2005-2006 NEW YORK STATE EXECUTIVE BUDGET
EDUCATION, LABOR AND FAMILY ASSISTANCE
ARTICLE VII LEGISLATION
MEMORANDUM IN SUPPORT

CONTENTS

MEMORANDUM IN SUPPORT

A BUDGET BILL submitted by the Governor in Accordance with Article VII of the Constitution

AN ACT to amend the public authorities law, in relation to composition and responsibilities of the New York state higher education capital matching grant board in administering and awarding capital matching grants for higher education facilities (Part A); to amend the education law, in relation to creating the partnership to accelerate completion time (Part B); to amend the education law, in relation to the eligibility requirements for the tuition assistance program and the creation of a tuition assistance loan program (Part C); to amend the education law, in relation to the powers of the boards of trustees of the state university of New York and the city university of New York to establish tuition rates (Part D); to amend the education law, in relation to the powers of the boards of trustees of the state university of New York to establish and contract with not-for-profit corporations (Part E); to amend the executive law, in relation to the establishment of the office of educational accountability and efficiency and provide for the powers and functions of such office; and to amend the education law, in relation to providing the opportunity for a sound basic education; and to amend the public authorities law, in relation to additional bonds for an emergency school capital plan (Part F); to amend the education law, in relation to the calculation and payment of state aid to school districts and boards of cooperative educational services; to amend the general municipal law, in relation to the contracting of school district construction projects; to amend the public authorities law, in relation to entering into agreements with school districts; to amend chapter 169 of the laws of 1994 relating to certain provisions related to the 1994-95 state operations, aid to localities, capital projects and debt service budgets, in relation to certain expiration and repeal dates contained therein; to amend chapter 756 of the laws of 1992 relating to funding a program for workforce education conducted by the consortium for worker education in New York city in relation to reimbursement for certain programs; to amend chapter 82 of the laws of 1995, amending the education law and certain other laws relating to state aid to school districts and the appropriation of funds for the support of government, in relation to the effectiveness thereof; to amend chapter 472 of the laws of 1998, amending the education law relating to the lease of school buses by school districts, in relation to the effectiveness thereof; to amend chapter 405 of the laws of 1999 amending the real property tax law and other laws relating to improving the administration of the school tax relief (STAR) program, in relation to the effectiveness thereof; to amend chapter 57 of the laws of 2004 amending the education law and other laws relating to the calculation and payment of state aid to school districts and boards of cooperative educational services, in relation to the effectiveness thereof; to repeal certain provisions of the education law relating to letting of construction contracts; to repeal paragraph b of subdivision 1 of section 1734 and subdivisions 1 and 3 of section 1735 of the public authorities law relating to contracts of the New York city school construction authority; to repeal section 11 of chapter 795 of the laws of 1967, amending the education law, the public authorities law and the real property tax law, relating to authorizing boards of cooperative educational services to own and construct buildings, in relation to specifications for certain public work; and providing for the repeal of certain provisions upon expiration thereof (Part G); to amend the education law, in relation to school district budgets for certain school years (Part H); to amend the education law, in relation to making certain technical amendments pertaining to payment of state aid to libraries and library systems (Part I); to amend the education law, in relation to establishing a program of capital financing for public broadcasting stations; and providing for the repeal of such provisions upon expiration thereof (Part J); to amend the state finance law, in relation to establishing a tenured teacher hearing account; and to amend the education law, in relation to administration of disciplinary hearings of tenured teachers (Part K); to amend the labor law, in relation to transfer to certain programs for the vocational rehabilitation of individuals with disabilities from the education department to the department of labor, to amend the mental hygiene law, the social services law, the election law and the education law, in relation to making technical corrections thereto; to repeal articles 21 and 23-A and section 4210 of the education law relating to vocational and educational services to individuals with disabilities; to repeal subdivision 23 of section 305 of the education law relating to the powers of the commissioner of education; to amend the labor law, in relation to the transfer of the workers’ compensation board to the department of labor; to repeal article 8 of the workers’ compensation law; to amend the labor law, in relation to abolishing outdated boards and councils and creating the fair wages task force; to amend the general business law and the state finance law, in relation to abolishing references to outdated boards and councils; to amend the executive law, in relation to the salaries of certain state officers; and to repeal certain provisions of the labor law and subdivision (e) of section 4 of chapter 624 of the laws of 1981 relating to enacting the “Garment Industry Job Retention Act”, relating thereto (Part L); to amend the state finance law, in relation to the use of moneys in the cultural education account (Part M); to amend the arts and cultural affairs law, the state finance law, the parks, recreation and historic preservation law and the not-for-profit corporation law, in relation to establishing the New York institute for cultural education and to transfer certain programs located in the state education department to the New York institute for cultural education; and repealing certain provisions of the education law relating thereto (Part N); to amend the social services law, in relation to holding districts responsible for achieving a fifty percent work participation rate for families receiving public assistance (Part O); to amend the social services law, in relation to penalties imposed for noncompliance with public assistance work requirements (Part P); to amend the tax law, in relation to providing an enhanced earned income tax credit under the personal income tax to certain non-custodial parents; to amend the social services law, in relation to creating a pilot program for the unemployed or underemployed non-custodial parent; and to amend the family court act, in relation to empowering the court to require underemployed or unemployed custodial parents participation in work activities (Part Q); to amend the social services law, in relation to the transfer of the functions, powers, duties and obligations of the department of labor concerning employment programs for applicants for and recipients of public assistance from the New York state department of labor to the New York state office of temporary and disability assistance and to repeal subdivision 14 of section 21 of the labor law, relating thereto (Part R); to amend the social services law, in relation to holding districts responsible for achieving a fifty percent work participation rate for single adults receiving public assistance (Part S); to amend the social services law, in relation to reducing the earned income disregard percentage for public assistance recipients; and to repeal certain provisions of such law relating thereto (Part T); to amend the education law, in relation to establishing the American airlines flight 587 memorial scholarship program (Part U); to amend the labor law, in relation to worker protection and labor standards fees (Part V); and to amend the family court act, the county law, the executive law and the social services law, in relation to persons in need of supervision; and to repeal sections 734 and 735 of the family court act, relating to preliminary procedures for persons in need of supervision (Part W)

PURPOSE:

This bill contains provisions needed to implement the Education, Labor and Family Assistance portions of the 2005-06 Executive Budget.

SUMMARY OF PROVISIONS, EXISTING LAW, PRIOR LEGISLATIVE HISTORY AND STATEMENT IN SUPPORT:

Part A – Amend provisions for the Higher Education Capital Matching Grant Board.

This bill modifies the composition of the New York State Higher Education Capital Matching Grant Board and alters the allocation of funds provided for the Higher Education Facilities Capital Matching Grants program.

Effective immediately, this bill amends the Public Authorities Law to:

• Increase the number of members serving on the New York State Higher Education Capital Matching Grant Board (the Board) from three to seven and specifies that the Governor shall designate the chairman of the Board;
• Authorize the Board to award $150 million on a competitive basis to public and private colleges and $100 million to private colleges based on each college’s relative size (as measured by enrollment) and student financial need (as measured by Tuition Assistance Program spending);
• Require a three to one (non-State to State) match by all institutions for capital matching grants and awards made under the Higher Education Facilities Capital Matching Grants program.

The 2004-05 Executive Budget proposed a new $350 million Higher Education Facilities Capital Matching Grants program, for both public and private colleges, administered by a Higher Education Capital Investment Review Board. Under the Executive’s proposal, the entire $350 million was to be awarded through a competitive process that required a three to one match by institutions and restricted the amount that could be awarded to any one sector to $250 million. The Legislature substantially modified the Executive’s proposal by:

• Reducing the membership of the board from seven persons appointed by the Governor to three persons and requiring that the Board could only act by unanimous rather than majority vote;
• Distributing the $350 million program based on a formula that provided $175 million to the independent sector and $175 million to public colleges within the State University of New York (SUNY) and the City University of New York (CUNY); and
• Reducing the matching requirement from three to one for both public and private colleges to a three to one match for independent colleges, a two to one match for SUNY State Operated campuses and CUNY Senior colleges and a one to one match for SUNY and CUNY community colleges.

The $350 million appropriation for the Higher Education Capital Matching Grant program was subsequently vetoed by the Governor although the legislation enacted by the Legislature in regard to establishing the program was not.

This bill will supplement the capital programs of both private and public institutions, thereby encouraging fund-raising activities and providing access to capital for projects which might not otherwise be affordable.

Part B – Establish a new Partnership to Accelerate Completion Time (PACT) program.

To promote timely and successful college graduation, this bill creates the Partnership to Accelerate Completion Time (PACT) program.

