S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         6045
                              2015-2016 Regular Sessions
                                   I N  S E N A T E
                                  September 11, 2015
                                      ___________
       Introduced  by  Sen.  SAVINO -- read twice and ordered printed, and when
         printed to be committed to the Committee on Rules
       AN ACT to amend the retirement and social security  law  and  the  state
         finance  law, in relation to enacting the New York state secure choice
         savings program act
         THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section  1.  Short  title. This act shall be known and may be cited as
    2  the "New York state secure choice savings program act".
    3    S 2. The retirement and social security law is amended by adding a new
    4  article 14-C to read as follows:
    5                                ARTICLE 14-C
    6                NEW YORK STATE SECURE CHOICE SAVINGS PROGRAM
    7  SECTION 570. DEFINITIONS.
    8          571. PROGRAM ESTABLISHED.
    9          572. COMPOSITION OF THE BOARD.
   10          573. FIDUCIARY DUTY.
   11          574. DUTIES OF THE BOARD.
   12          575. RISK MANAGEMENT.
   13          576. INVESTMENT FIRMS.
   14          577. INVESTMENT OPTIONS.
   15          578. BENEFITS.
   16          579. EMPLOYER AND EMPLOYEE INFORMATION  PACKETS  AND  DISCLOSURE
   17                 FORMS.
   18          580. PROGRAM IMPLEMENTATION AND ENROLLMENT.
   19          581. PAYMENTS.
   20          582. DUTY AND LIABILITY OF THE STATE.
   21          583. DUTY AND LIABILITY OF PARTICIPATING EMPLOYERS.
   22          584. AUDIT AND REPORTS.
   23          585. PENALTIES.
   24          586. DELAYED IMPLEMENTATION.
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD11645-01-5
       S. 6045                             2
    1          587. FEDERAL CONSIDERATIONS.
    2    S 570. DEFINITIONS. ALL TERMS SHALL HAVE THE SAME MEANING AS WHEN USED
    3  IN  A  COMPARABLE  CONTEXT IN THE INTERNAL REVENUE CODE. AS USED IN THIS
    4  ARTICLE, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
    5    1. "BOARD" SHALL MEAN THE NEW YORK SECURE CHOICE SAVINGS BOARD  ESTAB-
    6  LISHED UNDER THIS ARTICLE.
    7    2.  "COMMISSIONER"  SHALL  MEAN  THE COMMISSIONER OF THE DEPARTMENT OF
    8  TAXATION AND FINANCE.
    9    2-A. "DEPARTMENT" SHALL MEAN THE DEPARTMENT OF TAXATION AND FINANCE.
   10    3. "EMPLOYEE" SHALL MEAN ANY INDIVIDUAL WHO IS EIGHTEEN YEARS  OF  AGE
   11  OR  OLDER,  WHO  IS  EMPLOYED BY AN EMPLOYER, AND WHO HAS WAGES THAT ARE
   12  ALLOCABLE TO NEW YORK STATE DURING A CALENDAR YEAR.
   13    4. "EMPLOYER" SHALL MEAN A PERSON OR ENTITY  ENGAGED  IN  A  BUSINESS,
   14  INDUSTRY,  PROFESSION,  TRADE,  OR  OTHER  ENTERPRISE IN NEW YORK STATE,
   15  WHETHER FOR PROFIT OR NOT FOR PROFIT, THAT (I) HAS AT NO TIME DURING THE
   16  PREVIOUS CALENDAR YEAR EMPLOYED FEWER THAN TWENTY-FIVE EMPLOYEES IN  THE
   17  STATE,  (II)  HAS BEEN IN BUSINESS AT LEAST TWO YEARS, AND (III) HAS NOT
   18  OFFERED A QUALIFIED RETIREMENT PLAN, INCLUDING, BUT NOT  LIMITED  TO,  A
   19  PLAN  QUALIFIED  UNDER  SECTIONS 401(A), 401(K), 403(A), 403(B), 408(K),
   20  408(P) OR 457(B) OF THE INTERNAL REVENUE CODE OF 1986 IN  THE  PRECEDING
   21  TWO YEARS.
   22    5. "ENROLLEE" SHALL MEAN ANY EMPLOYER WHO IS ENROLLED IN THE PROGRAM.
   23    6.  "FUND" SHALL MEAN THE NEW YORK STATE SECURE CHOICE SAVINGS PROGRAM
   24  FUND.
   25    7. "INTERNAL REVENUE CODE" SHALL MEAN THE  INTERNAL  REVENUE  CODE  OF
   26  1986, OR ANY SUCCESSOR LAW, IN EFFECT FOR THE CALENDAR YEAR.
   27    8. "IRA" SHALL MEAN A ROTH IRA (INDIVIDUAL RETIREMENT ACCOUNT).
   28    9.  "PARTICIPATING  EMPLOYER" SHALL MEAN AN EMPLOYER OR SMALL EMPLOYER
   29  THAT PROVIDES  A  PAYROLL  DEPOSIT  RETIREMENT  SAVINGS  ARRANGEMENT  AS
   30  PROVIDED  FOR BY THIS ARTICLE FOR ITS EMPLOYEES WHO ARE ENROLLEES IN THE
   31  PROGRAM.
   32    10. "PAYROLL DEPOSIT RETIREMENT SAVINGS  ARRANGEMENT"  SHALL  MEAN  AN
   33  ARRANGEMENT  BY WHICH A PARTICIPATING EMPLOYER ALLOWS ENROLLEES TO REMIT
   34  PAYROLL DEDUCTION CONTRIBUTIONS TO THE PROGRAM.
   35    11. "PROGRAM" SHALL MEAN THE NEW  YORK  STATE  SECURE  CHOICE  SAVINGS
   36  PROGRAM.
   37    12.  "SMALL EMPLOYER" SHALL MEAN A PERSON OR ENTITY ENGAGED IN A BUSI-
   38  NESS, INDUSTRY, PROFESSION, TRADE,  OR  OTHER  ENTERPRISE  IN  NEW  YORK
   39  STATE, WHETHER FOR PROFIT OR NOT FOR PROFIT, THAT (I) EMPLOYED LESS THAN
   40  TWENTY-FIVE EMPLOYEES AT ANY ONE TIME IN THE STATE THROUGHOUT THE PREVI-
   41  OUS  CALENDAR YEAR, OR (II) HAS BEEN IN BUSINESS LESS THAN TWO YEARS, OR
   42  BOTH ITEMS (I) AND (II), BUT THAT NOTIFIES THE  DEPARTMENT  THAT  IT  IS
   43  INTERESTED IN BEING A PARTICIPATING EMPLOYER.
   44    13.  "WAGES"  MEANS  ANY  COMPENSATION  WITHIN  THE MEANING OF SECTION
   45  219(F)(1) OF THE INTERNAL REVENUE CODE THAT IS RECEIVED BY  AN  ENROLLEE
   46  FROM A PARTICIPATING EMPLOYER DURING THE CALENDAR YEAR.
   47    S  571.  PROGRAM ESTABLISHED. A RETIREMENT SAVINGS PROGRAM IN THE FORM
   48  OF AN AUTOMATIC ENROLLMENT PAYROLL DEDUCTION IRA, KNOWN AS THE NEW  YORK
   49  STATE  SECURE CHOICE SAVINGS PROGRAM, IS HEREBY ESTABLISHED AND SHALL BE
   50  ADMINISTERED BY THE BOARD FOR THE PURPOSE OF PROMOTING  GREATER  RETIRE-
   51  MENT SAVINGS FOR PRIVATE-SECTOR EMPLOYEES IN A CONVENIENT, LOW-COST, AND
   52  PORTABLE MANNER.
   53    S  572. COMPOSITION OF THE BOARD. THERE IS HEREBY CREATED THE NEW YORK
   54  STATE SECURE CHOICE SAVINGS BOARD.
   55    1. THE BOARD SHALL CONSIST OF THE FOLLOWING SIX MEMBERS:
       S. 6045                             3
    1    (A) THE COMMISSIONER, OR HIS OR  HER  DESIGNEE,  WHO  SHALL  SERVE  AS
    2  CHAIR;
    3    (B) THE STATE COMPTROLLER, OR HIS OR HER DESIGNEE;
    4    (C)  TWO  PUBLIC  REPRESENTATIVES WITH EXPERTISE IN RETIREMENT SAVINGS
    5  PLAN ADMINISTRATION OR INVESTMENT, OR BOTH, APPOINTED BY THE GOVERNOR;
    6    (D) A REPRESENTATIVE OF  PARTICIPATING  EMPLOYERS,  APPOINTED  BY  THE
    7  GOVERNOR; AND
    8    (E) A REPRESENTATIVE OF ENROLLEES, APPOINTED BY THE GOVERNOR.
