DAR File No. 39943

Administrative Services, Finance

Rule R25-15

Change Date and Set Aside Provisions for Annual Leave II

Notice of Proposed Rule

(New Rule)

DAR File No.: 39943
Filed: 11/12/2015 12:08:37 PM

RULE ANALYSIS

Purpose of the rule or reason for the change:

This rule is required by legislation, see S.B. 269 from the 2014 General Session. S.B. 269 requires the Division of Finance to make rules to establish a change date for annual leave II; and for the determination, collection, and deposit of set-aside rates for annual leave II.

Summary of the rule or change:

This rule is to establish a change date for annual leave II. The change date established by the Division of Finance is 06/20/2015. All annual leave accrued on or after the change date, to an employee who is eligible to receive paid leave, will be considered annual leave II. State agencies are required to offer annual leave II in lieu of annual leave to eligible employees on or after the change date. The rule also requires the Division of Finance to determine a set-aside rate for each subfund of the annual leave trust fund. The set-aside rates will be determined by the expected increase in the annual leave liability subject to a 10% cap. The rule names the subfunds of the trust and requires the Division of Finance to apply the set-aside rates to gross pay of eligible employees and deposit the amounts generated into the applicable subfunds of the trust. There is no impact to state employees. The rule does not affect existing annual leave benefits. (DAR NOTE: A corresponding 120-day (emergency) Rule R25-15 that is effective as of 11/12/2015 is under DAR No. 39942 in this issue, December 1, 2015, of the Bulletin.)

State statutory or constitutional authorization for this rule:

• Subsection 67-19-14.6(2)
• Subsection 67-19-14.6(7)(b)
• Subsection 67-19-14.6(4)
• Subsection 67-19-14.6(5)

Anticipated cost or savings to:

the state budget:

There may be a cost to the state budget, but it will depend on whether there is a projected increase in the annual leave liability each year. The cost to the state will be further limited to a cap of 10% of the total annual leave liability that can be deposited into the trust from funds generated by the set aside rates. There is no impact to state employees, and the rule does not affect existing annual leave benefits.

local governments:

There will not be costs to local governments because the rule only governs state employees eligible to receive paid leave for leave accrued after 06/20/2015.

small businesses:

There will not be costs to small businesses because the rule only governs state employees eligible to to receive paid leave.

persons other than small businesses, businesses, or local governmental entities:

State employees' annual leave accrued on or after 06/20/2015 will be considered annual leave II. State agencies are required to offer annual leave II in lieu of annual leave to eligible employees on or after the change date. This rule does not affect existing annual leave benefits of state employees.

Compliance costs for affected persons:

The rule establishes a change date for leave accrued on or after the change date of June 20, 2015. State employees' annual leave accrued after June 20, 2015 will be considered annual leave II. Because the rule does not require any new action on the part of state employees who are eligible for annual leave there are no compliance costs.

Comments by the department head on the fiscal impact the rule may have on businesses:

There will be no fiscal impact to businesses because the rule only applies to state employees eligible to receive paid leave.

Kimberly K. Hood, Executive Director

The full text of this rule may be inspected, during regular business hours, at the Division of Administrative Rules, or at:

Administrative Services
Finance
Room 2110 STATE OFFICE BLDG
450 N STATE ST
SALT LAKE CITY, UT 84114-1201

Direct questions regarding this rule to:

• John Reidhead at the above address, by phone at 801-538-1678, by FAX at 801-538-3244, or by Internet E-mail at [email protected]

Interested persons may present their views on this rule by submitting written comments to the address above no later than 5:00 p.m. on:

12/31/2015

This rule may become effective on:

01/07/2016

Authorized by:

John Reidhead, Director

R25. Administrative Services, Finance.

R25-15. Change Date and Set Aside Provisions for Annual Leave II.

R25-15-1. Authority, Purpose, and Definitions.

(1) This rule is authorized under Subsection 67-19-14.6(2) which requires the division to establish a change date, and Subsection 67-19-14.6(7)(b) which requires the division to make rules for the set aside provisions under Subsections 67-19-14.6(4)and 67-19-14.6(5).

(2) Terms used in this rule are defined in Subsection 67-19-14.6(1).

 

R25-15-2. Change Date.

For the purposes of Subsection 67-19-14.6(2):

(1) The change date established by the division is June 20, 2015.

(2) All annual leave accrued on or after the change date, to an employee who is eligible to receive paid leave, will be considered annual leave II.

(3) State agencies are required to offer annual leave II in lieu of annual leave to eligible employees on or after the change date.

 

R25-15-3. Determination of Set Aside.

(1) The division may contract with a qualified actuary to help the division determine the expected change in the annual leave liability for a fiscal year.

(2) As required by generally accepted accounting principles and with consideration of Subsection 67-19-14.6(4), the division will calculate the annual leave liability to include applicable employer paid taxes and other employer paid benefits that would be required if the employee were paid for the annual leave.

(3) For each fiscal year, if the division expects the annual leave liability to increase, the division, in consultation with the Governor's Office of Management and Budget, will determine a rate for set aside for each applicable subfund of the annual leave trust.

(4) The division will inform the legislative Fiscal Analyst of the proposed set-aside rates.

(5) The set-aside rates will be determined as a percentage of gross pay of an employee who is eligible to receive paid leave, which if put into effect, would be expected to generate the amount of the projected increase in the annual leave liability applicable to each subfund of the annual leave trust.

(6) In accordance with Subsection 67-19-14.6(4)(c) and Subsection 67-19f-201(3)(b), the proposed set-aside rates will also be adjusted or eliminated as applicable if the accrual of funding in a subfund of the annual leave trust is expected to reach 10% of the annual leave liability attributable to the subfund.

(7) At the beginning of each fiscal year, the division will put into effect the set aside rates authorized by the Legislature for the fiscal year.

 

R25-15-4. Collection and Deposit of Set Aside in Subfunds of the Annual Leave Trust.

(1) To implement the provision of Title 67 Chapter 19f, State Employees' Annual Leave Trust Fund Act, the division created the following subfunds within the trust:

(a) Public Safety,

(b) Transportation,

(c) Public Education, and

(d) General.

(2) The Public Safety subfund applies to all employees within the Department of Public Safety.

(3) The Transportation Subfund applies to all employees within the Department of Transportaion.

(4) The Public Education subfund applies to all employees within the State Office of Education and State Office of Vocational Rehabilitation.

(5) The General subfund applies to all other employees in the Executive, Legislative, and Judicial Branches of the State.

(6) The division shall deposit in each applicable subfund, the amount of funds generated by applying the authorized set-aside rates to each employee eligible to receive paid leave.

(7) In consultation with the Governor's Office of Management and Budget, in accordance with Subsection 67-19-14.6(4)(c) and Subsection 67-19f-201(3)(b), the division will reduce or stop charging a set-aside rate if the funding in a subfund of the annual leave trust reaches or is expected to reach 10% of the annual leave liability attributable to the subfund.

 

KEY: annual leave, trust fund, liability, state employees

Date of Enactment or Last Substantive Amendment: 2016

Authorizing, and Implemented or Interpreted Law: 67-19-14.6(2); 67-19-14.6(7)(b); 67-19-14.6(4); 67-19-14.6(5); 67-19-14.6(1)