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Current Status Bill Number:View additional legislative information at the LPITS web site.3053 Ratification Number:29 Act Number:16 Type of Legislation:General Bill GB Introducing Body:House Introduced Date:20010109 Primary Sponsor:J. Young All Sponsors:J. Young, Kirsh, Davenport, G.M. Smith, W.D. Smith, Harrison, Whipper Drafted Document Number:l:\council\bills\skb\18038som01.doc Date Bill Passed both Bodies:20010328 Date of Last Amendment:20010322 Governor's Action:S Date of Governor's Action:20010410 Subject:Embezzlement by employee; general lien created upon public retirement system or pension plan; Ethics, Crimes, Property History Body Date Action Description Com Leg Involved ______ ________ ______________________________________ _______ ____________ ------ 20010501 Act No. A16 ------ 20010410 Signed by Governor ------ 20010410 Ratified R29 House 20010328 Concurred in Senate amendment, enrolled for ratification ------ 20010326 Scrivener's error corrected Senate 20010322 Amended, read third time, returned to House with amendment ------ 20010314 Scrivener's error corrected Senate 20010313 Amended, read second time, notice of general amendments Senate 20010313 Committee amendment adopted Senate 20010307 Committee report: Favorable with 11 SJ amendment Senate 20010125 Introduced, read first time, 11 SJ referred to Committee House 20010124 Read third time, sent to Senate ------ 20010124 Scrivener's error corrected House 20010123 Amended, read second time ------ 20010118 Scrivener's error corrected House 20010117 Committee report: Favorable with 25 HJ amendment House 20010109 Introduced, read first time, 25 HJ referred to Committee House 20001206 Prefiled, referred to Committee 25 HJ Versions of This Bill Revised on January 17, 2001 - Word format Revised on January 18, 2001 - Word format Revised on January 23, 2001 - Word format Revised on January 24, 2001 - Word format Revised on March 7, 2001 - Word format Revised on March 13, 2001 - Word format Revised on March 14, 2001 - Word format Revised on March 22, 2001 - Word format Revised on March 26, 2001 - Word format
(A16, R29, H3053)
AN ACT TO AMEND CHAPTER 1, TITLE 8, CODE OF LAWS OF SOUTH CAROLINA, 1976, RELATING TO PUBLIC OFFICERS AND EMPLOYEES, BY ADDING SECTION 8-1-115 SO AS TO CREATE A GENERAL LIEN UPON ANY PUBLIC RETIREMENT OR PENSION PLAN NOT COVERED BY ERISA OF ANY PUBLIC OFFICER, EMPLOYEE, OR ANY OTHER PERSON WHO IS CONVICTED OF AN OFFENSE INVOLVING EMBEZZLEMENT OR MISAPPROPRIATION OF PUBLIC FUNDS OR PROPERTY TO THE PRIVATE USE OF HIMSELF OR ANY OTHER PERSON, TO THE EXTENT OF THE TOTAL LOSS, DAMAGE OR EXPENSE TO THE STATE, OR TO A COUNTY, MUNICIPALITY, OR OTHER POLITICAL SUBDIVISION OF THE STATE, TO PROVIDE FOR THE JUDGE SENDING A NOTICE OF THE LIEN TO THE ATTORNEY GENERAL AND APPROPRIATE RETIREMENT OR PENSION PLAN SYSTEM, TO PROVIDE THAT THE SPOUSE OR REPRESENTATIVE OF MINOR CHILDREN MAY FILE A PETITION TO HAVE THE JUDGE DISSOLVE THE LIEN IN WHOLE OR IN PART IN FAVOR OF THE SPOUSE OR MINOR CHILDREN BECAUSE THE SPOUSE OR MINOR CHILDREN WOULD SUFFER EXTREME FINANCIAL HARDSHIP IF THE LIEN WERE TO ATTACH, TO PROVIDE THE LIEN SHALL NOT ATTACH TO THE ALTERNATE PAYEE'S PORTION OF THE RETIREMENT BENEFIT IF THE CONVICTED PERSON IS SUBJECT TO A QUALIFIED DOMESTIC RELATIONS ORDER OR IF THE CONVICTED PERSON IS SUBJECT TO A CHILD SUPPORT ORDER, TO PROVIDE THAT AN ACTION TO ENFORCE THE LIEN CREATED BY THIS SECTION MAY BE BROUGHT AT ANY TIME UP TO THE DEATH OF A PERSON WHOSE RETIREMENT OR PENSION PLAN IS SUBJECT TO THE LIEN, TO PROVIDE FOR SATISFACTION AND DISCHARGE OF THE LIEN CREATED BY THIS SECTION BY THE ATTORNEY GENERAL OR HIS DESIGNEE; TO AMEND SECTION 9-1-1680, AS AMENDED, RELATING TO EXEMPTION, WITH EXCEPTIONS, OF ANNUITY RETIREMENT ALLOWANCES, AND CONTRIBUTIONS FROM TAXATION AND LEGAL PROCESS, SO AS TO PROVIDE THAT ANNUITIES, RETIREMENT ALLOWANCES, AND CONTRIBUTIONS ARE SUBJECT TO THE GENERAL LIEN CREATED BY SECTION 8-1-115 AND THE DOCTRINE OF CONSTRUCTIVE TRUST EX MALEFICIO; TO AMEND SECTIONS 9-8-190, 9-9-180, AND 9-11-270, ALL AS AMENDED, ALL RELATING TO THE EXEMPTION OF RETIREMENT ALLOWANCES FROM TAXATION AND LEGAL PROCESS, SO AS TO PROVIDE THE RETIREMENT ALLOWANCE IS SUBJECT TO SECTION 8-1-115 AND THE DOCTRINE OF CONSTRUCTIVE TRUST EX MALEFICIO; TO PROVIDE FOR THIS ACT'S RETROACTIVE APPLICATION; AND TO PROVIDE A SEVERABILITY CLAUSE.
