S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                        5111--A
                              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  --  committee  discharged,  bill  amended,
         ordered reprinted as amended and recommitted to said committee
       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.
                                                                  LBD03005-05-5
       S. 5111--A                          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 PROVIDED,
   44  HOWEVER, THAT, ANNUALLY, SUCH FEE SHALL NOT EXCEED AN  AMOUNT  EQUAL  TO
   45  THE  ACTUAL EXPENSES INCURRED OR THREE PERCENT OF THE TOTAL CONTRIBUTION
   46  MADE TO THE FUND BY PARTICIPATING TRUSTEES IN A FISCAL  YEAR,  WHICHEVER
   47  IS LESS.
   48    8. THE COMPTROLLER SHALL ENTER INTO AN AGREEMENT WITH EACH PARTICIPAT-
   49  ING  TRUSTEE.  EACH SUCH AGREEMENT SHALL INCLUDE, BUT NOT BE LIMITED TO,
   50  THE FOLLOWING TERMS:
   51    (A) A STATEMENT THAT THE COMPTROLLER SHALL BE UNDER NO  OBLIGATION  TO
   52  REVIEW OR VERIFY THE ESTIMATED COSTS OF BENEFITS TO BE FUNDED WITH MONEY
   53  CONTRIBUTED TO THE FUND;
   54    (B)  A  PROVISION  THAT  THE PARTICIPATING TRUSTEE SHALL DETERMINE THE
   55  AMOUNTS OF MONEY TO  BE  CONTRIBUTED  TO  THE  FUND  AND  DESIGNATE  THE
   56  SUB-FUNDS  IN  WHICH THE MONEYS SHALL BE INVESTED. THE COMPTROLLER SHALL
       S. 5111--A                          3
    1  ACCEPT SUCH AMOUNTS AND HIS OR  HER  ONLY  RESPONSIBILITY  SHALL  BE  TO
    2  INVEST THE MONEYS IN THE SUB-FUNDS DIRECTED BY THE PARTICIPATING TRUSTEE
    3  AND  TO REPORT THE CONTRIBUTIONS, WITHDRAWALS, BALANCES AND EARNINGS, TO
    4  THE  PARTICIPATING  TRUSTEE  ON  A  REGULAR BASIS TO BE SET FORTH IN THE
    5  AGREEMENT, BUT NO LESS FREQUENTLY THAN ANNUALLY;
    6    (C) A STATEMENT THAT IT SHALL BE THE RESPONSIBILITY OF THE PARTICIPAT-
    7  ING TRUSTEE TO DETERMINE COSTS ELIGIBLE TO BE FUNDED FROM MONEYS IN  THE
    8  FUND  AND THE COMPTROLLER'S ONLY OBLIGATION SHALL BE TO MAKE PAYMENTS ON
    9  THE DATES AND IN THE AMOUNTS REQUESTED BY THE PARTICIPATING TRUSTEE;
   10    (D) A REQUIREMENT THAT THE PARTICIPATING TRUSTEE SHALL ANNUALLY, ON  A
   11  DATE  PROVIDED IN THE AGREEMENT, PROVIDE THE COMPTROLLER WITH A SCHEDULE
   12  OR AMENDED SCHEDULE OF MONEYS EXPECTED TO BE CONTRIBUTED TO THE FUND AND
   13  WITHDRAWALS EXPECTED TO BE MADE FROM ITS ACCOUNT. SUCH SCHEDULE SHALL BE
   14  BINDING ON THE PARTICIPATING TRUSTEE;
   15    (E) A PROVISION THAT THE MONEY IN  THE  FUND  SHALL  BE  PAID  TO  THE
   16  PARTICIPATING  TRUSTEE  OR  ITS DESIGNEE UPON REQUISITION AS PROVIDED IN
   17  THE AGREEMENT;
   18    (F) A PROVISION FOR THE ASSESSMENT OF ADMINISTRATIVE COSTS, INVESTMENT
   19  FEES AND OTHER CHARGES, INCLUDING ANY PENALTIES TO BE IMPOSED FOR  EARLY
   20  OR EXCESSIVE WITHDRAWALS, AND FOR THE DEDUCTION OF SUCH FEES AND CHARGES
   21  FROM INVESTMENT EARNINGS;
   22    (G) A STATEMENT BY THE PARTICIPATING TRUSTEE RELATING TO ITS CONSIDER-
   23  ATION  OF  THE RISKS INVOLVED IN THE INVESTMENT SUB-FUNDS TO WHICH IT IS
   24  ALLOCATING ITS MONEYS AND ITS UNDERSTANDING OF  ITS  RESPONSIBILITY  FOR
   25  ANY LOSSES RESULTING FROM SUCH RISKS;
   26    (H)  A STATEMENT THAT NEITHER THE COMPTROLLER NOR ANY OFFICER, EMPLOY-
   27  EE, AGENT OR ADVISOR OF THE COMPTROLLER SHALL BE LIABLE FOR ANY LOSS  OR
   28  EXPENSE  SUFFERED  BY  THE  FUND  IN  THE  ABSENCE OF BAD FAITH, WILLFUL
   29  MISCONDUCT OR INTENTIONAL WRONGDOING; AND
   30    (I) A PROVISION FOR THE TERMINATION  OF  THE  PARTICIPATING  TRUSTEE'S
   31  INCLUSION  IN  THE  FUND,  INCLUDING  THE DISPOSITION AND/OR TRANSFER OF
   32  ACCUMULATED ASSETS.
   33    S 2. The civil service law is amended by adding a new section  169  to
   34  read as follows:
   35    S  169. OTHER POST EMPLOYMENT BENEFITS ("OPEB") TRUST. 1. FOR PURPOSES
   36  OF THIS SECTION:
   37    (A) "OPEB TRUST BOARD" OR "BOARD" SHALL  MEAN  THE  BOARD  ESTABLISHED
   38  PURSUANT TO SUBDIVISION TWO OF THIS SECTION;
   39    (B) "STATE" SHALL MEAN THE STATE OF NEW YORK;
