§ 207-c. Employee benefit fund; division of military and naval
affairs. 1. Definitions. As used in this section, unless otherwise
expressly stated:

a. "Director" shall mean the director of employee relations.

b. "Employee" shall mean any person in the service of the state of New
York who is appointed to and serving in a position contained within the
collective negotiating unit designated as the division of military and
naval affairs unit established pursuant to article fourteen of the civil
service law who is otherwise eligible for health insurance coverage
pursuant to law and the rules and regulations of the department of civil
service, except that it shall not mean seasonal employees whose
employment is expected to last less than six months, employees in
temporary positions of less than six months duration, or employees
holding appointments otherwise expected to last less than six months.

2. Where and to the extent that, an agreement between the state and an
employee organization entered into pursuant to article fourteen of the
civil service law so provides on behalf of employees and upon audit and
warrant of the comptroller, the director shall provide for the payment
of moneys quarterly to such employee organization for the establishment
and maintenance of an employee benefit fund established by the employee
organization for the employees in the negotiating unit covered by the
controlling provision of such agreement providing for such employee
benefit fund, such amount to be determined consistent with the procedure
established in said agreement but, on the basis of the number of
employees as defined herein on the payroll during the payroll period the
last day of which ends no later than twenty-one calendar days before the
beginning of the quarter next following such day as determined by the
comptroller. The amount, which will be determined pursuant to this
section, for employees who are paid from first instance funds, or from
special or administrative funds, will be paid from the appropriations as
provided by law, in which case the comptroller will establish procedures
to ensure repayment from first instance general state charge
appropriations or from said special or administrative funds. The
director may enter into an agreement with an employee organization which
sets forth the specific terms and conditions for the establishment and
administration of an employee benefit fund as a condition for the
transmittal of moneys pursuant to this section.

3. Such employee organization shall periodically as specified by the
director, supply a description of the benefits purchased or provided by
the employee benefit fund, the utilization experience of the benefit
fund, the amount disbursed for or the cost of such benefits and such
other information as may be requested by the director.

4. The employee organization shall report to the comptroller, in the
form and manner as he may direct, the amount it expended for the
purchase of or providing for such benefits for any period specified by
the comptroller. The comptroller is hereby authorized to audit the books
of the employee organization with respect to any moneys transmitted to
it pursuant to this section.

5. Neither the state nor any officer or employee of the state
(including "employee" as defined herein and any other employee of the
state) shall be a party to any contract or agreement entered into by any
employee organization providing for benefits purchased in whole or in
part with moneys transmitted to such employee organization pursuant to
this section. No benefit provided pursuant to such contracts or
agreements shall be payable by the state and all such benefits shall be
paid by the responsible parties to such agreements or contracts pursuant
to the terms and conditions of such agreements or contracts. The
employee organization shall be a fiduciary with respect to an employee
benefit fund established pursuant to this section.

6. Nothing herein shall be deemed to diminish, impair or reduce any
benefit otherwise payable to any employee established or authorized by
law, rule or regulation by reason of such employee's lack of eligibility
to participate in any benefit program established by an employee
organization pursuant to this section.

7. In the event it is determined that the moneys transmitted to an
employee organization pursuant to this section is income for which
payroll deductions are required for income tax withholdings from the
salary or wages of employees pursuant to law, the comptroller shall
determine the amount of such withholdings required and deduct the amount
so required to be withheld from the salary or wages of the employees
concerned.

8. The employee organization shall indemnify the state for any claims
whatsoever paid by it arising from the establishment, administration or
discontinuation of any employee benefit provided pursuant to this
section, together with reasonable costs of litigation arising therefrom.

9. Insofar as the provisions of this section are inconsistent with the
provisions of any other act, general or special, the provisions of this
section shall be controlling.