Reprinted

February 25, 2004





ENGROSSED

HOUSE BILL No. 1401

_____


DIGEST OF HB 1401 (Updated February 24, 2004 3:46 pm - DI 75)



Citations Affected: IC 2-5; IC 5-10.2; noncode.

Synopsis: Public officers compensation commissions. Establishes the public officers compensation advisory commission to make recommendations to the general assembly regarding the salaries to be paid to public officers. Provides that recommended increases in salaries may not exceed the change in the Indiana nonfarm income. Provides that for purposes of computing a retirement benefit for a person who is a member of the Indiana state teachers' retirement fund and who takes an unpaid leave of absence to serve in an elected position: (1) "annual compensation" includes the total amount that was not paid to the member but would have been paid to the member during the year under the member's employment contracts if the member had not taken any unpaid leave of absence to serve in an elected position; and (2) the "average of the annual compensation" means the annual compensation for the one year of service in which the member's annual compensation was highest.

Effective: Upon passage; June 1, 2004.





Kuzman, Bosma, Richardson , Mahern
(SENATE SPONSORS _ HARRISON, ROGERS)




    January 20, 2004, read first time and referred to Committee on Ways and Means.
    January 29, 2004, amended, reported _ Do Pass.
    February 4, 2004, read second time, amended, ordered engrossed.
    February 5, 2004, engrossed. Read third time, passed. Yeas 61, nays 34.

SENATE ACTION

    February 12, 2004, read first time and referred to Committee on Rules and Legislative Procedure.
    February 17, 2004, amended, reported favorably _ Do Pass.
    February 24, 2004, read second time, amended, ordered engrossed.





Reprinted

February 25, 2004

Second Regular Session 113th General Assembly (2004)


PRINTING CODE. Amendments: Whenever an existing statute (or a section of the Indiana Constitution) is being amended, the text of the existing provision will appear in this style type, additions will appear in this style type, and deletions will appear in this style type.
Additions: Whenever a new statutory provision is being enacted (or a new constitutional provision adopted), the text of the new provision will appear in this style type. Also, the word NEW will appear in that style type in the introductory clause of each SECTION that adds a new provision to the Indiana Code or the Indiana Constitution.
Conflict reconciliation: Text in a statute in this style type or this style type reconciles conflicts between statutes enacted by the 2003 Regular Session of the General Assembly.


ENGROSSED

HOUSE BILL No. 1401



    A BILL FOR AN ACT to amend the Indiana Code concerning state offices and administration and to make an appropriation.

Be it enacted by the General Assembly of the State of Indiana:

SOURCE: IC 2-5-1.5; (04)EH1401.2.1. -->     SECTION 1. IC 2-5-1.5 IS ADDED TO THE INDIANA CODE AS A NEW CHAPTER TO READ AS FOLLOWS [EFFECTIVE UPON PASSAGE]:
     Chapter 1.5. Public Officers Compensation Advisory Commission
    Sec. 1. As used in this chapter, "commission" refers to the public officers compensation advisory commission established by section 6 of this chapter.
    Sec. 2. As used in this chapter, "growth rate" refers to the rate of change in Indiana nonfarm income determined by the Bureau of Economic Analysis of the United States Department of Commerce.
    Sec. 3. As used in this chapter, "political subdivision" has the meaning set forth in IC 36-1-2-13.
    Sec. 4. As used in this chapter, "public employee" refers to any of the following:
        (1) An employee of the state.
        (2) An employee of a political subdivision.
        (3) An employee of any other entity whose salary is paid in any part from funds derived from taxes imposed by the state or a political subdivision.
    Sec. 5. As used in this chapter, "public officer" refers to any of the following:
        (1) The governor.
        (2) The lieutenant governor.
        (3) The secretary of state.
        (4) The auditor of state.
        (5) The treasurer of state.
        (6) The attorney general.
        (7) The clerk of the supreme court.
        (8) The state superintendent of public instruction.
        (9) A justice of the supreme court of Indiana.
        (10) A judge of the court of appeals of Indiana.
        (11) A judge of the Indiana tax court.
        (12) A judge of a circuit, superior, probate, or county court.
        (13) A member of the general assembly.
    Sec. 6. There is established the public officers compensation advisory commission.
    Sec. 7. (a) The commission consists of the following members:
        (1) Two (2) members appointed by the speaker of the house of representatives. The members appointed under this subdivision may not be members of the same political party.
        (2) Two (2) members appointed by the president pro tempore of the senate. The members appointed under this subdivision may not be members of the same political party.
        (3) Two (2) members appointed by the governor. The members appointed under this subdivision may not be members of the same political party.
        (4) Two (2) members appointed by the chief justice of the supreme court of Indiana. The members appointed under this subdivision may not be members of the same political party.
        (5) One (1) member appointed by the chief judge of the court of appeals of Indiana.
    (b) The following may not be a commission member:
        (1) A public officer.
        (2) A public employee.
        (3) An individual who has a pecuniary interest in the salary of a public officer. For purposes of this subdivision, an individual has a pecuniary interest in the salary of a public officer if an increase in the salary of a public officer will result