   40    (C)  "FUND"  SHALL  MEAN THE OTHER POST EMPLOYMENT BENEFITS INVESTMENT
   41  FUND CREATED BY SECTION NINETY-SEVEN-LLLL OF THE STATE FINANCE LAW; AND
   42    (D) "OTHER POST  EMPLOYMENT  BENEFITS"  SHALL  MEAN  BENEFITS,  EXCEPT
   43  PENSIONS  OR  OTHER  BENEFITS FUNDED THROUGH A PUBLIC RETIREMENT SYSTEM,
   44  PROVIDED OR TO BE PROVIDED BY THE STATE AS COMPENSATION, WHETHER  PURSU-
   45  ANT  TO  STATUTE,  CONTRACT OR OTHER LAWFUL AUTHORITY, TO ITS CURRENT OR
   46  FORMER OFFICERS OR EMPLOYEES, OR THEIR FAMILIES OR BENEFICIARIES,  AFTER
   47  SERVICE  TO  THE  STATE HAS ENDED, INCLUDING, BUT NOT LIMITED TO, HEALTH
   48  CARE BENEFITS. THE TERM  "OTHER  POST  EMPLOYMENT  BENEFITS"  SHALL  NOT
   49  INCLUDE  CASH PAYMENTS FOR THE MONETARY VALUE OF SICK LEAVE, VACATION OR
   50  OTHER SIMILAR ACCRUALS, RETIREMENT INCENTIVE OR SEPARATION PAYMENTS,  OR
   51  BENEFITS  PROVIDED PURSUANT TO THE CONSOLIDATED OMNIBUS BUDGET RECONCIL-
   52  IATION ACT OF 1985 (PUBLIC LAW 99-272), AS AMENDED.
   53    2. THERE IS HEREBY ESTABLISHED AN OPEB TRUST BOARD TO CONSIST  OF  THE
   54  PRESIDENT  OF  THE CIVIL SERVICE COMMISSION, THE DIRECTOR OF THE BUDGET,
   55  THE DIRECTOR OF EMPLOYEE RELATIONS, ONE MEMBER APPOINTED BY  THE  TEMPO-
   56  RARY  PRESIDENT OF THE SENATE AND ONE MEMBER APPOINTED BY THE SPEAKER OF
       S. 5111--A                          4
    1  THE ASSEMBLY. THE BOARD MAY ESTABLISH A TRUST IN  ITS  CUSTODY  FOR  THE
    2  PURPOSE  OF ACCUMULATING ASSETS TO FUND THE COST OF PROVIDING OTHER POST
    3  EMPLOYMENT BENEFITS. CONTRIBUTIONS TO SUCH TRUST MAY BE  MADE  BY  STATE
    4  APPROPRIATION.
    5    3.  THE BOARD IS HEREBY DECLARED TO BE THE TRUSTEE OF THE TRUST ESTAB-
    6  LISHED PURSUANT TO THIS SECTION PROVIDED, HOWEVER, THAT  THE  BOARD  MAY
    7  DESIGNATE  THE  PRESIDENT  OF  THE  CIVIL  SERVICE COMMISSION AS TRUSTEE
    8  SUBJECT TO ACCEPTANCE OF SUCH POSITION BY  THE  PRESIDENT.  THE  TRUSTEE
    9  SHALL  BE  RESPONSIBLE  FOR  THE  OPERATION AND MANAGEMENT OF THE TRUST,
   10  INCLUDING THE INVESTMENT OF TRUST ASSETS, AND SHALL BE  SUBJECT  TO  ALL
   11  THE  DUTIES  AND  RESPONSIBILITIES IMPOSED BY LAW ON TRUSTEES, EXCEPT TO
   12  THE EXTENT INCONSISTENT WITH THIS SECTION.
   13    4. CONTRIBUTIONS TO THE TRUST, AND ANY INTEREST  OR  OTHER  INCOME  OR
   14  EARNINGS  ON  CONTRIBUTIONS, SHALL BE IRREVOCABLE BEFORE ALL LIABILITIES
   15  OF THE STATE GOVERNMENT FOR OTHER POST  EMPLOYMENT  BENEFITS  HAVE  BEEN
   16  SATISFIED AND SHALL BE SOLELY DEDICATED TO, AND USED SOLELY FOR, PROVID-
   17  ING OTHER POST EMPLOYMENT BENEFITS AND PAYING APPROPRIATE AND REASONABLE
   18  EXPENSES  OF  ADMINISTERING  THE  TRUST.  NO ASSETS, INCOME, EARNINGS OR
   19  DISTRIBUTIONS OF THE TRUST SHALL BE SUBJECT TO ANY CLAIM OF CREDITORS OF
   20  THE STATE, OR TO ASSIGNMENT OR EXECUTION, ATTACHMENT OR ANY OTHER  CLAIM
   21  ENFORCEMENT  PROCESS INITIATED BY OR ON BEHALF OF SUCH CREDITORS. EXCEPT
