2008-09 NEW YORK STATE EXECUTIVE BUDGET
PUBLIC PROTECTION AND GENERAL GOVERNMENT
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 arts and cultural affairs law, in relation to revising the powers and duties of the empire state plaza arts commission (Part A); to amend the arts and cultural affairs law, in relation to the composition of the board of directors of the Executive Mansion Trust (Part B); to amend the executive law, in relation to creating, in the department of state, the office of indigent defense services; and to amend the state finance law, in relation to the distribution of monies from the indigent legal services fund (Part C); to amend the executive law, the criminal procedure law, the penal law, the correction law, and the family court act, in relation to establishing a witness protection program (Part D); to amend the judiciary law, the New York city civil court act and the county law, in relation to compensation of certain state employees; and to repeal certain provisions of the judiciary law and the county law relating to the compensation of state-paid judges and certain district attorneys (Part E); to amend chapter 83 of the laws of 1995 amending the state finance law and other laws relating to bonds, notes and revenues, in relation to making section 163 of the state finance law permanent; and to amend the state finance law, in relation to imposing a centralized procurement contract fee, increasing the membership of the state procurement council and clarifying its authority (Part F); to amend chapter 989 of the laws of 1958 creating a temporary state commission of investigation, in relation to extending the expiration of the provisions thereof (Part G); to amend the county law and the tax law, in relation to clarifying the applicability of the state wireless communications service surcharge, applying the administrative and enforcement provisions of the tax law to such surcharge, imposing such surcharge on prepaid wireless communications service and providing a safe harbor for providers of prepaid wireless communications services, and conforming the base of the city and county wireless communications service surcharges to that of the state wireless communications service surcharge; and to repeal certain provisions of the county law relating thereto (Part H); to amend the civil service law, in relation to excess provisional employees of a city having a population of one million or more; and providing for the repeal of such provisions upon expiration thereof (Part I); to amend the state finance law, in relation to broadening the allowable uses of funds deposited into the criminal justice improvement account (Part J); to amend the state finance law and the executive law, in relation to assessments on nuclear power plants to reimburse the state for costs of homeland security provided by the state militia (Part K); to amend the executive law, in relation to the eligibility criteria for medical parole (Part L); to amend the insurance law, in relation to the motor vehicle law enforcement and highway safety fee; to amend the state finance law, in relation to the motor vehicle theft and insurance fund and the state police motor vehicle law enforcement account; to amend the executive law, in relation to making permanent the applicability of the plan of operation and grant award process of the motor vehicle theft and insurance fraud prevention demonstration program; to amend chapter 62 of the laws of 2003, amending the insurance law and other laws relating to motor vehicle law enforcement fees, to amend chapter 56 of the laws of 2004, amending the insurance law and the state finance law relating to motor vehicle law enforcement fees and chapter 57 of the laws of 2000, amending the state finance law relating to a report on automobile theft prevention activities of the state police, in relation to making certain provisions permanent; to repeal certain provisions of the insurance law, relating to providing funding to the motor vehicle theft and insurance fraud and prevention fund; and to repeal subdivision bbb) of section 427 of chapter 55 of the laws of 1992 amending the tax law generally and enacting the omnibus revenue act of 1992, in relation to making the motor vehicle theft and insurance fraud prevention fund permanent (Part M); to amend the state finance law, in relation to the interest on lawyer account fund; and to amend the judiciary law, in relation to attorneys fiduciary funds and interest-bearing accounts (Part N); to amend the state finance law, in relation to aid and incentives for municipalities; and to amend the general municipal law, in relation to reports on the financial condition of municipalities (Part O); to amend the civil practice law and rules and the real property law, in relation to the recording of certain documents with a county clerk; to amend the general city law and the village law, in relation to locally administered utility taxes on mobile telecommunications service; and to amend the vehicle and traffic law, in relation to establishing a demonstration program imposing monetary liability on the owner of a vehicle for failure of an operator thereof to comply with traffic control indications in certain counties and cities (Part P); to amend the general municipal law, the state finance law, the public housing law, the education law, the public authorities law, chapter 560 of the laws of 1980 authorizing the city of New York to adopt a solid waste management law and chapter 892 of the laws of 1971 amending the public authorities law and other laws relating to enabling the dormitory authority to construct and finance dormitories, buildings and health facilities, in relation to separate specifications for public works contracts; to amend the general municipal law and the state finance law, in relation to payment by contractors to subcontractors and in relation to local government procurement practices; and to amend the labor law, in relation to public works contracts; to amend the public authorities law, in relation to bonds issued by the New York city transitional finance authority; and to repeal subdivision (a) of section 41 of part X of chapter 62 of the laws of 2003 amending the general municipal law and other laws relating to the acceptance of sealed bids in electronic format, relating to the effectiveness thereof (Part Q); to amend the state finance law, in relation to a program of aid to municipalities in which a video lottery gaming facility is located (Part R); to amend the New York state financial emergency act for the city of New York, in relation to the applicability of control period provisions and changes to generally accepted accounting principles; and to amend the local finance law, in relation to establishing a general period of probable usefulness for pollution remediation (Part S); to amend the real property law, the state finance law, the real property tax law, the second class cities law, the general municipal law, the town law and the education law, in relation to promoting consolidation in and improving the efficiency of real property tax administration; and to repeal certain provisions of the real property tax law, the village law, the town law and the education law relating thereto (Part T); to amend the insurance law, in relation to municipal cooperative health benefit plans, a study of community rating and the provision of claims experience to a municipality; to amend the agriculture and markets law and the county law, in relation to the sharing of the duties of weights and measures between municipalities; to amend the general municipal law and the highway law, in relation to mutual aid; to amend the public health law, in relation to the composition of county and part-county boards of health; to amend the town law, in relation to eliminating compensation for town special district commissioners; to amend the town law, in relation to the provision of sanitary services in the areas of towns outside of villages; and to amend the general municipal law, the town law and the village law, in relation to the petition requirements for initiating a referendum regarding municipal consolidation or dissolution (Part U); and to provide for the administration of certain funds and accounts related to the 2008-2009 budget; authorizing certain payments and transfers; to amend the state finance law, in relation to the school tax relief fund; to amend the state finance law, in relation to extending the deposit provisions; to amend the state finance law, in relation to financed creation or improvement of information technology systems and related research and development; to amend the state finance law, in relation to limitations on the issuance of state-supported debt; to amend the state finance law, in relation to revenue bonds, variable rate bonds and state-supported bond authorization; to amend the public authorities law, in relation to state-supported debt for certain educational institutions other than state operated or contract colleges for SUNY and state-supported debt of state university athletic facilities; to amend the public authorities law, in relation to state-supported debt for eligible school reconstruction, capital facility programs and public schools; to amend the judiciary law, in relation to state-supported debt for the New York state judicial institute; to amend chapter 57 of the laws of 2004, amending the education law and other laws relating to the support of education, in relation to state-supported debt; to amend the education law, in relation to state-supported debt of public broadcasting facilities; to amend chapter 57 of the laws of 2005, relating to the 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, in relation to state-supported debt; to amend the public authorities law, in relation to the New York state higher education capital matching grant board and state-supported debt; to amend the education law, in relation to state-supported debt and the EXCEL program; to amend the public authorities law, in relation to state-supported debt and the EXCEL program; to amend the public authorities law, in relation to cultural education facilities and state-supported debt; to amend the public authorities law, in relation to state environment infrastructure projects and state-supported debt; to amend the public authorities law, in relation to the financing of hazardous waste site remediation projects; to amend the public authorities law, in relation to notes and bonds of a corporation and state-supported debt; to amend the public authorities law, in relation to state park infrastructure projects and state-supported debt; to amend the public authorities law, in relation to the New York state energy and research development authority and state-supported debt; to amend chapter 83 of the laws of 1995, amending the state finance law and other laws relating to state finances, in relation to state-supported debt; to amend chapter 7 of the laws of 1989, relating to authorizing the New York state urban development corporation to assist the state in restructuring certain payment requirements with respect to lease rental obligations in connection with certain state office facilities and related public improvements, in relation to state-supported debt; to amend chapter 190 of the laws of 1990, amending the business corporation law and other laws relating to the payment of taxes and fees, in relation to state-supported debt; to amend chapter 61 of the laws of 2005, relating to providing for the administration of certain funds and accounts related to the 2005-2006 budget, in relation to state-supported debt; to amend chapter 81 of the laws of 2002, relating to providing for the administration of certain funds and accounts related to the 2002-2003 budget, in relation to state-supported debt; to amend the public authorities law, in relation to financing of courthouse improvements and state-supported debt; to amend the public authorities law, in relation to state-supported debt for certain educational institutions other than state operated or contract colleges for SUNY; to amend the public authorities law, in relation to state-supported debt and the acquisition of state buildings and other facilities; to amend the state finance law, in relation to state-supported debt and issuance of certificates of participation; to amend the public authorities law, in relation to state-supported debt and the financing of department of agriculture and markets facilities; to amend the public authorities law, in relation to state-supported debt and courthouse improvements and training facilities; to amend chapter 60 of the laws of 2006, relating to providing for the administration of certain funds and accounts related to the 2006-2007 budget, in relation to state-supported debt; to amend chapter 389 of the laws of 1997, relating to the financing of certain improvement funds, in relation to state-supported debt; to amend the public authorities law, in relation to expedited deployment funding and state-supported debt; to amend the private housing finance law, in relation to housing program bonds and notes and state-supported debt; to amend the public authorities law, in relation to state-supported debt and the convention center; to amend chapter 432 of the laws of 1997, amending the state finance law and other laws relating to community enhancement facilities assistance program, in relation to state-supported debt; to amend chapter 684 of the laws of 1986 relating to providing for the construction of the center for computers, microelectronics and telecommunications on the campus of Columbia University in the city of New York, in relation to state-supported debt; to amend chapter 796 of the laws of 1992, relating to providing for enhancements to the center for science and technology on the campus of Syracuse University in the city of Syracuse and the Cornell super computer center on the campus of Cornell University in the city of Ithaca and the higher education applied technology program, in relation to state-supported debt; to amend chapter 174 of the laws of 1968, constituting the New York state urban development corporation act, in relation to state-supported debt; to amend chapter 839 of the laws of 1987, relating to establishing the omnibus economic development act of nineteen hundred eighty-seven, in relation to state-supported debt; to amend chapter 258 of the laws of 1993, relating to providing for the development and modernization of sports facilities, in relation to state-supported debt; to amend the public authorities law, in relation to state-supported debt and financing of child care facilities development projects; to amend the public authorities law, in relation to state-supported debt and financing of projects for biomedical facilities; to amend chapter 61 of the laws of 2000, relating to authorizing bonds for the strategic investment program, in relation to state-supported debt; to amend chapter 84 of the laws of 2002, relating to authorizing the New York state urban development corporation and the dormitory authority of the state of New York to issue bonds or notes for the purpose of financing certain project costs, in relation to state-supported debt; to amend chapter 3 of the laws of 2004, amending the public authorities law and other laws relating to authorizing the New York state urban development corporation and the dormitory authority of the state of New York to issue bonds and notes, in relation to state-supported debt; to amend chapter 59 of the laws of 2004, relating to authorizing the New York state urban development corporation and the dormitory authority to issue bonds and notes, in relation to state-supported debt; to amend chapter 59 of the laws of 2005, relating to the authority of the urban development corporation and the dormitory authority to issue bonds, in relation to state-supported debt; to amend chapter 62 of the laws of 2003, relating to authorizing the urban development corporation to issue bonds, in relation to state-supported debt; to amend chapter 81 of the laws of 2002, relating to authorizing the urban development corporation to issue bonds for the JOBS Now program, in relation to state-supported debt; to amend chapter 58 of the laws of 2006, relating to authorizing the New York state urban development corporation or dormitory authority to issue bonds or notes, in relation to state-supported debt; to amend chapter 35 of the laws of 1979, relating to appropriating funds to the New York state urban development corporation, in relation to state-supported debt; to amend chapter 161 of the laws of 2005, amending the education law and other laws relating to the issuance of bonds or notes in connection with certain eligible project costs, in relation to state-supported debt; to amend the public authorities law, in relation to state-supported debt for certain educational institutions other than state operated or contract colleges for SUNY; to amend chapter 392 of the laws of 1973, constituting the New York state medical care facilities finance agency act, in relation to state-supported debt; to amend the public authorities law, in relation to the state-supported debt and the New York state higher education capital matching grant board; to amend chapter 432 of the laws of 1997, amending the state finance law and other laws relating to capital projects at Albany county airport, in relation to state-supported debt; to amend chapter 329 of the laws of 1991, amending the state finance law and other laws relating to the establishment of the dedicated highway and bridge trust fund, in relation to state-supported debt; to amend the public authorities law, in relation to state-supported debt and dedicated highway and bridge trust fund bonds; to amend chapter 109 of the laws of 2006, relating to authorizing the thruway authority to issue bonds and notes, in relation to state-supported debt; to amend chapter 61 of the laws of 2000, amending the public authorities law and other laws relating to the state’s infrastructure system, in relation to state-supported debt; to amend the public authorities law, in relation to state-supported debt and bonds and notes of corporations; and providing for the repeal of certain provisions upon expiration thereof (Part V)

