S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6123
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               May 11, 2017
                                ___________
 
 Introduced by Sen. ALCANTARA -- read twice and ordered printed, and when
   printed to be committed to the Committee on Finance
 
 AN  ACT  to  amend  the  labor law and the workers' compensation law, in
   relation to establishing the New York small contractor  safety  group,
   inc.  and  providing  for its functions, powers and duties, and estab-
   lishing the New York small contractor safety group fund within the New
   York state insurance fund and making an appropriation therefor
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  This  act  shall  be known and may be cited as the "small
 contractors relief act of 2017."
   § 2. The labor law is amended by adding a new article 25-D to read  as
 follows:
                               ARTICLE 25-D
        NEW YORK SMALL CONTRACTOR SAFETY GROUP, INC. PILOT PROGRAM
 SECTION 863. DEFINITIONS.
         863-A. NEW  YORK  SMALL  CONTRACTOR  SAFETY  GROUP,  INC.  PILOT
                  PROGRAM.
         863-B. MANAGEMENT OF THE SAFETY GROUP; BOARD OF DIRECTORS.
         863-C. PLAN OF OPERATION.
         863-D. MEMBERSHIP.
         863-E. SECURING COVERAGE.
         863-F. ASSESSMENT OF SAFETY GROUP MEMBERS.
         863-G. AUDIT AUTHORITY.
         863-H. FINANCIAL OVERSIGHT OF THE SAFETY GROUP.
         863-I. EXEMPTION FROM TAXES.
         863-J. MANDATORY WORK  SAFETY  PROGRAM  ATTENDANCE  AND  PARTIC-
                  IPATION.
         863-K. EXPIRATION OF PILOT PROGRAM.
         863-L. RULES AND REGULATIONS.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD01677-01-7
              

 S. 6123                             2
 
   SECTION  863.  DEFINITIONS. FOR PURPOSES OF THIS ARTICLE THE FOLLOWING
 TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   1. "BOARD" MEANS THE BOARD OF DIRECTORS OF THE SAFETY GROUP.
   2.  "LIABILITY  INSURANCE"  MEANS PERSONAL INJURY LIABILITY INSURANCE,
 PROPERTY DAMAGE LIABILITY INSURANCE AND EMPLOYER'S LIABILITY  INSURANCE,
 AS  SUCH  TERMS ARE DEFINED IN PARAGRAPHS THIRTEEN, FOURTEEN AND FIFTEEN
 OF SUBSECTION (A) OF SECTION ONE THOUSAND ONE HUNDRED  THIRTEEN  OF  THE
 INSURANCE LAW AND SHALL ALSO INCLUDE ANY TYPE OF INSURANCE DEEMED BY THE
 SUPERINTENDENT  OF FINANCIAL SERVICES TO BE SUBSTANTIALLY SIMILAR PURSU-
 ANT TO PARAGRAPH THIRTY OF SUBSECTION (A) OF SUCH SECTION.
   3. "SMALL CONTRACTOR" MEANS ANY CONTRACTOR WHICH (I) IS A RESIDENT  IN
 THIS  STATE,  (II)  IS INDEPENDENTLY OWNED AND OPERATED, (III) IS EITHER
 (A) A CERTIFIED MINORITY OR WOMEN OWNED BUSINESS AS PROVIDED FOR IN  LAW
 OR  (B)  IF  NOT SUCH A CERTIFIED MINORITY OR WOMEN OWNED BUSINESS, BOTH
 (1) IN THE FISCAL YEAR PRIOR TO  THE  YEAR  FOR  WHICH  APPLICATION  FOR
 COVERAGE  UNDER  THIS  ARTICLE  IS  REQUESTED, HAD LESS THAN ONE MILLION
 DOLLARS IN GROSS REVENUES, AND (2) PROVIDES ADEQUATE PROOF, AS EVIDENCED
 BY A LETTER OF REJECTION OR OTHERWISE  APPROPRIATE  DOCUMENTATION,  THAT
 AFTER  WRITTEN  APPLICATION  FOR  LIABILITY  INSURANCE  COVERAGE FROM AN
 INSURER LICENSED IN THIS STATE TO PROVIDE SUCH INSURANCE,  IT  HAS  BEEN
 DENIED COVERAGE FOR EITHER THE PRIOR FISCAL YEAR, OR THE FISCAL YEAR FOR
 WHICH  LIABILITY  INSURANCE  IS  REQUESTED.  ADDITIONALLY, IT SHALL ALSO
 INCLUDE CONTRACTORS WITH A GROSS REVENUE OF ONE MILLION DOLLARS OR MORE,
 UP TO A LIMIT TO BE DETERMINED BY THE SAFETY GROUP FOLLOWING ACTUARIALLY
 PRUDENT PRINCIPLES, PROVIDED THAT SUCH CONTRACTORS CAN PROVIDE  ADEQUATE
 PROOF  THAT THEY ARE UNABLE TO SECURE INSURANCE COVERAGE AS PROVIDED FOR
 HEREIN.
