BILL NUMBER: SB 919AMENDED BILL TEXT AMENDED IN SENATE APRIL 21, 2010 INTRODUCED BY Senator Hollingsworth FEBRUARY 1, 2010An act to amend Section 22000 of the Government Code, relating to public retirement.An act to amend Sections 19816.21, 20405.1, 20677, 20677.4, 20677.5, 20681, 20683, 20683.1, 20686, 20687, 20687.2, 20689, 20694, 21 076, 21251.13, 21354.1, 21362.2, 21363.1, 21363.3, 21363.4, 21363.8, 21369.1, 22762, and 22850 of, to add Sections 20037.14, 20037.15, 20037.16, 21354.6, 21363.5, 21363.6, 21363.7, 22871.1, 22875.1, and 22894 to, and to repeal Section 20401.5 of, the Government Code, relating to state employee benefits, making an appropriation therefor, and declaring the urgency thereof, to take effect immediately. LEGISLATIVE COUNSEL'S DIGEST SB 919, as amended, Hollingsworth.Public retirement: social security.State employee benefits. (1) The Public Employees' Retirement Law (PERL) provides a defined benefit to members of the Public Employees' Retirement System (PERS) based on age at retirement, service credit, and final compensation, as those terms are defined. Under PERL employees belong to various membership categories, which include state safety members and state miscellaneous members. Safety members of PERS receive a higher level of benefits and make higher contributions than state miscellaneous members. Under existing law, effective July 1, 2004, specified state employee positions in State Bargaining Unit 7 are classified as state safety members of PERS. Certain managerial, supervisory, or confidential positions, as well as specified officers and employees of the executive branch, by virtue of their relation to State Bargaining Unit 7, are also classified as state safety members of PERS. This bill would provide that state employees in State Bargaining Unit 7 first hired on or after the date the act takes effect, in job classifications formerly subject to state safety membership prior to that date, shall be state miscellaneous members of PERS. The bill would provide that these provisions would apply notwithstanding a certain statutory provision or any provision of an expired memorandum of understanding, as specified. (2) PERL defines final compensation variously based on different member classifications, bargaining units, and dates of hire. PERL generally provides for a definition of final compensation based on the highest annual average compensation earnable by the member during a designated 12-month or 36-month period. This bill would provide that final compensation for a person who becomes a state member of the system on or after the date the act takes effect, and who is represented by State Bargaining Unit 6, 8, 9, or as a peace officer/firefighter member of State Bargaining Unit 7, means the highest annual average compensation earnable by the member during a designated 36-month period. This bill would provide that final compensation for a person who becomes a patrol member of the system on or after July 3, 2010, and who is represented by State Bargaining Unit 5, means the highest annual average compensation earnable by the member during a designated 36-month period. The bill would provide that these provisions would apply notwithstanding a certain statutory provision or any provision of an expired memorandum of understanding, as specified. The bill would also apply this definition of final compensation to a state employee who is excepted from the definition of state employee for purposes of state labor relations, as specified, or an officer or employee of the executive branch of state government who is not a member of the civil service, who is employed by the state for the first time and becomes a state member of the system on or after the date the act takes effect. (3) PERL provides that attorneys in the offices of the Attorney General and the State Public Defender are state miscellaneous members of PERS. PERL authorizes state prosecutors and state public defenders, as defined, to be included within the state safety member classification under PERS, if agreed to in a memorandum of understanding, as specified. This bill would repeal the provisions described above that authorize state prosecutors and state public defenders to be included within the state safety member classification pursuant to an agreement in a memorandum of understanding. (4) PERL prescribes contribution rates for state employees who are state miscellaneous, state industrial, state safety members, patrol members, or state peace officer/firefighter members, among others, in amounts based on percentages of monthly compensation. PERL reduces those contributions by excepting from the definition of monthly compensation specified amounts ranging between $238 and $863, based on member classification, among other things. Member contributions are deposited into the Public Employees' Retirement Fund, which is a continuously appropriated trust fund. This bill would increase these contribution rates for specified state miscellaneous members, state industrial members, state safety members, patrol members, or state peace office/firefighter members by eliminating the exceptions from the definition of monthly compensation of specified amounts ranging between $238 and $863, as described above. The bill would apply these provisions notwithstanding a specified statutory provision or any provision of an expired memorandum of understanding, as specified. By increasing member contributions into a continuously appropriated fund, this bill would make an appropriation. (5) PERL establishes various retirement formulas that apply to specified membership categories. Under PERL, state miscellaneous members, state industrial members, and school members of the First Tier, are generally subject to a retirement formula commonly known as 2% at 55, which, if the member retires at 55 years of age, yields a benefit equal to 2% of the member's final compensation multiplied by the member's years of service credit, as specified. Under PERL state miscellaneous and state industrial members of the Second Tier are generally subject to a retirement formula commonly known as 1.25. Under PERL, patrol members and specified state peace officer/firefighter members are generally subject to a retirement formula commonly known as 3% at 50, while other state peace officer/firefighter members are subject to a 3% at 55 retirement formula. Under PERL, state safety members are generally subject to a 2.5% at 55 retirement formula. This bill would provide that state miscellaneous members, state industrial members, and school members, of the First Tier, who are first employed on and after the date the act takes effect, are subject to a 2% at 65 retirement formula. This bill would provide that state miscellaneous and state industrial members, of the Second Tier, who are first employed after the date the act takes effect are subject to a 0.5% at 65 retirement formula. The bill would provide that patrol members who are first employed on and after July 3, 2010, and state peace officer/firefighter members in State Bargaining Unit 6, 7, or 8 who are first employed on and after the date the act takes effect, are subject to a 2.7% at 57 retirement formula. The bill would provide state peace officer/firefighter members who are first employed on and after the date the act takes effect, who are employed by the schools, the California State University, or the legislative or judicial branch of government, are subject to a 2.5% at 57 retirement formula. The bill would provide that state safety members who are first employed on and after the date the act takes effect, are subject to a 2% at 62 retirement formula. The bill would provide that these provisions would apply notwithstanding a certain statutory provision or any provision of an expired memorandum of understanding, as specified. (6) The Public Employees' Medical and Hospital Care Act (PEMHCA), which is administered by the Board of Administration of the Public Employees' Retirement System, permits an employee or annuitant to enroll in a health benefit plan approved or maintained by the board, as specified. PEMHCA permits the board, without compliance with any provision of law relating to competitive bidding, to enter into contracts with carriers offering health care benefit plans or with entities offering services relating to the administration of health benefit plans. Existing law provides for a monthly appropriation from the General Fund of amounts necessary for the administration of the act and other specified employer contributions. This bill would provide that, on and after the date the act takes effect, another unnamed entity of the state that is authorized by statute is within the definition of the term "board" for the purposes of administrating the PEMHCA. By providing that General Fund moneys that are appropriated monthly may be spent by this additional administrative body, this bill would make an appropriation. The bill would also allow the board, as it would be defined, without compliance with any provision of law relating to competitive bidding, to provide self-funded plans by contracting with entities offering services relating to the administration of health benefit plans. By permitting General Fund moneys appropriated monthly to be spent for a new purpose, this bill would make an appropriation. The bill would permit plan designs and premiums to vary in different areas of the state. (7) PEMHCA requires the state and each employee or annuitant to contribute a portion of the cost of providing the benefit coverage afforded under the approved health benefit plan in which the employee or annuitant is enrolled. Existing law provides that a represented state employee first hired on or after January 1, 1989, shall not be vested for the full employer contribution payable for annuitants unless he or she has 20 years of credited state service, as defined, at the time of retirement, as specified. The employer contribution payable for annuitants with at least 10 years of credited service but less than 20 years of service is prorated based on credited state service at the time of retirement. This bill would, notwithstanding those provisions, prohibit a state, California State University, legislative, or judicial branch employee first hired on or after the date the act takes effect, from receiving any portion of the employer contribution payable for annuitants unless he or she is credited with 25 years of state service, as defined, at the time of retirement. The bill would provide that the employer contribution for these employees who become annuitants or a survivor of that person, be adjusted in the annual Budget Act. The bill would require that those adjustments be based on the principle that the employer contribution for each annuitant shall be the same as the highest employer contribution paid for an active state employee. (8) PEMHCA authorizes a contracting agency, as specified, to elect to become subject to the act, along with the agency's employees and annuitants. Existing law establishes certain minimum rates for contracting employer contributions in this regard and requires that the employer contribution be equal for both employees and annuitants. This bill would permit a contracting agency of PEMHCA and the exclusive representative of employees of that agency to agree through collective bargaining that the employer contribution for employee and annuitant health benefits coverage for employees first hired on or after the effective date of a memorandum of understanding may differ from the employer contribution provided to existing employees and annuitants. The bill would provide that these provisions are not subject to labor negotiation impasse procedures. The bill would require a contracting agency that applies a different contribution rate to employees not represented by a bargaining unit to certify that, with regard to those employees, there is not an applicable memorandum of understanding. The bill would provide that an agreement reached in this regard is not valid if it provides an employer contribution for employees with less than 5 years of credited service with the contracting agency. (9) This bill would declare that it is to take effect immediately as an urgency statute.The Board of Administration of the Public Employees' Retirement system is required, upon application by a public agency, as defined, to execute an agreement with the federal government for the coverage of the public employees of the agency under the federal Social Security Act in conformity with specified regulations.Existing law expresses the Legislature's policy that protection afforded to employees in positions covered by a public retirement system on the