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SENATE BILL #S8699 SAME AS ASSEMBLY BILL #A11743

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SENATE BILL #S8699 SAME AS ASSEMBLY BILL #A11743

    SENATE BILL #S8699 SAME AS ASSEMBLY BILL #A11743

    LAWS OF NEW YORK, 2008

    CHAPTER 640

     AN ACT to amend the education law and the retirement and social security law, in

    relation to professional services providers

     Became a law October 7, 2008, with the approval of the Governor.

     Passed by a majority vote, three-fifths being present.

     The People of the State of New York, represented in Senate and Assembly, do

    enact as follows:

     Section 1. Article 41 of the education law is amended by adding a new part 3 to read

    as follows:

     PART III

     PROFESSIONAL SERVICES PROVIDERS

     Section 2050. Definition.

     2051. Charging for professional services.

     2052. Enforcement.

     2053. Reports regarding lawyers.

     2054. Non-exclusivity of rights or remedies.

     ? 2050. Definition. As used in this part, a "lawyer" shall mean an attorney or

    counselor governed by article fifteen of the judiciary law, who receives remuneration or other compensation from a school district or board of cooperative educational services in exchange for legal services provided to such district or board.

     ? 2051. Charging for professional services. 1. A lawyer shall not simultaneously be an independent contractor and an employee of a school district or board of cooperative educational services for the purpose of providing legal services to such school district or board of cooperative educational services.

     2. A lawyer who is not an employee of a school district or board of cooperative educational services, shall not seek to be or be considered, treated or otherwise reported by the school district, or board of cooperative educational

    services as an employee thereof for purposes of compensation, remuneration,

    health insurance, pension and all employment-related benefits and emoluments

    associated therewith.

     ? 2052. Enforcement. 1. Any lawyer who violates section two thousand

     fifty-one of this part, shall be liable for a civil penalty not to exceed three times the charges and fees for contracted services or salary received by the lawyer

    and paid by such school district or board of cooperative educational services for

    legal services, and in addition, may be enjoined from continuing such

violation. Civil penalties and injunctive relief provided in this section shall be

    recoverable in an action brought by the attorney general.

     2. Any person who shall knowingly:

     (a) violate subdivision two of section two thousand fifty-one of this part;

     (b) make a false statement of material fact; or

     (c) falsify or permit to be falsified any record or records of the retirement system established in this chapter

     EXPLANATION--Matter in italics is new; matter in brackets [ ] is old law

     to be omitted.

     CHAP. 640 2

in an attempt to defraud the retirement system established in this chapter as a

    result of such act for the purpose of obtaining a credit towards pension benefits, or a benefit or payment in excess of one thousand dollars from such

    retirement system for a professional services provider to which such

    professional services provider would not be entitled, shall be guilty of a class E

    felony.

     ? 2053. Reports regarding lawyers. Every school district and board of cooperative educational services shall, on or before the forty-fifth day after the commencement of its fiscal year, file with the department, the comptroller and the attorney general a report specifying: (a) all lawyers who provide legal services

    to such district or board; (b) whether such district or board hired such lawyers

    as employees; and (c) all remuneration and compensation paid for legal services.

     ? 2054. Non-exclusivity of rights or remedies. Nothing in this part shall be construed to limit, in any matter, any rights or remedies otherwise available under law against any party or to any person or entity, including, but not

    limited to, the attorney general or the comptroller of the state of New York.