   22  AS OTHERWISE PROVIDED IN SUBDIVISION NINE OF THIS SECTION,  THE  TRUSTEE
   23  SHALL  NOT BE RESPONSIBLE FOR THE ADEQUACY OF THE ASSETS OF THE TRUST TO
   24  MEET ANY OTHER POST EMPLOYMENT BENEFIT. THE TRUSTEE SHALL NOT BE RESPON-
   25  SIBLE FOR TAKING ANY ACTION TO ENFORCE THE PAYMENT OF ANY  APPROPRIATION
   26  INTO THE TRUST. THE TRUST MAY BE TERMINATED ONLY WHEN ALL LIABILITIES OF
   27  THE  STATE  FOR  OTHER  POST EMPLOYMENT BENEFITS HAVE BEEN SATISFIED AND
   28  THERE IS NO PRESENT OR FUTURE OBLIGATION, CONTINGENT  OR  OTHERWISE,  OF
   29  THE  STATE  TO  PROVIDE  SUCH  OTHER POST EMPLOYMENT BENEFITS. UPON SUCH
   30  TERMINATION, ANY REMAINING TRUST ASSETS, AFTER ANY  PROPER  EXPENSES  OF
   31  THE TRUST HAVE BEEN PAID, SHALL REVERT TO THE STATE.
   32    5.  WITHDRAWALS  FROM  THE TRUST SHALL BE MADE FOR THE SOLE PURPOSE OF
   33  PROVIDING FUNDS FOR THE COSTS OF OTHER POST EMPLOYMENT BENEFITS CURRENT-
   34  LY DUE AND PAYABLE BY THE STATE.
   35    6. THE TRUSTEE MAY CONTRACT  TO  OBTAIN  SERVICES  NECESSARY  FOR  THE
   36  MANAGEMENT  AND  OPERATION  OF  THE  TRUST,  INCLUDING  THE PROFESSIONAL
   37  SERVICES NECESSARY TO CARRY OUT HIS OR HER RESPONSIBILITIES AS  TRUSTEE.
   38  CONTRACTS  FOR  SUCH SERVICES SHALL BE LET PURSUANT TO THE PROVISIONS OF
   39  THE STATE FINANCE LAW APPLICABLE TO STATE CONTRACTS.
   40    7. THE TRUSTEE SHALL MANAGE THE ASSETS OF THE TRUST IN A  CAREFUL  AND
   41  PRUDENT  MANNER.  THE  TRUSTEE  MAY  INVEST  ASSETS OF THE TRUST ONLY BY
   42  PAYMENT TO THE FUND IN ACCORDANCE WITH SECTION NINETY-SEVEN-1111 OF  THE
   43  STATE  FINANCE  LAW.  ANY INTEREST OR OTHER INCOME OR EARNINGS RESULTING
   44  FROM THE INVESTMENT OF ASSETS OF THE TRUST SHALL ACCRUE  TO  AND  BECOME
   45  PART OF THE ASSETS OF THE TRUST.
   46    8.  THE  TRUSTEE  SHALL DEVELOP, IN CONSULTATION WITH THE STATE HEALTH
   47  INSURANCE COUNCIL, A WRITTEN INVESTMENT POLICY FOR SELECTING  AMONG  THE
   48  INVESTMENT  OPTIONS OFFERED BY THE STATE COMPTROLLER PURSUANT TO SECTION
   49  NINETY-SEVEN-LLLL OF THE STATE FINANCE LAW SO THAT THE  COMPTROLLER  MAY
   50  BE ABLE TO INVEST FUND MONIES IN ACCORDANCE WITH SUCH POLICY. SUCH POLI-
   51  CY SHALL INCLUDE A STATEMENT OF INVESTMENT OBJECTIVES ADDRESSING, IN THE
   52  FOLLOWING  ORDER  OF  PRIORITY:  THE ABILITY TO TIMELY MEET DISBURSEMENT
   53  REQUESTS WITHOUT FORCED SALE OF ASSETS, SAFETY OF PRINCIPAL AND  ATTAIN-
   54  MENT OF MARKET RATES OF RETURN.
   55    9.  NEITHER  THE STATE NOR THE TRUSTEE SHALL BE LIABLE FOR ANY LOSS OR
   56  EXPENSE SUFFERED BY THE TRUST IN THE ABSENCE OF BAD FAITH, GROSS  NEGLI-
       S. 5111--A                          5
    1  GENCE,  WILLFUL  MISCONDUCT OR INTENTIONAL WRONGDOING. THE TRUSTEE SHALL
    2  BE CONSIDERED TO BE ACTING AS AN OFFICER OF THE STATE  FOR  PURPOSES  OF
    3  SECTION  SEVENTEEN  OF  THE PUBLIC OFFICERS LAW, PROVIDED, HOWEVER, THAT
    4  THE  COSTS OF ANY DEFENSE OR INDEMNIFICATION OF THE TRUSTEE ARISING FROM
    5  THE EXERCISE OF THE FUNCTIONS OF  TRUSTEE  SHALL  BE  PAYABLE  FORM  THE