date that an agreement for coverage for those employees under the federal Social Security Act is made applicable to the service performed, or to the benefits received, under the retirement system and that those protections are not impaired as a result of the agreement or as a result of a legislative enactment made in anticipation of the agreement.This bill would make technical, nonsubstantive changes to that provision.Vote:majority2/3 . Appropriation:noyes . Fiscal committee:noyes . State-mandated local program: no. THE PEOPLE OF THE STATE OF CALIFORNIA DO ENACT AS FOLLOWS: SECTION 1. Section 19816.21 of the Government Code is amended to read: 19816.21. (a) Notwithstanding Sections 18717 and 19816.20, effective July 1, 2004, the following officers and employees, who are in the following classifications or positions on or after July 1, 2004, and before the date specified in subdivision (d), shall be state safety members of the Public Employees' Retirement System: (1) State employees in State Bargaining Unit 7 (Protective Services and Public Services) whose job classifications are subject to state miscellaneous membership in the Public Employees' Retirement System, unless otherwise excluded by a memorandum of understanding. (2) State employees in managerial, supervisory, or confidential positions that are related to the job classifications described in paragraph (1) and that are subject to state miscellaneous membership in the Public Employees' Retirement System, provided that the Department of Personnel Administration has approved their inclusion. (3) Officers and employees of the executive branch of state government who are not members of the civil service and who are in positions that are related to the job classifications described in paragraph (1) and that are subject to state miscellaneous membership in the Public Employees' Retirement System, provided that the Department of Personnel Administration has approved their inclusion. (b) The department shall notify the Public Employees' Retirement System of the classes or positions that become subject to state safety membership under this section, as prescribed in Section 20405.1. (c) Notwithstanding Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, no state employee in State Bargaining Unit 7 first hired on or after the date specified in subdivision (d), shall be a state safety member. Any job classification for which employees were granted state safety membership pursuant to this section prior to the date specified in subdivision (d), shall be subject to state miscellaneous membership on and after that date, for employees first hired on or after that date. (d) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 2. Section 20037.14 is added to the Government Code , to read: 20037.14. (a) Notwithstanding Sections 20035 and 20037, final compensation for service credit accrued while a state employee who is excepted from the definition of state employee in subdivision (c) of Section 3513, or an officer or employee of the executive branch of state government who is not a member of the civil service, who is employed by the state for the first time and becomes a state member of the system on or after the date specified in subdivision (d), means the highest average annual compensation earnable by the member during the consecutive 36-month period immediately preceding the effective date of his or her retirement, or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. (b) Except as provided in subdivision (c), this section does not apply to: (1) Former state employees who return to state employment on or after the date specified in subdivision (d). (2) State employees hired prior to the date specified in subdivision (d), who were subject to Section 20281.5 during the first 24 months of state employment. (3) State employees hired prior to the date specified in subdivision (d), who become excluded or exempt employees on or after that date. (4) State employees on an approved leave of absence employed before the date specified in subdivision (d), who return to active employment on or after that date. (c) Notwithstanding subdivision (b), this section shall apply to an employee who was subject to Section 20037.6, 20037.7, 20037.8, 20037.9, 20037.10, 20037.11, 20037.12, or 20037.13 from the date of first employment until the date specified in subdivision (d). (d) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 3. Section 20037.15 is added to the Government Code , to read: 20037.15. (a) Notwithstanding Sections 20035 and 20037, final compensation for a person who becomes a state member of the system on or after the date specified in subdivision (f), and is represented by State Bargaining Unit 6, 8, 9, or as a peace officer/firefighter member of State Bargaining Unit 7, means the highest average annual compensation earnable by the member during the consecutive 36-month period immediately preceding the effective date of his or her retirement, or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. (b) This section applies to service credit accrued while a member of State Bargaining Unit 6, 8, 9, or as a peace officer/firefighter member of State Bargaining Unit 7. (c) Except as provided in subdivision (d), this section does not apply to: (1) Former state employees previously employed before the date specified in subdivision (f), who return to state employment on or after that date. (2) State employees hired prior to the date specified in subdivision (f), who were subject to Section 20281.5 during the first 24 months of state employment. (3) State employees hired prior to the date specified in subdivision (f), who become subject to representation by State Bargaining Unit 6, 7, 8, or 9 on or after that date. (4) State employees on an approved leave of absence employed before the date specified in subdivision (f), who return to active employment on or after that date. (d) Notwithstanding subdivision (b), this section shall apply to an employee who was subject to Section 20037.6, 20037.7, 20037.8, 20037.9, 20037.10, 20037.11, 20037.12, or 20037.13 from the date of first employment until the date specified in subdivision (f). (e) Notwithstanding Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section shall control as of the date specified in subdivision (f), without further legislative action. (f) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 4. Section 20037.16 is added to the Government Code , to read: 20037.16. (a) Notwithstanding Sections 20035 and 20037, final compensation for a person who becomes a state member of the system on or after July 3, 2010, and is represented by State Bargaining Unit 5, means the highest average annual compensation earnable by the member during the consecutive 36-month period immediately preceding the effective date of his or her retirement, or the date of his or her last separation from state service if earlier, or during any other period of 36 consecutive months during his or her state membership that the member designates on the application for retirement. (b) This section applies to service credit accrued while a member of State Bargaining Unit 5. (c) Except as provided in subdivision (d), this section does not apply to: (1) Former state employees previously employed before July 3, 2010, who return to state employment on or after July 3, 2010. (2) State employees hired prior to July 3, 2010, who were subject to Section 20281.5 during the first 24 months of state employment. (3) State employees hired prior to July 3, 2010, who become subject to representation by State Bargaining Unit 5, 6, 7, 8, or 9 on or after July 3, 2010. (4) State employees on an approved leave of absence employed before July 3, 2010, who return to active employment on or after July 3, 2010. (d) Notwithstanding subdivision (c), this section shall apply to an employee who is subject to Section 20037.6, 20037.7, 20037.8, 20037.9, 20037.10, 20037.11, 20037.12, or 20037.13 from the date of first employment until July 2, 2010. (e) Notwithstanding Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section shall control as of July 3, 2010, without further legislative action. SEC. 5. Section 20401.5 of the Government Code is repealed.20401.5. (a) "State safety member" also includes state prosecutors and state public defenders. (b) For purposes of this part, "state prosecutor" means a state officer or employee who meets all of the following criteria: (1) He or she is employed by the Department of Justice, Office of the Attorney General. (2) His or her job classification is Chief Assistant Attorney General, Senior Assistant Attorney General, Supervising Deputy Attorney General, Deputy Attorney General, or any other similar classification or title. (3) His or her effective date of retirement is on or after the date the state employer and the bargaining unit elect to be subject to this section as provided in subdivision (f). (c) For purposes of this part, "state public defender" means a state officer or employee who meets all of the following criteria. (1) He or she is employed by the Office of the State Public Defender. (2) His or her job classification is State Public Defender, Senior Deputy State Public Defender, Supervising Deputy State Public Defender, Deputy State Public Defender, or any other similar classification or title. (3) His or her effective date of retirement is on or after the date the state employer and the bargaining unit elect to be subject to this section as provided in subdivision (f). (d) Past state miscellaneous service performed by a state prosecutor or state public defender who becomes a state safety member pursuant to this section shall be converted to state safety service if the past service was rendered in a position that has subsequently been reclassified as a state safety position pursuant to this section. Any unfunded liability resulting from this section shall be paid by the employer. (e) Notwithstanding any other provision of this part, state prosecutors and state public defenders shall be subject to the benefit formula contained in Section 21369.1, or any other benefit formula applicable to state safety members that does not provide benefits greater than those benefits provided under Section 21363.1. (f) This section does not apply to any officers or employees described in subdivision (b) or (c) who are members of State Bargaining Unit 2 unless and until the state employer and the bargaining unit elect to be subject to this section by amendment to or by express provision in a memorandum of understanding entered into between the parties. (g) This section does not apply to any officer or employee described in subdivision (b) or (c) who dies prior to the date the state employer and the bargaining unit elect to be subject to this section as provided in subdivision (f).SEC. 6. Section 20405.1 of the Government Code is amended to read: 20405.1. Notwithstanding Section 20405, this section shall apply to state employees in state bargaining units that have agreed to these provisions in a memorandum of understanding between the state employer and the recognized employee organization, as defined in Section 3513, state employees who are excluded from the definition of "state employee" by subdivision (c) of Section 3513, and officers or employees of the executive branch of state government who are not members of the civil service. (a) On and after the effective date of this section, state safety members shall also include officers and employees whose classifications or positions are found to meet the state safety criteria prescribed in Section 19816.20, provided the Department of Personnel Administration agrees to their inclusion, and officers and employees whose classifications or positions have been designated as subject to state safety membership pursuant to Section 19816.21 before the date specified in subdivision (e) . For employees covered by a collective bargaining agreement, the effective date of safety membership shall be the date on which the department and the employees' exclusive representative reach agreement by memorandum of understanding pursuant to Section 3517.5 or any later date specified in the memorandum of understanding. For employees not covered by a collective bargaining agreement, the Department of Personnel Administration shall determine the effective date of safety membership. (b) The department shall notify the board as new classes or positions become eligible for state safety membership, as specified in subdivision (a), and specify how service prior to the effective date shall be credited. (c) The department shall prepare and submit to the Legislature an annual report that contains the classes or positions that are eligible