S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
     S. 5179--A                                            A. 5824--A
 
                        2021-2022 Regular Sessions
 
                       S E N A T E - A S S E M B L Y
 
                             February 25, 2021
                                ___________
 
 IN  SENATE  --  Introduced  by  Sens.  PALUMBO, JORDAN -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Civil  Service  and  Pensions -- recommitted to the Committee on Civil
   Service and Pensions in accordance with  Senate  Rule  6,  sec.  8  --
   committee  discharged,  bill amended, ordered reprinted as amended and
   recommitted to said committee
 
 IN ASSEMBLY -- Introduced by M. of A. THIELE, BRABENEC, ASHBY,  DeSTEFA-
   NO, WALCZYK -- read once and referred to the Committee on Governmental
   Employees -- recommitted to the Committee on Governmental Employees in
   accordance  with Assembly Rule 3, sec. 2 -- committee discharged, bill
   amended, ordered reprinted as amended and recommitted to said  commit-
   tee
 
 AN  ACT  to amend the retirement and social security law, in relation to
   participation by free association libraries in the New York state  and
   local employees' retirement system
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. The retirement and social security law is amended by adding
 a new section 31-g to read as follows:
   § 31-G. PARTICIPATION BY FREE ASSOCIATION LIBRARIES.  A  FREE  ASSOCI-
 ATION  LIBRARY  AS  DEFINED  IN  SECTION  TWO HUNDRED FIFTY-THREE OF THE
 EDUCATION LAW AND WHICH MEETS THE CRITERIA SET FORTH  IN  THIS  SECTION,
 MAY  BY RESOLUTION ADOPTED AS PROVIDED IN SECTION SEVEN HUNDRED EIGHT OF
 THE NOT-FOR-PROFIT CORPORATION LAW BY ITS BOARD OF TRUSTEES AND  SUBJECT
 TO  THE APPROVAL OF THE COMPTROLLER, ELECT TO PARTICIPATE IN THE RETIRE-
 MENT SYSTEM. ACCEPTANCE OF ITS EMPLOYEES FOR MEMBERSHIP IN  THE  RETIRE-
 MENT SYSTEM SHALL BE MANDATORY WITH THE COMPTROLLER, WHO SHALL DETERMINE
 THE  AMOUNTS  OF CONTRIBUTION PAYABLE BY SUCH LIBRARY AND ITS EMPLOYEES,
 SHALL RESOLVE QUESTIONS OF CREDIT FOR PRIOR SERVICE, AND  SHALL  IN  ALL
 OTHER  RESPECTS  ASSURE THAT SUCH EMPLOYEES SHARE THE SAME RIGHTS, OBLI-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD05803-03-2
              

 S. 5179--A                          2                         A. 5824--A
 
 GATIONS AND BENEFITS AS OTHER MEMBERS OF THE RETIREMENT SYSTEM.  A  FREE
 ASSOCIATION  LIBRARY  SHALL  BE  ELIGIBLE  TO JOIN THE RETIREMENT SYSTEM
 UNDER THE FOLLOWING CONDITIONS:
   (A) SUCH LIBRARY SHALL BE CHARTERED BY THE STATE BOARD OF REGENTS;
   (B)  SUCH  LIBRARY  SHALL SERVE THE ENTIRE POPULATION OF ITS CHARTERED
 SERVICE AREA;
   (C) THE BOARD OF TRUSTEES OF SUCH LIBRARY  SHALL  BE  ELECTED  BY  THE
 VOTERS OF ITS CHARTERED SERVICE AREA;
   (D) SUCH LIBRARY'S BUDGET SHALL BE APPROVED BY THE VOTERS OF ITS CHAR-
 TERED SERVICE AREA;
   (E)  AT  LEAST FIFTY-ONE PERCENT OF SUCH LIBRARY'S BUDGET SHALL DERIVE
 FROM PUBLIC SOURCES; AND
   (F) SUCH LIBRARY SHALL FILE THE ANNUAL REPORT WITH THE COMPTROLLER  AS
 REQUIRED  OF PUBLIC LIBRARIES BY SECTION THIRTY OF THE GENERAL MUNICIPAL
 LAW.
   § 2. This act shall take effect immediately.
 FISCAL NOTE.-- Pursuant to Legislative Law, Section 50:
   This bill would permit any free association public library which meets
 certain specific criteria to elect participation in the New  York  State
 and Local Employees' Retirement System (NYSLERS).
   If  this  bill  is enacted during the 2022 legislative session, and an
 eligible corporation elects participation, the future annual cost  would
 depend  on  the  retirement  plan adopted and the billable salary of the
 electing corporation.
   As a percentage of payroll, we anticipate  that  the  annual  contrib-
 utions  of the affected corporation for the fiscal year ending March 31,
 2023, will be as follows:
 
      Tier           Rate
 
       1        8.5% to 17.3%
       2        7.9% to 15.8%
       3            12.9%
       4            12.9%
       5            11.0%
       6             8.1%
 
   In addition to the annual contributions discussed above, there will be
 a deficiency cost to the affected corporation which will be payable  for
 a  25-year  period. These costs will depend on the age, service, salary,
 tier status and plan of the affected employees.
   Internal Revenue Service (IRS) plan qualification  issues:  permitting
 participation  of  non-governmental employees in the NYSLERS could jeop-
 ardize  the  Retirement  System's  governmental  plan  status  and   its
 exemption from ERISA. This development could result in the loss of qual-
 ified  status,  which  would mean the loss of tax benefits.  This result
 would substantially impair the System's  value  to  our  more  than  one
 million participants.
   Prior to the enactment of this legislation, we recommend that a favor-
 able ruling be obtained from the IRS stating that these provisions would
 not  harm  the  qualification status of the System. It is estimated that
 the costs to obtain such a ruling would be $28,000 for the  services  of
 the IRS, and $800 per hour for legal consultants.
   Summary of relevant resources:
   Membership  data as of March 31, 2021 was used in measuring the impact
 of the proposed change, the same data used in the April 1, 2021 actuari-
 S. 5179--A                          3                         A. 5824--A
 
 al valuation.  Distributions and other statistics can be  found  in  the
 2021  Report  of the Actuary and the 2021 Comprehensive Annual Financial
 Report.
   The  actuarial  assumptions and methods used are described in the 2020
 and 2021 Annual Report to the Comptroller on Actuarial Assumptions,  and
 the  Codes,  Rules  and  Regulations of the State of New York: Audit and
 Control.
   The Market Assets and GASB Disclosures are found in the March 31, 2021
 New York State and Local  Retirement  System  Financial  Statements  and
 Supplementary Information.
   I am a member of the American Academy of Actuaries and meet the Quali-
 fication Standards to render the actuarial opinion contained herein.
   This  fiscal note does not constitute a legal opinion on the viability
 of the proposed change nor is it intended to serve as a  substitute  for
 the professional judgment of an attorney.
   This  estimate, dated March 24, 2022, and intended for use only during
 the 2022 Legislative Session, is Fiscal Note No. 2022-104,  prepared  by
 the Actuary for the New York State and Local Retirement System.