Beginning in the 2005-06 academic year, this bill:

• Establishes PACT and ensures participation on the part of all public colleges and authorizes private colleges to participate on a voluntary basis;
• Provides that associate degree students who enroll in PACT must commit to complete their associate degree within two academic years and bachelor degree students must commit to complete their bachelor degree within four years, unless the baccalaureate program normally requires five years to complete;
• Requires participating institutions to provide all necessary courses and advisement for students to graduate within the defined timeframes, and provides that if the institution fails to provide the necessary courses, the institution would be responsible for paying the student’s tuition and course-related fees required to complete the degree;
• Authorizes start-up funding of $50 per first-time, full-time student to each State – operated campus and community college within the State University of New York (SUNY) and City University of New York (CUNY);
• Authorizes State awards to participating public/independent colleges of $250 per associate degree/$500 per bachelor degree conferred to a successful PACT graduate at such institution; and
• Directs the SUNY and CUNY Trustees to modify their university-wide campus allocation plan to recognize and reward campuses that perform well in graduating students in a timely fashion, after taking into consideration the differing student populations served at the various campuses.

This is a new bill.

Delayed completion of an associate or bachelor degree causes students to remain in college longer than necessary and produces increased costs for families, institutions and State taxpayers. This bill creates a program that will promote timely and successful college graduation.

Part C – Modify the Tuition Assistance Program (TAP) to provide incentives for timely graduation, create a Tuition Assistance Loan Program and reform certain TAP eligibility criteria.

To modify the award parameters for the Tuition Assistance Program (TAP) to provide incentives for graduation, create a Tuition Assistance Loan Program and reform the program to improve accountability.

Effective April 1, 2005, this bill restructures the TAP program to:

• Provide TAP awards to first-time students in two components – a “base” award equivalent to one-half of the current TAP award and a “performance” award equivalent to the remaining one-half of the award;
• Reward students for successful completion of their degrees by providing the “performance” award upon graduation in an amount equal to their deferred TAP awards, plus any interest incurred by the recipient as a result of using student loans to finance their performance award;
• Create a TAP loan program whereby students who have exhausted all their federal loan eligibility will be able to borrow an amount up to the amount of their TAP performance award;
• Require students to be in full-time attendance at the time that institutions certify them as being eligible for TAP awards;
• Eliminate TAP eligibility for students in default on student loans regardless of the loan guarantor; and
• Strengthen academic criteria for first-time students in 2005-06 by raising the required minimum grade point average and credits earned during the first four semesters of study for continued TAP eligibility.

Awards made under the TAP program are currently authorized in Articles 13 and 14 of the Education Law under sections 601,604,661-665, 667, and 667-a. Existing law authorizes, for full-time undergraduate students, maximum awards of up to the lesser of tuition or $5,000 (for students receiving first time awards in 2000-01 or thereafter) and minimum awards of $500.

A similar proposal that deferred one-third of all students’ awards was advanced in the 2002-03, 2003-04 and 2004-05 Executive Budgets. A proposal for providing incentives for improving student graduation rates was advanced in the 1999-00 Executive Budget.

• Providing TAP to students in two components — a “base” award and a “performance” award — provides a financial incentive which rewards students for their successful academic progress. This change will also ensure that State taxpayer funds are invested wisely and productively for their intended purpose — enabling needy students to obtain college diplomas.
• Providing an incentive for successful graduation is needed since, at the present time, more than one-third of TAP recipients fail to complete their degree programs.
• Creating a TAP loan program will ensure that students who have exhausted all their
  federal loan eligibility will have the means of financing their deferred performance award.
• Including the payment of interest in the performance awards will ensure students
  who complete their degrees do not incur additional expenses because of the deferral of a portion of their TAP awards.
• Require students to be in full-time attendance at the time that institutions certify them as being eligible for a TAP award, rather than the current practice of certifying students as eligible for a TAP award if they were enrolled full-time earlier in the semester but had since dropped below full-time status, will ensure that taxpayers are not paying for the tuition liability incurred by students who do not meet current TAP eligibility criteria.
• Eliminating TAP eligibility for all students in default on federal student loans conforms the eligibility criteria for students in default on federal student loans whether they have a loan guaranteed by the Higher Education Services Corporation (HESC), another guarantor or if they have a Federal Direct Student Loan. Currently, only students in default on federal loans guaranteed by HESC lose eligibility for TAP awards.
• Strengthen academic criteria for continued TAP eligibility will require students to demonstrate a commitment to graduate on a timely basis by increasing the minimum grade point average and accelerating the rate at which students are expected to accumulate course credit requirements during the first four semesters of study.

Part D – Establish new tuition policy provisions at SUNY and CUNY.

This bill amends the Education Law to provide the Trustees of the State University of New York (SUNY) and the City University of New York (CUNY) with increased flexibility in establishing tuition rates.

This bill amends §355 (SUNY) and §6206 (CUNY) of the Education Law to provide the respective Boards of Trustees increased flexibility in establishing tuition rates. Specific provisions would:

• Authorize modest annual increases for first-year undergraduate resident students at SUNY by applying an annual inflation index adjustment (e.g., the Higher Education Price Index).
• Freeze tuition for resident undergraduate students beginning in the Fall 2005, for the duration of their degree program (i.e., up to four years for bachelor degree programs);
• Restrict the tuition rate guarantee to SUNY students who graduate on time; the guarantee would not be extended for students who do not graduate in a four-year period or its equivalent. Once the guarantee period lapsed, a student’s tuition would increase annually in accordance with the Higher Education Price Index (HEPI); no subsequent guarantee would be offered;
• Authorize the SUNY Trustees to adjust tuition beyond the cap driven by the HEPI for resident undergraduate students enrolled at SUNY’s doctoral campuses and at all campuses if State funding does not fully cover collective bargaining and other mandatory operating costs;
• Eliminate prohibitions against charging differential tuition at various SUNY and CUNY campuses;
• Authorize differential tuition rates for SUNY medical students who agree to practice in a public capacity upon graduation; and
• Allow the SUNY and CUNY Trustees to adopt tuition changes prior to enactment of the State budget.

The Education Law currently mandates that all students enrolled in programs leading to like degrees at SUNY’s State-operated institutions and CUNY’s senior colleges be charged a uniform rate of tuition, except for differential rates based on State residency. In addition, differential tuition may be charged at SUNY colleges of agriculture and technology for associate degree programs, provided such tuition rates do not exceed tuition charged for like programs at other SUNY institutions. Existing law further prohibits the Trustees from adopting changes to tuition rates prior to enactment of the annual State budget.

This is a new bill; however, similar legislation providing authorization to establish differential tuition rates for graduate and professional degree programs were advanced in 2000-01, 2001-02, 2002-03 and 2003-04.

Enactment of this bill would provide both Universities with the ability to generate revenues in a manner that is sensitive to the needs of the campuses and that provides greater fiscal stability for the Universities. In addition, the four-year tuition freeze for SUNY students is consistent with Executive initiatives that seek to encourage timely degree completion by students. Finally, authorizing the SUNY and CUNY Trustees to adopt tuition increases prior to enactment of the State budget provides further stability to the Universities in their ability to implement the annual tuition increases and manage their resources.

Part E – Authorize the SUNY Board of Trustees to transfer the operations of the SUNY hospitals to one or more private not-for-profit corporations.

This bill authorizes the State University Trustees to transfer the operations of the SUNY hospitals to one or more private not-for-profit corporations and directs the Trustees to develop a plan for such transfer.

Effective April 1, 2005, this bill:

• authorizes the State University Trustees to establish and/or contract with one or more not-for-profit corporations, pursuant to a plan approved by the Commissioner of Health, for the transfer of the operations of the three SUNY hospitals at Brooklyn, Stony Brook, and Syracuse;
• directs the State University Trustees to develop a plan for transfer of the operations of the SUNY hospitals to private not-for-profit corporations and to consider the following in developing such plan: continuity of employment of hospital staff, access to capital, revenue maximization, alternative governance structures, the teaching and research missions of the hospitals, and an implementation timetable; and
• directs the State University Trustees to submit such plan to the Governor and the Legislature on or before October 1, 2005.

Section 355 of the existing Education Law establishes the administrative and fiscal powers and duties of the State University Trustees.

Similar legislation was proposed in the 2003-04 Executive Budget.

Recent developments in the health care marketplace, including deregulation of hospital reimbursement rates and expansion of managed care have made the delivery of health care in New York State increasingly more competitive. Because of the various legal constraints imposed on them as State institutions, SUNY’s hospitals are currently unable to compete effectively in this environment. Transferring the operations of the SUNY hospitals to not-for-profit corporations will better position the SUNY hospitals to enter into networking relationships with other health care providers to develop high quality, cost-effective and integrated delivery systems. In addition, not-for-profit status will promote more effective long-term planning, expedite short-term decision-making and help ensure the future competitive and financial stability of the SUNY hospitals.

