GOVERNOR PATERSON SIGNS LAW TO HEIGHTEN PENSION SYSTEM STANDARDS

Legislation will Combat Abuses of Pension System

Paterson Also Signs Law to Increase Penalties for Motion Picture Piracy

Governor David A. Paterson today signed into law bill S.8669(Skelos)/ A. 11743(Sweeney), to curb abuses in the state pension system, after an investigation found abuses of the pension system within school districts, particularly by attorneys being paid as both an employee and independent contractor, and by recent retirees who used state waivers to work at essentially the same positions for which they were collecting pensions.

“At a time when the State is facing an unprecedented fiscal crisis, we must be honest about flaws in current operations,” said Governor Paterson. “While there are many cases where a retiree remains an asset to the State even after retirement, the Attorney General’s investigation revealed that this process was being misused, particularly in school districts. The State and local governments must be diligent to ensure that such waivers are subject to the most careful review. I commend my colleagues for passing this legislation.”

The reforms:

Bar attorneys from simultaneously serving a school district or Board of Cooperative Educational Services (BOCES) as an employee and independent contractor;

Require an attorney who is an independent contractor of a school district or BOCES to not obtain employee benefits such as health insurance and pension;

Impose reporting and disclosure requirements on school districts, including broader disclosure of administrator compensation during the budget process, annual reporting of employees receiving pensions under various waiver provisions, and making annual expense information available on a website or at a public library;

Put in place a variety of civil and criminal penalties for violations of its provisions, and for defrauding the pension system; and
Implement various reforms to the process by which retirees can obtain waivers under Retirement and Social Security Law § 211 (“211 waivers”), which allows the State and local governments to hire retirees while they receive a pension for two year periods, if there are no available non-qualified retirees.

Attorney General Andrew Cuomo said: “This legislation strikes the right balance by continuing to allow government agencies to recruit and hire for specialized positions while helping to end the statewide fraud and abuse in the pension system that has cost New York’s taxpayers millions. My office will continue rooting out and prosecuting corruption in the pension system and I applaud Gov. Paterson and the Legislature for creating this new and comprehensive tool adding tough new penalties for pension fraud while increasing transparency and accountability in all levels of government.”

In addition, the Governor also signed legislation to help fight piracy in the motion picture industry by strengthening penalties for operating recording devices in movie theatres. This bill, S.8201-A(Padavan)/A.11184-A(Lentol), updates some of the definitional language in Penal Law § 275.32, in particular to clarify that the statute applies to the unlawful recording of live theatre performances, and would rename the existing crime as “Unlawful operation of a recording device in a motion picture or live theater in the third degree.” It also creates two new unlawful operation crimes: (1) a new second-degree crime, which is a class A misdemeanor; and (2) a new first-degree crime, which is a class E felony.

“Every time someone brings a video camera into a theatre and illegally records a movie or live performance, it costs the industry – and in return, the State – money,” said Governor Paterson. “A stronger law was necessary to help crack down on this pervasive crime.”

Attorney General Cuomo said: “These tough new penalties will help to crack down on an illegal enterprise that has pervaded the film industry and Broadway for far too long. Both the motion picture and live performance industries are vital to our State’s economic health. I thank the Legislature and Governor Paterson for joining me in making this effort a priority.”

State Comptroller Thomas P. DiNapoli said: “The legislation that Governor Paterson signed today, along with the Retirement System regulations I implemented in April, clearly defines for school districts and BOCES across the State when someone can be considered a public employee and not an independent contractor. This legislation also places a responsibility on school districts to demonstrate in no uncertain terms why a 211 waiver is needed to hire retired individuals to fill vacancies. This is real progress toward protecting taxpayers' dollars and preserving the integrity of the Retirement System.”