S T A T E   O F   N E W   Y O R K
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                                   8952
 
                             I N  S E N A T E
 
                             September 2, 2020
                                ___________
 
 Introduced  by  Sen. SANDERS -- 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 2019."
   §  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.
   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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD00832-01-9

 S. 8952                             2
 
   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,
 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

 S. 8952                             3
 
 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.
   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

 S. 8952                             4
 
 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
 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

 S. 8952                             5
 
 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
 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

 S. 8952                             6
 
 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 NINETEEN 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.
 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

 S. 8952                             7
 
 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.