     ? 2. Subdivision 3 of section 2601-a of the education law, as amended by section

    10-c of part L of chapter 405 of the laws of 1999, is amended to read as follows:

     3. The board of education shall prepare a proposed school district budget for the

    ensuing year in accordance with the provisions of section seventeen hundred sixteen

    of this chapter, including all provisions relating to required notices and appendices to

    the statement of expenditures. No board of education shall incur a school district

    liability except as authorized by the provisions of section seventeen hundred

    eighteen of this chapter. Such proposed budget shall be presented in three

    components: a program component, a capital component and an administrative

    component which shall be separately delineated in accordance with regulations of the

    commissioner after consultation with local school district officials. The administrative

    component shall include, but need not be limited to, office and central administrative

    expenses, traveling expenses and [salaries and benefits of all certified school administrators and supervisors who spend a majority of their time performing administrative or supervisory duties] all compensation, salaries and benefits of

    all school administrators and supervisors, including business administrators,

    superintendents of schools and deputy, assistant, associate or other

    superintendents under all existing employment contracts or collective bargaining

agreements, any and all expenditures associated with the operation of the board of

    education, the office of the superintendent of schools, general administration, the

    school business office, consulting costs not directly related to direct student services

    and programs, planning and all other administrative activities. The program

    component shall include, but need not be limited to, all program expenditures of the

    school district, including the salaries and benefits of teachers and any school

    administrators or supervisors who spend a majority of their time performing teaching

    duties, and all transportation operating expenses. The capital component shall

    include, but need not be limited to, all transportation capital, debt service, and lease

    expenditures; costs resulting from judgments in tax certiorari proceedings or the

    payment of awards from court judgments, administrative orders or settled or

    compromised claims; and all facilities costs of the school district, including facilities

    lease expenditures, the annual debt service and total debt for all facilities

    financed by bonds and notes of the school district, and the costs of

     3 CHAP. 640

construction, acquisition, reconstruction, rehabilitation or improvement of school

    buildings, provided that such budget shall include a rental, operations and maintenance

    section that includes base rent costs, total rent costs, operation and maintenance

    charges, cost per square foot for each facility leased by the school district, and any and

    all expenditures associated with custodial salaries and benefits, service contracts,

    supplies, utilities, and maintenance and repairs of school facilities. For the purposes

    of the development of a budget for the nineteen hundred ninety-seven--ninety-eight

    school year, the board of education shall separate its program, capital and

    administrative costs for the nineteen hundred ninety-six--ninety-seven school year in

    the manner as if the budget for such year had been presented in three components.

    Except as provided in subdivision four of this section, nothing in this section shall

    preclude the board, in its discretion, from submitting additional items of expenditure

    to the voters for approval as separate propositions or the voters from submitting

    propositions pursuant to sections two thousand eight and two thousand thirty-five of

    this chapter.

     ? 3. The retirement and social security law is amended by adding a new section 217

    to read as follows:

     ? 217. Reporting requirements; school salary transparency and disclosure. 1.

    A school district and a board of cooperative educational services shall

    report all money earned by a retired person in their employ that is in excess of

    the earnings limitation outlined in section two hundred twelve of this article to the retirement system administered by the state or any of its political subdivisions from whom such retired person is collecting their retirement allowance.

     2. A school district or a board of cooperative educational services employing

    a retired person who is eligible to collect or is already collecting a retirement

    allowance from a retirement system administered by the state or any of its

    political subdivisions shall report on an annual basis to the retirement system paying such retirement allowance to such retired person and to the state

comptroller. This report shall consist of the re-employed retiree's name, date

    of birth, place of employment, current position and all earnings.

     ? 4. Subdivision 4 of section 1608 of the education law, as amended by section 5 of

    part A of chapter 436 of the laws of 1997, is amended to read as follows:

     4. Commencing with the proposed budget for the nineteen hundred ninety-eight--

    ninety-nine school year, such proposed budget shall be presented in three

    components: a program component, a capital component and an administrative

    component which shall be separately delineated in accordance with regulations of the

    commissioner after consultation with local school district officials. The administrative

    component shall include, but need not be limited to, office and central administrative

    expenses, traveling expenses and [salaries and benefits of all certified school

    administrators and supervisors who spend a majority of their time performing

    administrative or supervisory duties,] all compensation, salaries and benefits

    of all school administrators and supervisors, including business administrators,

    superintendents of schools and deputy, assistant, associate or other

    superintendents under all existing employment contracts or collective bargaining

    agreements any and all expenditures associated with the operation of the office of trustee or board of trustees, the office of the superintendent of schools, general