in an ascertainable increase in the income or net worth of the individual.
    Sec. 8. (a) The term of a commission member begins on the later of the following:
        (1) July 1 after the member is appointed.
        (2) The day the member accepts the member's appointment.
    (b) The term of a commission member expires on July 1 of the fourth year after the year the member's term begins.
    (c) A member may be reappointed to serve a new term.
    Sec. 9. (a) If there is a vacancy on the commission, the public officer who appointed the member whose position is vacant shall appoint an individual to fill the vacancy.
    (b) The member appointed under this section shall fill the vacancy for the remainder of the unexpired term.
    Sec. 10. (a) Before July 1 of each odd numbered year, the chairman of the legislative council shall appoint one (1) member to be chair of the commission.
    (b) The member appointed as chair of the commission serves as chair beginning July 1 after appointment.
    (c) A member of the commission may be reappointed as chair of the commission.
    Sec. 11. Five (5) commission members constitute a quorum. The affirmative votes of at least five (5) commission members are necessary for the commission to take official action other than to adjourn or to meet to hear reports or testimony.
    Sec. 12. The commission shall meet at the call of the chair and at other times as the commission considers necessary.
    Sec. 13. Each member of the commission is entitled to the following:
        (1) The salary per diem provided under IC 4-10-11-2.1(b).
        (2) Reimbursement for traveling expenses as provided under IC 4-13-1-4.
        (3) Other expenses actually incurred in connection with the member's duties as provided in the state policies and procedures established by the Indiana department of administration and approved by the budget agency.
    Sec. 14. The legislative services agency shall provide administrative support for the commission. At the request of the legislative services agency, the state personnel department or the Indiana judicial center established by IC 33-13-14-2 shall assign staff to provide research and other support to assist the legislative services agency in providing administrative support to the

commission.
    Sec. 15. The legislative services agency may contract with consultants on behalf of the commission as the commission considers necessary to implement this chapter.
    Sec. 16. Except as otherwise provided by this chapter, the commission is subject to the rules of the legislative council.
    Sec. 17. The commission shall make reports to the general assembly as required by this chapter or by the legislative council.
    Sec. 18. The commission shall meet at least one (1) time not later than July 1 of each even-numbered year to do the following:
        (1) Determine the growth rate from January 1 of the previous year to January 1 of the current year.
        (2) Receive information relating to the salaries of public officers.
        (3) Consider recommendations for suitable salaries for public officers.
        (4) Take testimony relating to the salaries of public officers.
    Sec. 19. (a) Not later than September 1 of each even-numbered year, the commission shall make written recommendations to the:
        (1) legislative council; and
        (2) budget committee;
concerning suitable salaries for public officers. The recommendations to the legislative council must be in an electronic format under IC 5-14-6.
    (b) When making recommendations, the commission shall make a separate recommendation, including a recommendation for no adjustment of salary, for each separate public officer listed in section 5 of this chapter.
    (c) The commission may not recommend a rate of increase in the salary of a public officer that exceeds the growth rate.
    Sec. 20. A commission recommendation does not take effect unless enacted by the general assembly.
    Sec. 21. There is annually appropriated to the legislative services agency from the state general fund money necessary for the operation of the commission.
    Sec. 22. Notwithstanding IC 1-1-1-8, the provisions of this chapter are not severable.