   4. "SAFETY GROUP" MEANS THE NEW YORK SMALL  CONTRACTOR  SAFETY  GROUP,
 INC.    ESTABLISHED IN SECTION EIGHT HUNDRED SIXTY-THREE-A OF THIS ARTI-
 CLE.
   § 863-A. NEW YORK SMALL CONTRACTOR SAFETY GROUP, INC.  PILOT  PROGRAM.
 THERE  IS  HEREBY  CREATED A PILOT PROGRAM TO BE CONDUCTED BY A NOT-FOR-
 PROFIT CORPORATION TO BE KNOWN AT THE NEW YORK SMALL  CONTRACTOR  SAFETY
 GROUP,  INC.  TO  THE  EXTENT  THAT THE PROVISIONS OF THE NOT-FOR-PROFIT
 CORPORATION LAW DO NOT CONFLICT WITH THE PROVISIONS OF THIS ARTICLE,  OR
 WITH  THE  PLAN  OF  OPERATION ESTABLISHED PURSUANT TO THIS ARTICLE, THE
 NOT-FOR-PROFIT CORPORATION LAW SHALL APPLY TO THE  SAFETY  GROUP,  WHICH
 SHALL  BE  A  TYPE  C CORPORATION PURSUANT TO SUCH LAW. IF AN APPLICABLE
 PROVISION OF THIS ARTICLE OR OF THE SAFETY  GROUP'S  PLAN  OF  OPERATION
 RELATES TO A MATTER EMBRACED IN A PROVISION OF THE NOT-FOR-PROFIT CORPO-
 RATION  LAW  BUT  IS  NOT  IN  CONFLICT THEREWITH, BOTH PROVISIONS SHALL
 APPLY. THE SAFETY GROUP SHALL PERFORM ITS FUNCTIONS IN  ACCORDANCE  WITH
 ITS  PLAN OF OPERATION ESTABLISHED AND APPROVED PURSUANT TO THIS ARTICLE
 AND SHALL EXERCISE ITS POWERS THROUGH THE BOARD HEREIN ESTABLISHED.
   § 863-B. MANAGEMENT OF THE SAFETY GROUP; BOARD OF DIRECTORS. 1. WITHIN
 FORTY-FIVE DAYS AFTER THE EFFECTIVE DATE OF THIS ARTICLE, THERE SHALL BE
 APPOINTED THE BOARD OF THE SAFETY GROUP,  WHICH  BOARD  SHALL  HAVE  THE
 AUTHORITY  TO  MANAGE  THE BUSINESS AND AFFAIRS OF THE SAFETY GROUP. THE
 BOARD SHALL CONSIST OF NINE DIRECTORS, THREE OF WHOM SHALL  BE  SELECTED
 BY  THE GOVERNOR, TWO OF WHOM SHALL BE APPOINTED BY THE TEMPORARY PRESI-
 DENT OF THE SENATE, TWO OF WHOM SHALL BE APPOINTED  BY  THE  SPEAKER  OF
 ASSEMBLY,  ONE  OF  WHOM  SHALL  BE APPOINTED THE MINORITY LEADER OF THE
 SENATE, AND ONE OF WHOM SHALL BE APPOINTED BY THE MINORITY LEADER OF THE
 ASSEMBLY. EACH MEMBER OF THE BOARD SHALL BE  APPOINTED  FOR  A  TERM  OF
 THREE  YEARS,  PROVIDED  HOWEVER, THAT OF THE INITIAL MEMBERS APPOINTED,
 THE MEMBERS SELECTED BY THE GOVERNOR SHALL HAVE A TERM OF  THREE  YEARS,

 S. 6123                             3
 
 THE  MEMBERS  APPOINTED BY THE TEMPORARY PRESIDENT OF THE SENATE AND THE
 MINORITY LEADER OF THE ASSEMBLY SHALL BE APPOINTED FOR  A  TERM  OF  TWO
 YEARS,  AND THE MEMBERS APPOINTED BY THE SPEAKER OF THE ASSEMBLY AND THE
 MINORITY LEADER OF THE SENATE SHALL BE APPOINTED FOR A TERM OF ONE YEAR.
 MEMBERS  WHO  ARE  APPOINTED SHALL HAVE EXPERIENCE IN ONE OR MORE OF THE
 FIELDS OF ORGANIZED LABOR, CONSTRUCTION, PUBLIC BIDDING, WORK SAFETY  OR
 ANY  OTHER  CONSTRUCTION  RELATED FIELDS, AND HAVE IN THEIR PROFESSIONAL
 CAPACITY DEMONSTRATED A WILLING AND CONSCIENTIOUS EFFORT TO PROMOTE WORK
 SAFETY AND FAIR AND EQUITABLE TREATMENT OF WORKERS AND MANAGEMENT.