PURPOSE:

This bill contains provisions needed to implement the Public Protection and General Government portions of the 2008-09 Executive Budget.

This memorandum describes Parts A through V of the bill which are described wholly within the parts listed below.

Part A – Revise the powers and duties of the Empire State Plaza Arts Commission.

Purpose:

To revise the powers and duties of the Empire State Plaza Art Commission.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement Support:

This bill revises the powers and duties of the Commission to enhance the benefit to the State of the unique American art collection displayed in the Empire State Plaza. This bill charges the Commission to establish a program for the promotion of the Empire State Plaza Art Collection to the public, and authorizes the solicitation of gifts, grants and loans of works of art for the collection, as well as the solicitation and acceptance of gifts of funds. Further, this bill expands the annual reporting responsibilities of the Commission regarding accomplishments and future projects.

The current statutory authority for the Commission is very limited and focuses primarily on custodial duties related to the preservation of the collection. Given the significance of the collection, expanding the Commission’s charge to promote the collection and solicit and receive gifts will have a direct public benefit.

Budget Implications:

The Executive Budget provides an appropriation of $500,000 to permit the expenditure of any gifts or grants received by the Commission.

Effective Date: This bill takes effect immediately.

Part B – Amend the Arts and Cultural Affairs Law, in relation to the composition of the board of directors of the Executive Mansion Trust.

Purpose:

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

The bill amends Arts and Cultural Affairs Law § 54.05 to: (1) clarify that members of the Executive Mansion Trust are corporate directors who are empowered to solicit donations; (2) increase the number of voting board members of the Executive Mansion Trust from five to fifteen; (3) eliminate as an ex officio board member the chair of the New York Historical Society; and (4) provide for staggered terms of the board members.

Budget Implications:

The efforts of the Executive Mansion Trust may reduce future requirements for State Office of General Services support to maintain and preserve the Executive Mansion.

Effective Date:

This bill takes effect immediately.

Part C – Create a State office to monitor the provision of indigent defense services statewide and to consider and recommend measures to improve the delivery of such services.

Purpose:

This bill will create an Office of Indigent Defense Services in the Department of State.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Section one of the bill adds a new Article 6-G to the Executive Law to create the Office of Indigent Defense Services and set forth its powers and duties, which include: examining, evaluating and collecting information on the existing public defense system in the counties; developing a case management system to facilitate the collection and reporting of such information; analyzing the collected data in order to recommend measures to enhance the system and ensure that indigent criminal defendants receive constitutionally effective counsel; developing a plan to improve the delivery of defense services; distributing available State funding pursuant to such a plan; reviewing payment vouchers for assigned counsel and the approval process for their reimbursement; and planning, coordinating and providing free or low-cost practice training to public defense attorneys.

In its June 2006 final report, the Commission on the Future of Indigent Defense Services (“Kaye Commission”) found widespread problems with the State’s existing indigent defense system. This bill will allow the State to monitor and improve the indigent defense system in significant ways. It will create a reliable data-collection mechanism that will lead to continuous analysis of the criminal defense delivery system throughout the State.

