North Carolina HB 481: Modernize Debt Settlement Prohibition.

Bill Text

GENERAL ASSEMBLY OF NORTH CAROLINA
SESSION 2025

SESSION LAW 2026-33
HOUSE BILL 481

*H481-v-5*
AN ACT TO AMEND THE SPECIAL SEPARATION ALLOWANCE OPTION FOR STATE
AND LOCAL LAW ENFORCEMENT OFFICERS.

The General Assembly of North Carolina enacts:

SECTION 1.(a) G.S. 143-166.41 reads as rewritten:
"...
(b1) Eligibility for Allowance and Calculation of Allowance Amount. – To be eligible for
an allowance under this section, an officer is required to meet one of the following sets of criteria
that shall also determine the allowance amount:
(1) For officers meeting all of the following criteria, the annual special separation
allowance to be paid is equal to eighty-five hundredths percent (0.85%) of the
annual base rate of compensation most recently applicable to the officer for
each year of that officer's creditable service:
...
c. The officer has completed at least five years of continuous service as
a law enforcement officer immediately preceding the officer's service
retirement. Any break in this required continuous service that is a
result of disability retirement or disability salary continuation benefits
shall not adversely affect an officer's qualification to receive an
allowance under this subdivision so long as the officer returned to
service within 45 days after the disability benefits or retirement
benefits had ceased and is otherwise qualified to receive the allowance.
...
(2) For officers meeting all of the following criteria, the annual special separation
allowance to be paid is equal to eighty-five hundredths percent (0.85%) of the
annual equivalent of the base rate of compensation at the time the officer
attained 30 years of service multiplied by 30:
...
b. The officer has completed at least five years of continuous service as
a law enforcement officer immediately preceding the officer's service
retirement. Any break in this required continuous service that is a
result of disability retirement or disability salary continuation benefits
shall not adversely affect an officer's qualification to receive an
allowance under this subdivision so long as the officer returned to
service within 45 days after the disability benefits or retirement
benefits had ceased and is otherwise qualified to receive the allowance.
...
(c) Cessation of Payment. – Payment of the allowance to a retired officer under the
provisions of this section shall cease at the first occurrence of one of the following:
...
(2) The last day of the month in which either of the following applies:

Page 2 Session Law 2026-33 House Bill 481
a. If the officer is receiving an allowance in an amount determined under
subdivision (b1)(1) of this section, the officer attains 62 years of age.
b. If the officer is receiving an allowance in an amount determined under
subdivision (b1)(2) of this section, there has been a period of receiving
the any allowance under this section that is equivalent to the total of
62 years minus the age at which the officer first completed 30 years of
creditable service.
...."
SECTION 1.(b) G.S. 143-166.42 reads as rewritten:
"...
(b1) Qualification for Allowance and Calculation of Allowance. – To be eligible for an
allowance under this section, an officer is required to meet one of the following sets of criteria,
which shall also determine the allowance amount:
(1) For officers meeting all of the following criteria, the annual special separation
allowance to be paid is equal to eighty-five hundredths percent (0.85%) of the
annual base rate of compensation most recently applicable to the officer for
each year of that officer's creditable service:
...
c. The officer has completed at least five years of continuous service as
a law enforcement officer immediately preceding the officer's service
retirement. Any break in this required continuous service that is a
result of retirement, disability retirement retirement, or disability
salary continuation benefits shall not adversely affect an officer's
qualification to receive an allowance under this subdivision so long as
the officer returned to service within 45 days after the disability
benefits or retirement benefits had ceased and is otherwise qualified to
receive the allowance.
...
(2) For officers meeting all of the following criteria, the annual special separation
allowance to be paid is equal to eighty-five hundredths percent (0.85%) of the
annual equivalent of the base rate of compensation at the time the officer
attained 30 years of service multiplied by 30:
a. Prior to attaining 62 years of age, the officer has completed 30 or more
years of creditable service, at least fifty percent (50%) of which was
as a law enforcement officer.
b. The officer has completed at least five years of continuous service as
a law enforcement officer immediately preceding the officer's service
retirement. Any break in this required continuous service that is a
result of retirement, disability retirement retirement, or disability
salary continuation benefits shall not adversely affect an of