FINAL BILL REPORT

HB 91

                                  C 387 L 87

BYRepresentatives H. Sommers,  Hankins, Walk, Sayan, B. Williams, Holm, O'Brien and Winsley; by request of Secretary of State

Changing provisions relating to state employee incentives.

House Committe on State Government

Senate Committee on Governmental Operations

SYNOPSIS AS ENACTED

BACKGROUND:

In 1982, the legislature created the State Productivity Board to administer a revived Employee Suggestion Awards Program (ESP) and a newly created state employee Incentive Pay Program (IPP). The two programs are intended to effect and to reward eligible state employees for cost savings and productivity gains in state agencies.  "State employees" are defined as employees in agencies of the state civil service system and the state higher education personnel system.

Under ESP, the board pays state employees whose money-saving suggestions it accepts 10 percent of the net savings to the benefitting agency, up to $10,000.  Awards for approved employee suggestions under this program must be paid from the appropriated funds of the benefitting agency.

IPP allows employees in state agency work units to receive 25 percent of any savings to the state that their units may have realized.

The legislature initially intended the board to be self-supporting from agency savings.  However, time lags between agency payments of awards and the realization of savings have created a cash flow problem, hampering the achievement of this goal.  In 1985, the legislature enacted provisions permitting an appropriation to supplement agency savings in supporting the board's administration.

The Productivity Board is chaired by the secretary of state, and consists of three appointed persons with experience in administering employee incentives, and the directors of the Department of Personnel, the Higher Education Personnel Board and the Office of Financial Management.

The Productivity Board and its two programs are scheduled for termination on June 30, 1987.

SUMMARY:

The State Productivity Board and its programs, the Employee Suggestion Awards Program (ESP) and the Incentive Pay Program, are continued indefinitely.  The Legislative Budget Committee (LBC) must perform a cost-benefit analysis of both board programs in 1990, with findings reported to appropriate legislative committees in January 1991.  The Incentive Pay Program is renamed the Teamwork Incentive Pay Program.

The definition of "state employees" eligible for awards under both board programs is changed to specifically exclude the following: elected officials; directors of state agencies and institutions, and their confidential secretaries and administrative assistants; and others specifically ruled ineligible by board rules.

Agencies may pay Employee Suggestion Awards Program awards from nonappropriated funds that benefit from approved employee suggestions.  After joint approval by the board and the director of the Office of Financial Management, payments of ESP awards and fees may also be drawn from the General Fund for suggestions that generate new or additional revenue for that fund.

Existing statutory provisions are amended:  the legislature must appropriate revenue from the Department of Personnel (DOP) Service Fund to pay for the board's administrative costs; revenue deposited in the DOP Service Fund may offset amounts appropriated to the board from other sources for administrative costs; and the board must review revenue transfers annually and may reduce or suspend such transfers if they are not needed to meet administrative costs.

Three new members are added to the board:  the director of the Department of General Administration and two members appointed by the governor -- one representing the state civil service system and one representing the higher education personnel system.  The governor and the chairperson of the board are allowed jointly to make ad hoc appointments to the board. Ad hoc members of the Productivity Board shall not have the right to vote on board action.

VOTES ON FINAL PASSAGE:

      House 93   0

      Senate    48     1(Senate amended)

      House 97   0(House concurred)

EFFECTIVE:July 1, 1987

            May 15, 1987 (Section 10)