for state safety membership under this section. (d) Any person designated as a state safety member pursuant to this section may elect, within 90 days of notification by the board, to remain subject to the miscellaneous or industrial service retirement benefit and contribution rate by filing an irrevocable election with the board. A member who so elects shall be subject to the reduced benefit factors specified in Section 21076, 21353, or 21354.1, as applicable, only for service also included in the federal system. (e) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 7. Section 20677 of the Government Code is amended to read: 20677. (a) (1) The normal rate of contribution for a state miscellaneous member employed by the California State University, the University, or the legislative or judicial branch whose service is not included in the federal system shall be 6 percent of the compensation in excess of three hundred seventeen dollars ($317) per month paid that member for service rendered on and after July 1, 1976. (2) The normal rate of contribution for a school member or a local miscellaneous member shall be 7 percent of the compensation paid that member for service rendered on and after June 21, 1971. (3) Notwithstanding paragraph (2), the normal rate of contribution for a local miscellaneous member subject to Section 21354.3, 21354.4, or 21354.5 shall be 8 percent of the compensation paid that member for service rendered on and after the date the member's contracting agency elects to be subject to that section. (4) The normal rate of contribution as established under this subdivision for a local miscellaneous or school member whose service is included in the federal system, and whose service retirement allowance is reduced under Section 21353, 21354, 21354.1, 21354.3, 21354.4, or 21354.5 because of that inclusion, shall be reduced by one-third as applied to compensation not exceeding four hundred dollars ($400) per month for service after the date of execution of the agreement including service in the federal system and prior to termination of the agreement with respect to the coverage group to which he or she belongs. Notwithstanding the foregoing, effective January 1, 2001, the normal rate of contribution for school members whose service is included in the federal system shall not be reduced pursuant to this paragraph as applied to compensation earned on or after that date. (b) (1) The normal rate of contribution for a state miscellaneous member employed by the California State University, the University, or the legislative or judicial branch whose service has been included in the federal system shall be 5 percent of compensation in excess of five hundred thirteen dollars ($513) per month paid that member for service rendered on and after July 1, 1976. (2) The normal rate of contribution for a state miscellaneous or industrial member employed by the California State University, the University, or the legislative or judicial branch, who has elected to be subject to Section 21353.5 and whose service has been included in the federal system, shall be 5 percent of compensation, subject to the reduction specified in paragraph (5) of subdivision (a). (c) Notwithstanding subdivisions (a) and (b) the following shall apply: (1) The normal rate of contribution for a state miscellaneous member employed by the California State University, the University, or the legislative or judicial branch whose service is not included in the federal system shall be 6 percent of the compensation per month paid that member for service rendered on and after the date specified in subdivision (d). (2) The normal rate of contribution for a state miscellaneous member employed by the California State University, the University, or the legislative or judicial branch whose service has been included in the federal system shall be 5 percent of compensation per month paid that member for service rendered on and after the date specified in subdivision (d). (d) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 8. Section 20677.4 of the Government Code is amended to read: 20677.4. (a) (1) The normal rate of contribution for a state miscellaneous or state industrial member whose service is not included in the federal system shall be 6 percent of the compensation in excess of three hundred seventeen dollars ($317) per month paid to that member for service rendered on or after July 1, 1976. (2) The normal rate of contribution for a state miscellaneous or state industrial member, who has elected to be subject to Section 21353.5 and whose service is not included in the federal system, shall be 6 percent of the member's compensation. (3) The normal rate of contribution as established under this subdivision for a member whose service is included in the federal system, and whose service retirement allowance is reduced under Section 21354.1, because of that inclusion, shall be reduced by one-third as applied to compensation not exceeding four hundred dollars ($400) per month for service after the date of execution of the agreement including service in the federal system and prior to termination of the agreement with respect to the coverage group to which he or she belongs. (b) The normal rate of contribution for a state miscellaneous or state industrial member whose service has been included in the federal system shall be 5 percent of compensation in excess of five hundred thirteen dollars ($513) per month paid that member for service rendered on or after July 1, 1976. (c) Notwithstanding subdivisions (a) and (b) the following shall apply: (1) The normal rate of contribution for a state miscellaneous or state industrial member whose service is not included in the federal system shall be 6 percent of the compensation per month paid to that member for service rendered on or after the date specified in subdivision (i). (2) The normal rate of contribution for a state miscellaneous or state industrial member whose service has been included in the federal system shall be 5 percent of compensation per month paid that member for service rendered on or after the date specified in subdivision (i).(c)(d) The normal rate of contribution for a state miscellaneous or state industrial member who is subject to Section 21076 or 21077 shall be 0 percent.(d)(e) A member who elected to become subject to Section 21353 solely for service rendered on or after the effective date of the election, as authorized by subdivision (c) of Section 21070 during the period between November 1, 1988, and October 31, 1989, is not required to make the contributions specified in Section 21073.(e)(f) A member who elects to become subject to Section 21354.1, as applicable, shall contribute at the rate specified in paragraph (1) of subdivision (a) or paragraph (1) of subdivision (b), as determined by the member's status with the federal system, and the rate shall be applied from the first of the month following the date of the election. A member who makes the election shall also contribute for service prior to the date the contribution rate was applied, in the manner specified in Section 21073 or 21073.1, as applicable.(f)(g) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless and until approved by the Legislature in the annual Budget Act.(g)(h) The Director of the Department of Personnel Administration may establish the normal rate of contribution for a state employee who is excepted from the definition of "state employee" in subdivision (c) of Section 3513, and an officer or employee of the executive branch of state government who is not a member of the civil service. The normal rate of contribution shall be the same for all members identified in this subdivision. The contribution rate shall be effective the beginning of the pay period indicated by the Director of the Department of Personnel Administration but shall be no earlier than the beginning of the pay period following the date the board receives notification. (i) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 9. Section 20677.5 of the Government Code is amended to read: 20677.5. (a) Notwithstanding any provisions of Section 20677.4 to the contrary, effective with the beginning of the July 2006 pay period, the normal rate of contribution for state miscellaneous or state industrial members who are subject to Section 21354.1, and are represented by State Bargaining Unit 2, shall be: (1) Seven percent of the compensation in excess of three hundred seventeen dollars ($317) per month paid to a member whose service is not included in the federal system. (2) Six percent of compensation in excess of five hundred thirteen dollars ($513) per month paid to that member whose service has been included in the federal system. (b) Notwithstanding Section 20677.4 or subdivision (a), effective with the beginning of the pay period immediately following the date specified in subdivision (e), the normal rate of contribution for state miscellaneous or state industrial members who are subject to Section 21354.1, and are represented by State Bargaining Unit 2, shall be: (1) Seven percent of the compensation per month paid to a member whose service is not included in the federal system. (2) Six percent of compensation per month paid to that member whose service has been included in the federal system.(b)(c) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless and until approved by the Legislature in the annual Budget Act.(c)(d) The Director of the Department of Personnel Administration may establish the normal rate of contribution for a state employee who is excepted from the definition of "state employee" in subdivision (c) of Section 3513, and an officer or employee of the executive branch of state government who is not a member of the civil service. The normal rate of contribution shall be the same for all members identified in this subdivision. The contribution rate shall be effective the beginning of the pay period indicated by the Director of the Department of Personnel Administration but shall be no earlier than the beginning of the pay period following the date the board receives notification. (e) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 10. Section 20681 of the Government Code is amended to read: 20681. (a) The normal rate of contribution for patrol members shall be 8 percent of the compensation in excess of eight hundred sixty-three dollars ($863) per month paid those members. The Legislature reserves the right to increase the rate of contribution of patrol members as it may find appropriate from time to time. (b) Notwithstanding subdivision (a), the normal rate of contribution for patrol members shall be 8 percent of the compensation per month paid those members for service rendered on or after July 3, 2010. The Legislature reserves the right to increase the rate of contribution of patrol members as it may find appropriate from time to time.(b)(c) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act.(c)(d) The provisions of a memorandum of understanding pertaining to subdivision (a) may be applied to patrol members who either are excluded from the definition of state employees in subdivision (c) of Section 3513, or are nonelected officers or employees of the executive branch of government and are not members of the civil service, provided the Department of Personnel Administration has approved this inclusion and has notified the board. SEC. 11. Section 20683 of the Government Code is amended to read: 20683. (a) For each state member subject to Section 21369 or 21369.1, the normal rate of contribution shall be 6 percent of compensation in excess of three hundred seventeen dollars ($317) per month paid to a member whose service is not included in the federal system or in excess of five hundred thirteen dollars ($513) for one whose service is included in the federal system. If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if those provisions of the memorandum of understanding require the expenditure of funds, those provisions shall not become effective unless approved by the Legislature in the annual Budget Act. (b) Notwithstanding subdivision (a), for each state member subject to Section 21369 or 21369.1, the normal rate of contribution shall be 6 percent of compensation per month paid that member for service rendered on or after the date specified in subdivision (g).(b)(c) The Director of the Department of Personnel Administration may establish the normal rate of contribution for a state employee who is excepted from the definition of "state employee" in subdivision (c) of Section 3513, and an officer or employee of the executive branch of state government who is not a member of the civil service. The normal rate of contribution shall be the same for all members identified in this subdivision. The contribution rate shall be effective the beginning of the pay period indicated by the Director of the Department of Personnel Administration but shall be no earlier than the beginning of the pay period following the date the board receives notification.