House Engrossed

 

 

 

 

State of Arizona

House of Representatives

Forty-ninth Legislature

Seventh Special Session

2010

 

 

HOUSE BILL 2003

 

 

 

AN ACT

 

Amending section 15‑257, Arizona Revised Statutes; repealing section 38‑618.01, Arizona Revised Statutes; amending section 38‑619, Arizona Revised Statutes; Amending title 41, chapter 4, article 1, Arizona Revised Statutes, by adding section 41‑707; repealing section 41‑763.03, Arizona Revised Statutes; relating to state budget procedures.

 

 

(TEXT OF BILL BEGINS ON NEXT PAGE)

 



Be it enacted by the Legislature of the State of Arizona:

Section 1.  Section 15-257, Arizona Revised Statutes, is amended to read:

START_STATUTE15-257.  Employee evaluation system

Notwithstanding section 38‑618.01, The superintendent of public instruction may establish a system to evaluate the performance of employees of the department of education. END_STATUTE

Sec. 2.  Repeal

Section 38-618.01, Arizona Revised Statutes, is repealed.

Sec. 3.  Section 38-619, Arizona Revised Statutes, is amended to read:

START_STATUTE38-619.  Performance based incentives program oversight committee; definition

A.  A performance based incentives program oversight committee is established consisting of:

1.  The director of the department of administration or the director's designee.

2.  The executive director of the Arizona board of regents or the executive director's designee.

3.  Two members of the senate who are appointed by the president of the senate.  The appointees shall be members of different political parties.  One of these appointees shall be designated to cochair the committee.

4.  Two members of the house of representatives who are appointed by the speaker of the house of representatives.  The appointees shall be members of different political parties.  One of these appointees shall be designated to cochair the committee.

5.  An agency director who is appointed by the governor.

6.  A representative from the governor's office of equal opportunity who is appointed by the governor.

7.  Two public members who have expertise in compensation analysis.  The speaker of the house of representatives shall appoint one of these members, and the president of the senate shall appoint one of these members.

B.  The committee shall:

1.  Develop and adopt guidelines for a state employee performance based incentives program.  The guidelines shall include agency or university goals that result in cost reduction, increased productivity and improved quality of the delivery of state services or products.

2.  Identify incentives and available resources to provide incentives, such as vacancy savings achieved in each state agency and state university.

3.  Coordinate with state agencies and universities participating in the ongoing performance based incentives program to evaluate the success of the program.

4.  Review agency and university requests to participate in a pilot incentive program or an established performance based incentive program and make recommendations on those requests to the director of the department of administration or the executive director of the Arizona board of regents.

5.  Review performance measures established pursuant to section 38‑618.01 for reasonableness and monitor the effectiveness of the governmental units in meeting these performance measures.

C.  The committee may recommend that the director of the department of administration or the executive director of the Arizona board of regents place an approved program on probationary status or terminate an approved program for failing to meet approved goals and objectives.

D.  For the purposes of this section, "governmental unit" means all agencies, departments, boards and commissions of this state.

Sec. 4.  Title 41, chapter 4, article 1, Arizona Revised Statutes, is amended by adding section 41-707, to read:

START_STATUTE41-707.  Working capital surplus report

On or before December 31 of each year, the director shall submit to the joint legislative budget committee a working capital surplus report associated with meeting the requirements for any tax‑exempt deficit financing agreements entered into on or after January 1, 2009.END_STATUTE

Sec. 5.  Repeal

Section 41‑763.03, Arizona Revised Statutes, is repealed.

Sec. 6.  Federal stimulus funding; reporting

A.  The governor's office of economic recovery shall provide a report to the joint legislative budget committee on or before October 1, 2010 outlining each state agency's receipt of monies from the American recovery and reinvestment act of 2009 (P.L. 111-5) in fiscal years 2009‑2010 and 2010‑2011.

B.  The report shall include the following information for each state agency receiving monies from the American recovery and reinvestment act of 2009 (P.L. 111‑5):

1.  The amount of monies received by each state agency from each federal grant.

2.  The purpose of receiving the additional monies.

3.  How the monies were spent.

4.  The number of personnel funded by the monies and whether they were existing personnel.

5.  The extent to which the monies offset state budget reductions.

C.  The governor's office of economic recovery may meet the requirements of subsection A by notifying the joint legislative budget committee that its report has been posted to the governor's office of economic recovery website, if the information provided through the website meets all of the requirements prescribed in subsection B.

