S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         5111
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                      May 1, 2015
                                      ___________
       Introduced by Sen. MARCHIONE -- (at request of the State Comptroller) --
         read  twice  and  ordered printed, and when printed to be committed to
         the Committee on Finance
       AN ACT to amend the state finance law, the civil  service  law  and  the
         general  municipal  law,  in  relation  to  authorizing  the state and
         certain local governments to establish other post employment  benefits
         (OPEB)  trusts  and  establishing  the  other post employment benefits
         (OPEB) investment fund
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  The  state finance law is amended by adding a new section
    2  97-llll to read as follows:
    3    S 97-LLLL. OTHER POST EMPLOYMENT BENEFITS ("OPEB") INVESTMENT FUND. 1.
    4  THERE IS HEREBY ESTABLISHED IN THE SOLE CUSTODY OF THE STATE COMPTROLLER
    5  A SPECIAL INVESTMENT FUND TO BE KNOWN AS THE OTHER POST EMPLOYMENT BENE-
    6  FITS INVESTMENT FUND.
    7    2. FOR PURPOSES OF THIS SECTION:
    8    (A) "FUND" SHALL MEAN THE OTHER POST  EMPLOYMENT  BENEFITS  INVESTMENT
    9  FUND CREATED BY THIS SECTION;
   10    (B) "COMPTROLLER" SHALL MEAN THE STATE COMPTROLLER;
   11    (C) "STATE" SHALL MEAN THE STATE OF NEW YORK;
   12    (D)  "LOCAL  GOVERNMENT"  SHALL  HAVE THE SAME MEANING AS SET FORTH IN
   13  PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION SIX-T OF THE GENERAL MUNICI-
   14  PAL LAW;
   15    (E) "OTHER PUBLIC CORPORATION" SHALL MEAN ANY PUBLIC CORPORATION OTHER
   16  THAN A LOCAL GOVERNMENT THAT IS AUTHORIZED TO ESTABLISH  AN  IRREVOCABLE
   17  TRUST; AND
   18    (F)  "PARTICIPATING TRUSTEE" SHALL MEAN THE TRUSTEE FOR THE STATE, AND
   19  THE TRUSTEE FOR ANY LOCAL GOVERNMENT OR  ANY  OTHER  PUBLIC  CORPORATION
   20  THAT INVESTS MONEYS IN THE FUND PURSUANT TO THIS SECTION.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD03005-02-5
       S. 5111                             2
    1    3. THE FUND SHALL CONSIST OF ALL MONEYS PAID TO THE COMPTROLLER BY THE
    2  STATE  PURSUANT  TO  SECTION ONE HUNDRED SIXTY-NINE OF THE CIVIL SERVICE
    3  LAW, BY LOCAL GOVERNMENTS PURSUANT  TO  SECTION  SIX-T  OF  THE  GENERAL
    4  MUNICIPAL  LAW  AND  BY ANY OTHER PUBLIC CORPORATION THAT ESTABLISHES AN
    5  OTHER  POST  EMPLOYMENT BENEFITS TRUST. THE MONEYS IN THE FUND SHALL NOT
    6  BE WITHIN THE STATE TREASURY, AND SHALL NOT BE DEEMED TO BE STATE  FUNDS
    7  FOR  ANY PURPOSE. NOTWITHSTANDING THE PROVISIONS OF SECTION FOUR OF THIS
    8  CHAPTER, OR ANY OTHER PROVISION OF LAW, MONEYS MAY BE DISBURSED FROM THE
    9  FUND FOR ANY AUTHORIZED PURPOSE WITHOUT APPROPRIATION.
   10    4. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE MONEYS IN THE  FUND