Be it enacted by the General Assembly of the State of South Carolina:
Lien created on public retirement or pension plan of public officer or employee convicted of embezzling public funds; procedures; exceptions
SECTION 1. Chapter 1, Title 8 of the 1976 Code is amended by adding:
"Section 8-1-115. (A) There is hereby created a general lien upon any public retirement or pension plan not governed by ERISA of any public officer, public employee, or any other person who is convicted of an offense involving embezzlement or misappropriation of public funds or public property to the private use of himself or any other person, to the extent of the total loss, damage, and expense to the State, or to a county or municipality, or to any agency or political subdivision of the State, or to any state, county or municipal agency, any college or university, or to any school, special or public service district within the State, that is authorized by law to perform a governmental function or provide a governmental service.
(B)(1) The presiding judge before whom any public officer, employee, or any other person is convicted of an offense described in subsection (A) must send to the Attorney General and the appropriate retirement or pension plan system a notice of the lien showing the name of the person convicted whose retirement or pension plan is subject to the lien created by subsection (A) and the date of the conviction, which is the date upon which the lien attaches. The presiding judge must set the lien at the time of conviction and the presiding judge's notice of lien must state the amount of the lien.
(2)(a) Within ten days of the date of conviction, the convicted person's spouse or representative of the convicted person's minor children may file a petition with the presiding judge requesting the judge to dissolve the lien, in whole or in part, in favor of the spouse or minor children because the spouse or minor children would suffer extreme financial hardship if the lien were to attach. If the petition is filed, the lien is stayed pending a hearing on the petition and the ruling of the judge. Any benefits occurring during the stay accrue to the potential benefit of the spouse and minor children, if the petition is successful, and do not accrue to the benefit of the convicted person. The judge's ruling must be based on clear and convincing evidence that the spouse or minor children would suffer extreme financial hardship were the lien to attach and that the spouse or minor children have not been convicted of the same offense involving the embezzlement of public funds for which the lien was created. To the extent that the lien is dissolved in whole or in part in favor of the spouse or minor children, the appropriate retirement or pension plan system is directed to make payment directly to the spouse or representative of the minor children. The dissolution extends only until the minor children reach majority or the spouse dies or remarries at which time the lien reattaches.
(b) If the convicted person is divorced and is subject to a Qualified Domestic Relations Order (QDRO) pursuant to Section 9-18-10, et seq., then the lien shall not attach to the alternate payee's portion of the retirement benefit, unless the alternate payee has been convicted of the same offense involving embezzlement of public funds for which the lien was created. The pension plan is directed to make payment to the alternate payee in accordance with the provisions of the QDRO.
(c) If the convicted person's pension benefit is subject to an order for child support, then the lien shall not attach to the portion of the convicted person's benefit which goes to pay support for any minor child who has not been convicted of the same offense involving embezzlement of public funds for which the lien was created.
(C) In addition to any other sentence imposed upon a person convicted of an offense described in subsection (A) and taking into account the petition process set forth in subsection (B), the presiding judge may require full restitution of all public funds embezzled or misappropriated and full payment for the conversion, use, and value of public property appropriated to private use and may provide for an indeterminate sentence of incarceration or probation, or both, until restitution in full has been made.
(D) The Attorney General is charged with an affirmative duty to recover public funds and property embezzled or converted to private use, or the value thereof, and he or his designee may bring an action to enforce the lien created by this section at any time up to the death of a person whose retirement or pension plan is subject to the lien created by subsection (A).
