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First Substitute H.B. 251

Representative Bradley M. Daw proposes the following substitute bill:





Chief Sponsor: Bradley M. Daw

Senate Sponsor: Howard A. Stephenson

             8      LONG TITLE
             9      General Description:
             10          This bill requires that the executive director of the Department of Human Resource
             11      Management develop, subject to available funding, manager and supervisor training
             12      and enacts provisions related to an incentive award.
             13      Highlighted Provisions:
             14          This bill:
             15          .    requires that the executive director develop, subject to available funding, manager
             16      and supervisor training;
             17          .    enacts provisions related to an incentive award; and
             18          .    makes technical corrections.
             19      Money Appropriated in this Bill:
             20          None
             21      Other Special Clauses:
             22          None
             23      Utah Code Sections Affected:
             24      AMENDS:
             25          49-20-401, as last amended by Laws of Utah 2008, Chapter 176

             26          67-19-6, as last amended by Laws of Utah 2010, Chapter 249
             27          67-19-12, as last amended by Laws of Utah 2010, Chapter 249
             29      Be it enacted by the Legislature of the state of Utah:
             30          Section 1. Section 49-20-401 is amended to read:
             31           49-20-401. Program -- Powers and duties.
             32          (1) The program shall:
             33          (a) act as a self-insurer of employee benefit plans and administer those plans;
             34          (b) enter into contracts with private insurers or carriers to underwrite employee benefit
             35      plans as considered appropriate by the program;
             36          (c) indemnify employee benefit plans or purchase commercial reinsurance as
             37      considered appropriate by the program;
             38          (d) provide descriptions of all employee benefit plans under this chapter in cooperation
             39      with covered employers;
             40          (e) process claims for all employee benefit plans under this chapter or enter into
             41      contracts, after competitive bids are taken, with other benefit administrators to provide for the
             42      administration of the claims process;
             43          (f) obtain an annual actuarial review of all health and dental benefit plans and a
             44      periodic review of all other employee benefit plans;
             45          (g) consult with the covered employers to evaluate employee benefit plans and develop
             46      recommendations for benefit changes;
             47          (h) annually submit a budget and audited financial statements to the governor and
             48      Legislature which includes total projected benefit costs and administrative costs;
             49          (i) maintain reserves sufficient to liquidate the unrevealed claims liability and other
             50      liabilities of the employee benefit plans as certified by the program's consulting actuary;
             51          (j) submit, in advance, its recommended benefit adjustments for state employees to:
             52          (i) the Legislature; and
             53          (ii) the executive director of the state Department of Human Resource Management;
             54          (k) determine benefits and rates, upon approval of the board, for multiemployer risk
             55      pools, retiree coverage, and conversion coverage;
             56          (l) determine benefits and rates based on the total estimated costs and the employee

             57      premium share established by the Legislature, upon approval of the board, for state employees;
             58          (m) administer benefits and rates, upon ratification of the board, for single employer
             59      risk pools;
             60          (n) request proposals for provider networks or health and dental benefit plans
             61      administered by third party carriers at least once every three years for the purposes of:
             62          (i) stimulating competition for the benefit of covered individuals;
             63          (ii) establishing better geographical distribution of medical care services; and
             64          (iii) providing coverage for both active and retired covered individuals;
             65          (o) offer proposals which meet the criteria specified in a request for proposals and
             66      accepted by the program to active and retired state covered individuals and which may be
             67      offered to active and retired covered individuals of other covered employers at the option of the
             68      covered employer;
             69          (p) perform the same functions established in Subsections (1)(a), (b), (e), and (h) for
             70      the Department of Health if the program provides program benefits to children enrolled in the
             71      Utah Children's Health Insurance Program created in Title 26, Chapter 40, Utah Children's
             72      Health Insurance Act;
             73          (q) establish rules and procedures governing the admission of political subdivisions or
             74      educational institutions and their employees to the program;
             75          (r) contract directly with medical providers to provide services for covered individuals;
             76      and
             77          (s) take additional actions necessary or appropriate to carry out the purposes of this
             78      chapter.
             79          (2) (a) Funds budgeted and expended shall accrue from rates paid by the covered
             80      employers and covered individuals.
             81          (b) Administrative costs shall be approved by the board and reported to the governor
             82      and the Legislature.
             83          (3) The Department of Human Resource Management shall include the benefit
             84      adjustments described in Subsection (1)(j) in the total compensation plan recommended to the
             85      governor required under Subsection 67-19-12 [(6)] (7)(a).
             86          Section 2. Section 67-19-6 is amended to read:
             87           67-19-6. Responsibilities of the executive director.