   2. THE BOARD SHALL HAVE THE POWER TO REMOVE FOR  CAUSE  ANY  DIRECTOR.
 THE  AUTHORITY  THAT APPOINTED A DIRECTOR SHALL HAVE THE POWER TO REMOVE
 SUCH DIRECTOR FOR CAUSE OR WITHOUT CAUSE. AT THE EXPIRATION OF A  DIREC-
 TOR'S  TERM, THE AUTHORITY THAT APPOINTED SUCH DIRECTOR SHALL RE-APPOINT
 SUCH DIRECTOR FOR AN ADDITIONAL TERM OR APPOINT A NEW DIRECTOR FOR  SUCH
 SUBSEQUENT  TERM.  A  VACANCY  OCCURRING IN A DIRECTOR POSITION SHALL BE
 FILLED BY THE AUTHORITY THAT ORIGINALLY MADE SUCH SELECTION OR  APPOINT-
 MENT.  A  VACANCY IN ANY ONE OR MORE OF THE DIRECTOR POSITIONS SHALL NOT
 PREVENT THE REMAINING DIRECTORS FROM TRANSACTING ANY BUSINESS,  PROVIDED
 A QUORUM IS PRESENTED AND VOTING.
   3.  ALL  OF  THE  DIRECTORS SHALL HAVE EQUAL VOTING RIGHTS AND FIVE OR
 MORE DIRECTORS SHALL CONSTITUTE A QUORUM, PROVIDED THAT IF THE NUMBER OF
 DIRECTORS IN OFFICE IS FEWER THAN FIVE, A QUORUM SHALL  CONSIST  OF  THE
 NUMBER  OF  DIRECTORS  IN OFFICE. THE AFFIRMATIVE VOTE OF FIVE DIRECTORS
 SHALL BE NECESSARY FOR THE TRANSACTION OF ANY BUSINESS OR  THE  EXERCISE
 OF  ANY  POWER  OR  FUNCTION  OF  THE SAFETY GROUP, PROVIDED THAT IF THE
 NUMBER OF DIRECTORS IN OFFICE IS FEWER THAN FIVE, THE  AFFIRMATIVE  VOTE
 OF ALL DIRECTORS IN OFFICE SHALL BE NECESSARY FOR THE TRANSACTION OF ANY
 BUSINESS  OR  THE EXERCISE OF ANY POWER OR FUNCTION OF THE SAFETY GROUP.
 THE BOARD MAY DELEGATE TO ONE OR MORE OF ITS DIRECTORS, OFFICERS, AGENTS
 OR EMPLOYEES SUCH POWERS AND DUTIES AS IT MAY DEEM PROPER.
   4. FOR THEIR ATTENDANCE AT MEETINGS, THE DIRECTORS OF THE SAFETY GROUP
 SHALL BE ENTITLED TO COMPENSATION, AS AUTHORIZED BY  THE  BOARD,  IN  AN
 AMOUNT NOT TO EXCEED TWO HUNDRED DOLLARS PER MEETING PER DIRECTOR AND TO
 REIMBURSEMENT  OF  THEIR ACTUAL OUT-OF-POCKET EXPENSES. DIRECTORS OF THE
 SAFETY GROUP, EXCEPT AS OTHERWISE PROVIDED BY LAW, MAY ENGAGE IN PRIVATE
 OR PUBLIC EMPLOYMENT OR IN A PROFESSION OR BUSINESS.
   5. THE SAFETY GROUP SHALL INDEMNIFY AND HOLD  HARMLESS  EACH  DIRECTOR
 AND  OFFICER  OF THE SAFETY GROUP FROM ALL LIABILITY, CLAIMS, OR DAMAGES
 BY REASON OF HIS OR  HER  ACTS  OR  OMISSIONS  IN  CONNECTION  WITH  THE
 PERFORMANCE  OF HIS OR HER DUTIES AS A DIRECTOR OR OFFICER OF THE SAFETY
 GROUP TO THE FULLEST EXTENT PERMITTED BY THE NOT-FOR-PROFIT  CORPORATION
 LAW,  AND,  IN FURTHERANCE THEREOF, THE SAFETY GROUP SHALL OBTAIN DIREC-
 TOR'S AND OFFICER'S LIABILITY INSURANCE  COVERAGE  ON  TERMS  CONSISTENT
 WITH  SECTION SEVEN HUNDRED TWENTY-SIX OF THE NOT-FOR-PROFIT CORPORATION
 LAW.
