MISSISSIPPI LEGISLATURE

1999 Regular Session

To: Fees and Salaries of Public Officers; Appropriations

By: Representative Bowles

AN ACT TO ESTABLISH A STATE EMPLOYEE INCENTIVE PROGRAM TO HELP ENCOURAGE STATE EMPLOYEES TO REDUCE STATE EXPENDITURES, INCREASE PRODUCTIVITY AND IMPROVE THE QUALITY OF STATE SERVICES AND TO RECOGNIZE THE CONTRIBUTIONS OF STATE EMPLOYEES IN ACHIEVING THESE GOALS; TO ESTABLISH A STATE AGENCY PRODUCTIVITY PROGRAM TO HELP ENCOURAGE AGENCIES TO INCREASE THEIR PRODUCTIVITY AT LOWER COSTS WITHOUT DECREASING REQUIRED SERVICES AND TO RECOGNIZE AGENCIES THAT ACHIEVE THESE GOALS; TO CREATE THE MISSISSIPPI INCENTIVE AND PRODUCTIVITY COMMITTEE TO ADMINISTER THE PROGRAMS; TO CREATE A SPECIAL FUND IN THE STATE TREASURY TO PROVIDE FUNDS FOR THE PROGRAMS; TO AUTHORIZE MONETARY AWARDS AND CERTIFICATES OF APPRECIATION TO BE MADE TO ELIGIBLE STATE EMPLOYEES WHO MAKE SUGGESTIONS THAT REDUCE STATE EXPENDITURES, INCREASE PRODUCTIVITY OR IMPROVE THE QUALITY OF STATE SERVICES; TO PRESCRIBE CRITERIA FOR ELIGIBLE EMPLOYEES AND ELIGIBLE SUGGESTIONS; TO PROVIDE THAT INITIAL DETERMINATIONS OF ELIGIBILITY SHALL BE MADE BY STATE AGENCY COORDINATORS; TO PRESCRIBE THE PROCEDURE FOR SUBMITTING SUGGESTIONS TO THE COMMITTEE AND FOR EVALUATION OF SUGGESTIONS BY THE COMMITTEE; TO AUTHORIZE PRODUCTIVITY AWARDS TO BE MADE TO STATE AGENCIES THAT OPERATE AT A LOWER COST THAN THE AMOUNT APPROPRIATED TO THE AGENCY WITHOUT A DECREASE IN THE LEVEL OF SERVICES REQUIRED TO BE PROVIDED; TO AMEND SECTION 25-9-134, MISSISSIPPI CODE OF 1972, IN CONFORMITY TO THE PROVISIONS OF THIS ACT; AND FOR RELATED PURPOSES.

BE IT ENACTED BY THE LEGISLATURE OF THE STATE OF MISSISSIPPI:

SECTION 1. This act shall be known as the "Employee Incentive and Agency Productivity Act."

ARTICLE 1.

GENERAL PROVISIONS

SECTION 2. As used in this article, the term "committee" means the Mississippi Incentive and Productivity Committee.

SECTION 3. (1) The Mississippi Incentive and Productivity Committee is created, which shall be composed of:

(a) The Executive Director of the Department of Finance and Administration;

(b) The Director of the Legislative Budget Office;

(c) The State Personnel Director;

(d) The Director of the Office of Budget and Fund Management of the Department of Finance and Administration; and

(e) Three (3) agency heads, one (1) each appointed by the Governor, the Lieutenant Governor, and the Speaker of the House of Representatives.

(2) The Executive Director of the Department of Finance and Administration shall serve as chairman of the committee.

(3) Agency heads shall serve a two-year term, with the term of one (1) member expiring June 30 of each even-numbered year and the term of two (2) members expiring June 30 of each odd-numbered year.

SECTION 4. (1) The committee shall develop policies, procedures, and record-keeping measures to administer this act.

(2) The committee may adopt rules to carry out this act.

(3) The committee may accept contributions or assistance from private institutions and organizations and may request and receive aid and assistance from the Governor's Office and other state governmental bodies to effectively implement this act.

SECTION 5. (1) The committee may hire staff necessary to perform its functions.

