S T A T E   O F   N E W   Y O R K
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                                  5525

                       2015-2016 Regular Sessions

                          I N  A S S E M B L Y

                            February 26, 2015
                               ___________

Introduced  by  M. of A. ABBATE -- (at request of the State Comptroller)
  -- read once and referred to the Committee on Governmental Employees

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-llll to read as follows:
  S 97-LLLL. 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD03005-02-5
              

A. 5525                             2

LAW, BY LOCAL GOVERNMENTS PURSUANT  TO  SECTION  SIX-T  OF  THE  GENERAL
MUNICIPAL  LAW  AND  BY ANY OTHER PUBLIC CORPORATION THAT ESTABLISHES AN
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, MONEYS MAY BE DISBURSED FROM THE
FUND FOR ANY AUTHORIZED PURPOSE WITHOUT APPROPRIATION.
  4.  NOTWITHSTANDING ANY OTHER PROVISION OF LAW, THE MONEYS IN THE FUND
MAY BE INVESTED BY THE COMPTROLLER IN  ACCORDANCE  WITH  THE  INVESTMENT
OPTIONS  SELECTED PURSUANT TO THE WRITTEN INVESTMENT POLICY DEVELOPED BY
EACH PARTICIPATING TRUSTEE 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 THE COMPTROLLER'S INVESTMENT PURPOSES, PROVIDED THAT THE
MONEY OF EACH PARTICIPATING TRUSTEE SHALL BE SEPARATELY ACCOUNTED FOR.
  6. THE COMPTROLLER SHALL, WITHIN  HIS  OR  HER  DISCRETION,  ESTABLISH
SUB-FUNDS  AND INVEST SUCH SUB-FUNDS SEPARATELY TO PROVIDE PARTICIPATING
TRUSTEES WITH A NUMBER OF OPTIONS TO MEET VARIOUS INVESTMENT OBJECTIVES.
SUCH OPTIONS SHALL REFLECT VARYING LEVELS OF RISK FOR  SUCH  INVESTMENT.
INVESTMENT  EARNINGS  SHALL  BE PRORATED AMONG PARTICIPATING TRUSTEES IN
EACH SUB-FUND IN PROPORTION TO THE AMOUNT OF INVESTMENTS HELD BY PARTIC-
IPATING 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;

A. 5525                             3

  (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
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-LLLL 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  THE  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

A. 5525                             4

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
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 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-LLLL 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-LLLL  OF  THE STATE FINANCE LAW SO THAT THE COMPTROLLER MAY
BE ABLE TO INVEST FUND MONIES IN ACCORDANCE  WITH  SUCH  POLICY.    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 ATTAIN-
MENT 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

A. 5525                             5

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.
  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-

A. 5525                             6

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.
  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-LLLL  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-LLLL 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,

A. 5525                             7

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
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

A. 5525                             8

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.