   11  MAY  BE  INVESTED  BY  THE COMPTROLLER IN ACCORDANCE WITH THE INVESTMENT
   12  OPTIONS SELECTED PURSUANT TO THE WRITTEN INVESTMENT POLICY DEVELOPED  BY
   13  EACH  PARTICIPATING  TRUSTEE  IN  ANY INVESTMENTS IN COMPLIANCE WITH THE
   14  FOLLOWING STANDARDS:
   15    (A)  THE  COMPTROLLER  SHALL  EXERCISE  SUCH  JUDGMENT,  CARE,  SKILL,
   16  PRUDENCE  AND  DILIGENCE  UNDER THE CIRCUMSTANCES THEN PREVAILING THAT A
   17  KNOWLEDGEABLE AND PRUDENT INVESTOR ACTING IN A LIKE CAPACITY AND  FAMIL-
   18  IAR  WITH  SUCH  MATTERS  WOULD USE IN THE CONDUCT OF AN ENTERPRISE OF A
   19  LIKE CHARACTER AND WITH LIKE AIMS; AND
   20    (B) THE COMPTROLLER SHALL PRUDENTLY DIVERSIFY THE  INVESTMENT  OF  THE
   21  FUND'S PORTFOLIO AMONG INVESTMENT TYPES AND WITHIN INVESTMENT TYPES IN A
   22  MANNER  CONSISTENT  WITH THE FOREGOING UNLESS UNDER THE CIRCUMSTANCES IT
   23  IS CLEARLY PRUDENT NOT TO DO SO.
   24    5. THE COMPTROLLER SHALL MAINTAIN A SEPARATE ACCOUNT FOR EACH  PARTIC-
   25  IPATING  TRUSTEE.  HOWEVER,  MONEYS  OF  PARTICIPATING  TRUSTEES  MAY BE
   26  COMMINGLED FOR THE COMPTROLLER'S INVESTMENT PURPOSES, PROVIDED THAT  THE
   27  MONEY OF EACH PARTICIPATING TRUSTEE SHALL BE SEPARATELY ACCOUNTED FOR.
   28    6.  THE  COMPTROLLER  SHALL,  WITHIN  HIS OR HER DISCRETION, ESTABLISH
   29  SUB-FUNDS AND INVEST SUCH SUB-FUNDS SEPARATELY TO PROVIDE  PARTICIPATING
   30  TRUSTEES WITH A NUMBER OF OPTIONS TO MEET VARIOUS INVESTMENT OBJECTIVES.
   31  SUCH  OPTIONS  SHALL REFLECT VARYING LEVELS OF RISK FOR SUCH INVESTMENT.
   32  INVESTMENT EARNINGS SHALL BE PRORATED AMONG  PARTICIPATING  TRUSTEES  IN
   33  EACH SUB-FUND IN PROPORTION TO THE AMOUNT OF INVESTMENTS HELD BY PARTIC-
   34  IPATING TRUSTEES.
   35    7.  THE  COMPTROLLER MAY HIRE SUCH OFFICERS AND EMPLOYEES AND CONTRACT
   36  WITH SUCH ADVISORS AND AGENTS AS THE COMPTROLLER DEEMS NECESSARY FOR THE
   37  MANAGEMENT AND INVESTMENT OF  MONEYS  IN  THE  FUND.  ANY  OFFICERS  AND
   38  EMPLOYEES  EMPLOYED BY THE COMPTROLLER FOR THE MANAGEMENT AND INVESTMENT
   39  OF MONEYS IN THE FUND SHALL BE  OFFICERS  AND  EMPLOYEES  OF  THE  COMP-
   40  TROLLER,  PROVIDED,  HOWEVER, THAT ANY COSTS ASSOCIATED WITH THE EMPLOY-
   41  MENT OF SUCH OFFICERS AND EMPLOYEES AND ANY ADVISORS OR AGENTS SHALL  BE
   42  CHARGED AGAINST THE FUND. SUCH CHARGES SHALL BE INCLUDED IN THE ADMINIS-
   43  TRATIVE FEE CHARGED TO PARTICIPATING TRUSTEES IN THE FUND.
   44    8. THE COMPTROLLER SHALL ENTER INTO AN AGREEMENT WITH EACH PARTICIPAT-
   45  ING  TRUSTEE.  EACH SUCH AGREEMENT SHALL INCLUDE, BUT NOT BE LIMITED TO,
   46  THE FOLLOWING TERMS:
   47    (A) A STATEMENT THAT THE COMPTROLLER SHALL BE UNDER NO  OBLIGATION  TO
   48  REVIEW OR VERIFY THE ESTIMATED COSTS OF BENEFITS TO BE FUNDED WITH MONEY
   49  CONTRIBUTED TO THE FUND;
   50    (B)  A  PROVISION  THAT  THE PARTICIPATING TRUSTEE SHALL DETERMINE THE
