BILL NUMBER:  S7203

 TITLE OF BILL :
An act authorizing certain school districts to elect to withdraw
excess monies from the employee benefit accrued liability reserve
fund; and to repeal certain provisions of the general municipal law,
relating to the examination of accounts


 PURPOSE OR GENERAL IDEA OF BILL :
To allow those school districts that have reserve funds to access
them.

 SUMMARY OF SPECIFIC PROVISIONS :
Section one allows school districts with excess monies in an employee
benefit accrued liability reserve (EBALR) to transfer all or part of
these excess funds into a general fund of the school district. Section
two repeals Subdivision 3 of section 33 of the general municipal law
is repealed.

 JUSTIFICATION :
A recent audit by the State Comptroller found that many school
districts and BOCES had over-funded their reserve funds for Employee
Benefit and Accrued Liabilities, in some cases because the districts
erroneously believed that those reserves could be used to fund retiree
health insurance. In fact, ELBAR reserves may only be used to pay
              

employees for accrued leave time due to them when they leave district
employment.

During the testimony of the New York State School Boards Association
to the Joint Legislative Fiscal Committees on the 2010-2011 Executive
Budget, it was stated very clearly that access to these funds would be
a great asset and that they strongly support the proposal to allow
districts to withdraw funds in order to maintain educational
programming in the 2010-11 school year. Given the severity of this
fiscal crisis, making use of these funds to offset program cuts and
higher local taxes is of paramount importance to districts across the
state.

Comptroller DiNapoli has also expressed his support for allowing
school districts to use this excess money to benefit taxpayers, and
has called on the legislature to adopt such a change. This bill has
been written in conjunction with his office to provide that school
districts which have set aside excess ELBAR reserves will be able to
access their money without going through the New York State
Comptroller's office. Comptroller DiNapoli believes that since it is
their money, they should be able to access it. This legislation would
allow the School Districts of New York State with excess funds in
their EBALR accounts to use those funds to help support schools and
relieve the burden placed on the taxpayers of New York State.

 PRIOR LEGISLATIVE HISTORY :
New Bill.

 FISCAL IMPLICATIONS :
None.

 EFFECTIVE DATE :
This act shall take effect immediately.