A BILL TO BE ENTITLED
AN ACT prospectively eliminating longevity pay for state employees subject to the state personnel act who are hired on or after january 1, 2006, and providing that the savings generated shall be used for pay improvements.
The General Assembly of North Carolina enacts:
SECTION 1.  G.S. 138.4 reads as rewritten:
"§ 138‑4.  Governor to set salaries of administrative officers; exceptions; longevity pay.
(a)	The salaries of all State administrative officers not subject to the State Personnel Act shall be set by the Governor, unless a law provides otherwise.
Whenever by law it is provided that a salary shall be fixed or set by the General Assembly in the Current Operations Appropriations Act, and that office or position is filled by appointment of the Governor, or the appointment is subject to the approval of the Governor, or is made by a commission a majority of whose members are appointed by the Governor, then the Governor may, increase or decrease the salary of a new appointee by a maximum of ten percent (10%) over or under the salary of that position as provided in the Current Operations Appropriations Act, such increased or decreased salary to remain in effect until changed by the General Assembly or until the end of the fiscal year, whichever occurs first. The Governor under this paragraph may not increase the salary of any nonelected official above the level set in the Current Operations Appropriations Act for any member of the Council of State. This section does not apply to any office filled by election by the people, and does not apply to any office in the legislative or judicial branches.
Prior to taking any action under this section, the Governor may consult with the Advisory Budget Commission.
Except as provided in subsection (b) of this section, officials whose salaries are covered by the provisions of this section shall be eligible for longevity pay on the same basis as is provided to employees of the State who are subject to the State Personnel Act.
(b)	Any State employee who is on duty on December 31, 2005, shall be eligible to receive, or as they become eligible shall begin to receive, longevity pay according to longevity pay schedules in effect on that date. State employees on duty on December 31, 2005, will be eligible for any future increases in longevity pay according to the longevity pay schedules in effect on that date. Employees who are reduced‑in‑force and who are reemployed within 12 months remain eligible for the longevity program. Any State employee who is subject to the State Personnel Act and who is hired on or after January 1, 2006, shall not be eligible to participate in the State's longevity pay program. Any funds saved through the elimination of longevity pay for these employees shall be retained by State agencies, departments, and institutions, and The University of North Carolina, to be used exclusively for pay improvements for State employees in those departments who are subject to the State Personnel Act, and these funds shall be in addition to funds available through the Salary Adjustment Fund allocation."
SECTION 2.  This act becomes effective July 1, 2005.