(2) The Director of the Office of Budget and Fund Management of the Department of Finance and Administration shall oversee the administration of the state employee incentive program under Article 3 and the agency productivity award program under Article 5.

SECTION 6. Not later than January 1 before each Regular Session of the Legislature, the committee shall report in writing to the Governor, the Lieutenant Governor, and the Speaker of the House of Representatives on the committee's activities, decisions, and recommendations for awards.

SECTION 7. There is created in the State Treasury a special fund to be known as the Mississippi Employee Incentive and Agency Productivity Fund. Monies in the fund shall be appropriated by the Legislature to fund the incentive and productivity awards. The Legislature shall provide sufficient monies for the fund to adequately fund the incentive and productivity awards.

ARTICLE 3.

STATE EMPLOYEE INCENTIVE PROGRAM

SECTION 8. As used in this article:

(a) "Agency coordinator" means a state employee who is designated by the agency head of the employee's agency to act as the liaison between the agency and the committee.

(b) "Award" means a certificate of appreciation or a monetary award that is granted to a state employee in payment for an employee suggestion.

(c) "Certificate of appreciation" means a nonmonetary award that is granted to a state employee in recognition of an employee suggestion.

(d) "Incentive program" means the state employee incentive program.

(e) "State agency" means a department, committee, board, office, or other agency in the executive or judicial branch of government that is created under the constitution or a statute of this state.

(f) "State employee" means an employee of a state agency and does not include an elected official.

SECTION 9. (1) The purposes of the state employee incentive program are to:

(a) Reduce state expenditures, increase productivity, and improve the quality of state services; and

(b) Recognize the contributions made by certain state employees in achieving the goals described in paragraph (a).

(2) An employee may be compensated for a suggestion under the incentive program only as provided by this article.

SECTION 10. (1) The committee may recommend that an award be granted to an eligible state employee who makes a suggestion that:

(a) Reduces state expenditures, increases agency productivity, or improves the quality of state services; and

(b) Is approved and implemented.

(2) An award or transfer of funds must be computed on the net annual actual or projected savings that are certified by the affected state agency and the committee.

(3) An employee is eligible for an award of ten percent (10%) of the net savings, not to exceed Five Thousand Dollars ($5,000.00), if the employee's suggestion results in savings that:

(a) Can be computed using a cost-benefit analysis; and

(b) Equal or exceed One Hundred Dollars ($100.00) after implementation costs.

(4) An employee is not eligible for a monetary award but may be recognized by a certificate of appreciation if the employee's suggestion results in:

(a) Intangible savings or benefits that cannot be computed using a cost-benefit analysis; or

(b) A net annual savings of less than One Hundred Dollars ($100.00).

(5) The committee may also issue a certificate of appreciation to each employee who is granted an award under this article.

SECTION 11. (1) Each state employee is eligible to participate in the incentive program except an employee:

(a) Who has authority to implement the suggesting being made;

(b) Who is on unpaid leave of absence;

(c) Whose job description includes responsibility for cost analysis, efficiency analysis, savings implementation, or other programs in the employee's agency;

(d) Who is involved in or has access to agency research and development information used as the basis of the suggestion; or

(e) Whose job description or routine job duties include developing the type of change in agency operations recommended by the suggestion.

(2) The restrictions in subsection (1) do not prevent any employee from proposing suggestions which are outside of the employee's scope of authority.

SECTION 12. (1) An employee's eligibility under Section 11 of this act is determined on the employee's status when the agency coordinator receives the original employee suggestion.

(2) A former employee is eligible for an award if the employee's suggestion is implemented on or before the second anniversary of the date of final disposition of the suggestion. An award granted to an employee who dies before the award is received shall be paid to the employee's estate.

SECTION 13. (1) To be eligible for consideration under the incentive program an employee suggestion must:

(a) Be given to the agency coordinator;

(b) Be in writing and in the form the committee prescribes;

(c) Be signed by the employee;

(d) Describe the type of cost savings or other benefit the employee foresees if the suggestion is adopted.

(2) An employee is not eligible to receive an award under this article for a suggestion that:

(a) Does not describe a method to achieve the desired savings or benefit;

(b) Proposes an idea under implementation or consideration on the date the suggestion is given to the agency;

(c) Relates only to personnel matters or grievances, including employee classification or compensation;

(d) Proposes a correction for a condition that resulted only because applicable established procedures were not properly followed; or

(e) Proposes implementation of a policy or procedure that the employee's agency adopted before the employee made the suggestion to the agency.

