Indicates Matter Stricken

Indicates New Matter

 

Committee Report

February 21, 2024

 

S. 250

 

Introduced by Senators M. Johnson and Malloy

 

S. Printed 02/21/24--S.

Read the first time January 10, 2023

 

________

 

The committee on Senate Judiciary

To whom was referred a Bill (S. 250) to amend Section 42-3-20 of the South Carolina Code of Laws, relating to the membership of the South Carolina Workers' Compensation Commission, so as to provide, 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, SECTION 1, by striking Section 42-3-20(A)(1) and (2) and inserting:

(1) The commission shall consist of seven members appointed by the Governor with the advice and consent of the Senate for terms of six years and until their successors are appointed and qualify. Effective for appointments made on or after July 1, 2024, a person is eligible to be a commissioner if, at the time of his appointment, he is a citizen of the United States and of this State, has attained the age of thirty-two years upon his appointment, has been a licensed attorney for at least eight years upon his appointment, and has been a resident of this State for five years immediately preceding his appointment.

       (2) Notwithstanding the provisions of this section, commissioners serving on July 1, 2024, are not required to be a licensed attorney to be eligible to continue serving as a commissioner.

       (3) In the event the Governor does not fill a vacancy within sixty days after the vacancy occurs, the commission by majority vote shall deputize a person with suitable experience, training, and knowledge to serve as a deputy commissioner to serve until such time as the Governor fills the vacancy. As soon as the Governor appoints a replacement who is confirmed by the Senate, the deputy commissioner shall immediately cease to serve in that office. While serving as a deputy commissioner, the deputy commissioner has the power and authority to swear or cause the witnesses to be sworn and shall transmit all testimony and shall make a recommendation to the commission for an award. The commission must determine the award based upon testimony received by the deputy commissioner and may consider the deputy commissioner''s recommendation.

Amend the bill further, SECTION 2, by striking Section 42-3-40(B) and inserting:

    (B) A commissioner shall be entitled to judicial retirement as provided under the provisions of Chapter 8 of Title 9, provided the commissioner meets all eligibility requirements under Section 42-3-20(A) effective at the commissioner's initial appointment after July 1, 2024.

Amend the bill further, SECTION 4, by striking Section 9-8-40(A)(3) and inserting:

       (3) All commissioners of the Workers' Compensation Commission,  who have not retired and are eligible pursuant to Section 42-3-20, may elect to become a member of the system. Commissioners making that election may transfer prior service into the system as provided in Section 9-8-50, and to the extent the service thus transferred occurred after the member took office as a commissioner, that service is deemed earned service in the system.

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

SECTION 5.  This act takes effect upon approval by the Governor and applies to commissioners with an initial appointment on or after July 1, 2024, and to their subsequent reappointments.

 

Renumber sections to conform.

Amend title to conform.

 

LUKE RANKIN for Committee.

 

 

statement of estimated fiscal impact

Explanation of Fiscal Impact

State Expenditure

This bill adds requirements for appointments to WCC.  These new requirements include that a person must be a citizen of the United States and of South Carolina and must have been a resident of the state for at least five years prior to his appointment, must be at least thirty-two years old, and must have been a licensed attorney for at least eight years upon his appointment.  Additionally, a current commissioner may elect to become a member of JSRS.  Also, any other person who joins the commission before reaching the age of seventy-two after this bill takes effect will become a member of JSRS but will cease to be a member if he ceases to be a commissioner for reasons other than retirement or death.  This bill takes effect upon signing of the governor and applies to commissioners who are appointed or reappointed on or after July 1, 2023. 

 

Workers Compensation Commission.  This bill includes the workers compensation commissioners in the definition of judges in the state and adds additional requirements to qualify as a commissioner.  As this bill applies to commissioners appointed or reappointed on July 1, 2023, WCC anticipates the modified requirements will not have an impact on the commission. 

 

Additionally, this bill allows current commissioners to transfer from SCRS to JSRS beginning July 1, 2023, and any commissioner appointed on or after July 1, 2023, will be eligible for enrollment in JSRS. Currently, commissioners are members of SCRS.  Employee and employer contributions into state retirement funds are based on salary.  Commissioners' current salaries are set at 85 percent of the salary paid to the circuit court judges of the state.  The following table displays the employee and employer contributions for SCRS and JSRS based on the contribution rates provided by PEBA.

