Authority: Discretionary Inclusion.

A. Transfers from this item may be made to supplement general fund appropriations to state agencies for:

1. Adjusting base rates of pay;

2. Adjusting rates of pay for budgeted overtime of salaried employees;

3. Salary increases for positions with salaries listed elsewhere in this act;

4. Salary increases for locally elected constitutional officers and their employees;

5. Employer costs of employee benefit programs when required by salary-based pay adjustments;

6. Salary increases for local employees supported by the Commonwealth, other than those funded through appropriations to the Department of Education; and

7. Increases in the cost of medical/hospitalization insurance for state employees. ; and

8. Transition payments during the change from semi-monthly to biweekly pay for state employees.

This appropriation provides for the compensation adjustments described in Paragraphs C. through G., of this item, subject to conditions stated in this item.

B. Transfers from this item may be made when appropriations to the state agencies concerned are insufficient for the purposes stated in Paragraph A. of this item, as determined by the Department of Planning and Budget and subject to guidelines prescribed by the Department. Further, the Department of Planning and Budget may transfer appropriations within this item from the second year of the biennium to the first year, when necessary to accomplish the purposes stated in Paragraph A. of this item.

C.1. The base salary of listed employees, as set out in this paragraph, shall be increased by 4.35% on December 1, 1996, by providing for:

a.) Classified employees in positions included in the Commonwealth's graded pay plan, a base structure adjustment of 2.05%, to be compounded by a one-step increase of 2.25% for all such employees, or

b.) All other employees not in positions included in the Commonwealth's graded pay plan, a base structure adjustment of 4.35%.

D. Transfers from this item shall be used to effect the increases provided for in Paragraph C, of this Item, and related increases in employee benefits for:

1. Executive Department

a. Full-time employees of the Executive Department subject to the Virginia Personnel Act;

b. Full-time employees of the Executive Department not subject to the Virginia Personnel Act, except faculty at the institutions of higher education and officials elected by popular vote;

c. Any official whose salary is listed in §4-6.01 of this act;

d. Full-time professional staff of the Governor's Office, the Lieutenant Governor's Office, the Attorney General's Office, Cabinet Secretaries' Offices, including the Deputy Secretaries, the Virginia Liaison Office, and the Secretary of the Commonwealth's Office;

2. Legislative Department

a. Heads of agencies in the Legislative Department;

b. Full-time employees in the Legislative Department, other than officials elected by popular vote;

c. Secretaries and administrative assistants as provided for in Item 1, of this act;

3. Judicial Department

a. Judges and Justices in the Judicial Department;

b. Heads of agencies in the Judicial Department;

c. Full-time employees in the Judicial Department;

4. Independent Agencies

a. Commissioners of the State Corporation Commission and the Virginia Workers' Compensation Commission, the Director of the State Lottery Department and the Director of the Virginia Retirement System;

b. Full-time employees of the State Lottery Department, the State Corporation Commission, the Virginia Workers' Compensation Commission, and the Virginia Retirement System;

5. State-supported Local Employees

a. Locally elected commonwealth's attorneys, and clerks of the circuit court;

b. Full-time employees of locally elected constitutional officers;

c. Members of local electoral boards;

d. Full-time employees of Community Services Boards, Centers for Independent Living, Juvenile Block Grant Employees, Youth Services Prevention positions, and locally administered, independently operated local health departments contracting with the Virginia Department of Health.

E. The base salary of listed employees, as set out in this paragraph, shall be increased by 2.00% on December 1 November 29, 1997. Transfers from this item shall be used to effect this increase and related increases in employee benefits for:

1. Executive Department

a. Full-time employees of the Executive Department subject to the Virginia Personnel Act;

b. Full-time employees of the Executive Department not subject to the Virginia Personnel Act, except faculty at the institutions of higher education and officials elected by popular vote;

c. Any official whose salary is listed in §4-6.01 of this act;

d. Full-time professional staff of the Governor's Office, the Lieutenant Governor's Office, the Attorney General's Office, Cabinet Secretaries' Offices, including the Deputy Secretaries, the Virginia Liaison Office and the Secretary of the Commonwealth's Office;

