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

                                  7534

                            I N  S E N A T E

                             April 19, 2010
                               ___________

Introduced  by  Sen. C. JOHNSON -- (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:

  Section  1.  The  state finance law is amended by adding a new section
97-jjjj to read as follows:
  S 97-JJJJ. OTHER POST EMPLOYMENT BENEFITS ("OPEB") INVESTMENT FUND. 1.
THERE IS HEREBY ESTABLISHED IN THE SOLE CUSTODY OF THE STATE COMPTROLLER
A SPECIAL INVESTMENT FUND TO BE KNOWN AS THE OTHER POST EMPLOYMENT BENE-
FITS INVESTMENT FUND.
  2. FOR PURPOSES OF THIS SECTION:
  (A) "FUND" SHALL MEAN THE OTHER POST  EMPLOYMENT  BENEFITS  INVESTMENT
FUND CREATED BY THIS SECTION;
  (B) "COMPTROLLER" SHALL MEAN THE STATE COMPTROLLER;
  (C) "STATE" SHALL MEAN THE STATE OF NEW YORK;
  (D)  "LOCAL  GOVERNMENT"  SHALL  HAVE THE SAME MEANING AS SET FORTH IN
PARAGRAPH (A) OF SUBDIVISION ONE OF SECTION SIX-T OF THE GENERAL MUNICI-
PAL LAW;
  (E) "OTHER PUBLIC CORPORATION" SHALL MEAN ANY PUBLIC CORPORATION OTHER
THAN A LOCAL GOVERNMENT THAT IS AUTHORIZED TO ESTABLISH  AN  IRREVOCABLE
TRUST; AND
  (F)  "PARTICIPATING TRUSTEE" SHALL MEAN THE TRUSTEE FOR THE STATE, AND
THE TRUSTEE FOR ANY LOCAL GOVERNMENT OR  ANY  OTHER  PUBLIC  CORPORATION
THAT INVESTS MONEYS IN THE FUND PURSUANT TO THIS SECTION.
  3. THE FUND SHALL CONSIST OF ALL MONEYS PAID TO THE COMPTROLLER BY THE
STATE  PURSUANT  TO  SECTION ONE HUNDRED SIXTY-NINE OF THE CIVIL SERVICE
LAW, BY LOCAL GOVERNMENTS PURSUANT  TO  SECTION  SIX-T  OF  THE  GENERAL
MUNICIPAL  LAW  AND  BY ANY OTHER PUBLIC CORPORATION THAT ESTABLISHES AN