SOURCE: IC 5-10.2-4-3; (04)EH1401.2.2. -->     SECTION 2. IC 5-10.2-4-3 IS AMENDED TO READ AS FOLLOWS [EFFECTIVE JUNE 1, 2004]: Sec. 3. (a) Except as provided in subsection (e), (f), in computing the retirement benefit for a nonteacher member, "average of the annual compensation" means the average annual compensation calculated using the twenty (20) calendar

quarters of service in a position covered by the retirement fund before retirement in which the member's annual compensation was the highest. However, in order for a quarter to be included in the twenty (20) calendar quarters, the nonteacher member must have performed service throughout the calendar quarter. All twenty (20) calendar quarters do not have to be continuous but they must be in groups of four (4) consecutive calendar quarters. The same calendar quarter may not be included in two (2) different groups.
    (b) This subsection does not apply to a teacher member described in subsection (c). In computing the retirement benefit for a teacher member, "average of the annual compensation" means the average annual compensation for the five (5) years of service before retirement in which the member's annual compensation was highest. In order for a year to be included in the five (5) years, the teacher member must have received for the year credit under IC 21-6.1-4-2 for at least one-half (1/2) year of service. The five (5) years do not have to be continuous.
    (c) This subsection applies to a member of the Indiana state teachers' retirement fund who serves in an elected position for which the member takes an unpaid leave of absence. In computing the retirement benefit for a teacher member described in this subsection for years of service to which IC 21-6.1-5-7.5 does not apply, "average of the annual compensation" means the annual compensation for the one (1) year of service before retirement in which the member's annual compensation was highest. In order for a year to be used, the teacher member must have received for the year credit under IC 21-6.1-4-2 for at least one-half (1/2) year of service.
    ( d) Subject to IC 5-10.2-2-1.5 "annual compensation" means:
         (1) the basic salary earned by and paid to the member plus the amount that would have been part of that salary but for:
            (1) (A) the state's, a school corporation's, a participating political subdivision's, or a state educational institution's (as defined in IC 20-12-0.5-1) paying the member's contribution to the fund for the member; or
            (2) (B) the member's salary reduction agreement established under Section 125, 403(b), or 457 of the Internal Revenue Code; and
        (2) in the case of a member described in subsection (c) and for years of service to which IC 21-6.1-5-7.5 does not apply, the basic salary that was not paid during the year but would have been paid to the member during the year under the member's

employment contracts if the member had not taken any unpaid leave of absence to serve in an elected position.
The portion of a back pay award or a similar award that the board determines is compensation under an agreement or under a judicial or an administrative proceeding shall be allocated by the board among the years the member earned or should have earned the compensation. Only that portion of the award allocated to the year the award is made is considered to have been earned during the year the award was made. Interest on an award is not considered annual compensation for any year.
    (d) (e) Compensation of no more than two thousand dollars ($2,000) received from the employer in contemplation of the member's retirement, including severance pay, termination pay, retirement bonus, or commutation of unused sick leave or personal leave, may be included in the total annual compensation from which the average of the annual compensation is determined, if it is received:
        (1) before the member ceases service; or
        (2) within twelve (12) months after the member ceases service.
    (e) (f) This section applies to a member of the general assembly:
        (1) who is a participant in the legislators' retirement system established under IC 2-3.5;
        (2) who is also a member of the public employees' retirement fund or the state teachers' retirement fund; and
        (3) whose years of service in the general assembly may not be considered in determining the average of the annual compensation under this section, as provided in IC 2-3.5-1-2(b)(2) or IC 2-3.5-3-1(c).
The board shall use the board's actuarial salary increase assumption to project the salary for any previous year needed to determine the average of the annual compensation.

SOURCE: ; (04)EH1401.2.3. -->     SECTION 3. [EFFECTIVE JUNE 1, 2004] IC 5-10.2-4-3, as amended by this act, applies only to members of the Indiana state teachers' retirement fund who retire after May 31, 2004.
SOURCE: ; (04)EH1401.2.4. -->     SECTION 4. [EFFECTIVE UPON PASSAGE] Notwithstanding IC 1-1-1-8, the provisions of this act are not severable.
SOURCE: ; (04)EH1401.2.5. -->     SECTION 5. An emergency is declared for this act.