             88          (1) The executive director shall:
             89          (a) develop, implement, and administer a statewide program of human resource
             90      management that will:
             91          (i) aid in the efficient execution of public policy;
             92          (ii) foster careers in public service for qualified employees; and
             93          (iii) render assistance to state agencies in performing their missions;
             94          (b) design and administer the state pay plan;
             95          (c) design and administer the state classification system and procedures for determining
             96      schedule assignments;
             97          (d) design and administer the state recruitment and selection system;
             98          (e) administer agency human resource practices and ensure compliance with federal
             99      law, state law, and state human resource rules, including equal employment opportunity;
             100          (f) consult with agencies on decisions concerning employee corrective action and
             101      discipline;
             102          (g) maintain central personnel records;
             103          (h) perform those functions necessary to implement this chapter unless otherwise
             104      assigned or prohibited;
             105          (i) perform duties assigned by the governor or statute;
             106          (j) adopt rules for human resource management according to the procedures of Title
             107      63G, Chapter 3, Utah Administrative Rulemaking Act;
             108          (k) establish and maintain a management information system that will furnish the
             109      governor, the Legislature, and agencies with current information on authorized positions,
             110      payroll, and related matters concerning state human resources;
             111          (l) conduct research and planning activities to:
             112          (i) determine and prepare for future state human resource needs;
             113          (ii) develop methods for improving public human resource management; and
             114          (iii) propose needed policy changes to the governor;
             115          (m) study the character, causes, and extent of discrimination in state employment and
             116      develop plans for its elimination through programs consistent with federal and state laws
             117      governing equal employment opportunity in employment;
             118          (n) when requested by counties, municipalities, and other political subdivisions of the

             119      state, provide technical service and advice on human resource management at a charge
             120      determined by the executive director;
             121          (o) establish compensation policies and procedures for early voluntary retirement;
             122          (p) confer with the heads of other agencies about human resource policies and
             123      procedures;
             124          (q) submit an annual report to the governor and the Legislature; and
             125          (r) assist with the development of a vacant position report required under Subsection
             126      63J-1-201 (2)(b)(v).
             127          (2) (a) After consultation with the governor and the heads of other agencies, the
             128      executive director shall establish and coordinate statewide training programs, including and
             129      subject to available funding, the development of manager and supervisor training.
             130          (b) The programs developed under this Subsection (2) shall have application to more
             131      than one agency.
             132          (c) The department may not establish training programs that train employees to
             133      perform highly specialized or technical jobs and tasks.
             134          (3) (a) (i) The department may collect fees for training as authorized by this Subsection
             135      (3).
             136          (ii) Training funded from General Fund appropriations shall be treated as a separate
             137      program within the department budget.
             138          (iii) All money received from fees under this section will be accounted for by the
             139      department as a separate user driven training program.
             140          (iv) The user training program includes the costs of developing, procuring, and
             141      presenting training and development programs, and other associated costs for these programs.
             142          (b) (i) Funds remaining at the end of the fiscal year in the user training program are
             143      nonlapsing.
             144          (ii) Each year, as part of the appropriations process, the Legislature shall review the
             145      amount of nonlapsing funds remaining at the end of the fiscal year and may, by statute, require
             146      the department to lapse a portion of the funds.
             147          Section 3. Section 67-19-12 is amended to read:
             148           67-19-12. State pay plans -- Applicability of section -- Exemptions -- Duties of the
             149      executive director.

             150          (1) (a) This section, and the rules adopted by the department to implement this section,
             151      apply to each career and noncareer employee not specifically exempted under Subsection (2).
             152          (b) If not exempted under Subsection (2), an employee is considered to be in classified
             153      service.
             154          (2) The following employees are exempt from this section:
             155          (a) members of the Legislature and legislative employees;
             156          (b) members of the judiciary and judicial employees;
             157          (c) elected members of the executive branch and employees under schedule AC as
             158      provided under Subsection 67-19-15 (1)(c);
             159          (d) employees of the State Board of Education who are licensed by the State Board of
             160      Education;
             161          (e) officers, faculty, and other employees of state institutions of higher education;
             162          (f) employees in a position that is specified by statute to be exempt from this
             163      Subsection (2);
             164          (g) employees in the Office of the Attorney General;
             165          (h) department heads and other persons appointed by the governor under statute;
             166          (i) exempt employees as provided under Subsection 67-19-15 (1)(l);
             167          (j) employees of the Utah Schools for the Deaf and the Blind who are:
             168          (i) educators as defined by Section 53A-25b-102 ; or
             169          (ii) educational interpreters as classified by the department; and
             170          (k) temporary employees under schedule IN or TL as provided under Subsections
             171      67-19-15 (1)(o) and (p).
             172          (3) (a) The executive director shall prepare, maintain, and revise a position
             173      classification plan for each employee position not exempted under Subsection (2) to provide
             174      equal pay for equal work.
             175          (b) Classification of positions shall be based upon similarity of duties performed and
             176      responsibilities assumed, so that the same job requirements and the same salary range may be
             177      applied equitably to each position in the same class.
             178          (c) The executive director shall allocate or reallocate the position of each employee in
             179      classified service to one of the classes in the classification plan.
             180          (d) (i) The department shall conduct periodic studies and desk audits to provide that the