   51  AMOUNTS OF MONEY TO  BE  CONTRIBUTED  TO  THE  FUND  AND  DESIGNATE  THE
   52  SUB-FUNDS  IN  WHICH THE MONEYS SHALL BE INVESTED. THE COMPTROLLER SHALL
   53  ACCEPT SUCH AMOUNTS AND HIS OR  HER  ONLY  RESPONSIBILITY  SHALL  BE  TO
   54  INVEST THE MONEYS IN THE SUB-FUNDS DIRECTED BY THE PARTICIPATING TRUSTEE
   55  AND  TO REPORT THE CONTRIBUTIONS, WITHDRAWALS, BALANCES AND EARNINGS, TO
       S. 5111                             3
    1  THE PARTICIPATING TRUSTEE ON A REGULAR BASIS TO  BE  SET  FORTH  IN  THE
    2  AGREEMENT, BUT NO LESS FREQUENTLY THAN ANNUALLY;
    3    (C) A STATEMENT THAT IT SHALL BE THE RESPONSIBILITY OF THE PARTICIPAT-
    4  ING  TRUSTEE TO DETERMINE COSTS ELIGIBLE TO BE FUNDED FROM MONEYS IN THE
    5  FUND AND THE COMPTROLLER'S ONLY OBLIGATION SHALL BE TO MAKE PAYMENTS  ON
    6  THE DATES AND IN THE AMOUNTS REQUESTED BY THE PARTICIPATING TRUSTEE;
    7    (D)  A REQUIREMENT THAT THE PARTICIPATING TRUSTEE SHALL ANNUALLY, ON A
    8  DATE PROVIDED IN THE AGREEMENT, PROVIDE THE COMPTROLLER WITH A  SCHEDULE
    9  OR AMENDED SCHEDULE OF MONEYS EXPECTED TO BE CONTRIBUTED TO THE FUND AND
   10  WITHDRAWALS EXPECTED TO BE MADE FROM ITS ACCOUNT. SUCH SCHEDULE SHALL BE
   11  BINDING ON THE PARTICIPATING TRUSTEE;
   12    (E)  A  PROVISION  THAT  THE  MONEY  IN  THE FUND SHALL BE PAID TO THE
   13  PARTICIPATING TRUSTEE OR ITS DESIGNEE UPON REQUISITION  AS  PROVIDED  IN
   14  THE AGREEMENT;
   15    (F) A PROVISION FOR THE ASSESSMENT OF ADMINISTRATIVE COSTS, INVESTMENT
   16  FEES  AND OTHER CHARGES, INCLUDING ANY PENALTIES TO BE IMPOSED FOR EARLY
   17  OR EXCESSIVE WITHDRAWALS, AND FOR THE DEDUCTION OF SUCH FEES AND CHARGES
   18  FROM INVESTMENT EARNINGS;
   19    (G) A STATEMENT BY THE PARTICIPATING TRUSTEE RELATING TO ITS CONSIDER-
   20  ATION OF THE RISKS INVOLVED IN THE INVESTMENT SUB-FUNDS TO WHICH  IT  IS
   21  ALLOCATING  ITS  MONEYS  AND ITS UNDERSTANDING OF ITS RESPONSIBILITY FOR
   22  ANY LOSSES RESULTING FROM SUCH RISKS;
   23    (H) A STATEMENT THAT NEITHER THE COMPTROLLER NOR ANY OFFICER,  EMPLOY-
   24  EE,  AGENT OR ADVISOR OF THE COMPTROLLER SHALL BE LIABLE FOR ANY LOSS OR
   25  EXPENSE SUFFERED BY THE FUND  IN  THE  ABSENCE  OF  BAD  FAITH,  WILLFUL
   26  MISCONDUCT OR INTENTIONAL WRONGDOING; AND
   27    (I)  A  PROVISION  FOR  THE TERMINATION OF THE PARTICIPATING TRUSTEE'S
   28  INCLUSION IN THE FUND, INCLUDING  THE  DISPOSITION  AND/OR  TRANSFER  OF
   29  ACCUMULATED ASSETS.
   30    S  2.  The civil service law is amended by adding a new section 169 to
   31  read as follows:
   32    S 169. OTHER POST EMPLOYMENT BENEFITS ("OPEB") TRUST. 1. FOR  PURPOSES
   33  OF THIS SECTION:
   34    (A)  "PRESIDENT" SHALL MEAN THE PRESIDENT OF THE CIVIL SERVICE COMMIS-
   35  SION AS HEAD OF THE DEPARTMENT OF CIVIL SERVICE;
   36    (B) "STATE" SHALL MEAN THE STATE OF NEW YORK;
