Zoning and Building Codes for Tiny Houses – The Next Big Thing...

By Lauren Baron

Tiny houses are quickly becoming the next big thing. From tiny house television shows, to tiny house conferences – small-sized homes are gaining in popularity and beginning to pop up across the nation. For prospective owners, beyond designing and building a tiny house, owners must also consider where the home will ultimately reside. And as pint-sized homes become more popular in New York and other states, municipalities must consider how tiny houses fit within existing zoning and building codes.

For example, is a tiny house, in fact, a house?  In New York, a tiny house on a trailer that must be towed is considered a trailer within the meaning of the New York State Vehicle and Traffic Law and must be registered with the New York State Department of Motor Vehicles (“DMV”).  However, if the tiny house meets the length or square footage requirement for a mobile home, it may need to be registered as a mobile home with the DMV rather than a trailer.

Just because a tiny house owner obtains a DMV registration and title for it as either a trailer or mobile home does not mean additional permits or approvals are not required based on the local municipality’s zoning and building codes.  For example, the applicable municipal zoning code may have a separate definition for the terms “mobile home” or “trailer” that could apply to a tiny house, and may even prohibit mobile homes or the storage of trailers in certain zoning districts.

Further, a tiny house may fall within the definition of “dwelling unit” under many zoning and buildings codes, which contain minimum size and permitting requirements to construct a dwelling unit. Building codes also have certain safety standards to ensure a structure is safe to be used as a dwelling. Prospective tiny house builders should work with local code enforcement officers and municipal boards to ensure that their tiny house complies with these requirements in order to avoid potential zoning or building code violations.

Some municipalities throughout the country are embracing the tiny house movement and adding provisions to their zoning and building codes to define and allow “accessory dwelling units,” which are small dwelling units that can be placed on the same property as a larger dwelling.

As the popularity of tiny houses grows, municipalities may want to incorporate provisions into their zoning and building codes to more clearly regulate tiny houses to eliminate confusion for prospective tiny house owners and potential neighbors as to permitting requirements and where tiny houses may or may not be allowed within a particular municipality.

Medical Marijuana in the Workplace: What You Need to Know in New York State...

By Kyle Sturgess

Is your company prepared to handle medical marijuana in the workplace? Are you familiar with the issues, including the disability accommodations, that surround medical marijuana use? If your answer is “no,” “I’m not sure,” “we still have questions,” or a variation of these, you should attend Harris Beach’s upcoming webinar/seminar on medical marijuana in the workplace.

On October 27 at 8:00 a.m., Harris Beach will present an informative webinar that covers the myriad of legal and workplace issues surrounding medical marijuana use. Many employers are not aware that New York’s Compassionate Care Act establishes employment protections for medical marijuana use, and there are also protections included in the disability provisions of the New York State Human Rights Law. Businesses with four or more employees in New York must provide “reasonable accommodations” to employees or prospective employees who are certified to use medical marijuana.

To learn more, and help your business be prepared for potential employee use of medical marijuana, attend the webinar on October 27. For those in the Rochester, New York area, the session is also being held live at Harris Beach, and you may choose to attend in person.

Register for the Medical Marijuana in the Workplace webinar today.

Will Economics or Regulations Address the Issues Surrounding Shared Economy and Online Businesses Platforms?...

By David Rothman

In a January 2016 posting we commented on the city of San Francisco seeing the economic effects of Uber and Lyft, including that Yellow Cab, the largest taxi company in San Francisco, was reported to be seeking bankruptcy protection.  Uber and Lyft are both headquartered in San Francisco. We have also posted on Uber’s push to expand in New York, claiming to have the potential to create up to 13,000 full and part time jobs.

While the prior posts focused on the potential decrease in demand and value of taxi medallions, other events are worth mentioning.  Action by Uber and Lyft to cut fares in an effort to increase each company’s’ respective market share has had a substantial economic impact on their bottom lines. It’s been reported that both Uber and Lyft are facing significant financial losses.