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

                                                           LBD15403-02-0

S. 7534                             2

OTHER POST EMPLOYMENT BENEFITS TRUST. THE MONEYS IN THE FUND  SHALL  NOT
BE  WITHIN THE STATE TREASURY, AND SHALL NOT BE DEEMED TO BE STATE FUNDS
FOR ANY PURPOSE. NOTWITHSTANDING THE PROVISIONS OF SECTION FOUR OF  THIS
CHAPTER,  OR  ANY  OTHER PROVISION OF LAW TO THE CONTRARY, MONEYS MAY BE
DISBURSED FROM THE FUND FOR ANY  AUTHORIZED  PURPOSE  WITHOUT  APPROPRI-
ATION.
  4.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE MONEYS IN THE FUND
MAY BE INVESTED BY THE COMPTROLLER IN ANY INVESTMENTS IN COMPLIANCE WITH
THE FOLLOWING STANDARDS:
  (A)  THE  COMPTROLLER  SHALL  EXERCISE  SUCH  JUDGMENT,  CARE,  SKILL,
PRUDENCE  AND  DILIGENCE  UNDER THE CIRCUMSTANCES THEN PREVAILING THAT A
KNOWLEDGEABLE AND PRUDENT INVESTOR ACTING IN A LIKE CAPACITY AND  FAMIL-
IAR  WITH  SUCH  MATTERS  WOULD USE IN THE CONDUCT OF AN ENTERPRISE OF A
LIKE CHARACTER AND WITH LIKE AIMS; AND
  (B) THE COMPTROLLER SHALL PRUDENTLY DIVERSIFY THE  INVESTMENT  OF  THE
FUND'S PORTFOLIO AMONG INVESTMENT TYPES AND WITHIN INVESTMENT TYPES IN A
MANNER  CONSISTENT  WITH THE FOREGOING UNLESS UNDER THE CIRCUMSTANCES IT
IS CLEARLY PRUDENT NOT TO DO SO.
  5. THE COMPTROLLER SHALL MAINTAIN A SEPARATE ACCOUNT FOR EACH  PARTIC-
IPATING  TRUSTEE.  HOWEVER,  MONEYS  OF  PARTICIPATING  TRUSTEES  MAY BE
COMMINGLED FOR INVESTMENT PURPOSES, PROVIDED  THAT  THE  MONEY  OF  EACH
PARTICIPATING TRUSTEE SHALL BE SEPARATELY ACCOUNTED FOR.
  6. THE COMPTROLLER SHALL ESTABLISH SUB-FUNDS AND INVEST SUCH SUB-FUNDS
SEPARATELY TO PROVIDE PARTICIPATING TRUSTEES WITH A NUMBER OF OPTIONS TO
MEET   VARIOUS  INVESTMENT  OBJECTIVES.  INVESTMENT  EARNINGS  SHALL  BE
PRORATED AMONG PARTICIPATING TRUSTEES IN EACH SUB-FUND IN PROPORTION  TO
THE AMOUNT OF INVESTMENTS HELD BY PARTICIPATING TRUSTEES.
  7.  THE  COMPTROLLER MAY HIRE SUCH OFFICERS AND EMPLOYEES AND CONTRACT
WITH SUCH ADVISORS AND AGENTS AS THE COMPTROLLER DEEMS NECESSARY FOR THE
MANAGEMENT AND INVESTMENT OF  MONEYS  IN  THE  FUND.  ANY  OFFICERS  AND
EMPLOYEES  EMPLOYED BY THE COMPTROLLER FOR THE MANAGEMENT AND INVESTMENT
OF MONEYS IN THE FUND SHALL BE  OFFICERS  AND  EMPLOYEES  OF  THE  COMP-
TROLLER,  PROVIDED,  HOWEVER, THAT ANY COSTS ASSOCIATED WITH THE EMPLOY-
MENT OF SUCH OFFICERS AND EMPLOYEES AND ANY ADVISORS OR AGENTS SHALL  BE
CHARGED AGAINST THE FUND. SUCH CHARGES SHALL BE INCLUDED IN THE ADMINIS-
TRATIVE FEE CHARGED TO PARTICIPATING TRUSTEES IN THE FUND.
  8. THE COMPTROLLER SHALL ENTER INTO AN AGREEMENT WITH EACH PARTICIPAT-
ING  TRUSTEE.  EACH SUCH AGREEMENT SHALL INCLUDE, BUT NOT BE LIMITED TO,
THE FOLLOWING TERMS:
  (A) A STATEMENT THAT THE COMPTROLLER SHALL BE UNDER NO  OBLIGATION  TO
REVIEW OR VERIFY THE ESTIMATED COSTS OF BENEFITS TO BE FUNDED WITH MONEY
CONTRIBUTED TO THE FUND;
  (B)  A  PROVISION  THAT  THE PARTICIPATING TRUSTEE SHALL DETERMINE THE
AMOUNTS OF MONEY TO  BE  CONTRIBUTED  TO  THE  FUND  AND  DESIGNATE  THE
SUB-FUNDS  IN  WHICH THE MONEYS SHALL BE INVESTED. THE COMPTROLLER SHALL
ACCEPT SUCH AMOUNTS AND HIS OR  HER  ONLY  RESPONSIBILITY  SHALL  BE  TO
INVEST THE MONEYS IN THE SUB-FUNDS DIRECTED BY THE PARTICIPATING TRUSTEE
AND  TO REPORT THE CONTRIBUTIONS, WITHDRAWALS, BALANCES AND EARNINGS, TO
THE PARTICIPATING TRUSTEE ON A REGULAR BASIS TO  BE  SET  FORTH  IN  THE
AGREEMENT, BUT NO LESS FREQUENTLY THAN ANNUALLY;
  (C) A STATEMENT THAT IT SHALL BE THE RESPONSIBILITY OF THE PARTICIPAT-
ING  TRUSTEE TO DETERMINE COSTS ELIGIBLE TO BE FUNDED FROM MONEYS IN THE
FUND AND THE COMPTROLLER'S ONLY OBLIGATION SHALL BE TO MAKE PAYMENTS  ON
THE DATES AND IN THE AMOUNTS REQUESTED BY THE PARTICIPATING TRUSTEE;
  (D)  A REQUIREMENT THAT THE PARTICIPATING TRUSTEE SHALL ANNUALLY, ON A
DATE PROVIDED IN THE AGREEMENT, PROVIDE THE COMPTROLLER WITH A  SCHEDULE