Sec. 7.  Unrestricted federal monies; retroactivity

A.  Any unrestricted federal monies, excluding monies from the American recovery and reinvestment act of 2009 (P.L. 111‑5), received from July 1, 2010 through June 30, 2011 shall be deposited in the state general fund.  The monies shall be used for the payment of essential governmental services.

B.  This section is effective retroactively to from and after June 30, 2010.

Sec. 8.  Performance pay reduction; 2009-2010; 2010-2011; exceptions; definition

A.  In order to implement the expenditure reductions for personnel expenses in the 2010‑2011 general appropriations act, the joint legislative budget committee staff shall determine and the department of administration shall allocate to each state agency, department, board or commission an amount sufficient to decrease the salary rate of each employee by 2.75 per cent plus resulting employee related expenditure reductions effective from and after May 29, 2010.  Where applicable, this reduction shall come from monies previously appropriated for performance pay.  All monies from other appropriated funds and nonfederal nonappropriated funds that are reduced pursuant to this section shall be transferred to the state general fund.

B.  The joint legislative budget committee staff also shall determine and the department of administration shall allocate reductions, as necessary, in total expenditure authority resulting from the salary reductions required by this section.

C.  This section does not apply to the following:

1.  Board and commission members who are paid on a per diem basis.

2.  Employees of universities under the jurisdiction of the Arizona board of regents while the maintenance of effort provisions of the federal education stabilization program are in effect, as required by the American recovery and reinvestment act of 2009 (P.L. 111‑5).

3.  Employees of elected state officers.

D.  For the purposes of this section, "employees of elected state officers" means employees of the house of representatives, the senate, any budget unit that reports to the legislature, the judiciary, the secretary of state, the state treasurer, the attorney general, the corporation commission, the state mine inspector, the Arizona board of regents and the superintendent of public instruction.

Sec. 9.  Mandatory furloughs; 2009-2010; 2010-2011; 2011-2012; terms; exceptions; definitions

A.  In order to the implement the expenditure reductions for personnel expenses in the 2010‑2011 general appropriations act, the joint legislative budget committee staff shall determine and the department of administration shall allocate to each state agency, department, board or commission an amount sufficient to implement the mandatory furloughs pursuant to this section.  All monies from other appropriated funds and nonfederal nonappropriated funds that are reduced pursuant to this section shall be transferred to the state general fund.  The joint legislative budget committee staff also shall determine and the department of administration shall allocate reductions, as necessary, in total expenditure authority resulting from the mandatory furloughs required by this section.

B. Unless otherwise exempted by this section, each state agency, department, board or commission, in addition to any other furlough program implemented by the agency, shall furlough employees as follows:

1.  In fiscal year 2009‑2010:  One day

2.  In fiscal year 2010‑2011:  Six days

3.  In fiscal year 2011‑2012:  Six days

C.  It is the intent of the legislature that the furlough days required by this section be taken no more than once a month and in a way that maximizes utility savings and minimizes customer inconvenience.  The department of administration shall publish a list of the preferred furlough dates that best achieve these goals.  These published dates shall be the presumptive furlough dates for all governmental units unless otherwise approved by the department of administration.  Notwithstanding any other law, for fiscal years 2009‑2010, 2010‑2011 and 2011‑2012, the furlough dates published by the department of administration shall authorize participating state offices to be closed on those dates in order to meet the furlough requirements of this section.

D.  Employees who are subject to the furlough requirement of this section shall be on leave without pay and are not eligible to use any form of paid leave on a designated furlough day unless allowance for the use of paid leave in any specific case is otherwise required by state or federal law.

E.  On or before April 16, 2010, the department of administration shall develop a list of governmental unit functions or services requiring continuous operations throughout the entire week or workweek that would be significantly and negatively affected by the implementation of a furlough program due to either:

1.  The critical nature of the services delivered, such as direct public safety activities or direct care of patients, residents, inmates, detainees or other similar service populations.

2.  Other compelling demands for a governmental unit's functions or services.

F.  Employees whose services are determined to be essential pursuant to subsection E to ensuring that functions or services are delivered safely and effectively are exempt from the furlough requirements of this section.  It is the intent of the legislature to exempt from the furlough requirements of this section only those employees considered absolutely essential for the proper performance and oversight of these essential functions or services.

G.  In lieu of mandatory furlough participation, the director of a governmental unit may elect, on written approval of the director of the department of administration, to reduce employee pay for personnel not otherwise determined exempt pursuant to subsection F within the governmental unit by amounts that, when totaled, equal the savings generated by the furlough days otherwise required in this section.  The director of the department of administration may approve only those written requests in which the director of the governmental unit establishes, to the satisfaction of the director of the department of administration, that the governmental unit's implementation of mandatory furlough days would not be in the best interests of this state and that an equivalent pay reduction program is more appropriate.  The director of the department of administration may approve or disapprove only written requests that fully substitute the required furlough days with an equivalent salary rate and employee related expenditure reduction.  Governmental units shall submit written requests pursuant to this subsection no later than April 16, 2010.

