SB 599 — Open Skating Rinks/Bowling Alleys.

135-108.

(h) If, at any time, a beneficiary of short-term disability benefits is approved to receive long-term disability benefits under G.S.

135-106, then the short-term disability benefit shall cease on the effective date of the long-term disability benefit.

No participant shall receive both short-term and long-term disability benefits for the same time period." Page 2 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 SECTION 1.(c) G.S.

135-106(a) reads as rewritten:

"(a) Upon the application of a beneficiary or participant or of his legal representative or any person deemed by the Board of Trustees to represent the participant or beneficiary, any beneficiary or participant who has had five or more years of membership service may receive long-term disabilitybenefits from the Plan upon approval by the Board of Trustees, commencing on the first daysucceeding the conclusion of the short-term disability period provided for in G.S.

135-105, provided the beneficiary or participant makes application for such benefit within 180 days after the short-term disability period benefit payment under G.S.

135-105 ceases, after salary continuation payments cease, or after monthly payments for Workers' Compensation cease, whichever is later;

Provided, that the beneficiary or participant withdraws from active service by terminating employment as a teacher or State employee;

Provided, that the Medical Board shall certify that such beneficiary or participant is mentally or physically incapacitated for the further performance of duty, that such incapacity was incurred at the time of active employment and has been continuous thereafter, and that such incapacity is likely to be permanent;

Provided further that the Medical Board shall not certify any beneficiary or participant as disabled who is in receipt ofanypayments on account ofthesameincapacitywhich existed when the beneficiary first established membership in the Retirement System.

The Board of Trustees may extend this 180-day filing requirement upon receipt of clear and convincing evidence that application was delayed through no fault of the disabled beneficiary or participant and was delayed due to the employers' miscalculation of the end of the 180-day filing period.

However, in no instance shall the filing period be extended beyond an additional 180 days.

The Board of Trustees may require each beneficiary who becomes eligible to receive a long-term disability benefit to have an annual medical review or examination for the first five years and thereafter once every three years after the commencement of benefits under this section.

However, the Board of Trustees may require more frequent examinations and upon the advice of the Medical Board shall determine which cases require such examination.

Should any beneficiary refuse to submit to any examination required by this subsection or by the Medical Board, his long-term disability benefit shall be suspended until he submits to an examination, and should his refusal last for one year, his benefit may be terminated by the Board of Trustees.

If the Medical Board finds that a beneficiary is no longer mentally or physically incapacitated for the further performance of duty, the Medical Board shall so certify this finding to the Board of Trustees, and the Board of Trustees may terminate the beneficiary's long-term disability benefits effective on the last day of the month in which the Medical Board certifies that the beneficiary is no longer disabled.

Asto therequirement of five years ofmembership service, anyparticipantorbeneficiarywho does not havefive yearsofmembershipservicewithin the96 calendarmonths priorto conclusion of the cessation of short-term disability period benefit payments or cessation of salary continuation payments, whichever is later, shall not be eligible for long-term disability benefits.

Notwithstanding the requirement that the incapacity was incurred at the time of active employment, any participant who becomes disabled while on an employer approved leave of absence and who is eligible for and in receipt of temporary total benefits under The North Carolina Workers' Compensation Act, Article 1 of Chapter 97 of the General Statutes, will be eligible for all benefits provided under this Article." SECTION 1.(d) G.S.

135-106 is amended by adding a new subsection to read:

"(a1) Long-term disability benefits under this section shall commence the first day of the month following the date of approval of the application for benefits." SECTION 1.(e) G.S.

135-106(b) reads as rewritten:

"(b) After the commencement of benefits under this section, the benefits payable under the terms of this section during the first 36 months of the long-term disability period shall be equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable to the participant or beneficiary prior to the beginning of the short-term the disability period as Senate Bill 599-First Edition Page 3 General Assembly Of North Carolina Session 2019 maybe adjusted for percentage increases as provided under G.S.

135-108, plus sixty-five percent (65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by anyprimarySocial Securitydisabilitybenefits to which the beneficiarymay be entitled, effective as of the first of the month following the month of initial entitlement, and by monthly payments for Workers' Compensation to which the participant or beneficiary may be entitled.

