What's happening
This bill allows all New York school districts to establish insurance reserve funds, not just certain named districts.
Why it matters
Expands financial flexibility for all school districts. by letting them set aside funds in advance to cover insurance-related costs, helping schools better manage risks and unexpected expenses.
Promotes fiscal responsibility and stability. , as reserve funds can reduce reliance on emergency budget cuts or sudden tax increases when facing lawsuits, claims, or insurance payouts.
Requires actuarial oversight. for the amount and manner of fund use, ensuring that contributions and withdrawals are based on expert, independent assessments of what is reasonable and necessary.
Creates parity among school districts statewide. , ending a system where only specifically named districts could create such reserves, and allowing every district to plan for contingencies in the same manner.
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Who cares
Headline styles
Let Schools Save for Insurance
Plain English, a few words. Used as the page title.
Sponsors
1 Co-sponsor
History
- Referred to local government
- Referred to local government
Full text
2 pagesUnderlined is new[Struck] is removedOfficial text on nysenate.gov ↗
STATE OF NEW YORK
922
2025-2026 Regular Sessions
IN SENATE (Prefiled)
January 8, 2025
Introduced by Sens. GALLIVAN, TEDISCO -- read twice and ordered printed, and when printed to be committed to the Committee on Local Government
AN ACT to amend the general municipal law, in relation to authorizing all school districts to establish reserve funds
The People of the State of New York, represented in Senate and Assembly, do enact as follows:
Section 1. Paragraph (a) of subdivision 2 of section 6-n of the general municipal law, as separately amended by chapters 486, 515 and 525 of the laws of 2024, is amended to read as follows:
(a) The governing board of any municipal corporation may establish a reserve fund to be known as the insurance reserve fund. Upon the creation of the fund, the municipality may make expenditures from the fund for any loss, claim, action or judgment for which the municipal corporation is authorized or required to purchase or maintain insurance, except those kinds of risks for which insurance is authorized pursuant to paragraph one, two, three, fifteen, sixteen, seventeen, eighteen, twenty-two or twenty-three of subsection (a) of section one thousand one hundred thirteen of the insurance law, or for payments in lieu of contributions under article eighteen of the labor law; provided however, that no municipality shall make an expenditure from such fund for any loss, claim, action or judgment for which the municipal corporation has established a reserve fund under any other provision of law; provided, further that the Scarsdale union free school district, the Mamaroneck union free school district, the Minisink Valley central school district, the Vernon Verona Sherrill central school district, the Ithaca city school district, the Kenmore-Town of Tonawanda union free school district, the Bedford central school district, the Grand Island central school district, the Tonawanda city school district, the enlarged city school district of Middletown, the Frontier central school district, the Owego Apalachin central school district, the Maine-Endwell central
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD02901-01-5
school district, the Binghamton city school district, the Candor central school district, the Cleveland Hill union free school district, the Depew union free school district, the Iroquois central school district, the Liverpool central school district, the Auburn enlarged city school district, the Carmel central school district, the Clarence central school district, the Fulton city school district, and the Canastota central school district and any other school district, pursuant to a collective bargaining agreement, may establish insurance reserve funds in compliance with this section and article seventy-four of the education law and such school districts may make expenditures in compliance with this section and article seventy-four of the education law, in an amount and manner determined by a qualified and independent actuary certified by the American Academy of Actuaries to be reasonable and necessary, from such reserve fund for any loss, claim, action or judgment for which the school districts are authorized or required to purchase or maintain insurance for the kinds of risks for which insurance is authorized pursuant to paragraph three of subsection (a) of section one thousand one hundred thirteen of the insurance law.
§ 2. This act shall take effect on the first of July next succeeding the date on which it shall have become a law.
Reflowed for reading: line numbers and page breaks removed. Cite the official text.
Sponsor's memo
Title of bill
An act to amend the general municipal law, in relation to authorizing all school districts to establish reserve funds
Summary of provisions
Section 1 amends section 6-n of the general municipal law by providing that any school district may establish insurance reserve funds in compliance with section 6-n, provisions in the education law, and subject to a collective bargaining agreement. The provisions also include a limit on funds reserved to be determined by an independent actuary.
Section 2 sets forth the effective date.
Justification
Current law allows municipal corporations to self-insure to provide health insurance to their employees, officers, and retirees. Section 6-n of the general municipal law specifically does so by allowing these municipal corporations to establish and make expenditures from insurance reserve funds, but exempts accident and health insurance from these provisions.
Previous chapters authorized specific school districts to use their insurance reserve funds for expenses related to health and accident insurance as defined by paragraph three of subsection (a) of section one thousand one hundred thirteen of the insurance law. In the era of the tax cap, several school districts have opted to adopt self-insurance to manage rising healthcare costs, and for these districts, insurance reserve funds are necessary to maintain their self-insurance programs. The policy of the State should be aimed at allowing all school districts the flexibility offered by insurance reserve funds; instead, the legis- lature has approached the matter in a piecemeal way. In 2019 and 2020 alone, the legislature added 21 school districts to those who are allowed to operate an insurance reserve fund over the course of 21 different pieces of legislation. As of March 2021, an additional 4 school districts have legislation before the Senate to gain authori- zation. This bill offers the flexibility the legislature has extended to some school districts universally, expanding the authorization to any school district that wishes to create or use an insurance reserve fund for health self-insurance.
Legislative history
2023-24: S.4489/A.4953 Referred to Local Government/Referred to Educa- tion
2021-22: S.2065a Referred to Local Government
2019-20: S.2067b/A.114a Referred to Local Government/Referred to Educa- tion
2018: S.7702/A.10145A Reported to 3rd Reading/Referred to Education
Fiscal implications
None to the state.
Effective date
The first of July next succeeding the date on which it shall have become law.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.