An Act concerning the state employee suggestion program; relating to employee suggestion
bonus awards; amending K.S.A. 2002 Supp. 75-37,105 and repealing the existing section.
Be it enacted by the Legislature of the State of Kansas:

      Section  1. K.S.A. 2002 Supp. 75-37,105 is hereby amended to read
as follows: 75-37,105. (a) (1) There is established an employee award and
recognition program for state employees. Under this program monetary
or non-monetary awards may be made to state employees. An appointing
authority may implement a program of award and recognition for classi-
fied and unclassified employees or teams of employees for distinguished
accomplishment, meritorious service, innovations, Kansas quality man-
agement, volunteerism or length of service.

      (2) All awards and recognition provided under this section shall meet
the conditions for a discretionary bonus set out in 29 C.F.R. 778.211.

      (b) The total gross value of awards to any employee of the state during
a single fiscal year shall not exceed $3,500 except as provided in subsec-
tions (f) and (g). No award paid pursuant to this section during the fiscal
year shall be compensation, within the meaning of K.S.A. 74-4901 et seq.,
and amendments thereto, for any purpose under the Kansas public em-
ployees retirement system and shall not be subject to deductions for em-
ployee contributions thereunder. Each taxable award paid under this sec-
tion shall be a discretionary bonus, as defined by 29 C.F.R. 778, and shall
be in addition to the regular earnings to which that employee may be
entitled or for which the employee may become eligible. Monetary
awards are subject to taxes in accordance with federal internal revenue
code regulations. The value of non-monetary awards shall be reported by
state agencies in accordance with sections 74 and 132 of the federal in-
ternal revenue code and procedures prescribed by the director of ac-
counts and reports.

      (c) The award and recognition program shall be paid from moneys
appropriated and available for operating expenditures of the state agency
or from other funding sources as appropriated. In the case of employee
suggestions, the award or recognition for each employee shall be paid or
provided by the state agency that benefited from and implemented the

      (d) The regulations of the employee award board adopted pursuant
to K.S.A. 75-37,108 are hereby revoked.

      (e) The secretary of administration shall adopt rules and regulations
that provide oversight and administrative review of agency award and
recognition programs. The secretary of administration shall adopt rules
and regulations to provide safeguards to preclude opportunities for abuse
within the employee award and recognition program in each state agency
and to ensure objective decision-making procedures in award and rec-
ognition determinations for all participating employees.

      (f)  (1)  (A) Each state agency shall establish a state employee sug-
gestion program through which state employees may submit suggestions
for cost reductions in that agency through increased efficiencies or other
economies or savings in the operations of the state agency.

      (B) The Each employee making the a suggestion for cost reduction
shall be paid a one time employee suggestion bonus a monetary employee
award for innovation pursuant to subsection (a) of this section upon adop-
tion of the suggestion by the agency. Such a monetary award for inno-
vation shall be non-discretionary and shall be in the amount of 2.5% of
the estimated cost reduction, as certified by the agency's chief fiscal officer
and the agency appointing authority up to a maximum of $3,500. Each
employee making a suggestion for cost reduction shall also be paid an
employee suggestion bonus in the amount of the difference between the
amount of the innovation award received by the employee and 10% of
the documented cost reduction during the first 12 months after imple-
mentation of the suggestion, as documented to the division of the budget,
up to a maximum employee suggestion bonus of $37,500. The bonus shall
be paid solely upon documented cost reductions in the first 12 months
following the implementation of the suggestion as documented to the
division of the budget.

      (C) The agency shall retain 10% of the documented cost reduction.
Savings achieved through this cost reduction shall be placed in the Kansas
savings incentive account or fund for that agency. The remaining balance
of the savings achieved through this cost reduction shall revert to the state
general fund.

      (2) Each state agency shall submit each suggestion it receives, to-
gether with the state agency's estimated cost reduction, if any, and dis-
pensation of the suggestion to the division of the budget. The director of
the budget shall file copies with the director of the legislative research
department, who shall report annually on the information to members of
the legislative budget committee.

      (g)  (1) Salary bonus payments under the Kansas savings incentive
program shall be made only for the following conditions:

      (A) Suggestions Monetary innovation awards made under subsection
(f) for which a 10% suggestion bonus had not been awarded, or

      (B) for awards and recognition provided pursuant to subsection (a).

      (2) The director of personnel services shall establish guidelines and
limitations for bonus payments under the Kansas savings incentive pro-

      (h) Awards and incentives and other recognition pursuant to this sec-
tion shall not be deemed in violation of K.S.A. 46-237a, and any amend-
ments thereto.

      (i) The provisions of subsections (f) and (g) of this section shall expire
on June 30, 2006.

 Sec.  2. K.S.A. 2002 Supp. 75-37,105 is hereby repealed.

 Sec.  3. This act shall take effect and be in force from and after its
publication in the Kansas register.

Approved April 21, 2003.
 Published in the Kansas Register May 1, 2003.