2023-2024 Bill 108 Text of Previous Version (May. 08, 2023)

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Committee Report

May 4, 2023

S. 108

Introduced by Senators Davis, Scott, Kimbrell, Climer, Senn, Young, Fanning, Reichenbach, Peeler, Alexander, Cash, Malloy, Garrett, Rice, Cromer, McElveen, Loftis, Stephens, Corbin, Campsen and Adams

S. Printed 05/04/23--H. [SEC 5/8/2023 4:59 PM]

Read the first time March 30, 2023

________

The committee on Senate Rules

To who was referred a Bill (S.108) to amend the South Carolina Code of Laws by amending Section 9-1-1770, relating to Preretirement Death Benefit Programs under the South Carolina Retirement System, etc., respectfully

Report:

That they have duly and carefully considered the same, and recommend that the same do pass with amendment:

Amend the bill, as and if amended, by deleting SECTION 1.

Amend the bill further, by adding appropriately numbered SECTIONS to read:

SECTION X. Section 42-7-90 of the S.C. Code is amended by adding:

(3) first responder line of duty death benefit.

(a) For the purposes of this item, the term "first responder" means:

(i) an emergency medical technician as defined in Section 44-61-20(12);

(ii) a law enforcement officer as defined in Section 23-23-10(E)(1), including detention and corrections officers;

(iii) reserves as defined in Section 23-28-10(A);

(iv) constables appointed pursuant to Section 23-1-60;

(v) a fire department worker or volunteer worker; or

(vi) a coroner or a deputy coroner directly engaged in examining, treating, or directing persons during an emergency.

(b) Upon receipt by the State Accident Fund of the satisfactory proof of death of a first responder as defined in subitem (a) whose death was a natural and proximate result of an injury by external accident or violence incurred while undergoing a hazard peculiar to the first responder's employment as a first responder while in the actual performance of his duty, provided that his death is not the result of the first responder's wilful negligence, suicide, or intentionally self-inflicted bodily injury, there must be paid from the State Accident Fund to the designated beneficiary a one-time, lump sum benefit payment of seventy-five thousand dollars.

(c) The amount of the benefit provided for in subitem (b) is increased to a total of one hundred fifty thousand dollars if the first responder is killed in the line of duty as defined above and the first responder's death is either:

(i) the result of an unlawful and intentional act of another person; or

(ii) the result of an accident that occurs:

(A) as a result of the first responder's response to fresh pursuit, defined as the pursuit of a person who has committed or is reasonably suspected of having committed a felony, misdemeanor, traffic infraction, or violation of a county or municipal ordinance;

(B) as a result of the first responder's response to what is reasonably believed to be an emergency;

(D) while the first responder is enforcing what is reasonably believed to be a traffic law or ordinance.

(d) Payments made pursuant to this item must be paid to the beneficiary designated for this benefit by the first responder in writing and filed with the State Accident Fund in a manner prescribed by the agency during the first responder's lifetime. If no designation is made, then the payment must be paid to the first responder's surviving spouse. If there is no surviving spouse, the payment must be paid to the first responder's surviving children in equal portions. If there is no surviving spouse or child, the benefit is payable to the first responder's surviving parents in equal portions. If a beneficiary is not designated and there is no surviving child, spouse, or parent, then the sum must be paid to the first responder's estate. The payments required by this subsection are in addition to any other benefit set forth in this chapter or otherwise in law, including worker's compensation, and are exempt from the claims and demands of creditors of the first responder.

(e) Any benefits paid pursuant to this item are not subject to subrogation, assignment, set-off, or lien claimed pursuant to Section 42-1-560.

(f) Within thirty days after a written determination of the State Accident Fund regarding payment, a person or representative of the estate, as set out in subitem (d), may seek relief by requesting a contested case hearing before the Administrative Law Court in accordance with its rules. A hearing may be requested to contest any part of the decision made pursuant to this section.

SECTION X. Article 1, Chapter 7, Title 42 of the S.C. Code is amended by adding:

Section 42-7-220. There is established, within the office of the State Accident Fund, the South Carolina First Responder Line of Duty Death Benefit Fund. This fund is separate and distinct from the general fund of the State and all other funds. Earnings and interest on this fund must be credited to it and any balance in this fund at the end of the fiscal year carries forward in the fund in the succeeding fiscal year. This fund is created to ensure payment of line of duty death benefits to first responders as defined in 42-7-90 and only may be used for that purpose. The fund must be administered by the Director of the State Accident Fund who shall establish procedures to implement this section. The Director of the State Accident Fund shall report to the State Treasurer expenditures made from the fund pursuant to this section. From the general fund of the State, the State Treasurer monthly shall deposit in the account sufficient funds to pay claims pursuant to this section. The amount deposited may not exceed the actual amount paid in claims.

Amend the bill further, by striking SECTION 5 and inserting:

SECTION 5. This act takes effect on July 1, 2024.

Renumber sections to conform.

Amend title to conform.

BRUCE BANNISTER for Committee.