 

                              SCRS Contribution                   JSRS Contribution

                              Employee       Employer           Employee             Employer               Employee           Employer

                                                                                                                                        Increase             Increase

Contribution Rates  9.00%            18.56%              10.00%                62.94%                  1.00%                44.38%

Salaries

Director   $177,435 $15,969         $32,932             $17,744               $111,678                $1,774               $78,746

Member  $172,257  $15,503         $31,971             $17,226               $108,418                $1,723               $76,448

Total*  $1,210,976  $108,988        $224,757            $121,098              $762,188                $12,110             $537,431

*Total includes one director and six members. 

 

If all commissioners are enrolled in JSRS, the total annual increase of expenditures for WCC will be $537,431 for the increased employer contributions to the retirement system.  However, according to WCC, some of the current commissioners may opt not to transition from SCRS to JSRS, depending upon the personal cost and benefits of joining JSRS and how close a commissioner may be to retirement.  Additionally, WCC contributes approximately $2.9 million in non-payroll based contributions to SCRS.  WCC will continue to contribute this amount to JSRS. 

 

Public Employee Benefit Authority.  This bill allows commissioners to become members in JSRS.  There are currently 141 active members in JSRS. This bill will increase the total number of active members to 148, once all 7 commissioners are enrolled in JSRS. PEBA provided an actuarial analysis to determine the potential fiscal impact to JSRS.

 

 Based on the actuarial analysis provided by PEBA, this bill will increase the unfunded liability of JSRS by $6.553 million. The actuarial report recommends a one-time appropriation of $6.553 million to offset this increase in the unfunded liability, particularly given the relatively low funded ratio currently that would decrease from 46.2 percent to 45.7 percent.  PEBA also anticipates this bill will result in a negligible decrease to the unfunded liability of SCRS as the removal of 7 members from over 200,000 will have a minimal impact to the overall obligations of SCRS. 

 

Additionally, this bill will increase the employee and employer contribution in JSRS and decrease the employee and employer contributions to SCRS.   The table above displays the total amount of employee and employer contributions for both SCRS and JSRS.  Additionally, WCC contributes approximately $2.9 million in non-payroll based contributions to SCRS.  WCC will continue to contribute this amount to JSRS. 

 

This section of the fiscal impact statement has been updated to include additional information provided by PEBA. 

 

State Expenditure

This bill adds requirements for appointments to the WCC.  These new requirements include that a person must be a citizen of the United States and of South Carolina and must have been a resident of the state for at least five years prior to his appointment, must be at least thirty-two years old, and must have been a licensed attorney for at least eight years upon his appointment.  Additionally, a current commissioner may elect to become a member of JSRS.  Also, any other person who joins the commission before reaching the age of seventy-two after this bill takes effect will become a member of JSRS but will cease to be a member if he ceases to be a commissioner for reasons other than retirement or death.  This bill takes effect upon signing of the governor and applies to commissioners who are appointed or reappointed on or after July 1, 2023.  Commissioners are currently members of the South Carolina Retirement System (SCRS).  This bill allows commissioners to transfer from SCRS to JSRS beginning July 1, 2023.  

 

There are 7 members appointed to the WCC.  This bill will have an impact on WCC due to the increased employer contributions for the commissioners who become part of JSRS and impact JSRS due to the increase in membership. PEBA is working to provide an actuarial analysis on the impact on the retirement systems and the modification of the employee/employer contributions for WCC due to this bill.  The fiscal impact of this bill is pending, contingent upon an additional response from PEBA. 