    9    2.  MEMBERS  OF  THE BOARD SHALL SERVE WITHOUT COMPENSATION BUT MAY BE
   10  REIMBURSED FOR NECESSARY TRAVEL EXPENSES  INCURRED  IN  CONNECTION  WITH
   11  THEIR BOARD DUTIES FROM FUNDS APPROPRIATED FOR THE PURPOSE.
   12    3.  THE INITIAL APPOINTMENTS FOR THE GOVERNOR'S APPOINTEES SHALL BE AS
   13  FOLLOWS: ONE PUBLIC REPRESENTATIVE FOR FOUR YEARS; ONE PUBLIC  REPRESEN-
   14  TATIVE  FOR TWO YEARS; THE REPRESENTATIVE OF PARTICIPATING EMPLOYERS FOR
   15  THREE YEARS; AND THE REPRESENTATIVE OF ENROLLEES FOR ONE YEAR. THEREAFT-
   16  ER, ALL THE GOVERNOR'S APPOINTEES SHALL BE FOR TERMS OF FOUR YEARS.
   17    4. A VACANCY IN THE TERM OF AN APPOINTED BOARD MEMBER SHALL BE  FILLED
   18  FOR THE BALANCE OF THE UNEXPIRED TERM IN THE SAME MANNER AS THE ORIGINAL
   19  APPOINTMENT.
   20    5.  EACH  APPOINTMENT  BY THE GOVERNOR SHALL BE SUBJECT TO APPROVAL BY
   21  THE COMMISSIONER, WHO, UPON APPROVAL, SHALL CERTIFY HIS OR HER  APPROVAL
   22  TO THE SECRETARY OF STATE.
   23    S 573. FIDUCIARY DUTY. THE BOARD, THE INDIVIDUAL MEMBERS OF THE BOARD,
   24  THE  TRUSTEES,  ANY  OTHER AGENTS APPOINTED OR ENGAGED BY THE BOARD, AND
   25  ALL PERSONS SERVING AS PROGRAM STAFF SHALL DISCHARGE THEIR  DUTIES  WITH
   26  RESPECT TO THE PROGRAM SOLELY IN THE INTEREST OF THE PROGRAM'S ENROLLEES
   27  AND BENEFICIARIES AS FOLLOWS:
   28    1.  FOR  THE EXCLUSIVE PURPOSES OF PROVIDING BENEFITS TO ENROLLEES AND
   29  BENEFICIARIES AND DEFRAYING REASONABLE  EXPENSES  OF  ADMINISTERING  THE
   30  PROGRAM;
   31    2.  BY  INVESTING  WITH THE CARE, SKILL, PRUDENCE, AND DILIGENCE UNDER
   32  THE PREVAILING CIRCUMSTANCES THAT A PRUDENT  PERSON  ACTING  IN  A  LIKE
   33  CAPACITY  AND FAMILIAR WITH THOSE MATTERS WOULD USE IN THE CONDUCT OF AN
   34  ENTERPRISE OF A LIKE CHARACTER AND WITH LIKE AIMS; AND
   35    3. BY USING ANY CONTRIBUTIONS PAID BY EMPLOYEES AND EMPLOYERS INTO THE
   36  TRUST EXCLUSIVELY FOR THE PURPOSE OF PAYING BENEFITS TO THE ENROLLEES OF
   37  THE PROGRAM, FOR THE COST OF ADMINISTRATION  OF  THE  PROGRAM,  AND  FOR
   38  INVESTMENTS MADE FOR THE BENEFIT OF THE PROGRAM.
   39    S  574.  DUTIES  OF  THE  BOARD.  IN  ADDITION TO THE OTHER DUTIES AND
   40  RESPONSIBILITIES STATED IN THIS ARTICLE, THE BOARD SHALL:
   41    1. CAUSE THE PROGRAM TO BE DESIGNED, ESTABLISHED  AND  OPERATED  IN  A
   42  MANNER THAT:
   43    (A) ACCORDS WITH BEST PRACTICES FOR RETIREMENT SAVINGS VEHICLES;
   44    (B) MAXIMIZES PARTICIPATION, SAVINGS, AND SOUND INVESTMENT PRACTICES;