2. Legislative Department

a. Heads of agencies in the Legislative Department;

b. Full-time employees in the Legislative Department, other than officials elected by popular vote;

c. Secretaries and administrative assistants as provided for in Item 1, of this act;

3. Judicial Department

a. Judges and Justices in the Judicial Department;

b. Heads of agencies in the Judicial Department;

c. Full-time employees in the Judicial Department;

4. Independent Agencies

a. Commissioners of the State Corporation Commission and the Virginia Workers' Compensation Commission, the Director of the State Lottery Department and the Director of the Virginia Retirement System;

b. Full-time employees of the State Lottery Department, the State Corporation Commission, the Virginia Workers' Compensation Commission, and the Virginia Retirement System;

5. State-supported Local Employees

a. Locally elected commonwealth's attorneys, and clerks of the circuit court;

b. Full-time employees of locally elected constitutional officers;

c. General Registrars and members of local electoral boards;

d. Full-time employees of Community Services Boards, Centers for Independent Living, Juvenile Block Grant Employees, Youth Services Prevention positions, and locally administered, independently operated local health departments contracting with the Virginia Department of Health.

F.1. Institutions of higher education may utilize funds provided in their appropriations for faculty salary increases in accordance with their faculty salary plans.

2. Faculty salary increases shall be allotted only to those institutions of higher education which have faculty evaluation plans to include regular, rigorous pre- and post-tenure performance reviews acceptable to the Secretary of Education and the State Council of Higher Education.

G. The Department of Personnel and Training may approve pilot compensation programs within agencies. Such pilot programs shall be funded from existing agency appropriations or from funds provided for increases specified in Paragraph C of this item, or a combination of both. A report on such pilot programs shall be made to the Governor and the Chairmen of the House Appropriations and Senate Finance Committees by October 1, 1997. The Secretary of Administration shall approve any change in compensation plans based on pilot programs, prior to their implementation.

H.1. The heads of agencies in the Legislative and Judicial Departments, the Commissioners of the State Corporation Commission and the Virginia Workers' Compensation Commission, and the Attorney General may, at their discretion, utilize the funds provided pursuant to Paragraphs C., D., E., and J., of this item, to implement the provisions of existing pay plans.

2. The Director of the Virginia Retirement System may, at his discretion, utilize the funds provided pursuant to Paragraphs C., D., E., and J., of this item, to implement the provisions of existing pay plans for investment personnel.

3. The Director of the State Lottery Department may, at his discretion, utilize the funds provided pursuant to Paragraphs C., D., E., and J. of this item to implement the provisions of existing pay plans for sales personnel.

4. The Directors of the University of Virginia Medical Center and the Medical College of Virginia Hospitals Authority may, at their discretion, utilize the funds provided pursuant to Paragraphs C., D., E. and J., of this item, to implement the provisions of existing pay plans.

5. The Executive Director of the Virginia Port Authority may, at his discretion, utilize the funds provided pursuant to Paragraphs C., D., E., and J. of this item to implement the provisions of existing pay plans for marketing personnel.

I. The base rates of pay, and related employee benefits, for wage employees shall be increased as provided for in Paragraphs C., D., and E. hereof. The cost of such increases for wage employees shall be borne by funds appropriated to each agency.

J.1. Except as provided for in paragraph J.3. of this item, agencies supported in whole or in part by nongeneral funds shall pay the proportionate share of costs, from nongeneral fund revenues, of wages, salaries, and employee benefits as stated in this item, subject to rules and regulations prescribed by the Governing Authority.

2. Such nongeneral fund revenues and balances are hereby appropriated for this purpose, including those nongeneral fund revenues available to the colleges and universities, subject to the provisions of §4-2.01.b., of this act.

3. Costs associated with the increases authorized in paragraphs C. and D. of this item, for employees of Educational and General Programs at the institutions of higher education shall be borne by the general fund for the 1996-97 fiscal year.

4. Costs associated with the increases authorized in paragraphs C., D., and E. of this item, for employees of Educational and General Programs at the Virginia Military Institute and the Virginia Community College System shall be borne by the general fund for the 1997-98 fiscal year.