The Office will also recommend measures to improve the quality of indigent representation. Such measures could include demonstration programs designed to test the effectiveness of systemic changes, staffing the Office of Indigent Defense Services with defenders to provide representation in certain cases, or providing grants to counties that make demonstrable improvements to their service delivery systems. It will provide free or low-cost practice training to public defense attorneys. The bill also mandates that the Office develop a plan for a more rational distribution of available State funds, in a manner that is consistent with the needs of the counties and the quality of the representation offered.

Sections two through six of this bill amend section 98-b of the State Finance Law to cap – at $72 million – the amount of funding which may flow to counties from the Indigent Legal Services Fund under the current distribution formula. Any accumulated fund balance in excess of the $72 million cap is expected to be distributed in 2009-10 under a plan designed by the Office of Indigent Defense Services and approved by the Director of the Budget. Further this authorizes the State Comptroller to make necessary adjustments in payments to counties in relation to their ability to meet the Maintenance of Effort requirements or as a result of an audit.

Budget Implications:

This bill is required to implement the 2008-09 Executive Budget, which contains an appropriation of $3 million for the Office of Indigent Defense Services. The Office will be funded by redirecting existing funds in the Legal Services Assistance Fund that are already dedicated to the support of indigent defense services.

Further, the Financial Plan accompanying the Executive Budget projects disbursements from the Indigent Legal Services Fund reflecting the $72 million cap, which results in an estimated $6 million being reserved in the fund balance to be distributed in 2009-10 under a new mechanism developed by the Office of Indigent Defense Services.

Effective Date:

This bill would take effect immediately.

Part D – Enhance protective services offered to victims and witnesses who are at risk of physical or emotional harm, intimidation or retaliatory violence as a result of their cooperation with law enforcement

Purpose:

This bill would create a witness protection program in statute in order to encourage victims and witnesses to testify against violent criminals and to assist prosecutors in further reducing violent crime throughout the State.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Section 1 of the bill would add a new subdivision 17 to Executive Law § 837 to authorize DCJS to create and operate the new witness protection program in consultation with the District Attorneys. A number of states have created such programs in statute, often in response to a high-profile murder of a victim or witness. These programs can be a vital component of state efforts to reduce violent crime, both by encouraging witnesses to come forward and by protecting them from retribution when they do. There is, however, no statutorily authorized witness protection program in New York. Instead, for the last three years, DCJS has contracted with the New York Prosecutor’s Training Institute (NYPTI) to administer a program to provide some funding to prosecutors for protective services. This bill would establish a witness protection program in statute, with a particular emphasis on protection of vulnerable witnesses and victims, including victims and witnesses in domestic violence and sexual exploitation cases, and victims and witnesses testifying against violent or dangerous criminals. This program will provide for a full range of protective services, from changing a domestic violence victim’s locks, to a temporary relocation of a witness, to a change in the witness’s identity if necessary and appropriate.

Section 2 of the bill would amend CPL § 240.50 to specify that a court may issue a protective order to prevent the disclosure of the identity of a victim or witness. The current discovery statute generally allows a court to issue a “protective order” when a witness faces a substantial risk of physical harm or intimidation, and explicitly provides for the issuance of such an order to protect the confidentiality of informants and the home addresses of certain law enforcement officers. It does not, however, contain specific provisions allowing the protection of the identity or location of victims and other witnesses who may be at risk of retaliation or intimidation. This bill will clarify that the courts have the authority to issue such orders.

Sections 3 through 6 would amend Penal Law §§ 215.11, 215.12, 215.15 and 215.16 to: elevate the crimes of Tampering with a Witness in the Third Degree and Intimidating a Victim or Witness in the Third Degree from Class E to Class D felonies; and elevate the crimes of Tampering with a Witness in the Second Degree and Intimidating a Victim or Witness in the Second Degree from Class D to Class C felonies. These provisions will give prosecutors additional tools to protect witnesses who have been subjected to harassment and intimidation as a result of their cooperation with law enforcement.

Sections 7 through 16 would amend various sections of the Correction Law, the Criminal Procedure Law, the Executive Law and the Family Court Act to require the transmission of orders of protection issued at sentencing to the state and local agencies responsible for an offender’s custody and supervision – the Department of Correctional Services, the Division of Parole, and Probation Departments. This proposal is based on a recommendation in the preliminary report of the New York State Commission on Sentencing Reform, as a means to protect victims and witnesses after an offender is released from confinement and while he or she is being supervised in the community.

Section 17 of the bill provides the effective date.

Budget Implications:

This bill is necessary to implement the 2008-09 Executive Budget, which appropriates $500,000 to the Division of Criminal Justice Services for implementation of a statewide witness protection program.

Effective Date:

This bill would take effect immediately.

Part E – Amend and repeal applicable laws to authorize a judicial salary increase.

Purpose:

This bill would amend the Judiciary Law, the New York City Civil Court Act, and the County Law, in relation to compensation for certain Judges and District Attorneys.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

The bill sets the salary of a State Supreme Court Justice at $165,200, retroactive to April 1, 2006, and provides an additional 2.5 percent salary increase effective April 1, 2008. Salaries for all other judges, including Housing Court Judges, are established at set percentages of a Supreme Court Justice’s salary.

The bill would amend County Law § 700(11) by replacing the District Attorney compensation provisions that apply to all counties except New York, Bronx, Kings, Queens and Richmond with a flat $60,000 grant. This grant would reimburse counties for a portion of the increased costs associated with higher District Attorney salaries, which are tied to the salaries of County Court Judges.

Judges have not received a pay raise since 1999, while the cost of living has continued to increase. On average, salaries for those affected by this bill would increase 24 percent.

Budget Implications:

This bill is consistent with the Financial Plan submitted as part of the 2008-09 Executive Budget which provides $143 million for judicial salaries.

Effective Date:

This bill would be effective immediately. Salary increases for Judges and increased aid to counties for District Attorney salaries are retroactive to April 1, 2006.

Part F – Amend the State Finance Law, to make permanent the Procurement Stewardship Act, to expand the role of the State Procurement Council, and to recapture the cost of providing centralized contracts.

Purpose:

The bill would make permanent State Finance Law § 163, which governs the purchasing of services and commodities. In addition, the duties and members of the State Procurement Council are increased, to create a statewide forum for adopting future procurement reforms. Finally, the bill would require contractors to include a 0.5 percent surcharge on the purchase price charged to entities using centralized contracts, to support the cost of developing such contracts.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill removes the provision that sunsets State Finance Law § 163, which governs the purchasing of services and commodities, making permanent the myriad provisions of the Procurement Stewardship Act.

This bill also amends State Finance Law § 163 to expand the role of the State Procurement Council by clarifying its policy making role, and increasing the number of members from 19 to 25. The Office of Court Administration and the Chief Information Officer are added as permanent members of the Council, and the Governor is authorized to make an additional 4 appointments. In addition, State Finance Law § 161 is amended to include the Chief Information Officer in procurement decisions relating to technology.

Further, the bill adds a new State Finance Law § 163-c requiring contractors to include a 0.5 percent surcharge on the purchase price charged to entities (State agencies, local governments, public authorities, not-for-profits) using centralized contracts, to support the cost of developing such contracts. Contractors must make a filing quarterly and remit the fee electronically to the Department of Taxation and Finance. If a contractor notifies the Office of General Services (OGS) that it can not reasonably comply with the filing and payment requirements, the contractor may pay by check and submit the required filings in paper to OGS. These provisions apply only to new contracts.

Several states and the federal government now impose similar fees, to recover a portion of the cost of establishing their centralized contracts. Since New York’s centralized contracts provide commodities, services and technology at substantially lower prices than could be obtained if individual users were to procure them on their own, recapturing a portion of the OGS’s cost is equitable.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-09 Executive Budget, which includes projected revenues of $8 million in 2008-09, growing to $20 million in future years.

Effective Date:

This bill would take effect immediately except that Section 2 shall take effect 60 days after it shall have become law and apply to bids issued on or after the first day of the calendar quarter next succeeding the date on which Section 2 shall have become a law.

Part G – Extend the sunset date of the Temporary State Commission of Investigation.

Purpose:

The bill extends the life of the Temporary State Commission of Investigation for an additional seven months past the current sunset date of September 1, 2008, and establishes a new sunset date of March 31, 2009.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

The bill extends the expiration date of the Commission to March 31, 2009.

The Commission was created in 1958, pursuant to Article V, Section 3 of the State Constitution, allowing the Legislature to create “temporary commissions” for special purposes – in this case, to conduct investigations into alleged violation of State laws with particular reference to organized crime and racketeering.