   37    (C) "FUND" SHALL MEAN THE OTHER POST  EMPLOYMENT  BENEFITS  INVESTMENT
   38  FUND CREATED BY SECTION NINETY-SEVEN-LLLL OF THE STATE FINANCE LAW; AND
   39    (D)  "OTHER  POST  EMPLOYMENT  BENEFITS"  SHALL  MEAN BENEFITS, EXCEPT
   40  PENSIONS OR OTHER BENEFITS FUNDED THROUGH A  PUBLIC  RETIREMENT  SYSTEM,
   41  PROVIDED  OR TO BE PROVIDED BY THE STATE AS COMPENSATION, WHETHER PURSU-
   42  ANT TO STATUTE, CONTRACT OR OTHER LAWFUL AUTHORITY, TO  ITS  CURRENT  OR
   43  FORMER  OFFICERS OR EMPLOYEES, OR THEIR FAMILIES OR BENEFICIARIES, AFTER
   44  SERVICE TO THE STATE HAS ENDED, INCLUDING, BUT NOT  LIMITED  TO,  HEALTH
   45  CARE  BENEFITS.  THE  TERM  "OTHER  POST  EMPLOYMENT BENEFITS" SHALL NOT
   46  INCLUDE CASH PAYMENTS FOR THE MONETARY VALUE OF SICK LEAVE, VACATION  OR
   47  OTHER  SIMILAR ACCRUALS, RETIREMENT INCENTIVE OR SEPARATION PAYMENTS, OR
   48  BENEFITS PROVIDED PURSUANT TO THE CONSOLIDATED OMNIBUS BUDGET  RECONCIL-
   49  IATION ACT OF 1985 (PUBLIC LAW 99-272), AS AMENDED.
   50    2.  THE  PRESIDENT MAY ESTABLISH A TRUST IN HIS OR HER CUSTODY FOR THE
   51  PURPOSE OF ACCUMULATING ASSETS TO FUND THE COST OF PROVIDING OTHER  POST
   52  EMPLOYMENT  BENEFITS.   CONTRIBUTIONS TO SUCH TRUST MAY BE MADE BY STATE
   53  APPROPRIATION.
   54    3. THE PRESIDENT IS HEREBY DECLARED TO BE THE  TRUSTEE  OF  THE  TRUST
   55  ESTABLISHED  PURSUANT TO THIS SECTION. AS TRUSTEE THE PRESIDENT SHALL BE
   56  RESPONSIBLE FOR THE OPERATION AND MANAGEMENT OF THE TRUST, INCLUDING THE
       S. 5111                             4
    1  INVESTMENT OF TRUST ASSETS, AND SHALL BE SUBJECT TO ALL THE  DUTIES  AND
    2  RESPONSIBILITIES IMPOSED BY LAW ON TRUSTEES, EXCEPT TO THE EXTENT INCON-
    3  SISTENT WITH THIS SECTION.
    4    4.  CONTRIBUTIONS  TO  THE  TRUST, AND ANY INTEREST OR OTHER INCOME OR
    5  EARNINGS ON CONTRIBUTIONS, SHALL BE IRREVOCABLE BEFORE  ALL  LIABILITIES
    6  OF  THE  STATE  GOVERNMENT  FOR OTHER POST EMPLOYMENT BENEFITS HAVE BEEN
    7  SATISFIED AND SHALL BE SOLELY DEDICATED TO, AND USED SOLELY FOR, PROVID-
    8  ING OTHER POST EMPLOYMENT BENEFITS AND PAYING APPROPRIATE AND REASONABLE
    9  EXPENSES OF ADMINISTERING THE TRUST.  NO  ASSETS,  INCOME,  EARNINGS  OR
   10  DISTRIBUTIONS OF THE TRUST SHALL BE SUBJECT TO ANY CLAIM OF CREDITORS OF
   11  THE  STATE, OR TO ASSIGNMENT OR EXECUTION, ATTACHMENT OR ANY OTHER CLAIM
   12  ENFORCEMENT PROCESS INITIATED BY OR ON BEHALF OF SUCH CREDITORS.  EXCEPT
   13  AS OTHERWISE PROVIDED IN SUBDIVISION NINE OF THIS SECTION, THE PRESIDENT
   14  SHALL  NOT BE RESPONSIBLE FOR THE ADEQUACY OF THE ASSETS OF THE TRUST TO
   15  MEET ANY OTHER POST EMPLOYMENT  BENEFIT.  THE  PRESIDENT  SHALL  NOT  BE
   16  RESPONSIBLE  FOR  TAKING ANY ACTION TO ENFORCE THE PAYMENT OF ANY APPRO-
   17  PRIATION INTO THE TRUST. THE TRUST  MAY  BE  TERMINATED  ONLY  WHEN  ALL
   18  LIABILITIES  OF  THE  STATE FOR OTHER POST EMPLOYMENT BENEFITS HAVE BEEN
   19  SATISFIED AND THERE IS NO PRESENT OR FUTURE  OBLIGATION,  CONTINGENT  OR
   20  OTHERWISE,  OF THE STATE TO PROVIDE SUCH OTHER POST EMPLOYMENT BENEFITS.
   21  UPON SUCH TERMINATION, ANY REMAINING  TRUST  ASSETS,  AFTER  ANY  PROPER
   22  EXPENSES OF THE TRUST HAVE BEEN PAID, SHALL REVERT TO THE STATE.
   23    5.  WITHDRAWALS  FROM  THE TRUST SHALL BE MADE FOR THE SOLE PURPOSE OF
   24  PROVIDING FUNDS FOR THE COSTS OF OTHER POST EMPLOYMENT BENEFITS CURRENT-
   25  LY DUE AND PAYABLE BY THE STATE.
   26    6. THE PRESIDENT MAY CONTRACT TO OBTAIN  SERVICES  NECESSARY  FOR  THE
   27  MANAGEMENT  AND  OPERATION  OF  THE  TRUST,  INCLUDING  THE PROFESSIONAL
   28  SERVICES NECESSARY TO CARRY OUT HIS OR HER RESPONSIBILITIES AS  TRUSTEE.
   29  CONTRACTS  FOR  SUCH SERVICES SHALL BE LET PURSUANT TO THE PROVISIONS OF
   30  THE STATE FINANCE LAW APPLICABLE TO STATE CONTRACTS.
   31    7. THE PRESIDENT SHALL MANAGE THE ASSETS OF THE TRUST IN A CAREFUL AND
   32  PRUDENT MANNER. THE PRESIDENT MAY INVEST ASSETS OF  THE  TRUST  ONLY  BY
   33  PAYMENT  TO THE FUND IN ACCORDANCE WITH SECTION NINETY-SEVEN-LLLL OF THE
   34  STATE FINANCE LAW.  ANY INTEREST OR OTHER INCOME OR  EARNINGS  RESULTING
   35  FROM  THE  INVESTMENT  OF ASSETS OF THE TRUST SHALL ACCRUE TO AND BECOME
