals, or receipts to the lease to secure repayment of revenue bonds, notes, or certificates issued by the board for the purpose of facilitating the financing of public buildings, as specified. This bill would eliminate the repeal date and require the Department of Finance to report to the Legislature by June 30, 2017, on the effects of this repeal, as specified. Existing law requires all revenue bonds issued for state building construction to bear the signature of the Governor, and the facsimile countersignature of the Controller and the Treasurer, as specified. Existing law requires all interest coupons attached to each bond to bear the facsimile signature of the Treasurer, as specified. Existing law specifies that the rate of interest to be born by the bonds need not be uniform for all bonds of the same issue or series or division and provides that the rate may be determined and fixed by the State Public Works Board by resolution adopted at or after the sale of the bonds. This bill would eliminate the requirement that all interest coupons attached to each bond bear the facsimile signature of the Treasurer and all references to interest coupons in these provisions. The bill would additionally provide that a “not to exceed” interest rate may be determined and fixed by the board by resolution adopted prior to or after the sale of the bonds. Existing law requires the highest bid received on the sale of the bonds to be determined by deducting the total amount of the premium bid, if any, from the total amount of the interest that the state would be required to pay from the date of the bonds or the last preceding interest payment date, whichever is latest, to the respective maturity date of the bonds, as specified, and requires the award to be made on the basis of the lowest net interest cost to the state. Existing law requires the Treasurer, upon receipt of a resolution of the State Public Works Board authorizing the issuance of bonds, to provide for the preparation of the bonds in accordance with the resolution. In the case of a public sale, existing law authorizes the Treasurer to sell the bonds at the time, and with the notice, determined by the Treasurer, upon sealed bids, to the bidder whose bid will result in the lowest net interest cost on account of the bonds. This bill would instead authorize the Treasurer, for a public sale, to set forth the form and means of bids, and to sell to the bidder whose bid will result in the lowest interest cost to the state on account of the bonds. The bill would set forth the procedures the Treasurer may use to determine the lowest interest cost to the state, including the net interest cost of each bid, or the true interest cost of each bid, as defined. Existing law authorizes the Department of Corrections and Rehabilitation, participating counties, and the State Public Works Board to acquire, design, and construct local jail facilities approved by the Board of State and Community Corrections (BSCC). Existing law authorizes the State Public Works Board to issue revenue bonds, notes, or bond anticipation notes in the amounts of $365,771,000 and $854,229,000, in 2 phases, to finance the acquisition, design, and construction, and a reasonable construction reserve, of approved local jail facilities, as specified. Existing law authorizes the State Public Works Board to issue revenue bonds, notes, or bond anticipation notes in the amount of $500,000,000 to finance the acquisition, design, and construction, and a reasonable construction reserve, of approved adult local criminal justice facilities, as defined. The funds derived from those revenue bonds, notes, or bond anticipation notes are continuously appropriated for the purposes described above. This bill would decrease the authorization for revenue bonds, notes, or bond anticipation notes in the first phase from $365,771,000 to $340,866,000 and increase the authorization of the 2nd phase from $854,229,000 to $870,074,000. The bill would also increase the authorization to be used for adult local criminal justice facilities from $500,000,000 to $509,060,000. This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

An act to amend Sections 13332.19, 15816, 15817.1, 15820.903, 15820.913, 15820.922, 15831, 15832, and 15848 of, and to repeal Section 15770.5 of, the Government Code, relating to public works, and making an appropriation therefor, to take effect immediately, bill related to the budget.


The people of the State of California do enact as follows:

SECTION 1.
Section 12439 of the Government Code is repealed.
12439.
(a)Beginning July 1, 2002, any state position that is vacant for six consecutive monthly pay periods shall be abolished by the Controller on the following July 1. The six consecutive monthly pay periods may occur entirely within one fiscal year or between two consecutive fiscal years.
(b)The Director of Finance may authorize the reestablishment of any positions abolished pursuant to this section if one or more of the following conditions existed during part or all of the six consecutive monthly pay periods:
(1)There was a hiring freeze in effect during part or all of the six consecutive pay periods.
(2)The department has diligently attempted to fill the position, but was unable to complete all the steps necessary to fill the position within six months.