(3) The committee may request that additional information be provided before approving a suggestion.

SECTION 14. (1) If two (2) or more employees submit the same suggestion relating to the same agency, the first suggestion that the agency coordinator receives is eligible for consideration.

(2) If the same suggestion is received on the same day from two (2) or more employees working at different locations, an award granted for the suggestion may be divided equally among the employees.

(3) Two (2) or more employees may submit a joint suggestion. An award granted for the suggestion may be divided equally among the employees.

SECTION 15. Each state agency shall designate an agency coordinator, who shall:

(a) Promote employee participation in the incentive program;

(b) Obtain an impartial evaluation of each employee suggestion;

(c) Promote the implementation of adopted suggestions by the agency;

(d) Monitor the cost savings and other benefits that result from the implementation of an employee suggestion;

(e) File reports with the committee as required by committee rule; and

(f) Arrange and conduct intraagency award ceremonies to recognize agency employees who are granted awards under this article.

SECTION 16. (1) An agency coordinator shall make the initial determination of the eligibility of an employee suggestion or of an agency employee who makes a suggestion.

(2) An employee who is aggrieved by an eligibility determination of an agency coordinator may request a redetermination.

(3) The committee shall adopt rules to govern the redetermination process. An agency coordinator shall give each employee who makes a suggestion a copy of the committee rules relating to redeterminations or reevaluations.

SECTION 17. (1) Not later than thirty (30) days after the date an agency coordinator receives an employee suggestion, the agency coordinator shall send the suggestion and the evaluation of the suggestion to the committee for further analysis and comment regarding implementation. If, after any necessary analysis, the committee determines that the suggestion has merit, the committee shall refer the suggestion to each appropriate state agency for proposed adoption and implementation.

(2) Not later than thirty (30) days after the date the committee makes a final determination on adoption or rejection of an employee suggestion, the committee shall notify each employee in writing who proposed the suggestion of the committee's determination.

(3) Final adoption of an employee suggestion is at the discretion of the head of each agency. Any agency that implements a suggestion proposed under this article shall provide information requested by the committee that is necessary to compute the amount of savings or other benefits derived from the suggestion. If a suggestion is not adopted by an agency, the agency head must submit an explanation in writing to the committee for the rejection. A summary report of these rejections will be included in the committee's annual report to the Governor and the Legislature.

SECTION 18. (1) The committee is the final arbiter of any dispute arising from the implementation of the incentive program or from eligibility determination.

(2) An employee may not appeal a committee decision to a court.

SECTION 19. An employee whose suggestion has been rejected may request a reevaluation of the suggestion if the employee has reasonable grounds to believe that the importance of the suggestion has been overlooked or misinterpreted. The employee must make the request in writing not later than thirty (30) days after the date the employee receives notice of the rejection. The employee shall provide any additional information that the employee considers useful to the reevaluation.

SECTION 20. The committee may grant an award or issue a certificate of appreciation to an employee who makes a suggestion that results in an agency's adopting a policy or procedure before the suggestion is submitted to the agency coordinator if the employee or agency demonstrates to the committee that:

(a) The employee making the suggestion is eligible under this article;

(b) The suggestion is eligible under this article;

(c) The employee proposed a reasonable method of implementation and described the type of savings or benefit foreseen to the agency before agency implementation; and

(d) The agency adopted the policy or procedure as a result of the suggestion.

SECTION 21. The committee shall note a suggestion that requires legislative action. If, as a direct result of an employee suggestion, legislation is passed to implement the suggestion, the committee shall consider the suggestion for an award. The employee's agency coordinator shall notify the committee if implementing legislation is passed.

SECTION 22. On request of an employee who has made a suggestion under this article, the committee to the greatest extent possible shall maintain the employee's confidentiality in the evaluation or award process.

SECTION 23. By submitting a suggestion under this article, an employee agrees with the state that a claim of the employee based on the suggestion, including a patent, copyright, trademark, or other similar claim, is assigned to the state.