K. Out of the amounts for Compensation Supplements, $2,119,746 the first year and $14,811,441 the second year shall be transferred to state agencies to implement changes made to the contribution rates to the Virginia Retirement System. The effective contribution rates are as follows:

L. The Director of the Department of Planning and Budget is hereby directed to withhold from agency appropriations amounts appropriated from the general fund for group life insurance contributions in excess of the amounts required. A "premium holiday" will be effected for fiscal year 1997 and members of the Virginia Retirement System will not make a contribution. For fiscal year 1998, the contribution rate will be 0.35 percent of payroll. The general fund reduction to be achieved by this action is estimated at $5,308,732 in the first year.

M.1. During a transition period from January to August, 1997, the semi-monthly pay dates for all state agencies shall be progressively advanced by one pay period, according to the schedule set out in this paragraph:

2. The general fund appropriation for the pay periods of June 16 to June 30, 1997, and June 16 to June 30, 1998 shall be utilized to offset the cost of the salary increases authorized in paragraphs C., D. and E. of this item.

3. Following the transition period required by paragraph M.1. of this item, normal pay dates shall remain one semi-monthly pay period in arrears, and the normal pay dates shall be the first and sixteenth of each month. Should such normal pay date fall on a weekend, or official state holiday, employees shall be paid on the last business day preceding such normal pay date.

4. The Comptroller may make such adjustments as he deems necessary, in keeping with the purposes of this paragraph, in the pay dates of employees paid on alternative pay schedules other than the Commonwealth's normal semi-monthly schedule. In the cases of agencies in the Legislative and Judicial Departments, the independent agencies, and those institutions of higher education with distributed payroll authority, such adjustments in alternative pay schedules shall be mutually agreeable.

5. Out of the amount appropriated to this item may be paid up to $100,000 for a program to provide information to state employees on the payroll and compensation changes provided for in this item. This employee information program shall be administered by the Secretary of Finance, with assistance of the Secretary of Administration. In implementing this program, all agencies and institutions of the Commonwealth shall provide such assistance as the secretaries, or their designees, shall request.

M.1. A biweekly pay schedule for state employees will be instituted beginning with the paycheck received on Friday, July 18, 1997, for work performed June 30 through July 11. State employees will receive their normal semi-monthly paycheck for the work period June 16, 1997, though June 30, 1997, on July 1, 1997. In addition, employees identified in paragraphs D.1. through D.4 of this item will receive a transition payment on July 1, 1997, equal to three calendar days of earnings. Costs associated with the three calendar day transition payment for employees of Educational and General Programs at the institutions of higher education shall be borne by the general fund. On July 18, 1997, employees will be paid for the work performed June 30 through July 11.

2. The general fund appropriation for the pay periods June 16 to June 30, 1997, and June 13 to June 26, 1998, shall be utilized to offset the cost of the salary increases authorized in paragraphs C., D., and E. of this item.

3. Following the transition period required in paragraph M.1. of this item, state employees will receive a paycheck on Friday, August 1, 1997, for the pay period beginning on Saturday, July 12, and ending on Friday, July 25. Succeeding pay periods will follow the same schedule.

4. The Comptroller may make such adjustments as he deems necessary, in keeping with the purpose of this paragraph, in the pay dates of employees paid on alternative pay schedules other than the Commonwealth's normal schedule prior to the implementation of paragraph M.1.

5. Out of the amount appropriated to this item may be paid up to $100,000 for a program to provide information to state employees on payroll and compensation changes provided for in this item. This employee information program shall be administered by the Secretary of Finance, with assistance of the Secretary of Administration. In implementing this program, all agencies and institutions of the Commonwealth shall provide such assistance as the Secretaries, and their designees, shall request.

N. Out of the amounts in this Item shall be provided to the Department of Correctional Education, $210,000 the first year and $421,000 the second year from the general fund in order to provide salary adjustments for teachers employed in adult and youth correctional education centers. The Department of Personnel and Training shall assist the Department of Correctional Education in determining the necessary salary adjustments for each center.

O. Out of the amounts for Compensation Supplements shall be paid $2,093,757 the first year and $4,547,882 the second year to continue implementation of the salary plan for local Social Services employees pursuant to Item 375. B. of Chapter 994, 1993 Acts of Assembly.