Amend CSHB 1 as follows:
      (1)  On page IX-21 through IX-24, amend Section 1,
Subsections 1 through 18, to read as follows:
                 SALARY ADMINISTRATION PROVISIONS
      1.  Salary Rates for Classified Positions. For each fiscal
year of the biennium beginning September 1, 1997, annual salary
rates for classified positions shall be in accordance with the
above Classification Salary Schedules. Except as specifically
provided by other provisions of this Act, salaries of state
employees who in August 1997 are in classified positions shall be
converted to the salary schedules set forth in this Act as follows:
            a.  For the fiscal year beginning September 1, 1997 the
salary of an employee, who in August 1997 is paid as a classified
employee shall be converted to Salary Schedule A, B, or C to the
appropriate salary group at the same salary rate in which paid in
August 1997, except as provided under Section 1, Subsection
1(d).<at a numbered salary step in salary groups 2 through 21,
shall be converted to the salary schedule for fiscal year 1998 in
this Act at the same numbered salary step in the same salary group
in which paid in August 1997.>
            b.  For the fiscal year beginning September 1, 1997,
the salary of an employee, who in August 1997 is paid as an
employee exempt from the Classification Act, and whose position is
not listed in the agency's "Schedule of Exempt Positions" in this
Act, shall be converted to Salary Schedule A, B, or C to the
appropriate salary group at the same salary rate in which paid in
August 1997, except as provided under Section 1, Subsection 1(d).
            c.<b.>  For the fiscal year beginning September 1, 1998
the salary of a<an> classified employee<, who in August 1998 is
paid at a numbered salary step in salary groups 2 through 21,>
shall be converted to the applicable salary schedule for the fiscal
year 1999 in this Act at the same <numbered> salary rate<step> in
the same salary group in which paid in August 1998.
            d.  There is no authority to grant salary increases as
part of the conversion of employees to Salary Schedules A, B, and
C, except in the cases of: across-the-board salary increases
authorized in this Act; employees whose positions are reallocated
or reclassified in accordance with Subsections 3 and 4; or the
following:
                  (1)  Employees converted to Salary Schedule A who
are paid as positions exempt from the Classification Act in August
1997, and whose salaries fall between step rates in Salary Schedule
A, will move to the next higher salary step rate.
                  (2)  Employees converted to Salary Schedule C
whose salaries as of August 1997 are below the designated salary
rates for their salary groups shall have their salaries raised to
the applicable salary rates.
            e.  Notwithstanding other provisions in this Act,
agencies are authorized to pay salaries that are below or in excess
of the designated salary ranges in Section 1 as a result of the
fiscal year 1998 conversion of employees to appropriate salary
groups in Salary Schedules A and B. An employee hired by the State
on or after September 1, 1997, including interagency transfers,
must be paid at a salary rate that falls within the salary range of
the applicable salary group.
            f.  Notwithstanding other provisions in this Act, the
Department of Public Safety is authorized to pay its employees
classified as Corporal I, II, III, or IV, Traffic Law Enforcement,
at rates that exceed the maximum rates designated in Salary
Schedule C by up to $600.00 per fiscal year.
            g.  Employees within the Principals, Teachers,
Supervisors, and Coaches title at the School for the Blind and
Visually Impaired and the School for the Deaf are not subject to
the salary administration provisions in this section.
      2.  Salary When an Employee Changes Salary Status. An
employee who moves within an agency from an exempt position to a
classified position shall receive an annual salary rate in the
proper salary group not to exceed the salary step equal to the
current salary or the next higher salary step rate if moving to a
classification in Salary Schedule A, or an annual salary rate not
to exceed the current salary or the maximum of the new salary
range, whichever is lower, if moving to a classification in Salary
Schedule B.
      3.  Adjustments to Salary Rates for Reallocated Positions.
            a.  Reallocation to a higher salary group -- an
employee whose classified position is reallocated by this Act to a
higher salary group in Salary Schedule A or B shall receive the
minimum<step 1> rate in the higher salary group or the rate which
he would have received had his classified position not been
reallocated, whichever rate is higher; provided, however, an
employee whose classified position is reallocated by this Act to a
higher salary group may have his salary adjusted not more than two
steps (or 6.8%) higher than otherwise provided by this section.