SECTION 24. Funding for the incentive awards shall be made from appropriations by the Legislature from monies in the Mississippi Employee Incentive and Agency Productivity Fund.

SECTION 25. As used in this article:

(a) "Division" means a unit of a state agency that:

(i) Has an identifiable self-contained budget; or

(ii) Maintains its financial records under an accounting system that permits the accurate identification of the unit's expenditures and receipts.

(b) "Productivity award" means a cash award given to an eligible state agency or division in recognition of increased productivity. The method of measuring increased productivity is based on the amount lapsed at the end of the fiscal year.

(c) "State agency" means a department, committee, board, office, or other agency in the executive or judicial branch of state government, but does not include:

(i) The Office of the Governor; or

(ii) An institution of higher education.

(d) "Productivity award limit" means twenty-five percent (25%) of an agency's lapse of general funds for the award year.

SECTION 26. (1) The agency head of a state agency may apply to the committee for the recommendation of a productivity award for the agency or one of the agency's divisions. To apply, the agency head must provide the committee with evaluation components developed by the agency or division that permit a quantitative measure of the agency's or division's productivity and performance.

(2) The application must be:

(a) In the form the committee prescribes;

(b) Approved by the agency head;

(c) Submitted not later than thirty (30) days after the last day of the fiscal year.

SECTION 27. (1) The committee may not recommend a productivity award unless the committee determines that:

(a) The state agency or division has demonstrated that during the fiscal year the agency or division operated at a lower cost than the amount appropriated to the agency or division for that fiscal year without a decrease in the level of services required to be rendered by the agency or division during the year; and

(b) The cost of operation that the agency or division claims is not the result, in whole or part, of:

(i) Lowering of the quality of services rendered;

(ii) Reduced pass-through or transfer expenditures;

(iii) Receipts exceeding budgeted amounts;

(iv) Failure to implement a merited promotion, reclassification, or authorized salary increase;

(v) Postponement of a scheduled purchase, repair, or payment of accounts to a future fiscal year;

(vi) Stockpiling of inventory in the preceding fiscal year to reduce requirements during the fiscal year;

(vii) Substitution of nonstate funds for state appropriations; or

(viii) Another practice, event, or device that the committee determines has caused a distortion that results in an inaccurate claimed cost of operation.

(2) The committee shall consider as legitimate savings a reduction in expenditures made possible by, but not limited to, the following:

(a) Reduction in overtime for eligible employees;

(b) Elimination of:

(i) Consultant fees;

(ii) Budgeted positions;

(iii) Unnecessary travel, printing, and mailing; and

(iv) Payments for unnecessary advertising, membership dues, and subscriptions and other nonessential expenditures of the agency's or division's funds;

(c) Increased efficiency in energy use;

(d) Improved office procedures and systems; and

(e) Another practice or device that the committee determines has resulted in verifiable savings.

SECTION 28. If the committee determines that a state agency or division qualifies for a productivity award, the committee shall make such recommendation to the Legislature and notify the agency head.

SECTION 29. Funding for the productivity awards shall be made from appropriations by the Legislature from monies in the Mississippi Employee Incentive and Agency Productivity Fund. The total productivity appropriation to an agency shall not exceed the agency's productivity award limit.

SECTION 30. (1) The committee may award eligible employees of a state agency or division of a state agency an amount not to exceed fifty percent (50%) of the agency's total productivity award limit. The awarded amount shall be distributed in equal shares to the eligible current employees of the agency or division. A monetary award given to an individual employee may not exceed One Thousand Dollars ($1,000.00).

(2) An eligible employee who worked for less than the entire fiscal year or who worked part time is entitled to a proportional share computed on the part of the fiscal year or the average part of the work week, as applicable, that the employee worked.

(3) An employee is eligible under this section if the employee is an hourly, part-time, or temporary employee at the time the award is given.

SECTION 31. If the committee recommends awarding a productivity award to a state agency or division of a state agency, an amount not to exceed the remaining fifty percent (50%) of the agency's productivity award limit may be appropriated to the agency for use by the agency's administration at its discretion, including promoting agency productivity during the subsequent fiscal year.