   45    (C) MAXIMIZES SIMPLICITY, INCLUDING EASE OF ADMINISTRATION FOR PARTIC-
   46  IPATING EMPLOYERS AND ENROLLEES;
   47    (D)  PROVIDES  AN EFFICIENT PRODUCT TO ENROLLEES BY POOLING INVESTMENT
   48  FUNDS;
   49    (E) ENSURES THE PORTABILITY OF BENEFITS; AND
   50    (F) PROVIDES FOR THE DEACCUMULATION OF ENROLLEE  ASSETS  IN  A  MANNER
   51  THAT MAXIMIZES FINANCIAL SECURITY IN RETIREMENT.
   52    2. APPOINT A TRUSTEE TO THE IRA FUND IN COMPLIANCE WITH SECTION 408 OF
   53  THE INTERNAL REVENUE CODE.
   54    3.  EXPLORE AND ESTABLISH INVESTMENT OPTIONS, SUBJECT TO THIS ARTICLE,
   55  THAT OFFER EMPLOYEES RETURNS ON  CONTRIBUTIONS  AND  THE  CONVERSION  OF
       S. 6045                             4
    1  INDIVIDUAL  RETIREMENT  SAVINGS  ACCOUNT  BALANCES  TO SECURE RETIREMENT
    2  INCOME WITHOUT INCURRING DEBT OR LIABILITIES TO THE STATE.
    3    4.  ESTABLISH  THE PROCESS BY WHICH INTEREST, INVESTMENT EARNINGS, AND
    4  INVESTMENT LOSSES ARE ALLOCATED TO INDIVIDUAL PROGRAM ACCOUNTS ON A  PRO
    5  RATA  BASIS  AND  ARE COMPUTED AT THE INTEREST RATE ON THE BALANCE OF AN
    6  INDIVIDUAL'S ACCOUNT.
    7    5. MAKE AND ENTER INTO CONTRACTS NECESSARY FOR THE  ADMINISTRATION  OF
    8  THE  PROGRAM  AND  FUND,  INCLUDING,  BUT  NOT LIMITED TO, RETAINING AND
    9  CONTRACTING WITH INVESTMENT MANAGERS,  PRIVATE  FINANCIAL  INSTITUTIONS,
   10  OTHER  FINANCIAL AND SERVICE PROVIDERS, CONSULTANTS, ACTUARIES, COUNSEL,
   11  AUDITORS, THIRD-PARTY ADMINISTRATORS, AND OTHER PROFESSIONALS AS  NECES-
   12  SARY.
   13    6. CONDUCT A REVIEW OF THE PERFORMANCE OF ANY INVESTMENT VENDORS EVERY
   14  FOUR  YEARS,  INCLUDING,  BUT NOT LIMITED TO, A REVIEW OF RETURNS, FEES,
   15  AND CUSTOMER SERVICE. A COPY OF REVIEWS SHALL BE POSTED TO  THE  BOARD'S
   16  INTERNET WEBSITE.
   17    7. DETERMINE THE NUMBER AND DUTIES OF STAFF MEMBERS NEEDED TO ADMINIS-
   18  TER THE PROGRAM AND ASSEMBLE SUCH A STAFF, INCLUDING, AS NEEDED, EMPLOY-
   19  ING  STAFF,  APPOINTING  A  PROGRAM  ADMINISTRATOR,  AND  ENTERING  INTO
   20  CONTRACTS WITH THE COMMISSIONER TO  MAKE  EMPLOYEES  OF  THE  DEPARTMENT
   21  AVAILABLE TO ADMINISTER THE PROGRAM.
   22    8.  CAUSE MONEYS IN THE FUND TO BE HELD AND INVESTED AS POOLED INVEST-
   23  MENTS DESCRIBED IN THIS ARTICLE, WITH A VIEW TO ACHIEVING  COST  SAVINGS
   24  THROUGH EFFICIENCIES AND ECONOMIES OF SCALE.
   25    9.  EVALUATE AND ESTABLISH THE PROCESS BY WHICH AN ENROLLEE IS ABLE TO
   26  CONTRIBUTE A PORTION OF HIS OR HER WAGES TO THE  PROGRAM  FOR  AUTOMATIC
   27  DEPOSIT  OF THOSE CONTRIBUTIONS AND THE PROCESS BY WHICH THE PARTICIPAT-
   28  ING EMPLOYER PROVIDES A PAYROLL DEPOSIT RETIREMENT  SAVINGS  ARRANGEMENT
   29  TO  FORWARD  THOSE CONTRIBUTIONS AND RELATED INFORMATION TO THE PROGRAM,
   30  INCLUDING, BUT NOT LIMITED TO, CONTRACTING WITH FINANCIAL SERVICE COMPA-
   31  NIES AND THIRD-PARTY ADMINISTRATORS WITH THE CAPABILITY TO  RECEIVE  AND
   32  PROCESS  EMPLOYEE  INFORMATION  AND  CONTRIBUTIONS  FOR  PAYROLL DEPOSIT
   33  RETIREMENT SAVINGS ARRANGEMENTS OR SIMILAR ARRANGEMENTS.
   34    10. DESIGN AND ESTABLISH THE  PROCESS  FOR  ENROLLMENT  INCLUDING  THE
   35  PROCESS  BY WHICH AN EMPLOYEE CAN OPT NOT TO PARTICIPATE IN THE PROGRAM,
   36  SELECT A CONTRIBUTION LEVEL, SELECT AN INVESTMENT OPTION, AND  TERMINATE
   37  PARTICIPATION IN THE PROGRAM.
   38    11.  EVALUATE  AND  ESTABLISH  THE  PROCESS BY WHICH AN INDIVIDUAL MAY
   39  VOLUNTARILY ENROLL IN AND MAKE CONTRIBUTIONS TO THE PROGRAM.
   40    12. ACCEPT ANY GRANTS, APPROPRIATIONS, OR OTHER MONEYS FROM THE STATE,
   41  ANY UNIT OF FEDERAL, STATE, OR LOCAL GOVERNMENT, OR  ANY  OTHER  PERSON,
   42  FIRM,  PARTNERSHIP,  OR  CORPORATION  SOLELY  FOR DEPOSIT INTO THE FUND,
   43  WHETHER FOR INVESTMENT OR ADMINISTRATIVE PURPOSES.
   44    13. EVALUATE THE NEED FOR, AND PROCURE AS  NEEDED,  INSURANCE  AGAINST
   45  ANY  AND ALL LOSS IN CONNECTION WITH THE PROPERTY, ASSETS, OR ACTIVITIES
   46  OF THE PROGRAM, AND INDEMNIFY AS NEEDED EACH MEMBER OF  THE  BOARD  FROM
   47  PERSONAL  LOSS OR LIABILITY RESULTING FROM A MEMBER'S ACTION OR INACTION
   48  AS A MEMBER OF THE BOARD.
   49    14. MAKE PROVISIONS  FOR  THE  PAYMENT  OF  ADMINISTRATIVE  COSTS  AND
   50  EXPENSES  FOR  THE  CREATION,  MANAGEMENT, AND OPERATION OF THE PROGRAM.
   51  SUBJECT TO APPROPRIATION, THE STATE MAY PAY ADMINISTRATIVE COSTS ASSOCI-
   52  ATED WITH THE CREATION AND MANAGEMENT OF THE  PROGRAM  UNTIL  SUFFICIENT
   53  ASSETS  ARE  AVAILABLE  IN  THE  FUND  FOR THAT PURPOSE. THEREAFTER, ALL
   54  ADMINISTRATIVE COSTS OF THE FUND, INCLUDING REPAYMENT  OF  ANY  START-UP
   55  FUNDS PROVIDED BY THE STATE, SHALL BE PAID ONLY OUT OF MONEYS ON DEPOSIT
   56  THEREIN.  HOWEVER, PRIVATE FUNDS OR FEDERAL FUNDING RECEIVED IN ORDER TO
       S. 6045                             5
    1  IMPLEMENT THE PROGRAM UNTIL THE FUND IS  SELF-SUSTAINING  SHALL  NOT  BE
    2  REPAID  UNLESS  THOSE  FUNDS WERE OFFERED CONTINGENT UPON THE PROMISE OF
    3  SUCH REPAYMENT. THE BOARD SHALL KEEP ANNUAL ADMINISTRATIVE  EXPENSES  AS
    4  LOW  AS  POSSIBLE,  BUT IN NO EVENT SHALL THEY EXCEED 0.75% OF THE TOTAL
    5  TRUST BALANCE.
    6    15. ALLOCATE ADMINISTRATIVE FEES TO INDIVIDUAL RETIREMENT ACCOUNTS  IN
    7  THE PROGRAM ON A PRO RATA BASIS.
    8    16.  SET  MINIMUM  AND  MAXIMUM CONTRIBUTION LEVELS IN ACCORDANCE WITH
    9  LIMITS ESTABLISHED FOR IRAS BY THE INTERNAL REVENUE CODE.
   10    17. FACILITATE EDUCATION AND OUTREACH TO EMPLOYERS AND EMPLOYEES.
