Authorizes performance of credit, security clearance and criminal background checks of employees of the New York state higher education services corporation

BILL NUMBER:S3987B

Title of bill

An act to amend the education law, in relation to permitting credit, security clearance, and criminal background checks of employees of the Higher Education Services Corporation

Purpose of bill

This bill would amend the Education Law to permit background investigations, including criminal background checks and credit checks, of certain current and prospective Higher Education Services Corporation (HESC) employees, as required by the U.S. Department of Education for the performance of services under new and existing contracts related to the administration of federal student loans.

Summary of provisions

Section 1 of this bill would add a new Section 652-a to the Education Law to authorize HESC to perform background investigations, including criminal background checks and credit checks, for all current and prospective employees, when necessary for employee participation in the administration of federal student loans or other federal programs under the Federal Direct Loan Program (FDLP). Such investigations would be done in conjunction with the Department of Criminal Justice Services (DCJS) or a federal government agency with lawful authority to obtain the necessary information. The bill also provides for the confidentiality of information obtained during the course of investigations. Further, subjects of background investigations will be provided with information regarding the factors considered in making a determination pursuant to the new section and subjects will have the opportunity to seek correction of inaccurate information contained in background records. HESC shall be responsible for any fees associated with a background investigation of a current employee.

Section 2 of the bill would provide for an immediate effective date.

Existing law

Currently, Civil Service Law .50(4) permits state departments (upon engaging in a delineated process) to run criminal background checks on all new employees, with DCJS performing the criminal background checks. However, .50(4) specifically excludes from its ambit several classifications of employees: existing employees, New York State employees seeking transfer employment under of Civil Service Law §70, New York State employees who are on a preferred list subject to Civil Service Law §81 and who are seeking employment through their place on an eligible list as defined in Civil Service Law §56 and who have successfully completed a promotional exam subject to Civil Service Law §52.

Prior legislative history

This is a new proposal.

Statement in support

Over the past five years, HESC has paid out more than $167 million in State financial aid programs through its participation in the Federal Family Education Loan (FFEL) Program.

Provisions of the Health Care and Education Reconciliation Act (HCERA) (HR4872) passed in March 2010 eliminated future student loan originations under the FFEL Program, which went into effect on July 1,2010 As a result, all federal student loans will now be originated under the FDLP. HESC is seeking to obtain a contract to perform services for FDLP to maintain current agency funding levels.

Generally, entities seeking to do business with the federal government must meet a series of security and technology standards delineated by the Department of Commerce's National Institute of Standards and Technology (NIST). Among these standards is the requirement that all employees of the contracting entity be subject to background and/or security clearance investigations and credit screening. To ensure that HESC is able to meet current and anticipated federal contracting requirements, HESC is seeking the authorization to conduct such investigations on those HESC employees necessary for HESC to perform services under existing and new federal contracts.

BUDGET IMPLICATIONS

This bill would have a positive fiscal impact, as it would allow HESC to participate in federal revenue-generating programs.

EFFECTIVE DATE

The bill would take effect immediately.