Revision: May 29, 2024, 8:36 a.m.
HB 1559-FN - AS AMENDED BY THE SENATE
05/23/2024 2012s
05/23/2024 2142s
2024 SESSION
24-2202
12/02
HOUSE BILL 1559-FN
SPONSORS: Rep. Hunt, Ches. 14
COMMITTEE: Commerce and Consumer Affairs
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AMENDED ANALYSIS
This bill repeals RSA 399-F relative to cash dispensing machines.
The bill also establishes a retirement system benefit for group II members who retire due to a violent act injury.
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Explanation: Matter added to current law appears in bold italics.
Matter removed from current law appears [in brackets and struckthrough.]
Matter which is either (a) all new or (b) repealed and reenacted appears in regular type.
05/23/2024 2012s
05/23/2024 2142s 24-2202
12/02
STATE OF NEW HAMPSHIRE
In the Year of Our Lord Two Thousand Twenty Four
Be it Enacted by the Senate and House of Representatives in General Court convened:
1 New Subparagraphs; Violent Accidental Disability Retirement Allowance. Amend RSA 100-A:6, II by inserting after subparagraph (d) the following new subparagraphs:
(e)(1) Upon the application of a group II member in service or of the member's employer, any member shall be retired by the board of trustees on a violent accidental disability retirement allowance where the member has been totally and permanently incapacitated for duty as the result of a purposeful, hostile, and violent attack upon such member in the line of duty. In this section, a "purposeful, hostile, and violent attack" means a physical attack with a deadly weapon, as defined in RSA 625:11, V, and done with conscious intent and with such force that it results in the infliction of serious bodily injury, as defined in RSA 625:11, VI.
(2) The provisions of subparagraph (e)(1) shall apply provided that:
(A) The member is found to be mentally or physically incapacitated for the further performance of duty and that such incapacity is likely to be permanent;
(B) The member did not intend for injury to result from the member's conduct; and
(C) The incapacitating event has been determined by the commissioner of safety to meet the criteria of a violent attack under this section and certified to the retirement system on a form approved by the board of trustees. Solely for the purpose of making this determination and notwithstanding any other law to the contrary, the commissioner of safety may obtain any records held by any state or municipal official regarding the circumstances, cause, or manner of violent injury disability. The commissioner of safety may consult with the labor commissioner and may disclose any information or records obtained in the course of his or her inquiry. Any records held by the commissioner of safety pursuant to this section shall not be subject to the right-to-know law, RSA 91-A, and shall not be subject to disclosure in any civil action.
(D) The injury has been found to be compensable by the employer, the employer's insurance carrier, or the commissioner of labor pursuant to RSA 281-A:43.
(3) If the board of trustees is unable to grant violent accidental disability retirement benefits after review of medical and factual information submitted by the member and by a physician designated by the board, then the member shall be entitled to a hearing before the board in order to determine whether the member qualifies for disability retirement benefits. The hearing before the board may be designated to a presiding officer. The presiding officer designated by the board shall not be the same person who made an initial disability determination and recommendation to the board based on the medical and factual information submitted by the member and physician as stated above.
(f) Upon violent accidental disability retirement, the group II member shall receive a violent accidental disability retirement allowance equal to the member's earnable compensation during their last 12 months of active service at the date of the member's disability or an annual allowance of $75,000, whichever is greater.
2 Retrospective Application for Benefit. Members who retired under accidental disability on or after July 1, 2018 shall have 90 days from the effective date of this act to file application for violent accidental disability benefits under section 1 of this act and, if approved, such members' benefit shall be modified effective to the date of the application for violent accidental disability retirement benefits.
3 Maximum Benefit Limitation; Reference Added. Amend RSA 100-A:6-a to read as follows:
100-A:6-a Maximum Retirement Benefit. Notwithstanding any other provision of this chapter to the contrary, for members who commenced service before July 1, 2009, or have attained vested status prior to January 1, 2012, a member's initial calculation of the retirement benefit granted under the provisions of RSA 100-A:5 or RSA 100-A:6 shall not exceed 100 percent of the member's highest year of earnable compensation. For members who commenced service on or after July 1, 2009, and have not attained vested status prior to January 1, 2012, a member's maximum retirement benefit granted under the provisions of RSA 100-A:5 or RSA 100-A:6 shall not exceed the lesser of 85 percent of the member's average final compensation or $120,000. Nothing in this section shall affect the ability of a member to receive disability benefits pursuant to RSA 100-A:6, II(b) and (c) or RSA 100-A:6, II(e) and (f). This provision shall not limit the application of supplemental allowances.