(3)The position has been designated as a management position for purposes of collective bargaining and has been held vacant pending the appointment of the director, or other chief executive officer, of the department as part of the transition from one Governor to the succeeding Governor.
(4)The classification of the position is determined to be hard-to-fill.
(5)Late enactment of the budget causes the department to delay filling the position.
(c)The Controller shall reestablish any position for which the director of the department in which that position existed prior to abolishment certifies by August 15 that one or more of the following conditions existed during part or all of the six consecutive pay periods:
(1)The position is necessary for directly providing 24-hour care in an institution operated by the state.
(2)The position is necessary for the state to satisfy any licensing requirements adopted by a local, state, or federal licensing or other regulatory agency.
(3)The position is directly involved in services for public health, public safety, or homeland security.
(4)The position is being held vacant because the previous incumbent is eligible to exercise a mandatory right of return from a leave of absence as may be required by any provision of law including, but not limited to, leaves for industrial disability, nonindustrial disability, military service, pregnancy, childbirth, or care of a newborn infant.
(5)The position is being held vacant because the department has granted the previous incumbent a permissive leave of absence as may be authorized by any provision of law including, but not limited to, leaves for adoption of a child, education, civilian military work, or to assume a temporary assignment in another agency.
(6)Elimination of the position will directly reduce state revenues or other income by more than would be saved by elimination of the position.
(7)The position is funded entirely from moneys appropriated pursuant to Section 221 of the Food and Agricultural Code, was established with the Controller pursuant to Section 221.1 of the Food and Agricultural Code, and directly responds to unforeseen agricultural circumstances requiring the relative expertise that the position provides.
(d)Each department shall maintain for future independent audit all records on which the department relied in determining that any position or positions satisfied one or more of the criteria specified in paragraphs (1) to (6), inclusive, of subdivision (c).
(e)The only other exceptions to the abolishment required by subdivision (a) are those positions exempt from civil service or those instructional and instruction-related positions authorized for the California State University. No money appropriated by the subsequent Budget Act shall be used to pay the salary of any otherwise authorized state position that is abolished pursuant to this section.
(f)The Controller, no later than September 10 of each fiscal year, shall furnish the Department of Finance in writing a preliminary report of any authorized state positions that were abolished effective on the preceding July 1 pursuant to this section.
(g)The Controller, no later than October 15 of each fiscal year, shall furnish the Joint Legislative Budget Committee and the Department of Finance a final report on all positions that were abolished effective on the preceding July 1.
(h)Departments shall not execute any personnel transactions for the purpose of circumventing the provisions of this section.
(i)Each department shall include a section discussing its compliance with this section when it prepares its report pursuant to Section 13405.
(j)As used in this section, department refers to any department, agency, board, commission, or other organizational unit of state government that is empowered to appoint persons to civil service positions.
(k)This section shall become operative July 1, 2002.
SEC. 2.
Section 22775 of the Government Code is amended to read:
22775.
“Family member” means an employee’s or annuitant’s spouse or domestic partner and any child, including an adopted child, a stepchild, or recognized natural child. The board shall, by regulation, prescribe age limits and other conditions and limitations pertaining to children.
“Family member” does not include a former spouse or former domestic partner of an employee or annuitant.
SEC. 3.
Section 22781 of the Government Code is amended to read:
22781.
“Prefunding” means the making of periodic payments by an employer
or employee
to partially or completely
fund or
amortize the
actuarially determined normal costs or
unfunded actuarial obligation of the employer for
postemployment
health
care
benefits provided to annuitants and their family members.
SEC. 4.
Section 22843.1 is added to the Government Code, to read:
22843.1.
(a) Pursuant to standards established by the Department of Human Resources, the employing office of a state employee or state annuitant shall possess documentation verifying eligibility of an employee’s or annuitant’s family member prior to the enrollment of a family member in a health benefit plan. The employing office shall maintain the verifying documentation in the employee or annuitant’s official personnel or member file.
(b) The employing office of the state employee or state annuitant shall obtain verifying documentation to substantiate the continued eligibility of family members as follows:
(1) At least once every three years for the following family members:
(A) Spouses.
(B) Domestic partners.
(C) Children and stepchildren.
(D) Domestic partner children.
(2) At least once annually for other children for whom the state employee or state annuitant has assumed a parent-child relationship.