(c)(d) For each local safety member subject to Section 21369, the normal rate of contribution shall be 7 percent of compensation.(d)(e) The normal rate of contribution as established under this section for a local member whose service is included in the federal system and whose retirement allowance is reduced because of that inclusion shall be reduced by one-third as applied to compensation not exceeding four hundred dollars ($400) per month for service rendered after the date of execution of the modification of the federal-state agreement including those services in the federal system and prior to termination of his or her coverage under the federal system.(e)(f) The operative date of this section with respect to a local safety member shall be the date upon which he or she becomes subject to Section 21369. (g) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 12. Section 20683.1 of the Government Code is amended to read: 20683.1. (a) For each state safety member subject to Section 21369 or 21369.1 who are represented by State Bargaining Unit 2, the normal rate of contribution shall be 7 percent of compensation in excess of three hundred seventeen dollars ($317) per month paid to a member whose service is not included in the federal system beginning with the July 2006 pay period. If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if those provisions of the memorandum of understanding require the expenditure of funds, those provisions shall not become effective unless approved by the Legislature in the annual Budget Act. (b) Notwithstanding subdivision (a), for each state safety member subject to Section 21369 or 21369.1 who is represented by State Bargaining Unit 2, the normal rate of contribution shall be 7 percent of compensation per month paid to a member whose service is not included in the federal system beginning with the pay period immediately following the date specified in subdivision (d).(b)(c) The Director of the Department of Personnel Administration may establish the normal rate of contribution for a state employee who is excepted from the definition of "state employee" in subdivision (c) of Section 3513, and an officer or employee of the executive branch of state government who is not a member of the civil service. The normal rate of contribution shall be the same for all members identified in this subdivision. The contribution rate shall be effective the beginning of the pay period indicated by the Director of the Department of Personnel Administration but shall be no earlier than the beginning of the pay period following the date the board receives notification. (d) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 13. Section 20686 of the Government Code is amended to read: 20686. (a) For each state safety member defined in Section 20401 and whose current and prior service pensions shall be computed pursuant to Section 21373, the normal rate of contribution shall be 8 percent and shall be made only on the compensation in excess of two hundred thirty-eight dollars ($238) per month. The Legislature reserves the right to increase the rate of contribution as it may find appropriate from time to time. No adjustment shall be included in rates adopted under this section as the result of amendments hereto, changing the time at which members may retire or the benefits members shall receive, because of time during which members have contributed at different rates prior to that adoption. (b) Notwithstanding subdivision (a), for each state safety member defined in Section 20401 and whose current and prior service pensions shall be computed pursuant to Section 21373, the normal rate of contribution shall be 8 percent per month beginning with the pay period immediately following the date specified in subdivision (c). The Legislature reserves the right to increase the rate of contribution as it may find appropriate from time to time. (c) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 14. Section 20687 of the Government Code is amended to read: 20687. (a) The normal rate of contribution for state peace officer/firefighter members subject to Section 21363, 21363.1, 21363.3, 21363.4, or 21363.8 shall be 8 percent of the compensation in excess of two hundred thirty-eight dollars ($238) per month paid to those members. (b) Notwithstanding subdivision (a), the normal rate of contribution for state peace officer/firefighter members subject to Section 21363, 21363.1, 21363.3, 21363.4, 21363.5, or 21363.8 shall be 8 percent of the compensation per month paid to those members beginning with the pay period immediately following the date specified in subdivision (e).(b)(c) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5 or pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1, the memorandum of understanding shall be controlling without further legislative action, except that if those provisions of a memorandum of understanding require the expenditure of funds, those provisions shall not become effective unless approved by the Legislature in the annual Budget Act.(c)(d) The Director of the Department of Personnel Administration may establish the normal rate of contribution for a state employee who is excepted from the definition of "state employee" in subdivision (c) of Section 3513, and an officer or employee of the executive branch of state government who is not a member of the civil service. The normal rate of contribution shall be the same for all members identified in this subdivision. The contribution rate shall be effective the beginning of the pay period indicated by the Director of the Department of Personnel Administration but shall be no earlier than the beginning of the pay period following the date the board receives notification. (e) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 15. Section 20687.2 of the Government Code is amended to read: 20687.2. (a) Notwithstanding Section 20687, the normal rate of contribution for state peace officer/firefighter members who are supervisors within the boards and departments of the Youth and Adult Correctional Agency or who are correctional supervisors within the State Department of Mental Health for pay periods beginning after April 30, 2001, shall be 8 percent of compensation in excess of eight hundred sixty-three dollars ($863) per month paid those members. (b) Notwithstanding Section 20687 or subdivision (a), the normal rate of contribution for state peace officer/firefighter members who are supervisors within the boards and departments of the Youth and Adult Correctional Agency or who are correctional supervisors within the State Department of Mental Health for pay periods beginning after the date specified in subdivision (c), shall be 8 percent of compensation per month paid those members. (c) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 16. Section 20689 of the Government Code is amended to read: 20689. (a ) The Legislature reserves the right to increase or otherwise adjust the rates of contribution prescribed in this article in amounts and in a manner it may from time to time find appropriate. (b) If statutory changes made to state employee contribution rates beginning the date specified in subdivision (d), are in conflict with Section 3517.8 or a memorandum of understanding continued in effect pursuant to Section 3517.8, those statutory changes will be controlling as of the date specified in subdivision (d), without further legislative action until or unless a later memorandum of understanding reached pursuant to Section 3517.5 specifically supersedes those changes. (c) If statutory changes made to contribution rates beginning July 3, 2010, for employees in State Bargaining Unit 5 are in conflict with Section 3517.8 or a memorandum of understanding continued in effect pursuant to Section 3517.8, those statutory changes shall be controlling as of July 3, 2010, without further legislative action until or unless a later memorandum of understanding reached pursuant to Section 3517.5 specifically supersedes those changes. (d) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 17. Section 20694 of the Government Code is amended to read: 20694. (a) This section shall apply only to patrol members in State Bargaining Unit 5. (b) The state shall pay all of the normal contributions required to be paid by patrol members pursuant to Section 20681 until June 30, 2001. (c) Notwithstanding Section 20681, effective July 1, 2001, the normal rate of contribution for patrol members shall be 1.5 percent of the compensation in excess of eight hundred sixty-three dollars ($863) per month paid those members. The state shall pay the difference between the normal contributions that would be required to be paid by patrol members pursuant to Section 20681 and the amount paid by those members pursuant to this section. (d) Notwithstanding Section 20681 and subdivision (c), the normal rate of contribution for patrol members shall be 1.5 percent of the compensation per month paid to those members for service rendered on or after July 3, 2010.(d)(e) If the provisions of this section are in conflict with the provisions of a memorandum of understanding reached pursuant to Section 3517.5, the memorandum of understanding shall be controlling without further legislative action, except that if the provisions of a memorandum of understanding require the expenditure of funds, the provisions shall not become effective unless approved by the Legislature in the annual Budget Act. SEC. 18. Section 21076 of the Government Code is amended to read: 21076. (a) (1) The service retirement allowance for a state miscellaneous or state industrial member who has elected the benefits of this section is a pension equal to the fraction of one-hundredth of the member's final compensation set forth opposite the member's age at retirement, taken to the preceding completed quarter year in the following table, multiplied by the member's number of years of state miscellaneous service: Age at Retirement Fraction 50 .5000 50 1/4 .5125 50 1/2 .5250 50 3/4 .5375 51 .5500 51 1/4 .5625 51 1/2 .5750 51 3/4 .5875 52 .6000 52 1/4 .6125 52 1/2 .6250 52 3/4 .6375 53 .6500 53 1/4 .6625 53 1/2 .6750 53 3/4 .6875 54 .7000 54 1/4 .7125 54 1/2 .7250 54 3/4 .7375 55 .7500 55 1/4 .7625 55 1/2 .7750 55 3/4 .7875 56 .8000 56 1/4 .8125 56 1/2 .8250 56 3/4 .8375 57 .8500 57 1/4 .8625 57 1/2 .8750 57 3/4 .8875 58 .9000 58 1/4 .9125 58 1/2 .9250 58 3/4 .9375 59 .9500 59 1/4 .9625 59 1/2 .9750 59 3/4 .9875 60 1.0000 60 1/4 1.0125 60 1/2 1.0250 60 3/4 1.0375 61 1.0500 61 1/4 1.0625 61 1/2 1.0750 61 3/4 1.0875 62 1.1000 62 1/4 1.1125 62 1/2 1.1250 62 3/4 1.1375 63 1.1500 63 1/4 1.1625 63 1/2 1.1750 63 3/4 1.1875 64 1.2000 64 1/4 1.2125 64 1/2 1.2250 64 3/4 1.2375 65 1.2500 (2) This subdivision shall only apply to state miscellaneous or state industrial members who are first employed before the date specified in subdivision (d). (b) (1) Upon attaining the age of 65 years or more, the combined current and prior service pensions for state miscellaneous or state industrial members subject to this section is a pension derived from the contributions of the employer sufficient, when added to the service retirement annuity that is derived from the accumulated normal contributions of the member at the date of his or her retirement, to equal 0.5 percent of his or her final compensation at retirement multiplied by the number of years of service with which he or she is credited at retirement. For state miscellaneous or state industrial members that retire between 50 and 65 years of age, the amount of the service pension shall be calculated as a reduced, prorated fraction of 0.5 percent, as determined by the actuary, of his or her final compensation at retirement amount based on age at retirement and multiplied by the number of years of state miscellaneous or state industrial member service subject to this section with which he or she is credited at retirement. (2) This subdivision shall apply to state miscellaneous or state industrial members who are first employed on or after the date specified in subdivision (d).