   36  PART OF THE ASSETS OF THE TRUST.
   37    8. THE PRESIDENT SHALL DEVELOP, IN CONSULTATION WITH THE STATE  HEALTH
   38  INSURANCE  COUNCIL,  A WRITTEN INVESTMENT POLICY FOR SELECTING AMONG THE
   39  INVESTMENT OPTIONS OFFERED BY THE STATE COMPTROLLER PURSUANT TO  SECTION
   40  NINETY-SEVEN-LLLL  OF  THE STATE FINANCE LAW SO THAT THE COMPTROLLER MAY
   41  BE ABLE TO INVEST FUND MONIES IN ACCORDANCE  WITH  SUCH  POLICY.    SUCH
   42  POLICY SHALL INCLUDE A STATEMENT OF INVESTMENT OBJECTIVES ADDRESSING, IN
   43  THE FOLLOWING ORDER OF PRIORITY, THE ABILITY TO TIMELY MEET DISBURSEMENT
   44  REQUESTS  WITHOUT FORCED SALE OF ASSETS, SAFETY OF PRINCIPAL AND ATTAIN-
   45  MENT OF MARKET RATES OF RETURN.
   46    9. NEITHER THE STATE NOR THE PRESIDENT SHALL BE LIABLE FOR ANY LOSS OR
   47  EXPENSE SUFFERED BY THE TRUST IN  THE  ABSENCE  OF  BAD  FAITH,  WILLFUL
   48  MISCONDUCT  OR INTENTIONAL WRONGDOING. THE PRESIDENT SHALL BE CONSIDERED
   49  TO BE ACTING AS AN OFFICER OF THE STATE FOR PURPOSES OF  SECTION  SEVEN-
   50  TEEN  OF  THE  PUBLIC OFFICERS LAW, PROVIDED, HOWEVER, THAT THE COSTS OF
   51  ANY DEFENSE OR INDEMNIFICATION OF THE PRESIDENT ARISING FROM  THE  EXER-
   52  CISE OF THE FUNCTIONS OF TRUSTEE SHALL BE PAYABLE FROM THE ASSETS OF THE
   53  TRUST.
   54    10.  THE  PRESIDENT  SHALL  PREPARE  OR CAUSE TO BE PREPARED AN ANNUAL
   55  FINANCIAL REPORT OF ASSETS, LIABILITIES, REVENUES AND  EXPENSES  OF  THE
   56  TRUST  IN  ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE
       S. 5111                             5
    1  PRESIDENT SHALL CAUSE THE ACTIVITIES UNDERTAKEN IN CONNECTION  WITH  THE
    2  TRUST, INCLUDING THE ANNUAL FINANCIAL REPORT, TO BE AUDITED ANNUALLY, IN
    3  ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BY AN INDEPENDENT
    4  CERTIFIED  PUBLIC  ACCOUNTANT  ENGAGED  IN  A MANNER CONSISTENT WITH THE
    5  APPLICABLE PROVISIONS OF THE STATE  FINANCE  LAW.  THE  AUDIT  SHALL  BE
    6  COMPLETED  WITHIN  ONE HUNDRED TWENTY DAYS FROM THE CLOSE OF THE STATE'S
    7  FISCAL YEAR. A COPY OF THE ANNUAL FINANCIAL REPORT  AND  THE  REPORT  OF
    8  SUCH  AUDIT SHALL BE PROVIDED TO THE GOVERNOR, THE STATE COMPTROLLER AND
    9  THE CHAIRS OF THE LEGISLATIVE FISCAL COMMITTEES.
   10    11.  NOTHING  CONTAINED  IN  THIS  SECTION  SHALL  BE  INTERPRETED  OR
   11  CONSTRUED TO:
   12    (A)  CREATE  ANY OBLIGATION IN, IMPOSE ANY OBLIGATION ON, OR ALTER ANY
   13  OBLIGATION OF THE STATE TO PROVIDE OTHER POST EMPLOYMENT BENEFITS;
   14    (B) LIMIT OR RESTRICT THE AUTHORITY OF THE STATE TO MODIFY  OR  ELIMI-
   15  NATE OTHER POST EMPLOYMENT BENEFITS;
   16    (C) ASSURE OR DENY OTHER POST EMPLOYMENT BENEFITS; OR
   17    (D)  REQUIRE THE STATE TO FUND ITS LIABILITY FOR OTHER POST EMPLOYMENT
   18  BENEFITS.
   19    S 3. The general municipal law is amended by adding a new section  6-t
   20  to read as follows:
   21    S 6-T. OTHER POST EMPLOYMENT BENEFITS (OPEB) TRUST. 1. FOR PURPOSES OF
   22  THIS SECTION:
   23    (A)  "LOCAL  GOVERNMENT"  SHALL  MEAN  A MUNICIPAL CORPORATION, SCHOOL
   24  DISTRICT, BOARD OF COOPERATIVE  EDUCATIONAL  SERVICES,  DISTRICT  CORPO-
   25  RATION,  SPECIAL  IMPROVEMENT  DISTRICT  GOVERNED BY A SEPARATE BOARD OF
   26  COMMISSIONERS, COMMUNITY COLLEGE OR PUBLIC LIBRARY THAT  PROVIDES  OTHER
   27  POST EMPLOYMENT BENEFITS.
   28    (B)  "OTHER  POST  EMPLOYMENT  BENEFITS"  SHALL  MEAN BENEFITS, EXCEPT
   29  PENSIONS OR OTHER BENEFITS FUNDED THROUGH A  PUBLIC  RETIREMENT  SYSTEM,
   30  PROVIDED  OR  TO  BE  PROVIDED  AS COMPENSATION BY THE LOCAL GOVERNMENT,
   31  WHETHER PURSUANT TO STATE STATUTE, LOCAL ENACTMENT,  CONTRACT  OR  OTHER
   32  LAWFUL  AUTHORITY,  TO  ITS  FORMER OR CURRENT OFFICERS OR EMPLOYEES, OR
   33  THEIR FAMILIES OR BENEFICIARIES, AFTER SERVICE TO THE  LOCAL  GOVERNMENT
   34  HAS ENDED, INCLUDING, BUT NOT LIMITED TO, HEALTH CARE BENEFITS. THE TERM
   35  "OTHER POST EMPLOYMENT BENEFITS" SHALL NOT INCLUDE CASH PAYMENTS FOR THE
   36  MONETARY  VALUE  OF  SICK  LEAVE,  VACATION  OR  OTHER SIMILAR ACCRUALS,
   37  RETIREMENT INCENTIVE OR SEPARATION PAYMENTS, OR BENEFITS PROVIDED PURSU-
   38  ANT TO THE  CONSOLIDATED  OMNIBUS  BUDGET  RECONCILIATION  ACT  OF  1985
   39  (PUBLIC LAW 99-272), AS AMENDED.
