Second Regular Session Sixty-fifth General Assembly STATE OF COLORADO INTRODUCED LLS NO. 06-0134.01 Ed DeCecco HOUSE BILL 06-1047 HOUSE SPONSORSHIP Vigil, Coleman, Schultheis, and White SENATE SPONSORSHIP Takis, Hanna, and Taylor House Committees Senate Committees State, Veterans, & Military Affairs A BILL FOR AN ACT Concerning the inclusion of performance awards in salaries for purposes of making annual adjustments to the compensation of state employees. Bill Summary (Note: This summary applies to this bill as introduced and does not necessarily reflect any amendments that may be subsequently adopted.) Legislative Audit Committee. Specifies that performance awards are included in salaries for purposes of the annual compensation process used to adjust state employee salaries. Requires the general assembly to appropriate the adjustment necessary to maintain the salary structure and performance awards as a single item for each department in the general appropriation act. Requires the state personnel director to allocate the amount used for adjustments each year based on the appropriation by the general assembly and the annual compensation report. Makes conforming amendments. Be it enacted by the General Assembly of the State of Colorado: SECTION 1. 24-50-104 (1) (a) (II), (4) (a), and (4) (c), Colorado Revised Statutes, are amended to read: 24-50-104. Job evaluation and compensation. (1) Total compensation philosophy. (a) (II) The state personnel director shall establish technically and professionally sound survey methodologies to assess prevailing total compensation practices, levels, and costs. Except as provided in subparagraph (III) of this paragraph (a), for purposes of this paragraph (a), to determine and maintain salaries, which include performance awards, and state contributions for group benefit plans and performance awards that are comparable to public and private employment, the state personnel director shall annually review the results of appropriate surveys by public or private organizations, including surveys by the state personnel director. Any surveys provided on a confidential basis shall not be revealed except to the state auditor's office and the private firm conducting the audit required in paragraph (b) of subsection (4) of this section. The state personnel director shall adopt appropriate procedures to determine and maintain other elements of total compensation, including the payment of incentive awards to employees in the state personnel system. The state personnel director's review and determination of total compensation practices shall not be subject to appeal except as otherwise authorized by law or state personnel director procedures. (4) Annual compensation process. (a) The purpose of the annual compensation process is to determine any necessary adjustments to state employee salaries, which include performance awards, and state contributions for group benefit plans. and performance awards. The annual compensation survey, based on an analysis of surveys by public or private organizations, including surveys by the state personnel director, shall include a fair sample of public and private sector employers and jobs, including areas outside the Denver metropolitan area. In order to establish confidence in the selection of surveys, the state personnel director shall meet and confer in good faith with management and state employee representatives and the total compensation advisory council. (c) (I) By August 1, 2003, and by August 1 of each year thereafter, the state personnel director shall submit the annual compensation report and recommendations and with estimated costs for state employee compensation for the next fiscal year, covering salaries, which include performance awards, and state contributions for group benefit plans and performance awards, to the governor and the joint budget committee of the general assembly. The recommendations shall reflect a consideration of the results of the annual compensation survey, fiscal constraints, the ability to recruit and retain state employees, appropriate adjustments with respect to state employee compensation, and those costs resulting from implementation of section 24-50-110 (1) (a). The recommendations for state contributions for group benefit plans shall specify the annual group benefit plan year established pursuant to section 24-50-604 (1) (m). The annual compensation report shall include the results of the surveys of public or private employers and jobs for prevailing total compensation and the reasons for any deviation from prevailing total compensation in the recommendations submitted to the governor and the joint budget committee. The state personnel director shall also publish such report. (II) For the 2005-06 fiscal year and each fiscal year thereafter, the general assembly shall appropriate the adjustments necessary to maintain the salary structure and performance awards as a single line item for each department in the annual general appropriation act. Based on the appropriation by the general assembly and the annual compensation report, the state personnel director shall allocate the amount for the next fiscal year that is to be used for the adjustments necessary to maintain the salary structure and for performance awards. SECTION 2. Effective date. This act shall take effect at 12:01 a.m. on the day following the expiration of the ninety-day period after final adjournment of the general assembly that is allowed for submitting a referendum petition pursuant to article V, section 1 (3) of the state constitution (August 9, 2006, if adjournment sine die is on May 10, 2006); except that, if a referendum petition is filed against this act or an item, section, or part of this act within such period, then the act, item, section, or part, if approved by the people, shall take effect on the date of the official declaration of the vote thereon by proclamation of the governor.