S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2865

                       2009-2010 Regular Sessions

                          I N  A S S E M B L Y

                            January 21, 2009
                               ___________

Introduced  by M. of A. KOLB, WALKER, BARCLAY, GIGLIO, ERRIGO, BACALLES,
  CORWIN -- Multi-Sponsored by -- M. of A. AMEDORE, CALHOUN -- read once
  and referred to the Committee on Labor

AN ACT to amend the labor law and the tax law, in relation to establish-
  ing the family and medical leave independent savings account act

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. The labor law is amended by adding a new article 32 to read
as follows:
                               ARTICLE 32
        FAMILY AND MEDICAL LEAVE INDEPENDENT SAVINGS ACCOUNT ACT
SECTION 1000. SHORT TITLE.
        1001. DEFINITIONS.
        1002. ESTABLISHMENT OF PLAN.
        1003. DISTRIBUTION REQUIREMENTS.
  S  1000.  SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "FAMILY MEDICAL LEAVE INDEPENDENT SAVINGS ACCOUNT ACT".
  S 1001. DEFINITIONS.  AS USED IN THIS ARTICLE:
  1. "COMMISSIONER" MEANS THE COMMISSIONER OF LABOR.
  2. "EMPLOYEE" MEANS ANY PERSON EMPLOYED FOR HIRE BY AN EMPLOYER IN ANY
EMPLOYMENT.
  3. "EMPLOYER" MEANS ANY PERSON, CORPORATION, LIMITED LIABILITY  COMPA-
NY, OR ASSOCIATION EMPLOYING ANY INDIVIDUAL IN ANY OCCUPATION, INDUSTRY,
TRADE, BUSINESS OR SERVICE. THE TERM "EMPLOYER" SHALL ALSO MEAN: A COUN-
TY, CITY, TOWN, VILLAGE OR ANY OTHER POLITICAL SUBDIVISION AS DEFINED IN
SECTION ONE HUNDRED THIRTY-ONE OF THE RETIREMENT AND SOCIAL SECURITY LAW
OR  CIVIL  DIVISION  OF THE STATE; A SCHOOL DISTRICT OR ANY GOVERNMENTAL
ENTITY OPERATING A  PUBLIC  SCHOOL,  COLLEGE  OR  UNIVERSITY;  A  PUBLIC
IMPROVEMENT  OR  SPECIAL  DISTRICT;  A  PUBLIC  AUTHORITY, COMMISSION OR
PUBLIC BENEFIT CORPORATION; ANY  OTHER  PUBLIC  CORPORATION,  AGENCY  OR
INSTRUMENTALITY  OR  UNIT  OF  GOVERNMENT  WHICH  EXERCISES GOVERNMENTAL