S. 7534                             3

OR AMENDED SCHEDULE OF MONEYS EXPECTED TO BE CONTRIBUTED TO THE FUND AND
WITHDRAWALS EXPECTED TO BE MADE FROM ITS ACCOUNT. SUCH SCHEDULE SHALL BE
BINDING ON THE PARTICIPATING TRUSTEE;
  (E)  A  PROVISION  THAT  THE  MONEY  IN  THE FUND SHALL BE PAID TO THE
PARTICIPATING TRUSTEE OR ITS DESIGNEE UPON REQUISITION  AS  PROVIDED  IN
THE AGREEMENT;
  (F) A PROVISION FOR THE ASSESSMENT OF ADMINISTRATIVE COSTS, INVESTMENT
FEES  AND OTHER CHARGES, INCLUDING ANY PENALTIES TO BE IMPOSED FOR EARLY
OR EXCESSIVE WITHDRAWALS, AND FOR THE DEDUCTION OF SUCH FEES AND CHARGES
FROM INVESTMENT EARNINGS;
  (G) A STATEMENT BY THE PARTICIPATING TRUSTEE RELATING TO ITS CONSIDER-
ATION OF THE RISKS INVOLVED IN THE INVESTMENT SUB-FUNDS TO WHICH  IT  IS
ALLOCATING  ITS  MONEYS  AND ITS UNDERSTANDING OF ITS RESPONSIBILITY FOR
ANY LOSSES RESULTING FROM SUCH RISKS;
  (H) A STATEMENT THAT NEITHER THE COMPTROLLER NOR ANY OFFICER,  EMPLOY-
EE,  AGENT OR ADVISOR OF THE COMPTROLLER SHALL BE LIABLE FOR ANY LOSS OR
EXPENSE SUFFERED BY THE FUND  IN  THE  ABSENCE  OF  BAD  FAITH,  WILLFUL
MISCONDUCT OR INTENTIONAL WRONGDOING; AND
  (I)  A  PROVISION  FOR  THE TERMINATION OF THE PARTICIPATING TRUSTEE'S
INCLUSION IN THE FUND, INCLUDING  THE  DISPOSITION  AND/OR  TRANSFER  OF
ACCUMULATED ASSETS.
  S  2.  The civil service law is amended by adding a new section 169 to
read as follows:
  S 169. OTHER POST EMPLOYMENT BENEFITS ("OPEB") TRUST. 1. FOR  PURPOSES
OF THIS SECTION:
  (A)  "PRESIDENT" SHALL MEAN THE PRESIDENT OF THE CIVIL SERVICE COMMIS-
SION AS HEAD OF THE DEPARTMENT OF CIVIL SERVICE;
  (B) "STATE" SHALL MEAN THE STATE OF NEW YORK;
  (C) "FUND" SHALL MEAN THE OTHER POST  EMPLOYMENT  BENEFITS  INVESTMENT
FUND CREATED BY SECTION NINETY-SEVEN-JJJJ OF THE STATE FINANCE LAW; AND
  (D)  "OTHER  POST  EMPLOYMENT  BENEFITS"  SHALL  MEAN BENEFITS, EXCEPT
PENSIONS OR OTHER BENEFITS FUNDED THROUGH A  PUBLIC  RETIREMENT  SYSTEM,
PROVIDED  OR TO BE PROVIDED BY THE STATE AS COMPENSATION, WHETHER PURSU-
ANT TO STATUTE, CONTRACT OR OTHER LAWFUL AUTHORITY, TO  ITS  CURRENT  OR
FORMER  OFFICERS OR EMPLOYEES, OR THEIR FAMILIES OR BENEFICIARIES, AFTER
SERVICE TO THE STATE HAS ENDED, INCLUDING, BUT NOT  LIMITED  TO,  HEALTH
CARE  BENEFITS.  THE  TERM  "OTHER  POST  EMPLOYMENT BENEFITS" SHALL NOT
INCLUDE CASH PAYMENTS FOR THE MONETARY VALUE OF SICK LEAVE, VACATION  OR
OTHER  SIMILAR ACCRUALS, RETIREMENT INCENTIVE OR SEPARATION PAYMENTS, OR
BENEFITS PROVIDED PURSUANT TO THE CONSOLIDATED OMNIBUS BUDGET  RECONCIL-
IATION ACT OF 1985 (PUBLIC LAW 99-272), AS AMENDED.
  2.  THE  PRESIDENT MAY ESTABLISH A TRUST IN HIS OR HER CUSTODY FOR THE
PURPOSE OF ACCUMULATING ASSETS TO FUND THE COST OF PROVIDING OTHER  POST
EMPLOYMENT  BENEFITS.   CONTRIBUTIONS TO SUCH TRUST MAY BE MADE BY STATE
APPROPRIATION.
  3. THE PRESIDENT IS HEREBY DECLARED TO BE THE  TRUSTEE  OF  ANY  TRUST
ESTABLISHED  PURSUANT TO THIS SECTION. AS TRUSTEE THE PRESIDENT SHALL BE
RESPONSIBLE FOR THE OPERATION AND MANAGEMENT OF THE TRUST, INCLUDING THE
INVESTMENT OF TRUST ASSETS, AND SHALL BE SUBJECT TO ALL THE  DUTIES  AND
RESPONSIBILITIES IMPOSED BY LAW ON TRUSTEES, EXCEPT TO THE EXTENT INCON-
SISTENT WITH THIS SECTION.
  4.  CONTRIBUTIONS  TO  THE  TRUST, AND ANY INTEREST OR OTHER INCOME OR
EARNINGS ON CONTRIBUTIONS, SHALL BE IRREVOCABLE BEFORE  ALL  LIABILITIES
OF  THE  STATE  GOVERNMENT  FOR OTHER POST EMPLOYMENT BENEFITS HAVE BEEN
SATISFIED AND SHALL BE SOLELY DEDICATED TO, AND USED SOLELY FOR, PROVID-
ING OTHER POST EMPLOYMENT BENEFITS AND PAYING APPROPRIATE AND REASONABLE