4 Disability Retirement Benefits. Amend RSA 100-A:6, III(b)(4) to read as follows:
(4) The provisions of subparagraph (b)(1) shall not apply to a group II accidental disability beneficiary whose total of years of service as a member in group II plus years of accidental disability retirement is at least 20 years, as determined by the board, and who has attained the age of 45, or a group II violent accidental disability beneficiary, regardless of age or years of service. Any such accidental disability or violent accidental disability beneficiary shall receive retirement allowance benefits under this section without reduction for gainful occupation.
5 Benefits Upon Member's Death After Retirement - Group II Members. Amend RSA 100-A:12, II to read as follows:
II. Upon the death of a group II member who has retired on or after April 1, 1987, or upon the death of a group II member who has filed an application for retirement benefits with the board of trustees after January 1, 1991, there shall be paid to the person nominated by the member by written designation filed with the board, if living, otherwise to the retired member's estate, in addition to the amount payable under RSA 100-A:11 a lump sum of $3,600 if the member retired before July 1, 1988, and if the member is married on the date of such member's retirement, there shall be paid to such surviving spouse an allowance to continue until the spouse's death or remarriage equal to 50 percent of the member's service, ordinary disability, [or] accidental disability, or violent accidental disability retirement allowance payments. For any person who is a group II member as of June 30, 1988, and who retires on or after July 1, 1988, the lump sum payment shall be $10,000. For any person who becomes a member of group II on or after July 1, 1988, and on or prior to July 1, 1993, the lump sum payment shall be $3,600. It is the intent of the legislature that future group II members shall be included only if the total cost of such inclusion can be terminally funded.
6 New Subparagraph; New Hampshire Retirement System; Medical Benefits; Payment by Retirement System; Group II. Amend RSA 100-A:52, I by inserting after subparagraph (g) the following new subparagraph:
(h) Any member retired on a violent accidental disability retirement allowance pursuant to RSA 100-A:6, II(e).
7 New Hampshire Retirement System; Medical Benefits; Payment by Retirement System; Group II. Amend RSA 100-A:52, II to read as follows:
II.(a) For the fiscal year beginning July 1, 2011, the maximum amount payable by the retirement system under this subdivision on account of each person qualified under paragraph I who is not entitled to Medicare benefits, shall be $375.56 per month, and on account of each person qualified under paragraph I who is entitled to Medicare benefits, shall be $236.84 per month. The rate payable under this paragraph shall not be increased.
(b) Notwithstanding subparagraph (a), for the fiscal year beginning July 1, 2024, the maximum amount payable by the retirement system under this subdivision on account of each person qualified under subparagraph I(h) as result of a violent accidental disability who is not entitled to Medicare benefits, shall be $1,000 per month, and on account of each person qualified under subparagraph I(h) who is entitled to Medicare benefits, shall be $630.63 per month. The rate payable under this paragraph shall not be increased.
8 New Hampshire Retirement System; Medical Benefits; Application. Amend RSA 100-A:55, I to read as follows:
I. The additional benefits provided under RSA 100-A:52 shall apply to persons who are active or retired members of group II as of June 30, 2000; to persons who prior to July 1, 1988, had completed no less than 20 years of group II creditable service, but who for reasons other than retirement or death ceased to be a group II member prior to attaining the age of 45, and who, as of July 1, 1993, are eligible for vested deferred retirement benefits; [and] to persons who are group II permanent policemen or permanent firemen members on disability retirement as the natural and proximate result of injuries suffered while in the performance of duty who become permanent policemen members of group II before July 1, 2005 or permanent firemen members of group II before July 1, 2005; and to persons who are group II permanent policemen or permanent firemen members retired under a violent accidental disability. Such additional benefits shall not apply to other persons who become members of group II after the dates stated in this paragraph, without future legislation to include them. It is the intent of the legislature that future group II members shall be included only if the total cost of such inclusion can be terminally funded.
9 Medical Insurance Benefits; Retired Group II Employees. Amend RSA 21-I:30, VII(b) to read as follows:
(b) Dies or retires and is eligible for accidental death, [or] accidental disability, or violent accidental disability retirement benefits, regardless of the state employee's age or number of years of creditable service; or
10 Repeal. RSA 399-F, relative to cash dispensing machines, is repealed.
11 New Hampshire Canadian Trade Council; Authority to Raise and Accept Funds. Amend RSA 12-O:22 to read as follows:
12-O:22 New Hampshire Canadian Trade Council.
