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2018 Special Session I

Budget Bill - HB5001 (Enrolled)

Central Appropriations

Item 475

Item 475

First Year - FY2017Second Year - FY2018
Compensation and Benefit Adjustments (75700)$42,887,042$203,767,366
$203,568,592
Adjustments to Employee Compensation (75701)FY2017 $700,000FY2018 $116,171,354
Adjustments to Employee Benefits (75702)FY2017 $42,187,042FY2018 $87,596,012
$87,397,238
Fund Sources: 
GeneralFY2017 $42,887,042FY2018 $203,767,366
$203,568,592

Authority: Discretionary Inclusion.


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


1. Adjustments to base rates of pay;


2. Adjustments to rates of pay for budgeted overtime of salaried employees;


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


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


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


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


7. Adjustments to the cost of employee benefits to include but not limited to health insurance premiums and retirement and related contribution rates.


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. Except as provided for elsewhere in this Item, agencies supported in whole or in part by nongeneral fund sources, shall pay the proportionate share of changes in salaries and benefits as required by this Item, subject to the rules and regulations prescribed by the appointing or governing authority of such agencies. Nongeneral fund revenues and balances required for this purpose are hereby appropriated.


D. Any supplemental salary payment to a state employee or class of state employees by a local governing body shall be governed by a written agreement between the agency head of the employee or class of employees receiving the supplement and the chief executive officer of the local governing body. Such agreement shall also be reviewed and approved by the Director of the State Department of Human Resource Management. At a minimum, the agreement shall specify the percent of state salary or fixed amount of the supplement, the resultant total salary of the employee or class of employees, the frequency and method of payment to the agency of the supplement, and whether or not such supplement shall be included in the employee's state benefit calculations. A copy of the agreement shall be made available annually to all employees receiving the supplement. The receipt of a local salary supplement shall not subject employees to any personnel or payroll rules and practices other than those promulgated by the State Department of Human Resource Management.


E. The Governor is hereby authorized to transfer funds from agency appropriations to the accounts of participating state employees in such amounts as may be necessary to match the contributions of the qualified participating employees, consistent with the requirements of the Code of Virginia governing the deferred compensation cash match program. Such transfers shall be made consistent with the following:


1. The maximum cash match provided to eligible employees shall not be less than $20.00 per pay period, or $40.00 per month, in each year of the biennium. The Governor may direct the agencies of the Commonwealth to utilize funds contained within their existing appropriations to meet these requirements.


2. The Governor may direct agencies supported in whole or in part with nongeneral funds to utilize existing agency appropriations to meet these requirements. Such nongeneral revenues and balances are hereby appropriated for this purpose, subject to the provisions of § 4-2.01 b of this act. The use of such nongeneral funds shall be consistent with any existing conditions and restrictions otherwise placed upon such nongeneral funds.


3. The procurement of services related to the implementation of this program shall be governed by standards set forth in § 51.1-124.30 C, Code of Virginia, and shall not be subject to the provisions of Chapter 7 (§ 11-35 et seq.), Title 11, Code of Virginia.


F. The Secretary of Administration, in conjunction with the Secretary of Finance, may establish a program that allows for the sharing of cost savings from improved productivity, efficiency, and performance with agencies and employees. Such gain sharing programs require a management philosophy of open communication encouraging employee participation; a system which seeks, evaluates and implements employee input on increasing productivity; and a formula for measuring productivity gains and sharing these gains between employees and the agency. The Department of Human Resource Management, in conjunction with the Department of Planning and Budget, shall develop specific gain sharing program guidelines for use by agencies. The Department of Human Resource Management shall provide to the Governor, the Chairmen of the House Appropriations and Senate Finance Committees an annual report no later than October 1 of each year detailing identified savings and their usage.


G.1. Out of the appropriation for this Item, amounts estimated at $45,312,041 the first year and $91,173,497 the second year from the general fund shall be transferred to state agencies and institutions of higher education to support the general fund portion of costs associated with changes in the employer's share of premiums paid for the Commonwealth's health benefit plans.