S. 7534                             4

EXPENSES OF ADMINISTERING THE TRUST.  NO  ASSETS,  INCOME,  EARNINGS  OR
DISTRIBUTIONS OF THE TRUST SHALL BE SUBJECT TO ANY CLAIM OF CREDITORS OF
THE  STATE, OR TO ASSIGNMENT OR EXECUTION, ATTACHMENT OR ANY OTHER CLAIM
ENFORCEMENT  PROCESS INITIATED BY OR ON BEHALF OF SUCH CREDITORS. EXCEPT
AS OTHERWISE PROVIDED IN SUBDIVISION NINE OF THIS SECTION, THE PRESIDENT
SHALL NOT BE RESPONSIBLE FOR THE ADEQUACY OF THE ASSETS OF THE TRUST  TO
MEET  ANY  OTHER  POST  EMPLOYMENT  BENEFIT.  THE PRESIDENT SHALL NOT BE
RESPONSIBLE FOR TAKING ANY ACTION TO ENFORCE THE PAYMENT OF  ANY  APPRO-
PRIATION  INTO  THE  TRUST.  THE  TRUST  MAY BE TERMINATED ONLY WHEN ALL
LIABILITIES OF THE STATE FOR OTHER POST EMPLOYMENT  BENEFITS  HAVE  BEEN
SATISFIED  AND  THERE  IS NO PRESENT OR FUTURE OBLIGATION, CONTINGENT OR
OTHERWISE, OF THE STATE TO PROVIDE SUCH OTHER POST EMPLOYMENT  BENEFITS.
UPON  SUCH  TERMINATION,  ANY  REMAINING  TRUST ASSETS, AFTER ANY PROPER
EXPENSES OF THE TRUST HAVE BEEN PAID, SHALL REVERT TO THE STATE.
  5. WITHDRAWALS FROM THE TRUST SHALL BE MADE FOR THE  SOLE  PURPOSE  OF
PROVIDING FUNDS FOR THE COSTS OF OTHER POST EMPLOYMENT BENEFITS CURRENT-
LY DUE AND PAYABLE BY THE STATE.
  6.  THE  PRESIDENT  MAY  CONTRACT TO OBTAIN SERVICES NECESSARY FOR THE
MANAGEMENT AND  OPERATION  OF  THE  TRUST,  INCLUDING  THE  PROFESSIONAL
SERVICES  NECESSARY TO CARRY OUT HIS OR HER RESPONSIBILITIES AS TRUSTEE.
CONTRACTS FOR SUCH SERVICES SHALL BE LET PURSUANT TO THE  PROVISIONS  OF
THE STATE FINANCE LAW APPLICABLE TO STATE CONTRACTS.
  7.  THE PRESIDENT SHALL MANAGE AND INVEST THE ASSETS OF THE TRUST IN A
CAREFUL AND PRUDENT MANNER. THE PRESIDENT MAY INVEST ASSETS OF THE TRUST
ONLY BY PAYMENT TO THE FUND IN ACCORDANCE WITH SECTION NINETY-SEVEN-JJJJ
OF THE STATE FINANCE LAW.   ANY INTEREST OR  OTHER  INCOME  OR  EARNINGS
RESULTING FROM THE INVESTMENT OF ASSETS OF THE TRUST SHALL ACCRUE TO AND
BECOME PART OF THE ASSETS OF THE TRUST.
  8.  THE PRESIDENT SHALL DEVELOP, IN CONSULTATION WITH THE STATE HEALTH
INSURANCE COUNCIL, A WRITTEN INVESTMENT POLICY FOR SELECTING  AMONG  THE
INVESTMENT  OPTIONS OFFERED BY THE STATE COMPTROLLER PURSUANT TO SECTION
NINETY-SEVEN-JJJJ OF THE STATE FINANCE LAW.  SUCH POLICY SHALL INCLUDE A
STATEMENT OF INVESTMENT OBJECTIVES ADDRESSING, IN THE FOLLOWING ORDER OF
PRIORITY, THE ABILITY  TO  TIMELY  MEET  DISBURSEMENT  REQUESTS  WITHOUT
FORCED  SALE  OF  ASSETS,  SAFETY  OF PRINCIPAL AND ATTAINMENT OF MARKET
RATES OF RETURN.
  9. NEITHER THE STATE NOR THE PRESIDENT SHALL BE LIABLE FOR ANY LOSS OR
EXPENSE SUFFERED BY THE TRUST IN  THE  ABSENCE  OF  BAD  FAITH,  WILLFUL
MISCONDUCT  OR INTENTIONAL WRONGDOING. THE PRESIDENT SHALL BE CONSIDERED
TO BE ACTING AS AN OFFICER OF THE STATE FOR PURPOSES OF  SECTION  SEVEN-
TEEN  OF  THE  PUBLIC OFFICERS LAW, PROVIDED, HOWEVER, THAT THE COSTS OF
ANY DEFENSE OR INDEMNIFICATION OF THE PRESIDENT ARISING FROM  THE  EXER-
CISE OF THE FUNCTIONS OF TRUSTEE SHALL BE PAYABLE FROM THE ASSETS OF THE
TRUST.
  10.  THE  PRESIDENT  SHALL  PREPARE  OR CAUSE TO BE PREPARED AN ANNUAL
FINANCIAL REPORT OF ASSETS, LIABILITIES, REVENUES AND  EXPENSES  OF  THE
TRUST  IN  ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE
PRESIDENT SHALL CAUSE THE ACTIVITIES UNDERTAKEN IN CONNECTION  WITH  THE
TRUST, INCLUDING THE ANNUAL FINANCIAL REPORT, TO BE AUDITED ANNUALLY, IN
ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BY AN INDEPENDENT
CERTIFIED  PUBLIC  ACCOUNTANT  ENGAGED  IN  A MANNER CONSISTENT WITH THE
APPLICABLE PROVISIONS OF THE STATE  FINANCE  LAW.  THE  AUDIT  SHALL  BE
COMPLETED  WITHIN  ONE HUNDRED TWENTY DAYS FROM THE CLOSE OF THE STATE'S
FISCAL YEAR. A COPY OF THE ANNUAL FINANCIAL REPORT  AND  THE  REPORT  OF
SUCH  AUDIT SHALL BE PROVIDED TO THE GOVERNOR, THE STATE COMPTROLLER AND
THE CHAIRS OF THE LEGISLATIVE FISCAL COMMITTEES.