    6  ASSETS OF THE TRUST.
    7    10. THE TRUSTEE SHALL PREPARE OR CAUSE TO BE PREPARED AN ANNUAL FINAN-
    8  CIAL  REPORT  OF ASSETS, LIABILITIES, REVENUES AND EXPENSES OF THE TRUST
    9  IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE TRUSTEE
   10  SHALL CAUSE THE ACTIVITIES UNDERTAKEN  IN  CONNECTION  WITH  THE  TRUST,
   11  INCLUDING  THE  ANNUAL  FINANCIAL  REPORT,  TO  BE  AUDITED ANNUALLY, IN
   12  ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BY AN INDEPENDENT
   13  CERTIFIED PUBLIC ACCOUNTANT ENGAGED IN  A  MANNER  CONSISTENT  WITH  THE
   14  APPLICABLE  PROVISIONS  OF  THE  STATE  FINANCE  LAW. THE AUDIT SHALL BE
   15  COMPLETED WITHIN ONE HUNDRED TWENTY DAYS FROM THE CLOSE OF  THE  STATE'S
   16  FISCAL  YEAR.  A  COPY  OF THE ANNUAL FINANCIAL REPORT AND THE REPORT OF
   17  SUCH AUDIT SHALL BE PROVIDED TO THE GOVERNOR, THE STATE COMPTROLLER  AND
   18  THE CHAIRS OF THE LEGISLATIVE FISCAL COMMITTEES.
   19    11.  NOTHING  CONTAINED  IN  THIS  SECTION  SHALL  BE  INTERPRETED  OR
   20  CONSTRUED TO:
   21    (A) CREATE ANY OBLIGATION IN, IMPOSE ANY OBLIGATION ON, OR  ALTER  ANY
   22  OBLIGATION OF THE STATE TO PROVIDE OTHER POST EMPLOYMENT BENEFITS;
   23    (B)  LIMIT  OR RESTRICT THE AUTHORITY OF THE STATE TO MODIFY OR ELIMI-
   24  NATE OTHER POST EMPLOYMENT BENEFITS;
   25    (C) ASSURE OR DENY OTHER POST EMPLOYMENT BENEFITS; OR
   26    (D) REQUIRE THE STATE TO FUND ITS LIABILITY FOR OTHER POST  EMPLOYMENT
   27  BENEFITS.
   28    S  3. The general municipal law is amended by adding a new section 6-t
   29  to read as follows:
   30    S 6-T. OTHER POST EMPLOYMENT BENEFITS (OPEB) TRUST. 1. FOR PURPOSES OF
   31  THIS SECTION:
   32    (A) "LOCAL GOVERNMENT" SHALL  MEAN  A  MUNICIPAL  CORPORATION,  SCHOOL
   33  DISTRICT,  BOARD  OF  COOPERATIVE  EDUCATIONAL SERVICES, DISTRICT CORPO-
   34  RATION, SPECIAL IMPROVEMENT DISTRICT GOVERNED BY  A  SEPARATE  BOARD  OF
   35  COMMISSIONERS,  COMMUNITY  COLLEGE OR PUBLIC LIBRARY THAT PROVIDES OTHER
   36  POST EMPLOYMENT BENEFITS.
   37    (B) "OTHER POST  EMPLOYMENT  BENEFITS"  SHALL  MEAN  BENEFITS,  EXCEPT
   38  PENSIONS  OR  OTHER  BENEFITS FUNDED THROUGH A PUBLIC RETIREMENT SYSTEM,
   39  PROVIDED OR TO BE PROVIDED AS  COMPENSATION  BY  THE  LOCAL  GOVERNMENT,
   40  WHETHER  PURSUANT  TO  STATE STATUTE, LOCAL ENACTMENT, CONTRACT OR OTHER
   41  LAWFUL AUTHORITY, TO ITS FORMER OR CURRENT  OFFICERS  OR  EMPLOYEES,  OR
   42  THEIR  FAMILIES  OR BENEFICIARIES, AFTER SERVICE TO THE LOCAL GOVERNMENT
   43  HAS ENDED, INCLUDING, BUT NOT LIMITED TO, HEALTH CARE BENEFITS. THE TERM
   44  "OTHER POST EMPLOYMENT BENEFITS" SHALL NOT INCLUDE CASH PAYMENTS FOR THE
   45  MONETARY VALUE OF  SICK  LEAVE,  VACATION  OR  OTHER  SIMILAR  ACCRUALS,
   46  RETIREMENT INCENTIVE OR SEPARATION PAYMENTS, OR BENEFITS PROVIDED PURSU-
   47  ANT  TO  THE  CONSOLIDATED  OMNIBUS  BUDGET  RECONCILIATION  ACT OF 1985
   48  (PUBLIC LAW 99-272), AS AMENDED.