(c) For purposes of this section, the Public Employees’ Retirement System is the employing office of a state annuitant.
SEC. 5.
Section 22844 of the Government Code is amended to read:
22844.
(a) Employees, annuitants, and family members who become eligible to enroll on or after January 1, 1985, in Part A and Part B of Medicare
may
shall
not be enrolled in a basic health benefit plan. If the employee, annuitant, or family member is enrolled in Part A and Part B of Medicare, he or she may enroll in a Medicare health benefit plan.
(b) Employees, annuitants, and family members enrolled in a prescription drug plan under Part D of Medicare
may
shall
not be enrolled in a board-approved health benefit plan. This subdivision does not apply to an individual enrolled in a board-approved or offered health benefit plan that provides a prescription drug plan or qualified prescription drug coverage under Part D of Medicare as part of its benefit design.
(c) This section does not apply to employees and family members that are specifically excluded from enrollment in a Medicare health benefit plan by federal law or
federal
regulation.
(d) The board shall not grant any further exemptions to this section after July 1, 2015.
SEC. 6.
Section 22865 of the Government Code is amended to read:
22865.
Prior
Not later than 30 days prior
to the approval of
proposed
benefits and premium readjustments authorized under Section 22864, the board shall
notify
provide an initial estimate of proposed changes and costs in writing to
the
Legislature,
Joint Legislative Budget Committee,
the
chairpersons of the committees and subcommittees in each house of the Legislature that consider the Public Employees’ Retirement System’s budget and activities, the State Controller, the
Trustees of the California State University,
and
the Department of Human
Resources
Resources, the Director
of
Finance, and
the
proposed changes in writing.
Legislative Analyst.
SEC. 7.
Section 22866 of the Government Code is amended to read:
22866.
(a)
The board shall report to the Legislature
and the Director of Finance
annually, on November 1, regarding the
success or failure of each
health
benefit plan.
benefits program.
The report shall include, but not be limited
to, the costs
to the
board and to participants, the degree of satisfaction of members and annuitants with the health benefit plans and with the quality of the care provided, as determined by a representative sampling of participants, and the level of accessibility to preferred providers for rural members who do not have access to health maintenance organizations.
following:
(1) General overview of the health benefits program, including, but not limited to, the following:
(A) Description of health plans and benefits provided, including essential and nonessential benefits as required by state and federal law, member expected out-of-pocket expenses, and actuarial value by metal tier as defined by the federal Patient Protection and Affordable Care Act (Public Law 111-148), as amended by the federal Health Care and Education Reconciliation Act of 2010 (Public Law 111-152).
(B) Geographic coverage.
(C) Historic enrollment information by basic and medicare plans, by state and contract agencies, by active and retired membership, and by subscriber and dependent tier.
(D) Historic expenditures by basic and medicare plans, by state and contract agencies, by active and retired membership, and by subscriber and dependent tier.
(2) Reconciliation of premium increases or decreases from the prior plan year, and the reasons for those changes.
(A) Description of benefit design and benefit changes, including prescription drug coverage, by plan. The description shall detail whether benefit changes were required by statutory mandate, federal law, or an exercise of the board’s discretion, the costs or savings of the benefit change, and the impact of how the changes fit into a broader strategy.
(B) Discussion of risk.
(C) Description of medical trend changes in aggregate service categories for each plan. The aggregate service categories used shall include the standard categories of information collected by the board, consisting of the following: inpatient, emergency room, ambulatory surgery, office, ambulatory radiology, ambulatory lab, mental health and substance abuse, other professional, prescriptions, and all other service categories.
(D) Reconciliation of past year premiums against actual enrollments, revenues, and accounts receivables.
(3) Overall member health as reflected by data on chronic conditions.
(4) The impact of federal subsidies or contributions to the health care of members, including Medicare Part A, Part B, Part C, or Part D, low-income subsidies, or other federal program.
(5) The cost of benefits beyond Medicare contained in the board’s Medicare supplemental plans.
(6) A description of plan quality performance and member satisfaction, including, but not limited to, the following:
(A) The Healthcare Effectiveness Data and Information Set, referred to as HEDIS.
(B) The Medicare star rating for Medicare supplemental plans.