Part F – Initiate accountability and efficiency reforms for school districts and BOCES, including the creation of a new Office of Educational Accountability and Efficiency.

Section 1 of the bill sets forth legislative findings that establish legislative intent for ascertaining the cost of providing a sound basic education and for the adoption of reforms that ensure that every school has the resources necessary for providing the opportunity for a sound basic education, and measure and ensure that the reforms actually provide the opportunity for a sound basic education.

Section 2 of the bill adds a new Article 49-c to the Executive Law to establish a new Office of Educational Accountability and Efficiency which will have the following functions:

• Tracking and reporting on the educational performance of our public schools in providing all children a sound basic education;
• Reviewing and approving school improvement plans and providing assistance in the closure and/or reconfiguration of schools that fail to meet State educational standards;
• Undertaking evaluations of the financial condition of school districts with follow-up reviews of districts identified as being in fiscal distress or lacking proper financial controls and auditing or causing to have audited any identified school district;
• Promoting increased efficiency by serving as a catalyst for the creation of shared service arrangements among school districts, BOCES and other local government entities; and
• Coordinating teams of educators, auditors and efficiency experts to conduct top-to-bottom reviews of education spending across the State.

This section also provides for the appointment of an Executive Director by the Governor to head the OEAE and “whistle-blower protection” for any school employee who reports possible violations of Federal and/or State law to the office of educational accountability or appropriate law enforcement authorities.

In addition, this section requires that school districts provide public notification of significant audit findings.

Sections 3 through 5 of the bill amend sections 1608, 1716, 2022, of the Education Law, to establish new requirements for the school property tax report card.

Section 6 of the bill amends section 1709 of the education law to add a new subdivision 20-b that requires school districts to establish an internal audit function.

Section 7 of the bill amends section 2116-a of the Education Law to require school districts to change independent auditors every three years and to use a competitive process in selecting these auditors.

Section 8 adds a new section 2116-b to the education law to require school districts to establish an audit committee to oversee required annual audits.

Section 9 of the bill amends section 2576 of the Education Law to establish a maintenance of effort requirement for the Big 4 city school districts.

Section 10 of the bill adds a new Section 215-d to the Education Law to require the Board of Regents to present its annual report in a public meeting with the Governor and to require the Board of Regents to appoint an independent panel with representatives of the education community, higher education, the business community, and labor to review the current performance standards (testing requirements) and make recommendations as to whether the tests match the State learning standards.

Sections 11 through 15 of the bill amend sections 1604, 1709, 1903, 2503, 2554 of the Education Law to require school board members to receive annual training on the powers and duties of their office including training covering the basics of financial oversight, accountability and fiduciary responsibilities.

Sections 16 through 19 of the bill amend Sections 3012, 3014, 2509, and 2573 of the Education Law to replace tenure for school principals with three-to-five year contracts that are renewable based upon performance.

Section 20 of the bill amends section 3004 of the Education Law to provide for alternative certification for teachers and administrators and requires 175 hours of professional development for administrators.

Section 21 of the bill amends section 2502 of the Education law to provide for the Mayor of the city of Albany or his or her designee to serve as a non-voting member of the Albany board of education.

Sections 22 and 23 of the bill amend sections 2552 and 2553 of the Education Law to provide the mayors of Buffalo, Rochester, and Syracuse with the authority to appoint two voting members to their respective city school district board of education.

Section 24 of the bill amends section 305 of the Education Law to provide for the consolidation of a variety of reporting and planning requirements on school districts.

Sections 25 and 26 of the bill amend sections 3020 and 3020-a of the Education Law to expedite teacher disciplinary hearings and to create a new process for teachers charged with incompetence.

Sections 27 through 40 make a number of changes to Education Law to increase voter participation in local school district elections including the following:

• Set a single statewide day for budget revote;
• Require that bond resolutions for capital construction be put before the voters on the same day as the school budget except in cases of unforeseen emergencies;
• Extend school voting hours to the same as those used for general elections;
• Promote fair and impartial elections by ensuring that supervisors of voting have no vested interest in the elections; and
• Require boards of education and county boards of elections to work together to develop recommendations to improve the fairness and protect the integrity of the school district electoral process and also to expand the number and enhance the accessibility of polling places within a school district.

Section 41 of the bill amends section 2799-tt of Public Authorities law to increase the bonding authority available to New York City through the Transitional Finance Authority for purposes of addressing pressing school facilities needs.

Section 42 of the bill amends section 3601 of the Education Law to establish a five-year school aid reform plan, a sound basic education fund, and a local match for New York City as part of the sound basic education plan.

The Court of Appeals’ ruling in Campaign for Fiscal Equity v. State of New York provides the State with an historic opportunity to enact needed reforms in our educational system. This bill will accomplish that through specific reforms identified below:

Educational Accountability Reforms

• Requiring school districts to develop a 3-year Comprehensive SBE Plan, including a resource allocation plan to ensure that every school provides its students the opportunity for a sound basic education.
• Establishing a value-added accountability system to track individual student performance and annual progress, and assess how effectively schools utilize public funding.
• Requiring school districts to develop building-specific improvement plans for each poorly performing school, and imposing sanctions for poorly performing schools that fail to improve.
• Creating a new independent Office of Educational Accountability and Efficiency to monitor school performance, review and approve school improvement plans, provide enhanced financial oversight, and promote increased efficiency.
• Strengthening school leadership by allowing school districts to replace tenure for principals with renewable, performance-based 3-to-5 year contracts.
• Expediting teacher disciplinary hearings, and creating a new process for teachers charged with incompetence.
• Authorizing the Mayors of Buffalo, Rochester, Syracuse, and Albany to appoint members to their respective city boards of education.
• Reforming the school voting process to encourage expanded voter participation.

Additionally, this bill would ensure appropriate resources are available by:

• Creating a sound basic education fund, of which New York City schools would receive approximately 60 percent. When coupled with the matching requirement contained in this bill for New York City, as well as projected increases in regular school aid and Federal funds, New York City schools will receive approximately $4.7 billion in additional support over the next five years; and
• Extending the maintenance of effort that currently applies to the New York City Schools to the Big 4 City School districts.

Also, to assist New York City in addressing its pressing school facilities needs, this bill includes an increase of $2.8 billion in statutory bonding authorization that will be provided to New York City’s Transitional Finance Authority for school construction projects.

Part G – Provide reforms to the State’s education finance system.

This bill contains various provisions necessary for implementation of the education portion of the 2005-06 Executive Budget. This bill amends existing law to: advance reforms to the education finance system through the establishment of Flex Aid and Sound Basic Education (SBE) Aid; target building aid reimbursement more effectively; allow charter schools to access Dormitory Authority financing services; and refocus boards of cooperative educational services on the provision of cost-effective educational services.

Flex Aid and SBE Aid: This bill amends Education Law to establish Flex Aid through the consolidation of six existing aid programs and to distribute increased aid amounts through a Flex Aid formula. In addition, it also creates a new Sound Basic Education (SBE) Aid formula that will be used to allocate $325 million for the 2005-06 school year. Formula components of both Flex Aid and SBE Aid will reflect regional cost differences and concentrations of students living in poverty.

Consistent with the recommendations of the Zarb Commission and the Governor’s Five Year Sound Basic Education Plan, school finance reforms are necessary to ensure that the State’s existing school finance system is replaced with a system that is fair, sustainable and understandable. To achieve that goal, six aid categories are consolidated into a simplified Flex Aid category and both Flex Aid and SBE Aid incorporate measures that address regional cost differences and costs of educating concentrations of children living in poverty.

School Facilities/Building Aid: This bill amends Education Law to modify the basis for calculating allowable costs for building projects approved by the Commissioner of Education after February 1, 2005. It also encourages cost efficiency by providing school districts with an exemption from the Wicks law requirements that mandate the use of multiple contractors for school construction projects and providing school districts with access to a State clearinghouse for efficient and effective school construction designs. In addition, this bill creates a matching grant program to recognize certain legitimate costs that fall outside of the existing building aid cost allowances. Provisions of this bill would also streamline existing procurement processes to facilitate cost efficient school construction through the New York City School Construction Authority. In addition, the State Education Department (SED) would be authorized to perform advisory State reviews of New York City building plans to promote greater conformity between actual project costs and established State cost allowances. Finally, this bill would continue building aid payment reforms similar to those first enacted in 2003-04.