             181      classification plan remains reasonably current and reflects the duties and responsibilities
             182      assigned to and performed by employees.
             183          (ii) The executive director shall determine the schedule for studies and desk audits after
             184      considering factors such as changes in duties and responsibilities of positions or agency
             185      reorganizations.
             186          (4) (a) With the approval of the governor, the executive director shall develop and
             187      adopt pay plans for each position in classified service.
             188          (b) The executive director shall design each pay plan to achieve, to the degree that
             189      funds permit, comparability of state salary ranges to salary ranges used by private enterprise
             190      and other public employment for similar work.
             191          (c) The executive director shall adhere to the following in developing each pay plan:
             192          (i) Each pay plan shall consist of sufficient salary ranges to permit adequate salary
             193      differential among the various classes of positions in the classification plan.
             194          (ii) (A) The executive director shall assign each class of positions in the classification
             195      plan to a salary range and shall set the width of the salary range to reflect the normal growth
             196      and productivity potential of employees in that class.
             197          (B) The width of the ranges need not be uniform for all classes of positions in the plan.
             198          (iii) (A) The executive director shall issue rules for the administration of pay plans.
             199          [(B) The rules may provide for exceptional performance increases and for a program of
             200      incentive awards for cost-saving suggestions and other commendable acts of employees.]
             201          [(C)] (B) The executive director shall issue rules providing for salary adjustments.
             202          (iv) Merit increases shall be granted, on a uniform and consistent basis in accordance
             203      with appropriations made by the Legislature, to employees who receive a rating of "successful"
             204      or higher in an annual evaluation of their productivity and performance.
             205          (v) By October 31 of each year, the executive director shall submit market
             206      comparability adjustments to the director of the Governor's Office of Planning and Budget for
             207      consideration to be included as part of the affected agency's base budgets.
             208          (vi) By October 31 of each year, the executive director shall recommend a
             209      compensation package to the governor.
             210          (vii) (A) Adjustments shall incorporate the results of a total compensation market
             211      survey of salary ranges and benefits of a reasonable cross section of comparable benchmark

             212      positions in private and public employment in the state.
             213          (B) The survey may also study comparable unusual positions requiring recruitment in
             214      other states.
             215          (C) The executive director may cooperate with other public and private employers in
             216      conducting the survey.
             217          (viii) (A) The executive director shall establish criteria to assure the adequacy and
             218      accuracy of the survey and shall use methods and techniques similar to and consistent with
             219      those used in private sector surveys.
             220          (B) Except as provided under Sections 67-19-12.1 and 67-19-12.3 , the survey shall
             221      include a reasonable cross section of employers.
             222          (C) The executive director may cooperate with or participate in any survey conducted
             223      by other public and private employers.
             224          (D) The executive director shall obtain information for the purpose of constructing the
             225      survey from the Division of Workforce Information and Payment Services and shall include
             226      employer name, number of persons employed by the employer, employer contact information
             227      and job titles, county code, and salary if available.
             228          (E) The department shall acquire and protect the needed records in compliance with the
             229      provisions of Section 35A-4-312 .
             230          (ix) The establishing of a salary range is a nondelegable activity and is not appealable
             231      under the grievance procedures of Sections 67-19-30 through 67-19-32 , Chapter 19a,
             232      Grievance Procedures, or otherwise.
             233          (x) The governor shall:
             234          (A) consider salary adjustments recommended under Subsection (4)(c)(vi) in preparing
             235      the executive budget and shall recommend the method of distributing the adjustments;
             236          (B) submit compensation recommendations to the Legislature; and
             237          (C) support the recommendation with schedules indicating the cost to individual
             238      departments and the source of funds.
             239          (xi) If funding is approved by the Legislature in a general appropriations act, the
             240      adjustments take effect on the July 1 following the enactment.
             241          (5) (a) The executive director shall issue rules for the granting of incentive awards,
             242      including awards for cost saving actions, awards for commendable actions by an employee, or

             243      a market-based award to attract or retain employees.
             244          (b) An agency may not grant a market-based award unless the award is previously
             245      approved by the department.
             246          (c) In accordance with Subsection (5)(b), an agency requesting the department's
             247      approval of a market-based award shall submit a request and documentation, subject to
             248      Subsection (5)(d), to the department.
             249          (d) In the documentation required in Subsection (5)(c), the requesting agency shall
             250      identify for the department:
             251          (i) any benefit the market-based award would provide for the agency, including:
             252          (A) budgetary advantages; or
             253          (B) recruitment advantages;
             254          (ii) a mission critical need to attract or retain unique or hard to find skills in the market;
             255      or
             256          (iii) any other advantage the agency would gain through the utilization of a
             257      market-based award.
             258          [(5)] (6) (a) The executive director shall regularly evaluate the total compensation
             259      program of state employees in the classified service.
             260          (b) The department shall determine if employee benefits are comparable to those
             261      offered by other private and public employers using information from:
             262          (i) the most recent edition of the Employee Benefits Survey Data conducted by the U.S.
             263      Chamber of Commerce Research Center; or
             264          (ii) the most recent edition of a nationally recognized benefits survey.
             265          [(6)] (7) (a) The executive director shall submit proposals for a state employee
             266      compensation plan to the governor by October 31 of each year, setting forth findings and
             267      recommendations affecting employee compensation.
             268          (b) The governor shall consider the executive director's proposals in preparing budget
             269      recommendations for the Legislature.
             270          (c) The governor's budget proposals to the Legislature shall include a specific
             271      recommendation on employee compensation.

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