Such additional adjustment shall be for the purpose of maintaining
desirable salary relationships among employees in the affected
positions. However, in no case shall the employee advance to a step
number in the new salary group higher than the step number rate
held prior to the reallocation or receive an increase greater than
6.8%. For the purpose of reallocation, "higher salary group" shall
mean a salary group with a higher minimum salary rate.
            b.  Reallocation to a lower salary group -- an employee
whose classified position is reallocated by this Act to a lower
salary group in Salary Schedule A or B shall receive the annual
rate which he would have received had the position not been
reallocated, not to exceed the maximum<step 8> rate of the lower
salary group. For the purpose of reallocation, "lower salary group"
shall mean a salary group with a lower minimum salary rate.
      4.  Reclassification.
            a.  As provided in the Position Classification Act, a
position may be reclassified to another class of work in the
Position Classification Plan as a result of classification audits
or of program reorganizations by executive heads, or to a new
classification properly established by the Legislature.
Reclassification shall not be interpreted to mean a change in the
employee's duty assignment, but only shall mean the proper
definition of duties and classification of the position based upon
duties actually performed by the employee; hence, a position shall
be reclassified for the sole purpose of complying with the
requirements of the Position Classification Act. When
reclassifications are determined to be appropriate, they may be
made on a monthly basis.
            b.  Review of positions on September 1 -- all state
agencies subject to the Position Classification Act shall review
individual job assignments on September 1 of each fiscal year, and
may also review job assignments on a monthly basis, to insure that
each position is properly classified.
            c.  If it is determined that, in compliance with the
Position Classification Act, a position should be reclassified to a
classification: (a) in a higher salary group in Salary Schedule A
or B, the salary rate of the employee shall be determined in the
same manner as prescribed above for reallocation to a higher salary
group, or (b) in a lower salary group in Salary Schedule A or B,
the salary rate of the employee shall be determined in the same
manner as prescribed above for reallocation to a lower salary
group. For the purpose of reclassification, "higher salary group"
shall mean a salary group with a higher maximum salary rate; "lower
salary group" shall mean a salary group with a lower minimum salary
rate.
            d.  Each agency shall report to the State
Classification Office the results of such reviews and the approach
used to comply with the subsection and in the event the approach
taken is determined by the State Classification Office to be
inadequate, compliance audits to determine proper classification
shall be undertaken.
      5.  Merit Salary Increases. It is expressly provided that
agency administrators may grant merit salary increases to
classified employees in Salary Schedules A and B whose job
performance and productivity is consistently above that normally
expected or required. For classified employees in Salary Schedule
A, a merit increase involves an increase in an employee's salary to
a higher step rate in the same salary group. For classified
employees in Salary Schedule B, a merit increase involves an
increase in an employee's salary to a higher rate within the range
of the same salary group.  Such merit increases shall be subject to
the following restrictions:
            a.  The Comptroller shall prescribe such accounting and
reporting procedures as are necessary to insure the availability of
information reflecting each agency's utilization of merit salary
increases.
            b.  It is the intent of the Legislature that merit
salary increases be applied throughout the range of classified
salary groups utilized by each agency.
            c.  For an employee to be eligible for a merit salary
increase, the following additional criteria must be met: (a) the
employee must have been employed by the agency in a classified
position for at least six continuous months prior to the award, (b)
at least twelve months must have elapsed since the employee's last
promotion, demotion, or merit salary increase at the agency, and
(c) agency criteria for granting merit salary increases must
include specific criteria and documentation to substantiate the
granting of a<more than a one step> merit increase.
      6.  Promotions. A promotion means a change in duty assignment
of an employee within an agency from a position in one
classification to a position in another classification in a higher
salary group requiring higher qualifications, such as a greater
skill or longer experience, and involving a higher level of
responsibility. When an employee is promoted to a position in a
higher salary group in Salary Schedule A or B, he will receive a
salary rate at least one increment (or 3.4%) higher than his salary
rate before promotion or the minimum rate of the new salary range,
whichever is higher, and may, at the discretion of the agency
administrator, receive an annual rate up to and including the
maximum rate of the new salary range.<rate designated by the same
step number which designated his former rate.> For the purpose of
promotion, "higher salary group" shall mean a salary group with a
higher minimum salary rate.