When primary Social Security disability benefits are increased by cost-of-living adjustments, the increased reduction shall be applied in the first month following the month in which the member becomes entitled to the increased Social Security benefit.

The monthly benefit shall be further reduced by the amount of any monthly payments from the federal Department of Veterans Affairs, any other federal agency or any payments made under the provisions of G.S.

127A-108, to which the participant or beneficiary may be entitled on account of the same disability.

Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month.

However, a disabled participant may elect to receive any salary continuation as provided in G.S.

135-104 in lieu of long-term disability benefits;

provided such election shall not extend the first 36 consecutive calendar months of the long-term disability period.

An election to receive any salary continuation for any part of any given day shall be in lieu of any long-term benefit payable for that day, provided further, any lump-sum payout for vacation leave shall be treated as if the beneficiary or participant had exhausted the leave and shall be in lieu of any long-term benefit otherwise payable.

Provided that, in any event, a beneficiary's benefit shall be reduced during the first 36 months of the long-term disability period by an amount, as determined by the Board of Trustees, equal to a primary Social Security retirement benefit to which the beneficiary might be entitled, effective as of the first of the month following the month of initial entitlement.

After 36 months of long-term disability, no further benefits are payable under the terms of this section unless the member has been approved and is in receipt of primary Social Security disability benefits.

In that case the benefits payable shall be equal to sixty-five percent (65%) of 1/12th of the annual base rate of compensation last payable to the participant or beneficiaryprior to the beginning of the short-term disability period as may be adjusted for percentage increases as provided under G.S.

135-108, plus sixty-five percent (65%) of 1/12th of the annual longevity payment to which the participant or beneficiary would be eligible, to a maximum of three thousand nine hundred dollars ($3,900) per month reduced by the primary Social Security disability benefits to which the beneficiary may be entitled, effective as of the first of the month following the month of initial entitlement, and by monthlypayments for Workers' Compensation to which the participant or beneficiary may be entitled.

When primary Social Security disability benefits are increased by cost-of-living adjustments, the increased reduction shall be applied in thefirstmonthfollowingthemonthinwhichthememberbecomesentitledtotheincreasedSocial Security benefit.

The monthly benefit shall be further reduced by the amount of any monthly payments from the federal Department of Veterans Affairs, for payments from any other federal agency, or for any payments made under the provisions of G.S.

127A-108, to which the participant or beneficiary may be entitled on account of the same disability.

Provided, in any event, the benefit payable shall be no less than ten dollars ($10.00) a month.

Notwithstanding the foregoing, the long-term disability benefit is payable so long as the beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the earliest date at which the beneficiary is eligible for an unreduced service retirement allowance from the Retirement System, at which time the beneficiary would receive a retirement allowance calculated on the basis of the beneficiary's average final compensation at the time of disabilityas adjusted to reflect compensation increases subsequent to the time of disability and the creditable service accumulated by the beneficiary, including creditable service while in receipt of benefits under the Plan.

In the event the beneficiary has not been approved and is not in receipt of a primary Social Security disability benefit, the long-term disability benefit shall cease after the first 36 months of the long-term disability period.

When such a long-term disability recipient Page 4 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 begins receiving this unreduced service retirement allowance from the System, that recipient shall not be subject to the six-month waiting period set forth in G.S.

135-1(20).

However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the event the Social Security Administration grants a retroactive approval for primary Social Security disability benefits with a benefit effective date within the first 36 months of the long-term disability period.

In such event, the long-term disability benefit shall be restored retroactively to the date of cessation." SECTION 1.(f) G.S.

135-5(a)(5) reads as rewritten:

"(5) AnymemberwhoiseligibleforandisbeingpaidabenefitundertheDisability Income Plan as provided in G.S.

135-105 or G.S.

135-106 shall be deemed a member in service and maynot retire under the provisions of this section.

Any member who has made electronic submission or written application for long-term or extended short-term disability benefits under the Disability Income Plan as provided in G.S.

135-105 or G.S.