The Commission currently is scheduled to expire and cease operations on September 1, 2008. In order to allow sufficient time for the Commission to thoroughly complete its ongoing investigations, the bill extends the Commission from September 1, 2008, until March 31, 2009, after which the Commission will cease operations.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget.

Effective Date:

This bill takes effect immediately.

Part H – Extend the monthly surcharge on wireless communication devices to prepaid cellular phones and makes additional conforming and clarifying amendments.

Purpose:

This bill would: (1) apply the administrative and enforcement provisions of the Tax Law to the State wireless communications service surcharge; (2) conform the base of the city and county wireless surcharges to that of the State wireless surcharge; (3) clarify certain provisions of the State and local surcharges; (4) consolidate numerous sections of law authorizing individual counties to levy surcharges; and (5) amend the permissible uses of revenues from State and local wireless communication service surcharges.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill amends the County Law to clarify and conform technical definitions and administrative and enforcement provisions related to State and local wireless surcharges and Tax Law. These changes, recommended by the Department of Taxation and Finance, would produce a consistent, clearer and more readable statute.

This bill clarifies the application of the surcharge to prepaid wireless communications service. It would specify that the imposition of the tax on prepaid wireless communications service is on the provider, and would establish an alternative method for providers to calculate the surcharge.

This bill also consolidates numerous sections of the County Law into a single section authorizing a list of specific counties to levy local wireless surcharges. Currently, each county’s authorization to levy a surcharge is provided in a separate section of law.

Lastly, this bill amends the County Law to conform the permissible uses of revenues from the city and county wireless surcharges. Legislation passed in 2002 permitted 19 counties and New York City to use local surcharge revenues for “costs associated with the design, construction, operation, maintenance, and administration of public safety communications networks.” All other counties that were subsequently authorized to levy surcharges are limited to using the resulting revenues only for payment of “eligible wireless 911 service costs.” This bill would permit the second group of counties the same broader, public safety communications related uses as the first group once they have complied with enhanced wireless 911 standards governing the ability to locate wireless 911 callers geographically.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-09 Executive Budget, and to ensure adequate, long-term support for the Statewide Wireless Network. By expanding the monthly State surcharge on wireless communication devices to prepaid cellular phones, an additional $5 million in revenue will be generated in 2008-09. Of that amount, $3 million will be deposited to the Public Safety Communications Account and $2 million deposited to the General Fund. Beginning in 2009-10, full annual revenue will grow to $12 million, with $7 million deposited to the PSCA and $5 million deposited to the General Fund.

Effective Date:

This bill would take effect on the first day of the first sales tax quarter beginning at least one hundred twenty days after it becomes law.

Part I – Authorize the recovery of costs associated with the Department of Civil Service’s statutory mandate for review, approval and monitoring of the plan of New York City and other public employers to reduce their number of provisional employees.

Purpose:

To authorize Civil Service to recover its costs for approving and monitoring the plan submitted by New York City (the City) and other public employers for whom the New York City Department of Citywide Administrative Services (DCAS) administers civil service and examinations (collectively, the “DCAS employers”) to reduce their number of provisional employees.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Civil Service Law § 65 authorizes the DCAS employers to create a multi-year plan to reduce their number of provisional employees. This bill would amend section 65 to allow the Department of Civil Service to bill New York City for its annual costs related to the approval and monitoring of such plan, and to allow New York City to collect from other DCAS employers their share of such costs.

Costs billed to the City may not exceed amounts spent by the Department of Civil Service for this purpose each year. In the event that New York City does not pay, the State Comptroller may capture these funds from State aid to the City.

The costs of this bill are necessitated by the City’s prior practice of filling provisional appointments for time periods exceeding those set forth in Civil Service Law. Absent the ability of the State to recover its costs, the State would have to divert limited resources from other critical projects.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-09 Executive Budget, which assumes that New York City will reimburse these costs.

Effective Date:

This bill will take effect immediately, and will expire December 31, 2014.

Part J – Expand the use of the Criminal Justice Improvement Account.

Purpose:

This bill will expand the use of the Criminal Justice Improvement Account to enable

funding to be used for local criminal justice programs that support efforts to prosecute and reduce crime, and clarifies that the account may also be used to support operation of the Crime Victims Board.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Subdivision 3 of Section 97-bb of the State Finance Law is amended to allow funds deposited into the Criminal Justice Improvement Account (CJIA) to be used for expanded purposes, which closely relate to the current uses of the fund. Under existing statutory provisions, funds in the CJIA are used exclusively to fund crime victims programs.

Similar Article VII legislation was submitted as part of both the 2006-07 and 2007-08 Executive Budgets, but in both cases was ultimately rejected by the Legislature and replaced with one-year authorizations to transfer available funds to the General Fund.

This bill expands the allowable uses of the Criminal Justice Improvement Account to support programs that reduce crime and prevent future victimizations, and clarifies that these resources also may be used to support the operation of the Crime Victims Board. These resources will be used to continue programs that might otherwise be reduced due to fiscal constraints. At the same time, all existing crime victims programs already supported by this source remain fully funded.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget, providing $15 million in support for criminal justice and victims services programs, which would otherwise require General Fund support in 2008-09.

Effective Date: This bill takes effect April 1, 2008.

Part K – Assess on nuclear power plant licensees to enable the State to recoup costs associated with National Guard security missions.

Purpose:

The bill requires nuclear electric generating facility licensees to pay an assessment to enable the State to recover the costs and expenses incurred for the deployment of the State organized militia to provide security for such facilities.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill adds new sections to the Executive Law and the State Finance Law. Executive Law §29-f requires nuclear electric generating facility licensees to pay an assessment in an amount that is sufficient to enable the State to recover costs and expenses incurred for the deployment of the State organized militia to provide security for such facilities. The assessment will be paid quarterly. State Finance Law §99-r creates an account in the miscellaneous special revenue fund for the applicable costs and associated reimbursements.

Since the terrorist attacks of September 11, 2001, the organized militia, primarily the New York National Guard, has been deployed to protect vital and vulnerable infrastructure, including nuclear electric generating facilities. The militia has remained on State Active Duty at nuclear power plants since such time, working alongside facility security staff, at an annual cost and expense to the State of approximately $11.7 million. In the past, these costs and expenses have been funded via Homeland Security General Fund appropriations. This bill ensures that these costs and expenses will be borne by nuclear power plant licensees who receive security services.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-09 Executive Budget which assumes that the assessments will reimburse the State for its annual security costs and expenses related to nuclear power plant facilities.

Effective Date:

This bill takes effect immediately.

Part L – Revise the Medical Parole Statute to Authorize the Release of State Inmates who are Seriously Ill and Incapacitated.

Purpose:

This bill would revise the medical parole statute to authorize the release of state inmates who are seriously ill and incapacitated.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

In 1992, the Legislature enacted medical parole (Section 259-r of the Executive Law), under which inmates with terminal illnesses can receive a review by the Parole Board for compassionate release. Medical parole is predominately utilized by inmates over the age of 50 who, because of their age, have the lowest recidivism rates.

Over the past decade the number of inmates over the age of 55 who are incarcerated in State prison has more than doubled from approximately 1,500 inmates to over 3,300 inmates. These older inmates are generally the most seriously ill and consequently require the most expensive medical care. As such, the Department of Correctional Services (DOCS) has been challenged by a growing number of inmates who are afflicted with terminal or incapacitating conditions. This bill will authorize the compassionate release of such inmates when their health conditions – even if not terminal – are so serious and significant that the inmates no longer pose a threat to public safety.

This bill includes several medical parole provisions that have been adopted by other states as they have sought to provide compassionate medical release for both terminally ill and permanently incapacitated inmates. These legislative changes include:

• expanding eligibility to inmates who have a significant and permanent non-terminal condition, disease or syndrome that has rendered them so physically or cognitively incapacitated as to create a reasonable probability that they do not present any danger to society;
• enabling an inmate’s spouse, relative, attorney or advocate, as well as DOCS staff, to initiate a medical parole application for an inmate;
• amending the medical parole examination standard to require a physician to assess an inmate’s inability to perform normal activities of daily living rather than the inmate’s inability to care for himself or herself; and,
• involving the Department of Health, at the option of the Department of Correctional Services and the Division of Parole, in creating discharge plans and assisting with the placement of eligible medical parolees.