2. Notwithstanding any contrary provision of law, the health benefit plans for state employees resulting from the additional funding in this Item shall allow for a portion of employee medical premiums to be charged to employees.


3. The Department of Human Resource Management shall explore options within the health insurance plan for state employees to promote value-based health choices aimed at creating greater employee satisfaction with lower overall health care costs. It is the General Assembly's intent that any savings associated with this employee health care initiative be retained and used towards funding state employee salary or fringe benefit cost increases.


4. Notwithstanding any other provision of law, it shall be the sole responsibility and authority of the Department of Human Resource Management to establish and enforce employer contribution rates for any health insurance plan established pursuant to §2.2-2818, Code of Virginia.


5. The Department of Human Resource Management is prohibited from establishing a retail maintenance network for maintenance drugs that includes penalties for non-use of the retail maintenance network.


6. The Department of Human Resource Management shall not increase the annual out-of-pocket maximum included in the plans above the limits in effect for the plan year which began on July 1, 2014.


7. The Department of Human Resource Management shall develop and implement a pilot program beginning on July 1, 2017 for a single payment per episode for all services and costs spanning multiple providers across multiple settings for musculoskeletal injury claims to the maximum extent possible. The results of this pilot program, to include changes in return-to-work following injury times and costs of single payment per episode versus traditional payment per visit claim payments, shall be reported to the Governor, the Chairmen of the House Appropriations Committee and the Senate Finance Committee by August 1, 2018.


H.1. Contribution rates paid to the Virginia Retirement System for the retirement benefits of public school teachers, state employees, state police officers, state judges, and state law enforcement officers eligible for the Virginia Law Officers Retirement System shall be based on a valuation of retirement assets and liabilities that are consistent with the provisions of Chapters 701 and 823, Acts of Assembly of 2012.


2. Retirement contribution rates, excluding the five percent employee portion, shall be as set out below and include both the regular contribution rate and for the public school teacher plan the rate calculated by the Virginia Retirement System actuary for the 10-year payback of the retirement contribution payments deferred for the 2010-12 biennium:


FY 2017

FY2018

Public school teachers

14.66%

16.32%

State employees

13.49%

13.49%

State Police Officers' Retirement System

28.54%

28.54%

Virginia Law Officers' Retirement System

21.05%

21.05%

Judicial Retirement System

41.97%

41.97%


3. Payments to the Virginia Retirement System shall be made no later than the tenth day following the close of each month of the fiscal year.


4. The Director of Department of Planning and Budget shall withhold and transfer to this item, amounts estimated at $10,022,276 the first year and $10,458,009 the second year, from the general fund appropriations of state agencies and institutions of higher education, representing the net savings resulting from the changes in employer contributions for state employee retirement as provided for in this paragraph.


5. The funding necessary to support the cost of reimbursements to Constitutional Officers for retirement contributions are appropriated elsewhere in this act under the Compensation Board.


6. The funding necessary to support the cost of the employer retirement contribution rate for public school teachers is appropriated elsewhere in this act under Direct Aid to Public Education.


I.1. Except as authorized in Paragraph I.2. of this Item, rates paid to the Virginia Retirement System on behalf of employees of participating (i) counties, (ii) cities, (iii) towns, (iv) local public school divisions (only to the extent that the employer contribution rate is not otherwise specified in this act), and (v) other political subdivisions shall be based on the employer contribution rates certified by the Virginia Retirement System Board of Trustees pursuant to § 51.1-145(I), Code of Virginia.


