senate Bill S5407

2013-2014 Legislative Session

Directs the office of general services to conduct a study relating to the feasibility and advisability of establishing an office of risk assessment and management

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  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Jan 08, 2014 referred to finance
returned to senate
died in assembly
Jun 12, 2013 referred to governmental operations
delivered to assembly
passed senate
Jun 10, 2013 advanced to third reading
Jun 05, 2013 2nd report cal.
Jun 04, 2013 1st report cal.1010
May 16, 2013 referred to finance

Votes

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S5407 - Bill Details

See Assembly Version of this Bill:
A7650
Current Committee:
Senate Finance
Law Section:
General Services, Office of

S5407 - Bill Texts

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Directs the office of general services to conduct a study relating to the feasibility and advisability of establishing an office of risk assessment and management.

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BILL NUMBER:S5407

TITLE OF BILL:
An act
to direct the office of general services to
conduct a study to
examine, evaluate and make
recommendations relating to the feasibility and advisability of
establishing an office of risk assessment and management

PURPOSE:
The purpose of this bill is to begin the process of strengthening and
instituting a formal risk management regiment into normal daily State
operations & procedures and in anticipation of the incidence of a
natural disaster or other catastrophic weather event.

Instituting a formal risk management regiment to state operations will
help to minimize New York State's future losses and liability
exposure due to: a) physical injury to state employees and the
general public during normal business operations, b) damage to
physical property owned and controlled by the State during normal
business operations, c) systemic damage or loss to state governmental
operations, facilities or infrastructure caused by the occurrence of
a natural disaster or catastrophic weather event, and d) systemic
damage or loss to this State's local governments (including their
facilities, labor force and operations) and to the State's economy
either on a state-wide or localized basis due to the occurrence of a
natural disaster or catastrophic weather event.

SUMMARY OF PROVISIONS:

Section 1: Empowers the Office of General Services (OGS), in
consultation with the Department of Law, State Comptroller, State
Insurance Fund, Office of Employee Relations and the Division of the
Budget to conduct a study to examine, evaluate and make
recommendations concerning the feasibility and advisability of
establishing an office of risk assessment and management (GRAM),
within OGS.

The bill provides for a study on the appointment of a state risk
manager and to study the duties and responsibilities that the state
Risk Manager should possess. The risk manager is to help anticipate,
curtail and minimize future state liabilities due to personal injury
of its employees and the general public or the physical damage to
property that occurs during the normal course of state operations or
as a consequence of a natural disaster or catastrophic weather event.

In the end, due to the existence of the Bureau of Risk and Insurance
Management (BRIM) which is already within the OGS, BRIM's role maybe
expanded to take on the responsibilities of the proposed GRAM. Hence,
this may help to minimize the fiscal costs associated with
establishing such an office and
the upfront costs that will be need to be expended before cost savings
from its operations can be realized, The study can look at the
financing of this Office by securing risk management consultants.


Under this bill, OGS should study and assess the qualifications that.
the proposed risk manager should have to be appointed to that
position and how they are to be compensated.

Among the responsibilities that could be studied and determined to be
assigned, or not, to the risk manager and the Office include are:

1) conduct an inventory of all state real property and ascertain past,
present and future liability exposure due to state operations on
such property.

2) conduct a study of the actions, claims, and claims settlement
processes of the court. of claims, actions in the New York and
Federal Courts, and payment of those claims to ascertain trends in
the payment of state claims due to injury of persons or property.

3) examine and evaluate current state practices and how those
practices could be altered to minimize future claims brought against
the state and damage sustained by the State. Under this provision,
the risk manager and Office could be responsible for making
recommendations to alter state operations and capital construction
programs to anticipate potential future climatic changes that may be
caused by global warming. Under this scenario, various State agencies
would be advised on proper risk management techniques and procedures
and how alter their operations and capital plans to anticipate future
change.

4) to look at financial losses arising from the ownership, control or
use of real or personal property and to establish business continuity
programs for state services in the normal course of business or in
case of a natural disaster or catastrophic weather event.

The study should look to how state agencies are to cooperate with the
work of the State risk manager. Further, it will evaluate whether it
is desirable to allow any public benefit corporation, public
authority, or local government to contract with the state risk
manager to perform risk management services or supplement already
existing internal risk assessment and management services. This
could help reduce the cost of providing services for local
governments and to anticipate operational changes that may need to be
made in response to a natural disaster or catastrophic weather event.
In the end, this could help to reduce the increasing cost of real
property taxes.

