§ 99-aa. Retiree health benefit trust fund. 1. There is hereby
established in the joint custody of the commissioner of the department
of civil service and the state comptroller a special investment trust
fund to be known as the retiree health benefit trust fund, which shall
be classified as a fiduciary fund type.

2. For purposes of this section: (a) "commissioner" shall mean the
commissioner of the department of civil service;

(b) "state" shall mean the state of New York;

(c) "fund", or "trust", or "trust fund" shall mean the retiree health
benefit trust fund created by this section; and

(d) "retiree health benefits" shall mean benefits, except pensions or
other benefits funded through a public retirement system, provided or to
be provided by the state as compensation, whether pursuant to statute,
contract or other lawful authority, to its current or former officers or
employees, or their families or beneficiaries, after service to the
state has ended, including, but not limited to, health care benefits.

3. (a) Notwithstanding any provision of law to the contrary, the
retiree health benefit trust fund is established for the exclusive
benefit of retired state employees and their dependents.

(b) The sole purpose of the trust fund established pursuant to
subdivision one of this section shall be to fund the retiree health
benefits of retired state employees and their dependents.

4. (a) Payments into and from the trust fund established pursuant to
subdivision one of this section shall be made in accordance with this
section.

(b) Contributions to the trust, and any interest or other income or
earnings on contributions, shall be irrevocable before all liabilities
of the state government for retiree health benefits have been satisfied
and shall be solely dedicated to, and used solely for, providing retiree
health benefits and paying appropriate and reasonable expenses of
administering the trust. No assets, income, earnings or distributions of
the trust shall be subject to any claim of creditors of the state, or to
assignment or execution, attachment or any other claim enforcement
process initiated by or on behalf of such creditors. Except as otherwise
provided in subdivision eight of this section, the commissioner shall
not be responsible for the adequacy of the assets of the trust to meet
any other post-employment benefit. The trust may be terminated only when
all liabilities of the state for retiree health benefits have been
satisfied and there is no present or future obligation, contingent or
otherwise, of the state to provide such retiree health benefits. Upon
such termination, any remaining trust assets, after any proper expenses
of the trust have been paid, shall revert to the state.

(c) At the request of the director of the budget, the state
comptroller shall transfer monies from the general fund to the trust
fund up to and including an amount equivalent to one and fifty
one-hundredths of one per centum of the total actuarial accrued
liability included in the state of New York comprehensive annual
financial report.

(d) Any use of funds for retiree health benefits from such trust fund
shall not be subject to an appropriation and shall be transferred by the
state comptroller, at the request of the director of the budget, to the
extent funds are available in such trust fund, to the health insurance
fund for the sole and exclusive purpose of funding retiree health
benefits. The director of the budget shall notify both houses of the
legislature in writing thirty days prior to initiating transfers
pursuant to this authorization.

5. Investments. (a) The commissioner may establish a trust in joint
custody with the state comptroller for the purpose of accumulating
assets to fund the cost of providing retiree health benefits.

(b) The commissioner is hereby declared to be the trustee of the trust
established pursuant to subdivision one of this section, and the
commissioner shall delegate responsibility for managing the investments
of the trust fund established pursuant to subdivision one of this
section to the state comptroller. The state comptroller shall manage the
investments of the trust fund established pursuant to subdivision one of
this section in a careful and prudent manner consistent with the
guidelines and provisions of section ninety-eight this article.

(c) Any interest or other income or earnings resulting from the
investment of assets of the trust shall accrue to and become part of the
assets of the trust.

6. In accordance with paragraph (b) of subdivision five of this
section, the state comptroller shall develop, in consultation with the
state health insurance council, a written investment policy for
selecting investment options in a manner consistent with the investment
options prescribed in section ninety-eight of this article so that the
state comptroller may be able to invest fund monies in accordance with
such policy. Such policy shall include a statement of investment
objectives addressing, in the following order of priority, the ability
to timely meet disbursement requests without forced sale of assets,
safety of principal and attainment of market rates of return.

7. Neither the state nor the commissioner shall be liable for any loss
or expense suffered by the trust in the absence of bad faith, willful
misconduct or intentional wrongdoing. The commissioner shall be
considered to be acting as an officer of the state for purposes of
section seventeen of the public officers law, provided, however, that
the costs of any defense or indemnification of the commissioner arising
from the exercise of the functions of trustee shall be payable from the
assets of the trust.

8. Nothing contained in this section shall be interpreted or construed
to: (a) create any obligation in, impose any obligation on, or alter any
obligation of the state to provide retiree health benefits;

(b) limit or restrict the authority of the state to modify or
eliminate retiree health benefits;

(c) assure or deny retiree health benefits; or

(d) require the state to fund its liability for retiree health
benefits.