These actions, and others in the online business community, have started a debate amongst economists and public policy analysts, including the Harvard Business Review (HBR). The HBR published an article arguing that no regulatory regime is necessary, whereas the Unified Repository Base on Implementation Studies (part of the European Parliament, this particular study was published by the U.K. House of Lords) is considering the creation of a regulatory platform “with caution.”  The fact that the European Union is considering a regulatory regime is important because the E.U. has the largest use of the Internet by residents (77%) of anywhere on the planet.  The House of Lords report has repercussions to businesses in the “shared” community such as AirBnB, and eBay, as well as more traditional online platforms such as Amazon and others.

Whether market economics of supply and demand or the creation of “a better mouse-trap” is sufficient to address the regulations of online businesses is something now being debated amongst various economists and elected officials.

Today, online platforms are such a part of our daily lives that companies such as Amazon, Google, Twitter and Uber are virtually taken for granted.  These companies, and others, have provided additional choice for consumers and driven market efficiencies to the benefit of consumers.

The Case Against Regulation

The European Union published in May of this year its summary of what it identified as key issues related to the role of online platforms within the E.U.  While the E.U. currently has rules regarding consumer protections and the safeguarding of personal data is required of online platforms, the report concluded that new regulations be promulgated only where “deemed necessary” and online business should not be hampered by “burdensome regulation.”  The report further recommended an E.U.-level approach rather than a national approach so as to provide a consistent outcome for online platforms throughout the E.U.

Around the same time as the E.U. Commission report, the Harvard Business Review (add link or hyperlink to full Harvard Business Review) published a piece stating that the online business platform needs no additional regulatory regime as these “businesses have not redefined industries in a fundamental way; instead they are ‘old wines in new bottles’” and therefore existing regulations apply – no new regulations are necessary.

Current Regulatory Efforts

New York State in fact has adopted legislation, currently sitting before the Governor, which would regulate AirBnB within New York City. Strongly opposed to this, AirBnB announced on September 7, 2016 that it would sue the State should the Governor sign this bill into law.  Various other municipalities have enacted legislation which has not resulted in such threats, however, the City of New York is reported to be AirBnB’s most lucrative market and therefore this legislation may impact AirBnB’s financial viability.

Also in New York state, the Village of Skaneateles enacted an ordinance banning short-term (under 30 days) rentals, although hotels, lodges and bed and breakfasts with a special use permit are exempt from the ordinance.  In June 2016, several homeowners reportedly pled guilty to violating this ordinance.  In Florida, the City of Miami Beach has a similar ordinance, the enforcement of which has resulted in fines of more than $1.6 million against homeowners and websites as well as the eviction of tourists staying at 31 properties.

And across the country in Texas, the City of Austin enacted regulations requiring all drivers be fingerprinted by February 2017, whether an Uber, Lyft or taxi driver.  In May 2016 both Uber and Lyft ceased operations in Austin due to this requirement, arguing it does not advance safety of passengers, while seeking an amendment to that regulation by the city council.  As reported in August by CNBC, up to 10 new companies have “filled the void” left by Uber and Lyft ceasing operations with many of these new companies reportedly hiring former Uber and Lyft drivers.  Other cities in Texas have similar regulations, but have not had Uber or Lyft operating within those cities.  At present Lyft is reportedly seeking a state-wide regulation so as to avoid similar issues on a city by city basis.

Market Economics

In August 2016 Bloomberg reported that Uber lost “at least $1.2 billion in the first half of 2016” with subsidies to Uber drivers comprising a “majority of the company’s losses globally.”  Those subsidies, per the Washington Post in August 2016, were worth up to $500 per driver for making pick-ups in certain cities.  This is part of a larger “price-war” between Uber and Lyft with Lyft providing its own incentives to its drivers.  Uber also cut passenger fares in many cities this past January while also reducing the commission its drivers pay.  These fare cuts resulted in increased ridership but upset drivers who then protested Uber’s actions this past May.  Lyft drivers likewise were upset when Lyft reduced its fares in April of this year.  Recent reports suggest losses at Uber are more than $4 billion over Uber’s 7 year history, while an August report suggests Lyft may be losing up to $50 million per month.