   49    2. THE GOVERNING BODY OF A LOCAL GOVERNMENT, BY RESOLUTION, MAY ESTAB-
   50  LISH A TRUST IN THE CUSTODY OF THE CHIEF FISCAL  OFFICER  OF  THE  LOCAL
   51  GOVERNMENT,  FOR  THE PURPOSE OF ACCUMULATING ASSETS TO FUND THE COST TO
   52  THE LOCAL  GOVERNMENT  OF  PROVIDING  OTHER  POST  EMPLOYMENT  BENEFITS.
   53  CONTRIBUTIONS TO SUCH TRUST MAY BE MADE BY THE LOCAL GOVERNMENT BY BUDG-
   54  ETARY  APPROPRIATION  OR  TRANSFER  IN ACCORDANCE WITH THE PROVISIONS OF
   55  SUBDIVISION NINE OF SECTION SIX-P OF THIS ARTICLE.
       S. 5111--A                          6
    1    3. THE GOVERNING BOARD OF THE LOCAL GOVERNMENT IS HEREBY  DECLARED  TO
    2  BE  THE  TRUSTEE  OF  ANY  TRUST  ESTABLISHED  PURSUANT TO THIS SECTION,
    3  PROVIDED, HOWEVER, THAT THE GOVERNING BOARD, BY RESOLUTION,  MAY  DESIG-
    4  NATE  THE  CHIEF  FISCAL  OFFICER  OF  THE  LOCAL GOVERNMENT AS TRUSTEE,
    5  SUBJECT  TO ACCEPTANCE OF SUCH POSITION BY THE CHIEF FISCAL OFFICER AND,
    6  IN THE CASE OF A CITY WITH A POPULATION OF ONE MILLION OR MORE, THE CITY
    7  COMPTROLLER SHALL BE THE TRUSTEE. THE TRUSTEE SHALL BE  RESPONSIBLE  FOR
    8  THE  OPERATION  AND  MANAGEMENT  OF THE TRUST, INCLUDING THE DEPOSIT AND
    9  SECURING OF TRUST ASSETS IN THE SAME MANNER AS PROVIDED IN  SECTION  TEN
   10  OF  THIS  ARTICLE,  AND  THE  INVESTMENT  OF  TRUST ASSETS, AND SHALL BE
   11  SUBJECT TO ALL THE DUTIES AND RESPONSIBILITIES IMPOSED BY LAW  ON  TRUS-
   12  TEES,  EXCEPT  TO THE EXTENT INCONSISTENT WITH THIS SECTION. THE TRUSTEE
   13  SHALL EXECUTE AND FILE WITH THE CLERK OF THE LOCAL GOVERNMENT AN  APPRO-
   14  PRIATE UNDERTAKING, SEPARATE FROM AND IN ADDITION TO ANY OTHER UNDERTAK-
   15  ING  REQUIRED  OF THE TRUSTEE IN ANY OTHER CAPACITY, IN AN AMOUNT SUFFI-
   16  CIENT TO COVER TRUST ASSETS. IN  LIEU  THEREOF,  SUCH  COVERAGE  MAY  BE
   17  INCLUDED  IN  A BLANKET UNDERTAKING IN ACCORDANCE WITH SECTION ELEVEN OF
   18  THE PUBLIC OFFICERS LAW.  THE COST OF THE UNDERTAKING SHALL  BE  CONSID-
   19  ERED TO BE A REASONABLE EXPENSE OF ADMINISTERING THE TRUST.
   20    4.  CONTRIBUTIONS  TO  THE  TRUST, AND ANY INTEREST OR OTHER INCOME OR
   21  EARNINGS ON CONTRIBUTIONS, SHALL BE IRREVOCABLE BEFORE  ALL  LIABILITIES
   22  OF  THE  LOCAL  GOVERNMENT  FOR OTHER POST EMPLOYMENT BENEFITS HAVE BEEN
   23  SATISFIED, AND SHALL BE  SOLELY  DEDICATED  TO,  AND  USED  SOLELY  FOR,
   24  PROVIDING  OTHER  POST  EMPLOYMENT  BENEFITS  AND PAYING APPROPRIATE AND
   25  REASONABLE EXPENSES OF ADMINISTERING THE TRUST. NO ASSETS, INCOME, EARN-
   26  INGS OR DISTRIBUTIONS OF THE TRUST SHALL BE  SUBJECT  TO  ANY  CLAIM  OF