   40    2. THE GOVERNING BODY OF A LOCAL GOVERNMENT, BY RESOLUTION, MAY ESTAB-
   41  LISH  A  TRUST  IN  THE CUSTODY OF THE CHIEF FISCAL OFFICER OF THE LOCAL
   42  GOVERNMENT, FOR THE PURPOSE OF ACCUMULATING ASSETS TO FUND THE  COST  TO
   43  THE  LOCAL  GOVERNMENT  OF  PROVIDING  OTHER  POST  EMPLOYMENT BENEFITS.
   44  CONTRIBUTIONS TO SUCH TRUST MAY BE MADE BY THE LOCAL GOVERNMENT BY BUDG-
   45  ETARY APPROPRIATION OR TRANSFER IN ACCORDANCE  WITH  THE  PROVISIONS  OF
   46  SUBDIVISION NINE OF SECTION SIX-P OF THIS ARTICLE.
   47    3.  THE  GOVERNING BOARD OF THE LOCAL GOVERNMENT IS HEREBY DECLARED TO
   48  BE THE TRUSTEE OF  ANY  TRUST  ESTABLISHED  PURSUANT  TO  THIS  SECTION,
   49  PROVIDED,  HOWEVER,  THAT THE GOVERNING BOARD, BY RESOLUTION, MAY DESIG-
   50  NATE THE CHIEF FISCAL  OFFICER  OF  THE  LOCAL  GOVERNMENT  AS  TRUSTEE,
   51  SUBJECT  TO ACCEPTANCE OF SUCH POSITION BY THE CHIEF FISCAL OFFICER AND,
   52  IN THE CASE OF A CITY WITH A POPULATION OF ONE MILLION OR MORE, THE CITY
   53  COMPTROLLER SHALL BE THE TRUSTEE. THE TRUSTEE SHALL BE  RESPONSIBLE  FOR
   54  THE  OPERATION  AND  MANAGEMENT  OF THE TRUST, INCLUDING THE DEPOSIT AND
   55  SECURING OF TRUST ASSETS IN THE SAME MANNER AS PROVIDED IN  SECTION  TEN
   56  OF  THIS  ARTICLE,  AND  THE  INVESTMENT  OF  TRUST ASSETS, AND SHALL BE
       S. 5111                             6
    1  SUBJECT TO ALL THE DUTIES AND RESPONSIBILITIES IMPOSED BY LAW  ON  TRUS-
    2  TEES,  EXCEPT  TO THE EXTENT INCONSISTENT WITH THIS SECTION. THE TRUSTEE
    3  SHALL EXECUTE AND FILE WITH THE CLERK OF THE LOCAL GOVERNMENT AN  APPRO-
    4  PRIATE UNDERTAKING, SEPARATE FROM AND IN ADDITION TO ANY OTHER UNDERTAK-
    5  ING  REQUIRED  OF THE TRUSTEE IN ANY OTHER CAPACITY, IN AN AMOUNT SUFFI-
    6  CIENT TO COVER TRUST ASSETS. IN  LIEU  THEREOF,  SUCH  COVERAGE  MAY  BE
    7  INCLUDED  IN  A BLANKET UNDERTAKING IN ACCORDANCE WITH SECTION ELEVEN OF
    8  THE PUBLIC OFFICERS LAW.  THE COST OF THE UNDERTAKING SHALL  BE  CONSID-
    9  ERED TO BE A REASONABLE EXPENSE OF ADMINISTERING THE TRUST.
   10    4.  CONTRIBUTIONS  TO  THE  TRUST, AND ANY INTEREST OR OTHER INCOME OR
   11  EARNINGS ON CONTRIBUTIONS, SHALL BE IRREVOCABLE BEFORE  ALL  LIABILITIES
   12  OF  THE  LOCAL  GOVERNMENT  FOR OTHER POST EMPLOYMENT BENEFITS HAVE BEEN
   13  SATISFIED, AND SHALL BE  SOLELY  DEDICATED  TO,  AND  USED  SOLELY  FOR,
   14  PROVIDING  OTHER  POST  EMPLOYMENT  BENEFITS  AND PAYING APPROPRIATE AND
   15  REASONABLE EXPENSES OF ADMINISTERING THE TRUST. NO ASSETS, INCOME, EARN-
   16  INGS OR DISTRIBUTIONS OF THE TRUST SHALL BE  SUBJECT  TO  ANY  CLAIM  OF
   17  CREDITORS OF THE LOCAL GOVERNMENT OR OF ANY PERSON OR ENTITY ADMINISTER-
   18  ING  A  PLAN  FOR  THE PROVISION OF OTHER POST EMPLOYMENT BENEFITS OR TO
   19  ASSIGNMENT OR EXECUTION, ATTACHMENT OR ANY OTHER CLAIM ENFORCEMENT PROC-
   20  ESS INITIATED BY OR ON BEHALF OF SUCH CREDITORS.   EXCEPT  AS  OTHERWISE
   21  PROVIDED  IN SUBDIVISION SEVEN OF THIS SECTION, THE TRUSTEE SHALL NOT BE
   22  RESPONSIBLE FOR THE ADEQUACY OF THE ASSETS OF  THE  TRUST  TO  MEET  ANY
   23  OTHER  POST EMPLOYMENT BENEFIT. THE TRUSTEE SHALL NOT BE RESPONSIBLE FOR
   24  TAKING ANY ACTION TO ENFORCE THE PAYMENT OF ANY APPROPRIATION  INTO  THE
   25  TRUST.  THE  ASSETS OF THE TRUST, INCLUDING ALL INTEREST OR OTHER INCOME
   26  OR EARNINGS ON CONTRIBUTIONS TO THE TRUST,  SHALL  BE  EXEMPT  FROM  ALL