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05052-01-9
              

A. 2865                             2

POWERS UNDER THE LAWS  OF  THE  STATE  OR  ANY  INSTRUMENTALITY  JOINTLY
CREATED BY THIS STATE AND ANY OTHER STATE OR STATES.
  4.  THE TERM "FINANCIAL ORGANIZATION" MEANS AN ORGANIZATION AUTHORIZED
TO DO BUSINESS IN THE STATE OF NEW YORK AND (A) WHICH IS  AN  AUTHORIZED
FIDUCIARY  TO  ACT  AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF
CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF  1974"  AS
SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPA-
NY;  AND (B) (I) IS LICENSED OR CHARTERED BY THE STATE INSURANCE DEPART-
MENT, (II) IS LICENSED OR CHARTERED BY  THE  STATE  BANKING  DEPARTMENT,
(III)  IS  CHARTERED  BY  AN  AGENCY  OF THE FEDERAL GOVERNMENT, (IV) IS
SUBJECT TO  THE  JURISDICTION  AND  REGULATION  OF  THE  SECURITIES  AND
EXCHANGE COMMISSION OF THE FEDERAL GOVERNMENT, OR (V) IS ANY OTHER ENTI-
TY  OTHERWISE  AUTHORIZED  TO ACT IN THIS STATE AS A TRUSTEE PURSUANT TO
THE PROVISIONS OF AN  ACT  OF  CONGRESS  ENTITLED  "EMPLOYEE  RETIREMENT
INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY BE AMENDED FROM TIME
TO TIME.
  S 1002. ESTABLISHMENT OF PLAN. 1. (A) THE COMMISSIONER SHALL ESTABLISH
A  FAMILY  AND  MEDICAL  LEAVE  INDEPENDENT SAVINGS ACCOUNT PLAN FOR ALL
EMPLOYEES AND SHALL PROMULGATE ANY AND ALL RULES AND REGULATIONS  NECES-
SARY FOR THE IMPLEMENTATION OF THIS ARTICLE.
  (B)  THE  COMMISSIONER SHALL ENTER INTO WRITTEN AGREEMENTS WITH ONE OR
MORE FINANCIAL ORGANIZATIONS TO ADMINISTER THE FAMILY AND MEDICAL  LEAVE
INDEPENDENT  SAVINGS ACCOUNT PLAN FOR EMPLOYEES AND TO INVEST FUNDS HELD
PURSUANT TO  SUCH  PLAN.  THE  COMMISSIONER  SHALL  ESTABLISH  REPORTING
REQUIREMENTS  FOR SUCH FINANCIAL ORGANIZATIONS INCLUDING BUT NOT LIMITED
TO REPORTS TO THE COMMISSIONER, PARTICIPATING EMPLOYEES, AND PARTICIPAT-
ING EMPLOYERS, REGARDING THE FISCAL STATUS OF FAMILY AND  MEDICAL  LEAVE
INDEPENDENT SAVINGS ACCOUNTS.
  (C)  THE  RULES  AND REGULATIONS PROMULGATED BY THE COMMISSIONER SHALL
ESTABLISH STANDARDS FOR THE SELECTION OF FINANCIAL ORGANIZATIONS AUTHOR-
IZED TO DO BUSINESS IN THIS STATE TO ADMINISTER IN SUCH  PLANS,  INCLUD-
ING,  BUT  NOT  LIMITED TO, THE FOLLOWING CRITERIA: (I) RATES OF COMMIS-
SION, BROKERAGE AND OTHER  FEES,  ADMINISTRATIVE  EXPENSES  AND  RELATED
SERVICE  CHARGES  IMPOSED BY THE FINANCIAL ORGANIZATION; (II) VARIETY OF
TYPES OF INVESTMENT OPPORTUNITIES OFFERED BY THE FINANCIAL  ORGANIZATION
AND/OR  AMONG  THE  FINANCIAL  ORGANIZATIONS SELECTED AND THE ABILITY TO
TRANSFER AMONG SUCH OPPORTUNITIES; (III) THE STABILITY OF THE  FINANCIAL
ORGANIZATION  AS  EVIDENCED  BY EXPERIENCE, REPUTATION, ASSETS AND HOLD-
INGS, ABILITY TO GUARANTEE SPECIFIC RATES OF  RETURN;  (IV)  ABILITY  TO
COMPLY  WITH  REPORTING  REQUIREMENTS TO THE COMMISSIONER AND TO PARTIC-
IPANTS IN SUCH A PLAN; AND (V) SUCH OTHER FACTORS WHICH WOULD BE CONSID-
ERED BY A PRUDENT INVESTOR IN SUCH A PLAN.
  (D) THE COMMISSIONER SHALL PROVIDE ASSISTANCE TO ANY EMPLOYER  AS  THE
COMMISSIONER   MAY   DEEM  APPROPRIATE  TO  THE  IMPLEMENTATION  OF  THE
PROVISIONS OF THIS ARTICLE.
  2. (A) NOTWITHSTANDING ANY OTHER PROVISION OF LAW, EVERY  EMPLOYER  IN
THE  STATE  MUST  PROVIDE A FAMILY AND MEDICAL LEAVE INDEPENDENT SAVINGS
ACCOUNT PLAN FOR ITS EMPLOYEES IN ACCORDANCE WITH STANDARDS,  RULES  AND
REGULATIONS PROMULGATED BY THE COMMISSIONER.
  (B)  AT  THE  REQUEST OF AN EMPLOYEE OF ANY EMPLOYER, THE CHIEF FISCAL
OFFICER OR OTHER APPROPRIATE OFFICER OF SUCH EMPLOYER SHALL, BY  PAYROLL
DEDUCTION, DEFER THE PAYMENT OF PART OF THE COMPENSATION OF SUCH EMPLOY-
EE, AS PROVIDED IN A WRITTEN STATEMENT BY THE EMPLOYEE, AND TRANSFER THE
AMOUNT SO DEFERRED TO THE AUTHORIZED FINANCIAL ORGANIZATION.