Section 3602(6) of the Education Law provides for the payment of building aid to school districts for capital costs of school facilities. Section 101 of the General Municipal Law, sections 407-a, 458, 482 of the Education Law pertain to the bidding of contracts for public construction projects. Section 408 of the Education Law authorizes the Commissioner of Education to review building plans prior to school district construction. In order to assist New York City to better address its facility needs. Sections 1734 and 1735 of the Public Authorities Law pertain to the requirements for bidding contracts for New York City school construction projects.

The creation of a simplified building aid formula that includes reasonable and realistic allowances for construction costs and student based needs will provide school districts with an appropriate level of funding to construct necessary facilities. Similarly, other changes will promote cost-efficient school construction and provide reimbursement of certain legitimate school construction costs that fall outside cost allowances.

Currently, the Wicks Law requires most school districts to issue multiple bids for school construction projects. Elimination of this mandate will save school districts and the State an average of more than 10 percent on the cost of building schools.

BOCES/Special Services Aid: This bill would limit the amount of aid paid in these two aid categories in the 2005-06 school year to the lesser of the amount generated by the current formula or the amount paid in the 2004-05 school year. Also, effective with expenditures made July 1, 2005 and reimbursable with aid paid in the 2006-07 school year, the purchase of administrative and general office services from Boards of Cooperative Educational Services (BOCES) will no longer be eligible for BOCES aid. In addition, those services eligible for BOCES aid will be compared to the State contract price for the same services and commodities to ensure cost efficiencies.

The existing BOCES formula currently supports 65 percent of local costs — an amount richer than other needs based formulas. School districts are currently provided an artificial incentive to use BOCES simply as a means to generate additional State aid — regardless of the actual cost effectiveness of these BOCES services. The changes proposed in this bill would ensure BOCES services are truly cost-effective.

Special Education: Effective February 1, 2005, the restriction on the creation or expansion of programs that serve only children with disabilities will be reinstated through June 30, 2009 and the use of independent evaluators for preschool children would be strengthened. The bill also contains provisions that would clarify that, consistent with federally-mandated limitations, school districts could seek private insurance information from parents of disabled students.

In addition, the bill conforms the payment of Private Excess Cost Aid for private special education programs to Public Excess Cost aid for public school programs. This will reduce the average reimbursement from 85 percent to 49 percent, thereby eliminating unintended fiscal incentives to place children in restrictive settings. Finally, it requires SED, consistent with the recent Federal Individuals with Disabilities Education Act (IDEA) reauthorization, to report to the Governor and the Legislature on any State requirements related to special education that exceed those required by Federal law.

The existing SED-administered program serving children under age three with hearing impairments will be transferred to the Department of Health, and coordinated with the Early Intervention program.

This bill amends sections 4204-a, 4357, 4402, 4405, 4408 and 4410 of the Education Law. Sections 4204-a and 4357 of the Education Law govern programs serving deaf children below the age of three. Sections 4402, 4405 and 4408 of the Education Law pertains to procedures for children with disabilities — including summer programs. Section 4410 of the Education Law governs the provision of preschool special education services to children.

Provisions of this bill related to preschool special education are intended to ensure that new preschool special education programs create settings that educate children in the most inclusive setting possible. This is consistent with existing State and Federal policy, which requires disabled children to be educated with their non-disabled peers whenever possible. Because there are instances when specialized classrooms which serve only disabled children are necessary, the State Education Department would continue to have the flexibility to approve new restrictive programs when there is a demonstrated need for such programs.

The provisions of this bill that place the deaf infant program under the oversight of the Department of Health are intended to ensure appropriate service delivery and administration of this program by coordinating it with the Early Intervention program — a program that serves disabled infants and toddlers until they are three years old.

Other Miscellaneous Provisions: Other provisions of this bill make various changes to Education Law, consistent with those in the proposed appropriation bill, to miscellaneous school aid and education programs. Additionally, other changes include:

• Authorizing charter schools to access the Dormitory Authority of the State of New York (DASNY) financing and construction management services for school construction.
• Clarifying that charter schools authorized by the Chancellor of the New York City schools do not count against the statutory limit on the creation of such schools — as is currently the case for conversion schools.
• Creating new Academic Achievement Awards to recognize educational performance and operational efficiency in schools.
• Creating a new Fund for Innovation to provide Big Five City school districts with additional resources to create public/private partnerships that integrate technology into the classroom.
• Establishing section 3609-f of Education Law to specify a payment schedule for Sound Basic Education Aid.

Part H – Protect taxpayers from escalating school taxes and maintain the value of their STAR savings by placing limits on school budget increases.

This bill would protect STAR taxpayer savings by placing limits on school budget increases.

Effective immediately for school years beginning with 2005-2006, this bill adds a new subdivision 6 to section 2022 of the Education Law to require that a school district’s total annual spending increase could not exceed 4 percent, or 120 percent of the increase in the Consumer Price Index for the prior year, whichever is less, without a two-thirds majority vote. Spending increases attributable to enrollment growth, voter-approved capital projects, court orders, and certain other purposes allowed for contingency budgets would be excluded from the increase limitations. When less than two-thirds of the voters approve the budget, the school district may present a proposition to override the cap on one additional occasion.

The requirements for limiting spending increases would not apply in the fiscally dependent school districts of the Big Five cities, which have their own constitutional tax limits and in which residents do not vote directly on school budgets.

Under sections 2022 and 2023 of the Education Law, school boards must adopt a contingency budget if voters fail to approve a school budget after the second submission. A school district’s contingency budget cannot result in a 120 percent increase in the Consumer Price Index over the prior year, or a 4 percent increase, whichever is less. Certain types of expenditures such as emergency expenditures and enrollment-driven cost increases are excluded from the contingency budget limit.

The 2001-2002, 2003-04 and 2004-05 Executive Budgets included a similar proposal to limit school district spending increases.

The Governor’s STAR program was enacted to provide homeowners with relief from the heavy and growing burdens of school taxes. STAR has successfully provided citizens throughout the State with dramatic reductions in their school tax bills. This bill will ensure that the benefits intended by STAR are not diminished by excessive increases in local school spending and taxes. By capping school budget increases without a two-thirds majority approval vote, this bill will ensure that the intended benefits of STAR are not diminished without careful consideration by voters.

Part I – Streamline the Library Aid program and make technical amendments.

This bill would make various technical amendments pertaining to the payment of State aid to libraries and library systems.

This bill amends various sections of the Education Law to increase the efficiency of the State’s Library Aid administration by:

• Replacing outdated language that is no longer relevant or necessary;
• Providing statutory payment schedules to avert the need for time-consuming contract procedures for certain categories of aid; and
• Simplifying reporting requirements for library systems and reducing the record-keeping workload for school library systems.

A similar bill (A.10808-A) to update and streamline the statutory provisions relating to Library Aid passed the Legislature in 2004. That bill was vetoed by the Governor (Veto #251) because it also mandated a statutory payment date that could negatively impact the State’s cash management flexibility. However, the Governor committed to advance an acceptable bill to achieve a comparable purpose.

Part J – Establish the Public Broadcasting Facilities Assistance Program.

This bill establishes the Public Broadcasting Facilities Assistance program to provide bonded matching grants for eligible capital improvement projects of public broadcasting stations.

This bill authorizes an appropriate State Authority to issue $15 million in bonds which will be used to provide matching grants to public television and radio stations for capital improvements, including projects related to the introduction of new technology and compliance with the FCC mandate for digital conversion. This bill also provides that:

• The grant recipients are required to obtain one-to-one matching funds from non-State sources.
• Funds will be allocated to public broadcasters in proportion to the State operating aid they received in 2004-05.
• Annual appropriations by the Legislature would provide for the retirement of the debt incurred under this legislation.

This is a new bill.

This bill would provide a much needed infusion of capital funds to modernize and enhance the facilities and equipment of public broadcasting stations, especially in light of the FCC mandate that all public television stations complete their conversion to digital technology by May 2006 at an estimated remaining cost of $70 million.

Part K – Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local school districts initiating such hearings.

This bill would align fiscal responsibility by authorizing the Commissioner of Education to establish a chargeback whereby individual school districts will be responsible for funding the costs of disciplinary hearings involving tenured teachers.

Section 3020-A of Education Law establishes procedures for the conduct of disciplinary hearings for tenured teachers and requires that the State Education Department (SED) coordinate the administration of such hearings and pay for associated costs. This bill authorizes SED to recover the actual cost of such hearings from the school districts, boards of cooperative educational services (BOCES) and county vocational education and extension boards (CVEEBs) that initiate such hearings. A Tenured Teacher Hearing Account is established within the miscellaneous special revenue fund for this purpose.