135-106, and who has been rejected by the Plan's Medical Board for a long-term or extended short-term benefit shall have 90 days from the date of notification of the rejection to convert his or her application to an early or service retirement application, provided that the member meets the eligibilityrequirements, effective the first day of the month following the month in which short-term disability benefits ended ended, if applicable, or the first day of the month following the month in which any salary continuation as may be provided in G.S.

135-104 ended, or the first day of the month following the month in which the member terminated the member's employment, whichever is later." SECTION 1.(g) This section becomes effective July 1, 2020, and applies to short-term and long-term disability benefits applied for on or after that date, as determined by receipt of the application by the employer.

PART II.

MODERNIZING THE MEDICAL REVIEW BOARD SECTION 2.(a) G.S.

135-6." SECTION 1.(b)2.(b) G.S.

135-6." SECTION 1.(c)2.(c) G.S.

128-28(l)." SECTION 1.(d)2.(d) G.S.

135-6." SECTION 1.(e)2.(e) G.S.

135-6." SECTION 1.(f)2.(f) G.S.

The medical board shall arrange for and pass upon all medical examinations required under the provisions of Senate Bill 599-First Edition Page 5 General Assembly Of North Carolina Session 2019 this Chapter, and shall investigate all essential statements and certificates by or on behalf of a member in connection with an application for disability retirement, and shall report in writing to the Board of Trustees its conclusion and recommendations upon all the matters referred to it.

*S599-v-2* General Assembly Of North Carolina Session 2019 (2) The person was not acting in good faith.

(5) The person incurred the liability from the operation of a motor vehicle." SECTION 1.(g)2.(g) G.S.

(5) Expedite reviews and determinations in accordance with rules adopted by the State Treasurer and the Board of Trustees." SECTION 1.(h)2.(h) G.S.

The Medical Board shall arrange for and pass upon all medical examinations required under the provisions of this Chapter,and shall investigateall essentialstatements and certificatesbyor onbehalfofamember in connection with an application fordisabilityretirement,andshallfordisabilityretirement, and shall reportin writingto theBoard of Trustees its conclusion and recommendations upon all the matters referred to it.

Page 6 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 (3) The person committed gross negligence or willful or wanton misconduct that resulted in the damages or injury.

(5) The person incurred the liability from the operation of a motor vehicle." SECTION 1.(i)2.(i) G.S.

Page 2 Senate Bill 599-Second Edition General Assembly Of North Carolina Session 2019 (1) Arrange for and review medical examinations required under the provision of this Chapter.

(5) Expedite reviews and determinations in accordance with rules adopted by the State Treasurer and the Board of Trustees." SECTION 1.(j)2.(j) G.S.

In accordance with subsection (c) of this section, the Board of Trustees may also appoint agents, contractors, and employees as the Board of Trustees deems advisable to investigate the results of medical examinations, clinical evidence, all essential statements and certifications by and on behalf of applicants for benefits.benefits." SECTION 2.(k) G.S.

In order to accomplish the purposes outlined in this subsection, the Retirement Systems Division of the Department of State Treasurer is authorized to increase receipts from the assets oftheDisabilityIncomePlanofNorthCarolinaorto paycosts associated with the administration of these changes directly from the plan assets." SECTION 1.(k) G.S.

"(3) Disability Income Plan of North Carolina Trust Fund assets may be used for reasonable expenses to determine eligibility for or administer benefits provided by the Fund as approved by the Board of Trustees." SECTION 1.(l)2.(l) G.S.

135-106(a)135-106(a), as amended by Section 1(c) of this act, reads as rewritten:

"(a) Upontheapplicationofabeneficiaryorparticipantorofhisorherlegalrepresentative or any person deemed by the Board of Trustees to represent the participant or beneficiary, any beneficiary or participant who has had five or more years of membership service may receive long-term disabilitybenefitsdisability benefits from the Plan upon approval by the Board of Trustees, commencingprovided on the firstSenate dayBill succeeding599-First theEdition conclusionPage of7 General Assembly Of North Carolina Session 2019 beneficiaryor participant makes application for such benefit within 180 days after the short-term disability periodbenefit providedpayment forunder in G.S.