(C) The degree of satisfaction of members and annuitants with the health benefit plans and with the quality of the care provided, to the extent the board surveys participants.
(D) The level of accessibility to preferred providers for rural members who do not have access to health maintenance organizations.
(E) Other applicable quality measurements collected by the board as part of the board’s health plan contracts.
(7) A description of risk assessment and risk mitigation policy related to the board’s self-funded and flex-funded plan offerings, including, but not limited to the following:
(A) Reserve levels and their adequacy to mitigate plan risk.
(B) The expected change in reserve levels and the factors leading to this change.
(C) Policies to reduce excess reserves or rebuild inadequate reserves.
(D) Decisions to lower premiums with excess reserves.
(E) The use of reinsurance and other alternatives to maintaining reserves.
(8) Description and reconciliation of administrative expenditures, including, but not limited to, the following:
(A) Organization and staffing levels, including salaries, wages, and benefits.
(B) Operating expenses and equipment expenditure items, including, but not limited to, internal and external consulting and intradepartmental transfers.
(C) Funding sources.
(D) Investment strategies, historic investment performance, and expected investment returns of the Public Employees’ Contingency Reserve Fund and the Public Employees’ Health Care Fund.
(9) Changes in strategic direction and major policy initiatives.
(b) A report submitted pursuant to subdivision (a) shall be provided in compliance with Section 9795.
SEC. 8.
Section 22940 of the Government Code is amended to read:
22940.
(a)
There is in the State Treasury the Annuitants’ Health Care Coverage Fund that is a trust fund and a retirement fund, within the meaning of Section 17 of Article XVI of the California Constitution.
Notwithstanding
Subject to the limitation provided in subdivision (b), notwithstanding
Section 13340, all moneys in the fund are continuously appropriated without regard to fiscal years to the board for expenditure for the prefunding of health care coverage for annuitants pursuant to this part, including administrative costs. The board has sole and exclusive control and power over the administration and investment of the Annuitants’ Health Care Coverage Fund and shall make investments pursuant to Part 3 (commencing with Section 20000).
(b) (1) Moneys accumulated in the designated state subaccounts of the fund, or a successor fund, that are derived from investment income shall not be used to pay benefits for state annuitants and dependents until the earlier of:
(A) With regard to a particular designated state subaccount, the date the funded ratio of the designated state subaccount reaches at least 100 percent as determined in that employer’s postemployment benefits actuarial valuation and then only for the purpose of paying benefits for state annuitants and dependents associated with that subaccount.
(B) July 1, 2046.
(2) For purposes of this subdivision, “designed state subaccount” means a separate account maintained within the fund to identify prefunding contributions and assets attributable to a specified state collective bargaining unit or other state entity for the purpose of providing benefits to state annuitants and dependents associated with a specified collective bargaining unit or other state entity.
(3) This subdivision shall not be construed as prohibiting an alternative funding strategy agreed to in a written memorandum of understanding.
SEC. 9.
This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.
SECTION 1.
It is the intent of the Legislature to enact statutory changes relating to the Budget Act of 2015.