A bill to transfer the administration and funding of tenured teacher hearings to local educational entities (S.814/A.1604 of 1997) was not adopted by the Legislature. A 2004 bill (Part L S.6057-A/A.9557-A) which, as the current bill, would have preserved the State’s role in coordinating and overseeing the teacher hearings, while assigning responsibility for the costs to the local school district that initiates such hearings did not pass the Legislature.

By aligning the fiscal responsibility for hearing costs with the local district that initiates such hearing, this bill is likely to generate efficiencies including a reduction in the cost of hearing officers and a compression in the duration of hearings. Continued SED oversight ensures fairness and consistency in the administration of this program.

Part L – Transfer the State Education Department’s Vocational Rehabilitation portion of the VESID program to the Labor Department; transfer the administration of the Workers’ Compensation Board to the Labor Department; eliminate antiquated boards and councils, including the Hazard Abatement Board and the Capital Abatement Program; and add a Compliance Assistance component to the existing Office of Safety and Health Training and Education Program.

This bill transfers the vocational rehabilitation portion of the Vocational and Educational Services for Individuals with Disabilities (VESID) Program from the State Education Department (SED) to the Department of Labor (DOL); merges the Workers’ Compensation Board (WCB) with DOL to improve coordination and enhance placement of injured workers back into employment; abolishes DOL boards and councils; creates new units and programs; and makes certain changes in DOL’s structure.

Sections one through nineteen of the bill repeal a portion of the Vocational Rehabilitation Program as well as Service Centers for Independent Living within SED and establish them within DOL, and provide for the transfer of all attendant responsibilities, records and employees as appropriate, from SED to DOL.

Since 1995, the Executive has maintained a commitment to consolidate and improve State service delivery in order to more efficiently utilize scarce public resources. The consolidation of vocational rehabilitation and related services for disabled persons within DOL will increase the overall effectiveness of these programs through increased coordination with existing DOL employment services. It will also provide VESID programs with greater access to DOL expertise in developing and operating a wide array of employment programs.

Sections twenty through twenty-nine repeal the existing Article 8 of the Workers’ Compensation Law that specifies the Board’s composition and statutory framework and transfers administration of WCB and all existing functions, powers and duties to DOL. These sections also provide for the orderly transfer of all current WCB employees to DOL, authorize the merger of administrative functions and claimant services, and continue the WCB’s autonomy in making case determinations without Labor Commissioner input or control.

The merger of WCB into DOL will ultimately provide for administrative efficiencies as well as increasing the overall effectiveness of transitioning individuals from receipt of Workers’ Compensation benefits to work. Additionally, a total of 32 states, including New Jersey, Pennsylvania and Vermont, currently have a Workers’ Compensation program housed within their state Department of Labor.

Sections thirty through fifty provide for the elimination of the following Councils, Boards or Committees: State Unemployment Insurance Advisory Council, Asbestos Advisory Board, Hazard Abatement Board, Public Work Advisory Board, Minimum Wage Standards for Farm Workers Advisory Council, and the Laser Operating Examination Board. These sections also provide for the creation of the Worker Protection License, Certificate Permit Processing and Collections Unit; and the Compliance Assistance and Training and Education Program, as well as references thereto, which would replace the current Hazard Abatement Board, and upgrade DOL to an “A” category agency.

The abolition of outdated or dormant DOL boards and councils, and the creation of new units and programs is necessary to increase worker protection. These eliminations should have minimal programmatic and/or policy impacts since many of said boards and councils have not met since the early 1990’s. Additionally, the board and council members are non-salaried positions which, although entitled to reimbursement for travel expenses when required to meet, do so with such infrequency that the cost is minimal. The bill also amends the Executive Law by upgrading DOL to an “A” category agency to more accurately reflect the agency’s increased powers, duties and staffing.

Part M – Provide for the support of the Summer School of the Arts, NYS Theatre Institute and the Performing Arts Center Corporation from funds of the Cultural Education revenue account.

This bill amends the State Finance Law to authorize the use of special revenue funds in the Cultural Education Account to support certain cultural education programs.

This bill authorizes the use of special revenue funds in the Cultural Education Account (which is supported by a $15 surcharge on filing and indexing certain records) to meet the expenses of the following programs: New York State Summer School of the Arts in the State Education Department, the New York State Theatre Institute (NYSTI), and the Nelson A. Rockefeller Performing Arts Center Corporation (PACC). The bill also makes conforming changes to the dedicated fund for the Summer School of the Arts.

This is a new bill.

The Cultural Education Account was established as a dedicated source to support and promote cultural education activities in the State. Existing law authorizes the use of funds in this Account to support the operations of the State Museum, State Library and the State Archives. This bill would expand the list of programs funded from this Account to include the Summer School of the Arts, NYSTI and PACC – three important State cultural education programs.

Part N – Establish a New York Institute for Cultural Education (NYICE) that would be responsible for the administration of the State Museum, the State Library, the State Archives and other cultural education programs currently administered by the State Education Department.

This bill establishes a new public benefit corporation — the New York Institute for Cultural Education (NYICE) — that will assume responsibility for the cultural education programs that are currently administered by the State Education Department (SED).

This bill creates a new public benefit corporation — NYICE — to administer programs for the preservation, development and promotion of New York’s cultural resources, including the State Museum, the State Library and the State Archives. It provides for:

• Selection of 15 members to serve renewable five-year terms on the Board of NYICE as follows: eight members appointed by the Governor, two each by the Senate and the Assembly majorities, one each by the Senate and Assembly minorities, and one by the Board of Regents;
• Reassignment of responsibility from SED to NYICE for the administration of State aid programs for public libraries and public broadcasting stations, and grants to local governments and nonprofit organizations for preservation of records and documents;
• Transfer of responsibility from SED to NYICE for designated programs relating to cultural resources and associated staff, facilities and funding by October, 2005;
• Transfer of current SED employees to NYICE in accordance with Civil Service Law;
• Continuation of SED’s responsibility for chartering museums, libraries and charter schools, and licensing of public television and radio stations; and
• Amendments to the Arts and Cultural Affairs Law, State Finance Law, Parks, Recreation and Historic Preservation Law, and the Not-for-Profit Corporations Law to reflect the creation of NYICE and the transfer of functions from SED to NYICE.

The Education Law assigns to SED the responsibility to administer the State Museum

(§§ 232, 233-a, 234 –235-b), the State Library (§§ 232 and 245 – 252), Library Aid (§§ 271-285), Public Broadcasting Aid (§ 236) and grants for historic documents and records (§ 140).

The Arts and Cultural Affairs Law assigns SED the responsibility to administer the State Archives (§ 57.05) and the Local Government Records Management program (§§ 57.07-57.11).

The 2002-03, 2003-04 and 2004-05 Executive Budgets included a similar Article VII proposal to transfer the administration and staffing for the State’s cultural education programs to a public benefit corporation — NYICE. The Legislature did not pass the proposed legislation that would have authorized the creation of NYICE.

Proposals to establish a separate agency for the State’s cultural resources (the Office of Cultural Resources), and effect the transfer of various cultural education programs from SED to the new agency were introduced as Article VII bills accompanying the Executive Budgets in 2000-01 (Part C of S.6291/A.9291) and 2001-02 (Part B of S.1145/A.1997). They were not passed by the Legislature.

This bill would increase the prominence and visibility of the State’s cultural institutions by establishing NYICE as a separate public benefit corporation with the sole purpose of developing and promoting cultural resources. The new public benefit corporation would:

• Forge partnerships with Federal and local governments, nonprofit organizations and the private sector to support cultural institutions and programs across the State;
• Transform the State Museum into a more vibrant, attractive and high-tech resource to showcase New York’s cultural heritage; and
• Increase opportunities for the State Library and State Archives to emerge as world-class information centers.

Part O – Establish fiscal penalties for social service districts that do not engage a minimum number of their Family Assistance population in work-related activities.

This bill creates an incentive for local social services districts to increase the work participation rate of those families who have been on public assistance for less than five years by applying a fiscal penalty to those districts that fail to engage at least 50 percent of such individuals in work-related activities.

Currently, although social services districts are required to meet a 50 percent work participation rate for their public assistance families, a fiscal penalty would only be imposed on these districts if the State did not meet its overall Federal work participation rate requirement.

This bill imposes a fiscal penalty upon districts if they individually miss the 50 percent work participation requirement, even if the State’s overall work participation rates meet Federal work requirements. As with the statutory penalty that currently exists for the Safety Net population, districts that fail to meet this work requirement will be subject to a five percent reduction in State funding reimbursement of administrative costs associated with the public assistance, medical assistance, food stamp and employment programs.