 

 

Frank A. Rainwater, Executive Director

Revenue and Fiscal Affairs Office

 

________

 

 

 

 

 

 

 

 

 

A bill

 

TO AMEND SECTION 42-3-20 OF THE South Carolina CODE OF LAWS, RELATING TO THE MEMBERSHIP OF THE SOUTH CAROLINA WORKERS' COMPENSATION COMMISSION, SO AS TO PROVIDE FOR QUALIFICATIONS TO SERVE AS A COMMISSIONER; TO AMEND SECTION 42-3-40, RELATING TO COMMISSIONERS' SALARIES, SO AS TO PROVIDE THAT COMMISSIONERS ARE ENTITLED TO JUDICIAL RETIREMENT AS PROVIDED UNDER THE PROVISIONS OF CHAPTER 8 OF TITLE 9; TO AMEND SECTION 9-8-10(16), RELATING TO THE DEFINITION OF "JUDGE", TO INCLUDE COMMISSIONERS OF THE WORKERS' COMPENSATION COMMISSION; AND TO AMEND SECTION 9-8-40, RELATING TO MEMBERSHIP IN THE SYSTEM, SO AS TO PROVIDE FOR THE MEMBERSHIP OF COMMISSIONERS OF THE WORKERS' COMPENSATION COMMISSION.

 

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

 

SECTION 1.  Section 42-3-20(A) of the S.C. Code is amended to read:

 

    Section 42-3-20. (A)(1) The commission shall consist of seven members appointed by the Governor with the advice and consent of the Senate for terms of six years and until their successors are appointed and qualify. Effective for appointments made on or after July 1, 2023, a person is eligible to be a commissioner if, at the time of his appointment, he is a citizen of the United States and of this State, has attained the age of thirty-two years upon his appointment, has been a licensed attorney for at least eight years upon his appointment, and has been a resident of this State for five years immediately preceding his appointment.

       (2) In the event the Governor does not fill a vacancy within sixty days after the vacancy occurs, the commission by majority vote shall deputize a person with suitable experience, training, and knowledge to serve as a deputy commissioner to serve until such time as the Governor fills the vacancy. As soon as the Governor appoints a replacement who is confirmed by the Senate, the deputy commissioner shall immediately cease to serve in that office. While serving as a deputy commissioner, the deputy commissioner has the power and authority to swear or cause the witnesses to be sworn and shall transmit all testimony and shall make a recommendation to the commission for an award. The commission must determine the award based upon testimony received by the deputy commissioner and may consider the deputy commissioner's recommendation.

 

SECTION 2.  Section 42-3-40 of the S.C. Code is amended to read:

 

    Section 42-3-40. (A) The annual salary for the commissioners shall be eighty-five percent of the salary paid to the circuit judges of the State. The commissioners shall receive a subsistence allowance of thirty-five dollars a day while in the performance of their duties outside the Columbia office.

    (B) Commissioners shall be entitled to judicial retirement as provided under the provisions of Chapter 8 of Title 9.

 

SECTION 3.  Section 9-8-10(16) of the S.C. Code is amended to read:

 

    (16) "Judge" means a justice of the Supreme Court or a judge of the court of appeals, circuit or family court of the State of South Carolina. Subject to the provisions of Section 9-8-40, "judge" also means an administrative law judge or a commissioner serving on the South Carolina Workers' Compensation Commission as provided in Section 42-3-20.

 

SECTION 4.  Section 9-8-40 of the S.C. Code is amended to read:

 

    Section 9-8-40.  (A)(1) All persons who are judges or solicitors on July 1, 1979, and who have not attained age seventy-two shall become members of the system as of that date.

       (2) All administrative law judges on July 1, 2014, who have not retired may elect to become a member of the system. Administrative law judges making that election may transfer prior service into the system as provided in Section 9-8-50, and to the extent the service thus transferred occurred after the member took office as an administrative law judge, that service is deemed earned service in the system.

       (3) All commissioners of the Workers' Compensation Commission, as provided in Section 42-3-20, who have not retired may elect to become a member of the system. Commissioners making that election may transfer prior service into the system as provided in Section 9-8-50, and to the extent the service thus transferred occurred after the member took office as a commissioner, that service is deemed earned service in the system.

       (4) All other persons become members of the system on taking office as judge, solicitor, or circuit public defender, or commissioner before attaining age seventy-two.

    (2)(B) If a member of the system ceases to be a judge, solicitor, or circuit public defender, or commissioner for reasons other than death or retirement, he then ceases to be a member of the system, whether or not he withdraws his accumulated contributions.

 

SECTION 5.  This act takes effect upon approval by the Governor and applies to commissioners appointed or reappointed on or after July 1, 2023.

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