(b)(c ) This section shall not apply to a National Guard member. (d) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 19. Section 21251.13 of the Government Code is amended to read: 21251.13. (a) Notwithstanding any other provision of law, Sections 21070.5, 21070.6, 21073.1, 21073.7, 21354.1, 21362.2, 21363.1, and 21369.1 and the amendments to Sections 21070, 21071, 21072, 21073, 21073.5, and 21353.5, enacted during the first year of the 1999-2000 Regular Session: (1) Shall not become operative unless the board adopts a resolution that does both of the following: (A) employs, for the June 30, 1998, valuation, 95 percent of the market value of assets of the state employer as the actuarial value of the assets; and (B) amortizes the June 30, 1998, excess assets over a period of 20 years, beginning July 1, 1999. (2) Shall not apply to a state employee, as defined in subdivision (c) of Section 3513, in a bargaining unit unless and until incorporated in a memorandum of understanding, pursuant to Section 3517.5, applicable to that bargaining unit. (3) Shall not apply to excluded employees, as defined in Section 3527, unless the Department of Personnel Administration has approved the application of those provisions to those employees. Notwithstanding any provision of law to the contrary, any approval by the Department of Personnel Administration for the application of these provisions to those excluded employees is irrevocable. On and after July 3, 2010, the Department of Personnel Administration may make Section 21363.5 applicable to excluded employees connected to State Bargaining Unit 5 who are first employed on and after July 3, 2010. On and after the date specified in subdivision (g), the Department of Personnel Administration may make Section 21363.5 applicable to excluded peace officer/firefighters connected with State Bargaining Unit 6, 7, or 8 who are first employed on and after the date specified in subdivision (f). (b) Notwithstanding anything in a memorandum of understanding to the contrary, (1) the benefits provided under the provisions of those sections described in subdivision (a), as added or amended during the first year of the 1999-2000 Regular Session, shall not terminate upon the expiration or termination of the memorandum of understanding, and (2) the only conditions to the operation of the provisions of those sections described in subdivision (a), as added or amended during the first year of the 1999-2000 Regular Session, are contained in this section. (c) Notwithstanding Section 3517.8 or any provision of a memorandum of understanding continued in effect pursuant to Section 3517.8, on and after the date specified in subdivision (f), the retirement formulas defined in Section 21354.1, 21363.1, 21363.3, 21363.4, 21363.8, or 21369.1 shall only apply to state employees who were first employed and subject to that section before that date. Those sections shall not apply to any state employee member first employed on and after the date specified in subdivision (f). (d) Notwithstanding Section 3517.8 or any provision of a memorandum of understanding continued in effect pursuant to Section 3517.8, on and before July 2, 2010, the retirement formula defined in Section 21362.2 shall only apply to state patrol members first employed and subject to that section on or after July 3, 2010.(c)(e) Upon request by the state employer or other entity, or on its own volition, the board may change the amortization period, or take any other action the board deems necessary or appropriate, to mitigate the impact of unforeseen factors that may cause an increase in the employer contribution by the state. Nothing in this section shall be construed to limit the board's authority under Section 17 of Article 16 of the California Constitution. (f) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 20. Section 21354.1 of the Government Code is amended to read: 21354.1. (a) The combined current and prior service pensions for school members, state miscellaneous or state industrial members, or university members who are subject to the provisions of this section is a pension derived from the contributions of the employer sufficient, when added to the service retirement annuity that is derived from the accumulated normal contributions of the member at the date of retirement, to equal the fraction of one-fiftieth of the member's final compensation set forth opposite the member's age at retirement, taken to the preceding completed quarter year, in the following table, multiplied by the number of years of current and prior service, except service in a category of membership other than that of a school member, state miscellaneous or state industrial member, or university member or service covered under this retirement formula with which the member is entitled to be credited at retirement: Age at retirement Fraction 50 ............................... 0.550 50 1/4 ........................... 0.573 50 1/2 ........................... 0.595 50 3/4 ........................... 0.618 51 ............................... 0.640 51 1/4 ........................... 0.663 51 1/2 ........................... 0.685 51 3/4 ........................... 0.708 52 ............................... 0.730 52 1/4 ........................... 0.753 52 1/2 ........................... 0.775 52 3/4 ........................... 0.798 53 ............................... 0.820 53 1/4 ........................... 0.843 53 1/2 ........................... 0.865 53 3/4 ........................... 0.888 54 ............................... 0.910 54 1/4 ........................... 0.933 54 1/2 ........................... 0.955 54 3/4 ........................... 0.978 55 ............................... 1.000 55 1/4 ........................... 1.008 55 1/2 ........................... 1.016 55 3/4 ........................... 1.024 56 ............................... 1.032 56 1/4 ........................... 1.040 56 1/2 ........................... 1.048 56 3/4 ........................... 1.055 57 ............................... 1.063 57 1/4 ........................... 1.071 57 1/2 ........................... 1.079 57 3/4 ........................... 1.086 58 ............................... 1.094 58 1/4 ........................... 1.102 58 1/2 ........................... 1.110 58 3/4 ........................... 1.118 59 ............................... 1.125 59 1/4 ........................... 1.134 59 1/2 ........................... 1.141 59 3/4 ........................... 1.149 60 ............................... 1.157 60 1/4 ........................... 1.165 60 1/2 ........................... 1.173 60 3/4 ........................... 1.180 61 ............................... 1.188 61 1/4 ........................... 1.196 61 1/2 ........................... 1.203 61 3/4 ........................... 1.211 62 ............................... 1.219 62 1/4 ........................... 1.227 62 1/2 ........................... 1.235 62 3/4 ........................... 1.243 63 and over ...................... 1.250 (b) The fraction specified in the above table shall be reduced by one-third as applied to that part of final compensation that does not exceed four hundred dollars ($400) per month for all service of a member any of whose service has been included in the federal system. This subdivision shall not apply to school members whose service is included in the federal system with respect to service performed on or after January 1, 2001. (c) This section shall supersede Section 21353 for all school members, all university members, and all state miscellaneous members, with respect to service rendered for the California State University or the legislative or judicial branch of government, who retire on or after January 1, 2000 , or are first employed before the date specified in subdivision (f). If this provision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (f), without further legislative action . (d) This section shall also supersede Section 21353 for state miscellaneous or state industrial members, for service not subject to subdivision (c), who are employed by the state on or after January 1, 2000 , and before the date specified in subdivision (f) , and who do not elect under Section 21070.5 to be subject to Second Tier benefits. If this provision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this sect ion will be controlling as of the date specified in subdivision (f), without further legislative action. (e) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (f) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 21. Section 21354.6 is added to the Government Code , to read: 21354.6. (a) Upon attaining the age of 65 years or more, the combined current and prior service pensions for state miscellaneous, state industrial, or school members subject to this section is a pension derived from the contributions of the employer sufficient, when added to the service retirement annuity that is derived from the normal contributions of the member at the date of his or her retirement, to equal 2 percent of his or her final compensation at retirement multiplied by the number of years of current and prior service, except service in a category of membership other than state miscellaneous, state industrial, or school member, or service covered under First Tier retirement formula, with which he or she is credited at retirement. For state miscellaneous, state industrial, or school members that retire between 50 and 65 years of age, the amount of the service pension shall be calculated at a reduced, prorated fraction of 2 percent, as determined by the actuary, of his or her final compensation at retirement amount based on age at retirement and multiplied by the number of years of state miscellaneous, state industrial, and school member service subject to this section with which he or she is credited at retirement. (b) The amount computed pursuant to subdivision (a) shall be reduced by one-third as applied to that part of final compensation that does not exceed four hundred dollars ($400) per month for all service of a member any of whose service has been included in the federal system. This reduction shall not apply to a member employed by a contracting agency that enters into a contract after July 1, 1971, and elects not to be subject to this paragraph or with respect to service rendered after the termination of coverage under the federal system with respect to the coverage group to which the member belongs. (c) The improved retirement allowance provided by this section is granted subject to future reduction prior to a member's retirement, by offset of federal system benefits or otherwise, as the Legislature may from time to time deem appropriate because of changes in the federal system benefits. (d) This section shall apply to state miscellaneous, state industrial, and school members first employed on or after the date specified in subdivision (g). If this paragraph is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this paragraph shall be controlling as of the date specified in subdivision (g), without further legislative action. (e) If this section is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (g), without further legislative action. (f) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (g) The changes made by the act adding this section shall be operative on the date the act takes effect. SEC. 22. Section 21362.2 of the Government Code is amended to read: 21362.2. (a) Upon attaining the age of 50 years or more, the combined current and prior service pension for state patrol members and for local safety members with respect to local safety service rendered to a contracting agency that is subject to the provisions of this section is a pension derived from the contributions of the employer sufficient when added to the service retirement annuity that is derived from the accumulated normal contributions of the member at the date of his or her retirement to equal 3 percent of his or her final compensation at retirement, multiplied by the number of years of patrol service or local safety service subject to this section with which he or she is credited at retirement. (b) In no event shall the current service pension and the combined current and prior service pensions under this section for all service to all employers exceed an amount that, when added to the service retirement annuity related to that service, equals 85 percent of final compensation. For state patrol members with respect to service for all state employers under this section, the benefit shall not exceed 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. Where a state or local member has service under this section with both state and local agency employers, the higher maximum shall apply and the additional benefit shall be funded by increasing the member's pension payable with respect to the employer for whom the member performed the service subject to the higher maximum. (c) For patrol members employed by the state