2. Rates paid to the VRS on behalf of employees of participating (i) counties, (ii) cities, (iii) towns, (iv) local public school divisions (only to the extent that the employer contribution rate is not otherwise specified in this act), and (v) other political subdivisions shall be based on the employer contribution rates certified by the Virginia Retirement System Board of Trustees pursuant to § 51.1-145(I), Code of Virginia, unless the participating employer notifies VRS that it has opted to base the employer contribution rate on the higher of: a) the contribution rate in effect for FY 2012, or b) seventy percent of the results of the June 30, 2011 actuarial valuation of assets and liabilities as approved by the Virginia Retirement System Board of Trustees for the 2012-14 biennium, eighty percent of the results of the June 30, 2013 actuarial valuation of assets and liabilities as approved by the Virginia Retirement System Board of Trustees for the 2014-16 biennium, ninety percent of the results of the June 30, 2015 actuarial valuation of assets and liabilities as approved by the Virginia Retirement System Board of Trustees for the 2016-18 biennium, and one-hundred percent of the results of the June 30, 2017 actuarial valuation of assets and liabilities as approved by the Virginia Retirement System Board of Trustees for the 2018-20 biennium.


3. Every participating employer that opts not to use the employer contribution rates certified by the Virginia Retirement System Board of Trustees pursuant to § 51.1-145(I), Code of Virginia, must certify to the board of the Virginia Retirement System by resolution adopted by its local governing body that it: has reviewed and understands the information provided by the Virginia Retirement System outlining the potential future fiscal implications of electing or not electing to utilize the employer contribution rates certified by the Virginia Retirement System Board of Trustees, as provided for in paragraph I.1.


4. Local public school divisions must receive the concurrence of the local governing body if electing to pay the alternate contribution rate set out in paragraph I.2. Such concurrence must be documented by a resolution of the governing body.


5. The board of the Virginia Retirement System shall provide all employers participating in the Virginia Retirement System with a summary of the implications inherent in the use of the employer contribution rates certified by the Virginia Retirement System (VRS) Board of Trustees set out in paragraph I.1, and the alternate employer contribution rates set out in paragraph I.2.


J.1. The Virginia Retirement System Board of Trustees shall account for the employer retirement contribution payments deferred for the 2010-2012 biennium based on limiting employer retirement contributions to the Virginia Retirement System to the actuarial normal cost. In setting the employer retirement contribution rates for subsequent biennia, the board shall calculate a separate, supplemental employer contribution rate that will amortize such deferred payments over a period of ten years using the board's assumed long-term rate of return. The Governor shall include funds to support payment of such board-approved, supplemental employer contribution rates in the budget submitted to the General Assembly.


2. For purposes of setting rates for the 2014-16 biennium, and future biennia, the board shall treat any lump-sum deposits into the retirement system as an expedited repayment of the 2010-2012 deferred contributions for the appropriate system. Should these deposits exceed the remaining amounts owed for the deferred contributions, the balance shall remain in these specific systems to address the overall unfunded liability.


K.1. Contribution rates paid to the Virginia Retirement System for other employee benefits to include the public employee group life insurance program, the Virginia Sickness and Disability Program, the state employee retiree health insurance credit, and the public school teacher retiree health insurance credit, shall be based on a valuation of assets and liabilities that assume an investment return of seven percent and an amortization period of 30 years.


2. Contribution rates paid on behalf of public employees for other programs administered by the Virginia Retirement System shall be:


FY 2017

FY 2018

State employee retiree health insurance credit

1.18%

1.18%

Public school teacher retiree health insurance credit

1.11%

1.23%

State employee group life insurance program

1.31%

1.31%

Employer share of the public school teacher group life insurance program

0.52%

0.52%

Virginia Sickness and Disability Program

0.66%

0.66%



3. Funding for the Virginia Sickness and Disability Program is calculated on a rate of 0.55 percent of total payroll.


4. Out of the general fund appropriation for this Item is included $6,055,177 the first year and $6,318,390 the second year to support the general fund portion of the net costs resulting from changes in employer contributions for state employee benefits as provided for in this paragraph.


5. The funding necessary to support the cost of reimbursements to Constitutional Officers for public employee group life insurance contributions is appropriated elsewhere in this act under the Compensation Board.