   27  STATE  AND  LOCAL  TAXES.    THE  TRUST  MAY BE TERMINATED ONLY WHEN ALL
   28  LIABILITIES OF THE LOCAL GOVERNMENT FOR OTHER POST  EMPLOYMENT  BENEFITS
   29  HAVE  BEEN  SATISFIED  AND  THERE  IS  NO  PRESENT OR FUTURE OBLIGATION,
   30  CONTINGENT OR OTHERWISE, OF THE LOCAL GOVERNMENT TO PROVIDE  SUCH  OTHER
   31  POST  EMPLOYMENT  BENEFITS.  UPON  SUCH TERMINATION, ANY REMAINING TRUST
   32  ASSETS, AFTER ANY PROPER EXPENSES OF THE TRUST  HAVE  BEEN  PAID,  SHALL
   33  REVERT  TO  THE  LOCAL  GOVERNMENT  TO  BE PAID INTO ONE OR MORE RESERVE
   34  FUNDS, DULY ESTABLISHED PURSUANT TO THIS ARTICLE OR OTHER STATE STATUTE,
   35  IN SUCH AMOUNTS AS DETERMINED  BY  THE  GOVERNING  BOARD  OF  THE  LOCAL
   36  GOVERNMENT.
   37    5. DISBURSEMENTS FROM THE TRUST SHALL BE MADE ONLY UPON A DULY AUTHOR-
   38  IZED  REQUEST PURSUANT TO RESOLUTION OF THE GOVERNING BOARD OF THE LOCAL
   39  GOVERNMENT STATING THE AMOUNT OF THE REQUESTED DISBURSEMENT  AND  DETER-
   40  MINING  THAT THE DISBURSEMENT IS FOR THE SOLE PURPOSE OF PROVIDING FUNDS
   41  FOR THE COSTS OF OTHER POST EMPLOYMENT BENEFITS CURRENTLY DUE AND  PAYA-
   42  BLE BY THE LOCAL GOVERNMENT.
   43    6.  THE TRUSTEE SHALL INVEST THE ASSETS OF THE TRUST IN THE OTHER POST
   44  EMPLOYMENT BENEFITS INVESTMENT FUND IN THE CUSTODY OF  THE  STATE  COMP-
   45  TROLLER,  IN  ACCORDANCE  WITH  SECTION  NINETY-SEVEN-LLLL  OF THE STATE
   46  FINANCE LAW. ANY INTEREST OR OTHER INCOME OR EARNINGS RESULTING FROM THE
   47  INVESTMENT OF ASSETS OF THE TRUST SHALL ACCRUE TO AND BECOME PART OF THE
   48  ASSETS OF THE TRUST. THE TRUSTEE  SHALL  DEVELOP  A  WRITTEN  INVESTMENT
   49  POLICY  FOR  SELECTING AMONG THE INVESTMENT OPTIONS OFFERED BY THE STATE
   50  COMPTROLLER PURSUANT TO SECTION NINETY-SEVEN-LLLL OF THE  STATE  FINANCE
   51  LAW  WHICH, AT A MINIMUM, SHALL INCLUDE A STATEMENT OF INVESTMENT OBJEC-
   52  TIVES ADDRESSING, IN THE FOLLOWING ORDER OF  PRIORITY,  COMPLIANCE  WITH
   53  ALL LEGAL REQUIREMENTS, THE ABILITY TO TIMELY MEET DISBURSEMENT REQUESTS
   54  WITHOUT  FORCED  SALE  OF  ASSETS, SAFETY OF PRINCIPAL AND ATTAINMENT OF
   55  MARKET RATES OF RETURN.
       S. 5111                             7
    1    7. NEITHER THE LOCAL GOVERNMENT NOR THE TRUSTEE SHALL  BE  LIABLE  FOR
    2  ANY  LOSS  OR EXPENSE SUFFERED BY THE TRUST IN THE ABSENCE OF BAD FAITH,
    3  WILLFUL MISCONDUCT OR  INTENTIONAL  WRONGDOING.  THE  TRUSTEE  SHALL  BE
    4  CONSIDERED  TO  BE  AN  EMPLOYEE OF THE LOCAL GOVERNMENT FOR PURPOSES OF
    5  SECTION EIGHTEEN OF THE PUBLIC OFFICERS LAW, PROVIDED, HOWEVER, THAT THE
    6  COSTS  OF ANY DEFENSE OR INDEMNIFICATION OF THE TRUSTEE ARISING FROM THE
    7  EXERCISE OF THE FUNCTIONS OF TRUSTEE SHALL BE PAYABLE FROM THE ASSETS OF
    8  THE TRUST.
    9    8. THE TRUSTEE SHALL PREPARE OR CAUSE TO BE PREPARED AN ANNUAL  FINAN-
   10  CIAL  REPORT  OF ASSETS, LIABILITIES, REVENUES AND EXPENSES OF THE TRUST
   11  IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE TRUSTEE
   12  SHALL CAUSE THE ACTIVITIES UNDERTAKEN  IN  CONNECTION  WITH  THE  TRUST,
   13  INCLUDING  THE  ANNUAL  FINANCIAL REPORT, TO BE AUDITED ANNUALLY, EITHER
   14  SEPARATELY OR AS PART OF THE OVERALL AUDIT OF THE REPORTING  ENTITY,  IN
   15  ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BY AN INDEPENDENT
   16  CERTIFIED  PUBLIC  ACCOUNTANT  ENGAGED  IN  A MANNER CONSISTENT WITH THE
   17  PROCUREMENT POLICIES AND PROCEDURES  ADOPTED  BY  THE  LOCAL  GOVERNMENT