Both companies have financial backing and are each believed to seek dominant market share based on the strategy that achieving long-term dominance will result in profits and ultimately will justify these initial operating losses.  Time will tell whether undercharging customers so as to achieve market share supremacy was smart business but it is possible that at least one of these companies will lose financial backing and become a trivia question.

What’s in a name? NYSED releases a draft revision of learning standards to replace the Common Core...

By Howard J. Goldsmith

The New York State School Boards Association (NYSSBA) in its September 26, 2016 edition of On Board, reported that the Board of Regents (“Regents”) has released draft revisions of the revised state learning standards to replace the Common Core Learning Standards. This initiative is the result of one of the recommendations from the December 2015 report from the Governor’s New York Common Core Task Force. The report’s first recommendation is for the Regents “to adopt high quality standards with input from local districts, educators, and parents through an open and transparent process.” Basically, undoing the silo work of the previous Commissioner and Regents Chancellor which led to the adoption and implementation of the Common Core Learning Standards.  The revised standards are the result of this multi-phase re-boot started in April 2016 when the State Education Department (SED) convened English Language Arts Standards and Math Learning Standards Review committees comprised of over 130 teachers, administrators, parents and higher education representative. In the SED press release issued with the revisions, Regents Chancellor Rosa stated: “Learning standards form the very framework of our educational system, so it’s critical that we get this right for all our students.”

In addition to a period of public comment and review, On Board reports that the Regents are expected to start reviewing the new standards –  and possibly give them a name – in early 2017. As Shakespeare said: “What’s in a name? that which we call a rose By any other name would smell as sweet.” This is one of Shakespeare’s most famous lines in the central struggle and tragedy from Romeo and Juliet. It is the perfect framework to consider the struggles and lost opportunities New York’s educational stakeholders have gone through over the past five plus years to return to the natural and common sense approach of teamwork, consensus building, and transparency.

Naming the revised standards is not difficult and is rooted in the pre-Common Core, pre-RTT positive work and history of achievement by the Regents and the State Education Department. We do not need a name for the revised standards since we already have a name that is well respected and has been emulated by other states for years. The standards adopted by the New York State Board of Regents under its authority in the Education Law are “The New York State Learning Standards.”  There is no mention of the Common Core or any other name for New York’s student learning standards. As clearly set forth in section 100.1(t) of the Commissioner’s Regulations: “State learning standards means the knowledge, skills and understandings that individuals can and do habitually demonstrate over time as a consequence of instruction and experience.” The regulations go on to describe the New York State Learning Standards to be organized into seven general curriculum areas: 1) English language arts; 2) Mathematics, science and technology; 3) Social studies; 4) Languages other than English; 5) The arts; 6) Health, physical education and family and consumer sciences; and, 7) Career development and occupational studies.

In the past, SED periodically reviewed and revised various curriculum areas within the New York State Learning Standards. New versions were referenced by the last year reviewed and revised, but the standards always kept the same name, identity, and label of excellence. The revised standards were the result of SED leadership with the invaluable teamwork from teachers, administrators, school boards, and other education stakeholders from across the state. The initiative of bringing together diverse standards review teams for this important work is not a new model as may be misunderstood from the SED press release. It is new when compared to the recent Regents’ history of developing and adopting the Common Core Standards. But this model of teacher participation, state buy-in, and organized implementation in regards to standards review, professional development, and alignment with assessments is not, and has been undertaken through SED’s Office of Curriculum and Instructional Support numerous times in past years.

So the naming of the revised standards is not difficult and is already done. This rose of a name, The New York State Learning Standards, fits in well with the efforts of Commissioner Elia and Chancellor Rosa. They openly admit their focus is to correct the damage of the previous flawed implementation to regain the confidence, support and respect of teachers, administrators, parents, and boards of education.