6. The funding necessary to support the cost of the employer public school teacher group life insurance and retiree health insurance credit rates is appropriated elsewhere in this act under Direct Aid to Public Education.


L.1. The retiree health insurance credit contribution rates for the following groups of state supported local public employees shall be: 0.36 percent for constitutional officers and employees of constitutional officers, 0.42 percent for employees of local social services boards, and 0.41 percent for General Registrars and employees of General Registrars.


2. Out of the general fund appropriation for this Item is included $661,062 the first year and $661,062 the second year to support the general fund portion of the net costs resulting from changes in the retiree health insurance credit contribution rates for state supported local public employees through the Compensation Board, the Department of Social Services, and the Department of Elections pursuant to § 51.1-1403, Code of Virginia.


M.1. Notwithstanding the provisions of § 2.2-3205(A), Code of Virginia, the terminating agency shall not be required to pay the Virginia Retirement System the costs of enhanced retirement benefits provided for in § 2.2-3204(A), Code of Virginia for employees who are involuntarily separated from employment with the Commonwealth if the Director of the Department of Planning and Budget certifies that such action results from 1. budget reductions enacted in the Appropriation Act, 2. budget reductions executed in response to the withholding of appropriations by the Governor pursuant to §4-1.02 of the Act, 3. reorganization or reform actions taken by state agencies to increase efficiency of operations or improve service delivery provided such actions have been previously approved by the Governor, or 4. downsizing actions taken by state agencies as the result of the loss of federal or other grants, private donations, or other nongeneral fund revenue, and if the Director of the Department of Human Resource Management certifies that the action comports with personnel policy. Under these conditions, the entire cost of such benefits for involuntarily separated employees shall be factored into the employer contribution rates paid to the Virginia Retirement System.


2. Notwithstanding the provisions of § 2.2-3205(A), Code of Virginia, the terminating agency shall not be required to pay the Virginia Retirement System the costs of enhanced retirement benefits provided for in § 2.2-3204(A), Code of Virginia, for employees who are involuntarily separated from employment with the Commonwealth if the Speaker of the House of Delegates and the Chairman of the Senate Committee on Rules have certified on or after July 1, 2016, that such action results from 1. budget reductions enacted in the Appropriation Act pertaining to the Legislative Department; 2. reorganization or reform actions taken by agencies in the legislative branch of state government to increase efficiency of operations or improve service delivery provided such actions have been approved by the Speaker of the House of Delegates and the Chairman of the Senate Committee on Rules; or 3. downsizing actions taken by agencies in the legislative branch of state government as the result of the loss of federal or other grants, private donations, or other nongeneral fund revenue and if the applicable agency certifies that the actions comport with the provisions of and related policies associated with the Workforce Transition Act. Under these conditions, the entire cost of such benefits for involuntarily separated employees shall be factored into the employer contribution rates paid to the Virginia Retirement System.


N. The purpose of this paragraph is to provide a transitional severance benefit, under the conditions specified, to eligible city, county, school division or other political subdivision employees who are involuntarily separated from employment with their employer.


1.a. "Involuntary separation" includes, but is not limited to, terminations and layoffs from employment with the employer, or being placed on leave without pay-layoff or equivalent status, due to budget reductions, employer reorganizations, workforce downsizings, or other causes not related to the job performance or misconduct of the employee, but shall not include voluntary resignations. As used in this paragraph, a "terminated employee" shall mean an employee who is involuntarily separated from employment with his employer.


b. The governing authority of a city, county, school division or other political subdivision electing to cover its employees under the provisions of this paragraph shall adopt a resolution, as prescribed by the Board of Trustees of the Virginia Retirement System, to that effect. An election by a school division shall be evidenced by a resolution approved by the Board of such school division and its local governing authority.