This proposal will also result in operational improvements in the manner that DOCS provides medical services to its 63,000 inmates. Many of the ill and/or incapacitated inmates are housed in Regional Medical Units (RMUs) located at five Department of Correctional Services facilities. These RMUs were originally created, beginning in 1991, to serve as an alternative to costly stays in outside hospitals. Instead, with an ever-growing aged and infirmed prison population, the RMUs also serve as nursing homes and hospices for DOCS inmates. With these proposed changes in the medical parole law, long-term outside hospital stays can be avoided by gradually reverting RMUs to their original purpose.

Inmates convicted of homicides or sex offenses will continue to be ineligible for medical parole.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget which reflects a projected savings of $5.4 million in medical costs.

Effective Date:

The bill will be effective immediately.

Part M – Increase the Motor Vehicle Law Enforcement fee, expand its uses and make permanent various related provisions.

Purpose:

This bill would raise the Motor Vehicle Law Enforcement fee from $5 to $20, and authorize use of the revenues for an additional purpose. It also makes permanent the fee and related programs that would otherwise expire in 2008.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill amends Insurance Law § 9110 to rename the Motor Vehicle Law Enforcement fee the Motor Vehicle Law Enforcement and Highway Safety fee. It increases the fee from $5 to $20, and dedicates $5 of the increase to support the State Police, and another $10 to support a new bridge safety initiative housed within the Dedicated Highway and Bridge Trust Fund. This fee was last increased, from $1 to $5, in 2003.

This bill also makes technical amendments to the Insurance Law and State Finance Law to simplify the flow of these revenues into dedicated State accounts, and eliminates the requirement that the Superintendent of Insurance distinguish between fees collected from passenger and commercial vehicle policies.

The bill also makes permanent all provisions related to the Motor Vehicle Law Enforcement account, as well as the New York motor vehicle theft and insurance fraud prevention program and related provisions.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget as it will generate $194 million in new revenue and is necessary to support the proposed budgets for the State Police and the Department of Transportation.

Effective Date: This bill takes effect April 1, 2008. though the provisions related to the fee increase and the new revenue deposit structure do not become effective until July 1, 2008.

Part N – Clarify and expand the responsibilities of the board of trustees administering the Interest on Lawyer Account Fund.

Purpose:

To strengthen the role of the board of trustees administering the Interest on Lawyer Account (IOLA) Fund, and ensure that grants made from the fund result in the development of a statewide network of high quality civil legal services.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill clarifies and refines the duties and responsibilities of IOLA’s board concerning oversight of lawyer escrow accounts and the provision of civil legal services. The bill also provides additional guidance to the board regarding the development of criteria for awarding of grants through an evaluative process.

The statutory framework governing the IOLA fund has remained unchanged since first enacted in 1984. Given an expected growth in fund resources of more than $50 million next year, the IOLA board will benefit from having a reasoned, analytic and transparent process for distributing these funds.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget, which projects total deposits to the IOLA fund will reach $70 million.

Effective Date:

This bill is effective immediately.

Part O – Modify the Aid and Incentives for Municipalities (AIM) program to improve equity in funding for fiscally distressed municipalities, create a new Local Government Efficiency Grant program, expand local government financial accountability requirements, and phase-in a scheduled increase in aid for the City of New York.

Purpose:

This bill amends the Aid and Incentives for Municipalities (AIM) program to improve equity in funding for fiscally distressed municipalities, create a new Local Government Efficiency Grant program, expand local government financial accountability requirements, and phase-in a scheduled increase in aid for the City of New York.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Sections 1 through 5 amend State Finance Law § 54, which authorizes the Aid and Incentives for Municipalities (AIM) program, to:

• Promote equity in AIM funding for fiscally distressed municipalities that receive significantly less aid per capita than their peers
  
  Currently, a fiscally distressed municipality that receives additional AIM funding based upon the level of fiscal distress can also qualify for an additional 4.5% increase in AIM funding if its AIM funding on a per capita basis is less than 75% of its peer average. This bill increases the 75% threshold to 80% in SFY 2008-09, 85% in SFY 2009-10, and 90% in SFY 2010-11. Enactment of this change will accelerate the redress of historical disparities in aid among similar fiscally distressed cities, towns and villages.
• Phase in the scheduled increase in AIM funding for New York City. The City’s AIM funding was reduced to $20 million in SFY 2007-08 and is currently scheduled to return to $327.9 million in SFY 2008-09. This change will provide the City with $163.9 million of AIM funding in SFY 2008-09 and $327.9 million for SFY2009-10 and in each fiscal year thereafter.
• Clarify that Erie County will continue to receive aid at the amount provided in SFY 2006-07, and that merger incentives awarded under the new Local Government Efficiency Grant program will be included in a municipality’s base-level AIM funding for purposes of calculating future year AIM funding .

Sections 6 through 9 amend State Finance Law § 54 to create a new Local Government Efficiency Grant (LGEG) program, which restructures financial incentives for municipalities to consolidate and share services previously funded under the Shared Municipal Service Incentive (SMSI) Program. The new LGEG program will include an evaluation component, improved technical assistance to local governments, new state agency services for local governments, enhancements to the consolidation incentive offered last year, and a new “21^st Century Demonstration Projects” component promoting transformative regional pilot projects. This change would implement a recommendation of the Commission on Local Government Efficiency and Competitiveness to make shared service proposals both more ambitious and more effective at lowering costs for local taxpayers.

Sections 10 through 13 amend General Municipal Law Article 3 to improve local fiscal management practices and transparency with expanded reporting requirements as follows:

• Municipalities will be required to post financial reports on their websites, including their most recent budget, independent audit and multi-year financial plan.
• The State Comptroller will be required to collect and report new fiscal performance data for all local governments. This initiative is a recommendation of the Commission on Local Government Efficiency and Competitiveness that would enable local governments to assess comparative efficiency, identify opportunities to consolidate or share services, and make informed projections for financial plans required under the AIM program.
• All municipalities that meet the AIM program’s criteria for fiscal distress will be required to obtain and disclose an annual independent audit, as well as to prepare corrective action plans in response to any audit findings. Independent audits not only provide oversight, but can also help distressed municipalities improve their structural finances.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget and the State Financial Plan. Raising the thresholds to qualify for AIM per capita adjustments will increase AIM spending by: $4.7 million in SFY 2008-09, $10.6 million in SFY 2009-10 and $19.0 million in SFY 2010-11. Recommended AIM funding for the City of New York will reduce SFY 2008-09 spending requirements by $163.9 million. The Executive Budget includes a $25 million appropriation for the new Local Government Efficiency Grant (LGEG) program.

Effective Date:

This bill takes effect immediately, with certain provisions relating to the AIM Program deemed effective April 1, 2007. The new reporting requirements relating to the fiscal condition of municipalities will take effect January 1, 2009.

Part P – Offer additional revenue opportunities to local governments, including an option for counties to increase mortgage recording fees, authorization for cities and villages to collect utilities gross receipts tax on mobile phone services, and authorization for certain cities and counties to establish red light camera traffic safety programs.

Purpose:

This bill will relieve pressure on local property taxes by: (1) giving counties the option to increase mortgage recording fees; (2) allowing cities and villages to collect utilities gross receipts tax on mobile phone services, as is currently done by New York City and the State; and (3) allowing the cities of Buffalo, Rochester, Syracuse and Yonkers, as well as Nassau and Suffolk counties, to operate red light camera traffic safety programs similar to the program currently operating in New York City.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Section 1 amends CPLR § 8021 to give all counties and New York City the option to increase the county clerk recording fee from $5 to $20 and the additional per page filing fee from $3 to $5. Section 2 amends Real Property Law § 333 to allow Suffolk County to set its conveyance verification fee by local law. The “per page” and recording fees were last increased in 1977 and 1983, respectively, and several counties have requested authority to update these fee schedules.