The real work of the Regents is not just maintaining the standards review process, but making it systematic and regular. With today’s dynamic and constantly changing global environment and competitive workforce with cutting edge technologies, there is no such thing as the status quo. The content of our New York State Learning Standards are either moving forward or they are moving backwards. Relying on any constant framework for learning standards within our changing world means we are moving backwards. Standing still is simply not an option.

This process must include an ongoing established system with long term funding that is directed and dedicated for this purpose. The Regents need to develop and adopt a chart that cycles each of the seven general curriculum areas through a multi-year analysis that includes not just committee review and recommendations to revise and update the respective content of the standards; but public outreach, professional development, statewide implementation strategies, curriculum adjustment and development, assessment alignment, and feedback. This multi-step cycle will be laid out over a period of years for each of the curriculum areas. The seven standards areas will each get the same level of attention but be on its own step within the perpetual cycle. Once the loop is completed with the feedback cycle, the respective standard area starts again on this ongoing cycle of review, revision, adjustment, implementation, alignment and feedback.

Once the Regents and SED develop this full process to the benefit of our current and future New York State students, they can take up the challenge of naming this system. They can call it whatever they want, but if it allows New York students, educators, schools, and SED staff to once again be the model of educational excellence and innovation, it will smell as sweet as a rose.

Federal Funds Coming to Suffolk County for Fire Island to Montauk Point Plan...

By Anthony Manetta

The U.S. Army Corps of Engineers’ ambitious Fire Island to Montauk Point (FIMP) project aims to put $1.2B in federal funding to work in Suffolk County. The FIMP plan, which was first proposed and funded in the aftermath of Hurricane Sandy, would strengthen Long Island’s coast against future flooding and storms. The areas of focus are along Suffolk County’s south shore including the Towns of Babylon, Islip, Brookhaven, Southampton, East Hampton and the Fire Island communities. The FIMP plan calls to raise or flood-proof about 4,400 homes, elevate 5.9 miles of roads and build new berms and dunes.  In addition, the Town of Brookhaven has called for the voluntary buy out of homes and other structures near the water.

However, the FIMP plan is not without controversy. Local residents have had mixed reactions to the proposal, which is now years behind schedule. The FIMP plan public comment and review period, which involves a team of agencies including U.S. Army Corps of Engineers, New York District, the NYS Department of Environmental Conservation, Suffolk County and the Department of Interior, has been extended to October 18, 2016. Assuming the plan moves forward, work is not expected to begin until 2018.

While the plan may be delayed, and represents a significant federal investment, the funds and monies accessed to rebuild beaches, dunes and berms can yield significant future savings as a preventative measure.

40 Municipalities Designated as ‘Fiscally Stressed’...

By David Rothman

New York State Comptroller Thomas DiNapoli’s office has released its latest fiscal stress report, which has identified 40 municipalities as fiscally stressed. The designation of ‘significant fiscal stress’ was given to the counties of Monroe, Franklin, Broome and Rockland; the cities of Albany and Port Jervis; and the towns of Tuxedo and Parish. 14 additional communities were identified as under ‘moderate fiscal stress’ and 18 were listed as ‘susceptible to fiscal stress.’

The monitoring system used by DiNapoli’s office takes into account a variety of factors which are used to develop a fiscal condition score. Inputs include fund balance, cash-on-hand, and patterns of operating deficits. The Comptroller’s office also assigns an environmental score which includes population trends, and poverty and unemployment rates.

This latest report, which continues the trend of less than positive financial information being released by the State Comptroller’s office, is based on 2015 financial information and only includes municipalities with fiscal years ending on December 31. In total, 1,043 communities are on such fiscal years.

The State Comptroller’s office also released a report detailing the three-year trend in fiscal stress, which noted that 65 communities were listed as ‘fiscally stressed’ at least once over the last three years. The counties of Monroe, Rockland, and Franklin have been listed in the ‘significant’ category for the last three years.

Webinar: The Fair Labor Standards Act for Public School Districts and BOCES...