   § 863-C. PLAN OF OPERATION. 1. WITHIN NINETY DAYS AFTER THE  EFFECTIVE
 DATE  OF THIS ARTICLE, THE SAFETY GROUP SHALL FILE WITH THE COMMISSIONER
 OF LABOR AND THE SUPERINTENDENT OF FINANCIAL SERVICES ITS PLAN OF OPERA-
 TION, WHICH SHALL BE DESIGNED TO ASSURE THE FAIR, REASONABLE AND EQUITA-
 BLE ADMINISTRATION OF THE SAFETY GROUP. THE PLAN OF  OPERATION  AND  ANY
 SUBSEQUENT  AMENDMENTS  THERETO  SHALL BE FILED WITH THE COMMISSIONER OF
 LABOR AND THE SUPERINTENDENT OF FINANCIAL SERVICES, WHO SHALL HAVE NINE-
 TY DAYS TO APPROVE OR REJECT ANY PROPOSAL CONTAINED IN SUCH  PLAN  WHICH
 THEY  JOINTLY  DETERMINE DOES NOT CONFORM TO THE INTENT OF THIS ARTICLE.
 UPON TRANSMISSION TO THE SAFETY GROUP OF SUCH OBJECTIONS THE GROUP SHALL
 MODIFY THE PLAN ACCORDINGLY AND THE PLAN SHALL THEN BECOME OPERATIVE.

 S. 6123                             4
 
   2. THE PLAN OF OPERATION SHALL CONSTITUTE THE BY-LAWS  OF  THE  SAFETY
 GROUP AND SHALL, IN ADDITION TO THE REQUIREMENTS ENUMERATED ELSEWHERE IN
 THIS  ARTICLE,  (A) ESTABLISH PROCEDURES FOR COLLECTING AND MANAGING THE
 ASSETS OF THE SAFETY GROUP; (B) ESTABLISH REGULAR PLACES AND  TIMES  FOR
 MEETINGS  OF  THE  BOARD  OF  DIRECTORS  AND  THE MEMBERS; (C) ESTABLISH
 ACCOUNTING AND RECORD-KEEPING PROCEDURES FOR ALL FINANCIAL  TRANSACTIONS
 OF  THE  SAFETY GROUP, ITS AGENTS AND THE BOARD OF DIRECTORS; (D) ESTAB-
 LISH A PROCEDURE FOR DETERMINING AND COLLECTING THE  APPROPRIATE  AMOUNT
 OF  ASSESSMENTS  AND  SURCHARGES  UNDER  THIS ARTICLE; (E) SET FORTH THE
 PROCEDURES BY WHICH THE SAFETY  GROUP  MAY  EXERCISE  THE  AUDIT  RIGHTS
 GRANTED  TO  IT  UNDER  THIS  ARTICLE;  (F) ESTABLISH PROCEDURES FOR THE
 CREATION OF A SAFETY PROGRAM, RISK MANAGEMENT  PROGRAM  AND  SUCH  OTHER
 PROGRAMS  FOR THE SAFETY GROUP'S MEMBERS AS THE BOARD DEEMS APPROPRIATE;
 (G) ESTABLISH PROCEDURES FOR EXPELLING MEMBERS WHO FAIL TO  SATISFY  THE
 SAFETY  GROUP'S  SAFETY  COMPLIANCE  RULES WHICH RULES SHALL PROVIDE FOR
 GRACE PERIODS OF COVERAGE AFTER EXPULSION AS DETERMINED FAIR AND EQUITA-
 BLE BY THE GROUP; (H) ESTABLISH RULES FOR THE CALCULATION OF  MEMBERSHIP
 FEE ASSESSMENTS; AND (I) CONTAIN SUCH ADDITIONAL PROVISIONS AS THE BOARD
 MAY  DEEM NECESSARY OR PROPER FOR THE EXECUTION OF THE POWERS AND DUTIES
 OF THE SAFETY GROUP.
   § 863-D. MEMBERSHIP. MEMBERSHIP IN THE SAFETY GROUP SHALL BE  OPEN  TO
 ALL SMALL CONTRACTORS INITIALLY ADMITTED AS MEMBERS OF THE GROUP AND ALL
 SMALL  CONTRACTORS  WHO  THEREAFTER APPLY FOR INSURANCE COVERAGE AND ARE
 DETERMINED TO BE ELIGIBLE FOR INSURANCE  COVERAGE  AS  PROVIDED  BY  THE
 GROUP  AND, AS PROVIDED IN THE PLAN OF OPERATION. THE SAFETY GROUP SHALL
 PROVIDE TO ITS MEMBERS A COPY OF THE PLAN OF OPERATION  AND  ANY  SUBSE-
 QUENT AMENDMENTS AND SHALL INFORM ITS MEMBERS OF THEIR RIGHTS AND DUTIES
 AS MEMBERS OF THE SAFETY GROUP.