Federal welfare reform mandates a 50 percent work participation rate for all TANF families (i.e., those families who have been on public assistance less than five years). The Federal government also allows states to apply a credit to this work participation rate based on a state’s percentage caseload reduction. However, with the pending reauthorization of the Federal welfare program, this credit may no longer be applicable. In addition, both houses of Congress have submitted bills that will increase the work participation rate requirement to 70 percent (New York State’s current work participation rate is only 42 percent). By directly linking work rates with reimbursement for public assistance costs, this bill will provide districts with an added incentive to fully examine all options for engaging public assistance recipients in work activities.

Part P – Authorize withholding of the entire welfare grant if the head of the household does not fulfill his or her employment obligation.

This bill encourages public assistance recipients to comply with work requirements, thereby improving their employment outcomes and State work participation rates by withholding the entire welfare grant of a household where the head of the household does not comply with employment requirements.

Section 342 of the Social Services Law currently establishes authority for pro-rata durational sanctions for applicants and recipients of public assistance who fail to comply (without good cause) with work requirements. As a result, if the head of a four-person household does not comply with work requirements, the household still receives three-quarters of the amount of the welfare grant.

This bill will:

• Expand conciliation notices to include provisions that remind noncompliant individuals of their ability to present reasons for their noncompliance at scheduled conciliation conferences. This notice will also remind such individuals that failure to comply may jeopardize their benefits and child care subsidies;
• Require social services districts to make a second attempt to contact those households with dependent children who fail to respond to the first conciliation notice; such districts will also be required to notify district child welfare staff of the potential loss of benefits to the household;
• Withhold the full monthly welfare grant in the first instance the head of the household fails to comply with work requirements for two consecutive months. Prior to the two-month deadline, the household’s benefits will be reduced pro rata (i.e., the portion of the benefit belonging to the non-compliant member will be withheld);
• Apply the full family sanction to those households that fail to comply with work requirements immediately upon the second and subsequent instances of noncompliance; such households will receive a pro rata reduction upon compliance for the duration of the sanction period (three months for the second instance of noncompliance and six months for subsequent instances).

Implementation of a full family sanction policy will remove the current disincentive to work that allows recipients to receive a reduced benefit regardless of the duration of their noncompliance. Since this proposal also permits case closures for multiple instances of noncompliance, it will cease payment to those currently sanctioned families that may have alternate sources of income and use the reduced benefit as supplemental income.

As a complement to the State proposal to penalize those districts that fail to meet a fifty percent work participation rate, the full family sanction will help localities protect their resources by appropriately strengthening their ability to make work rates. In addition, encouraging individuals to participate in work programs will increase the likelihood of the family becoming self-sufficient.

This proposal will also help the State meet Federal work participation rate requirements which are expected to be increased from the current 50 percent to 70 percent within a five-year time period. Currently, both houses of Congress have proposed welfare reauthorization bills with these increased rate requirements.

Finally, the full family sanction proposal will protect the children of these sanctioned families from undue risk by requiring social services officials to notify child welfare services workers when a household is in danger of losing the public assistance benefit.

This proposal is similar to an Article VII provision introduced in 2004 (Part B of S-6057A/A-9557-A) that was not enacted.

Part Q – Create a “Strengthening Families through Stronger Fathers” initiative.

This bill addresses the need to assist low-income non-custodial parents to become more economically stable and to play a more contributory role in the economic and social well-being of their children.

The bill provides incentives for non-custodial parents to be employed and to become involved in the lives of their children and, thereby, strengthen the family unit.

The bill amends :

• Tax Law, section 606 by adding subsection (d-1) which establishes a new enhanced State Earned Income Tax Credit (EITC) for certain non-custodial parents;
• Social Services Law, section 111-c by adding a new subdivision 4 which suspends enforcement of child support arrears, when satisfactory proof is submitted that the parents are currently married and residing together with the children subject to the child support order;
• Family Court Act, section 440 by adding subdivision 7 enhancing the court’s power to require child support obligors who are unemployed or underemployed to participate in local social service district employment programs; and
• Social Services Law by adding a new section 335-c that provides for pilot programs in up to five local social services districts to provide intensive employment services as well as parenting education.

Studies indicate that despite the successes of welfare reform, one problem area that still exists is the unemployed/underemployed non-custodial parent, particularly young males. The lack of financial and other parental support contributes to the difficult challenges that many custodial parents and their children face.

This Strengthening Families through Stronger Fathers proposal will provide a new State EITC as a financial incentive. The credit will be structured to provide up to 400% of the Federal maximum EITC ($390) for qualified, non-custodial parents between the ages of 18 and 30, who have an order of child support in place, and who have paid in the taxable year, at least the amount of their current child support due during the taxable year. While the amount of the benefit will vary, the maximum combined federal and State EITC could be as high as $1,950. This tax benefit will encourage non-custodial parents to work and continue to support their children.

The bill also provides the court with statutory authority to order unemployed and under-employed non-custodial parents into employment programs, where available. In addition, there will be a new demonstration project that will provide intensive employment services and supports for non-custodial parents in up to five counties.

Part R – Transfer Department of Labor welfare employment programs to the Office of Temporary and Disability Assistance.

To improve and enhance the administration of employment programs for public assistance recipients, this bill will transfer the staff, responsibilities and resources currently assigned to the Department of Labor (DOL) for this purpose to the Office of Temporary Disability Assistance (OTDA).

Currently State law provides:

• all powers and duties regarding employment programs funded by the Temporary Assistance for Needy Families (TANF) reside in DOL;
• the Commissioner of Labor is charged with oversight of local social service district efforts to administer employment programs for public assistance recipients;
• DOL is responsible for reporting on and the monitoring of, various employment measures and statistics required by the Federal government; and
• DOL is assigned some of the staff originally deployed in the Department of Social Services prior to the 1997 Welfare Reform legislation.

Effective April 1, 2005 this bill will:

• transfer responsibility for the operation and administration of work and employment programs for public assistance recipients from DOL to OTDA;
• provide for the transfer and transition of all duties, powers, contracts and appropriations;
• provide for the orderly transfer of employees pursuant to Section 70 of the Civil Service Law; and
• repeal Labor Law provisions that are no longer required.

OTDA’s core mission is to promote greater self-sufficiency of the State’s residents through the efficient delivery of temporary and transitional assistance. Many recipients who needed only basic employment services are no longer on public assistance. Families and individuals remaining on public assistance are more often the hard-to-serve with multiple barriers to self-sufficiency. Incorporating welfare services in one agency is more conducive to providing the comprehensive services needed to transition the hardest-to-serve into work. To improve coordination with local social service districts OTDA will review, restructure and realign existing employment programs to insure maximum integration with local government efforts to improve placement into work.

Part S – Reduce the Safety Net work participation rate for singles from 90% to 50% and enforce penalties.

This bill creates an incentive for local social services districts to increase the work participation rate of single adults and childless couples on public assistance by applying a fiscal penalty to those districts that fail to engage at least 50 percent of such individuals in work-related activities.

Under current State law, social services districts that fail to engage at least 90 percent of their nonexempt Safety Net single adult/childless couples in eligible work-related activities may be subject to a maximum five percent reduction in their State reimbursement for the administrative costs associated with the welfare program.

This bill reduces the Safety Net work participation rate requirement from 90 percent to 50 percent; however, this rate is applied against a district’s entire single adult and childless couple caseload – including those who are categorized as exempt.

As of July 2004, over 60 percent of the State’s single adults and childless couples were exempted from work-related activities and this population has been increasing in recent years. Research shows that low-income adults with disabilities are less likely to be employed and more likely to receive government support than low-income adults without limitations. Yet, despite this lifetime benefit of support, these adults report more financial difficulties than those low-income individuals without disabilities. By disregarding the exempt population when determining work rates, this bill would provide districts with the incentive to reexamine their Safety Net population to both better identify those recipients with the capacity to work and to provide the support services that will increase the likelihood of these individuals obtaining employment and attaining self-sufficiency.

This is a new proposal.

Part T – Realign the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare.

To reward work but discourage long-term reliance on welfare and lessen public assistance costs by reducing the amount of a family’s earned income that may be ignored during the determination of welfare benefit eligibility when such family has been on assistance for more than five years. Those families that have been on assistance for less than five years will have the amount of income the State will ignore increased to 50 percent from the current 43 percent.

Section 131-a of the Social Services Law requires the first $90 of a family’s earned income to be disregarded for the purpose of determining welfare benefit eligibility. The remainder of the family’s earned income is disregarded at a percentage that is recalculated each June to reflect changes in poverty and welfare benefit levels. Currently, the applicable percentage on the “remaining income” is 43 percent of a family’s earnings.