Sections 3 through 5 amend General City Law § 20-b and Village Law § 5-530 to include mobile telecommunications service within the scope of the utility gross receipts tax that may be imposed by cities and villages. The State, New York City, and approximately 60 cities and 360 villages outside of New York City, impose gross receipt taxes under statutory authority that dates back to 1959. The statutes authorizing these taxes for New York City and the State were modernized to cover mobile telecommunication services in 1995 and 1998, respectively. This bill makes comparable changes to the statutes authorizing cities and villages to impose these taxes, which will take effect for taxable periods beginning on or after September 1, 2008. The amendments conform to Federal Mobile Telecommunications Sourcing Act requirements to source mobile telecommunications services to the “place of primary use,” which generally is the customer’s residence or place of business.

Section 6 amends Vehicle & Traffic Law § 1111-a to expand the Red Light Camera Traffic Safety Demonstration program currently operating in New York City to also include the cities of Buffalo, Rochester, Syracuse and Yonkers, and the counties of Nassau and Suffolk. These additional localities would be authorized to operate up to 50 red light cameras and to impose fines of up to $50 for each red light traffic violation. The current program was established in 1988 for New York City, which has reported success in improving traffic safety and raising additional revenue. A number of large municipalities have requested similar authorization in order to improve public safety and reduce the need for property taxes. This amendment will not change the scheduled December 1, 2009 sunset of the program.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget because it offers local governments revenue opportunities to ease the local property tax burden. The increases in recording fees is expected to raise annual revenue of approximately $70 million for counties and $27 million for New York City. Extending the utility gross receipts tax to mobile telecommunications is estimated to provide $8 million in additional annual revenue for cities and villages outside of New York City. The expansion of the Red Light Camera Traffic Safety program to additional cities and counties could provide roughly $3.5 million in annual revenue for each participating municipality.

Effective Date:

This bill will take effect immediately.

Part Q – Provide mandate relief for local governments.

Purpose:

This bill will facilitate local government cost saving efforts by providing relief from certain State mandates.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Sections 1 through 19 will amend existing multiple bidding requirements (the Wicks Law) for the State, municipalities, school districts and public authorities by increasing the current $50,000 threshold to $3,000,000 for projects in New York City, $1,500,000 for projects in Nassau, Suffolk, and Westchester Counties, and $500,000 in all other counties. In addition, the bill will allow for the pre-qualification of bidders, provide prompt payment protections for sub-contractors, authorize the use of project labor agreements for projects otherwise subject to the Wicks Law, and empower the Commissioner of Labor to issue a stop-bid order to enforce compliance with the Wicks Law requirements.

Sections 20 through 22 of the bill will give local governments more contracting flexibility by (1) making permanent existing authorization to use electronic bidding tools; (2) increasing the competitive bidding thresholds from $10,000 to $20,000 for commodities and from $20,000 to $50,000 for public works projects; (3) allowing contracts for services to be awarded on the basis of “best value” rather than lowest bid; (4) allowing purchasing of information technology products and services through cooperative purchasing under the federal General Services Administration Information Technology Schedule 70 or successor schedules; and (5) allowing localities to purchase materials, equipment and supplies through certain contracts let by other states and local governments.

Sections 23 and 24 of the bill amend the New York City Transitional Finance Authority Act. Section 23 amends the Public Authorities Law § 2799-bb definition of project capital costs to delete the requirement that they be classified as capital assets under generally accepted accounting principles. This change will enable the New York City Transitional Finance Authority (TFA) to issue bonds to finance the same costs as may currently be financed through the issuance of City general obligation (GO) bonds.

Section 24 amends Public Authorities Law § 2799-gg to unify TFA’s statutory bonding authority with the City’s GO debt limit by providing that TFA debt issued above the current $13.5 billion statutory cap will count against the City’s available GO debt limit, change TFA’s statutory cap calculation from bonds issued to bonds outstanding, and apply TFA’s current 20% variable rate bond cap to the unified cap/debt limit under this new structure.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget because it will provide fiscal relief and increased operational flexibility for local governments. The Wicks Law reforms will save the State an estimated $1.6 million, and will save New York City nearly $9 million in debt service costs by the close of its 2010 fiscal year. In addition, these reforms will lower the City’s capital costs by an estimated $200 million in the first year of its enactment. School districts throughout the State should also realize future savings in debt service costs as a result of this action. New York City will realize $20 million in debt service savings from the changes to the TFA debt capacity by the close of its 2009 fiscal year.

Effective Date:

The changes made in section 1 through 19 of this bill will take effect on July 1, 2008, and will control all contracts advertised or solicited for bid on or after that date under the provisions of any law requiring contracts to be let pursuant to provisions of law amended by this bill. The changes in the remainder of this bill will take effect immediately.

Part R – Restructure State aid provided to municipalities in which a video lottery gaming facility is located.

Purpose:

This bill restructures State aid paid to municipalities in which a video lottery gaming facility is located.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill amends State Finance Law § 54-l, which authorizes a State aid program for local governments in which a video lottery gaming facility is located (“VLT aid”), to: (1) limit the aid program to local governments where video lottery gaming facilities are currently operating; (2) set payments in SFY 2008-09 at amounts paid in SFY 2007-08; and (3) transition to a reimbursement program outside the City of Yonkers with a 50 percent reduction in aid for SFY 2009-10, followed in SFY 2010-11 and thereafter with payments to reimburse local governments for the net costs incurred as a result of video lottery gaming operations.

The current reimbursement formula under this program allocates aid to 17 eligible municipalities without regard to local need for such revenue or the actual fiscal impact resulting from hosting video lottery gaming facilities. This bill phases out the current formula over two years and moves to a formula that reimburses actual local costs attributable to hosting these facilities, thereby establishing a more affordable and rational basis for allocating impact aid to affected municipalities. Under this bill, aid to the City of Yonkers will continue at the $20 million amount paid in SFY 2007-08, and will continue to require Yonkers to use this funding to support its dependent school district.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget and the State Financial Plan because it targets aid based upon local fiscal impact while reducing the State cost of providing aid to municipalities in which a video lottery gaming facility is located by an estimated $500,000 in 2008-09, $27.5 million in 2009-10, and $30.5 million each year thereafter.

Effective Date:

This bill takes effect April 1, 2008.

Part S – Extend the powers of the New York State Financial Control Board and make changes to the Board’s authority.

Purpose:

This bill will continue State oversight of New York City finances by preserving the ability of the New York State Financial Control Board (FCB) to impose a control period if City fiscal conditions warrant. The bill will also empower the FCB to phase-in or waive any change to generally accepted accounting principles (GAAP) that would negatively impact the City’s operating budget.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

This bill amends the New York State Financial Emergency Act (FEA, Chapter 868 of the Laws of 1975) to extend the FCB’s power to impose a control period, which is currently set to sunset on June 30, 2008. The 2003 refinancing of outstanding Municipal Assistance Corporation debt extended the termination of the FEA until the later of June 30, 2008 or when there are no longer bonds outstanding containing the state covenants authorized by the FEA. Since the City was issuing thirty year general obligation bonds with this covenant until 2003, the FEA, including the FCB, has effectively been extended until 2033. This bill provides that the FCB’s power to impose a control period will terminate when the FCB itself terminates, assuring that the FCB retains this important fiscal control.

The bill will also give the FCB greater flexibility regarding implementation of GAAP changes by expanding its current power to delay implementation to also allow phase-in or waiver of any change to GAAP that would negatively impact the City’s budget. The bill further provides that the FCB’s power to waive or delay implementation of a GAAP change supersedes all other laws, including the City Charter.

In addition, the bill adds a new subdivision 104 to Local Finance Law § 11(a) to establish a period of probable usefulness for pollution remediation expenses, which will clarify the City’s authority to issue bonds for these purposes.

Budget Implications:

New York City has estimated that recent GAAP changes included in Governmental Accounting Standards Board Statement 49 (GASB 49) would require the City to include $500 million in annual pollution remediation costs in its operating budgets beginning in July 2008. This bill will empower the FCB to phase-in or waive this GAAP change, which will allow the City to continue issuing bonds for these expenses.

City reimbursement through its local sales tax of State expenses related to the fiscal oversight activities of the FCB and the Office of the State Deputy Comptroller is continued by separate Article VII legislation contained in the Executive Budget extending the fourth cent of the City sales tax. These expenses are estimated at $8 million in State Fiscal Year 2008-09.

Effective Date:

This bill takes effect April 1, 2008.

Part T – Reform local property tax administration with: (1) targeted increases in the real property transfer fee to fund State and local improvements in property tax administration; and (2) statutory changes to eliminate barriers and strengthen financial incentives for municipalities to improve the efficiency and quality of local property tax administration.