on or after January 1, 2000, or are first employed on or before July 2, 2010, this section shall supersede Section 21362. If this provision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of July 3, 2010, without further legislative action. (d) This section shall not apply to state safety or state peace officer/firefighter members. (e) This section shall not apply to any contracting agency nor its employees unless and until the agency elects to be subject to the provisions of this section by amendment to its contract made in the manner prescribed for approval of contracts or, in the case of contracts made after the date this section becomes operative, by express provision in the contract making the contracting agency subject to this section. The operative date of this section for a local safety member shall be the effective date of the amendment to his or her employer's contract electing to be subject to this section. (f) This section shall supersede Section 21362, 21363, 21363.1, 21366, 21368, 21369, or 21370, whichever is then applicable, with respect to local safety members who retire after the date this section becomes applicable to their respective employers. (g) The Legislature reserves, with respect to any member subject to this section, the right to provide for the adjustment of industrial disability retirement allowances because of earnings of a retired person and modification of the conditions and qualifications required for retirement for disability as it may find appropriate because of the earlier ages of service retirement made possible by the benefits under this section. (h) Operation and application of this section is subject to the limitations set forth in Section 21251.13. SEC. 23. Section 21363.1 of the Government Code is amended to read: 21363.1. (a) The combined current and prior service pensions for state peace officer/firefighter members subject to this section with respect to state peace officer/firefighter service, and for local safety members with respect to local safety service rendered to a contracting agency that is subject to this section, is a pension derived from the contributions of the employer sufficient when added to the service retirement annuity that is derived from the accumulated normal contributions of the state peace officer/firefighter member or local safety member at the date of his or her retirement to equal the fraction of 3 percent of his or her final compensation set forth opposite his or her age at retirement taken to the preceding completed quarter year, in the following table, multiplied by the number of years of state peace officer/firefighter service or local safety service subject to this section with which he or she is credited at retirement: Age at Retirement Fraction 50 ........................ .800 50 1/4 .................... .810 50 1/2 .................... .820 50 3/4 .................... .830 51 ....................... .840 51 1/4 .................... .850 51 1/2 .................... .860 51 3/4 .................... .870 52 ....................... .880 52 1/4 .................... .890 52 1/2 .................... .900 52 3/4 .................... .910 53 ....................... .920 53 1/4 .................... .930 53 1/2 .................... .940 53 3/4 .................... .950 54 ....................... .960 54 1/4 .................... .970 54 1/2 .................... .980 54 3/4 .................... .990 55 and over .............. 1.000 (b) In no event shall the current service pension and the combined current and prior service pensions under this section for all service to all employers exceed an amount that, when added to the service retirement annuity related to that service, equals 85 percent of final compensation. For state peace officer/firefighter members with respect to service for all state employers under this section, the benefit shall not exceed 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. Where a state or local member has service under this section with both state and local agency employers, the higher maximum shall apply and the additional benefit shall be funded by increasing the member's pension payable with respect to the employer for whom the member performed the service subject to the higher maximum. (c) This section shall supersede Section 21363 for state peace officer/firefighter members who are employed by the state before the date specified in subdivision (i), with respect to service rendered for the California State University or the legislative or judicial branch of government. (d) This section shall also supersede Section 21363 for state peace officer/firefighter members, for service not subject to subdivision (c), who are employed by the state on or after January 1, 2000 , and before the date specified in subdivision (i ) . (e) This section shall not apply to any contracting agency nor its employees unless and until the agency elects to be subject to the provisions of this section by amendment to its contract made in the manner prescribed for approval of contracts or, in the case of contracts made after the date this section becomes operative, by express provision in the contract making the contracting agency subject to this section. The operative date of this section for a local safety member shall be the effective date of the amendment to his or her employer's contract electing to be subject to this section. (f) This section shall supersede Section 21363, 21366, 21368, 21369, or 21370, whichever is then applicable, with respect to local safety members who retire after the date this section becomes applicable to their respective employers. (g) The Legislature reserves, with respect to any member subject to this section, the right to provide for the adjustment of industrial disability retirement allowances because of earnings of a retired person and modification of the conditions and qualifications required for retirement for disability as it may find appropriate because of the earlier age of service retirement made possible by the benefits under this section.(h) The Legislature reserves the right to subsequently modify or amend this part in order to completely effectuate the intent and purposes of this section and the right to not provide any new comparable advantages if disadvantages to employees result from any modification or amendment.(i)(h ) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (i) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 24. Section 21363.3 of the Government Code is amended to read: 21363.3. (a) The combined current and prior service pensions for state peace officer/firefighter members described in Section 20394 is a pension derived from the contributions of the employer sufficient when added to the service retirement annuity that is derived from the accumulated normal contributions of the member at the date of his or her retirement to equal 3 percent of his or her final compensation at the age of 50 years, multiplied by the number of years of state peace officer/firefighter service subject to this section with which he or she is credited at retirement. (b) In no event shall the current service pension and the combined current and prior service pensions under this section for all service to all employers exceed an amount that, when added to the service retirement annuity related to that service, equals 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. Where a state peace officer/firefighter member has service under this section, or other safety retirement formulas pursuant to this part with state or local agency employers, the higher maximum shall apply and the additional benefit shall be funded by increasing the member's pension payable with respect to the state employer. (c) This section shall apply to state peace officer/firefighter members described in Section 20394 if authorized by, and in accordance with, a memorandum of understanding reached between the Trustees of the California State University and the recognized employee organization pursuant to Chapter 12 (commencing with Section 3560) of Division 4 of Title 1. This section may also apply to sworn peace officer/firefighter members described in Section 20394 in related management positions, if the Trustees of the California State University have approved the application in writing to the Board of Administration of the Public Employees' Retirement System. (d) This section shall supersede Section 21363.1 with respect to peace officer/firefighter service for members employed by the California State University police department on or after the date a memorandum of understanding, or action by the Trustees of the California State University regarding related management positions, makes this section applicable to these members. (e) This section may not prevent a subsequent memorandum of understanding, or subsequent action by the Trustees of the California State University regarding related management positions, from making this section inapplicable to peace officer/firefighter members first employed by the California State University police department on or after a date specified in a subsequent memorandum of understanding, or subsequent action by the Trustees of the California State University regarding related management positions. (f) This section shall not apply to any state peace officer/firefighter member described in Section 20394 who is first employed on or after the date specified in subdivision (g). If this subdivision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (g), without further legislative action. (g) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 25. Section 21363.4 of the Government Code is amended to read: 21363.4. (a) Upon attaining the age of 50 years or more, the combined current and prior service pension for a state peace officer/firefighter member described in subdivision (c) who retires or dies on or after January 1, 2006, is a pension derived from the contributions of the employer sufficient , when added to the service retirement annuity that is derived from the accumulated normal contributions of the member at the date of his or her retirement , to equal 3 percent of his or her final compensation at retirement, multiplied by the number of years of state peace officer/firefighter service, as defined in subdivision (d), subject to this section with which he or she is credited at retirement. (b) For state peace officer/firefighter members, with respect to service for all state employers under this section, the current service pension and the combined current and prior service pension under this section shall not exceed an amount that, when added to the service retirement annuity related to that service, equals 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. (c) For purposes of this section, "state peace officer/firefighter member" means state peace officer/firefighter members under this part who, on or after January 1, 2006, are employed by the state and are members of State Bargaining Unit 6 or State Bargaining Unit 8, or who are first employed by the state before the date specified in subdivision (h), and are members of State Bargaining Unit 6 or State Bargaining Uni t 8, and may include state peace officer/firefighter members in related managerial, supervisory, or confidential positions and officers or employees of the executive branch of state government who are not members of the civil service, provided the Department of Personnel Administration has approved their inclusion in writing to the board. (d) For purposes of this section, "state peace officer/firefighter service" means service performed by a state peace officer/firefighter member while a member of State Bargaining Unit 6 or State Bargaining Unit 8, and may include state peace officer/firefighter service in related managerial, supervisory, or confidential positions or as officers or employees of the executive branch of state government who are not members of the civil service, provided the Department of Personnel Administration has approved their inclusion in writing to the board. (e) This section shall supersede Section 21363 or 21363.1, whichever is applicable, with respect to state peace officer/firefighter members employed on and after January 1, 2006, or who are first employed before the date specified in subdivision (h), and service as defined herein. (f) The Legislature reserves, with respect to any member subject to this section, the right to provide for the adjustment of industrial disability retirement allowances because of earnings of a retired person and modification of the conditions and qualifications required for retirement for disability as it may find appropriate because of the earlier ages of service