This bill retains the $90 monthly disregard, but:

• Establishes the earned income disregard (EID) applicable percentage at 50 percent for families on welfare less than five years; and
• Reduces the EID percentage to 25 percent for families who have been on welfare for more than five years.

By adjusting the EID applicable percentage up from 43 percent to 50 percent, this proposal increases the benefits of low-income working families who have been on assistance for less than five years. For instance, the average working family on public assistance currently earns approximately $8,000 per year. Of this amount, $1,080 is ignored during eligibility determination as part of the “first $90” disregard and an additional $2,976 is ignored as part of the “43 percent of remaining income” disregard - for a total income disregard of $4,056. With this proposal, this same family (if on assistance for less than five years) would have a total disregard of $4,540--$1,080 as part of the “first $90” disregard and $3,460 as part of the revised “50 percent of remaining income” disregard. With less of their earned income being counted, this family would be able to qualify for more public assistance.

This proposal also decreases the benefits of low-income working families who have been on assistance for more than five years by adjusting their EID applicable percentage down from 43 percent to 25 percent. For instance, a family on assistance for more than five years, earning approximately $8,000 per year, would have their total disregard reduced from $4,055 to $2,810 ($1,080 as part of the “first $90” disregard and $1,730 as part of the revised “25 percent of remaining income” disregard). Therefore, this proposal would remove a disincentive that may be functioning as a deterrent to families moving from welfare to self-sufficiency. By reducing the EID based on length of stay on public assistance, this bill underscores the important message that welfare provides only temporary assistance and recipients are to move to self-sufficiency as soon as possible.

This proposal is similar to an Article VII provision Part D of S/ 6057-A/ 9557-A introduced in 2004 that was not enacted.

Part U – Establish a new scholarship program for families of victims of the American Airlines Flight 587 crash.

This bill establishes the American Airlines Flight 587 Memorial Scholarship program for the children, spouses and financial dependents of those who died as a result of the November 12, 2001 crash of American Airlines Flight 587 in Rockaway, Queens.

Effective immediately and retroactive to the 2001-02 academic year, this bill:

• establishes the American Airlines Flight 587 Memorial Scholarship program for the children, spouses and financial dependents of victims of the November 12, 2001 crash of American Airlines Flight 587 in Rockaway, Queens; and
• provides eligible recipients with annual scholarships to fund the cost of attendance at an institution of the State University or City University of New York or an equivalent amount for attendance at any independent college located in New York State.

This is a new bill.

These scholarships guarantee that the families impacted by this tragic event will have sufficient funds to pay for college.

Part V – Conform the asbestos handling license renewal fee with the initial application fees that were increased in 2004-05.

This bill increases the asbestos handling license renewal fee from $300-$500 and will generate $185,000 in additional revenue needed to maintain Department of Labor worker protection and labor standards programs at current levels. This fee increase was intended to be included with the various Department of Labor SFY 2004-05 enacted fee increases but was inadvertently omitted.

Section 1 amends subdivision three of section 903 of the Labor Law to increase the asbestos handling license renewal fee from $300 to $500 which is consistent with current asbestos license application fees set forth in section 903 of Labor Law.

Section 2 amends subdivision five of section 903 of the Labor Law to revise Asbestos Handling Certificate Categories by adding a new Project Monitor category and renaming various other categories consistent with proposed regulation changes to 12 NYCRR Part 56-3.1(e) currently under review at the Governor’s Office of Regulatory Reform.

This renewal fee increase was inadvertently omitted when fees were increased in SFY 2004-05 based on a Department review of the actual costs of program administration, on-site inspections and issuance of certificates and licenses.

This fee has not been increased since 1990.

Part W – Reduce placements of Persons-In-Need-of-Supervision (PINS) in detention facilities and make services available to PINS in their communities.

This bill discourages the placement of persons-in-need of supervision (PINS) into detention facilities by requiring local governments and the courts to exhaust community- based preventive service alternatives before filing PINS petitions and making detention placements.

Major provisions of this bill would:

• Divert youth from Family Court PINS adjudications by requiring all counties and New York City to offer preventive services, including crisis intervention and respite, to divert youth at risk of being adjudicated as PINS by a court;
• Require all counties and New York City to designate the local social services district or probation department as the lead agency for efforts to divert youth and their families away from the PINS petition process and into alternative community-based services;
• Require police or peace officers who apprehend at-risk youth to bring them before the local social services or probation department, to a crisis intervention program, or release them to their parents with a promise to appear before the local social services or probation department as directed, or bring them before a family court only if these other options cannot be exercised;
• Increase the maximum length-of-stay for youth in approved Runaway and Homeless Youth Act programs, and authorize such programs to provide crisis intervention or respite services for youth who are not runaways or homeless;
• Prohibit parents/legally responsible adult(s) who fail to participate in reasonable preventive services offered to a youth and his or her family from filing a PINS petition;
• Require the courts to determine there is no substantial likelihood youth will benefit from preventive services, and that alternatives to detention have been exhausted, prior to making detention placements;
• Reduce from 30 days to 15 days the time that PINS placed with local commissioners of social service may remain in detention after placement; and
• Require documentation to the Office of Children and Family Services that youth remaining in detention need specialized treatment or placement and that efforts have been made to locate an alternative placement prior to extending the detention placement an additional 15 days.

The Executive Law, Family Court Act, Social Service Law and County Law govern the filing of PINS petitions and court action related to PINS placements in detention facilities. Current law does not require all local governments to offer preventive services, or the courts to exhaust alternative community-based program options prior to placing PINS in detention.

This bill seeks to provide youth at risk of being adjudicated as PINS with comprehensive services in the least restrictive setting. Detention facilities provide short-term care of youth with pending court cases and offer limited educational or other programs. PINS and their families often require more comprehensive services that are more effectively provided through community-based resources. By requiring local governments and the courts to exhaust community-based service options before making detention placements, PINS will be diverted away from detention facilities and into local services that address specific needs. To help ensure sufficient resources for community-based services, the Executive Budget proposes to provide $5.2 million to support such services, including the re-investment of $1 million of projected State savings from this bill. Counties and New York City have the option to re-invest estimated local savings of $3 million from this bill and other resources into community-based services.

BUDGET IMPLICATIONS:

Part A – Amend provisions for the Higher Education Capital Matching Grant Board.

This program would leverage over $750 million in external funds to match the State’s $250 million investment providing for a combined capital program of $1 billion. The State’s share of the program will be financed through the issuance of bonds.

Part B – Establish a new Partnership to Accelerate Completion Time (PACT) program.

Total start up funding for PACT at SUNY and CUNY campuses in 2005-06 is estimated at $4.8 million on an academic year basis. The State awards to participating public/independent colleges of $250 per associate degree/$500 per bachelor degree conferred to successful PACT graduates is estimated to have a full annual cost of $7.0 million in 2009-10.

Part C – Modify the Tuition Assistance Program (TAP) to provide incentives for timely graduation, create a Tuition Assistance Loan Program and reform certain TAP eligibility criteria.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget since the amount appropriated for TAP reflects the enactment of this legislation.

Part D – Establish new tuition policy provisions at SUNY and CUNY.

This bill would provide SUNY and CUNY the statutory flexibility to adjust their tuition rates and provide campuses with a means to generate additional revenues that can be used to strengthen programs.

Part E – Authorize the SUNY Board of Trustees to transfer the operations of the SUNY hospitals to one or more private not-for-profit corporations.

Although no immediate savings would accrue to the State as a result of this bill, as a result of the transfer of the SUNY hospitals to new not-for-profit corporations, the State could reduce and/or eliminate the State subsidy to the SUNY hospitals ($119.6 million in the 2005-06 Executive Budget). In addition, upon the completion of such transfer, the State’s All Funds budget would be reduced by $1.3 billion, the State workforce would be reduced by over 10,000 full-time equivalent employees and SUNY hospital debt could eventually be removed from the State debt cap.

Part F – Initiate accountability and efficiency reforms for school districts and BOCES, including the creation of a new Office of Educational Accountability and Efficiency.

This bill is necessary to implement the 2005-06 Executive Budget.

Part G – Provide reforms to the State’s education finance system.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget by establishing a framework for certain school aid formulas and out-year reforms.

Part H – Protect taxpayers from escalating school taxes and maintain the value of their STAR savings by placing limits on school budget increases.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget. Capping school districts’ spending should moderate the rate of increase in school taxes, thus also moderating the rate of increase in future State costs for STAR exemption reimbursements generating a savings of $20 million in 2005-06.

Part I – Streamline the Library Aid program and make technical amendments.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget, which includes $84.4 million for Library Aid.

Part J – Establish the Public Broadcasting Facilities Assistance Program.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget which recommends an appropriation of $15 million for the Public Broadcasting Facilities Assistance program.