   27  CREDITORS OF THE LOCAL GOVERNMENT OR OF ANY PERSON OR ENTITY ADMINISTER-
   28  ING  A  PLAN  FOR  THE PROVISION OF OTHER POST EMPLOYMENT BENEFITS OR TO
   29  ASSIGNMENT OR EXECUTION, ATTACHMENT OR ANY OTHER CLAIM ENFORCEMENT PROC-
   30  ESS INITIATED BY OR ON BEHALF OF SUCH CREDITORS.   EXCEPT  AS  OTHERWISE
   31  PROVIDED  IN SUBDIVISION SEVEN OF THIS SECTION, THE TRUSTEE SHALL NOT BE
   32  RESPONSIBLE FOR THE ADEQUACY OF THE ASSETS OF  THE  TRUST  TO  MEET  ANY
   33  OTHER  POST EMPLOYMENT BENEFIT. THE TRUSTEE SHALL NOT BE RESPONSIBLE FOR
   34  TAKING ANY ACTION TO ENFORCE THE PAYMENT OF ANY APPROPRIATION  INTO  THE
   35  TRUST.  THE  ASSETS OF THE TRUST, INCLUDING ALL INTEREST OR OTHER INCOME
   36  OR EARNINGS ON CONTRIBUTIONS TO THE TRUST,  SHALL  BE  EXEMPT  FROM  ALL
   37  STATE  AND  LOCAL  TAXES.    THE  TRUST  MAY BE TERMINATED ONLY WHEN ALL
   38  LIABILITIES OF THE LOCAL GOVERNMENT FOR OTHER POST  EMPLOYMENT  BENEFITS
   39  HAVE  BEEN  SATISFIED  AND  THERE  IS  NO  PRESENT OR FUTURE OBLIGATION,
   40  CONTINGENT OR OTHERWISE, OF THE LOCAL GOVERNMENT TO PROVIDE  SUCH  OTHER
   41  POST  EMPLOYMENT  BENEFITS.  UPON  SUCH TERMINATION, ANY REMAINING TRUST
   42  ASSETS, AFTER ANY PROPER EXPENSES OF THE TRUST  HAVE  BEEN  PAID,  SHALL
   43  REVERT  TO  THE  LOCAL  GOVERNMENT  TO  BE PAID INTO ONE OR MORE RESERVE
   44  FUNDS, DULY ESTABLISHED PURSUANT TO THIS ARTICLE OR OTHER STATE STATUTE,
   45  IN SUCH AMOUNTS AS DETERMINED  BY  THE  GOVERNING  BOARD  OF  THE  LOCAL
   46  GOVERNMENT.
   47    5. DISBURSEMENTS FROM THE TRUST SHALL BE MADE ONLY UPON A DULY AUTHOR-
   48  IZED  REQUEST PURSUANT TO RESOLUTION OF THE GOVERNING BOARD OF THE LOCAL
   49  GOVERNMENT STATING THE AMOUNT OF THE REQUESTED DISBURSEMENT  AND  DETER-
   50  MINING  THAT THE DISBURSEMENT IS FOR THE SOLE PURPOSE OF PROVIDING FUNDS
   51  FOR THE COSTS OF OTHER POST EMPLOYMENT BENEFITS CURRENTLY DUE AND  PAYA-
   52  BLE BY THE LOCAL GOVERNMENT.
   53    6.  THE TRUSTEE SHALL INVEST THE ASSETS OF THE TRUST IN THE OTHER POST
   54  EMPLOYMENT BENEFITS INVESTMENT FUND IN THE CUSTODY OF  THE  STATE  COMP-
   55  TROLLER,  IN  ACCORDANCE  WITH  SECTION  NINETY-SEVEN-LLLL  OF THE STATE
   56  FINANCE LAW. ANY INTEREST OR OTHER INCOME OR EARNINGS RESULTING FROM THE
       S. 5111--A                          7
    1  INVESTMENT OF ASSETS OF THE TRUST SHALL ACCRUE TO AND BECOME PART OF THE
    2  ASSETS OF THE TRUST. THE TRUSTEE  SHALL  DEVELOP  A  WRITTEN  INVESTMENT
    3  POLICY  FOR  SELECTING AMONG THE INVESTMENT OPTIONS OFFERED BY THE STATE
    4  COMPTROLLER  PURSUANT  TO SECTION NINETY-SEVEN-LLLL OF THE STATE FINANCE
    5  LAW WHICH, AT A MINIMUM, SHALL INCLUDE A STATEMENT OF INVESTMENT  OBJEC-