I. The commissioner of business and economic affairs and the secretary of state shall have the authority to establish a New Hampshire trade council to meet with one or more trade councils established by the Canadian provinces, either separately or collectively. The members of the council shall include 2 senators appointed by the president of the senate, 2 house members appointed by the speaker of the house of representatives, the commissioner or designee, the secretary of state or designee, and such other members as the commissioner and secretary of state may appoint.
II. The New Hampshire Canadian trade council shall be authorized to raise and accept funds through direct solicitation or other fundraising events, alone or with other groups, and accept gifts, grants, and bequests from individuals, corporations, foundations, government agencies, and public and private organizations and institutions.
III. There is established in the state treasury the New Hampshire Canadian trade council fund. The funds shall be comprised of monies obtained according to paragraph II. The fund shall be non-lapsing and shall be continually appropriated to the secretary of state's office to defray the council's administrative costs and to carry out its purposes.
12 New Subparagraph; Application of Receipts; New Hampshire Canadian Trade Council Fund. Amend RSA 6:12, I(b) by inserting after subparagraph (394) the following new subparagraph:
(395) Moneys deposited in the New Hampshire Canadian Trade Council fund as established in RSA 12-O:22.
I. Sections 1-9 of this act shall take effect July 1, 2024.
II. Section 10 of this act shall take effect upon its passage.
III. The remainder of this act shall take effect 60 days after its passage.
24-2202
Amended 5/29/24
HB 1559-FN- FISCAL NOTE
AS AMENDED BY THE SENATE (AMENDMENTS #2024-2012s and #2024-2142s)
FISCAL IMPACT: [ X ] State [ X ] County [ X ] Local [ ] None
Estimated State Impact - Increase / (Decrease) | ||||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||||
Revenue | $0 | Sections 1-9 DAS: is Unable to Estimate Impact | Sections 1-9 DAS: is Unable to Estimate Impact | Sections 1-9 DAS: is Unable to Estimate Impact | ||||
Revenue Fund(s) | General Fund and Internal Service Fund | |||||||
Expenditures | $0 | Sections 1-9 NHRS: Indeterminable Increase due to System Upgrades | Sections 1-9 NHRS: $400,000 Assumptions are Scalable | Sections 1-9 NHRS: $410,000 Assumptions are Scalable | ||||
DAS: is Unable to Estimate Impact | DAS: is Unable to Estimate Impact | DAS: is Unable to Estimate Impact | ||||||
Sections 10-12 Indeterminable Under $10,000 | Sections 10-12 Indeterminable Under $10,000 | Sections 10-12 Indeterminable Under $10,000 | ||||||
Funding Source(s) | General Fund and Highway Fund Various Agency Funds | |||||||
Appropriations | $0 | $0 | $0 | $0 | ||||
Funding Source(s) | None | |||||||
• Does this bill provide sufficient funding to cover estimated expenditures? [X] No • Does this bill authorize new positions to implement this bill? [X] N/A | ||||||||
| ||||||||
Estimated Political Subdivision Impact - Increase / (Decrease) | ||||||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 | ||||
Revenue | $0 | $0 | $0 | $0 | ||||
Expenditures | $0 | Sections 1-9 NHRS: Indeterminable Increase due to System Upgrades | Sections 1-9 NHRS:$1,080,000 Assumptions are Scalable | Sections 1-9 NHRS:$1,110,000 Assumptions are Scalable | ||||
*The New Hampshire Retirement System states it is not able to separate the fiscal impact of this legislation between county and local government, therefore the fiscal impact is shown together as political subdivisions.
METHODOLOGY:
Sections 1 thru 9 of this bill establishes a new violent accidental disability retirement benefit for group II members. The new benefits include a violent accidental disability retirement allowance equal to the member's earnable compensation during their last 12 months of active service at the date of the member's disability or an annual allowance of $75,000, whichever is greater. Additionally, it provides a medical subsidy benefit of $1,000 per a month for persons not entitled to medicare benefits and $630.63 per a month for persons entitled to medicare benefits. Eligible Group II state employees would also be entitled to state retiree medical insurance.