S. 7534                             5

  11.  NOTHING  CONTAINED  IN  THIS  SECTION  SHALL  BE  INTERPRETED  OR
CONSTRUED TO:
  (A)  CREATE  ANY OBLIGATION IN, IMPOSE ANY OBLIGATION ON, OR ALTER ANY
OBLIGATION OF THE STATE TO PROVIDE OTHER POST EMPLOYMENT BENEFITS;
  (B) LIMIT OR RESTRICT THE AUTHORITY OF THE STATE TO MODIFY  OR  ELIMI-
NATE OTHER POST EMPLOYMENT BENEFITS;
  (C) ASSURE OR DENY OTHER POST EMPLOYMENT BENEFITS; OR
  (D)  REQUIRE THE STATE TO FUND ITS LIABILITY FOR OTHER POST EMPLOYMENT
BENEFITS.
  S 3. The general municipal law is amended by adding a new section  6-t
to read as follows:
  S 6-T. OTHER POST EMPLOYMENT BENEFITS (OPEB) TRUST. 1. FOR PURPOSES OF
THIS SECTION:
  (A)  "LOCAL  GOVERNMENT"  SHALL  MEAN  A MUNICIPAL CORPORATION, SCHOOL
DISTRICT, BOARD OF COOPERATIVE  EDUCATIONAL  SERVICES,  DISTRICT  CORPO-
RATION,  SPECIAL  IMPROVEMENT  DISTRICT  GOVERNED BY A SEPARATE BOARD OF
COMMISSIONERS, COMMUNITY COLLEGE OR PUBLIC LIBRARY THAT  PROVIDES  OTHER
POST EMPLOYMENT BENEFITS.
  (B)  "OTHER  POST  EMPLOYMENT  BENEFITS"  SHALL  MEAN BENEFITS, EXCEPT
PENSIONS OR OTHER BENEFITS FUNDED THROUGH A  PUBLIC  RETIREMENT  SYSTEM,
PROVIDED  OR  TO  BE  PROVIDED  AS COMPENSATION BY THE LOCAL GOVERNMENT,
WHETHER PURSUANT TO STATE STATUTE, LOCAL ENACTMENT,  CONTRACT  OR  OTHER
LAWFUL  AUTHORITY,  TO  ITS  FORMER OR CURRENT OFFICERS OR EMPLOYEES, OR
THEIR FAMILIES OR BENEFICIARIES, AFTER SERVICE TO THE  LOCAL  GOVERNMENT
HAS ENDED, INCLUDING, BUT NOT LIMITED TO, HEALTH CARE BENEFITS. THE TERM
"OTHER POST EMPLOYMENT BENEFITS" SHALL NOT INCLUDE CASH PAYMENTS FOR THE
MONETARY  VALUE  OF  SICK  LEAVE,  VACATION  OR  OTHER SIMILAR ACCRUALS,
RETIREMENT INCENTIVE OR SEPARATION PAYMENTS, OR BENEFITS PROVIDED PURSU-
ANT TO THE  CONSOLIDATED  OMNIBUS  BUDGET  RECONCILIATION  ACT  OF  1985
(PUBLIC LAW 99-272), AS AMENDED.
  2. THE GOVERNING BODY OF A LOCAL GOVERNMENT, BY RESOLUTION, MAY ESTAB-
LISH  A  TRUST  IN  THE CUSTODY OF THE CHIEF FISCAL OFFICER OF THE LOCAL
GOVERNMENT, FOR THE PURPOSE OF ACCUMULATING ASSETS TO FUND THE  COST  TO
THE  LOCAL  GOVERNMENT  OF  PROVIDING  OTHER  POST  EMPLOYMENT BENEFITS.
CONTRIBUTIONS TO SUCH TRUST MAY BE MADE BY THE LOCAL GOVERNMENT BY BUDG-
ETARY APPROPRIATION OR TRANSFER IN ACCORDANCE  WITH  THE  PROVISIONS  OF
SUBDIVISION NINE OF SECTION SIX-P OF THIS ARTICLE.
  3.  THE  GOVERNING BOARD OF THE LOCAL GOVERNMENT IS HEREBY DECLARED TO
BE THE TRUSTEE OF  ANY  TRUST  ESTABLISHED  PURSUANT  TO  THIS  SECTION,
PROVIDED,  HOWEVER,  THAT THE GOVERNING BOARD, BY RESOLUTION, MAY DESIG-
NATE THE CHIEF FISCAL  OFFICER  OF  THE  LOCAL  GOVERNMENT  AS  TRUSTEE,
SUBJECT  TO ACCEPTANCE OF SUCH POSITION BY THE CHIEF FISCAL OFFICER AND,
IN THE CASE OF A CITY WITH A POPULATION OF ONE MILLION OR MORE, THE CITY
COMPTROLLER SHALL BE THE TRUSTEE. THE TRUSTEE SHALL BE  RESPONSIBLE  FOR
THE  OPERATION  AND  MANAGEMENT  OF THE TRUST, INCLUDING THE DEPOSIT AND
SECURING OF TRUST ASSETS IN THE SAME MANNER AS PROVIDED IN  SECTION  TEN
OF  THIS  ARTICLE,  AND  THE  INVESTMENT  OF  TRUST ASSETS, AND SHALL BE
SUBJECT TO ALL THE DUTIES AND RESPONSIBILITIES IMPOSED BY LAW  ON  TRUS-
TEES,  EXCEPT  TO THE EXTENT INCONSISTENT WITH THIS SECTION. THE TRUSTEE
SHALL EXECUTE AND FILE WITH THE CLERK OF THE LOCAL GOVERNMENT AN  APPRO-
PRIATE UNDERTAKING, SEPARATE FROM AND IN ADDITION TO ANY OTHER UNDERTAK-
ING  REQUIRED  OF THE TRUSTEE IN ANY OTHER CAPACITY, IN AN AMOUNT SUFFI-
CIENT TO COVER TRUST ASSETS. IN  LIEU  THEREOF,  SUCH  COVERAGE  MAY  BE
INCLUDED  IN  A BLANKET UNDERTAKING IN ACCORDANCE WITH SECTION ELEVEN OF
THE PUBLIC OFFICERS LAW.  THE COST OF THE UNDERTAKING SHALL  BE  CONSID-
ERED TO BE A REASONABLE EXPENSE OF ADMINISTERING THE TRUST.