Section 2: In addition, such study shall examine and determine:

1) the financial benefits to the State that could be realized by
establishing the Office.

2) the financial costs and estimate of the size of the workforce
needed to staff such an Office.

3) the method or process by which the Office could be established and
the manner in which such office's operations could be phased in over
a five year period of time.


4) the method of financing such Office, in as much as the initial
costs of it may not be offset by cost savings and reduction in
liability exposure until the Office has been in existence for some
time.

Sections 3 & 4: Provides for an immediate effective date and that such
Study shall be submitted to the Governor, Attorney General, State
Comptroller and State Legislature within 18 months of this bill's
effective date.

EXISTING LAW:
There is now no provision for a comprehensive system to assess risks
and potential losses for the operation of activities conducted by the
State of New York or its political subdivisions.

JUSTIFICATION:
The State of New York each year faces dramatic exposure and
third-party liability both to persons under the care and custody of
the state and visitors to state premises. In 2007, the liabilities
for workers' compensation alone exceed $1.7 Billion for indemnity
claims and 1.2 Billion for medical claims. Further, tort actions
adjudicated in the Court. of Claims cost $82.5 million last year alone.

The expansion of a central Office of Risk Assessment and Management
would go far to determine the full extent of the State's exposure to
civil tort liability and allow the state to systemically reduce such
exposure through the integration of professional risk management
procedures into daily state operations.

Enactment of this measure would help to start the process on how to
institute procedures and policies to help bring New York State in
line with a majority of states, most larger municipalities, and most
large corporate entities that have centralized risk management
evaluation procedures and mitigation practices. Not only will this
bill help reduce the annual payments to satisfy personal and property
damage against the state, it will help to reduce personal injuries
sustained by State employees and members of the general public.
Further details on the need to codify and expand the responsibilities
and duties of a state-wide risk manager can be found in a report.
produced by Senator. Klein entitled. "Expansion of New York State's
Risk Assessment and Management Activities" stated March 2011.

There is a growing concern that global warming may be significantly
altering weather patterns in New York State and the entire Atlantic
seaboard. Global warming may be altering weather patterns in a manner
that is instigating the increasing number of more severe and
catastrophic weather events in New York, especially along our coastal
areas and in farming regions of the State. These seemingly more
commonly reoccurring significant or catastrophic weather events, such
as hurricanes, storm surges, ice storms, floods and droughts are
imposing substantial new costs to operate State and local
governments, to reconstruct after such events, and are significantly
damaging the State's economy both on a state-wide and localized basis.

The institution of a formal risk management program in New York should
help our state & local governments anticipate damages caused by such
potential future severe weather events. Further, it can help our


State's economy to anticipate such changes in weather patterns, to
mitigate damage to such economy, and channel new growth into new
industries in a manner that is consistent with potential future
weather patterns.

LEGISLATIVE HISTORY:
New bill, but this bill starts the process to begin to -
study how to establish and finance an Office of Risk Management and
Assessment as provided for in S. 2326.The contents of this bill was
included and adopted in the Senate Budget Resolution for the fiscal
year 2013 - 2014.

FISCAL IMPLICATIONS: To be determined.

LOCAL FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediate.

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

                                  5407

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sens.  KLEIN, ADDABBO, CARLUCCI, SAVINO, VALESKY -- read
  twice and ordered printed, and when printed to  be  committed  to  the
  Committee on Finance

AN  ACT  to  direct the office of general services to conduct a study to
  examine, evaluate and make recommendations relating to the feasibility
  and advisability of establishing an  office  of  risk  assessment  and
  management

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

  Section 1. The office of general services, in  consultation  with  the
department of law, the department of audit and control, the state insur-
ance  fund,  the  office  of  employee relations and the division of the
budget, shall conduct a study to examine, evaluate and make  recommenda-
tions concerning the feasibility and advisability of establishing, with-
in  the  office  of  general  services, an office of risk assessment and
management. The office of general services, in  conducting  such  study,
should direct its attention to at least the following:
  (a)  the  suggested  proposed powers of such office of risk assessment
and management, which may include, but not be limited to, the power to:
  (1) analyze the potential exposure  of  the  state  to  liability  and
financial  loss arising from its acts and omissions, from the ownership,
control or use of its real and personal  property,  or  the  conduct  or
actions of its employees or agents;
  (2)  establish  and coordinate business continuity programs for essen-
tial state functions and services;
  (3) implement risk management programs to manage the state's  exposure
to risk in the most cost effective manner including, but not limited to,
programs to reduce the likelihood and potential cost of loss events, and
the  purchase  of  insurance  or  other  risk sharing arrangements where
appropriate; and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10938-02-3