Summary: The Public Employees’ Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees’ Retirement System, governs the funding and provision of postemployment health care benefits for eligible retired public employees and their families. PEMHCA defines “family member” for these purposes. PEMHCA authorizes the board to contract with carriers offering health benefit plans and prohibits employees, annuitants, and their family members who are eligible for Medicare, as specified, from enrolling in a basic health benefit plan. PEMHCA requires the board to make certain notifications and reports to the Legislature in connection with health benefit plans offered pursuant to its provisions. This bill would clarify the definition of family for the purposes of PEMHCA by specifically excluding former spouses and former domestic partners. The bill would require the employing office, as specified, of a state employee or state annuitant, pursuant to standards established by the Department of Human Resources, to possess documentation verifying eligibility of an employee’s family member prior to the enrollment of a family member in a health benefit plan and to verify continued eligibility pursuant to a specified schedule. The bill would prohibit the board from granting further exceptions to the rule against enrolling in employees, annuitants, and their family members who are eligible for Medicare, as specified, in a basic health benefit plan. The bill would revise the entities to which the board is required to provide notification of approval of proposed benefit and premium readjustments to exclude the Legislature as a whole and to instead require provision of an initial estimate of proposed changes in writing to the Joint Legislative Budget Committee, the chairpersons of the committees and subcommittees in each house of the Legislature that consider the Public Employees’ Retirement System’s budget and activities, the State Controller, the Director of Finance, and the Legislative Analyst. The bill would specify the latest date that this notification may take place. The bill would require the board to provide a specified, detailed report to the Legislature and the Director of Finance annually, on November 1, regarding the health benefit plans it provides. PEMHCA establishes the Annuitants’ Health Care Coverage Fund, which is continuously appropriated for the purpose of prefunding of health care coverage for annuitants, including administrative costs. PEMHCA defines “prefunding” for these purposes. This bill would prohibit the use of certain state funds in the Annuitants’ Health Care Coverage Fund for the payment of benefits until the earlier of 2 specified dates. The bill would revise the definition of prefunding to include employee as well as employer payments and to provide that payments may fund the actuarially determined normal costs of postemployment health care benefits. By providing a new funding source for a continuously appropriated fund, this bill would make an appropriation. Existing law prescribes the duties of the Controller, which generally regard supervision of the fiscal concerns of the state. Existing law requires the Controller to abolish a state position that is vacant for 6 consecutive monthly pay periods on the following July 1, and permits the Director of Finance to authorize reestablishment of a position abolished pursuant to this authority under certain conditions. Among other things, existing law requires the Controller to reestablish a position abolished pursuant to this authority if the director of the department in which that position existed prior to abolishment makes a certification by August 15, as specified. This bill would repeal the provisions pertaining to vacant positions described above. This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill. This bill would express the intent of the Legislature to enact statutory changes relating to the Budget Act of 2015.

An act relating to the Budget Act of 2015.
An act to amend Sections 22775, 22781, 22844, 22865, 22866, and 22940 of, to add Section 22843.1 to, and to repeal Section 12439 of, the Government Code, relating to state government, and making an appropriation therefor, to take effect immediately, bill related to the budget.


The people of the State of California do enact as follows:

SECTION 1.
Section 18546 of the Government Code is amended to read:
18546.
“Career executive” means an employee appointed from an employment list established for the express purpose of providing a list of persons who are eligible for career executive assignments, as specified in Article 5 (commencing with Section 18990) of Chapter 4 and Article 9 (commencing with Section 19889) of Chapter 2.5 of Part 2.6, in which examination, selection, classification, salary, tenure, and other conditions of employment may be varied from those prevailing under Chapter 3 (commencing with Section 18800) to Chapter 7 (commencing with Section 19570), inclusive, for other employees in the state civil service.
SEC. 2.
Section 18990 of the Government Code is amended to read:
18990.
(a) Notwithstanding any other provision of law or rule, persons employed by the Legislature for two or more consecutive years shall be given an opportunity, upon request, to obtain civil service appointment list eligibility by taking any promotional civil service examination or career executive assignment examinations for which they meet the minimum qualifications of the class for which they seek appointment. Persons receiving passing scores shall gain list eligibility or appointment. In evaluating minimum qualifications, a person’s legislative experience shall be considered state civil service experience in a comparable class that has the same or substantially similar duties and responsibilities as the person’s legislative position.
(b) Persons who meet the requirements of this section, but who resigned or were released from service with the Legislature, shall be eligible to take promotional civil service examinations and career executive assignment examinations in accordance with subdivision (a).
SEC. 3.
Section 18991 of the Government Code is amended to read:
18991.
Notwithstanding any other provision of law, persons retired from the United States military, honorably discharged from active military duty with a service-connected disability, or honorably discharged from active duty, shall be eligible to apply for promotional civil service examinations and career executive assignment examinations for which they meet the minimum qualifications of the class to which they seek appointment. Persons receiving passing scores shall gain list eligibility for appointment. In evaluating minimum qualifications, the person’s military experience shall be considered state civil service experience in a comparable class that has the same or substantially similar duties and responsibilities as the person’s position in the military.
SEC. 4.
Section 18992 of the Government Code is amended to read:
18992.