2.a. Any (i) “eligible employee” as defined in § 51.1-132, (ii) “teacher” as defined in § 51.1-124.3, and (iii) any “local officer” as defined in § 51.1.124.3 except for the treasurer, commissioner of the revenue, attorney for the Commonwealth, clerk of a circuit court, or sheriff of any county or city, and (a) for whom reemployment with his employer is not possible because there is no available position for which the employee is qualified or the position offered to the employee requires relocation or a reduction in salary and (b) whose involuntary separation was due to causes other than job performance or misconduct, shall be eligible, under the conditions specified, for the transitional severance benefit conferred by this paragraph. The date of involuntary separation shall mean the date an employee was terminated from employment or placed on leave without pay-layoff or equivalent status.


b. Eligibility shall commence on the date of involuntary separation.


3.a. On his date of involuntary separation, an eligible employee with (i) two years' service or less to the employer shall be entitled to receive a transitional severance benefit equivalent to four weeks of salary; (ii) three years through and including nine years of consecutive service to the employer shall be entitled to receive a transitional severance benefit equivalent to four weeks of salary plus one additional week of salary for every year of service over two years; (iii) ten years through and including fourteen years of consecutive service to the employer shall be entitled to receive a transitional severance benefit equivalent to twelve weeks of salary plus two additional weeks of salary for every year of service over nine years; or (iv) fifteen years or more of consecutive service to the employer shall be entitled to receive a transitional severance benefit equivalent to two weeks of salary for every year of service, not to exceed thirty-six weeks of salary.


b. Transitional severance benefits shall be computed by the terminating employer's payroll department. Partial years of service shall be rounded up to the next highest year of service.


c. Transitional severance benefits shall be paid by the employer in the same manner as normal salary. In accordance with § 60.2-229, transitional severance benefits shall be allocated to the date of involuntary separation. The right of any employee who receives a transitional severance benefit to also receive unemployment compensation pursuant to § 60.2-100 et seq. shall not be denied, abridged, or modified in any way due to receipt of the transitional severance benefit; however, any employee who is entitled to unemployment compensation shall have his transitional severance benefit reduced by the amount of such unemployment compensation. Any offset to a terminated employee's transitional severance benefit due to reductions for unemployment compensation shall be paid in one lump sum at the time the last transitional severance benefit payment is made.


d. For twelve months after the employee's date of involuntary separation, the employee shall continue to be covered under the (i) health insurance plan administered by the employer for its employees, if he participated in such plan prior to his date of involuntary separation, and (ii) group life insurance plan administered by the Virginia Retirement System pursuant to Chapter 5 (§ 51.1-500 et seq.) of Title 51.1, or such other group life insurance plan as may be administered by the employer. During such twelve months, the terminating employer shall continue to pay its share of the terminated employee's premiums. Upon expiration of such twelve month period, the terminated employee shall be eligible to purchase continuing health insurance coverage under COBRA.


e. Transitional severance benefit payments shall cease if a terminated employee is reemployed or hired in an individual capacity as an independent contractor or consultant by the employer during the time he is receiving such payments.


f. All transitional severance benefits payable pursuant to this section shall be subject to applicable federal laws and regulations.


4.a. In lieu of the transitional severance benefit provided in subparagraph 3 of this paragraph, any otherwise eligible employee who, on the date of involuntary separation, is also (i) a vested member of a defined benefit plan within the Virginia Retirement System, including the hybrid retirement program described in § 51.1-169, and including a member eligible for the benefits described in subsection B of § 51.1-138, and (ii) at least fifty years of age, may elect to have the employer purchase on his behalf years to be credited to either his age or creditable service or a combination of age and creditable service, except that any years of credit purchased on behalf of a member of the Virginia Retirement System, including a member eligible for the benefits described in subsection B of § 51.1-138, who is eligible for unreduced retirement shall be added to his creditable service and not his age. The cost of each year of age or creditable service purchased by the employer shall be equal to fifteen percent of the employee's present annual compensation. The number of years of age or creditable service to be purchased by the employer shall be equal to the quotient obtained by dividing (i) the cash value of the benefits to which the employee would be entitled under subparagraphs 3.a. and 3.d. of this paragraph by (ii) the cost of each year of age or creditable service. Partial years shall be rounded up to the next highest year. Deferred retirement under the provisions of subsection C of §§ 51.1-153 and disability retirement under the provisions of § 51.1-156 et seq., shall not be available under this paragraph.