By Sara Visingard

Changes to the federal Fair Labor Standards Act (FLSA) go into effect December 1, 2016, and with this comes updated rules for exemptions to the FLSA’s minimum wage and overtime requirements. On October 13, Harris Beach PLLC is offering a webinar which will review the FLSA as it applies to schools. The webinar will highlight some of the special rules applicable to employees of public school districts and BOCES in regards to the FLSA, as well as assist in the understanding of the application of these rules in the educational establishment context.

Registration for the webinar as well as more information is available here.

New Cybersecurity Regulations Proposed for the Banking and Insurance Industries...

By John Forbush

Concerns over protecting the technology and computer networks that are critical to the U.S. economy and national security are ever-present in the minds of government officials and other policymakers. However, as many of these networks are privately owned and operated, government mandates to protect these networks have been the exception – until now. New cybersecurity regulations for the banking and insurance industries have been proposed by the New York State Department of Financial Services (DFS), entitled Cybersecurity Requirements for Financial Services Companies.

These proposed regulations, which would become effective January 1, 2017 and are explained in our in-depth Legal Alert, require covered financial institutions to implement specified cybersecurity programs and practices aimed at protecting confidential information, as well as information technology systems themselves, from cyberattacks. Beginning on September 28, the proposed regulations will be open for a 45-day public comment period.

These regulations, along with the recent appointment of a Chief Privacy Officer for New York’s school system, points to the increasing focus on cybersecurity in New York, as well as the increasing role government may play in fostering cybersecurity best-practices in the private sector.

Wyandanch Rising Helps Revitalize One of Long Island’s Poorest Communities...

By Thomas J. Garry

Wyandanch, part of the Town of Babylon on Long Island, had long struggled with generating economic growth and development. Wyandanch was known as one of Long Island’s poorest communities, even being identified by a Suffolk County Planning Department report as the most economically distressed community on Long Island.

“Wyandanch Rising” began in 2003, and brought the Town of Babylon together with other local community organizations and citizens to develop solutions to the various economic problems facing Wyandanch. The Town of Babylon adopted the Wyandanch Rising plan in 2004, and the revitalization efforts began immediately.

Today, the Wyandanch Rising project has become a $500 million redevelopment effort, which is focused on transit-oriented development. Harris Beach is proud to have helped make Wyandanch Rising a reality by serving as counsel to the Town of Babylon on the project, and we continue to do so today. Wyandanch Rising involves a unique use of development corporations, the adoption of a form-based zoning code, issuance of tax-exempt bonds and low income housing tax credits (LIHTC), as well as agreements between the Town and Long Island Railroad (LIRR/MTA) concerning the swap of municipal and MTA-owned land in compliance with PAAA and PARA.

The project was recently featured on WLIW21 as part of a special report on Long Island Business.


School Water Outlets May Need to be Immediately Tested for Lead...

By Douglas Gerhardt

The new mandate requiring that all school water outlets in New York undergo lead contamination testing was signed into law by Governor Cuomo in early September. These new lead testing requirements were also accompanied by emergency regulations, in which schools may need to test water outlets for lead contamination as soon as September 30. There are also specific reporting requirements which schools and school districts will need to follow.

To help schools and school districts understand these new lead testing regulations, Harris Beach has released an in-depth Legal Alert on the issue. We have also been following this issue closely on the NYMuniblog, and will keep you informed of any new developments, as we expect more information to be released as the testing deadline nears.

Drone Licensing Sees the Light of Day

By David M. Rothman

Here at the NYMuniBlog we have frequently commented on the regulatory and legal issues confronting the use of drones.  Recently published articles in various newspapers have highlighted the continuing uses of drones for both the private sector as well as public sector (police capabilities) uses. In addition, newly released Federal Aviation Administration (FAA) drone licensing regulations have many industry insiders’ predicting an increase in the commercial use of drones.


Private Use

It was  reported that over 3,000 people signed up to take the first drone pilot test which was given at the end of August, with the FAA estimating that the number of drone operators could exceed the 171,000 private pilots within the first year.  Demand for the license is so intense that reportedly the University of the District of Columbia Community College set aside 100 slots for drone testing as compared to the slots set aside for the four people who take an FAA exam there every month.