A. 2865                             3

  (C)  EMPLOYERS  SHALL BE GRANTED THE OPTION TO ANNUALLY ELECT TO MATCH
ANY AMOUNT OF EMPLOYEE CONTRIBUTIONS TO A FAMILY AND MEDICAL LEAVE INDE-
PENDENT SAVINGS ACCOUNT.
  3.  FAMILY  AND  MEDICAL  LEAVE  INDEPENDENT SAVINGS ACCOUNTS SHALL BE
MAINTAINED BY FINANCIAL ORGANIZATIONS UNDER WRITTEN AGREEMENT  WITH  THE
COMMISSIONER.   SUCH FINANCIAL ORGANIZATIONS SHALL BE SOLELY RESPONSIBLE
FOR DISTRIBUTIONS TO PARTICIPANTS PURSUANT TO THIS ARTICLE.
  4. NOTWITHSTANDING THE OTHER PROVISIONS OF  THIS  SECTION,  EMPLOYEES,
OTHERWISE  ELIGIBLE TO PARTICIPATE IN THE FAMILY AND MEDICAL LEAVE INDE-
PENDENT SAVINGS ACCOUNT PLAN, WHO ARE IN A NEGOTIATING UNIT  REPRESENTED
BY  AN EMPLOYEE ORGANIZATION WHICH NEGOTIATES PURSUANT TO ARTICLE TWENTY
OF THIS CHAPTER OR ARTICLE FOURTEEN OF THE CIVIL SERVICE LAW  SHALL  NOT
BE  PERMITTED  TO PARTICIPATE UNDER THE PROVISIONS OF THIS SECTION UNTIL
SUCH TIME AS SUCH PARTICIPATION IS AUTHORIZED PURSUANT TO A COLLECTIVELY
NEGOTIATED AGREEMENT BETWEEN THE EMPLOYER AND THE EMPLOYEE ORGANIZATION;
PROVIDED, HOWEVER, THAT THE EMPLOYER NEED ONLY NEGOTIATE WHETHER OR  NOT
SUCH EMPLOYEES SHALL BE INCLUDED IN SUCH PLAN.
  5. ANY COMPENSATION DEFERRED BY AN EMPLOYEE UNDER A FAMILY AND MEDICAL
LEAVE  INDEPENDENT  SAVINGS  ACCOUNT  PLAN  ESTABLISHED PURSUANT TO THIS
SECTION SHALL BE CONSIDERED PART OF ANNUAL COMPENSATION BY  ANY  RETIRE-
MENT  SYSTEM  OR  PLAN  TO  WHICH THE STATE OR EMPLOYER CONTRIBUTIONS ON
BEHALF OF SAID EMPLOYEE. HOWEVER, THIS IN NO WAY SHALL BE  CONSTRUED  TO
SUPERSEDE  THE  PROVISION  OF  SECTION  FOUR  HUNDRED  THIRTY-ONE OF THE
RETIREMENT AND SOCIAL SECURITY LAW OR ANY  OTHER  SIMILAR  PROVISION  OF
STATE  OR FEDERAL LAW WHICH LIMITS THE SALARY BASE FOR COMPUTING RETIRE-
MENT BENEFITS PAYABLE BY A RETIREMENT SYSTEM OR PLAN.
  S 1003. DISTRIBUTION REQUIREMENTS. 1. DURING PERIODS OF APPROVED FAMI-
LY AND MEDICAL LEAVE, EMPLOYEE PARTICIPANTS  SHALL  BE  ELIGIBLE  FOR  A
DISTRIBUTION  FROM  THE  ACCUMULATED  FUNDS DEFERRED TO THEIR FAMILY AND
MEDICAL LEAVE INDEPENDENT SAVINGS ACCOUNT ESTABLISHED PURSUANT  TO  THIS