S. 7534                             6

  4.  CONTRIBUTIONS  TO  THE  TRUST, AND ANY INTEREST OR OTHER INCOME OR
EARNINGS ON CONTRIBUTIONS, SHALL BE IRREVOCABLE BEFORE  ALL  LIABILITIES
OF  THE  LOCAL  GOVERNMENT  FOR OTHER POST EMPLOYMENT BENEFITS HAVE BEEN
SATISFIED, AND SHALL BE  SOLELY  DEDICATED  TO,  AND  USED  SOLELY  FOR,
PROVIDING  OTHER  POST  EMPLOYMENT  BENEFITS  AND PAYING APPROPRIATE AND
REASONABLE EXPENSES OF ADMINISTERING THE TRUST. NO ASSETS, INCOME, EARN-
INGS OR DISTRIBUTIONS OF THE TRUST SHALL BE  SUBJECT  TO  ANY  CLAIM  OF
CREDITORS OF THE LOCAL GOVERNMENT OR OF ANY PERSON OR ENTITY ADMINISTER-
ING  A  PLAN  FOR  THE PROVISION OF OTHER POST EMPLOYMENT BENEFITS OR TO
ASSIGNMENT OR EXECUTION, ATTACHMENT OR ANY OTHER CLAIM ENFORCEMENT PROC-
ESS INITIATED BY OR ON BEHALF OF SUCH CREDITORS.   EXCEPT  AS  OTHERWISE
PROVIDED  IN SUBDIVISION SEVEN OF THIS SECTION, THE TRUSTEE SHALL NOT BE
RESPONSIBLE FOR THE ADEQUACY OF THE ASSETS OF  THE  TRUST  TO  MEET  ANY
OTHER  POST EMPLOYMENT BENEFIT. THE TRUSTEE SHALL NOT BE RESPONSIBLE FOR
TAKING ANY ACTION TO ENFORCE THE PAYMENT OF ANY APPROPRIATION  INTO  THE
TRUST.  THE  ASSETS OF THE TRUST, INCLUDING ALL INTEREST OR OTHER INCOME
OR EARNINGS ON CONTRIBUTIONS TO THE TRUST,  SHALL  BE  EXEMPT  FROM  ALL
STATE  AND  LOCAL  TAXES.    THE  TRUST  MAY BE TERMINATED ONLY WHEN ALL
LIABILITIES OF THE LOCAL GOVERNMENT FOR OTHER POST  EMPLOYMENT  BENEFITS
HAVE  BEEN  SATISFIED  AND  THERE  IS  NO  PRESENT OR FUTURE OBLIGATION,
CONTINGENT OR OTHERWISE, OF THE LOCAL GOVERNMENT TO PROVIDE  SUCH  OTHER
POST  EMPLOYMENT  BENEFITS.  UPON  SUCH TERMINATION, ANY REMAINING TRUST
ASSETS, AFTER ANY PROPER EXPENSES OF THE TRUST  HAVE  BEEN  PAID,  SHALL
REVERT  TO  THE  LOCAL  GOVERNMENT  TO  BE PAID INTO ONE OR MORE RESERVE
FUNDS, DULY ESTABLISHED PURSUANT TO THIS ARTICLE OR OTHER STATE STATUTE,
IN SUCH AMOUNTS AS DETERMINED  BY  THE  GOVERNING  BOARD  OF  THE  LOCAL
GOVERNMENT.