   11    18. FACILITATE COMPLIANCE BY THE PROGRAM WITH ALL APPLICABLE  REQUIRE-
   12  MENTS  FOR  THE  PROGRAM  UNDER THE INTERNAL REVENUE CODE, INCLUDING TAX
   13  QUALIFICATION REQUIREMENTS OR ANY OTHER APPLICABLE  LAW  AND  ACCOUNTING
   14  REQUIREMENTS.
   15    19.  CARRY  OUT THE DUTIES AND OBLIGATIONS OF THE PROGRAM IN AN EFFEC-
   16  TIVE, EFFICIENT, AND LOW-COST MANNER.
   17    20. EXERCISE ANY AND ALL OTHER POWERS  REASONABLY  NECESSARY  FOR  THE
   18  EFFECTUATION OF THE PURPOSES, OBJECTIVES, AND PROVISIONS OF THIS ARTICLE
   19  PERTAINING TO THE PROGRAM.
   20    21.  DEPOSIT INTO THE NEW YORK STATE SECURE CHOICE ADMINISTRATIVE FUND
   21  ALL GRANTS, GIFTS, DONATIONS, FEES, AND EARNINGS FROM  INVESTMENTS  FROM
   22  THE  NEW  YORK STATE SECURE CHOICE SAVINGS PROGRAM FUND THAT ARE USED TO
   23  RECOVER ADMINISTRATIVE COSTS. ALL EXPENSES OF THE BOARD  SHALL  BE  PAID
   24  FROM THE NEW YORK STATE SECURE CHOICE ADMINISTRATIVE FUND.
   25    S  575.  RISK MANAGEMENT. THE BOARD SHALL ANNUALLY PREPARE AND ADOPT A
   26  WRITTEN STATEMENT OF INVESTMENT POLICY THAT INCLUDES A  RISK  MANAGEMENT
   27  AND  OVERSIGHT PROGRAM. THIS INVESTMENT POLICY SHALL PROHIBIT THE BOARD,
   28  PROGRAM, AND FUND FROM  BORROWING  FOR  INVESTMENT  PURPOSES.  THE  RISK
   29  MANAGEMENT  AND  OVERSIGHT  PROGRAM  SHALL BE DESIGNED TO ENSURE THAT AN
   30  EFFECTIVE RISK MANAGEMENT SYSTEM IS IN PLACE TO MONITOR THE RISK  LEVELS
   31  OF  THE  PROGRAM  AND FUND PORTFOLIO, TO ENSURE THAT THE RISKS TAKEN ARE
   32  PRUDENT AND PROPERLY MANAGED, TO PROVIDE AN INTEGRATED PROCESS FOR OVER-
   33  ALL RISK MANAGEMENT, AND TO ASSESS INVESTMENT RETURNS AS WELL AS RISK TO
   34  DETERMINE IF THE RISKS TAKEN  ARE  ADEQUATELY  COMPENSATED  COMPARED  TO
   35  APPLICABLE PERFORMANCE BENCHMARKS AND STANDARDS. THE BOARD SHALL CONSID-
   36  ER  THE STATEMENT OF INVESTMENT POLICY AND ANY CHANGES IN THE INVESTMENT
   37  POLICY AT A PUBLIC HEARING.
   38    S 576. INVESTMENT FIRMS. 1. THE BOARD SHALL ENGAGE, AFTER AN OPEN  BID
   39  PROCESS,  AN  INVESTMENT  MANAGER OR MANAGERS TO INVEST THE FUND AND ANY
   40  OTHER ASSETS OF THE PROGRAM. MONEYS IN THE FUND MAY BE INVESTED OR REIN-
   41  VESTED BY THE COMMISSIONER OR MAY BE INVESTED IN WHOLE OR  IN  PART.  IN
   42  SELECTING  THE INVESTMENT MANAGER OR MANAGERS, THE BOARD SHALL TAKE INTO
   43  CONSIDERATION AND GIVE WEIGHT  TO  THE  INVESTMENT  MANAGER'S  FEES  AND
   44  CHARGES IN ORDER TO REDUCE THE PROGRAM'S ADMINISTRATIVE EXPENSES.
   45    2.  THE  INVESTMENT  MANAGER OR MANAGERS SHALL COMPLY WITH ANY AND ALL
   46  APPLICABLE FEDERAL AND STATE LAWS, RULES, AND REGULATIONS,  AS  WELL  AS
   47  ANY  AND  ALL  RULES,  POLICIES, AND GUIDELINES PROMULGATED BY THE BOARD
   48  WITH RESPECT TO THE PROGRAM AND THE INVESTMENT OF THE  FUND,  INCLUDING,
   49  BUT NOT LIMITED TO, THE INVESTMENT POLICY.
   50    3.  THE  INVESTMENT  MANAGER OR MANAGERS SHALL PROVIDE SUCH REPORTS AS
   51  THE BOARD DEEMS NECESSARY FOR  THE  BOARD  TO  OVERSEE  EACH  INVESTMENT
   52  MANAGER'S PERFORMANCE AND THE PERFORMANCE OF THE FUND.
   53    S  577. INVESTMENT OPTIONS. 1. THE BOARD SHALL ESTABLISH AS AN INVEST-
   54  MENT OPTION A LIFE-CYCLE FUND WITH A TARGET DATE BASED UPON THE  AGE  OF
   55  THE  ENROLLEE. THIS SHALL BE THE DEFAULT INVESTMENT OPTION FOR ENROLLEES
       S. 6045                             6
    1  WHO FAIL TO ELECT AN INVESTMENT OPTION UNLESS AND UNTIL THE BOARD DESIG-
    2  NATES BY RULE A NEW INVESTMENT OPTION AS THE DEFAULT.
    3    2. THE BOARD MAY ALSO ESTABLISH ANY OR ALL OF THE FOLLOWING ADDITIONAL
    4  INVESTMENT OPTIONS:
    5    (A) A CONSERVATIVE PRINCIPAL PROTECTION FUND;
    6    (B) A GROWTH FUND;
    7    (C)  A  SECURE RETURN FUND WHOSE PRIMARY OBJECTIVE IS THE PRESERVATION
    8  OF THE SAFETY OF PRINCIPAL AND THE PROVISION OF A  STABLE  AND  LOW-RISK
    9  RATE  OF  RETURN; IF THE BOARD ELECTS TO ESTABLISH A SECURE RETURN FUND,
   10  THE BOARD MAY PROCURE ANY INSURANCE, ANNUITY, OR OTHER PRODUCT TO INSURE
   11  THE VALUE OF INDIVIDUALS' ACCOUNTS AND GUARANTEE A RATE OF  RETURN;  THE
   12  COST  OF  SUCH FUNDING MECHANISM SHALL BE PAID OUT OF THE FUND; UNDER NO
   13  CIRCUMSTANCES SHALL THE BOARD, PROGRAM, FUND, THE STATE, OR ANY  PARTIC-
   14  IPATING  EMPLOYER ASSUME ANY LIABILITY FOR INVESTMENT OR ACTUARIAL RISK;
   15  THE BOARD SHALL DETERMINE WHETHER TO ESTABLISH SUCH  INVESTMENT  OPTIONS
   16  BASED  UPON  AN  ANALYSIS  OF  THEIR  COST, RISK PROFILE, BENEFIT LEVEL,
   17  FEASIBILITY, AND EASE OF IMPLEMENTATION; OR
   18    (D) AN ANNUITY FUND.
   19    3. IF THE BOARD ELECTS TO ESTABLISH A SECURE RETURN  FUND,  THE  BOARD
   20  SHALL  THEN  DETERMINE WHETHER SUCH OPTION SHALL REPLACE THE TARGET DATE
   21  OR LIFE-CYCLE FUND AS THE DEFAULT INVESTMENT OPTION FOR ENROLLEES WHO DO
   22  NOT ELECT AN INVESTMENT OPTION. IN MAKING SUCH DETERMINATION, THE  BOARD
   23  SHALL  CONSIDER  THE  COST,  RISK  PROFILE,  BENEFIT  LEVEL, AND EASE OF
   24  ENROLLMENT IN THE SECURE RETURN FUND. THE BOARD MAY AT ANY  TIME  THERE-
   25  AFTER  REVISIT THIS QUESTION AND, BASED UPON AN ANALYSIS OF THESE CRITE-
   26  RIA, ESTABLISH EITHER THE SECURE RETURN FUND OR THE LIFE-CYCLE  FUND  AS
   27  THE DEFAULT FOR ENROLLEES WHO DO NOT ELECT AN INVESTMENT OPTION.
   28    S  578. BENEFITS. INTEREST, INVESTMENT EARNINGS, AND INVESTMENT LOSSES
   29  SHALL BE ALLOCATED TO INDIVIDUAL PROGRAM ACCOUNTS AS ESTABLISHED BY  THE
   30  BOARD PURSUANT TO THIS ARTICLE. AN INDIVIDUAL'S RETIREMENT SAVINGS BENE-
   31  FIT  UNDER  THE  PROGRAM  SHALL BE AN AMOUNT EQUAL TO THE BALANCE IN THE
   32  INDIVIDUAL'S PROGRAM ACCOUNT ON THE DATE THE RETIREMENT SAVINGS  BENEFIT
   33  BECOMES  PAYABLE.  THE  STATE SHALL HAVE NO LIABILITY FOR THE PAYMENT OF
   34  ANY BENEFIT TO ANY PARTICIPANT IN THE PROGRAM.
   35    S 579. EMPLOYER AND EMPLOYEE INFORMATION PACKETS AND DISCLOSURE FORMS.
   36  1. PRIOR TO THE OPENING OF THE PROGRAM FOR ENROLLMENT, THE  BOARD  SHALL
   37  DESIGN  AND  DISSEMINATE TO ALL EMPLOYERS AN EMPLOYER INFORMATION PACKET
   38  AND AN EMPLOYEE  INFORMATION  PACKET,  WHICH  SHALL  INCLUDE  BACKGROUND
   39  INFORMATION  ON  THE PROGRAM, APPROPRIATE DISCLOSURES FOR EMPLOYEES, AND
   40  INFORMATION REGARDING THE VENDOR INTERNET WEBSITE DESCRIBED.
   41    2. THE BOARD SHALL PROVIDE FOR  THE  CONTENTS  OF  BOTH  THE  EMPLOYEE
   42  INFORMATION PACKET AND THE EMPLOYER INFORMATION PACKET.
   43    3.  THE  EMPLOYEE  INFORMATION PACKET SHALL INCLUDE A DISCLOSURE FORM.
   44  THE DISCLOSURE FORM SHALL EXPLAIN, BUT NOT BE LIMITED  TO,  ALL  OF  THE
   45  FOLLOWING:
   46    (A) THE BENEFITS AND RISKS ASSOCIATED WITH MAKING CONTRIBUTIONS TO THE
   47  PROGRAM;
   48    (B) THE MECHANICS OF HOW TO MAKE CONTRIBUTIONS TO THE PROGRAM;
   49    (C) HOW TO OPT OUT OF THE PROGRAM;
   50    (D)  HOW  TO  PARTICIPATE  IN  THE  PROGRAM  WITH  A LEVEL OF EMPLOYEE
   51  CONTRIBUTIONS OTHER THAN THREE PERCENT;
   52    (E) THE PROCESS FOR WITHDRAWAL OF RETIREMENT SAVINGS;
   53    (F) HOW TO OBTAIN ADDITIONAL INFORMATION ABOUT THE PROGRAM;
   54    (G) THAT EMPLOYEES SEEKING FINANCIAL ADVICE SHOULD  CONTACT  FINANCIAL
   55  ADVISORS,  THAT PARTICIPATING EMPLOYERS ARE NOT IN A POSITION TO PROVIDE
       S. 6045                             7
    1  FINANCIAL ADVICE, AND THAT PARTICIPATING EMPLOYERS ARE  NOT  LIABLE  FOR
    2  DECISIONS EMPLOYEES MAKE PURSUANT TO THIS ARTICLE;
    3    (H) THAT THE PROGRAM IS NOT AN EMPLOYER-SPONSORED RETIREMENT PLAN; AND
    4    (I) THAT THE PROGRAM FUND IS NOT GUARANTEED BY THE STATE.
