Senate Bill S7265

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

                                  7265

                            I N  S E N A T E

                               May 2, 2012
                               ___________

Introduced  by  Sen.  OPPENHEIMER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Local Government

AN ACT to amend the general municipal law, in  relation  to  authorizing
  school  districts  to  establish  and  maintain  self-funded insurance
  health care rate stabilization funds

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

  Section  1.  The  general  municipal  law  is  amended by adding a new
section 6-n-1 to read as follows:
  S 6-N-1. SELF-FUNDED INSURANCE HEALTH CARE RATE STABILIZATION FUND. 1.
(A) "MUNICIPAL CORPORATION," AS USED  IN  THIS  SECTION,  SHALL  MEAN  A
MUNICIPAL CORPORATION, AS DEFINED IN SECTION TWO OF THIS CHAPTER, SCHOOL
DISTRICT,  EXCEPT  A  SCHOOL DISTRICT IN A CITY WITH A POPULATION OF ONE
HUNDRED TWENTY-FIVE  THOUSAND OR MORE, BOARD OF COOPERATIVE  EDUCATIONAL
SERVICES,  FIRE  DISTRICT, A DISTRICT CORPORATION AND A SPECIAL IMPROVE-
MENT DISTRICT GOVERNED BY A SEPARATE BOARD OF COMMISSIONERS.
  (B) "JUDGMENTS", "ACTIONS" AND "CLAIMS",  AS  USED  IN  THIS  SECTION,
SHALL  MEAN  THOSE  JUDGMENTS,  ACTIONS AND CLAIMS AGAINST THE MUNICIPAL
CORPORATION THAT ARISE OUT OF THOSE KINDS OF RISKS  FOR  WHICH  EXPENDI-
TURES MAY BE MADE PURSUANT TO SUBDIVISION TWO OF THIS SECTION.
  2.  (A) THE GOVERNING BOARD OF ANY MUNICIPAL CORPORATION MAY ESTABLISH
A RESERVE FUND TO BE KNOWN AS THE SELF-FUNDED INSURANCE HEALTH CARE RATE
STABILIZATION FUND. UPON THE CREATION OF THE FUND, THE MUNICIPALITY  MAY
MAKE  EXPENDITURES FROM THE FUND FOR OFFICERS' AND EMPLOYEES' SELF-INSU-
RANCE OF HEALTH CARE BENEFITS AND CLAIMS OF SUCH OFFICERS  OR  EMPLOYEES
INCLUDING,  BUT NOT LIMITED TO DIRECT CASH REIMBURSEMENT TO OFFICERS AND
EMPLOYEES FOR HEALTH CARE EXPENSES; PROVIDED HOWEVER,  THAT  NO  MUNICI-
PALITY  SHALL  MAKE  AN  EXPENDITURE FROM SUCH FUND FOR ANY LOSS, CLAIM,
ACTION OR JUDGMENT FOR WHICH THE MUNICIPAL CORPORATION HAS ESTABLISHED A
RESERVE FUND UNDER ANY OTHER PROVISION OF LAW.
  (B) NOTWITHSTANDING ANY OTHER PROVISION OF LAW TO THE CONTRARY,  WHERE
A  MUNICIPAL CORPORATION HAS PREVIOUSLY ESTABLISHED A RESERVE FUND UNDER
ANOTHER PROVISION OF LAW FOR A TYPE OF RISK FOR WHICH  EXPENDITURES  MAY
BE  MADE  UNDER  PARAGRAPH (A) OF THIS SUBDIVISION, THE MUNICIPAL CORPO-