  5. DISBURSEMENTS FROM THE TRUST SHALL BE MADE ONLY UPON A DULY AUTHOR-
IZED  REQUEST PURSUANT TO RESOLUTION OF THE GOVERNING BOARD OF THE LOCAL
GOVERNMENT STATING THE AMOUNT OF THE REQUESTED DISBURSEMENT  AND  DETER-
MINING  THAT THE DISBURSEMENT IS FOR THE SOLE PURPOSE OF PROVIDING FUNDS
FOR THE COSTS OF OTHER POST EMPLOYMENT BENEFITS CURRENTLY DUE AND  PAYA-
BLE BY THE LOCAL GOVERNMENT.
  6.  THE TRUSTEE SHALL INVEST THE ASSETS OF THE TRUST IN THE OTHER POST
EMPLOYMENT BENEFITS INVESTMENT FUND IN THE CUSTODY OF  THE  STATE  COMP-
TROLLER,  IN  ACCORDANCE  WITH  SECTION  NINETY-SEVEN-JJJJ  OF THE STATE
FINANCE LAW. ANY INTEREST OR OTHER INCOME OR EARNINGS RESULTING FROM THE
INVESTMENT OF ASSETS OF THE TRUST SHALL ACCRUE TO AND BECOME PART OF THE
ASSETS OF THE TRUST. THE TRUSTEE  SHALL  DEVELOP  A  WRITTEN  INVESTMENT
POLICY  FOR  SELECTING AMONG THE INVESTMENT OPTIONS OFFERED BY THE STATE
COMPTROLLER PURSUANT TO SECTION NINETY-SEVEN-JJJJ OF THE  STATE  FINANCE
LAW  WHICH, AT A MINIMUM, SHALL INCLUDE A STATEMENT OF INVESTMENT OBJEC-
TIVES ADDRESSING, IN THE FOLLOWING ORDER OF  PRIORITY,  COMPLIANCE  WITH
ALL LEGAL REQUIREMENTS, THE ABILITY TO TIMELY MEET DISBURSEMENT REQUESTS
WITHOUT  FORCED  SALE  OF  ASSETS, SAFETY OF PRINCIPAL AND ATTAINMENT OF
MARKET RATES OF RETURN.
  7. NEITHER THE LOCAL GOVERNMENT NOR THE TRUSTEE SHALL  BE  LIABLE  FOR
ANY  LOSS  OR EXPENSE SUFFERED BY THE TRUST IN THE ABSENCE OF BAD FAITH,
WILLFUL MISCONDUCT OR  INTENTIONAL  WRONGDOING.  THE  TRUSTEE  SHALL  BE
CONSIDERED  TO  BE  AN  EMPLOYEE OF THE LOCAL GOVERNMENT FOR PURPOSES OF
SECTION EIGHTEEN OF THE PUBLIC OFFICERS LAW, PROVIDED, HOWEVER, THAT THE
COSTS OF ANY DEFENSE OR INDEMNIFICATION OF THE TRUSTEE ARISING FROM  THE
EXERCISE OF THE FUNCTIONS OF TRUSTEE SHALL BE PAYABLE FROM THE ASSETS OF
THE TRUST.
  8.  THE TRUSTEE SHALL PREPARE OR CAUSE TO BE PREPARED AN ANNUAL FINAN-
CIAL REPORT OF ASSETS, LIABILITIES, REVENUES AND EXPENSES OF  THE  TRUST