    5    4.  THE  EMPLOYEE  INFORMATION PACKET SHALL ALSO INCLUDE A FORM FOR AN
    6  EMPLOYEE TO NOTE HIS OR HER DECISION TO OPT OUT OF PARTICIPATION IN  THE
    7  PROGRAM  OR  ELECT TO PARTICIPATE WITH A LEVEL OF EMPLOYEE CONTRIBUTIONS
    8  OTHER THAN THREE PERCENT.
    9    5. PARTICIPATING EMPLOYERS SHALL SUPPLY THE EMPLOYEE INFORMATION PACK-
   10  ET TO EMPLOYEES UPON LAUNCH  OF  THE  PROGRAM.  PARTICIPATING  EMPLOYERS
   11  SHALL  SUPPLY  THE  EMPLOYEE  INFORMATION PACKET TO NEW EMPLOYEES AT THE
   12  TIME OF HIRING, AND NEW EMPLOYEES MAY OPT OUT OF  PARTICIPATION  IN  THE
   13  PROGRAM  OR  ELECT TO PARTICIPATE WITH A LEVEL OF EMPLOYEE CONTRIBUTIONS
   14  OTHER THAN THREE PERCENT AT THAT TIME.
   15    S 580. PROGRAM IMPLEMENTATION  AND  ENROLLMENT.  EXCEPT  AS  OTHERWISE
   16  PROVIDED  IN THIS ARTICLE, THE PROGRAM SHALL BE IMPLEMENTED, AND ENROLL-
   17  MENT OF EMPLOYEES SHALL  BEGIN,  WITHIN  TWENTY-FOUR  MONTHS  AFTER  THE
   18  EFFECTIVE  DATE OF THIS ARTICLE. THE PROVISIONS OF THIS SECTION SHALL BE
   19  IN FORCE AFTER THE BOARD OPENS THE PROGRAM FOR ENROLLMENT.
   20    1. EACH EMPLOYER SHALL ESTABLISH A PAYROLL DEPOSIT RETIREMENT  SAVINGS
   21  ARRANGEMENT TO ALLOW EACH EMPLOYEE TO PARTICIPATE IN THE PROGRAM AT MOST
   22  NINE MONTHS AFTER THE BOARD OPENS THE PROGRAM FOR ENROLLMENT.
   23    2.  EMPLOYERS  SHALL AUTOMATICALLY ENROLL IN THE PROGRAM EACH OF THEIR
   24  EMPLOYEES WHO HAS NOT OPTED OUT OF PARTICIPATION IN  THE  PROGRAM  USING
   25  THE  FORM  DESCRIBED IN THIS ARTICLE AND SHALL PROVIDE PAYROLL DEDUCTION
   26  RETIREMENT SAVINGS ARRANGEMENTS  FOR  SUCH  EMPLOYEES  AND  DEPOSIT,  ON
   27  BEHALF  OF SUCH EMPLOYEES, THESE FUNDS INTO THE PROGRAM. SMALL EMPLOYERS
   28  MAY, BUT ARE NOT  REQUIRED  TO,  PROVIDE  PAYROLL  DEDUCTION  RETIREMENT
   29  SAVINGS  ARRANGEMENTS FOR EACH EMPLOYEE WHO ELECTS TO PARTICIPATE IN THE
   30  PROGRAM.
   31    3. ENROLLEES SHALL HAVE THE ABILITY TO  SELECT  A  CONTRIBUTION  LEVEL
   32  INTO  THE  FUND. THIS LEVEL MAY BE EXPRESSED AS A PERCENTAGE OF WAGES OR
   33  AS A DOLLAR AMOUNT UP TO THE DEDUCTIBLE AMOUNT FOR THE ENROLLEE'S  TAXA-
   34  BLE YEAR UNDER SECTION 219(B)(1)(A) OF THE INTERNAL REVENUE CODE. ENROL-
   35  LEES  MAY  CHANGE THEIR CONTRIBUTION LEVEL AT ANY TIME, SUBJECT TO RULES
   36  PROMULGATED BY THE BOARD. IF AN ENROLLEE FAILS TO SELECT A  CONTRIBUTION
   37  LEVEL  USING  THE  FORM  DESCRIBED IN THIS ARTICLE, THEN HE OR SHE SHALL
   38  CONTRIBUTE THREE PERCENT OF HIS OR HER WAGES TO  THE  PROGRAM,  PROVIDED
   39  THAT  SUCH  CONTRIBUTIONS  SHALL NOT CAUSE THE ENROLLEE'S TOTAL CONTRIB-
   40  UTIONS TO IRAS FOR THE YEAR TO EXCEED  THE  DEDUCTIBLE  AMOUNT  FOR  THE
   41  ENROLLEE'S  TAXABLE  YEAR  UNDER  SECTION  219(B)(1)(A)  OF THE INTERNAL
   42  REVENUE CODE.
   43    4. ENROLLEES MAY  SELECT  AN  INVESTMENT  OPTION  FROM  THE  PERMITTED
   44  INVESTMENT  OPTIONS  LISTED  IN THIS ARTICLE. ENROLLEES MAY CHANGE THEIR
   45  INVESTMENT OPTION AT ANY TIME,  SUBJECT  TO  RULES  PROMULGATED  BY  THE
   46  BOARD.  IN  THE  EVENT  THAT  AN  ENROLLEE FAILS TO SELECT AN INVESTMENT
   47  OPTION, THAT ENROLLEE SHALL BE PLACED IN THE INVESTMENT OPTION  SELECTED
   48  BY  THE  BOARD  AS  THE DEFAULT UNDER THIS ARTICLE. IF THE BOARD HAS NOT
   49  SELECTED A DEFAULT INVESTMENT OPTION UNDER THIS ARTICLE, THEN AN  ENROL-
   50  LEE  WHO  FAILS  TO  SELECT  AN INVESTMENT OPTION SHALL BE PLACED IN THE
   51  LIFE-CYCLE FUND INVESTMENT OPTION.
   52    5. FOLLOWING INITIAL IMPLEMENTATION OF THE PROGRAM  PURSUANT  TO  THIS
   53  SECTION,  AT LEAST ONCE EVERY YEAR, PARTICIPATING EMPLOYERS SHALL DESIG-
   54  NATE AN OPEN ENROLLMENT PERIOD DURING  WHICH  EMPLOYEES  WHO  PREVIOUSLY
   55  OPTED OUT OF THE PROGRAM MAY ENROLL IN THE PROGRAM.
       S. 6045                             8
    1    6.  AN  EMPLOYEE WHO OPTS OUT OF THE PROGRAM WHO SUBSEQUENTLY WANTS TO
    2  PARTICIPATE THROUGH THE PARTICIPATING EMPLOYER'S PAYROLL DEPOSIT RETIRE-
    3  MENT SAVINGS  ARRANGEMENT  MAY  ONLY  ENROLL  DURING  THE  PARTICIPATING
    4  EMPLOYER'S  DESIGNATED  OPEN  ENROLLMENT  PERIOD  OR IF PERMITTED BY THE
    5  PARTICIPATING EMPLOYER AT AN EARLIER TIME.
    6    7.  EMPLOYERS  SHALL RETAIN THE OPTION AT ALL TIMES TO SET UP ANY TYPE
    7  OF EMPLOYER-SPONSORED RETIREMENT PLAN OR TO OFFER AN  AUTOMATIC  ENROLL-
    8  MENT  PAYROLL DEDUCTION IRA, INSTEAD OF HAVING A PAYROLL DEPOSIT RETIRE-
    9  MENT SAVINGS ARRANGEMENT TO ALLOW EMPLOYEE PARTICIPATION IN THE PROGRAM.
   10    8. AN EMPLOYEE MAY TERMINATE HIS OR HER PARTICIPATION IN  THE  PROGRAM
   11  AT ANY TIME IN A MANNER PRESCRIBED BY THE BOARD.
   12    9. THE BOARD SHALL ESTABLISH AND MAINTAIN AN INTERNET WEBSITE DESIGNED
   13  TO  ASSIST  EMPLOYERS IN IDENTIFYING PRIVATE SECTOR PROVIDERS OF RETIRE-
   14  MENT ARRANGEMENTS THAT CAN BE SET UP BY THE EMPLOYER RATHER THAN  ALLOW-
   15  ING  EMPLOYEE  PARTICIPATION IN THE PROGRAM UNDER THIS ARTICLE; HOWEVER,
   16  THE BOARD SHALL ONLY ESTABLISH AND MAINTAIN AN  INTERNET  WEBSITE  UNDER
   17  THIS  SUBSECTION  IF  THERE  IS  SUFFICIENT INTEREST IN SUCH AN INTERNET
   18  WEBSITE BY PRIVATE SECTOR PROVIDERS AND IF THE PRIVATE SECTOR  PROVIDERS
   19  FURNISH  THE  FUNDING  NECESSARY  TO ESTABLISH AND MAINTAIN THE INTERNET
   20  WEBSITE. THE BOARD MUST PROVIDE PUBLIC NOTICE OF THE AVAILABILITY OF AND
   21  THE PROCESS FOR INCLUSION ON THE  INTERNET  WEBSITE  BEFORE  IT  BECOMES
   22  PUBLICLY  AVAILABLE.  THIS  INTERNET  WEBSITE  MUST  BE AVAILABLE TO THE
   23  PUBLIC BEFORE THE BOARD OPENS THE PROGRAM FOR ENROLLMENT, AND THE INTER-
   24  NET WEBSITE ADDRESS MUST BE INCLUDED ON ANY INTERNET WEBSITE POSTING  OR
   25  OTHER  MATERIALS  REGARDING  THE  PROGRAM  OFFERED  TO THE PUBLIC BY THE
   26  BOARD.
   27    S 581. PAYMENTS. EMPLOYEE CONTRIBUTIONS DEDUCTED BY THE  PARTICIPATING