H.  On or before April 30, 2010, the department of administration shall report to the joint legislative budget committee those job classifications and the numbers, by governmental unit, of employees that have been exempted from the furlough program pursuant to this section.  The department shall provide report updates to the joint legislative budget committee whenever changes are made to the exempted job classifications or the numbers, by governmental unit, of exempted employees.  The report shall also include any written requests that were approved to fully substitute the required furlough days with an equivalent salary rate and employee related expenditure reduction pursuant to subsection G.

I.  This section does not apply to:

1.  Employees of universities under the jurisdiction of the Arizona board of regents while the maintenance of effort provisions of the federal education stabilization program are in effect, as required by the American recovery and reinvestment act of 2009 (P.L. 111‑5).

2.  Employees of elected state officers.

J.  For the purposes of this section:

1.  "Employees of elected state officers" means employees of the house of representatives, the senate, any budget unit that reports to the legislature, the judiciary, the secretary of state, the state treasurer, the attorney general, the corporation commission, the state mine inspector, the Arizona board of regents and the superintendent of public instruction.

2.  "Governmental unit" means all agencies, departments, boards and commissions of this state unless otherwise exempt under this section.

Sec. 10.  Reductions; employees of state elected offices; 2009‑2010 and 2010-2011; definitions

A.  In order to implement the expenditure reductions for personnel expenses in the 2010‑2011 general appropriations act, the joint legislative budget committee staff shall determine and the department of administration shall allocate to each state elected office an amount equivalent to a 2.75 per cent salary rate for non-elected employees of a state elected office plus resulting employee related expenditure reductions effective from and after May 29, 2010.  The appropriate officer of each state elected office shall determine how the reduction will be applied, including using vacancy savings, salary reductions and furloughs.  All monies from other appropriated funds and nonfederal nonappropriated funds that are reduced pursuant to this section shall be transferred to the state general fund.

B.  In order to implement the expenditure reductions for personnel expenses in the 2010‑2011 general appropriations act, the joint legislative budget committee staff shall determine and the department of administration shall allocate to each state elected office an amount equivalent to a 2.3 per cent salary rate for non-elected employees of a state elected office plus resulting employee related expenditure reductions effective from and after May 29, 2010 for fiscal years 2009‑2010 and 2010‑2011.  It is the intent of the legislature that the reduction taken under this subsection is the monetary equivalent of the mandatory furlough requirements in this act for state employees who are under the direction of the department of administration and will be continued while the mandatory furloughs are in effect through fiscal year 2011-2012.  The appropriate officer shall determine how the reduction will be applied, including using vacancy savings, salary reductions and furloughs.  All monies from other appropriated funds and nonfederal nonappropriated funds that are reduced pursuant to this section shall be transferred to the state general fund.

C.  This section does not apply to employees of universities under the jurisdiction of the Arizona board of regents.

D.  For the purposes of this section:

1.  "Appropriate officer" means the presiding elected officer of a state elected office or the director of a budget unit that reports to the legislature.

2.  "State elected office" means the house of representatives, the senate, a budget unit that reports to the legislature, the judiciary, the secretary of state, the state treasurer, the attorney general, the corporation commission, the state mine inspector, the Arizona board of regents and the superintendent of public instruction.

Sec. 11.  Required reduction in hours

An agency director may require agency covered employees to work reduced hours in order to comply with any reduction in appropriations for fiscal year 2010‑2011.  The director of the department of administration shall prescribe procedures to implement these reductions.  The director of the department of administration is exempt from the rule making requirements of title 41, chapter 6, Arizona Revised Statutes, for the purposes of prescribing these procedures.

Sec. 12.  Annual budgets

Notwithstanding section 35‑121, Arizona Revised Statutes, for fiscal year 2010‑2011, appropriations for all budget units may be limited to one fiscal year.

Sec. 13.  Calculation adjustments; fiscal year 2010-2011; closing state general fund balance

Notwithstanding any other law, for the purposes of calculating the state general fund balance at the close of fiscal year 2010‑2011, any monies that are appropriated from the state general fund that are exempt from lapsing pursuant to section 35‑190, Arizona Revised Statutes, and that remain unexpended and unencumbered at the close of fiscal year 2010‑2011 shall be included in the closing balance as if the appropriations had lapsed or otherwise reverted to the state general fund.