(a) Notwithstanding any other provision of law or rule, persons holding, for two or more consecutive years, nonelected exempt positions in the executive branch of government as defined in subdivisions (c), (e), (f), (g), (i), and (m) of Section 4 of Article VII of the Constitution and excluding those positions for which the salaries are set by statute, shall be given the opportunity, upon request, to obtain civil service appointment list eligibility by taking any promotional civil service examination or career executive assignment examination for which they meet the minimum qualifications of the class to which they seek appointment. Persons receiving passing scores shall gain list eligibility for appointment. In evaluating minimum qualifications, the person’s experience in the exempt position shall be considered state civil service experience in a comparable class that has the same or substantially similar duties and responsibilities as the person’s exempt position.
(b) Persons who meet the requirements of this section, but who resigned or were released from exempt employment of the executive branch of government, shall be eligible to take promotional civil service examinations and career executive assignment examinations in accordance with subdivision (a).
SEC. 5.
Section 18993 of the Government Code is amended to read:
18993.
(a) Notwithstanding any other provision of law, a legislative or nonelected exempt executive branch employee who is appointed to a career executive assignment pursuant to Section 18990 or 18992, shall be eligible to compete in his or her appointing power’s promotional examinations for which he or she meets the minimum qualifications of the class to which he or she seeks appointment. When such an employee’s career executive assignment is terminated by the appointing power, he or she shall have the right to request a deferred examination for any promotional eligible list that his or her appointing power has in existence at the time of the termination of the career executive assignment and for which he or she meets the minimum qualifications of the class to which he or she seeks appointment.
(b) A request for a deferred examination pursuant to subdivision (a) shall be made no later than 10 days after the effective date of the termination of the career executive assignment. The department shall administer the deferred examination within 30 days of the date of the request.
SEC. 6.
Section 19057 of the Government Code is repealed.
SEC. 7.
Section 19057.1 of the Government Code is amended to read:
19057.1.
Except for reemployment lists, State Restriction of Appointment lists, and Limited Examination and Appointment Program referral lists, there shall be certified to the appointing power the names and addresses of all those eligibles whose scores, at the time of certification, represent the three highest ranks on the employment list for the class, and who have indicated their willingness to accept appointment under the conditions of employment specified.
For purposes of ranking, scores of eligibles on employment lists covered by this section shall be rounded to the nearest whole percent. A rank shall consist of one or more eligibles with the same whole percentage score.
If the names on the list from which certification is being made represent fewer than three ranks, then, consistent with board rules, additional eligibles may be certified from the various lists next lower in order of preference until names from three ranks appear. If there are fewer than three names available for certification, and the appointing authority does not choose to appoint from among these, the appointing authority may demand certification of three names. In that case, examinations shall be conducted until at least three names may be certified by the procedure described in this section, and the appointing authority shall fill the position by appointment of one of the persons certified.
Fractional examination scores shall be provided to, and used by, the Department of the California Highway Patrol for its peace officer classes.
The department may, consistent with board rules, provide for certifying less than three ranks where the size of the certified group is disproportionate to the number of vacancies.
SEC. 8.
Section 19057.2 of the Government Code is repealed.
SEC. 9.
Section 19057.3 of the Government Code is amended to read:
19057.3.
(a) For a position in the Department of Corrections and Rehabilitation, there shall be certified to the appointing power the names and addresses of all those eligibles for peace officer and closely allied classes whose scores, at the time of certification, represent the three highest ranks on the employment list for the class in which the position belongs and who have indicated their willingness to accept appointment under the conditions of employment specified.
(b) For purposes of ranking, scores of eligibles on employment lists for the classes shall be rounded to the nearest whole percent. A rank consists of one or more eligibles with the same whole percentage score.
(c) If fewer than three ranks of persons willing to accept appointment are on the list from which certification is to be made, then additional eligibles shall be certified from the various lists next lower in order of preference until names from three ranks are certified. If there are fewer than three names on those lists, and the appointing power does not choose to appoint from among these, the appointing power may demand certification of three names and examinations shall be conducted until at least three names may be certified. The appointing power shall fill the position by the appointment of one of the persons certified.
(d) The department may, consistent with board rules, provide for certifying less than three ranks where the size of the certified group is disproportionate to the number of vacancies.
(e) The department may, consistent with board rules, allow for the names of eligibles to be transferred from lists for the same class or comparable classes where names from one list were certified under the rule of three ranks, and names from the other list were certified under the rule of three names.