   18  PURSUANT  TO  SECTION  ONE  HUNDRED  FOUR-B OF THIS CHAPTER AND SHALL BE
   19  SUBJECT TO A REQUEST FOR PROPOSALS PROCESS AT LEAST  EVERY  FIVE  YEARS.
   20  THE  AUDIT  SHALL  BE  COMPLETED WITHIN ONE HUNDRED TWENTY DAYS FROM THE
   21  CLOSE OF THE FISCAL YEAR OF THE LOCAL GOVERNMENT. A COPY OF  THE  ANNUAL
   22  FINANCIAL  REPORT  AND THE REPORT OF SUCH AUDIT SHALL BE PROVIDED TO THE
   23  STATE COMPTROLLER, THE TRUSTEE AND THE  GOVERNING  BOARD  OF  THE  LOCAL
   24  GOVERNMENT  AND SHALL BE PUBLICLY AVAILABLE AND POSTED ON THE WEBSITE OF
   25  THE LOCAL GOVERNMENT, IF SUCH A WEBSITE IS MAINTAINED.
   26    9. THE STATE COMPTROLLER MAY MAKE, AMEND AND  REPEAL  SUCH  RULES  AND
   27  REGULATIONS AS THE STATE COMPTROLLER MAY DEEM APPROPRIATE FOR THE PROPER
   28  OPERATION AND MANAGEMENT OF TRUSTS ESTABLISHED PURSUANT TO THIS SECTION.
   29    10.  NOTHING  CONTAINED  IN  THIS  SECTION  SHALL  BE  INTERPRETED  OR
   30  CONSTRUED TO:
   31    (A) CREATE ANY OBLIGATION IN, IMPOSE ANY OBLIGATION ON, OR  ALTER  ANY
   32  OBLIGATION  OF  ANY  LOCAL  GOVERNMENT  TO PROVIDE OTHER POST EMPLOYMENT
   33  BENEFITS;
   34    (B) LIMIT OR RESTRICT THE AUTHORITY OF A LOCAL GOVERNMENT TO MODIFY OR
   35  ELIMINATE OTHER POST EMPLOYMENT BENEFITS;
   36    (C) ASSURE OR DENY OTHER POST EMPLOYMENT BENEFITS; OR
   37    (D) REQUIRE ANY LOCAL GOVERNMENT TO FUND ITS LIABILITY FOR OTHER  POST
   38  EMPLOYMENT BENEFITS.
   39    S  4.  Subdivision  9  of section 6-p of the general municipal law, as
   40  added by chapter 518 of the laws of 1996, is amended to read as follows:
   41    9. If, after the establishment of such fund, the  municipality  deter-
   42  mines  that  such fund is no longer needed, the moneys remaining in such
   43  fund may be transferred to any other reserve  fund  OR  ANY  OTHER  POST
   44  EMPLOYMENT  BENEFITS  TRUST  of  the municipal corporation authorized by
   45  this chapter that is comprised of moneys which were raised on  the  same
   46  tax  base  as  the  moneys  in  the  reserve fund established under this
   47  section or TO A RESERVE FUND ESTABLISHED PURSUANT TO section  thirty-six
   48  hundred  fifty-one  of  the  education  law, only to the extent that the
   49  moneys in this fund shall exceed the sum sufficient to pay  all  liabil-
   50  ities  incurred  or  accrued  against it. Prior to the discontinuance of
   51  such fund, the fiscal and legal officers of such  municipal  corporation
   52  shall  certify  to  the  governing  board thereof the amount that may be
   53  necessary to retain in such fund to satisfy all liabilities incurred  or
   54  accrued  against  it  and  such  sum  shall  be retained in the fund for
   55  payment of such amounts or until later certified that such funds are  no
   56  longer needed.
       S. 5111                             8
    1    S  5.  The  provisions of section 6-t of the general municipal law, as
    2  added by section three of this act, shall not affect the validity of the
    3  establishment or implementation of the  New  York  City  Retiree  Health
    4  Benefit  Trust,  established  June  12,  2006 by the City of New York as
    5  Grantor, and neither the operation nor any amendment of such trust shall
    6  be  subject to the provisions of such section. The establishment of such
    7  trust and its operation in accordance with its terms is hereby  ratified
    8  and approved.
    9    S 6. This act shall take effect immediately.