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

                                                           LBD15193-01-2

S. 7265                             2

RATION MAY, BY RESOLUTION,  DISCONTINUE  SUCH  OTHER  RESERVE  FUND  AND
TRANSFER  ANY  UNEXPENDED  BALANCE TO THE RESERVE FUND ESTABLISHED UNDER
THIS SECTION; PROVIDED, HOWEVER, THAT  TO  THE  EXTENT  SUCH  UNEXPENDED
BALANCE  IS  SUBJECT  TO ANY LIABILITIES INCURRED OR ACCRUED AGAINST THE
OTHER RESERVE FUND, ANY UNEXPENDED BALANCES  SO TRANSFERRED  SHALL  ONLY
BE  USED  FOR SUCH INCURRED OR ACCRUED LIABILITIES INCLUDING EXPENSES IN
CONNECTION THEREWITH. PRIOR TO THE DISCONTINUANCE OF THE  OTHER  RESERVE
FUND,  THE  FISCAL AND LEGAL OFFICERS OF THE MUNICIPAL CORPORATION SHALL
CERTIFY TO THE GOVERNING BOARD THEREOF THE AMOUNT THAT MAY BE  NECESSARY
TO SATISFY ALL LIABILITIES INCURRED OR ACCRUED AGAINST IT.
  3. THERE MAY BE PAID INTO SUCH FUND:
  (A) SUCH AMOUNTS AS MAY BE PROVIDED BY BUDGETARY APPROPRIATIONS;
  (B)  AMOUNTS  FROM ANY OTHER FUND AUTHORIZED BY THIS CHAPTER BY RESOL-
UTION SUBJECT TO PERMISSIVE REFERENDUM; AND
  (C) SUCH OTHER FUNDS AS MAY BE LEGALLY APPROPRIATED.
  4. THE MONEYS IN SUCH FUND SHALL  BE  DEPOSITED  AND  SECURED  IN  THE
MANNER  PROVIDED BY SECTION TEN OF THIS ARTICLE. THE GOVERNING BOARD, OR
THE CHIEF FISCAL OFFICER OF SUCH MUNICIPAL CORPORATION, IF THE GOVERNING
BOARD SHALL DELEGATE SUCH DUTY TO HIM OR HER, MAY INVEST THE  MONEYS  IN
SUCH  FUND IN THE MANNER PROVIDED BY SECTION ELEVEN OF THIS ARTICLE. ANY
INTEREST EARNED OR CAPITAL GAIN REALIZED ON THE MONEY  SO  DEPOSITED  OR
INVESTED SHALL ACCRUE TO AND BECOME PART OF SUCH FUND.
  5.  THE  CHIEF FISCAL OFFICER SHALL ACCOUNT FOR THIS FUND SEPARATE AND
APART FROM ALL OTHER FUNDS OF THE MUNICIPAL CORPORATION. SUCH ACCOUNTING
SHALL SHOW: THE SOURCE, DATE AND AMOUNT OF EACH SUM PAID INTO THE  FUND;
THE INTEREST EARNED BY SUCH FUND; CAPITAL GAINS OR LOSSES RESULTING FROM
THE  SALE  OF INVESTMENTS OF THIS FUND; THE ORDER, PURPOSE THEREOF, DATE
AND AMOUNT OF EACH PAYMENT FROM THIS FUND; THE  ASSETS  OF  THE    FUND,
INDICATING  CASH BALANCE AND A SCHEDULE OF INVESTMENTS. THE CHIEF FISCAL
OFFICER, WITHIN SIXTY DAYS OF THE END OF EACH FISCAL YEAR, SHALL FURNISH
A DETAILED REPORT OF THE OPERATION AND CONDITION OF  THIS  FUND  TO  THE
GOVERNING  BOARD.  THE  CHIEF  FISCAL OFFICER SHALL ALSO KEEP A SEPARATE
ACCOUNT FOR EACH KIND OF RISK FUNDED PURSUANT TO SUBDIVISION TWO OF THIS
SECTION.
  6. NOTWITHSTANDING ANY PROVISION OF LAW  TO  THE  CONTRARY,  MUNICIPAL
CORPORATIONS  SHALL  NOT  HAVE THE POWER TO ENTER INTO AGREEMENTS, AMONG
THEMSELVES OR ONE FOR THE OTHER, TO POOL THEIR RESERVE FUND  ESTABLISHED
PURSUANT  TO  SUBDIVISION  TWO  OF THIS SECTION FOR THE PAYMENT OF JUDG-
MENTS, ACTIONS AND CLAIMS.
  7. ANY ACTION OR CLAIM SHALL BE COMPROMISED OR SETTLED BY THE  GOVERN-
ING  BOARD,  OFFICER OR EMPLOYEE OF THE MUNICIPAL CORPORATION AUTHORIZED
TO SETTLE OR COMPROMISE ACTIONS OR CLAIMS ON  BEHALF  OF  THE  MUNICIPAL
CORPORATION.
  8. AN EXPENDITURE MAY BE MADE FROM THIS FUND FOR THE PAYMENT OF ALL OR
PART OF THE COST, INCLUDING INTEREST, OF:
  (A) JUDGMENTS;
  (B)  ACTIONS  THAT HAVE BEEN COMPROMISED OR SETTLED AND THAT HAVE BEEN
APPROVED BY THE COURT IN WHICH THE ACTION OR PROCEEDING IS PENDING;
  (C) CLAIMS THAT HAVE BEEN SETTLED OR COMPROMISED AND  THAT  HAVE  BEEN
APPROVED  BY  A JUSTICE OF THE SUPREME COURT OF THE JUDICIAL DISTRICT IN
WHICH THE MUNICIPAL CORPORATION IS LOCATED; AND
  (D) CLAIMS AND LIABILITIES GENERATED THROUGH THE PROVISION  OF  HEALTH
CARE  BENEFITS  THROUGH  SELF-INSURANCE  INCLUDING,  BUT  NOT LIMITED TO
DIRECT CASH REIMBURSEMENT TO OFFICERS  AND  EMPLOYEES  FOR  HEALTH  CARE
EXPENSES.