   §  863-E.  SECURING COVERAGE. 1. WITHIN TWO HUNDRED SEVENTY DAYS AFTER
 THE EFFECTIVE DATE OF THIS ARTICLE, THE SAFETY  GROUP  SHALL  TAKE  SUCH
 ACTIONS AS ARE NECESSARY TO PURCHASE LIABILITY INSURANCE. LIMITATIONS ON
 COVERAGE  AND OTHER SPECIFIC REQUIREMENTS FOR ANY SUCH POLICY OF LIABIL-
 ITY INSURANCE PURCHASED BY THE GROUP SHALL BE AS  PROVIDED  FOR  IN  THE
 PLAN OF OPERATION. NO LATER THAN THIRTY DAYS AFTER THE COMMENCEMENT OF A
 NEW  POLICY  YEAR  THE  SAFETY GROUP SHALL FILE WITH THE COMMISSIONER OF
 LABOR, AND THE SUPERINTENDENT OF FINANCIAL SERVICES A COPY OF THE  GROUP
 POLICY IT HAS PURCHASED FOR THAT YEAR.
   2.  THE  SAFETY  GROUP  MAY  ALSO  PURCHASE  A GROUP POLICY FOR EXCESS
 LIABILITY INSURANCE COVERAGE ON BEHALF OF THOSE OF ITS MEMBERS  DESIRING
 SUCH EXCESS LIABILITY INSURANCE COVERAGE.
   §  863-F.  ASSESSMENT OF SAFETY GROUP MEMBERS. 1. IN ORDER TO MEET THE
 OBLIGATIONS AND PAY (A) THE COSTS OF THE GROUP GENERAL LIABILITY  INSUR-
 ANCE  POLICY  PURCHASED PURSUANT TO THIS ARTICLE AND (B) ITS EXPENSES IN
 CARRY OUT ITS POWERS, DUTIES AND OBLIGATIONS  UNDER  THIS  ARTICLE,  THE
 SAFETY  GROUP  SHALL  ASCERTAIN BY REASONABLE ESTIMATE THE TOTAL FUNDING
 NECESSARY TO CARRY ON ITS OPERATIONS. BASED UPON  SUCH  ESTIMATION,  THE
 SAFETY  GROUP  SHALL  ASSESS  ITS  MEMBERS  A  MEMBERSHIP FEE, TO FAIRLY
 REFLECT THE COST OF THE LIABILITY INSURANCE  COVERAGE  PROCURED  BY  THE
 SAFETY  GROUP  AND THE ADMINISTRATION OF THE SAFETY GROUP. FEES SHALL BE
 COLLECTED ANNUALLY OR MORE OFTEN AS DETERMINED BY THE SAFETY GROUP  UPON
 WRITTEN NOTICE THAT THEY SHALL BE DUE WITHIN SIXTY DAYS OF THE DATE UPON
 WHICH  SUCH  NOTICE  IS  RECEIVED.  THE SAFETY GROUP SHALL DETERMINE THE
 BASIS FOR CALCULATING SUCH FEES IN ACCORDANCE WITH RULES  SET  FORTH  IN
 THE  PLAN OF OPERATION, WHICH RULES SHALL BE APPLIED IN A FAIR AND EQUI-
 TABLE MANNER, AND IN AN OPEN AND TRANSPARENT MANNER SO AS TO MAKE  KNOWN
 THE  BASIS UPON WHICH SUCH CALCULATIONS HAVE BEEN MADE. UPON CALCULATION

 S. 6123                             5
 
 OF THE FEE EACH MEMBER MUST PAY, FROM  WITHIN  AMOUNTS  APPROPRIATED  BY
 LAW,  THE STATE SHALL MAKE AN INITIAL CAPITAL CONTRIBUTION TO THE SAFETY
 GROUP IN AN AMOUNT EQUAL TO FIFTY PERCENT OF THE AMOUNT OF  THE  FEE  SO
 ASSESSED  FOR  THE  PURPOSE  OF  PROVIDING INITIAL CAPITALIZATION OF THE
 SAFETY GROUP WHICH WILL ENABLE IT TO CONDUCT BUSINESS IN  A  FINANCIALLY
 PRUDENT  MANNER,  PROVIDED  HOWEVER,  THAT  THE  AMOUNT  OF SUCH INITIAL
 CAPITALIZATION PROVIDED  BY  THE  STATE  SHALL  NOT  EXCEED  TWENTY-FIVE
 MILLION DOLLARS.
   2.  SHOULD  THE  SAFETY  GROUP DETERMINE THAT THE MEMBERSHIP FEES THAT
 HAVE BEEN PAID TO IT ARE INADEQUATE TO MEET ITS OBLIGATIONS  UNDER  THIS
 ARTICLE,  THE SAFETY GROUP SHALL DETERMINE THE AMOUNT REQUIRED TO ELIMI-
 NATE SUCH DEFICIENCY. BASED UPON SUCH AMOUNT,  THE  SAFETY  GROUP  SHALL
 ASSESS  ITS  MEMBERS A SURCHARGE, CALCULATED ON A SIMILAR BASIS AS ABOVE
 DETERMINED FOR THE ORIGINAL MEMBERSHIP FEE, IN ACCORDANCE WITH RULES SET
 FORTH IN THE PLAN OF OPERATION.
