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Governor Brown vetoed SB 1451 by Senator Tony Mendoza (D-Artesia). This proposed law would have allowed the State Compensation Insurance Fund board of directors to appoint additional executive and management positions, not to exceed 1 percent of the number of the Fund’s civil service employees; and would have sunset that authority on December 31, 2021.

The State Fund sponsored SB 1451 claiming it would expand its ability to attract and retain staff with industry experience and specific expertise to continue its business transformation and respond effectively to market demands and changes. State Fund said it needs the ability to compete with the private market for such talent to bolster capabilities throughout the organization

The purpose of the bill according to the legislative analysis was to “give the State Fund board the flexibility to create additional exempt management positions, allowing it the ability to avoid hiring costly and ultimately temporary consultants without having to come to the Legislature to approve each new position. Providing the authority to fill these positions with appointed employees will allow the organization to respond more quickly to the market and accelerate progress through a multi-year business transformation that more effectively supports California’s workers, economy, and businesses by creating more stability in the marketplace.”

SCIF argued that “Because State Fund currently lacks the authority to create additional exempt management positions and to hire employees without seeking specific legislation for each position, it is difficult for the organization to create a meaningful and consistent career path for the recruitment and retention of talent with industry experience and specialized technical skills. Currently, State Fund often fills this gap by hiring temporary contract consultants at costly rates. When consultants leave, knowledge expertise and institutional memory is lost.

There was no opposition to the bill in the legislative record. It was approved by both houses of the California Legislature. However, Governor Brown vetoed the proposed law.

In his veto message he said “This bill grants the State Compensation Insurance Fund Board authority to appoint and set the salary for up to eight additional senior management positions.”

“Under limited circumstances it has been necessary for state agencies to have salary setting authority for certain positions. I’m not convinced this authority is justified in this instance.”