   28  EMPLOYER  THROUGH  PAYROLL  DEDUCTION SHALL BE PAID BY THE PARTICIPATING
   29  EMPLOYER TO THE FUND  USING  ONE  OR  MORE  PAYROLL  DEPOSIT  RETIREMENT
   30  SAVINGS  ARRANGEMENTS  ESTABLISHED  BY  THE  BOARD  UNDER  THIS ARTICLE,
   31  EITHER:
   32    1. ON OR BEFORE THE LAST DAY OF THE MONTH FOLLOWING THE MONTH IN WHICH
   33  THE COMPENSATION OTHERWISE WOULD HAVE BEEN PAYABLE TO  THE  EMPLOYEE  IN
   34  CASH; OR
   35    2.  BEFORE SUCH LATER DEADLINE PRESCRIBED BY THE BOARD FOR MAKING SUCH
   36  PAYMENTS, BUT NOT LATER THAN  THE  DUE  DATE  FOR  THE  DEPOSIT  OF  TAX
   37  REQUIRED  TO  BE  DEDUCTED AND WITHHELD RELATING TO COLLECTION OF INCOME
   38  TAX AT SOURCE ON WAGES OR FOR THE DEPOSIT OF TAX  REQUIRED  TO  BE  PAID
   39  UNDER  THE UNEMPLOYMENT INSURANCE SYSTEM FOR THE PAYROLL PERIOD TO WHICH
   40  SUCH PAYMENTS RELATE.
   41    S 582. DUTY AND LIABILITY OF THE STATE. 1. THE  STATE  SHALL  HAVE  NO
   42  DUTY OR LIABILITY TO ANY PARTY FOR THE PAYMENT OF ANY RETIREMENT SAVINGS
   43  BENEFITS  ACCRUED  BY  ANY  INDIVIDUAL  UNDER THE PROGRAM. ANY FINANCIAL
   44  LIABILITY FOR THE PAYMENT OF RETIREMENT SAVINGS BENEFITS  IN  EXCESS  OF
   45  FUNDS  AVAILABLE UNDER THE PROGRAM SHALL BE BORNE SOLELY BY THE ENTITIES
   46  WITH WHOM THE BOARD CONTRACTS TO PROVIDE INSURANCE TO PROTECT THE  VALUE
   47  OF THE PROGRAM.
   48    2. NO STATE BOARD, COMMISSION, OR AGENCY, OR ANY OFFICER, EMPLOYEE, OR
   49  MEMBER  THEREOF  IS  LIABLE  FOR  ANY  LOSS OR DEFICIENCY RESULTING FROM
   50  PARTICULAR INVESTMENTS SELECTED  UNDER  THIS  ARTICLE,  EXCEPT  FOR  ANY
   51  LIABILITY THAT ARISES OUT OF A BREACH OF FIDUCIARY DUTY.
   52    S  583. DUTY AND LIABILITY OF PARTICIPATING EMPLOYERS. 1.  PARTICIPAT-
   53  ING EMPLOYERS SHALL NOT HAVE ANY LIABILITY FOR AN EMPLOYEE'S DECISION TO
   54  PARTICIPATE IN, OR OPT OUT OF, THE PROGRAM OR FOR THE  INVESTMENT  DECI-
   55  SIONS OF THE BOARD OR OF ANY ENROLLEE.
       S. 6045                             9
    1    2. A PARTICIPATING EMPLOYER SHALL NOT BE A FIDUCIARY, OR CONSIDERED TO
    2  BE  A  FIDUCIARY,  OVER  THE PROGRAM. A PARTICIPATING EMPLOYER SHALL NOT
    3  BEAR RESPONSIBILITY FOR THE ADMINISTRATION,  INVESTMENT,  OR  INVESTMENT
    4  PERFORMANCE OF THE PROGRAM. A PARTICIPATING EMPLOYER SHALL NOT BE LIABLE
    5  WITH  REGARD TO INVESTMENT RETURNS, PROGRAM DESIGN, AND BENEFITS PAID TO
    6  PROGRAM PARTICIPANTS.
    7    S 584. AUDIT AND REPORTS. 1. THE BOARD SHALL ANNUALLY SUBMIT:
    8    (A) AN AUDITED FINANCIAL REPORT, PREPARED IN ACCORDANCE WITH GENERALLY
    9  ACCEPTED ACCOUNTING PRINCIPLES, ON THE OPERATIONS OF THE PROGRAM  DURING
   10  EACH  CALENDAR YEAR BY JULY FIRST OF THE FOLLOWING YEAR TO THE GOVERNOR,
   11  THE COMPTROLLER, THE COMMISSIONER AND THE SENATE AND ASSEMBLY; AND
   12    (B) A REPORT PREPARED BY THE BOARD, WHICH SHALL INCLUDE,  BUT  IS  NOT
   13  LIMITED TO, A SUMMARY OF THE BENEFITS PROVIDED BY THE PROGRAM, INCLUDING
   14  THE  NUMBER  OF  ENROLLEES IN THE PROGRAM, THE PERCENTAGE AND AMOUNTS OF
   15  INVESTMENT OPTIONS AND RATES OF RETURN, AND SUCH OTHER INFORMATION  THAT
   16  IS  RELEVANT TO MAKE A FULL, FAIR, AND EFFECTIVE DISCLOSURE OF THE OPER-
   17  ATIONS OF THE PROGRAM AND THE FUND. THE ANNUAL AUDIT SHALL BE MADE BY AN
   18  INDEPENDENT CERTIFIED PUBLIC ACCOUNTANT AND SHALL INCLUDE,  BUT  IS  NOT
   19  LIMITED TO, DIRECT AND INDIRECT COSTS ATTRIBUTABLE TO THE USE OF OUTSIDE
   20  CONSULTANTS,  INDEPENDENT CONTRACTORS, AND ANY OTHER PERSONS WHO ARE NOT
   21  STATE EMPLOYEES FOR THE ADMINISTRATION OF THE PROGRAM.
   22    2. IN ADDITION TO ANY OTHER STATEMENTS OR REPORTS REQUIRED BY LAW, THE
   23  BOARD SHALL PROVIDE PERIODIC REPORTS AT LEAST ANNUALLY TO  PARTICIPATING
   24  EMPLOYERS,  REPORTING THE NAMES OF EACH ENROLLEE EMPLOYED BY THE PARTIC-
   25  IPATING EMPLOYER AND THE AMOUNTS OF CONTRIBUTIONS MADE  BY  THE  PARTIC-
   26  IPATING EMPLOYER ON BEHALF OF EACH EMPLOYEE DURING THE REPORTING PERIOD,
   27  AS  WELL  AS TO ENROLLEES, REPORTING CONTRIBUTIONS AND INVESTMENT INCOME
   28  ALLOCATED TO, WITHDRAWALS FROM, AND BALANCES IN THEIR  PROGRAM  ACCOUNTS
   29  FOR THE REPORTING PERIOD. SUCH REPORTS MAY INCLUDE ANY OTHER INFORMATION
   30  REGARDING THE PROGRAM AS THE BOARD MAY DETERMINE.
   31    S 585. PENALTIES. 1. AN EMPLOYER WHO FAILS WITHOUT REASONABLE CAUSE TO
   32  ENROLL  AN EMPLOYEE IN THE PROGRAM WITHIN THE TIME PRESCRIBED UNDER THIS
   33  ARTICLE SHALL BE SUBJECT TO A PENALTY EQUAL TO:
   34    (A) TWO HUNDRED FIFTY DOLLARS FOR EACH EMPLOYEE FOR EACH CALENDAR YEAR
   35  OR PORTION OF A CALENDAR YEAR DURING  WHICH  THE  EMPLOYEE  NEITHER  WAS
   36  ENROLLED  IN  THE  PROGRAM  NOR  HAD ELECTED OUT OF PARTICIPATION IN THE
   37  PROGRAM; OR
   38    (B) FOR EACH CALENDAR YEAR BEGINNING AFTER THE DATE A PENALTY HAS BEEN
   39  ASSESSED WITH RESPECT TO AN  EMPLOYEE,  FIVE  HUNDRED  DOLLARS  FOR  ANY
   40  PORTION OF THAT CALENDAR YEAR DURING WHICH SUCH EMPLOYEE CONTINUES TO BE
   41  UNENROLLED WITHOUT ELECTING OUT OF PARTICIPATION IN THE PROGRAM.
   42    2. AFTER DETERMINING THAT AN EMPLOYER IS SUBJECT TO PENALTY UNDER THIS
   43  SECTION  FOR  A  CALENDAR  YEAR,  THE DEPARTMENT SHALL ISSUE A NOTICE OF
   44  PROPOSED ASSESSMENT TO SUCH EMPLOYER, STATING THE  NUMBER  OF  EMPLOYEES
   45  FOR  WHICH  THE PENALTY IS PROPOSED UNDER THIS SECTION AND THE NUMBER OF
   46  EMPLOYEES FOR WHICH THE PENALTY IS PROPOSED UNDER THIS SECTION FOR  SUCH
   47  CALENDAR  YEAR,  AND  THE  TOTAL  AMOUNT OF PENALTIES PROPOSED. UPON THE
   48  EXPIRATION OF NINETY DAYS AFTER THE DATE ON WHICH A NOTICE  OF  PROPOSED
   49  ASSESSMENT  WAS  ISSUED, THE PENALTIES SPECIFIED THEREIN SHALL BE DEEMED
   50  ASSESSED, UNLESS THE EMPLOYER HAD FILED A PROTEST  WITH  THE  DEPARTMENT
   51  UNDER  THIS  SECTION.  IF, WITHIN NINETY DAYS AFTER THE DATE ON WHICH IT