S. 7534                             7

IN ACCORDANCE WITH GENERALLY ACCEPTED ACCOUNTING PRINCIPLES. THE TRUSTEE
SHALL  CAUSE  THE  ACTIVITIES  UNDERTAKEN  IN CONNECTION WITH THE TRUST,
INCLUDING THE ANNUAL FINANCIAL REPORT, TO BE  AUDITED  ANNUALLY,  EITHER
SEPARATELY  OR  AS PART OF THE OVERALL AUDIT OF THE REPORTING ENTITY, IN
ACCORDANCE WITH GENERALLY ACCEPTED AUDITING STANDARDS, BY AN INDEPENDENT
CERTIFIED PUBLIC ACCOUNTANT ENGAGED IN  A  MANNER  CONSISTENT  WITH  THE
PROCUREMENT  POLICIES  AND  PROCEDURES  ADOPTED  BY THE LOCAL GOVERNMENT
PURSUANT TO SECTION ONE HUNDRED FOUR-B OF  THIS  CHAPTER  AND  SHALL  BE
SUBJECT  TO  A  REQUEST FOR PROPOSALS PROCESS AT LEAST EVERY FIVE YEARS.
THE AUDIT SHALL BE COMPLETED WITHIN ONE HUNDRED  TWENTY  DAYS  FROM  THE
CLOSE  OF  THE FISCAL YEAR OF THE LOCAL GOVERNMENT. A COPY OF THE ANNUAL
FINANCIAL REPORT AND THE REPORT OF SUCH AUDIT SHALL BE PROVIDED  TO  THE
STATE  COMPTROLLER,  THE  TRUSTEE  AND  THE GOVERNING BOARD OF THE LOCAL
GOVERNMENT AND SHALL BE PUBLICLY AVAILABLE AND POSTED ON THE WEBSITE  OF
THE LOCAL GOVERNMENT, IF SUCH A WEBSITE IS MAINTAINED.
  9.  THE  STATE  COMPTROLLER  MAY MAKE, AMEND AND REPEAL SUCH RULES AND
REGULATIONS AS THE STATE COMPTROLLER MAY DEEM APPROPRIATE FOR THE PROPER
OPERATION AND MANAGEMENT OF TRUSTS ESTABLISHED PURSUANT TO THIS SECTION.
  10.  NOTHING  CONTAINED  IN  THIS  SECTION  SHALL  BE  INTERPRETED  OR
CONSTRUED TO:
  (A)  CREATE  ANY OBLIGATION IN, IMPOSE ANY OBLIGATION ON, OR ALTER ANY
OBLIGATION OF ANY LOCAL GOVERNMENT  TO  PROVIDE  OTHER  POST  EMPLOYMENT
BENEFITS;
  (B) LIMIT OR RESTRICT THE AUTHORITY OF A LOCAL GOVERNMENT TO MODIFY OR
ELIMINATE OTHER POST EMPLOYMENT BENEFITS;
  (C) ASSURE OR DENY OTHER POST EMPLOYMENT BENEFITS; OR
  (D)  REQUIRE ANY LOCAL GOVERNMENT TO FUND ITS LIABILITY FOR OTHER POST
EMPLOYMENT BENEFITS.
  S 4. Subdivision 9 of section 6-p of the  general  municipal  law,  as
added by chapter 518 of the laws of 1996, is amended to read as follows:
  9.  If,  after the establishment of such fund, the municipality deter-
mines that such fund is no longer needed, the moneys remaining  in  such
fund  may  be  transferred  to  any other reserve fund OR ANY OTHER POST
EMPLOYMENT BENEFITS TRUST of the  municipal  corporation  authorized  by
this  chapter  that is comprised of moneys which were raised on the same
tax base as the moneys  in  the  reserve  fund  established  under  this
section  or TO A RESERVE FUND ESTABLISHED PURSUANT TO section thirty-six
hundred fifty-one of the education law, only  to  the  extent  that  the
moneys  in  this fund shall exceed the sum sufficient to pay all liabil-
ities incurred or accrued against it. Prior  to  the  discontinuance  of
such  fund,  the fiscal and legal officers of such municipal corporation
shall certify to the governing board thereof  the  amount  that  may  be
necessary  to retain in such fund to satisfy all liabilities incurred or
accrued against it and such sum  shall  be  retained  in  the  fund  for
payment  of such amounts or until later certified that such funds are no
longer needed.
  S 5. The provisions of section 6-t of the general  municipal  law,  as
added by section three of this act, shall not affect the validity of the
establishment  or  implementation  of  the  New York City Retiree Health
Benefit Trust, established June 12, 2006 by the  City  of  New  York  as
Grantor, and neither the operation nor any amendment of such trust shall
be  subject to the provisions of such section. The establishment of such
trust and its operation in accordance with its terms is hereby  ratified
and approved.
  S 6. This act shall take effect immediately.