S. 5407                             2

  (4) coordinate and support the risk management programs of  all  state
agencies; and
  (b)  the  appointment  of  a  risk manager, who shall be appointed and
empowered to administer the  proposed  office  of  risk  assessment  and
management.  With  regard  to  such  risk manager, the office of general
services should consider:
  (1) the process for the appointment of the risk manager;
  (2) the compensation to be paid to the risk manager;
  (3) the qualifications of the risk manager, which may include, but not
be limited to:
  (A) an understanding  of  and  the  ability  to  apply  the  generally
accepted principles, standards and techniques utilized for the identifi-
cation, assessment and management of enterprise risk;
  (B)  possessing  sufficient  experience  in identifying, assessing and
managing enterprise risk exposures that present the breadth and level of
complexity of issues that can reasonably be expected to be raised during
the course of state operations; and
  (C) having acquired his or  her  qualifications,  through  appropriate
education and relevant risk management experience on behalf of a commer-
cial or governmental organization; and
  (c)  the  fulfillment  of the functions of the proposed office of risk
assessment and management by conducting a  preliminary  examination  and
evaluation,  in consultation with the comptroller, the attorney general,
the temporary president of the senate and the speaker of  the  assembly,
of  the kinds and scope of risk exposures faced by the state. Such exam-
ination and evaluation may include, but not be limited to:
  (1) the practices and  procedures  of  all  state  agencies,  as  they
pertain  to,  impact  upon,  cause  or deter damage or loss to: physical
property  owned  or  controlled  by  the  state,  or  physical  injuries
sustained  by state employees, persons receiving services from the state
or members of the general public;
  (2) the actions, claim settlements,  and  claim  settlement  processes
related  to  actions  in  the court of claims, and  in federal and state
courts of competent jurisdiction as they relate to  the  disposition  of
matters against the state;
  (3)  the  essential operations and service functions of the state, and
the kinds of procedures that may be necessary  to  maintain  or  restore
such  operations  and functions to the required level following an emer-
gency event;
  (4) the potential future liabilities arising from existing or proposed
state operations or functions;
  (5) a description on how to prepare an inventory of all real  property
owned  or  leased,  for  a period of time of more than ten years, by all
state agencies, and to begin to ascertain how to  assess  past,  present
and  potential  future liability exposures and the nature of those expo-
sures; and
  (6) a description of the kinds of  appropriate  cost  effective  tech-
niques and programs needed to reduce the cost of the state's exposure to
liability  and  financial loss arising from its operations or the owner-
ship, control or use of real and personal property; and
  (d) allowing any public benefit corporation, public authority or local
government to contract for the services of the proposed risk manager and
the office of risk assessment and management  in  the  event  that  such
public  benefit  corporation,  public  authority  or local government is
without  internal  risk  assessment  and  enterprise   risk   management

S. 5407                             3

services,  or  wishes  to  supplement  such  internal  services with the
services provided by the risk manager and the office.
  S  2.  In addition to the requirements of section one of this act, the
office of general services shall, with particular care, begin  to  exam-
ine, analyze and determine:
  (a)  an  estimate  of the financial benefits that could be realized by
establishing an office of risk assessment and management and the  poten-
tial reduction in the state's liability exposure;
  (b)  the  financial costs and an estimate of the size of the workforce
necessary to establish the office of risk assessment and management;
  (c) the method or process by which the proposed office of risk assess-
ment and management could be established and the manner  in  which  such
office's operations could be phased in over 5 years; and
  (d)  the  method  of financing the establishment and operations of the
office of risk assessment and management, in  as  much  as  the  initial
costs  of such office may not be offset by cost savings and reduction in
liability exposure until such  office  has  been  in  existence  for  an
extended period of time.
  S  3.  Within  eighteen  months of the effective date of this act, the
office of general services shall submit to the  governor,  the  attorney
general,  the  state  comptroller, the temporary president of the senate
and the speaker of the assembly, a report of its  findings,  conclusions
and  recommendations,  and shall submit with its report such legislative
proposals as it deems necessary to implement its recommendations.
  S 4. This act shall take effect immediately.

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