Licensed operators will be allowed to fly drones on a for-hire basis during daylight hours at altitudes under 400 feet and only when the drone is operated within eyesight of the licensed operator, in addition to other restrictions and rules included in the FAA’s Part 107 regulations.  Hobbyists who operate a drone for personal enjoyment are not subject to these restrictions.

Among the early applicants for licensing are expected to be media companies, telecommunications companies, as well as construction, agriculture producers and electrical power companies.


Public Use

It is not only commercial users and citizens who continue to explore the use of drones but also municipalities and public entities, who are evaluating drone technology for crowd control, photographing traffic accidents, hostage situations and firefighting.  Municipalities throughout New York state are reported to have purchased, or budgeted to purchase drones while others are researching uses and considering acquiring drones for municipal use.

For municipalities considering drone technology, the FAA advises that municipalities follow the existing small unmanned aircraft system rule, or there is a “Certificate of Waiver or Authorization” for government entities seeking to fly a drone.  Examples of such uses include law enforcement, search and rescue, and disaster relief.

Texas Judge Enjoins and Prohibits Enforcement of Obama Administration’s Transgender Bathroom Guidelines...

By James Beyer

Last week, U.S. District Judge Reed O’Connor from the Northern District of Texas issued a preliminary injunction temporarily blocking the Obama administration’s guidelines directing public schools to permit transgender students to use bathrooms and locker rooms consistent with the gender with which they identify.  The Texas Attorney General, who initiated the lawsuit, was joined by twelve other states and two school districts seeking to halt the transgender guidelines that made headlines back in May.  Those guidelines, contained in a joint Department of Education and Department of Justice Dear Colleague Letter, were previously discussed on the NYMuniblog.

Judge O’Connor wrote in his ruling that not granting an injunction would put states “in the position of either maintaining their current policies in the face of the federal government’s view that they are violating the law, or changing them to comply with the guidelines and cede their authority over this issue.”  The injunction therefore effectively stops the federal government from enforcing the guidelines on a purportedly nationwide basis.  In granting the injunction, the court determined that the government bypassed the notice and comment process required for issuing guidelines and directives like those contained in the Dear Colleague Letter because the guidelines are, in practice, actual legislative rules which set clear legal standards.  The court likewise determined that the plain meaning of the term “sex” within Title IX of the Education Amendments of 1972 and its corresponding regulations means “the biological and anatomical differences between male and female students as determined at their birth.” The government’s attempt to interpret the term “sex” differently from the way it has been interpreted since the law and regulations’ enactment causes more confusion for educational institutions, and therefore is not entitled to deference.

Regarding the purported nationwide injunction, there is at least some precedent, cited by the court, standing for the proposition that the scope of injunctive relief is dictated by the extent of the violation established rather than by the geographical extent of the plaintiff class.  The violation is arguably nationwide, so the injunction arguably applies nationwide.  However, the court noted that the Title IX regulations providing for separate facilities are permissive, so states that authorize schools to define sex to include gender identity for purposes of providing separate restroom, locker room, showers, and other intimate facilities will not be impacted by it.  Those states that do not want to be covered by the injunction can avoid being covered by it by state law that recognizes the permissive nature of the regulations.  The injunction therefore only applies to those states whose laws direct separate restrooms, locker rooms, and the like.  In those states, the government is enjoined from enforcing the federal transgender guidelines, and from initiating, continuing, or concluding any investigation based on the government’s interpretation that the definition of sex includes gender identity in Title IX’s prohibition against discrimination on the basis of sex.

As the NYMuniblog has mentioned in a prior post when the federal guidelines were released in May, those guidelines—and now the preliminary injunction—do little in terms of affecting New York school districts.  Districts should continue to look to the State Education Department’s July 2015 guidance, which provides similar and consistent guidance in many of the areas discussed in the federal guidance.  Schools that do not have a transgender accommodation policy still have the responsibility to create a safe and supportive environment for transgender students—and all students—as well as a responsibility to respond to allegations of harassment, discrimination and bullying pursuant to the Dignity for All Students Act.