    administration, the school business office, consulting costs not directly related to

    direct student services and programs, planning and all

     CHAP. 640 4

other administrative activities. The program component shall include, but need not

    be limited to, all program expenditures of the school district, including the salaries and

    benefits of teachers and any school administrators or supervisors who spend a

    majority of their time performing teaching duties, and all transportation operating

    expenses. The capital component shall include, but need not be limited to, all

    transportation capital, debt service, and lease expenditures; costs resulting from

    judgments in tax certiorari proceedings or the payment of awards from court judgments,

    administrative orders or settled or compromised claims; and all facilities costs of the

    school district, including facilities lease expenditures, the annual debt service and total

    debt for all facilities financed by bonds and notes of the school district, and the costs

    of construction, acquisition, reconstruction, rehabilitation or improvement of school

    buildings, provided that such budget shall include a rental, operations and

    maintenance section that includes base rent costs, total rent costs, operation and

    maintenance charges, cost per square foot for each facility leased by the school

    district, and any and all expenditures associated with custodial salaries and benefits,

    service contracts, supplies, utilities, and maintenance and repairs of school facilities.

    For the purposes of the development of a budget for the nineteen hundred ninety-eight--

    ninety-nine school year, the trustee or board of trustees shall separate the district's

    program, capital and administrative costs for the nineteen hundred ninety-seven- -

    ninety-eight school year in the manner as if the budget for such year had been

    presented in three components.

     ? 5. Subdivision 4 of section 1716 of the education law, as amended by section 7 of

    part A of chapter 436 of the laws of 1997, is amended to read as follows:

     4. Commencing with the proposed budget for the nineteen hundred ninety-eight--

    ninety-nine school year, such proposed budget shall be presented in three

    components: a program component, a capital component and an administrative

    component which shall be separately delineated in accordance with regulations of the

    commissioner after consultation with local school district officials. The administrative

    component shall include, but need not be limited to, office and central administrative

    expenses, traveling expenses and [salaries and benefits of all certified school

    administrators and supervisors who spend a majority of their time performing

    administrative or supervisory duties] all compensation, salaries and benefits of

    all school administrators and supervisors, including business administrators,

    superintendents of schools and deputy, assistant, associate or other

    superintendents under all existing employment contracts or collective bargaining

    agreements, any and all expenditures associated with the operation of the board of education, the office of the superintendent of schools, general administration, the

    school business office, consulting costs not directly related to direct student services

    and programs, planning and all other administrative activities. The program component

    shall include, but need not be limited to, all program expenditures of the school district,

    including the salaries and benefits of teachers and any school administrators or

    supervisors who spend a majority of their time performing teaching duties, and all

    transportation operating expenses. The capital component shall include, but need

    not be limited to, all transportation capital, debt service, and lease expenditures; costs

    resulting from judgments in tax certiorari proceedings or the payment of awards from

    court judgments, administrative orders or settled or compromised claims; and all

    facilities costs of the school district, including facilities lease expendi-

     5 CHAP. 640

tures, the annual debt service and total debt for all facilities financed by bonds

    and notes of the school district, and the costs of construction, acquisition,

    reconstruction, rehabilitation or improvement of school buildings, provided that such

    budget shall include a rental, operations and maintenance section that includes base

    rent costs, total rent costs, operation and maintenance charges, cost per square foot

    for each facility leased by the school district, and any and all expenditures

    associated with custodial salaries and benefits, service contracts, supplies, utilities,

    and maintenance and repairs of school facilities. For the purposes of the

    development of a budget for the nineteen hundred ninety-eight--ninety-nine school year,

    the board of education shall separate the district's program, capital and administrative

    costs for the nineteen hundred ninety-seven--ninety-eight school year in the manner as

    if the budget for such year had been presented in three components.