135-105,135-105 provided the beneficiary or participant makes application for such benefit within 180 days after the short-term disability period ceases, after salary continuation payments cease or after monthly payments for Workers' Compensation cease, whichever is later;

Provided, that the Board of Trustees or the Medical Review Board Senate Bill 599-Second Edition Page 3 General Assembly Of North Carolina Session 2019 shall certify that such beneficiary or participant is mentally or physically incapacitated for the further performance of duty, that such incapacity was incurred at the time of active employment and has been continuous thereafter, and that such incapacity is likely to be permanent;

Asto therequirement of five years ofmembership service, anyparticipantorbeneficiarywho does not havefivehave yearsofmembershipservicewithinfive the96years calendarmonthsof priortomembership conclusionservice ofwithin the 96 calendar months prior to the cessation of short-term disability periodbenefit payments or cessation of salary continuation payments, whichever is later, shall not be eligible for long-term disability benefits.

Notwithstanding the requirement that the incapacity was incurred at the time of active employment, any participant who becomes disabled while on an employer approved leave of absence and who is eligible for and in receipt of temporary total benefits under The North Carolina Workers' Compensation Act, Article 1 of Chapter 97 of the General Statutes, will be eligible for all benefits provided under this Article." SECTION 1.(n)2.(m) G.S.

135-106(c1) reads as rewritten:

"(c1) During the long-term disability period, a beneficiary may return to service for trial rehabilitation for periods of not greater than 36 months of continuous service.

Such return will not cause the beneficiary to become a participant and will not require a new waiting period or short-term disability period to commence regardless of whether the beneficiary is unable to continue in service due to the same incapacity or a different incapacity.

A beneficiarywho, during a period of trial rehabilitation, is unable to continue in service may be entitled to a restoration of the long-term disability benefit provided that the Board of Trustees ortheMedical Review Boardcertifies thatthe beneficiaryis disabledin accordance with thelaws in effect at the time of the Board's original approval for long-term disability benefits, either due to the same or a different incapacity, notwithstanding the requirement the incapacity has been continuous.

In the event that the Board of Trustees or the Medical Review Board determines that the long-term disability benefit should be restored, the restored benefit should be calculated in Page 8 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 accordance with G.S.

135-106(b);

should include any post-disability benefit adjustments as provided by G.S.

135-108;

and shall continue as long as the beneficiary remains disabled until the beneficiary has received a total of 36 long-term disability payments.

Continuation of long-term disability benefit payments beyond 36 total payments shall be dependent upon approval for primary Social Security disability benefits as required by G.S.

135-106(b).

A beneficiarywho returns to service for a period of trial rehabilitation and who has continued in service for greater than 36 continuous months shall again become a participant, and any subsequent incapacityshall be treated as a new incapacitycausing a new waiting period to begin.

Such a beneficiary may be entitled to additional long-term disability benefits on account of the new incapacity provided the beneficiary meets all other requirements notwithstanding the requirementoffive yearsofmembershipservicewithinthe96calendarmonthspriortobecoming disabled or the cessation of continuous salary continuation payments." SECTION 2.(n) G.S.

"(d) Notwithstanding the foregoing, a participant or beneficiary who has applied for and been approved by the Medical Board for long-term disability benefits may make an irrevocable election, within 90 days from the date of notification of such approval, and prior to receipt of any long-term disability benefit payments, to receive a return of accumulated contributions from the Retirement System or to forfeit all pending and accrued rights to the long-term disability benefit including any ancillary benefits and retire on an early service retirement allowance, effective with thetheon on the later of the following dates:

(3) The first day of the month following the month in which the beneficiary was approved for long-term disability benefits, whichever is later." SECTION 1.(o)2.(o) G.S.

– Upon the application of a member or of his employer, any member who has had five or more years of creditable service may be retired by Page 4 Senate Bill 599-Second Edition General Assembly Of North Carolina Session 2019 the Board of Trustees, on the first day of any calendar month, not less than one day nor more than 120 days next following the date of filing such application, on a disability retirement allowance:

…." SECTION 1.(p)2.(p) G.S.