      7.  Demotions. Demotion means a change in duty assignment of
an employee from a position in one classification to a position in
another classification in a lower salary group. When an<An>
employee <who> is demoted to a position in a lower salary group in
Salary Schedule A or B, he will receive a salary rate at
least<shall have his salary reduced at least to a rate> one
increment (or 3.4%) below the rate he received before demotion. As
an exception to the provisions in this paragraph, an agency is not
required to reduce an employee's salary if: i) the employee accepts
a position in another classification in a lower salary group in
lieu of a layoff under a reduction in force, or ii) the employee is
selected for another position in a classification in a lower salary
group as a result of applying for the position. For the purpose of
demotion, "lower salary group" shall mean a salary group with a
lower minimum salary rate.
      8.  Salary Reduction for Disciplinary Reasons. If a
classified employee's performance so warrants, the executive head
may reduce his salary for disciplinary reasons to a <step> rate in
the designated salary group no lower than the minimum <step> rate.
The employee's pay may be restored to any (<step> rate in the range
up to and including his prior rate as such employee's performance
improves.
      9.  Reductions in Force. Notwithstanding agency rules,
regulations, personnel handbooks or policies, agencies undergoing
statutorily mandated reorganizations may institute reductions in
force occurring as a direct result of the reorganizations.
      10.  Salary Limited to Maximum Step Rate. No salary
adjustment authorized by this section shall result in an employee
receiving an annual salary rate in excess of the maximum rate of
the salary group to which his classified position is allocated.
      11.  Temporary Assignment. To facilitate the work of state
agencies, any classified employee may, during emergencies or other
special circumstances, be temporarily assigned to other duties for
a period not to exceed six months and during that time may receive
the appropriate rate of pay if the temporary assignment is in a
class in a <higher> salary group with a higher minimum salary rate.
An employee may not be assigned to those duties for more than six
months during a twelve month period. During a temporary assignment,
an agency shall not: a) award a merit salary increase to the
employee, b) promote or demote the employee, or c) reduce the
employee's salary.
      12.  Part-time Employees. Regular full-time positions paid
out of funds appropriated may also be filled by part-time
employees. In computing the salaries of these employees, the rates
of pay shall be proportional to the rates authorized for full-time
classified employment or to the applicable exempt position. It is
further provided that part-time employees as described in this
subsection shall be subject to all of the provisions of this
section.
      13.  Hourly Employees. It is the intent of the Legislature
that hourly employees shall receive per hour rate increases
proportionate to those provided in this Act for full-time salaried
classified employees.
      14.  Salary Supplementation.
            a.  No employee holding a position classified in this
Act under the authority of the Position Classification Act or an
exempt position for which the salary is specifically set in, or
pursuant to, this Act may receive a salary supplement from any
source unless a specific grant of authority is provided by general
law.
            b.  None of the funds appropriated by this Act to state
agencies and to institutions of higher education shall be expended
for payment of salary to any person whose classified or exempt
salary is being supplemented from other than appropriated funds
until a report showing the amount and sources of salary being paid
from other sources has been reported to the Secretary of State and
Comptroller of Public Accounts.
      15.  Exemption of Positions by the Governor. Appropriations
may be used to pay the salaries of positions exempted from the
position classification plan by the Governor under authority
granted in Section 654.012(12)(A), Government Code, with the
limitation that appropriations may be used only to pay the salaries
of bona fide new positions established to carry out duties in
relation to programs, functions, etc., that were not anticipated
and, therefore, not funded under this Act. It is expressly provided
that this authorization does not extend to the use of
appropriations to adjust the salary of any exempt position retitled
solely for the purpose of adjusting a salary that has already been
established either in or through this Act and that any position
exempted from the Position Classification Plan by the Governor
shall contain a certification that the exemption is for a bona fide
new position. No payment of funds for a position exempted by the
Governor shall be made by the Comptroller of Public Accounts until
formal notification of the action of the Governor to exempt the
position has been filed with the State Classification Officer and
the Legislative Budget Board. A position exempted by the Governor
in the first year of this biennium may be continued and the NTE
rate established for the position may be adjusted the second year
of the biennium at a rate no higher than the rate set for in this
Act for adjusting classified positions.
      16.<Exempt Positions and> Classified Salary Rates.