The New Hampshire Retirement System's actuary provided valuations based upon data used in the annual actuarial valuation as of June 30, 2021. The valuation assumes an annual rate of interest of 6.75 percent, wage inflation of 2.75 percent per year and uses the entry-age actuarial cost valuation method. Contribution rates for fiscal years 2024 and 2025 are certified and will remain unchanged. However, actual FY 2026-2027 employer rates will be based on the actuarial valuation of June 30, 2023, and are currently unknown at this time, so only the net impact of the estimated allocation of this benefit is shown below.
Additionally, as the bill's provisions includes existing group II accidental disability retirees who retired on or after July 1, 2018 and have 90 days from enactment of the statute to apply for the new benefit as well as any disabilities occurring in the future, the actuary assumed 10% of disabilities occurring in the line of duty for Police members (32 members) would be a result of violence and 1% for Fire members (1 member).
Lastly, the bill would affect benefit levels for current eligible members already in pay status. The actuary currently has no data available concerning the member’s annual rate of earnable compensation at the time of accidental disability retirement, so an assumed annual rate of earnable compensation for these members is projected to be 5% higher than their average final compensation, which was used to determine their benefits.
State Impact
| Net Impact of Proposal |
Employees | 0.00% |
Police | 0.38% |
Fire | 0.03% |
Expected Employer Dollar Increase (Decrease) Due to Proposal | ||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 |
Employees | - | - | $0 | $0 |
Police | - | - | $400,000 | $410,000 |
Fire | - | - | $0 | $0 |
TOTAL | $0 | $0 | $400,000 | $410,000 |
Political Subdivisions Impact
Increase (Decrease) in Employer Pension Rates as a Percent of Payroll | |
| Net Impact of Proposal |
Employees | 0.00% |
Teachers | 0.00% |
Police | 0.38% |
Fire | 0.03% |
Expected Employer Dollar Increase (Decrease) Due to Proposal | ||||
| FY 2024 | FY 2025 | FY 2026 | FY 2027 |
Employees | - | - | $0 | $0 |
Teachers | - | - | $0 | $0 |
Police | - | - | $1,030,000 | $1,060,000 |
Fire | - | - | $50,000 | $50,000 |
TOTAL | $0 | $0 | $1,080,000 | $1,110,000 |
The NHRS actuary projects an increase in the actuarial accrued liability of $9.2 million for increase for the pension portion and $1.2 million for medical subsidy payments for a total of $10.4 million, based on the provisions in the bill which will be amortized over a fixed period of no longer than 20-years.
Lastly, the NHRS states there will be an indeterminable increase in expenditures in FY 2025 due to administrative costs relating to the reprogramming of the pension administrative system.
The Department of Administrative Service state they are unable to calculate an estimated fiscal impact due to several factors.
1. The bill mentions subsidies for medical insurance to be provided to employers for such retirements, but lacks clarification on funding sources and administrative procedures for these subsidies.
2. The bill does not clearly define the eligible population (police, fire, all Group IIs). Definitions vary under other RSAs pertaining to work related injuries or death.
3. There is a conflict in law related to the amount charged to state retirees for their health benefit premium. The premium contributions paid by State of NH retirees is defined in RSA 21-I:30 for both non-Medicare (20%) and Medicare (10%) retirees. If the intention of the bill was to provide a medical subsidy benefit to offset the premium paid by State retirees, then there is a conflict in law.
4. RSA 21-I:43-a “Compensation for State Employees Injured in the Line of Duty” states that the executive head of the agency of the employee injured in the line of duty determines if the injury was due to a hostile pr overt act. This bill names the Commissioner of Safety as the one who can deem an incident as a violent act. It is possible that the two different commissioner opinions of eligibility do not match which could result in a dispute over benefit eligibility.
Furthermore, the Department cannot anticipate the number of eligible Group II members affected by violent act injuries, nor predict how their dependents and their medical/pharmacy claims would influence overall expenses resulting in an indeterminable impact to State expenditures and revenues.
Section 10 of this bill repeals RSA 399-F relative to cash dispensing machines and is requested by the Banking Department. The fiscal impact of the repeal is estimated to be under $10,000 starting in FY 2025 and forward.
Sections 11 and 12 of this bill authorizes the New Hampshire Canadian Trade Council to raise and accept funds to be deposited into the newly established New Hampshire Canadian Trade Council Fund which shall non-lapsing and continually appropriated to the Secretary of State's Office to defray the council's administrative costs to carry out its purpose. The fiscal impact is estimated to be under $10,000 starting in FY 2025 and forward.
AGENCIES CONTACTED:
New Hampshire Retirement System, Department of Administrative Services, and Banking Department