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This amended bill requires a lump sum payment of $75,000 to be paid to the beneficiary of a first responder who is killed in the line of duty if certain criteria are met. The payment is increased to $150,000 if the first responder is killed in the line of duty and the death is a result of an unlawful and intentional act of another person, or the first responder is killed while responding to an emergency or other similar incident. Currently, the preretirement incidental death benefit is equal to the member's annual earnable compensation at the time of death. This bill will provide an additional $75,000 or $150,000 payment. The payments made must be from the contributions made by participating employers to the Preretirement Death Benefit Program under either PORS or SCRS. The bill also specifies that the payments made for an emergency medical services provider volunteer, a law enforcement volunteer, or a fire department volunteer must be paid from the SAF.

PEBA provided an actuarial analysis to determine the potential impact covering law enforcement officers and emergency medical services providers will have on PORS and SCRS. The actuarial analysis anticipates that approximately two to three line-of-duty deaths occur each year for law enforcement officers in PORS based on historical experience, which results in an increase of $300,000 in death benefits paid for law enforcement officers. This will increase the cost of PORS by around 0.02 percent annually, which the report considers to be a minimal impact to the actuarial accrued liability, and about a 0.02 percent increase in the normal cost rate in PORS. This estimate is based on the actuarial valuation of PORS as of July 1, 2022.

PEBA does not currently have line-of-duty information for members in SCRS to determine the member's occupation. As such, the actuarial analysis assumes that the experience in SCRS for emergency medical services providers will be similar to PORS, for a potential annual cost of $300,000 for two to three line-of-duty deaths each year. Alternatively, this would increase to $1,200,000 if there are eight to ten line-of-duty deaths. However, since the covered payroll for SCRS is several times larger than covered payroll for PORS, the cost impact as a percentage is significantly smaller than the estimated 0.02 percent increase for PORS.

Given the limited information available, we have provided the following analysis of the potential cost of the amended bill based on our research and the information provided by PEBA.

An analysis of occupational deaths related to emergency services estimated a rate of 14.2 fatalities per 100,000 police officers, 12.7 for emergency medical services providers, and 16.5 for firefighters annually. Currently, there are approximately 15,089 Class 1, 2, and 3 law enforcement officers based on data from the SC Criminal Justice Academy. The SC Office of State Fire Marshall reports that there are approximately 18,500 firefighters employed in SC, including volunteer and paid firefighters. Further, the Department of Health and Environmental Control reported approximately 12,328 emergency medical technicians. Based on these rates and the above employment levels, we would estimate approximately 2 law enforcement deaths, 3 firefighter death, and 2 emergency medical services provider deaths per year.

From these figures, we would estimate that the bill as amended will increase death benefits from PORS by approximately $750,000 and SCRS benefits by approximately $300,000, for a total of up to $1,050,000 per year to the two retirement systems. These figures are based on the $150,000 benefit and would be lower if any of the eligible deaths do not meet the requirements for the enhanced payment level. However, if any of these first responders are volunteers, this could shift responsibility of the payments of the death benefits to the SAF.

The SAF expressed concerns regarding the administration of payments for volunteers. First, it is unclear from the bill if the volunteer must be a participant in SCRS or PORS to collect the benefit payments. The SAF believes that it is possible that a volunteer could collect under both subitems 5 and 6 of 9-1-1770(D)(5) and (6)/9-11-120(E)(5) and (6). If it is not a requirement that the individual be a participant in SCRS or PORS to collect the death benefit, there appears to be a possibility for the beneficiary of a person who is a member and a volunteer to receive a double the death benefits, or the possibility of a conflict regarding responsibility for payment of those benefits. This could either create a situation for a double recovery, or, if the statute limits the individual to a single recovery, it does not clarify the issue of whether these funds should come from the Preretirement Death Benefit Program or the SAF.

Ultimately, the impact on the SAF will depend on the benefit payments required. Additionally, the SAF is entirely funded by premiums paid by policyholders. The bill does not provide a mechanism by which the SAF can be reimbursed for any benefits paid under these sections. Therefore, the fiscal impact would depend on whether a mechanism is added to the bill under which SAF can be reimbursed. At this time, there is no method for generating the funds to cover these payments.

State Expenditure

This bill requires an employer who participates in the Preretirement Death Program to pay the beneficiary of a law enforcement officer who is killed in the line of duty a lump sum payment of $75,000. The payment is increased to $150,000 if the officer is killed in the line of duty and the death is a result of an unlawful and intentional act of another person, or the officer is killed while responding to an emergency or other similar incident. Currently, the preretirement incidental death benefit is equal to the member's annual earnable compensation at the time of death. This bill will provide an additional $75,000 or $150,000 payment.