– After a medical examination of the member, the medical board shall certify to the Board of Trustees the Board of Trustees or the Medical Review Board shall certify that the member is mentally or physically incapacitated for further performance of duty as a member of the General Assembly, that the incapacity was incurred at the time of active employment and has been continuous thereafter, that the incapacityis likely to be permanent and whether the member should be retired." SECTION 1.(q)2.(q) G.S.

Senate Bill 599-First Edition Page 9 General Assembly Of North Carolina Session 2019 "(a) Upon application by or on behalf of the member, any member in service who has completed five or more years of creditable service and who has not attained his or her sixty-fifth birthday may be retired by the Board of Trustees, on the first day of any calendar month, not less than one day nor more than 120 days next following the date of filing such application, on a disability retirement allowance;

provided, the beneficiary presents clear and convincing evidencethat thebeneficiarywouldthebeneficiarywouldhavemetall havemetall applicablerequirements for disabilityretirement Senate Bill 599-Second Edition Page 5 General Assembly Of North Carolina Session 2019 benefits while still in service as a member.

The allowance on account of disability retirement benefits to the beneficiaryshall be retroactive to the effective date of early or service retirement." SECTION 1.(r)2.(r) G.S.

TECHNICALDIPNC CHANGESOVERPAYMENTS OWED BY ORP MEMBERS ON CONVERSION TO SERVICE SECTION 3.(a) G.S.

135-107 reads as rewritten:

"§ 135-107.

Optional Retirement Program.

(a) Any participant of the Optional Retirement Program who becomes a beneficiary under the Plan shall be eligible to receive long-term disability benefits so long as the beneficiary is disabled and is in receipt of a primary Social Security disability benefit until the time the beneficiary would first qualify for an unreduced service retirement benefit had the beneficiary Page 10 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 elected to be a member of the Teachers' and State Employees' Retirement System, and shall receive no service accruals as otherwise provided members of the Retirement System under the provisions of G.S.

135-4(y).

In the event a beneficiary who was a participant in the Optional Retirement Program has not been approved and is not in receipt of a primary Social Security disability benefit, the long-term disability benefit shall cease after the first 36 months of the long-term disability period.

However, a beneficiary shall be entitled to a restoration of the long-term disability benefit in the event the Social Security Administration grants a retroactive approval for primary Social Security disability benefits with a benefit effective date within the first 36 months of the long-term disability period.

In such event, the long-term disability benefit shall be restored retroactively to the date of cessation.

(b) If aparticipant oftheOptional RetirementProgram owes anyoverpayment to thePlan at the time in which the beneficiary would first qualify for an unreduced retirement benefit had thebeneficiaryelectedto bea member oftheTeachers'and StateEmployees' Retirement System, then the participant shall make a payment in full to the Plan of the total amount due.

If payment in full of the total amount due is not received by the Plan, then, notwithstanding G.S.

135-48.40(a), that beneficiary shall not be eligible for coverage under the North Carolina State Health Plan for Teachers and State Employees until payment in full of the total amount due is received by the Plan." SECTION 3.(b) This section becomes effective October 1, 2019, and applies to beneficiaries who are participants of the Optional Retirement Program and who would first qualify for unreduced retirement benefits had the beneficiaries elected to be a member of the Teachers' and State Employees' Retirement System on or after that date.

PART IV.

TECHNICAL CHANGES SECTION 4.(a) G.S.

128-27(d), (d1), (d2) and (d3) (d2), (d3), and (d4), each member retired on a disabilityretirement allowance shall,onorbeforeApril 1515ofeach ofeach calendar year, provide the Board of Trustees with a statement of his or her income received as compensation for services, including fees, commissions or similar items, and income received from business, for the previous calendar year.

TheDirectoroftheStateRetirementSystems shallcontact anyStateorfederalagency which can provide information to substantiate the statement required to be submitted bythis subdivision and may enter into agreements for the exchange of information." SECTION 3.(b)4.(b) G.S.

All benefits and expenses against the Plan shall be disbursed from the Benefit Senate Bill 599-First Edition Page 11 General Assembly Of North Carolina Session 2019 Trust.

Page 6 Senate Bill 599-Second Edition General Assembly Of North Carolina Session 2019 a.