     ? 6. Subdivision 2 of section 1716 of the education law, as amended by section 7 of

    part A of chapter 436 of the laws of 1997, is amended to read as follows:

     2. Such statement shall be completed at least seven days before the budget

    hearing at which it is to be presented and copies thereof shall be prepared and made

    available, upon request and at the school district offices, at any public library or

    free association library within the district and on the school district's internet

    website, if one exists, to residents within the district during the period of fourteen

    days immediately preceding the annual meeting and election or special district

meeting at which the budget vote will occur and at such meeting or hearing. The

    board shall also as a part of the notice required by section two thousand four of this

    chapter give notice of the date, time and place of the budget hearing and that a copy of

    such statement may be obtained by any resident in the district at each schoolhouse

    in the district in which school is maintained during certain designated hours on each

    day other than a Saturday, Sunday or holiday during the fourteen days immediately

    preceding such meeting. The board shall include notice of the availability of such

    statement at least once during the school year in any district-wide mailing distributed.

     ? 7. Subdivision 2 of section 1608 of the education law, as amended by section 5 of

    part A of chapter 436 of the laws of 1997, is amended to read as follows:

     2. Such statement shall be completed at least seven days before the budget

    hearing at which it is to be presented and copies thereof shall be prepared and made

    available, upon request and at the school district offices, at any public library or

    free association library within the district and on the school district's internet

    website, if one exists, to residents within the district during the period of fourteen days immediately preceding the annual meeting and election or special district

    meeting at which the budget vote will occur and at such meeting or hearing. The

    board shall also as a part of the notice required by section two thousand three of this

    chapter give notice of the date, time and place of the budget hearing and that a copy of

    such statement may be obtained by any resident in the district at each schoolhouse

    in the district in which school is maintained during certain designated hours on each

    day other than a Saturday, Sunday or holiday during the fourteen days immediately

    preceding such meeting. The board shall include notice of the availability of such

    statement at least once during the school year in any district-wide mailing distributed.

     CHAP. 640 6

     ? 8. Subdivision 1 and paragraph (b) of subdivision 2 of section 211 of the

    retirement and social security law, subdivision 1 as amended by chapter 161 of the laws

    of 1969 and paragraph (b) of subdivision 2 as amended by chapter 635 of the

    laws of 1970, are amended to read as follows:

     1. Notwithstanding the provisions of sections one hundred one, two hundred

    twelve and four hundred one of this chapter or section five hundred three of the

    education law, or the provisions of any local law or charter, a retired person may be

    employed and earn compensation in a position or positions in the public service,

    without any effect on his or her status as retired and without suspension or diminution of his or her retirement allowance subject to one of the following: (a) His or her total

    compensation in such position or [postions] positions in any calendar year,

    including compensation earned under other provisions of this article, shall not exceed

    the multiple of five hundred dollars next higher than the difference between (1) the

    sum of his or her annual retirement allowance computed without optional modification

    plus annual supplemental retirement payments, if any, and (2) the salary on which his

    or her retirement allowance is based or his or her final salary, whichever is greater;

    or (b) The position in which he or she is employed is not a position in the service of a

    former employer.

     (b) Such approval may be granted only on the written request of the prospective

    employer of such retired person, which request shall state detailed reasons therefor

related to the standards set forth herein, and on a finding, on evidence satisfactory to

    the appropriate officer or authority specified in paragraph (a) of this subdivision,

     (1) that the retired person is duly qualified, competent and physically fit for

    performance of the duties of the position in which he or she is to be employed and is properly certified where such certification is required;

     (2) [that there is need for his services in such position;

     (3) if] that he or she will earn more than one thousand dollars in one year, including

    compensation earned in such position under other provisions of this article[,] that there are not readily available for recruitment persons qualified to perform the duties of

    such position; and (4)];

     (3) that the prospective employer has prepared a detailed recruitment plan to fill such vacancy on a permanent basis;

     (4) that his or her employment is in the best interests of the government service; and

     (5)(i) that there is an urgent need for his or her services in such position as a result of an unplanned, unpredictable and unexpected vacancy where sufficient time is not available to recruit a qualified individual and that such hiring shall be deemed as non-permanent rather than a final filling of such

    position; or

     (ii) that the prospective employer has undertaken extensive recruitment

    efforts to fill such vacancy and as a result thereof, has determined that there are

    no available non-retired persons qualified to perform the duties of such

    position.