Part K – Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local school districts initiating such hearings.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget which does not include General Fund support for the Tenured Teacher Hearings Program, which is projected to cost $2.1 million.

Part L – Transfer the State Education department’s Vocational Rehabilitation portion of the VESID program to the Labor Department; transfer the administration of the Workers’ compensation board to the Labor Department; eliminate antiquated boards and councils, including the Hazard Abatement Board and the Capital Abatement Program; and add a Compliance Assistance component to the existing Office of Safety and Health Training and Education Program.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget. VESID’s vocational rehabilitation services are primarily supported by Federal funding. This bill would result in improved program coordination and will lead to enhanced cost-effectiveness for vocational rehabilitation programs.

The WCB is supported by fees, fines and penalties imposed on private and public sector employers as they relate to enforcement of the Workers’ Compensation Law. It is anticipated that some administrative efficiencies can be expected in the future.

The fiscal impact of the elimination of the majority of obsolete boards and councils is minimal since members are non-salaried and reimbursement associated with required travel, if any, is negligible. The elimination of the Hazard Abatement Board will also result in the elimination of the Capital Abatement Program, which provides 75% reimbursement of the cost of capital improvements made as a result of Public Health and Safety (PESH) violations. Elimination of the program will result in increased deposits to the State Treasury totaling $430,000 annually.

Part M – Provide for the support of the Summer School of the Arts, NYS Theatre Institute and the Performing Arts Center Corporation from funds of the Cultural Education revenue account.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget which provides for the proposed transfer of these programs to special revenue funding resulting in a General Fund savings of $3.6 million.

Part N – Establish a New York Institute for Cultural Education (NYICE) that would be responsible for the administration of the State Museum, the State Library, the State Archives and other cultural education programs currently administered by the State Education Department.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget which recommends the transfer of the State’s cultural education programs to the newly created public benefit corporation, NYICE.

Part O – Establish fiscal penalties for social service districts that do not engage a minimum number of their Family Assistance population in work-related activities.

Enactment of this bill is necessary to prepare the State for Federal regulation changes during SFY 2005-2006 that will increase work participation rates and that will likely be more stringent. This ensures that, during SFY 2005-2006, the local social services districts achieve minimum work rates as required by Federal Welfare Reform.

Part P – Authorize withholding of the entire welfare grant if the head of the household does not fulfill his or her employment obligation.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget, which assumes $8.6 million in related General Fund savings.

Part Q – Create a “Strengthening Families through Stronger Fathers” initiative.

The 2005-2006 Executive Budget includes approximately $16 million in first year costs for this initiative. Up to $3 million will be committed to the demonstration projects, while the remaining amount is estimated as the impact of providing the enhanced State tax credit.

Part R – Transfer Department of Labor welfare employment programs to the Office of Temporary and Disability Assistance.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget; however, no actual savings are assumed as a result of the transfer. The budget will transfer all appropriations that support the staff and functions from DOL to OTDA. The State’s continued success in welfare reform depends on our ability to provide innovative services and supports to help Public Assistance recipients overcome barriers to employment and make a successful transition from welfare into work.

Federal reauthorization of TANF will likely include increased work participation rates and the elimination of caseload reduction credits that currently help the State meet work participation requirements. Under proposed TANF reauthorization proposals, the State faces a potential $360 million penalty if new work participation rates are not met; therefore this proposal better positions the State to improve performance.

Part S – Reduce the Safety Net work participation rate for singles from 90% to 50% and enforce penalties.

Enactment of this bill is necessary to implement the 2005-06 Executive Budget, which assumes $15 million in related General Fund savings.

Part T – Realign the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget, which assumes $1.2 million in related General Fund savings.

Part U – Establish a new scholarship program for families of victims of the American Airlines Flight 587 crash.

It is estimated that nearly 150 children and spouses could be eligible for the American Airlines Flight 587 Memorial Scholarship over the next 20 years at a maximum average annual cost of approximately $100,000. The initial costs of the scholarship program ($400,000) include funding for scholarship costs retroactive to the 2001-02 academic year.

Part V – Conform the asbestos handling license renewal fee with the initial application fees that were increased in 2004-05.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget because current fee revenue does not adequately cover the costs of worker protection and labor standards programs. The $185,000 in annual revenue generated by this proposal is necessary to continue programs at their current levels.

Part W – Reduce placements of Persons-In-Need-of-Supervision (PINS) in detention facilities and make services available to PINS in their communities.

Enactment of this bill is necessary to implement the 2005-2006 Executive Budget because it will result in estimated State savings of $3 million, of which $1 million will be re-invested into a $5.2 million appropriation to support PINS-related community-based services. Counties and New York City will also realize projected local savings of $3 million, and can re-invest savings into community-based services.

EFFECTIVE DATE:

Part A – Amend provisions for the Higher Education Capital Matching Grant Board.

This bill takes effect immediately.

Part B – Establish a new Partnership to Accelerate Completion Time (PACT) program.

This bill takes effect on July 1, 2005.

Part C – Modify the Tuition Assistance Program (TAP) to provide incentives for timely graduation, create a Tuition Assistance Loan Program and reform certain TAP eligibility criteria.

This bill takes effect on April 1, 2005.

Part D – Establish new tuition policy provisions at SUNY and CUNY.

This bill takes effect April 1, 2005.

Part E – Authorize the SUNY Board of Trustees to transfer the operations of the SUNY hospitals to one or more private not-for-profit corporations.

This bill takes effect on April 1, 2005.

Part F – Initiate accountability and efficiency reforms for school districts and BOCES, including the creation of a new Office of Educational Accountability and Efficiency.

This bill takes effect April 1, 2005.

Part G – Provide reforms to the State’s education finance system.

This act takes effect July 1, 2005, except that selected provisions will take effect immediately or on other specified dates.

Part H – Protect taxpayers from escalating school taxes and maintain the value of their STAR savings by placing limits on school budget increases.

This bill takes effect April 1, 2005.

Part I – Streamline the Library Aid program and make technical amendments.

This bill takes effect on April 1, 2005.

Part J – Establish the Public Broadcasting Facilities Assistance Program.

This bill takes effect on April 1, 2005.

Part K – Align fiscal responsibility for tenured teachers’ disciplinary hearings with the local school districts initiating such hearings.

This bill takes effect April 1, 2005.

Part L – Transfer the State Education department’s Vocational Rehabilitation portion of the VESID program to the Labor Department; transfer the administration of the Workers’ compensation board to the Labor Department; eliminate antiquated boards and councils, including the Hazard Abatement Board and the Capital Abatement Program; and add a Compliance Assistance component to the existing Office of Safety and Health Training and Education Program.

This bill takes effect April 1, 2005, except that provisions relating to the transfer of employees from VESID to DOL take effect October 1, 2005 to facilitate an orderly transfer.

Part M – Provide for the support of the Summer School of the Arts, NYS Theatre Institute and the Performing Arts Center Corporation from funds of the Cultural Education revenue account.

This bill takes effect on April 1, 2005.

Part N – Establish a New York Institute for Cultural Education (NYICE) that would be responsible for the administration of the State Museum, the State Library, the State Archives and other cultural education programs currently administered by the State Education Department.

This bill takes effect on October 1, 2005.

Part O – Establish fiscal penalties for social service districts that do not engage a minimum number of their Family Assistance population in work-related activities.

This bill takes effect April 1, 2005.

Part P – Authorize withholding of the entire welfare grant if the head of the household does not fulfill his or her employment obligation.

This bill takes effect April 1, 2005.

Part Q – Create a “Strengthening Families through Stronger Fathers” initiative.

The bill takes effect immediately, except that section one shall apply to tax years beginning on or after January 1, 2005 and before January 1, 2012.

Part R – Transfer Department of Labor welfare employment programs to the Office of Temporary and Disability Assistance.

This bill takes effect April 1, 2005.

Part S – Reduce the Safety Net work participation rate for singles from 90% to 50% and enforce penalties.

This bill takes effect April 1, 2005.

Part T – Realign the amount of earnings an individual may retain while receiving public assistance based upon the length of time an individual has been on welfare.

This bill takes effect April 1, 2005, and would impact grants paid on and after October 1, 2005.

Part U – Establish a new scholarship program for families of victims of the American Airlines Flight 587 crash.

This bill is effective immediately and deemed to have been in full force and effect on and after April 1, 2001.

Part V – Conform the asbestos handling license renewal fee with the initial application fees that were increased in 2004-05.

This bill takes effect immediately.

Part W – Reduce placements of Persons-In-Need-of-Supervision (PINS) in detention facilities and make services available to PINS in their communities.

This bill takes effect April 1, 2005.