   3. TO PAY  THE  COSTS  OF  ANY  EXCESS  LIABILITY  INSURANCE  COVERAGE
 PURCHASED  PURSUANT TO THIS ARTICLE, THE SAFETY GROUP SHALL ASSESS THOSE
 OF ITS MEMBERS WHO WISH TO OBTAIN  SUCH  EXCESS  LIABILITY  INSURANCE  A
 SEPARATE  FEE, CALCULATED IN ACCORDANCE WITH RULES SET FORTH IN THE PLAN
 OF OPERATION.
   § 863-G. AUDIT AUTHORITY.  THE  SAFETY  GROUP  SHALL  HAVE  THE  POWER
 DIRECTLY OR THROUGH ITS REPRESENTATIVES TO INSPECT THE BOOKS AND RECORDS
 OF ITS MEMBERS TO VERIFY (A) COMPLIANCE WITH THE REQUIREMENTS OF MEMBER-
 SHIP  IN  THE SAFETY GROUP AND (B) THE ACCURACY OF INFORMATION FURNISHED
 TO THE SAFETY GROUP. THE SAFETY GROUP OR ITS  REPRESENTATIVES  SHALL  BE
 AFFORDED CONVENIENT ACCESS AT ALL REASONABLE HOURS TO ALL BOOKS, RECORDS
 AND  OTHER DOCUMENTS OF ITS MEMBERS THAT MAY BE RELEVANT TO SUCH AUDITS.
 IN ADDITION THE COMPTROLLER OF THIS STATE SHALL HAVE  THE  AUTHORITY  TO
 PERIODICALLY AUDIT THE BOOKS AND RECORDS OF THE SAFETY GROUP IN ORDER TO
 ENSURE ITS COMPLIANCE WITH THE LAW.
   §  863-H. FINANCIAL OVERSIGHT OF THE SAFETY GROUP. NO LATER THAN APRIL
 FIRST OF EACH YEAR, THE SAFETY GROUP SHALL SUBMIT TO THE COMMISSIONER OF
 LABOR AND THE SUPERINTENDENT OF FINANCIAL SERVICES  CERTIFIED  FINANCIAL
 STATEMENTS  PREPARED  IN  ACCORDANCE  WITH GENERALLY ACCEPTED ACCOUNTING
 PRINCIPLES BY A CERTIFIED PUBLIC ACCOUNTANT. THE MEMBERS OF  THE  SAFETY
 GROUP  SHALL  BE  REQUIRED  ON  AND  AFTER JANUARY FIRST OF EACH YEAR TO
 AFFORD A CERTIFIED PUBLIC ACCOUNTANT CONVENIENT ACCESS AT ALL REASONABLE
 HOURS TO ALL BOOKS, RECORDS AND OTHER DOCUMENTS THAT MAY BE RELEVANT  TO
 THE PREPARATION OF SUCH STATEMENTS. SUCH COMMISSIONER AND SUPERINTENDENT
 ARE  HEREBY  AUTHORIZED  TO UNDERTAKE SUCH STUDIES AND INVESTIGATIONS IT
 DEEMS WARRANTED TO ENSURE THE SAFETY GROUP IS COMPLYING WITH ALL  APPLI-
 CABLE STATE LAWS.
   §  863-I.  EXEMPTION FROM TAXES. THE SAFETY GROUP SHALL BE EXEMPT FROM
 PAYMENT OF ALL FEES AND TAXES LEVIED BY THE STATE OR ANY OF ITS SUBDIVI-
 SIONS, EXCEPT TAXES LEVIED ON REAL PROPERTY.
   § 863-J. MANDATORY WORK SAFETY PROGRAM ATTENDANCE  AND  PARTICIPATION.
 IN  ORDER TO EFFECTIVELY CARRY OUT THE INTENT OF THIS ARTICLE TO PROVIDE
 LIABILITY INSURANCE TO SMALL CONTRACTORS, MEMBERS OF  THE  SAFETY  GROUP
 SHALL  BE REQUIRED TO ATTEND AND PARTICIPATE IN WORK AND JOB SITE SAFETY
 TRAINING AND SATISFY THE SAFETY GROUP'S SAFETY  COMPLIANCE  RULES  AS  A
 CONDITION TO THEIR MEMBERSHIP. ANY MEMBER WHO FAILS OR REFUSES TO EXTEND
 ITS  FULL  COOPERATION  IN ATTENDING OR PARTICIPATING IN SUCH PROGRAM OR
 SATISFYING SUCH SAFETY COMPLIANCE  RULES  MAY  BE  TERMINATED  FROM  THE
 GROUP,  OR  SUSPENDED UNTIL IT BRINGS ITSELF INTO COMPLIANCE. THE SAFETY
 GROUP, IN ESTABLISHING THE COMPONENTS OF THE  PROGRAM  MAY  UTILIZE  THE

 S. 6123                             6

 EXPERTISE  OF  LARGE  CONTRACTORS'  WORK AND JOB SAFETY PROGRAMS, OR THE
 SERVICES OF OTHER EXPERTS IN THE FIELD.