     Such approvals may be granted for periods not exceeding two years each, provided that such person may not return to work in the same or similar

    position for a period of one year following retirement. The authority or officer specified in paragraph (a) of this subdivision, upon approving employment of a

    retired person under this section, shall certify such approval to the retirement system

    or pension plan from which such person is receiving a retirement allowance.

     7 CHAP. 640

     ? 9. Subdivision 1 of section 212 of the retirement and social security law, as

    amended by chapter 474 of the laws of 2002, is amended to read as follows:

     1. Notwithstanding the provisions of section one hundred one, two hundred eleven

    or four hundred one of this chapter or of section five hundred three of the education

    law, or the provisions of any local law or charter, any retired person may continue as

    retired and, without loss, suspension or diminution of his or her retirement allowance, earn in a position or positions in public service in any calendar year an amount not

    exceeding the amount set forth in the table in subdivision two of this section provided

    such retired person employed under this section duly executes and files with the

    retirement system from which he or she is receiving a retirement allowance a statement

    that he elects to have the provisions of this section apply to him or her. A statement of election executed and filed pursuant to this section may be withdrawn by a retired

    person at any time by a statement similarly executed and filed. However, there shall

    be no earning limitations under the provisions of this section on or after the

    calendar year in which any retired person attains age sixty-five. The retirement board of

the New York state teachers' retirement system is authorized to adopt rules and

    regulations which would allow retired persons receiving a retirement allowance from

    such system to make such statements of earnings from a position or positions in public

    service as such board shall determine necessary to enforce the provisions of this

    section in lieu of the fore-going statement of election.

     ? 10. Section 525 of the education law is amended to read as follows:

     ? 525. Protection against fraud.

     1. Any person who shall knowingly make any false statement, or shall falsify or permit

    to be falsified any record or records of this retirement system in any attempt to

    defraud such system as a result of such act, shall be guilty of a misdemeanor, and

    shall be punishable therefor under the laws of the state of New York.

     2. Any violation of subdivision one of this section that results in a member or

    beneficiary of the retirement system receiving a benefit or payment in excess of one thousand dollars more than he or she would have been entitled to shall be a class E felony. Any violation of subdivision one of this section that results in a

    member or beneficiary of the retirement system to receive a benefit or

    payment in excess of three thousand dollars more than he or she would have

    been entitled to shall be a class D felony.

     3. Should any change or error in records result in any employee or beneficiary

    receiving from the retirement system more or less than he would have been entitled

    to receive had the records been correct, then, on the discovery of any such error, the

    retirement board shall correct such error, and, as far as practicable, shall adjust the

    payments in such a manner that the actuarial equivalent of the benefit to which he was

    correctly entitled shall be paid.

     ? 11. Section 111 of the retirement and social security law is amended to read as

    follows:

     ? 111. Protection against fraud. a. Any person who shall:

     1. Knowingly make any false statement, or

     2. Falsify or permit to be falsified any record of the retirement system, in any

    attempt to defraud such system as the result of such act shall be guilty of a

    misdemeanor.

     b. Any violation of subdivision a of this section that results in a member or

    beneficiary of the retirement system receiving a benefit or

     CHAP. 640 8

payment in excess of one thousand dollars more than he or she would have been

    entitled to shall be a class E felony. Any violation of subdivision a of this section

    that results in a member or beneficiary of the retirement system receiving a

    benefit or payment in excess of three thousand dollars more than he or she would have been entitled to shall be a class D felony.

     c. In the event that any change or error in any record of the retirement system

    causes a member or beneficiary of such system to receive more or less than he would

    have been entitled to receive had such record been correct, the comptroller, upon the

    discovery of any such change or error, shall correct such record. As far as practicable,

    the comptroller shall adjust payments in such a manner that the actuarial equivalent of

    any benefit rightly due shall be paid.

