HOUSE OF REPRESENTATIVES	H.B. NO.	1075
TWENTY-SEVENTH LEGISLATURE, 2013
STATE OF HAWAII

A BILL FOR AN ACT

relating to incentive programs.

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

     SECTION 1.  The legislature finds that state employees present a wealth of untapped knowledge and expertise in their various areas of work.

     The purpose of this Act is to:

     (1)  Affirm the State's commitment to providing efficient and effective services to the public by creating an incentive program within state government to encourage innovation and savings within each department; and

     (2)  Enhance the existing incentive program for state workers, which encourages, recognizes, and rewards the creativity of employees who contribute to the efficiency and quality of state government operations.

     SECTION 2.  Chapter 26, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§26-   Department incentives. (a)  Except as otherwise provided by law, any executive department that implements cost-saving practices to reduce the department's expenses shall be authorized to disburse the savings realized as follows:

(1) Fifty per cent of the realized savings shall lapse and be returned to the general fund in the manner prescribed in section 40-66; and

(2) Fifty per cent of the realized savings shall be returned to the department to be evenly distributed to its employees in amounts not less than $1 and not more than $1,000 per employee, in accordance with the department's public approval rating.

(b)  The department of budget and finance shall select a private agency to conduct a biannual public opinion survey, in a manner to be determined by the private agency, to establish a public approval rating of all executive departments upon which the disbursement of realized savings would be based.

(c)  As used in this section, "public approval" means the perception or opinion of the public regarding the efficiency and quality of service of a department."

     SECTION 3.  Chapter 78, Hawaii Revised Statutes, is amended by adding a new section to be appropriately designated and to read as follows:

     "§78-    Department incentives. (a)  The head of each department of the state government may pay cash awards to, and incur necessary expenses for the honorary recognition of, officers and employees of the government who by their suggestions, inventions, superior accomplishments, or other personal efforts, including length of service, contribute to the efficiency, economy, or other improvement of government operations or who perform special acts or services in the public interest in connection with or related to their official employment; provided that any officer or employee whose suggestion or invention results in direct cost-savings to a department shall be paid a cash award equal to ten per cent of the cost-savings generated during the first year in which the suggestion or invention is placed into operation.  If more than one officer or employee is responsible for the suggestion or invention resulting in the cost-savings, each shall receive a pro rata share of the cash award.  Any cash award received by an officer or employee pursuant to this section shall not be considered as compensation for the purposes of computing an officer or employee's average final compensation pursuant to chapter 88.

(b)  Except as otherwise provided by law, all cost-savings resulting from a suggestion or invention of an officer or employee for which a cash award has been paid pursuant to subsection (a), less the amount of the cash award itself, shall be retained by the department of that officer or employee.  Any funds retained by the department pursuant to this subsection shall not lapse until June 30 of the following fiscal year.

(c)  Any funds retained by a department pursuant to subsection (b), may be used to supplement moneys appropriated for any of the department's programs; provided that the retention by the department of any of those funds shall not be used as the basis for reducing the department's future budget requests or allotments except at the department's request."

     SECTION 4.  The state auditor shall review the operations of each executive department to examine its efficiency and the quality of service provided to the public.  The auditor shall submit a report to the legislature with findings and recommendations no later than twenty days prior to the convening of the 2014 regular session.

     SECTION 5.  There is appropriated out of the general revenues of the State of Hawaii the sum of $        or so much thereof as may be necessary for fiscal year 2013-2014 and the same sum or so much thereof as may be necessary for fiscal year 2014-2015 to carry out the purposes of this Act.

     The sums appropriated shall be expended by the department of budget and finance for the purposes of this Act.

     SECTION 6.  New statutory material is underscored.

     SECTION 7.  This Act shall take effect on July 1, 2013.

INTRODUCED BY:

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Report Title:

State Government Employee Incentive Program; Cash Awards; Appropriation

Description:

Creates an incentive program to encourage innovation and savings by the executive departments.  Establishes an incentive program to provide cash rewards to state employees whose suggestions or inventions result in cost-savings.  Authorizes the department to retain cost-savings less the cash award amount.  Requires the auditor to report on efficacy and quality of the department's service to the public.  Appropriates funds.

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