   52  WAS ISSUED, A PROTEST OF A NOTICE OF PROPOSED ASSESSMENT IS FILED  UNDER
   53  THIS  SECTION,  THE PENALTIES SPECIFIED THEREIN SHALL BE DEEMED ASSESSED
   54  UPON THE DATE WHEN THE DECISION OF THE DEPARTMENT WITH  RESPECT  TO  THE
   55  PROTEST BECOMES FINAL.
       S. 6045                            10
    1    3.  A  WRITTEN  PROTEST AGAINST THE PROPOSED ASSESSMENT SHALL BE FILED
    2  WITH THE  DEPARTMENT  IN  SUCH  FORM  AS  THE  DEPARTMENT  MAY  BY  RULE
    3  PRESCRIBE, SETTING FORTH THE GROUNDS ON WHICH SUCH PROTEST IS BASED.  IF
    4  SUCH  A PROTEST IS FILED WITHIN NINETY DAYS AFTER THE DATE THE NOTICE OF
    5  PROPOSED  ASSESSMENT  IS  ISSUED,  THE  DEPARTMENT  SHALL RECONSIDER THE
    6  PROPOSED ASSESSMENT AND SHALL GRANT THE EMPLOYER A HEARING. AS  SOON  AS
    7  PRACTICABLE AFTER SUCH RECONSIDERATION AND HEARING, THE DEPARTMENT SHALL
    8  ISSUE  A  NOTICE  OF DECISION TO THE EMPLOYER, SETTING FORTH THE DEPART-
    9  MENT'S FINDINGS OF FACT AND THE BASIS OF DECISION. THE DECISION  OF  THE
   10  DEPARTMENT SHALL BECOME FINAL:
   11    (A)  IF NO ACTION FOR REVIEW OF THE DECISION IS COMMENCED, ON THE DATE
   12  ON WHICH THE TIME FOR COMMENCEMENT OF SUCH REVIEW HAS EXPIRED; OR
   13    (B) IF A TIMELY ACTION FOR REVIEW OF THE DECISION IS COMMENCED, ON THE
   14  DATE ALL PROCEEDINGS IN COURT FOR THE REVIEW  OF  SUCH  ASSESSMENT  HAVE
   15  TERMINATED  OR  THE TIME FOR THE TAKING THEREOF HAS EXPIRED WITHOUT SUCH
   16  PROCEEDINGS BEING INSTITUTED.
   17    4. AS SOON AS PRACTICABLE AFTER THE PENALTIES SPECIFIED IN A NOTICE OF
   18  PROPOSED ASSESSMENT ARE  DEEMED  ASSESSED,  THE  DEPARTMENT  SHALL  GIVE
   19  NOTICE TO THE EMPLOYER LIABLE FOR ANY UNPAID PORTION OF SUCH ASSESSMENT,
   20  STATING THE AMOUNT DUE AND DEMANDING PAYMENT. IF AN EMPLOYER NEGLECTS OR
   21  REFUSES TO PAY THE ENTIRE LIABILITY SHOWN ON THE NOTICE AND DEMAND WITH-
   22  IN  TEN DAYS AFTER THE NOTICE AND DEMAND IS ISSUED, THE UNPAID AMOUNT OF
   23  THE LIABILITY SHALL BE A LIEN IN FAVOR OF THE STATE  UPON  ALL  PROPERTY
   24  AND  RIGHTS  TO  PROPERTY,  WHETHER  REAL  OR PERSONAL, BELONGING TO THE
   25  EMPLOYER.
   26    5. AN EMPLOYER WHO HAS OVERPAID A PENALTY ASSESSED UNDER THIS  SECTION
   27  MAY  FILE  A  CLAIM  FOR REFUND WITH THE DEPARTMENT. A CLAIM SHALL BE IN
   28  WRITING IN SUCH FORM AS THE DEPARTMENT MAY BY RULE PRESCRIBE  AND  SHALL
   29  STATE  THE SPECIFIC GROUNDS UPON WHICH IT IS FOUNDED. AS SOON AS PRACTI-
   30  CABLE AFTER A CLAIM FOR REFUND IS FILED, THE DEPARTMENT SHALL EXAMINE IT
   31  AND EITHER ISSUE A REFUND OR ISSUE A NOTICE OF DENIAL. IF SUCH A PROTEST
   32  IS FILED, THE DEPARTMENT SHALL  RECONSIDER  THE  DENIAL  AND  GRANT  THE
   33  EMPLOYER  A  HEARING.  AS SOON AS PRACTICABLE AFTER SUCH RECONSIDERATION
   34  AND HEARING, THE DEPARTMENT SHALL ISSUE A  NOTICE  OF  DECISION  TO  THE
   35  EMPLOYER.  THE  NOTICE SHALL SET FORTH BRIEFLY THE DEPARTMENT'S FINDINGS
   36  OF FACT AND THE BASIS OF DECISION IN EACH CASE DECIDED IN  WHOLE  OR  IN
   37  PART  ADVERSELY  TO THE EMPLOYER. A DENIAL OF A CLAIM FOR REFUND BECOMES
   38  FINAL NINETY DAYS AFTER THE DATE OF ISSUANCE OF THE NOTICE OF THE DENIAL
   39  EXCEPT FOR SUCH AMOUNTS DENIED AS TO WHICH  THE  EMPLOYER  HAS  FILED  A
   40  PROTEST  WITH  THE  DEPARTMENT.  IF A PROTEST HAS BEEN TIMELY FILED, THE
   41  DECISION OF THE DEPARTMENT SHALL BECOME FINAL:
   42    (A) IF NO ACTION FOR REVIEW OF THE DECISION IS COMMENCED ON  THE  DATE
   43  ON WHICH THE TIME FOR COMMENCEMENT OF SUCH REVIEW HAS EXPIRED; OR
   44    (B)  IF A TIMELY ACTION FOR REVIEW OF THE DECISION IS COMMENCED ON THE
   45  DATE ALL PROCEEDINGS IN COURT FOR THE REVIEW  OF  SUCH  ASSESSMENT  HAVE
   46  TERMINATED  OR  THE TIME FOR THE TAKING THEREOF HAS EXPIRED WITHOUT SUCH
   47  PROCEEDINGS BEING INSTITUTED.
   48    6. NO NOTICE OF PROPOSED ASSESSMENT MAY BE ISSUED WITH  RESPECT  TO  A
   49  CALENDAR  YEAR  AFTER  JUNE  THIRTIETH OF THE FOURTH SUBSEQUENT CALENDAR
   50  YEAR. NO CLAIM FOR REFUND MAY BE FILED MORE THAN ONE YEAR AFTER THE DATE
   51  OF PAYMENT OF THE AMOUNT TO BE REFUNDED.
   52    7. WHENEVER NOTICE IS REQUIRED BY THIS SECTION, IT  MAY  BE  GIVEN  OR
   53  ISSUED  BY  MAILING  IT  BY  FIRST-CLASS  MAIL  ADDRESSED  TO THE PERSON
   54  CONCERNED AT HIS OR HER LAST KNOWN ADDRESS.
   55    8. ALL BOOKS AND RECORDS AND OTHER PAPERS AND  DOCUMENTS  RELEVANT  TO
   56  THE  DETERMINATION  OF  ANY PENALTY DUE UNDER THIS SECTION SHALL, AT ALL
       S. 6045                            11
    1  TIMES DURING BUSINESS HOURS OF THE DAY, BE SUBJECT TO INSPECTION BY  THE
    2  DEPARTMENT OR ITS DULY AUTHORIZED AGENTS AND EMPLOYEES.
    3    9. THE DEPARTMENT MAY REQUIRE EMPLOYERS TO REPORT INFORMATION RELEVANT
    4  TO  THEIR  COMPLIANCE  WITH  THIS  ARTICLE ON TAX RETURNS AND FAILURE TO
    5  PROVIDE THE REQUESTED INFORMATION ON A RETURN SHALL CAUSE SUCH RETURN TO
    6  BE TREATED AS UNPROCESSABLE.
    7    10. FOR PURPOSES OF ANY PROVISION OF STATE LAW ALLOWING THE DEPARTMENT
    8  OR ANY OTHER AGENCY OF THIS STATE TO OFFSET AN AMOUNT OWED TO A TAXPAYER
    9  AGAINST A TAX LIABILITY OF THAT TAXPAYER OR ALLOWING THE  DEPARTMENT  TO
   10  OFFSET  AN OVERPAYMENT OF TAX AGAINST ANY LIABILITY OWED TO THE STATE, A
   11  PENALTY ASSESSED UNDER THIS SECTION SHALL BE DEEMED TO BE A TAX  LIABIL-
   12  ITY OF THE EMPLOYER AND ANY REFUND DUE TO AN EMPLOYER SHALL BE DEEMED TO
   13  BE AN OVERPAYMENT OF TAX OF THE EMPLOYER.
   14    11. EXCEPT AS PROVIDED IN THIS SUBSECTION, ALL INFORMATION RECEIVED BY
   15  THE  DEPARTMENT  FROM  RETURNS FILED BY AN EMPLOYER OR FROM ANY INVESTI-
   16  GATION CONDUCTED UNDER THE PROVISIONS OF THIS ARTICLE SHALL BE CONFIDEN-
   17  TIAL, EXCEPT FOR OFFICIAL PURPOSES WITHIN THE DEPARTMENT OR PURSUANT  TO
   18  OFFICIAL  PROCEDURES  FOR  COLLECTION  OF  PENALTIES ASSESSED UNDER THIS