   §  863-K.  EXPIRATION OF PILOT PROGRAM. THE PROVISIONS OF THIS ARTICLE
 SHALL FOR ALL PURPOSES BE CONDUCTED IN THE MANNER  OF  A  PILOT  PROGRAM
 WHICH  SHALL  EXPIRE  AND BE OF NO FURTHER FORCE AND EFFECT ON AND AFTER
 THE DATE OCCURRING FIVE YEARS AFTER THE DATE  UPON  WHICH  THIS  ARTICLE
 SHALL  HAVE  BECOME A LAW, UNLESS DULY EXTENDED OR MADE PERMANENT BY THE
 LEGISLATURE. ONE YEAR PRIOR TO SUCH DATE OF EXPIRATION, THE SAFETY GROUP
 SHALL SUBMIT A DETAILED ANALYSIS OF THE OPERATION AND  EFFECTIVENESS  OF
 THE PROGRAM TO THE TEMPORARY PRESIDENT OF THE SENATE, THE SPEAKER OF THE
 ASSEMBLY, THE COMMISSIONER OF LABOR, AND THE SUPERINTENDENT OF FINANCIAL
 SERVICES  FOR  THE  PURPOSES  OF AMENDING, REVISING, ADDING TO OR IN ANY
 MANNER ALTERING THE PROVISIONS OF THIS ARTICLE, THE  PLAN  OF  OPERATION
 THEN  IN  EFFECT  OR ANY OTHER SIGNIFICANT CHANGES TO LAW, RULE OR REGU-
 LATION WHICH WOULD IMPROVE THE PROVISION OF LIABILITY COVERAGE  AFFORDED
 TO  INSUREDS  PURSUANT  TO THE INSURANCE POLICIES PROVIDED BY THE SAFETY
 GROUP.
   § 863-L. RULES AND REGULATIONS. THE COMMISSIONER OF LABOR ON NOTICE TO
 THE SUPERINTENDENT OF FINANCIAL SERVICES IS HEREBY AUTHORIZED TO PROMUL-
 GATE ANY REGULATIONS AS MAY BE NECESSARY FOR THE  PROPER  IMPLEMENTATION
 OF THIS ARTICLE.
   §  3. The workers' compensation law is amended by adding a new section
 87-j to read as follows:
   § 87-J. AUTHORITY TO ISSUE GENERAL LIABILITY INSURANCE TO THE NEW YORK
 SMALL CONTRACTOR SAFETY GROUP, INC. 1. THE STATE INSURANCE FUND IS HERE-
 BY AUTHORIZED TO ISSUE  POLICIES  OF  GENERAL  LIABILITY  INSURANCE  AND
 LIABILITY  EXCESS  INSURANCE  POLICIES, AS NEEDED, TO THE NEW YORK SMALL
 CONTRACTOR SAFETY GROUP, INC. IN ORDER  TO  ENABLE  SUCH  NOT-FOR-PROFIT
 CORPORATION TO PROVIDE COVERAGE TO MEMBERS OF THE SAFETY GROUP.
   2.  A  SEPARATE FUND SHALL BE CREATED WITHIN THE STATE INSURANCE FUND,
 WHICH SHALL BE KNOWN AS THE "NEW  YORK  SMALL  CONTRACTOR  SAFETY  GROUP
 FUND" (THE "SAFETY GROUP FUND"), AND WHICH SHALL CONSIST OF ALL PREMIUMS
 RECEIVED  AND  PAID INTO THE SAFETY GROUP FUND ON ACCOUNT OF THE GENERAL
 LIABILITY INSURANCE AND THE LIABILITY EXCESS INSURANCE POLICIES  TO  THE
 SAFETY  GROUP,  ALL  PROPERTY AND SECURITIES ACQUIRED BY AND THROUGH THE
 USE OF MONEYS BELONGING TO THE SAFETY GROUP FUND, AND OF INTEREST EARNED
 UPON MONEYS BELONGING TO THE SAFETY GROUP FUND. THE ASSETS  AND  LIABIL-
 ITIES  OF  THE  SAFETY GROUP FUND SHALL BE AND REMAIN SEPARATE AND APART
 FROM THE ASSETS AND LIABILITIES OF THE  STATE  INSURANCE  FUND  AND  ITS
 OTHER FUNDS, AND NO MONEYS OF THE SAFETY GROUP FUND SHALL BE TRANSFERRED
 TO  THE  STATE INSURANCE FUND AND ITS OTHER FUNDS. THE SAFETY GROUP FUND
 SHALL BE EXEMPT FROM PAYMENT OF ALL FEES AND TAXES LEVIED BY  THE  STATE
 OR ANY OF ITS SUBDIVISIONS, EXCEPT TAXES LEVIED ON REAL PROPERTY.