b. In lieu of the (i) transitional severance benefit provided in subparagraph 3 of this paragraph and (ii) the retirement program provided in this subsection, any employee who is otherwise eligible may take immediate retirement pursuant to §§ 51.1-155.1 or 51.1-155.2.


c. The retirement allowance for any employee electing to retire under this paragraph who, by adding years to his age, is between ages fifty-five and sixty-five, shall be reduced on the actuarial basis provided in subdivision A. 2. of § 51.1-155.


d. The retirement program provided in this subparagraph shall be otherwise governed by policies and procedures developed by the Virginia Retirement System.


e. Costs associated with the provisions of this subparagraph shall be factored into the employer contribution rates paid to the Virginia Retirement System.


f. Notwithstanding the foregoing, the provisions of this paragraph N shall apply to an otherwise eligible employee who is a person who becomes a member on or after July 1, 2010, a person who does not have 60 months of creditable service as of January 1, 2013, or a person who is enrolled in the hybrid retirement program described in § 51.1-169, mutatis mutandis.


O. The final sentence of § 51.1-145 (N), Code of Virginia providing that the employer contribution rate established for each employer may include the annual rate of contribution payable by such employer with respect to employees enrolled in optional defined contribution retirement plans, shall not apply to optional defined retirement plans established under § 51.1-126 for employees engaged in teaching, administrative or research duties at institutions of higher education, § 51.1-126.1 for employees of teaching hospitals other than VCU and UVA Medical Centers, and § 51.1-126.3 for University of Virginia Medical Center employees.


T. 1. Notwithstanding the provisions of § 17.1-327, Code of Virginia, any justice, judge, member of the State Corporation Commission, or member of the Virginia Workers' Compensation Commission who is retired under the Judicial Retirement System and who is temporarily recalled to service shall be reimbursed for actual expenses incurred during such service and shall be paid a per diem of $250 for each day the person actually sits, exclusive of travel time.


2. Out of the general fund appropriation for this Item, $500,000 in the first year and $500,000 in the second year is provided to support the costs resulting from the changes in the per diem amounts provided for in paragraph T.1. The Director, Department of Planning and Budget, shall disburse funding from this Item to all affected judicial and independent agencies upon request.


U. The Director, Department of Planning and Budget, shall transfer from this Item, general fund amounts estimated at $181,038 the first year and shall withhold and transfer to this Item an amount estimated at $181,038 $17,736 the second year to from state agencies and institutions of higher education to support the general fund portion of costs of Line of Duty Act premiums based on the latest enrollment update from the Virginia Retirement System.


V. The Director, Department of Planning and Budget, shall withhold and transfer to this Item, an amount estimated at $279,966 the second year from the general fund appropriations of state agencies and institutions of higher education, representing savings from the workers' compensation premiums provided by the Department of Human Resource Management.


W. Out of the appropriation for this Item, $200,000 the first year and $50,000 the second year from the general fund is provided for the potential state agency cost of legislative or regulatory changes that impact the personnel practices of state government.