     ? 12. Section 411 of the retirement and social security law, as added by chapter

    1000 of the laws of 1966, is amended to read as follows:

     ? 411. Protection against fraud. a. Any person who shall:

     1. Knowingly make any false statement, or

     2. Falsify or permit to be falsified any record of the [policemen's and firemen's]

    New York state and local police and fire retirement system, in any attempt to

    defraud such system as the result of such act shall be guilty of a misdemeanor.

     b. Any violation of subdivision a of this section that results in a member or beneficiary of the retirement system receiving a benefit or payment in excess of one thousand dollars more than he or she would have been entitled to shall be a class E felony. Any violation of subdivision a of this section that results in a member or beneficiary of the retirement system receiving a benefit or payment in

    excess of three thousand dollars more than he or she would have been entitled

    to shall be a class D felony.

     c. In the event that any change or error in any record of the [policemen's and firemen's] New York state and local police and fire retirement system causes a member or beneficiary of such system to receive more or less than he would have been

    entitled to receive had such record been correct, the comptroller, upon the

    discovery of any such change or error, shall correct such record. As far as practicable,

    the comptroller shall adjust payments in such a manner that the actuarial equivalent of

    any benefit rightly due shall be paid.

     ? 13. This act shall take effect immediately, provided that sections one through

    seven of this act shall take effect on the ninetieth day after it shall have become a

    law; and provided further that section eight of this act shall not apply to individuals to

    whom waivers were granted prior to the effective date of this act.

     The Legislature of the STATE OF NEW YORK ss:

     Pursuant to the authority vested in us by section 70-b of the Public Officers Law, we

    hereby jointly certify that this slip copy of this session law was printed under our

    direction and, in accordance with such section, is entitled to be read into evidence.

     DEAN G. SKELOS SHELDON SILVER

     Temporary President of the Senate Speaker of the Assembly

    APPROVAL MEMORANDUM - No. 46 Chapter 640

    MEMORANDUM filed with Senate Bill Number 8699, entitled:

     "AN ACT to amend the education law and the retirement and social security law, in relation to professional services providers"

     APPROVED

     During the past year, an investigation by the New York State Attorney General revealed significant abuses in the New York State pension system. Such abuses included independent contractors participating in our employee pension system, and recently retired school district employees returning to their same positions and receiving both pension and salary. This bill was introduced in response to the findings of the Attorney General's investigation, and institutes a wide variety of important reforms to the public pension system. Among other provisions, it forbids attorneys from acting both as employees and independent contractors of school districts and boards of cooperative education; fosters greater disclosure through additional reporting requirements; creates additional civil and criminal enforcement remedies; and clarifies the requirements that must be met before a public employer may hire an individual who continues to receive a New York public pension. I am grateful to the Attorney General for having brought these issues to light, and to the sponsors for having so quickly advanced a legislative response. I am proud to be a part of this reform effort, and to sign this legislation into law.

     One section of the bill amends Retirement and Social Security Law (RSSL) Section 211, which allows state agencies and local governments to obtain permission (via a so-called "211 waiver") to employ an individual while that individual also receives a New York State or local government pension. This provision has played an important role in New York's work-force management, particularly in the law enforcement arena, although it is also crucial for filling other jobs, such as nurses and school bus drivers. Some parties have sought assurance that the bill would allow for continued use of 211 waivers when necessary. I believe the sponsors have been careful to ensure that it does, while at the same time addressing the abuses found in the investigation.

     The import of this portion of the legislation is clear and unmistakable: the public must be protected from improper "double-dipping," especially in these trying economic times, while employers must perform their governmental functions using the best available talent, giving careful thought and consideration to all factors in hiring. I trust that the Civil Service Commission and other officers, commissions and boards authorized to approve waivers will fulfill their obligations to see that the public is served by the implementation of this legislation and that the agencies of government continue to have the tools necessary to protect the public interest.

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