S. 7265                             3

  9.  THE ORDER OF THE COURT OR THE JUSTICE APPROVING SUCH SETTLEMENT OR
COMPROMISE MAY BE GRANTED UPON MOTION OF THE BODY, OFFICER  OR  EMPLOYEE
OF  THE MUNICIPAL CORPORATION AUTHORIZED TO DO SO, SUPPORTED BY AN AFFI-
DAVIT SETTING FORTH THE CAUSE OF ACTION OR CLAIM AGAINST  THE  MUNICIPAL
CORPORATION  AND  ALSO SUCH OTHER INFORMATION WHICH, IN ITS OR HIS OPIN-
ION, WILL ENABLE THE COURT OR JUSTICE TO ARRIVE AT A DETERMINATION  THAT
SUCH COMPROMISE OR SETTLEMENT IS JUST, REASONABLE AND TO THE INTEREST OF
THE MUNICIPAL CORPORATION. SUCH BODY, OFFICER OR EMPLOYEE MAY ALSO PRES-
ENT  THE AFFIDAVIT OF OTHER PERSONS IN SUPPORT OF SUCH MOTION. THE COURT
OR THE JUSTICE, IN ORDER TO ARRIVE AT SUCH A DETERMINATION, MAY  REQUIRE
SUCH  BODY,  OFFICER  OR EMPLOYEE TO PRESENT ADDITIONAL INFORMATION BY A
SUPPLEMENTARY AFFIDAVIT OR AFFIDAVITS OR MAY REQUIRE  OTHER  PERSONS  TO
PRESENT ADDITIONAL INFORMATION BY THEIR AFFIDAVITS.
  10.  NOTWITHSTANDING  SUBDIVISIONS  SEVEN AND EIGHT OF THIS SECTION OR
ANY OTHER PROVISION OF LAW TO THE CONTRARY, THE GOVERNING  BODY  OF  ANY
MUNICIPAL  CORPORATION  MAY,  WITHOUT  JUDICIAL  APPROVAL, COMPROMISE OR
SETTLE ANY ACTION OR CLAIM AND MAKE AN EXPENDITURE FROM THIS FUND  WHERE
THE  AMOUNT OF SUCH SETTLEMENT OR COMPROMISE DOES NOT EXCEED TWENTY-FIVE
THOUSAND DOLLARS.
  11. THE MEMBERS OF THE GOVERNING BOARD SHALL BE GUILTY OF A  MISDEMEA-
NOR IF THEY:
  (A)  AUTHORIZE  A  WITHDRAWAL FROM THIS FUND FOR ANY PURPOSE EXCEPT AS
PROVIDED IN THIS SECTION; OR
  (B) EXPEND ANY MONEY WITHDRAWN FROM THIS FUND FOR A PURPOSE OTHER THAN
AS PROVIDED IN THIS SECTION.
  12. 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  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 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  LIABILITIES  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 2. This act shall take effect immediately.