SEC. 10.
Section 19057.4 of the Government Code is repealed.
SEC. 11.
Section 19889 of the Government Code is amended to read:
19889.
It is the purpose of this article to encourage the development and effective use of well-qualified and carefully selected executives. In order to carry out this purpose, the State Personnel Board shall establish by rule a merit system specifically suited to the selection and placement of executive personnel. The department shall be responsible for salary administration, position classification, and for the motivation and training of executive personnel. For the purpose of administering this system there is established herewith a category of civil service appointment called “career executive assignments.” The department shall designate positions of a high administrative and policy influencing character for inclusion in or removal from this category subject to review by the State Personnel Board, except that the department shall not so designate a position in which there is an incumbent already appointed under the provisions of this part governing employees other than career executives.
SEC. 12.
Section 19889.2 of the Government Code is amended to read:
19889.2.
The provisions of this part governing the examination, selection, classification, and tenure of employees in the regular civil service shall not apply to “career executive assignments” unless provided for by State Personnel Board rule. The provisions of this part relating to punitive actions shall apply to all employees serving in career executive assignments, except that termination of a career executive assignment as provided for in Section 19889.3 is not a punitive action. State Personnel Board rules shall, at a minimum, afford all employees whose career executive assignments are terminated by the appointing power a right of appeal to the State Personnel Board for restoration of his or her assignment when he or she alleges that the termination was for reasons prohibited in Chapter 10 (commencing with Section 19680) of Part 2.
SEC. 13.
Section 19889.3 of the Government Code is amended to read:
19889.3.
(a) Eligibility for appointment to positions in the career executive assignment category shall be established as a result of competitive examinations. All candidates shall meet such minimum qualifications as the State Personnel Board may determine are requisite to the performance of high administrative and policy influencing functions.
(b) No person employed in a career executive assignment shall be deemed to acquire as a result of such service any rights to or status in positions governed by the provisions of this part relating to the civil service other than the category of career executive assignment, except as provided by State Personnel Board rule.
SEC. 14.
Section 19889.4 is added to the Government Code, to read:
19889.4.
In accordance with State Personnel Board rules, the following shall apply when an appointing power terminates a career executive assignment:
(a) An employee who at the time of his or her appointment to a career executive assignment was employed by the state and had permanent civil service status shall, if he or she so desires, be reinstated to a civil service position that is (1) not a career executive assignment and (2) that is at least at the same salary level as the last position that he or she held as a permanent or probationary employee. If the employee had completed a minimum of five years of state service, he or she may return to a position that is (1) at substantially the same salary level as the last position in which he or she had permanent or probationary status or (2) at a salary level that is at least two steps lower than that of the career executive position from which the employee is being terminated.
(b) Article 5 (commencing with Section 19140) of Chapter 5 of Part 2 shall apply to an employee who at the time of his or her appointment to a career executive assignment was not employed by the state but who had previously worked for the state and gained permanent civil service status.
(c) (1)
Unless otherwise provided in Article 5 (commencing with Section 18990) of Chapter 4 of Part 2, an
An
employee who at the time of his or her appointment to a career executive assignment was from outside civil service shall
be eligible to compete in any promotional examination for which he or she meets the minimum qualifications as prescribed by the class specification. An employee receiving a passing score shall have his or her name placed on the promotional list resulting from the examination or otherwise gain eligibility for appointment. He or she shall
have the right to request a deferred examination for any
promotional
open
eligible list that
is
his or her appointing power or the department ha
s
in existence at the time
of the termination of
the career executive assignment
is terminated
and for which he or she meets the minimum qualifications
as prescribed by the class specification. For
of the class to which he or she seeks appointment. Whether the employee takes a deferred examination or other open civil service examination, for
purposes of evaluating
whether he or she meets the
minimum
qualifications,
qualifications of the class to which he or she seeks appointment,
related experience gained in a career executive assignment shall be considered as state civil service experience in a comparable class.
Employees may transfer list eligibility between appointing powers in the same manner as provided for civil service employees.
(2) A request for a deferred examination pursuant to paragraph (1) shall not be made later than 10 days after the effective date of the termination of the career executive assignment. The department or its designee shall administer the deferred examination within 30 days of the date of the request.