Purpose:

This bill reforms the administration of local property taxes by increasing the real estate sales fee to support improvements in property tax administration, including financial incentives for municipalities to consolidate assessment and collection services, and by removing statutory impediments to improving efficiency and professional standards.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Sections 1 and 2 amend the Real Property Law and the State Finance Law to authorize targeted increases in the real property transfer fee that is paid whenever a deed is recorded. The current fee is $50 for housing cooperatives (co-ops), $75 for residential or farm property, and $165 for commercial property. The county that collects the fee retains $9, and the remainder is dedicated to expenses of the Office of Real Property Services funded in the Improvement of Real Property Tax Administration Account. The new fee is structured as a graduated, priced-based assessment, with increases targeted to higher-priced real estate ranging up to $425 for co-ops or residential property sales over $1 million, and up to $750 for commercial property sales over $1 million. There will be no increase in fees for residential and commercial sales of $175,000 or less, which currently represents more than half of all property sales. The fee increases are necessary to support new financial incentives and investments in technology to improve local property tax administration and to ensure adequate support for Office of Real Property Services operations.

Sections 2-a through 9 amend the Real Property Tax Law and the Village Law to: authorize the State Board of Real Property Services to prescribe a Uniform Assessment Code; replace elected assessors with appointed assessors by January 1, 2012; divest all villages of the responsibility for assessing real property; and give the cities of Long Beach, Glen Cove and Sherrill the option to divest themselves of such responsibility. These changes are based on recommendations of the Commission on Local Government Efficiency and Competitiveness to eliminate redundancy and improve professional standards in real property tax administration. In approximately 150 villages and these three cities, two different levels of government are assessing the same parcels of property. Eliminating this duplication of effort will lead to more efficient, consistent and equitable assessments. Local property tax administration can be further improved by allowing the State to establish professional standards under a Uniform Assessment Code and by replacing elected assessors with appointed assessors.

Sections 9-a through 10-b amend Real Property Tax Law § 1573 in order to restructure local “maintenance aid” programs, which promote annual revaluation and reassessment, as well as provide incentives for county assessing. To enhance and promote efficiency and equity in the administration of the property tax, these amendments would:

• Sunset the present $5 per parcel “annual aid” program after the 2011 assessment roll, coinciding with the current expiration of the “triennial aid” program;
• Replace these existing reassessment programs with a program that will offer $5 per parcel annually to assessing units that have State equalization rates of 100 percent, participate in a centralized data program, meet administrative standards, can attest to an assessment roll meeting professional appraisal standards and contain at least 10,000 parcels (or have contracted with their county to perform the assessment or appraisal function). The new program would first be available for 2009 assessment rolls, and localities would have to choose between the present annual reassessment aid or the new aid structure for the three years (2009, 2010 and 2011) that both programs would be available; and
• Provide additional incentives to counties of up to $5 per parcel based on the level of countywide assessing, and up to $3 per parcel to counties that perform the assessment or appraisal functions by contract for fewer than all of its cities and towns.

Section 11 adds a new § 1573-a to the Real Property Tax Law to enhance State financial incentives for local governments to centralize real property tax assessment and collection, with an emphasis on countywide consolidation. The current incentive program offers a one-time payment of up to $7 per parcel for a new county assessing unit or a new coordinated assessment program (CAP), and a one-time payment of $1 per parcel for counties that contract with cities or towns to perform assessment services. While these programs have had some success, they have not led to extensive centralization at the county level. To better promote both consolidated property tax assessment and centralized tax collection, this bill will:

• Create a new one-time incentive payment of up to $7 per parcel for counties that establish a centralized system of tax collection;
• Continue the one-time payment of $7 per parcel for new county or coordinated assessing units, with $3 per parcel for the next three succeeding years for a new county assessing unit; and
• Provide $7 per parcel to counties in which all cities and towns contract with the county to perform their appraisal or assessment functions, but which are not considered as the centralized assessing unit, with $2 per parcel for the next three succeeding years.

These incentives, which are based on recommendations of the Commission on Local Government Efficiency and Competitiveness, should result in lower per-parcel cost of administration, more highly qualified administrators, improved equity and elimination of unanticipated tax shifts due to equalization rate issues.

Sections 12 and 13 amend the Real Property Tax Law to authorize the State Board of Real Property Services to establish a program of continuing education for appraisers in county assessing units, and to make mandatory appraiser training a State expense. Under existing law, counties receive less reimbursement for training courses as compared to their municipal counterparts. These amendments will provide equal training opportunities, as well as State reimbursement to present and future county assessing units.

Sections 14 through 16 amend the Real Property Tax Law to simplify requirements for local governments to form, withdraw from or terminate a coordinated assessment program (CAP), and clarify the term of office for assessors under these programs. Reducing the complexity of CAP requirements would remove a potential barrier for municipalities to take advantage of this consolidation alternative.

Sections 17 through 46 of the bill amend the Real Property Tax Law, the General Municipal Law, the Town Law and the Education Law to remove statutory impediments to the consolidation of local government tax collection functions and to make available more efficient means for municipalities to collect property taxes. Specific changes will:

• Eliminate elected tax collectors in towns and make these offices appointed at the end of terms ending December 31, 2009, or at the end of any terms that extend beyond this date;
• Dispense with the requirement that town collecting officers be town residents;
• Allow towns and counties to enter into cooperative agreements so tax collection may be centralized at the county level;
• Abolish the position of school district collector at the end of terms ending December 31, 2009, or at the end of any terms that extend beyond this date, and transfer responsibility for this function to the appropriate city or town;
• Eliminate statutory authority for fee-based tax collection; and
• Authorize consolidated, county-based tax collection to take place via the internet, electronic funds transfer, or through contracts with banks for collection services.

These changes are based on recommendation of the Commission on Local Government Efficiency and Competitiveness. These measures will provide municipalities with opportunities to realize savings through consolidation and improve tax collection services.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget because it will improve the efficiency and effectiveness of property tax administration. Targeted increases in the real property transfer fee will raise approximately $30 million in additional annual revenue to fund new financial incentives and investments in technology for improved property tax administration, and ensure adequate support for Office of Real Property Services operations.

Effective Date:

The bill will take effect immediately, except that: (1) the new fee schedule provisions under sections 1 and 2 will take effect April 1, 2008; (2) changes relating to city and village assessing units under sections 6 and 7 will first apply to assessment rolls with taxable status dates on or after January 1, 2009; and (3) changes to the statutory powers, functions and duties of tax collectors, tax receivers and school district collectors will take effect when those offices cease to be elective.

Part U – Enact initial recommendations made by the Commission on Local Government Efficiency and Competitiveness.

Purpose:

This bill makes certain statutory changes necessary to implement the initial recommendations of the Governor’s Commission on Local Government Efficiency and Competitiveness (“the Commission”) with respect to municipal health benefit plan cooperatives, improved coordination of State and local highway services, certain inter-county functions, special districts, and petitions for municipal consolidations and dissolutions.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Sections 1 through 7 amend the Insurance Law to relax the requirements for forming a municipal cooperative health benefit plan pursuant to Article 47 of the Insurance Law as follows:

• Require insurers to provide up to three years of claims experience to a municipal corporation when it requests such information for the purposes of forming or joining such a cooperative;
• Reduce the minimum number of municipal corporations needed to establish such a cooperative from five to three;
• Provide flexibility in the reserve requirements for such cooperatives by allowing a qualified actuary to determine the amount of reserves each individual cooperative needs, and by allowing new cooperatives to amass these reserves over a five-year transition period. All such cooperatives are currently held to the same reserve requirements, regardless of the characteristics of their covered population, and are currently obligated to meet this requirement at the time of their formation; and
• Direct the Insurance Department to order a study, to be completed by September 1, 2009, of the impact on the community-rated health insurance market of allowing municipalities with 50 or fewer employees to join with larger municipalities to purchase experience-rated policies.

These changes are necessary because, due to the current stringent requirements, not a single municipal cooperative health benefit plan has been formed since the enactment of Article 47 in 1994. Municipalities also are deterred from forming or joining such cooperatives because they lack access to their claims experience and so cannot make an informed decision as to the potential risks and benefits of such an action. Nine counties are currently exploring countywide municipal health benefit plans, and almost all of the local government initiatives received by the Commission relating to municipal health insurance cooperatives identified the cost of community-rated policies as a problem.