            <a.>  <Exempt positions and compensation rates
authorized for fiscal years 1996 and 1997 pursuant to Article IX,
Section 1, Subsections 15 or 16.a., of House Bill 1, Seventy-fourth
Legislature, Regular Session, as may be adjusted for any
across-the-board salary increases authorized in that Act or in this
Act, are hereby reauthorized effective September 1, 1997 and shall
receive compensation at a rate not to exceed the amount established
by this authorization. This paragraph shall not apply to a position
listed in an agency "Schedule of Exempt Positions" in this Act.>
            <The maximum compensation rate authorized by the
preceding paragraph for an exempt position not listed in a
"Schedule of Exempt Positions" may be adjusted by the agency
administrator in an amount not to exceed 1.7% during any fiscal
year. A maximum compensation rate adjusted pursuant to this
provision during fiscal year 1996 may be readjusted during fiscal
year 1997 pursuant to this paragraph.>
            a.<b.>  Agencies covered by Section 1 of this article
shall make employments of personnel in accordance with the
provisions of the Position Classification Plan. Agencies may
utilize classified position titles as appropriate and may
determine, at the time of initial employment by the agency, the
salary rate<step> within the applicable salary<pay> group for
personnel employed under the Position Classification Plan. In no
event shall a classified position title be used to classify the
chief executive officer of an agency, except that an individual in
a classified position who is designated to act as the chief
executive officer on a temporary basis may continue to be paid a
salary under the Position Classification Plan in an amount not to
exceed the amount indicated for the agency's chief executive
officer in the agency "Schedule of Exempt Positions".
            b.  Salary Cap. For each fiscal year of the biennium
beginning September 1, 1997, the maximum monthly rate of
expenditure for merit salary increases and promotions awarded
during that fiscal year shall not exceed an amount equal to 1.7% of
the total amount expended by the agency in the prior fiscal year
for salaries divided by twelve. It is the intent of the Legislature
that the maximum rates of expenditures for merit salary increases
and promotions be computed separately for each year of the biennium
and that such merit salary increases and promotions as may be
awarded in the first fiscal year of the biennium shall not count
against the maximum monthly rate of expenditure for such increases
in the second fiscal year of the biennium.
      17.  Scheduled Exempt Positions.
            a.)  A position listed in a "Schedule of Exempt
Positions" shall receive compensation at a rate not to exceed the
amount indicated in that schedule.
            b.)  An exempt position listed in a "Schedule of Exempt
Positions" for which the term "Group", followed by an arabic
numeral, is indicated, may receive compensation at a rate within
the range indicated below for the respective salary group indicated
but not to exceed the amount indicated for that position in the
agency "Schedule of Exempt Positions".
              Scheduled Exempt Position Salary Rates
                  Minimum              Maximum
      Group       Salary               Salary
        1         $ 36,000             $  65,700
        2           51,840                77,760
        3           61,380                92,070
        4           72,720               109,080
        5           86,100               129,150
        6          102,000               157,500
      18.  Personnel and Payroll Reporting Procedures. To
facilitate pre-audit of payrolls and classification audits to
assure conformity with the provisions of this Act, and to provide
the Legislative Audit Committee with current information on
employment and wage rate practices in state government, the
Comptroller and the State Auditor shall jointly promulgate and
issue uniform procedures for personnel and payroll reporting for
all state agencies.
      (2)  On page IX-1, amend the first paragraph of Section 1 to
read as follows:
      PROVISIONS RELATING TO THE POSITION CLASSIFICATION PLAN
      Section 1. Except as otherwise specifically provided in this
Act, expenditures of appropriations for the salaries of employees
in classified positions in all affected agencies appropriated funds
by this Act, other than institutions of higher education,
university system offices, the Higher Education Coordinating Board,
and the National Research Laboratory Commission, shall be governed
by and be in conformity with the provisions of this Section,
including the following lists of position classification numbers,
position titles, salary group allocations, and rates of pay in
classification salary schedules hereinafter provided. As used with
respect to salary ranges, "minimum" means the lowest rate in a
salary range; "midpoint" means the rate designated as Step 5 in
Salary Schedule A; "midpoint" for Salary Schedule B will be
determined by adding the minimum and maximum rates of a salary
group and dividing the sum by two<4>; and "maximum" means the
highest rate designated in a salary range<as Step 8>. With respect
to Salary Schedule C, annual rates listed are actual salaries to be
paid to employees in the applicable salary groups, except for
ranges in C1 and C9 which allow for career development progressions
as established by the agencies.
      (3)  On pages IX-2 through IX-17, delete the Detailed Listing
of All Classified Positions and in its place insert the following:
      DETAILED LISTING OF ALL SCHEDULE A CLASSIFIED POSITIONS