   19  ARTICLE.  NOTHING CONTAINED IN THIS SUBSECTION SHALL PREVENT THE  DIREC-
   20  TOR FROM PUBLISHING OR MAKING AVAILABLE TO THE PUBLIC REASONABLE STATIS-
   21  TICS  CONCERNING  THE  OPERATION OF THIS ARTICLE WHEREIN THE CONTENTS OF
   22  RETURNS ARE GROUPED INTO AGGREGATES IN SUCH  A  WAY  THAT  THE  SPECIFIC
   23  INFORMATION OF ANY EMPLOYER SHALL NOT BE DISCLOSED. NOTHING CONTAINED IN
   24  THIS SUBSECTION SHALL PREVENT THE DIRECTOR FROM DIVULGING INFORMATION TO
   25  AN  AUTHORIZED  REPRESENTATIVE OF THE EMPLOYER OR TO ANY PERSON PURSUANT
   26  TO A REQUEST OR AUTHORIZATION MADE BY THE EMPLOYER OR BY  AN  AUTHORIZED
   27  REPRESENTATIVE OF THE EMPLOYER.
   28    12.  CIVIL  PENALTIES  AND  FEES COLLECTED UNDER THIS ARTICLE SHALL BE
   29  DEPOSITED WITH THE DEPARTMENT OF TAXATION AND FINANCE FOR PURPOSES DEDI-
   30  CATED TO THE ADMINISTRATION OF THE PROGRAM.
   31    13. THE DEPARTMENT MAY CHARGE THE BOARD A REASONABLE FEE FOR ITS COSTS
   32  IN PERFORMING ITS DUTIES UNDER THIS SECTION  TO  THE  EXTENT  THAT  SUCH
   33  COSTS HAVE NOT BEEN RECOVERED FROM PENALTIES IMPOSED UNDER THIS SECTION.
   34    14.  THIS  SECTION  SHALL BECOME OPERATIVE NINE MONTHS AFTER THE BOARD
   35  NOTIFIES THE DIRECTOR  THAT  THE  PROGRAM  HAS  BEEN  IMPLEMENTED.  UPON
   36  RECEIPT  OF SUCH NOTIFICATION FROM THE BOARD, THE DEPARTMENT SHALL IMME-
   37  DIATELY POST ON ITS INTERNET WEBSITE A NOTICE STATING THAT THIS  SECTION
   38  IS  OPERATIVE AND THE DATE THAT IT IS FIRST OPERATIVE. THIS NOTICE SHALL
   39  INCLUDE A STATEMENT THAT RATHER THAN ENROLLING EMPLOYEES IN THE  PROGRAM
   40  UNDER THIS ARTICLE, EMPLOYERS MAY SPONSOR AN ALTERNATIVE ARRANGEMENT.
   41    S  586.  DELAYED IMPLEMENTATION. IF THE BOARD DOES NOT OBTAIN ADEQUATE
   42  FUNDS TO IMPLEMENT THE PROGRAM WITHIN THE TIME  FRAME  SET  FORTH  UNDER
   43  THIS ARTICLE, THE BOARD MAY DELAY THE IMPLEMENTATION OF THE PROGRAM.
   44    S  587.  FEDERAL CONSIDERATIONS. THE BOARD SHALL REQUEST IN WRITING AN
   45  OPINION OR RULING FROM THE APPROPRIATE ENTITY WITH JURISDICTION OVER THE
   46  FEDERAL EMPLOYEE RETIREMENT INCOME SECURITY ACT REGARDING  THE  APPLICA-
   47  BILITY  OF  THE  FEDERAL  EMPLOYEE RETIREMENT INCOME SECURITY ACT TO THE
   48  PROGRAM. THE BOARD MAY NOT IMPLEMENT THE PROGRAM IF THE IRA ARRANGEMENTS
   49  OFFERED UNDER THE PROGRAM FAIL TO  QUALIFY  FOR  THE  FAVORABLE  FEDERAL
   50  INCOME  TAX  TREATMENT  ORDINARILY  ACCORDED  TO IRAS UNDER THE INTERNAL
   51  REVENUE CODE OR IF IT IS DETERMINED THAT  THE  PROGRAM  IS  AN  EMPLOYEE
   52  BENEFIT  PLAN  AND  STATE OR EMPLOYER LIABILITY IS ESTABLISHED UNDER THE
   53  FEDERAL EMPLOYEE RETIREMENT INCOME SECURITY ACT.
   54    S 3. The state finance law is amended by adding two new sections  99-x
   55  and 99-y to read as follows:
       S. 6045                            12
    1    S  99-X.  NEW YORK STATE SECURE CHOICE SAVINGS PROGRAM FUND. 1.  THERE
    2  IS HEREBY ESTABLISHED WITHIN THE CUSTODY OF THE  STATE  COMPTROLLER,  OR
    3  HIS  OR  HER  DESIGNEE,  IN  CONSULTATION WITH THE NEW YORK STATE SECURE
    4  CHOICE SAVINGS PROGRAM BOARD, A NEW FUND TO BE KNOWN  AS  THE  NEW  YORK
    5  STATE SECURE CHOICE SAVINGS PROGRAM FUND.
    6    2. THE FUND SHALL INCLUDE THE INDIVIDUAL RETIREMENT ACCOUNTS OF ENROL-
    7  LEES, WHICH SHALL BE ACCOUNTED FOR AS INDIVIDUAL ACCOUNTS.
    8    3.  MONEYS IN THE FUND SHALL CONSIST OF MONEYS RECEIVED FROM ENROLLEES
    9  AND PARTICIPATING EMPLOYERS PURSUANT TO AUTOMATIC PAYROLL DEDUCTIONS AND
   10  CONTRIBUTIONS TO SAVINGS MADE UNDER THE NEW  YORK  STATE  SECURE  CHOICE
   11  SAVINGS  PROGRAM  PURSUANT  TO ARTICLE 14-C OF THE RETIREMENT AND SOCIAL
   12  SECURITY LAW.
   13    4. THE FUND SHALL BE OPERATED IN A MANNER DETERMINED BY THE  NEW  YORK
   14  STATE  SECURE  CHOICE  SAVINGS  PROGRAM BOARD, PROVIDED THAT THE FUND IS
   15  OPERATED SO THAT THE ACCOUNTS OF ENROLLEES ESTABLISHED UNDER THE PROGRAM
   16  MEET THE REQUIREMENTS FOR IRAS UNDER THE INTERNAL REVENUE CODE.
   17    5. THE AMOUNTS DEPOSITED IN THE FUND SHALL NOT CONSTITUTE PROPERTY  OF
   18  THE STATE AND THE FUND SHALL NOT BE CONSTRUED TO BE A DEPARTMENT, INSTI-
   19  TUTION, OR AGENCY OF THE STATE. AMOUNTS ON DEPOSIT IN THE FUND SHALL NOT
   20  BE  COMMINGLED  WITH STATE FUNDS AND THE STATE SHALL HAVE NO CLAIM TO OR
   21  AGAINST, OR INTEREST IN, SUCH FUNDS.
   22    S 99-Y. NEW YORK STATE SECURE CHOICE ADMINISTRATIVE FUND. 1.  THERE IS
   23  HEREBY ESTABLISHED WITHIN THE CUSTODY OF THE STATE COMPTROLLER,  OR  HIS
   24  OR  HER  DESIGNEE, IN CONSULTATION WITH THE NEW YORK STATE SECURE CHOICE
   25  SAVINGS PROGRAM BOARD, A NEW FUND TO BE KNOWN  AS  THE  NEW  YORK  STATE
   26  SECURE CHOICE ADMINISTRATIVE FUND.
   27    2.  THE  NEW  YORK STATE SECURE CHOICE SAVINGS PROGRAM BOARD SHALL USE
   28  MONEYS IN THE ADMINISTRATIVE FUND TO PAY FOR ADMINISTRATIVE EXPENSES  IT
   29  INCURS  IN THE PERFORMANCE OF ITS DUTIES UNDER THE NEW YORK STATE SECURE
   30  CHOICE SAVINGS PROGRAM PURSUANT TO ARTICLE 14-C OF  THE  RETIREMENT  AND
   31  SOCIAL SECURITY LAW.
   32    3.  THE  NEW  YORK STATE SECURE CHOICE SAVINGS PROGRAM BOARD SHALL USE
   33  MONEYS IN THE  ADMINISTRATIVE  FUND  TO  COVER  START-UP  ADMINISTRATIVE
   34  EXPENSES  IT  INCURS IN THE PERFORMANCE OF ITS DUTIES UNDER ARTICLE 14-C
   35  OF THE RETIREMENT AND SOCIAL SECURITY LAW.
   36    4. THE ADMINISTRATIVE FUND MAY RECEIVE  ANY  GRANTS  OR  OTHER  MONEYS
   37  DESIGNATED  FOR  ADMINISTRATIVE  PURPOSES FROM THE STATE, OR ANY UNIT OF
   38  FEDERAL OR LOCAL GOVERNMENT, OR ANY OTHER PERSON, FIRM, PARTNERSHIP,  OR
   39  CORPORATION.  ANY  INTEREST  EARNINGS THAT ARE ATTRIBUTABLE TO MONEYS IN
   40  THE ADMINISTRATIVE FUND MUST BE DEPOSITED INTO THE ADMINISTRATIVE FUND.
   41    S 4. This act shall take effect immediately.