GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2001
H	1
HOUSE BILL 441

 
 
Short Title:	State Employees Incentive Bonus Program-AB.	()	
Sponsors:	Representatives Gibson; and Barefoot.	
Referred to:	State Personnel.	
March 1, 2001

A BILL TO BE ENTITLED
AN ACT amending the provisions of the state employees incentive bonus program, article 36a of chapter 143 of the General statues.

The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 143‑340(1) reads as rewritten:
"(1)	To establish the State Employee Incentive Bonus Program pursuant to Article 36A of this Chapter, with the authority to adopt all rules necessary to implement the program. The Secretary shall serve ex officio on all program committees and shall designate an executive secretary to administer the program."
SECTION 2.  G.S. 143‑345.20 reads as rewritten:
"§ 143‑345.20.  Definitions.
The following definitions apply in this Article:
(1)	Baseline reversion. – The two‑year historical average of reversions by a State department, agency, or institution.
						
(2a)	Participating agency. – Any State department, agency, or institution, or any local school administrative unit that employs State employees eligible to participate in the State Employees Incentive Benefit Program. The term includes the Community Colleges System, The University of North Carolina and its constituent universities, and charter schools. The term does not include federal or local government agencies.
(2b)	SEIBP. – Acronym for the State Employees Incentive Bonus Program.
(3)	State employee. – Any of the following:
a.	A person who is a contributing member of the Teachers' and State Employees' Retirement System of North Carolina, the Consolidated Judicial Retirement System of North Carolina, or the Optional Program.
b.	A person who receives wages from the State as a part‑time or temporary worker, but is not otherwise a contributing member of one of the retirement programs listed in sub‑subdivision a. of this subdivision."
SECTION 3.  G.S. 143‑345.21 reads as rewritten:
"§ 143‑345.21.  State employee incentive bonus.
(a)	A State employee or team of State employees may receive an incentive bonus or bonuses in reward for suggestions or innovations resulting in monetary savings to the State, increased revenues to the State, or improved quality of services delivered to the public.
	
(b1)	The amount of savings generated by suggestions and innovations shall be determined after a 12-month period of implementation. No incentive bonus shall be paid prior to the expiration of 12 months and payment may be delayed further as reasonably required to ensure that a complete cost implementation cycle is evaluated fully. 
(c)	 Any savings are to be calculated using the actual expenditures for a program, activity, or service compared to the budgeted amount for the same, if an amount has been budgeted for the program, activity, or service. The savings calculation shall include the amount of any reversions in excess of the baseline reversion.  Any savings realized through the State Employee Incentive Bonus Program shall be weighed against continued service to the  public and the assurance that there is not a negative impact State programs.
(d)	If a suggestion or innovation affects a program, activity, or service for which no separate budgeted amount has been made, the State Coordinator, in conjunction with the agency evaluator or agency fiscal officer, or both, for that suggestion or innovation, shall determine the budgetary impact of the suggestion or innovation.
(e)	Federal and local government funds and corporate and foundation grant funds are excluded from the SEIBP.
(f)	The Department of Administration shall establish a SEIBP reserve fund in which all savings for all suggestions shall be deposited as earned. Each participating agency shall be responsible for transferring savings to the SEIBP reserve fund. The funds may be encumbered as needed to ensure payment to the General Fund, to the suggester, and for distribution as required by G.S. 143-345.22. The Department of Administration shall provide a SEIBP reserve fund summary at the close of each fiscal year to the Office of State Budget, Planning, and Management and to the participating agencies. The Office of State Budget, Planning, and Management shall have oversight responsibility for ensuring that the required reversions and transfers are made to the General Fund and that all encumbered funds are accounted for and paid as required by law.
(g)	No distribution of suggester awards shall occur until reversion requirements to the General Fund are met and distributions as required by G.S. 143-345.22 are satisfied and verified by the Office of State Budget, Planning, and Management. When all of the requirements of G.S. 143-345.22 are fulfilled, the Department of Administration shall transfer to the suggester's agency funds required to award the suggester. The suggester's agency shall make the suggestion award and ensure that all taxes and withholding requirements are met.
(h)	Implementation costs may be prorated over a maximum of three years for suggestions or innovations that are capital intensive, involve leading edge technology or involve unconventional processes that require longer than 12 months for implementation. The amount of the average annual savings minus the average annual implementation cost shall be used as the basis for the agency to recommend a suggester award. The State Review Committee shall consult the Office of State Budget, Planning, and Management to make the final award determination in these cases.
(i)	There is established in the Department of Administration a nonreverting fund to be administered by the Office of State Personnel for the training and education of permanent State employees to address specific mission critical needs and objectives. Funds shall be credited from the SEIBP to the fund as provided by this Article.
SECTION 4.  G.S. 143‑345.22 reads as rewritten:
"§ 143‑345.22.  Allocation of incentive bonus funds; nonmonetary recognition.
(a)	If a State employee's suggestion or innovation results in a monetary savings or increased revenue to the State, the funds saved or increased shall be distributed according to the following scale or subject to guidelines as set forth by the funding source:
(1)	Twenty percent (20%) of the annualized savings or increased revenues, up to a maximum of twenty thousand dollars ($20,000) for any one State employee, to constitute gainsharing. If a team of State employees is the suggester, the bonus provided in this subdivision shall be divided equally among the team members, except that no team member  shall receive in excess of twenty thousand dollars ($20,000), nor  shall the team receive an aggregate amount in excess of one hundred thousand dollars ($100,000). These funds shall not revert.
(2)	Thirty percent (30%)  allocated as follows:
a.	Ten percent (10%) to the implementing agency for nonrecurring budget items to be used (i) first by the implementing agency to provide equipment, supplies, training, and limited but appropriate recognition for the division, section, or group responsible for the implementation of the cost saving measure and (ii) second to meet other similar needs within the agency.
b.	Ten percent (10%) to the Department of Administration for augmenting funding for the management and administration of the SEIBP. These funds shall not revert.
c.	Ten percent (10%) to the State employee education and training fund administered by the Office of State Personnel under G.S. 143-342.21(i). These funds shall not revert.
(3)	The remainder to the General Fund for nonrecurring budget items.
(a1)	Of the pool of funds identified in subsection (a) of this section, only the General Fund appropriations shall be subject to reversion, except during declared budget emergencies. Under nonemergency budget conditions, SEIBP funds arising from savings at The University of North Carolina, the Community Colleges System, the Highway Trust Fund, enterprise funds, and receipt supported organizations shall be exempt from the General Fund reversion requirements.
(b)	The budget of a State agency shall not be reduced in the following fiscal year by an amount similar to the monetary savings or increased revenues realized by the State Employee Incentive Bonus Program. The agency budget shall be reduced in subsequent years only if structural or organizational changes are made that warrant the reductions, including the transfer of responsibility for an activity or service to another agency or the elimination of some function of State government.
(c)	If a suggestion or innovation results in improved quality of services to the public or to other State agencies, departments, and institutions, but not in monetary savings to the State, the suggester shall receive a nonmonetary award in the form of a certificate, leave with pay, or other similar recognition."
SECTION 5.  G.S. 143‑345.23 reads as rewritten:
"§ 143‑345.23.  Suggestion and review process; role of agency coordinator and agency evaluator.
(a)	The process for a State employee or team of State employees to submit a cost‑saving or revenue‑increasing proposal shall begin  with the employee or team of employees submitting the suggestion or innovation to an agency  coordinator. The agency coordinator, in conjunction with an agency evaluator, shall review the suggestion or innovation for submission to the State Review Committee established in  G.S. 143-345.24.
(b)	An agency coordinator shall be appointed by the head of each participating agency to serve as liaison between the agency, the suggester, the agency evaluator, and the SEIBP office. The duties of the agency coordinator shall include:
(1)	Serving as an information source and maintaining sufficient forms necessary to submit suggestions.
(2)	 Presenting, in conjunction with the agency evaluator, the  recommendation for an award to the State Review Committee.
(3)	Working in conjunction with the agency evaluator  to process a particular suggestion or  innovation within 180 days, except when there are extenuating circumstances.
An agency may have more than one coordinator if required to provide sufficient services to State employees.
(c)	An agency evaluator shall be designated by the management of the implementing agency to evaluate one or more suggestions. The duties of an agency evaluator shall include:
(1)	 Receiving from the agency coordinator and reviewing within 90 days, when possible, the feasibility and effectiveness of cost‑saving or revenue‑increasing measures suggested by State employees.
(2)	Being knowledgeable of the subject program, activity, or service.
(3)	Determining, in conjunction with the agency fiscal officer, the budgetary impact of a suggestion or innovation.
(4)	Judging impartially both the positive and negative effects of a suggestion or innovation on the current functions of the subject program, activity, or service.