SEC. 15.
The sum of three hundred thousand dollars ($300,000) is hereby appropriated from the General Fund to the Department of Finance for the purpose of funding the posting on the department’s Internet Web site of all budget requests included as part of the Governor’s Budget.
SEC. 16.
This act is a bill providing for appropriations related to the Budget Bill within the meaning of subdivision (e) of Section 12 of Article IV of the California Constitution, has been identified as related to the budget in the Budget Bill, and shall take effect immediately.

Summary: The California Constitution provides that the civil service includes every officer and employee in the state except as otherwise provided in the Constitution, and existing statutory law, the State Civil Service Act, prescribes a comprehensive civil service personnel system for the state. The act grants eligibility for promotional civil service examinations and career executive assignment examinations to persons who meet certain requirements and minimum qualifications and who are employed by the Legislature, persons who are retired from the United States armed forces, honorably discharged from active military duty with a service-connected disability, or honorably discharged from active duty, or persons who were employees of the executive branch in exempt positions. This bill would revise eligibility standards applicable to people who were employed by the Legislature, people who retired or were discharged from the armed forces, and people who were formerly employed in exempt, executive branch positions, as described above, to permit them, upon request, to obtain civil service appointment list eligibility by taking promotional exams or career executive exams for which they meet minimum qualifications, as specified. The bill would eliminate the requirement that an employee or veteran, in this context, select only one promotional examination in which to compete when multiple examinations are given. Among other things, the bill would also remove a time limit on this eligibility granted to specified former employees of the Legislature and employees of the executive branch in exempt positions. Existing law generally requires that appointments to vacant positions be made by lists. Existing law requires, with specified exceptions, that an appointing power receive the names and addresses of the three persons highest on a promotional employment list for the class in which a position belongs, and if there are fewer than three names, as specified, additional names are provided from the various lists next lower in order of preference. Existing law prescribes requirements for providing names to an appointing power for positions designated as management and specifies a method of ranking eligible candidates in this context. Existing law prescribes requirements for providing names to an appointing power for positions designated as supervisory and not professional, scientific, or administrative, and that are not examined for on an open basis, and specifies a method of ranking eligible candidates in this context. Existing law requires an appointing power to fill a position from the names of the persons provided. This bill would repeal these provisions and make conforming changes. Existing law provides for career executive assignments to encourage the development for well-qualified executives and requires the State Personnel Board to establish, by a rule, a system of merit personnel administration specifically suited to the selection and placement of executive personnel. The State Civil Service Act defines career executive. Existing law requires the State Personnel Board, by rule, to provide that employees whose appointments to career executive assignments are terminated to be reinstated to civil service positions, as specified, at their option. This bill would revise the definition of career executive to eliminate the requirement that the person have permanent status in the civil service. This bill would provide that various provisions relating to personnel examinations don’t apply to career executive assignments unless provided for by rule, as specified. The bill would grant reinstatement rights to employees who at the time of appointment to a career executive assignment were not employed by the state but who had previously worked for it and had gained permanent civil service status. The bill would grant an employee who at the time of his or her appointment to a career executive assignment did not have was from outside civil service status eligibility to compete in any promotional examination for which he or she meets the minimum qualifications as prescribed by the class specification, except as specified, and would provide these employees other rights in this context, including the right to defer examinations and to transfer list eligibility in the same manner as civil service employees. examination for any open eligible list, as specified, in existence at the time of the termination of the career executive assignment for which he or she meets the minimum qualifications of the class to which appointment is sought. The bill would require, in this regard, that related experience gained in a career executive assignment be considered state civil service experience in a comparable class, as specified. The bill would make an appropriation from the General Fund of $300,000 to the Department of Finance for the purpose of funding the posting on the department’s Internet Web site of all budget requests included as part of the Governor’s Budget. This bill would declare that it is to take effect immediately as a bill providing for appropriations related to the Budget Bill.

An act to amend Sections 18546, 18990, 18991, 18992, 18993, 19057.1, 19057.3, 19889, 19889.2, and 19889.3 of, to add Section 19889.4 to, and to repeal Sections 19057, 19057.2, and 19057.4 of, the Government Code, relating to state civil service, and making an appropriation therefor, to take effect immediately, bill related to the budget.