SECTION 32. (1) At the end of a fiscal year the committee shall compare the expenditures of a state agency or division that participates in the productivity program for the fiscal year with the agency's or division's appropriation for that fiscal year or, if appropriate, the previous years' expenditures. The committee shall determine the amount by which the agency or division has reduced its cost of operations during the fiscal year based on information provided by the agency.

(2) The committee shall make any necessary adjustments in its determination to eliminate distortions. The committee may consider legislative increases in employee compensation and inflationary increases in the cost of services, materials, and supplies. In addition, the committee may consider extraordinary situations in which an agency or division would have had savings, but had to spend the money on an emergency situation.

SECTION 33. (1) The committee shall create in the Mississippi Employee Incentive and Agency Productivity Fund a productivity account for each state agency or division participating in the agency productivity program.

(2) During each fiscal year the agency head of an eligible agency shall monitor agency or division activities and estimate the savings resulting from increased economy and efficiency. At the end of the fiscal year the agency head shall certify the amount of savings with a breakdown of the results to the committee.

SECTION 34. It is the intent of the Legislature that a state agency or division that reduces its cost of operations and qualifies for a productivity award under this article should not be penalized for those savings through a corresponding reduction in appropriations for the subsequent fiscal year.

SECTION 35. Section 25-9-134, Mississippi Code of 1972, is amended as follows:

25-9-134. (1) The Legislature finds (a) that effective state and local governmental institutions are essential in the maintenance and development of public administration in an increasingly complex and interdependent society; (b) that since numerous governmental activities administered by district and local governments are related to a statewide purpose and are financed in part by state funds, a state interest exists in a high caliber of public service in state, district and local governments; and (c) that the quality of public service at all levels of government can be improved by the development of innovative systems of public administration.

(2) The State Personnel Board shall establish a program to encourage and recognize excellence, innovation and diversity on the part of state, district and local governmental entities in the design, execution and management of their own administrative procedures. The State Personnel Board shall establish by rule and regulation procedures for evaluating * * * examples of improvement in public administration, and shall provide for an annual awards program to recognize excellence in government. The board may establish categories of governmental service in order to recognize these achievements.

(3) Nominations for awards under the program of excellence in government prescribed herein shall be made to the State Personnel Director by the governing authority or board of the governmental entity employing the particular individual or group of individuals to be recognized. Such nominations shall be made at such time or times and shall contain such information as the State Personnel Board may prescribe. All nominations shall be submitted by the State Personnel Director to the Governor for review, comments and recommendation at least sixty (60) days prior to final evaluation by the State Personnel Board. An explanation in writing shall be sent to the Governor in the event the State Personnel Board does not concur with recommendations of the Governor in approving or disapproving the nominations.

(4) Nominations for awards under the program of excellence in government shall set forth clear and practicable actions for the improvement of particular aspects of technical or administrative procedure, such as:

(a) Establishment of personnel systems of general or special functional coverage to meet the needs of urban, suburban or rural governmental jurisdictions that may not be able to provide career inducements to well qualified professional, administrative and technical personnel;

(b) Strengthening one or more major areas of public administration, such as personnel recruitment, personnel training, personnel development and payroll administration; or

(c) Increasing intergovernmental cooperation with respect to such matters as personnel interchange, personnel recruiting, manpower utilization and interchange and fringe benefits.

(5) As part of the program of excellence in government, the State Personnel Board shall authorize and establish guidelines for state agencies to accept and present cash awards and bonuses as part of any federally funded employee awards incentive. The guidelines shall authorize state employees to compete for federal incentives and authorize state agencies to accept federal funds earmarked for incentives. All federal awards and bonuses received by state agencies shall not be designated as part of the agency's yearly budget for the purpose of receiving state appropriations.

(6) The State Personnel Board may evaluate a nominee under the program of excellence in government and recommend a monetary award for those suggestions which improve management of technical or administrative procedures resulting in bona fide cost reduction for the state or local governmental entity. Upon approval of such an award by the board, the State Personnel Board may notify the State Fiscal Officer or the local governmental authority, as the case may be, who shall pay the award to the employee upon receipt of the proper requisition.

(7) Sections 1 through 33 of this act shall not be construed as repealing or superseding the program established in this section.

SECTION 36. This act shall take effect and be in force from and after July 1, 1999.