PEBA provided an actuarial analysis to determine the potential impact this bill will have on PORS. The report assumes that all law enforcement officers who would be eligible for these death benefits are covered through PORS and that there will be no measurable impact to the South Carolina Retirement System. This analysis anticipates that approximately two to three line of duty deaths occur each year, which results in an increase of $300,000 in death benefits paid. This will increase the cost of PORS by around 0.02 percent annually, which the report considers to be a minimal impact to the actuarial accrued liability, and about a 0.02 percent increase in the normal cost rate in PORS. This estimate is based on the actuarial valuation of PORS as of July 1, 2022.

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

________

A bill

to amend the South Carolina Code of Laws by amending Section 9-1-1770, relating to Preretirement Death Benefit ProgramS under the south carolina retirement system, so as to provide for a death benefit for law enforcement officers killed in the line OF duty, to provide for the amount of the benefit, to provide who shall RECEIVE the death benefit payment, and to provide the source of the revenue for the payment; and by amending Section 9-11-120, relating to A Preretirement Death Benefit Program under the police officers retirement system, so as to provide for a death benefit for law enforcement officers killed in the line OF duty, to provide for the amount of the benefit, to provide who shall RECEIVE the death benefit payment, and to provide the source of the revenue for the payment.

Be it enacted by the General Assembly of the State of South Carolina:

SECTION 1. Section 9-1-1770(D) of the S.C. Code is amended to read:

(D)(1) RESERVED For the purposes of this subsection, "law enforcement officer" means a person who meets the requirements of Section 23-23-10(E)(1) of the S.C. Code of Laws and who is certified by the South Carolina Law Enforcement Training Council.For the purposes of this subsection, the term "first responder" means an emergency medical services provider or volunteer provider, a law enforcement officer or volunteer officer who meets the requirements of Section 23-23-10(E)(1) of the S.C. Code of Laws and who is certified by the South Carolina Law Enforcement Training Council, a fire department worker or volunteer worker, a coroner, or a deputy coroner directly engaged in examining, treating, or directing persons during an emergency.

(2) Upon receipt by the system of the satisfactory proof of death of a member of the system whose employer participates in the Preretirement Death Benefit Program and whose death was a natural and proximate result of an injury by external accident or violence incurred while undergoing a hazard peculiar to the member's employment as a first responder while in the actual performance of his duty, provided that his death is not the result of the member's wilful negligence, suicide, or intentionally self-inflicted bodily injury, there must be paid to the member's designated beneficiary a one-time, lump sum benefit payment of seventy-five thousand dollars.

(3) The amount of the benefit provided for in item (2) is increased to a total of one hundred fifty thousand dollars if the member is killed in the line of duty as defined above and the member's death is either:

(a) the result of an unlawful and intentional act of another person; or

(b) the result of an accident that occurs:

(i) as a result of the member's response to fresh pursuit, defined as the pursuit of a person who has committed or is reasonably suspected of having committed a felony, misdemeanor, traffic infraction, or violation of a county or municipal ordinance;

(ii) as a result of the member's response to what is reasonably believed to be an emergency;

(iii) at the scene of a traffic accident to which the member has responded; or

(iv) while the member is enforcing what is reasonably believed to be a traffic law or ordinance.

(4) Payments made pursuant to this subsection must be paid to the beneficiary designated for this benefit by the member in writing and filed with the system during the member's lifetime. If no designation is made, then the payment must be paid to the member's surviving spouse. If there is no surviving spouse, the payment must be paid to the member's surviving children in equal portions. If there is no surviving spouse or child, the benefit is payable to the member's surviving parents in equal portions. If a beneficiary is not designated and there is no surviving child, spouse, or parent, then the sum must be paid to the member's estate. The payments required by this subsection are in addition to any other benefit set forth in this chapter or otherwise in law, including worker's compensation, and are exempt from the claims and demands of creditors of the member.

(5) Payments made pursuant to this subsection must be paid from the contributions made by participating employers to the Preretirement Death Benefit Program. Notwithstanding any other provision of law, the board may adjust the required contributions to the Preretirement Death Benefit Program as necessary to fund these benefits on the basis of the program's actual experience and the recommendation of the system's actuary.

(6) Payments made pursuant to this subsection to a beneficiary of an emergency medical services provider volunteer, a law enforcement officer volunteer, or a fire department volunteer must be paid from the State Accident Fund with a verification and disbursement process identical to the manner in items (2) through (4).

(7) Any benefits paid pursuant to this subsection are not subject to subrogation, assignment, set-off, or lien claimed pursuant to Section 42-1-560.

SECTION 2. Section 9-11-120(E) of the S.C. Code is amended to read:

(E)(1) [Reserved] For the purposes of this subsection, "law enforcement officer" means a person who meets the requirements of Section 23-23-10(E)(1) of the S.C. Code of Laws and who is certified by the South Carolina Law Enforcement Training Council.For the purposes of this subsection, the term "first responder" means an emergency medical services provider or volunteer provider, a law enforcement officer or volunteer officer who meets the requirements of Section 23-23-10(E)(1) of the S.C. Code of Laws and who is certified by the South Carolina Law Enforcement Training Council, a fire department worker or volunteer worker, a coroner, or a deputy coroner directly engaged in examining, treating, or directing persons during an emergency.