Sections 8 and 9 amend the Agriculture and Markets Law to allow multiple counties to share one Director of Weights and Measures pursuant to an intermunicipal agreement. The Agriculture and Markets Law currently requires each county to have its own Director of Weights and Measures, who must reside in the county. This change has the potential not only to improve the delivery of such services, but also to generate cost savings for counties. The bill also amends the County Law to update antiquated “Sealer” references to conform to current terminology. There are three counties looking at sharing this position.

Sections 10 through 13 amend the General Municipal Law and the Highway Law to facilitate shared services agreements among municipalities and between municipalities and State agencies. These amendments will:

• Expand the list of services that can be the subject of shared service contracts;
• Authorize non-monetary exchanges of goods and services;
• Allow the State Department of Transportation (DOT) to contract with municipalities for terms of up to five years; and
• Broaden the range of emergency situations for which DOT can provide assistance, and allow municipalities to similarly assist the State.

Currently, DOT can contract with municipalities only for three-year terms and can provide only snow and ice control services to municipalities in emergencies. These amendments have the potential to make the delivery of highway services more efficient and more cost-effective at both the state and local levels.

Section 14 of this bill amends the Public Health Law to allow certain county and part-county health districts to share the same commissioner/director and, under these circumstances, to also have common district board members, subject to the approval of the State Department of Health (DOH). Residency requirements currently prohibit such sharing of board members. DOH will be required to periodically review approved director- and board-sharing arrangements to verify that such joint membership continues to serve the interest of public health. This change will allow small county or part-county health districts to reduce their administrative expenses without lowering the quality of the services they provide. Two counties are currently looking at this option.

Section 15 amends the Town Law to prohibit special district commissioners from receiving compensation for their services. However, such commissioners may still receive reimbursement for any actual and necessary expenses they incur in the performance of their official duties. Under current law, commissioners may receive compensation of up to $100 for each day spent in the service of the district, as well as health insurance and other perquisites. This change brings special district commissioners into conformity with school board members and fire district commissioners, who are also barred from receiving compensation. Audits by the Nassau County Comptroller have shown that many special district commissioners currently receive significant salaries and benefits.

Sections 16 and 17 amend the Town Law to address the wide variation in special district sanitation collection costs. The bill transfers to town boards most of management responsibilities for town special districts providing sanitary, refuse, or garbage services, but allows elected special district commissioners to continue to hold referenda on whether the level of services provided to district residents should be changed. As the Nassau County Comptroller has documented, some sanitation districts charge households up to three times more than other districts providing substantially the same level of services. These amendments have the potential to improve the management and reduce the costs of these special districts.

Sections 18 through 26 amend the General Municipal Law, the Village Law and the Town Law to create a uniform, simplified process by which citizens can submit petitions for municipal consolidations and dissolutions. A new Article 17-A is added to the General Municipal Law to establish uniform petition requirements, including a new petition form and a requirement that petitions contain signatures from 10 percent of registered voters to initiate the dissolution or consolidation process. The bill also makes conforming amendments to Village Law and Town Law provisions governing village consolidations and dissolutions, town consolidations, and fire and fire protection district consolidations. These changes are necessary to simplify the current often-confusing petition requirements.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-2009 Executive Budget because it adopts the preliminary recommendations of the Commission on Local Government Efficiency and Competitiveness, including proposals with the potential to generate cost savings for municipalities.

Effective Date:

This bill will take effect immediately, except that sections 15 and 16 will take effect on January 1, 2009.

Part V – Authorize transfers, temporary loans and miscellaneous capital/debt provisions, including certain bond caps.

Purpose:

This bill would provide the statutory authorization necessary for the administration of funds/accounts included in the 2008-09 Executive Budget, and proposes certain debt issuance modifications. Specifically, this bill (1) authorizes temporary loans and the deposit of certain revenues to specific funds/accounts, and transfers of funds including a deposit to the new rainy day reserve fund; (2) continues or extends various provisions of Chapter 59 of the Laws of 2004 in relation to capital projects and certain certifications; (3) authorizes bonds to be issued for equipment acquisition; (4) increases existing bond caps for various capital programs, permits greater flexibility in the issuance of State-supported debt through consolidated refundings; (5) increases the maximum amount of variable rate debt and interest exchange agreements authorized for the State; and (6) consolidates all current and proposed bond authorizations for greater transparency.

Summary of Provisions, Existing Law, Prior Legislative History, and Statement in Support:

Section 1 authorizes specific State funds and accounts to receive temporary loans during the 2008-09 fiscal year.

Section 2 authorizes specific Federal funds to receive temporary loans during the 2008-09 fiscal year.

Sections 3 through 11 authorize transfers between designated funds and accounts.

Section 12 authorizes the State Comptroller to deposit funds to the banking services account.

Section 13 authorizes reimbursement to the General Fund from the Correctional Facilities Capital Improvement Fund for costs related to capital projects.

Section 14 authorizes the deposit of funds into the School Tax Relief Fund.

Section 15 authorizes the State Comptroller to receive for deposit moneys to funds and accounts as identified by the Director of the Budget.

Section 16 amends State Finance Law to allow payment of prior years’ liabilities.

Section 17 authorizes the State Comptroller, with concurrence from the Budget Director, to transfer appropriations among Federal funds in accordance with the Comptroller’s consolidation plan.

Sections 18 through 27 authorize the State Comptroller to deposit reimbursements for certain capital spending from new capital appropriations contained in various Chapters of the Laws of 1999 through 2008 into the Capital Projects Fund.

Section 28 authorizes improvements to real property in accordance with State Finance Law § 66-e.

Section 29 continues the authorization to use excess debt service appropriation for Mental Hygiene facilities to make rebates necessary, to protect the tax-exempt status of the bonds.

Section 30 continues authorizations for disbursements for hazardous waste site remediation projects.

Section 31 amends the Public Authorities Law to create a new bonding authorization for the creation or improvement of technology systems and related research and development and establishes a $114 million bond cap.

Section 32 amends State Finance Law § 67-b to prohibit the issuance of debt secured solely by State local aid payments.

Section 33 amends State Finance Law § 68-b(8) to provide additional flexibility for PIT bond issuers to issue bonds for any other PIT bond issuers’ purposes.

Section 34 makes permanent provisions of State Finance Law § 69-c relating to the treatment of refundings with variable rates or swaps.

Section 35 adds a new section, State Finance Law § 67-c to consolidate all State-supported bond authorizations, whether current, amended or newly-proposed, into a single statute to allow for greater transparency and consistency. This includes converting some older “gross” cap amounts, which included bonded costs of issuance, to the more modern “net” cap standard, which matches project costs.

Sections 36-115 replace all prior State-supported bonding authorizations, which will now be governed by the provisions of section 34 of this bill as of April 1, 2008.

Section 116 makes the act effective immediately with full force and effect as of April 1, 2008.

This bill is necessary to execute a balanced Financial Plan in accordance with the 2008-09 Executive Budget. Such legislation is enacted annually to authorize the transfer of funds budgeted in the financial plan but that do not have permanent statutory authorization, as well as to provide for other transactions necessary to maintain a balanced financial plan.

In addition, State Finance Law requires statutory authorization for funds/accounts to receive temporary loans from the State Treasury. Similar provisions were enacted to implement the 2007-08 Budget and need to be extended to implement the 2008-09 Budget.

Budget Implications:

Enactment of this bill is necessary to implement the 2008-09 Executive Budget. Such legislation is enacted annually to authorize the transfer of funds budgeted in the financial plan but that do not have permanent statutory authorization, as well as to provide for other transactions, including temporary loans from the State Treasury for cash flow purposes, necessary to maintain a balanced Financial Plan. This bill is also necessary to reimburse projected Capital Projects Funds spending with the proceeds of bonds sold by public authorities, to maximize debt service savings from State-supported refundings, to ensure the continued tax-exempt status and reduced borrowing costs for certain State-supported debt, and to permit the State to carry out basic administrative functions.

Effective Date:

This bill takes effect on April 1, 2008.

The provisions of this act shall take effect immediately, provided, however, that the applicable effective date of each part of this act shall be as specifically set forth in the last section of such part.