(d)	The  executive secretary shall be responsible for general oversight and coordination of the State Employee Incentive Bonus Program. The State  coordinator shall be an employee of the Department of Administration. The State coordinator shall be responsible for day-to-day SEIBP program management and administration of the technical aspects of the program. The State coordinator shall be an ex officio voting member of the State Review Committee."
SECTION 6.  G.S. 143‑345.24 reads as rewritten:
"§ 143‑345.24.  Incentive Bonus Review Committee.
(a)	The Incentive Bonus Review Committee, hereinafter "State Review Committee", shall consist of nine members, as follows:
(1)	The State Coordinator.
(2)	A representative of the Office of State Budget, Planning, and Management.
(3)	A representative of the Office of State Personnel.
(4)	A representative of The University of North Carolina.
(5)	A representative of the Department of Justice.
(6)	A representative of the Department of Labor.
(7)	One State employee appointed by the Speaker of the House of Representatives.
(8)	One State employee appointed by the President Pro Tempore of the Senate.
(9)	One State employee appointed by the Governor upon the recommendation of the State Employees Association of North Carolina, Inc.
(b)	The duties of the State Review Committee shall include:
(1)	 Receiving from the various agency coordinators recommendations on  suggestions and innovations.
(2)	Determining the impact of a suggestion or innovation on State government services by judging the monetary savings, increased revenues, or improved quality of services generated by a suggestion or innovation.
(3)	Ensuring that the State employee incentive bonus process does not result in a negative impact on services provided to taxpayers by State government.
(c)	All administrative, management, clerical, and other functions and services required by the State Review Committee shall be supplied by the Department of Administration. The Department of Administration and the State Review Committee shall report annually to the Joint Legislative Commission on Governmental Operations on the administration of the State Employee Incentive Bonus Program."
SECTION 7.  G.S. 143‑345.25 reads as rewritten:
"§ 143‑345.25.   Innovations deemed property of the State; effect of decisions regarding bonuses.
(a)	All suggestions or innovations submitted by State employees pursuant to this Article are the property of the  State and all related intellectual property rights shall be assigned to the State. By January 1, 2002, the Office of State Personnel shall establish a policy regarding intellectual property rights that arise from the SEIBP.
(b)	Decisions regarding the award of bonuses by the agency coordinator and the State Review Committee are final and are not subject to review under the contested case procedures of Chapter 150B of the General Statutes."
SECTION 8.  This act becomes effective July 1, 2001, and applies to State employee suggestions and innovations submitted on or after that date.