    6  TIVES  ADDRESSING,  IN  THE FOLLOWING ORDER OF PRIORITY, COMPLIANCE WITH
    7  ALL LEGAL REQUIREMENTS, THE ABILITY TO TIMELY MEET DISBURSEMENT REQUESTS
    8  WITHOUT FORCED SALE OF ASSETS, SAFETY OF  PRINCIPAL  AND  ATTAINMENT  OF
    9  MARKET RATES OF RETURN.
   10    7.  NEITHER  THE  LOCAL GOVERNMENT NOR THE TRUSTEE SHALL BE LIABLE FOR
   11  ANY LOSS OR EXPENSE SUFFERED BY THE TRUST IN THE ABSENCE OF  BAD  FAITH,
   12  WILLFUL  MISCONDUCT  OR  INTENTIONAL  WRONGDOING.  THE  TRUSTEE SHALL BE
   13  CONSIDERED TO BE AN EMPLOYEE OF THE LOCAL  GOVERNMENT  FOR  PURPOSES  OF
   14  SECTION EIGHTEEN OF THE PUBLIC OFFICERS LAW, PROVIDED, HOWEVER, THAT THE
   15  COSTS  OF ANY DEFENSE OR INDEMNIFICATION OF THE TRUSTEE ARISING FROM THE
   16  EXERCISE OF THE FUNCTIONS OF TRUSTEE SHALL BE PAYABLE FROM THE ASSETS OF
   17  THE TRUST.
   18    8. THE TRUSTEE SHALL PREPARE OR CAUSE TO BE PREPARED AN ANNUAL  FINAN-
   19  CIAL  REPORT  OF ASSETS, LIABILITIES, REVENUES AND EXPENSES OF THE TRUST
   20  IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE TRUSTEE
   21  SHALL CAUSE THE ACTIVITIES UNDERTAKEN  IN  CONNECTION  WITH  THE  TRUST,
   22  INCLUDING  THE  ANNUAL  FINANCIAL REPORT, TO BE AUDITED ANNUALLY, EITHER
   23  SEPARATELY OR AS PART OF THE OVERALL AUDIT OF THE REPORTING  ENTITY,  IN
   24  ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BY AN INDEPENDENT
   25  CERTIFIED  PUBLIC  ACCOUNTANT  ENGAGED  IN  A MANNER CONSISTENT WITH THE
   26  PROCUREMENT POLICIES AND PROCEDURES  ADOPTED  BY  THE  LOCAL  GOVERNMENT
   27  PURSUANT  TO  SECTION  ONE  HUNDRED  FOUR-B OF THIS CHAPTER AND SHALL BE
   28  SUBJECT TO A REQUEST FOR PROPOSALS PROCESS AT LEAST  EVERY  FIVE  YEARS.
   29  THE  AUDIT  SHALL  BE  COMPLETED WITHIN ONE HUNDRED TWENTY DAYS FROM THE
   30  CLOSE OF THE FISCAL YEAR OF THE LOCAL GOVERNMENT. A COPY OF  THE  ANNUAL
   31  FINANCIAL  REPORT  AND THE REPORT OF SUCH AUDIT SHALL BE PROVIDED TO THE
   32  STATE COMPTROLLER, THE TRUSTEE AND THE  GOVERNING  BOARD  OF  THE  LOCAL
   33  GOVERNMENT  AND SHALL BE PUBLICLY AVAILABLE AND POSTED ON THE WEBSITE OF
   34  THE LOCAL GOVERNMENT, IF SUCH A WEBSITE IS MAINTAINED.
   35    9. THE STATE COMPTROLLER MAY MAKE, AMEND AND  REPEAL  SUCH  RULES  AND
   36  REGULATIONS AS THE STATE COMPTROLLER MAY DEEM APPROPRIATE FOR THE PROPER
   37  OPERATION AND MANAGEMENT OF TRUSTS ESTABLISHED PURSUANT TO THIS SECTION.
   38    10.  NOTHING  CONTAINED  IN  THIS  SECTION  SHALL  BE  INTERPRETED  OR
   39  CONSTRUED TO:
   40    (A) CREATE ANY OBLIGATION IN, IMPOSE ANY OBLIGATION ON, OR  ALTER  ANY
   41  OBLIGATION  OF  ANY  LOCAL  GOVERNMENT  TO PROVIDE OTHER POST EMPLOYMENT