retirement made possible by the benefits under this section. (g) This section shall not apply to any state peace officer/firefighter member who is first employed by the state on or after the date specified in subdivision (h). If this subdivision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (h), without further legislative action. (h) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 26. Section 21363.5 is added to the Government Code , to read: 21363.5. (a) Upon attaining the age of 57 years or more, the combined current and prior service pensions for state peace officer/firefighter members subject to this section with respect to state peace officer/firefighter service, and patrol members, as described in subdivision (c), with respect to patrol member service, is a pension derived from the contributions of the employer sufficient, when added to the service retirement annuity that is derived from the accumulated normal contributions of the state peace officer/firefighter member or patrol member at the date of his or her retirement, to equal 2.7 percent of his or her final compensation at retirement multiplied by the number of years of state peace officer/firefighter service or patrol service subject to this section with which he or she is credited at retirement. For peace officer/firefighter members and patrol members, described in subdivision (c), that retire between 50 and 57 years of age, the amount of the service pension shall be calculated at a reduced, prorated fraction of 2.7 percent, as determined by the actuary, of his or her final compensation at retirement amount based on age at retirement and multiplied by the number of years of state peace officer/firefighter service or patrol service subject to this section with which he or she is credited at retirement. (b) In no event shall the current service pension and the combined current and prior service pensions under this section for all service to all employers exceed an amount that, when added to the service retirement annuity related to that service, equals 85 percent of final compensation. For state peace officer/firefighter members with respect to service for all state employers under this section, the benefit shall not exceed 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. Where a state or local member has service under this section with both state and local agency employers, the higher maximum shall apply and the additional benefit shall be funded by increasing the member's pension payable with respect to the employer for whom the member performed the service subject to the higher maximum. (c) (1) This section shall apply to state peace officer/firefighter members in State Bargaining Unit 6, 7, or 8 first employed by the state on and after the date specified in subdivision (f). If this paragraph is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this paragraph shall be controlling as of the date specified in subdivision (f), without further legislative action. (2) This section shall also apply to state patrol members first employed by the state on and after July 3, 2010. If this paragraph is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this paragraph shall be controlling as of July 3, 2010, without further legislative action. (d) If this section is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (f), without further legislative action. (e) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (f) The changes made by the act adding this section shall be operative on the date the act takes effect. SEC. 27. Section 21363.6 is added to the Government Code , to read: 21363.6. (a) Upon attaining the age of 57 years or more, the combined current and prior service pensions for peace officer/firefighter members first employed by schools, the California State University, or the legislative or judicial branch of government and subject to this section, is a pension derived from the contributions of the employer sufficient, when added to the service retirement annuity that is derived from the normal contributions of the member at the date of his or her retirement, to equal 2.5 percent of his or her final compensation at retirement multiplied by the number of years of current and prior service, except service in a category of membership other than state miscellaneous, state industrial, or school member, or service covered under First Tier retirement formula, with which he or she is credited at retirement. For peace officer/firefighter members first employed by schools, the California State University, or the legislative or judicial branch of government that retire between 50 and 57 years of age, the amount of the service pension shall be calculated at a reduced, prorated fraction of 2.5 percent, as determined by the actuary, of his or her final compensation at retirement amount based on age at retirement and multiplied by the number of years of peace officer/firefighter service performed for schools, the California State University, or the legislative or judicial branch of government service subject to this section with which he or she is credited at retirement. (b) In no event shall the current service pension and the combined current and prior service pensions under this section for all service to all employers exceed an amount that, when added to the service retirement annuity related to that service, equals 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. Where a state or local member has service under this section with both state and local agency employers, the higher maximum shall apply and the additional benefit, if any, shall be funded by increasing the member' s pension payable with respect to the employer for whom the member performed the service subject to the higher maximum. (c) This section shall apply to peace officer/firefighter members first employed by schools, the California State University, or the legislative or judicial branch of government, on and after the date specified in subdivision (f). If this paragraph is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this paragraph shall be controlling as of the date specified in subdivision (f), without further legislative action. (d) If this section is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (f), without further legislative action. (e) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (f) The changes made by the act adding this section shall be operative on the date the act takes effect. SEC. 28. Section 21363.7 is added to the Government Code , to read: 21363.7. (a) Upon attaining the age of 62 years or more, the combined current and prior service pensions for state safety members subject to this section, is a pension derived from the contributions of the employer sufficient, when added to the service retirement annuity that is derived from the normal contributions of the member at the date of his or her retirement, to equal 2 percent of his or her final compensation at retirement multiplied by the number of years of current and prior service with which he or she is credited at retirement. For state safety members that retire between 50 and 62 years of age, the amount of the service pension shall be calculated at a reduced, prorated fraction of 2 percent, as determined by the actuary, of his or her final compensation at retirement amount based on age at retirement and multiplied by the number of years of state safety member service subject to this section with which he or she is credited at retirement. (b) In no event shall the current service pension and the combined current and prior service pensions under this section for all service to all employers exceed an amount that, when added to the service retirement annuity related to that service, equals 80 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. Where a state or local member has service under this section with both state and local agency employers, the higher maximum shall apply and the additional benefit, if any, shall be funded by increasing the member' s pension payable with respect to the employer for whom the member performed the service subject to the higher maximum. (c) This section shall apply to state safety members first employed on and after the date specified in subdivision (f). If this paragraph is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this paragraph shall be controlling as of the date specified in subdivision (f), without further legislative action. (d) If this section is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (f), without further legislative action. (e) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (f) The changes made by the act adding this section shall be operative on the date the act takes effect. SEC. 29. Section 21363.8 of the Government Code is amended to read: 21363.8. (a) Upon attaining the age of 50 years or more, the combined current and prior service pension for a state peace officer/firefighter member described in subdivision (c) who retires or dies on or after January 1, 2004, is a pension derived from the contributions of the employer sufficient when added to the service retirement annuity that is derived from the accumulated normal contributions of the member at the date of his or her retirement to equal 3 percent of his or her final compensation at retirement, multiplied by the number of years of state peace officer/firefighter service, as defined in subdivision (d), subject to this section with which he or she is credited at retirement. (b) For state peace officer/firefighter members, with respect to service for all state employers under this section, the current service pension and the combined current and prior service pension under this section may not exceed an amount that, when added to the service retirement annuity related to that service, equals 90 percent of final compensation. If the pension relates to service to more than one employer and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. (c) (1) This section shall apply to state peace officer/firefighter members under this part who, on or after January 1, 2004, are employed by the state and are members of State Bargaining Unit 7 , or who are first employed by the state before the date specified in subdivision (h), and are members of State Bargaining Unit 7 . (2) This section may also apply to state peace officer/firefighter members in managerial, supervisory, or confidential positions that are related to the members described in paragraph (1) and to officers or employees of the executive branch of state government who are not members of the civil service and who are in positions that are related to the members described in paragraph (1), if the Department of Personnel Administration has approved their inclusion in writing to the board. (d) (1) For purposes of this section, "state peace officer/firefighter service" means service performed by a state peace officer/firefighter member while a member of State Bargaining Unit 7. (2) That service may include state peace officer/firefighter service in managerial, supervisory, or confidential positions that are related to the members described in paragraph (1) or as officers or employees of the executive branch of state government who are not members of the civil service and who are in positions that are related to the members described in paragraph (1), provided the Department of Personnel Administration has approved their inclusion in writing to the board. (e) This section shall supersede Section 21363 or 21363.1, whichever is applicable, with respect to state peace officer/firefighter members employed on and after January 1, 2004, or who are first employed before the date specified in subdivision (h), subject to this section and state peace officer/firefighter service as defined herein. (f) The Legislature reserves, with respect to any member subject to this section, the right to provide for the adjustment of industrial disability retirement allowances because of earnings of a retired person and modification of the conditions and qualifications required for retirement for disability as it may find appropriate because of the earlier ages of service retirement made possible by the benefits under this section. (g) This section shall not apply to any state peace officer/firefighter member who is first employed by the state on or after the date specified in subdivision (h). If this subdivision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (h), without further legislative action. (h) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 30. Section 21369.1 of the Government Code is amended to read: 21369.1. (a) The combined current and prior service pensions for state safety members subject to this section with respect to state safety service that is subject to this section is a pension derived from the contributions of the employer sufficient when added to the service retirement annuity that is derived from the accumulated normal contributions of the state safety member at the date of his or her retirement to equal the fraction of one-fiftieth of his or her final compensation set forth opposite his or her age at retirement taken to the preceding completed quarter year, in the following table, multiplied by the number of years of state safety service subject to this section with which he or she is credited at retirement. Age at Retirement Fraction 50 ............................ 