School Districts Need to be Proactive in Testing for Lead in Water Outlets...

By Jim Beyer

On August 29, 2016, the State Education Department (“SED”) and State Department of Health (“DOH”) jointly released a field memorandum discussing required testing, reporting, and remediating lead in drinking water in schools.  The purpose of the field memo is to notify school districts that they need to be proactive in testing for lead in water outlets, and that they should prepare to immediately test all potable water outlets at schools buildings that are, or could be, used for drinking water, unless the building’s plumbing and outlets have been determined to be lead-free in accordance with federal standards.

The New York State Legislature recently passed a bill, A.10740/S. 8158, that would require all school districts and BOCES to test all potable water outlets for lead contamination, to remediate contamination where found, and to notify parents of children—as well as the public—of the lead test results.  While the bill remains unsigned, the DOH, in consultation with SED, is anticipating the law’s enactment by preparing to publish and implement regulations corresponding to the new law, which would cover issues related to monitoring by schools and their subsequent response to lead contamination issues, public notification, reporting, and waivers that may be granted in certain circumstances.

Schools should proactively begin testing in accordance with federal standards, which were previously discussed in our lead testing legal alert.  If lead contamination is detected, SED and DOH suggest that schools should be prepared to immediately discontinue the use of that water outlet, make arrangements to secure water from an alternative source, remediate the water outlet, and notify parents and the public of the lead contamination and the steps the school has taken to resolve the issue.  The full field memorandum on lead testing of water in New York state schools can be accessed here.

New York State Education Department Appoints Chief Privacy Officer...

By Susan E. Fine

On August 24, 2016, New York State Education Department (SED) announced the appointment of Temitope Akinyemi as its Chief Privacy Officer (CPO), pointing to the likelihood that new privacy mandates and guidelines for both school districts and BOCES will be announced during this school year. The Chief Privacy Officer position has been vacant since its creation pursuant to Education Law § 2-d(2) in 2014. According to the Department, Ms. Akinyemi previously served as the privacy officer for the state’s Office of Information Technology Services.  Her appointment is effective September 22, 2016.

Education Law § 2-d(2) governs student, teacher and principal data privacy and security, and encompasses a broad range of policies and practices SED and school districts need to implement to prevent the unauthorized release of information.  The law was enacted in response to the controversy over the State’s planned data dashboard and the role of InBloom.  The Chief Privacy Officer is responsible to promote the implementation of sound practices for the privacy and security of student, teacher and principal data, assist the Commissioner and educational agencies in meeting their obligations in this regard, and establish protocols for possible data breaches.

Many of the provisions of the statute were not carried out over the last two years because no CPO had been appointed.  Most critically, the statute provides for development of implementing regulations regarding the following: the Parents’ Bill of Rights for Data Privacy and Security (Parents’ Bill of Rights); standards for school policies on data security and privacy; and enforcement of standards with regard to third-party contractors.

Presently, the Parents’ Bill of Rights must state that:

  1. A student’s personally identifiable information cannot be sold or released for any commercial purposes;
  2. Parents have the right to inspect and review their child’s education records;
  3. State and federal laws protect the confidentiality of personally identifiable information, and safeguards in accord with industry standards such as encryption, firewalls, and password protection, must be in place when data is transferred or stored;
  4. A complete list of student data elements collected by the State is available for public review, and must include the website and/or mailing address where a complete list of student data elements collected by the State is available; and
  5. Parents have the right to have complaints about possible breaches of student data addressed, and the contact information of the official to whom complaints may be directed.

Regulations on the Parents’ Bill of Rights will likely add additional elements, which would in turn require school districts to update their own documents.

Additionally, policies on data security and privacy are mandated by the statute, and will have to be developed by all school districts once new regulations become effective.  The policies must cover, at minimum, data privacy and security protections and application of these requirements to third-party contractors.  While the CPO will be involved in developing model policies, school districts need to ensure that their policies meet their own unique needs while complying with the law.