X.1. The base salary of the following employees shall be increased by three percent on July 10, 2017:


a. Full-time and other classified employees of the Executive Department subject to the Virginia Personnel Act, excluding faculty and appointed officials at institutions of higher education;


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


c. Any official whose salary is listed in § 4-6.01 of this act, subject to the ranges specified in the agency head salary levels in § 4-6.01 c, except appointed officials at institutions of higher education;


d. Full-time 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;


e. Heads of agencies in the Legislative Department;


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


g. Legislative Assistants as provided for in Item 1 of this act;


h. Judges and Justices in the Judicial Department;


i. Heads of agencies in the Judicial Department;


j. Full-time employees in the Judicial Department;


k. Commissioners of the State Corporation Commission and the Virginia Workers' Compensation Commission, the Chief Executive Officer of the Virginia College Savings Plan, and the Directors of the Virginia Lottery, and the Virginia Retirement System; and


l. Full-time employees of the State Corporation Commission, the Virginia College Savings Plan, the Virginia Lottery, Virginia Workers' Compensation Commission, and the Virginia Retirement System.


2.a. Employees in the Executive Department subject to the Virginia Personnel Act shall receive the salary increases authorized in this paragraph only if they attained at least a rating of "Contributor" on their latest performance evaluation.


b. Salary increases authorized in this paragraph for employees in the Judicial and Legislative Departments, employees of Independent agencies, and employees of the Executive Department not subject to the Virginia Personnel Act shall be consistent with the provisions of this paragraph, as determined by the appointing or governing authority. The appointing or governing authority shall certify to the Department of Human Resource Management that employees receiving the awards are performing at levels at least comparable to the eligible employees as set out in subparagraph 2.a. of this paragraph.


3. The Department of Human Resource Management shall increase the minimum for each band within the Commonwealth's Classified Compensation Plan by three percent and the maximum salary for each band by three percent plus $6,793 on July 10, 2017 . No salary increase shall be granted to any employee as a result of this action. The department shall develop policies and procedures to be used in instances when employees fall below the entry level for a job classification due to poor performance. Movement through the revised pay band shall be based on employee performance.


4. Out of the amounts for Supplements to Employee Compensation is included $64,753,370 the second year from the general fund to support the general fund portion of costs associated with the salary increase provided in this paragraph.


5.The following agency heads, at their discretion, may utilize agency funds or the funds provided pursuant to this paragraph to implement the provisions of new or existing performance-based pay plans:


a. The heads of agencies in the Legislative and Judicial Departments;


b. The Commissioners of the State Corporation Commission and the Virginia Workers' Compensation Commission;


c. The Attorney General;


d. The Director of the Virginia Retirement System;


e. The Director of the Virginia Lottery;


f. The Director of the University of Virginia Medical Center;


g. The Chief Executive Officer of the Virginia College Savings Plan;


h. The Executive Director of the Virginia Port Authority; and


i. The Chief Executive Officer of the Virginia Alcoholic Beverage Control Authority.


6. The base rates of pay, and related employee benefits, for wage employees may be increased up to three percent no earlier than July 10, 2017. The cost of such increases for wage employees shall be borne by existing funds appropriated to each agency.


Y.1. The appropriations in this item include funds to increase the base salary of the following employees by two percent on August 1, 2017, provided that the governing authority of such employees use such funds to support salary increases for the following listed employees:


a. Locally-elected constitutional officers;


b. General Registrars and members of local electoral boards;


c. Full-time employees of locally-elected constitutional officers and,


d. Full-time employees of Community Services Boards, Centers for Independent Living, secure detention centers supported by Juvenile Block Grants, juvenile delinquency prevention and local court service units, local social services boards, local pretrial services act and comprehensive community corrections act employees, and local health departments where a memorandum of understanding exists with the Virginia Department of Health.


2. Out of the appropriation for Supplements to Employee Compensation is included $15,590,949 the second year from the general fund to support the costs associated with the salary increase provided in this paragraph.