(E) The Attorney General or his designee shall file a satisfaction and discharge of the lien created by this section after restitution has been made by payment of the amount of the lien in full or after the death of the person whose retirement or pension plan is subject to the lien created by subsection (A). If the beneficiary of the person whose retirement or pension plan is subject to the lien created by subsection (A) was, himself, convicted of the same offense involving the embezzlement or misappropriation of public funds or public property for which the lien was created, the lien must continue until restitution has been made or until the death of the beneficiary.
(F) The lien created by this section and the action to enforce the lien are cumulative and in addition to all other remedies provided by law."
Retirement allowance and annuity subject to lien
SECTION 2. Section 9-1-1680 of the 1976 Code, as last amended by Act 189 of 1989, is further amended to read:
"Section 9-1-1680. Except as provided in Section 8-1-115 and subject to the doctrine of constructive trust ex maleficio, the right of a person to an annuity or a retirement allowance or to the return of contributions, an annuity, or retirement allowance itself, any optional benefit, or any other right accrued or accruing to any person under the provisions of this chapter, and the monies of the system created under the provisions of this chapter or any private retirement system operated by a municipality, are exempted from any state or municipal tax, except the taxes imposed pursuant to Chapters 6 and 16 of Title 12, and exempted from levy and sale, garnishment, attachment, or any other process and are unassignable except as specifically otherwise provided in this chapter."
Retirement allowance subject to lien
SECTION 3. Section 9-8-190 of the 1976 Code, as last amended by Act 189 of 1989, is further amended to read:
"Section 9-8-190. Except as provided in Section 8-1-115 and subject to the doctrine of constructive trust ex maleficio, the right of a person to a retirement allowance or to the return of contributions, a retirement allowance itself, any optional allowance or payment on death or any other right accrued or accruing to any person under the provisions of this chapter, and the monies of the system are exempted from state or municipal tax, except the taxes imposed pursuant to Chapters 6 and 16 of Title 12, and exempted from levy and sale, garnishment, attachment, or any other process and are unassignable except as otherwise provided in this chapter."
Retirement allowance subject to lien
SECTION 4. Section 9-9-180 of the 1976 Code, as last amended by Act 189 of 1989, is further amended to read:
"Section 9-9-180. Except as provided in Section 8-1-115 and subject to the doctrine of constructive trust ex maleficio, the right of a person to a retirement allowance or to the return of contributions, a retirement allowance itself, any optional allowance or payment on death or any other right accrued or accruing to any person under the provisions of this chapter, and the monies of the system are exempted from any state or municipal tax, except the taxes imposed pursuant to Chapters 6 and 16 of Title 12, and exempted from levy and sale, garnishment, attachment, or any other process and are unassignable except as specifically otherwise provided in this chapter."
Retirement allowance subject to lien
SECTION 5. Section 9-11-270 of the 1976 Code, as last amended by Act 189 of 1989, is further amended to read:
"Section 9-11-270. Except as provided in Section 8-1-115 and subject to the doctrine of constructive trust ex maleficio, the right of a person to retirement allowance or to the return of contributions, a retirement allowance itself, any optional or death benefit, or any other right accrued or accruing to a person under the provisions of this chapter, and the monies of the system are exempted from any state or municipal tax, except the taxes imposed pursuant to Chapters 6 and 16 of Title 12, and exempted from levy and sale, garnishment, attachment, or any other process, and are unassignable except as specifically otherwise provided in this chapter."
Act is retroactive and prospective
SECTION 6. This act is intended to create remedies to more efficiently recover restitution due to state and local governmental entities in cases involving embezzlement or misappropriation of public funds or public property to the private use of a public officer or employee or any other person. As such, it is remedial legislation intended to be retroactive as well as prospective in its application, so as to attach the general lien created by Section 8-1-115(A) to any public retirement or pension plan not governed by ERISA of any public officer, public employee, or any other person who has been convicted of an offense described in Section 8-1-115(A). In cases where a living person was convicted of an offense described in Section 8-1-115(A) before the effective date of this act, the lien attaches to his public retirement or pension plan not governed by ERISA immediately upon approval of this act by the Governor. In cases concluded before the effective date of this act the Attorney General or his designee may send the notice of lien required by Section 8-1-115(B) to the appropriate retirement or pension plan system instead of the presiding judge.
Severability clause
SECTION 7. If any section, subsection, paragraph, subparagraph, sentence, clause, phrase, or word of this act is for any reason held to be unconstitutional or invalid, such holding shall not affect the constitutionality or validity of the remaining portions of this act, the General Assembly hereby declaring that it would have passed this act, and each and every section, subsection, paragraph, subparagraph, sentence, clause, phrase, and word thereof, irrespective of the fact that any one or more other sections, subsections, paragraphs, subparagraphs, sentences, clauses, phrases, or words hereof may be declared to be unconstitutional, invalid, or otherwise ineffective.
Time effective
SECTION 8. This act takes effect upon approval by the Governor.
Ratified the 10th day of April, 2001.
Approved the 10th day of April, 2001.
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