   3.  AN  ANNUAL  PER  CENTUM  OF THE PREMIUMS COLLECTED FROM THE SAFETY
 GROUP SHALL BE SET ASIDE TOWARDS THE SURPLUS OF THE  SAFETY  GROUP  FUND
 UNTIL  SUCH  TIME  AS  IN THE JUDGMENT OF THE COMMISSIONERS SUCH SURPLUS
 SHALL BE SUFFICIENTLY LARGE  TO  BOTH  (A)  PROVIDE  FOR  ADEQUATE  LOSS
 RESERVES AND (B) RETURN TO THE STATE THE AMOUNT OF THE INITIAL APPROPRI-
 ATION  MADE  BY  LAW  TO  PROVIDE  STATE FUNDS FOR THE ESTABLISHMENT AND
 ADMINISTRATION OF THE CHAPTER OF THE  LAWS  OF  TWO  THOUSAND  SEVENTEEN
 WHICH  ESTABLISHED  THE  NEW YORK SMALL CONTRACTOR SAFETY GROUP, INC. AT
 WHICH TIME THAT AMOUNT SHALL BE REPAID TO THE STATE AS PROVIDED  FOR  IN
 THE APPROPRIATION CONTAINED IN SUCH CHAPTER. THEREAFTER THE CONTRIBUTION
 TO SUCH SURPLUS MAY BE REDUCED OR DISCONTINUED CONDITIONAL UPON CONSTANT
 MAINTENANCE  OF  A  SUFFICIENT  SURPLUS  TO PROVIDE AGAINST CATASTROPHE.

 S. 6123                             7
 
 RESERVES SHALL BE SET UP AND MAINTAINED  ADEQUATE  TO  MEET  ANTICIPATED
 LOSSES AND CARRY ALL CLAIMS AND POLICIES TO MATURITY.
   4.  THE ENTIRE EXPENSE OF ADMINISTERING THE SAFETY GROUP FUND SHALL BE
 PAID OUT OF THE SAFETY GROUP FUND, WHICH EXPENSES SHALL BE DETERMINED ON
 AN EQUITABLE BASIS WITH DUE  ALLOWANCE  FOR  THE  DIVISION  OF  OVERHEAD
 EXPENSES  BETWEEN THE SAFETY GROUP FUND AND THE STATE INSURANCE FUND AND
 ITS OTHER FUNDS. THERE SHALL BE SUBMITTED TO THE DIRECTOR OF THE  BUDGET
 QUARTERLY  FINANCIAL  STATEMENTS  ON  A  CALENDAR YEAR BASIS. IN NO CASE
 SHALL THE AMOUNT OF ADMINISTRATIVE EXPENDITURES  SO  AUTHORIZED  FOR  AN
 ENTIRE  YEAR FROM THE SAFETY GROUP FUND EXCEED TWENTY-FIVE PER CENTUM OF
 THE EARNED PREMIUMS FROM THE SAFETY GROUP FUND FOR THAT YEAR.
   § 4. The sum of twenty-five million dollars ($25,000,000), or so  much
 thereof  as  may be necessary, is hereby appropriated from any moneys in
 the state treasury in the general  fund  to  the  credit  of  the  state
 purposes  account not otherwise appropriated to the state insurance fund
 for the initial capital of the New York small  contractor  safety  group
 fund in carrying out the provisions of this act. Such sum shall be paya-
 ble on the audit and warrant of the state comptroller on vouchers certi-
 fied  or approved in the manner provided by law. No expenditure shall be
 made from this appropriation until a certificate of approval  of  avail-
 ability  shall  have been issued by the director of the budget and filed
 with the state comptroller and a copy filed with  the  chairman  of  the
 senate finance committee and the chairman of the assembly ways and means
 committee.    Such  certificate  may be amended from time to time by the
 director of the budget and a copy of each such amendment shall be  filed
 with the state comptroller, the chairman of the senate finance committee
 and  the chairman of the assembly ways and means committee. The director
 of the budget shall not issue any certificate of appropriation of avail-
 ability until the safety group fund has entered into a written agreement
 with the director of the budget providing for repayment by  such  corpo-
 ration  to  the state of New York of an amount equal to the total amount
 expended by the state from the appropriation made herein. Such repayment
 may be made over a number of years as agreed to by the director  of  the
 budget  and  the  safety  group fund, and as necessary it may be amended
 from time to time as the director of the budget  and  the  safety  group
 fund  agree.  A  copy  of each such agreement and any amendment shall be
 filed with the state comptroller, the chairman  of  the  senate  finance
 committee and the chairman of the assembly ways and means committee.
   § 5. This act shall take effect immediately.