0.8500 50 1/4 ........................ 0.8625 50 1/2 ........................ 0.8750 50 3/4 ........................ 0.8875 51 ............................ 0.9000 51 1/4 ........................ 0.9125 51 1/2 ........................ 0.9250 51 3/4 ........................ 0.9375 52 ............................ 0.9500 52 1/4 ........................ 0.9625 52 1/2 ........................ 0.9750 52 3/4 ........................ 0.9875 53 ............................ 1.0000 53 1/4 ........................ 1.0320 53 1/2 ........................ 1.0630 53 3/4 ........................ 1.0940 54 ............................ 1.1250 54 1/4 ........................ 1.1570 54 1/2 ........................ 1.1880 54 3/4 ........................ 1.2190 55 and over ................... 1.2500 (b) For state safety members with respect to service for all state employers under this section, the benefit shall not exceed 80 percent of final compensation. If the pension relates to service to more than one employer, and would otherwise exceed that maximum, the pension payable with respect to each employer shall be reduced in the same proportion as the allowance based on service to that employer bears to the total allowance computed as though there were no limit, so that the total of the pensions shall equal the maximum. (c) This section shall supersede Section 21369 for state safety members , employed before the date specified in subdivision (g ), with respect to service rendered for the California State University. (d) This section shall also supersede Section 21369 for state safety members, for service not subject to subdivision (c), who are employed by the state on or after January 1, 2000 , or who are first employed before the date specified in subdivision (g ). If this subdivision is in conflict with Section 3517.8 or any provision of an expired memorandum of understanding continued in effect pursuant to Section 3517.8, this section will be controlling as of the date specified in subdivision (g), without further legislative action . (e) The Legislature reserves, with respect to any member subject to this section, the right to provide for the adjustment of industrial disability retirement allowances because of earnings of a retired person and modification of the conditions and qualifications required for retirement for disability as it may find appropriate because of the earlier age of service retirement made possible by the benefits under this section.(f) The Legislature reserves the right to subsequently modify or amend this part in order to completely effectuate the intent and purposes of this section and the right to not provide any new comparable advantages if disadvantages to employees result from any modification or amendment.(g)(f ) Operation and application of this section are subject to the limitations set forth in Section 21251.13. (g) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 31. Section 22762 of the Government Code is amended to read: 22762. (a) "Board" means the Board of Administration of the Public Employees' Retirement System. On and after t he date specified in subdivision (b), "board" also means another entity of the state that is authorized by statute. (b) The changes made by the act adding this subdivision shall be operative on the date the act takes effect. SEC. 32. Section 22850 of the Government Code is amended to read: 22850. (a) The board may, without compliance with any provision of law relating to competitive bidding, enter into contracts with carriers offering health benefit plans or with entities offering services relating to the administration of health benefit plans or provide self-funded plans by contracting with entities offering services relating to the administration of health benefit plans. Plan designs and premiums may vary in different areas of the state . (b) The board may contract with carriers for health benefit plans or approve health benefit plans offered by employee organizations, provided that the carriers have operated successfully in the hospital and medical care fields prior to the contracting for or approval thereof. The plans may include hospital benefits, surgical benefits, inpatient medical benefits, outpatient benefits, obstetrical benefits, and benefits offered by a bona fide church, sect, denomination, or organization whose principles include healing entirely by prayer or spiritual means. (c) Notwithstanding any other provision of this part, the board may contract with health benefit plans offering unique or specialized health services. (d) The board may administer self-funded or minimum premium health benefit plans. (e) The board may contract for or implement employee cost containment and cost reduction incentive programs that involve the employee, the annuitant, and family members as active participants, along with the carrier and the provider, in a joint effort toward containing and reducing the cost of providing medical and hospital health care services to public employees. In developing these plans, the board, in cooperation with the Department of Personnel Administration, may request proposals from carriers and certified public employee representatives. (f) Notwithstanding any other provision of this part, the board may do any of the following: (1) Contract for, or approve, health benefit plans that charge a contracting agency and its employees and annuitants rates based on regional variations in the costs of health care services. (2) Contract for, or approve, health benefit plans exclusively for the employees and annuitants of contracting agencies. State employees and annuitants may not enroll in these plans. The board may offer health benefit plans exclusively for employees and annuitants of contracting agencies in addition to or in lieu of other health benefit plans offered under this part. The governing body of a contracting agency may elect, upon filing a resolution with the board, to provide those health benefit plans to its employees and annuitants. The resolution shall be subject to mutual agreement between the contracting agency and the recognized employee organization, if any. (g) The board shall approve any employee association health benefit plan that was approved by the board in the 1987-88 contract year or prior, provided the plan continues to meet the minimum standards prescribed by the board. The trustees of an employee association health benefit plan are responsible for providing health benefit plan administration and services to its enrollees. Notwithstanding any other provision of this part, the California Correctional Peace Officer Association Health Benefits Trust may offer different health benefit plan designs with varying premiums in different areas of the state. (h) Irrespective of any other provision of law, the sponsors of a health benefit plan approved under this section may reinsure the operation of the plan with an admitted insurer authorized to write disability insurance, if the premium includes the entire prepayment fee. SEC. 33. Section 22871.1 is added to the Government Code , to read: 22871.1. (a) This section shall only apply to an employee of the state, the California State University, the Legislature, or the judicial branch who is first employed on or after the date specified in subdivision (d). (b) Notwithstanding Section 22871 or any other provision of this article, the employer contribution, with respect to each annuitant to whom this section applies who is retired from service or is a survivor of that person, shall be adjusted by the Legislature in the annual Budget Act. Those adjustments shall be based on the principle that the employer contribution for each annuitant shall be the same as the highest employer contribution paid for an active state employee. (c) An annuitant described in this section shall be subject to the applicable vesting schedule for employees who first become members of the system on or after the date specified in subdivision (d), including, but not limited to, that vesting schedule described in Section 22875.1. (d) The changes made by the act adding this section shall be operative on the date the act takes effect. SEC. 34. Section 22875.1 is added to the Government Code , to read: 22875.1. (a) Notwithstanding Sections 22870, 22871, 22873, 22874, and 22875, a state, California State University, or judicial branch employee who is first employed on or after the date specified in subdivision (e), shall not receive any portion of the employer contribution payable for annuitants unless he or she is credited with 25 years of state service at the time of retirement. (b) This section shall apply only to an employee who retires for service. For purposes of this section, "state service" means service in at least one of the following categories: (1) As an employee of the state, including service as an appointed officer of the state for compensation. (2) As an employee of the California State University. (3) As an employee of the judicial branch, except for all court services rendered by a justice of the Supreme Court or a Court of Appeal, or by a judge of a superior court. (c) This section does not apply to employees of the Legislature, or to service rendered as an elected officer of the state for compensation. (d) For purposes of this section, credited state service includes service to the state for which the employee, pursuant to Section 20281.5, did not receive credit. (e) The changes made by the act adding this section shall be operative on the date the act takes effect. SEC. 35. Section 22894 is added to the Government Code , to read: 22894. (a) A contracting agency and the exclusive representative of employees of that agency may agree through collective bargaining that the employer contribution for employee and annuitant health benefits coverage for employees first hired on or after the effective date of a memorandum of understanding may differ from the employer contribution provided to existing employees and annuitants pursuant to Sections 22890 and 22892. This issue may not be subject to labor negotiation impasse procedures. (b) If the memorandum of understanding establishes a retroactive effective date, any employee who is first hired on or before the date the memorandum of understanding is signed shall retain status as an existing employee for purposes of determining eligibility for postretirement health benefits coverage. (c) If the contracting agency applies a different contribution rate to employees not represented by a bargaining unit, the contracting agency shall certify to the board that, with regard to those employees, there is not an applicable memorandum of understanding. (d) An agreement reached pursuant to subdivision (a) is not valid if it provides an employer contribution for employees with less than five years of credited service with the contracting agency. (e) The contracting agency shall provide, in the manner prescribed by the board, notice of any agreement entered into pursuant to this section and any additional information necessary to implement this section. SEC. 36. This act is an urgency statute necessary for the immediate preservation of the public peace, health, or safety within the meaning of Article IV of the Constitution and shall go into immediate effect. The facts constituting the necessity are: In order to facilitate the orderly administration of public retirement systems and public employee health benefit systems subject to this act at the earliest possible time, it is necessary that this act take effect immediately.SECTION 1.Section 22000 of the Government Code is amended to read: 22000. It is the policy of the Legislature that the protection afforded to employees in positions covered by a retirement system on the date an agreement under this part is made applicable to service performed in those positions, or to periodic benefits received under that retirement system, will not be impaired as a result of making the agreement or as a result of a legislative enactment made in anticipation of the agreement.