Page 12 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 Notwithstanding the above provisions, the death benefit shall be payable on account of the death of any member who died or dies on or after January 1, 1974, but before January 1, 1979, after attaining age 65, if he or she had not yet attained age 65, if he or she had not yet attained age 66, was at the time of death completing the work year for those individuals under specific contract, or during the fiscal year for those individuals not under specific contract, in which he or she attained 65, and otherwise met all conditions for payment of the death benefit.

Notwithstanding the above provisions, the Board of Trustees may and is specifically authorized to providethedeath benefit accordingtotheterms andconditionsand conditions otherwiseappearing in this Plan in the form of group life insurance, either (i) by purchasing a contract or contracts of group life insurance with any life insurance company or companies licensed and authorized to Senate Bill 599-Second Edition Page 7 General Assembly Of North Carolina Session 2019 transact business in this State for the purpose of insuring the lives of members in service, or (ii) by establishing a separate trust fund qualified under Section 501(c)(9) of the Internal Revenue Code of 1954, as amended, for such purpose.

When employment has not been terminated, the date on which an absent member's sick and annual leave expire, unless he the memberisonapprovedleaveofabsenceandis inserviceinserviceunder under the provisions of G.S.

The amount of the death benefit for such member shall be the equivalent of the salary to which the member would have been entitled as a teacher or State employee during the 12-month period immediately prior to the month in which death occurred, not to be less Senate Bill 599-First Edition Page 13 General Assembly Of North Carolina Session 2019 than twenty-five thousand dollars ($25,000) nor to exceed fifty thousand dollars ($50,000).

Amember whois abeneficiaryof theDisabilityIncomePlanprovidedthe DisabilityIncomePlanprovided for in Article 6 of this Chapter, or a member who is in receipt of Workers' Compensation during the period for which he or she would haveotherwisebeen eligibleto receiveshort-term benefits orextended short-term benefits as provided in G.S.

135-105 and dies on or after Page 8 Senate Bill 599-Second Edition General Assembly Of North Carolina Session 2019 181 days from the last day of his or her actual service but prior to the date the benefits as provided in G.S.

For retired members who were deceased on or after January 1, 1999, but before July 1, 2004, the death benefit shall be a Page 14 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 lump-sum payment in the amount of six thousand dollars ($6,000).

Senate Bill 599-Second Edition Page 9 General Assembly Of North Carolina Session 2019 Should death occur If the retired member's death occurs before the completion of twenty-four months of contributions required under this subsection, contributions, then the deceased retired member's surviving spouse or legal representative if not survived by a spouse shall be paid the sum of the retired member's contributions required by this subsection sub-subdivision plus interest to be determined by the Board of Trustees.

Should death occur before the completion of 24 months of contributions required under this subsection, the deceased retired member's surviving Senate Bill 599-First Edition Page 15 General Assembly Of North Carolina Session 2019 spouseorlegal representativeifnotrepresentative ifnot survived byaspouseshall be paid the sum of the retired member's contributions required by this subsection plus interest to be determined by the Board of Trustees.

provided the retired member has elected, when first eligible, to make, and has continuously made, in advance of his death required contributions as Page 10 Senate Bill 599-Second Edition General Assembly Of North Carolina Session 2019 determined by the Board of Trustees on a fully contributory basis, through retirement allowance deductions or other methods adopted by the Board of Trustees, to a group death benefit trust fund administered by the Board of Trustees Fund and Pension Accumulation Fund.

Page 16 Senate Bill 599-First Edition General Assembly Of North Carolina Session 2019 Should death occur If the retired member's death occurs before the completion of 24 months of contributions required under this subsection, contributions, then the deceased retired member's designated beneficiary or beneficiaries, or surviving spouse if there is no surviving beneficiary, or legal representative if not survived by a designated beneficiary or spouse, shall be paid the sum of the retired member's contributions required by this subsection sub-subdivision plus interest to be determined by the Board of Trustees." PART IV.V.

EFFECTIVE DATE Senate Bill 599-Second Edition Page 11 General Assembly Of North Carolina Session 2019 SECTION 4.5.

Page 12 Senate Bill 599-Second599-First Edition Page 17