   42  BENEFITS;
   43    (B) LIMIT OR RESTRICT THE AUTHORITY OF A LOCAL GOVERNMENT TO MODIFY OR
   44  ELIMINATE OTHER POST EMPLOYMENT BENEFITS;
   45    (C) ASSURE OR DENY OTHER POST EMPLOYMENT BENEFITS; OR
   46    (D) REQUIRE ANY LOCAL GOVERNMENT TO FUND ITS LIABILITY FOR OTHER  POST
   47  EMPLOYMENT BENEFITS.
   48    S  4.  Subdivision  9  of section 6-p of the general municipal law, as
   49  added by chapter 518 of the laws of 1996, is amended to read as follows:
   50    9. If, after the establishment of such fund, the  municipality  deter-
   51  mines  that  such fund is no longer needed, the moneys remaining in such
   52  fund may be transferred to any other reserve  fund  OR  ANY  OTHER  POST
   53  EMPLOYMENT  BENEFITS  TRUST  of  the municipal corporation authorized by
   54  this chapter that is comprised of moneys which were raised on  the  same
   55  tax  base  as  the  moneys  in  the  reserve fund established under this
   56  section or TO A RESERVE FUND ESTABLISHED PURSUANT TO section  thirty-six
       S. 5111--A                          8
    1  hundred  fifty-one  of  the  education  law, only to the extent that the
    2  moneys in this fund shall exceed the sum sufficient to pay  all  liabil-
    3  ities  incurred  or  accrued  against it. Prior to the discontinuance of
    4  such  fund,  the fiscal and legal officers of such municipal corporation
    5  shall certify to the governing board thereof  the  amount  that  may  be
    6  necessary  to retain in such fund to satisfy all liabilities incurred or
    7  accrued against it and such sum  shall  be  retained  in  the  fund  for
    8  payment  of such amounts or until later certified that such funds are no
    9  longer needed.
   10    S 5. The provisions of section 6-t of the general  municipal  law,  as
   11  added by section three of this act, shall not affect the validity of the
   12  establishment  or  implementation  of  the  New York City Retiree Health
   13  Benefit Trust, established June 12, 2006 by the  City  of  New  York  as
   14  Grantor, and neither the operation nor any amendment of such trust shall
   15  be  subject to the provisions of such section. The establishment of such
   16  trust and its operation in accordance with its terms is hereby  ratified
   17  and approved.
   18    S 6. This act shall take effect on the one hundred eightieth day after
   19  it shall have become a law; provided, however, that effective immediate-
   20  ly  the state comptroller is hereby authorized to take any action neces-
   21  sary to implement the provisions of this act on or before such effective
   22  date.