ARTICLE,  IN  FULL  AND PARTIAL DISBURSEMENT OPTIONS TO BE DETERMINED BY
THE COMMISSIONER.
  2. UNDER THE FAMILY AND  MEDICAL  LEAVE  INDEPENDENT  SAVINGS  ACCOUNT
PLAN,  AMOUNTS  WILL  NOT  BE MADE AVAILABLE TO EMPLOYEE PARTICIPANTS OR
BENEFICIARIES EARLIER THAN: (I) WHEN THE PARTICIPANT IS  ON  PERIODS  OF
APPROVED  JOB  PROTECTED LEAVE PURSUANT TO THE PROVISIONS OF THE FEDERAL
FAMILY AND MEDICAL LEAVE ACT;  (II)  THE  CALENDAR  YEAR  IN  WHICH  THE
PARTICIPANT ATTAINS AGE SEVENTY AND ONE-HALF; (III) WHEN THE PARTICIPANT
HAS  A  SEVERANCE  FROM  EMPLOYMENT  WITH THE EMPLOYER; OR (IV) WHEN THE
PARTICIPANT IS FACED WITH AN UNFORESEEABLE  EMERGENCY  DETERMINED  IN  A
MANNER PRESCRIBED BY THE COMMISSIONER.
  3. (A) WHEN AN EMPLOYEE PARTICIPANT BECOMES SEPARATED FROM EMPLOYMENT,
ANY  UNUSED  FUNDS ACCUMULATED IN A FAMILY AND MEDICAL LEAVE INDEPENDENT
SAVINGS ACCOUNT MAY BE DISTRIBUTED  TO  SUCH  PARTICIPANT  IN  A  MANNER
PRESCRIBED BY THE COMMISSIONER, OR ROLLED OVER TO OTHER DEFERRED COMPEN-
SATION  PLANS OR INDIVIDUAL RETIREMENT ACCOUNTS IN ACCORDANCE WITH STATE
AND FEDERAL TAX LAWS.
  (B) ANY UNUSED BENEFIT FROM A FAMILY  AND  MEDICAL  LEAVE  INDEPENDENT
SAVINGS  ACCOUNT  PLAN  ESTABLISHED PURSUANT TO THIS ARTICLE SHALL BE IN
ADDITION TO ANY RETIREMENT BENEFITS PROVIDED AN EMPLOYEE UNDER ANY OTHER
PROVISION OF LAW.
  S 2. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 39 to read as follows:
  (39) THE AMOUNT DEDUCTED OR DEFERRED, DURING A TAXABLE YEAR,  FROM  AN
EMPLOYEE'S  SALARY  UNDER A FAMILY AND MEDICAL LEAVE INDEPENDENT SAVINGS

A. 2865                             4

ACCOUNT PLAN ESTABLISHED PURSUANT TO SECTION  TEN  HUNDRED  TWO  OF  THE
LABOR LAW.
  S 3. This act shall take effect on the one hundred eightieth day after
it shall have become a law; provided, however, that effective immediate-
ly,  the  addition,  amendment  and/or repeal of any rule or regulations
necessary for the implementation of this act on its effective  date  are
authorized  and  directed  to  be  made  and completed on or before such
effective date.