Z.1. The base salaries of faculty members at institutions of higher education shall be increased by two percent on July 10, 2017. The general fund share of the two percent salary adjustment shall be distributed to the following institutions in the amounts indicated below:


Institution

GF Amount

George Mason University

$1,973,365

Old Dominion University

$1,199,470

University of Virginia

$1,589,837

Virginia Commonwealth University

$2,099,109

Virginia Tech

$1,940,479

College of William and Mary

$710,236

Christopher Newport University

$368,566

University of Virginia - Wise

$112,200

James Madison University

$1,061,224

Longwood University

$327,291

University of Mary Washington

$317,856

Norfolk State University

$328,641

Radford University

$610,932

Virginia Military Institute

$111,859

Virginia State University

$295,548

Richard Bland College

$55,117

Virginia Community College System

$3,186,371

Virginia Institute of Marine Science

$169,332

Virginia Tech Extension

$524,979

Virginia State University Extension

$10,987

Total

$16,993,399


2. Nothing in this act shall preclude institutions of higher education from providing base salary increases or bonuses to faculty or staff.


3. Salary increases authorized in paragraph Z. 1. for employees of the Executive Department not subject to the Virginia Personnel Act shall be consistent with the provisions of this paragraph, as determined by the appointing or governing authority. However, notwithstanding anything herein to the contrary, the governing authorities of those state institutions of higher education with employees not subject to the Virginia Personnel Act may implement salary increases for such employees that may vary based on performance and other employment-related factors. The appointing or governing authority shall certify to the Department of Human Resource Management that employees receiving the awards are performing at levels at least comparable to the eligible employees as set out in paragraph X.1., subparagraph 2.a. of this item.


4. The base salaries of faculty members at select institutions of higher education that did not provide a supplement to faculty salaries in fiscal year 2017 shall be provided an additional one percent salary adjustment, in addition to the two percent raise provided to all faculty members at higher education institutions within this paragraph. The additional one percent salary adjustment shall be calculated using the base salary of faculty members at the applicable higher education institutions prior to application of the two percent salary adjustment. The general fund share of the additional one percent salary adjustment shall be distributed to the following institutions in the amounts indicated below:


Institution

GF Amount

Virginia Military Institute

$55,930

Virginia State University

$147,774

Norfolk State University

$164,320

James Madison University

$530,612

Radford University

$305,466

Cooperative Extension and Agricultural Research Services (VSU)

$5,494

Richard Bland College

$27,558

Christopher Newport University

$184,283

Total

$1,421,437


5. Out of the appropriation for Adjustments to Employee Compensation is included $18,414,836 the second year from the general fund to support the costs associated with the salary increases provided in this paragraph.


AA. The Director of the Department of Planning and Budget shall transfer $14,308,309 the second year from the general fund from this item to the Department of State Police to provide each sworn officer of the state police an increase in their annual salary equal to $6,793 effective July 10, 2017. This increase shall be effectuated prior to any percentage salary increase authorized in this act with the same effective date.


BB.1. Out of the amounts for compensation supplements in this item $2,553,890 from the general fund in the second year is provided for an additional two percent adjustment to the base salary of state employees in the following high turnover job roles effective September 10, 2017 for the purposes of relieving salary compression and maintaining market relevance:


a. Direct Service Associate I


b. Direct Service Associate II


c. Direct Service Associate III


d. Housekeeping and/or Apparel Worker I


e. Registered Nurse I


f. Registered Nurse II/Nurse Practitioner I/Physician's Assistant


g. Licensed Practical Nurse


h. Therapy Assistant/Therapist I


i. Therapist II


2.a. Employees in the Executive Department subject to the Virginia Personnel Act shall receive the salary increases authorized in this paragraph only if they attained at least a rating of "Contributor" on their latest performance evaluation.


b. Salary increases authorized in this paragraph for employees in the Judicial and Legislative Departments, employees of Independent agencies, and employees of the Executive Department not subject to the Virginia Personnel Act shall be consistent with the provisions of this paragraph, as determined by the appointing or governing authority. The governing authorities of those agencies and state institutions of higher education with employees not subject to the Virginia Personnel Act shall certify to the Department of Human Resource Management that employees receiving the awards are performing at levels at least comparable to the eligible employees as set out in subparagraph 2.a. of this paragraph.


3. The salary increase authorized in this paragraph is intended to be in addition to any other salary increase authorized in this act.