In addition, when school districts contract with a third party who will receive student data or teacher or principal data, the Parents’ Bill of Rights must be supplemented with additional information for each such contract.  That information includes, among other things, the purposes for which the data will be used, what happens to the data when the contract expires, and what security measures will be taken to protect the data.  Contractors are also expected to sign a copy of the District’s Parents’ Bill of Rights.  The statute also gives SED the authority to penalize third party contractors for the unauthorized release of student, teacher or principal data.

Due to some ambiguity in the statute, many school districts delayed effectuating this component of the law until implementing regulations are adopted specifying additional elements to the Parents’ Bill of Rights and elaborating on data privacy and security requirements.  In any case, third party contracts with providers who receive student, teacher or principal data will need to be reviewed once new regulations are adopted, either to comply with the law for those school districts that delayed doing so or to ensure continued compliance with the eventual regulatory mandates.  There is no way to be certain how long it will take after the CPO assumes her duties before regulations are drafted and implemented.

Regulations will also address a new mandated notice regarding parents’ right to request student data, ensuring the security of student data when it is transmitted, and the time period within which school districts must respond to such requests.

The appointment of SED’s CPO will ultimately complete, both for SED and educational agencies around the state, the implementation of the privacy and security requirements under the Education Law.  How SED, the Board of Regents and the CPO deal with the implementation of this challenging statutory mandate, that stemmed not from any new educational need, but rather from the backlash over data that was to have been received by InBloom, will be interesting to see.  We will continue to follow the developments in the weeks and months ahead, as these data and privacy requirements will impact many aspects of school district operations.

An Update to New York’s Projected Budget Deficit...

By David M. Rothman

Readers may recall our July 27, 2016 posting on the NYMuniBlog regarding the Office of the New York State Comptroller report projecting a potential budget gap of nearly $5 billion annually starting in state fiscal year 2017-18. That report noted lower than expected personal income tax receipts to date as a driver of the projected New York state budget deficit.

Governor Cuomo’s office this month has issued its first quarterly update to the adopted budget.  That update confirms the projected budget gaps noted by the Office of State Comptroller starting in the state’s fiscal year 2018. As cited by the Comptroller’s report, the lower than expected personal income tax receipts are among the main reasons for the projected budget deficit along with the upcoming reduction in the top marginal tax rate in 2018, as well as decreased settlement payments to the state. The first quarterly report also noted economic growth was 0.2 percent lower than the enacted budget and a slowing of consumer spending in 2016 as compared to 2015.

A 2018 New York state budget deficit of $3.2 billion is currently projected; however, the application of fund balance and other, unspecified reductions including potential reductions or delays in payments to local governments, and delays in capital maintenance and construction, brings the net deficit to $207 million.

Insights for School Districts Negotiating APPR Agreements...

By Howard Goldsmith

For New York state school districts negotiating APPR agreements, the pressure on them to finalize these agreements is mounting. School districts must have approved Annual Professional Performance Review (APPR) plans in place by the end of 2016, or they risk losing the state aid increases that were included in the past two New York state budgets. I recently had the opportunity to contribute to the New York State School Boards Association APPR report, titled “Building Trust at the Table: Lessons for Successfully Negotiating APPR Agreements.”

In the report, we provide insights into five key areas for New York state school districts to consider as they finalize their APPR agreements, which are currently governed by Section 3012-d of the state’s Education Law.

New York Supreme Court Upholds the Notice of Claim in Narrowing of Suit Against City...

By Andrew Orenstein

A recent decision from Justice Lynn Kotler (New York County), following First Department precedent, has upheld the purpose of the Notice of Claim.  In Flowers v. City of New York, the plaintiff brought a lawsuit against the City of New York and six individual police officers arising out of his arrest on November 20, 2008.  Before commencing the lawsuit, the plaintiff filed a Notice of Claim that named, however, only the City of New York and the New York City Police Department.  The individually-named police officers moved to dismiss the complaint because they were not named in the Notice of Claim, in violation of GML § 50-e.  The plaintiff argued he was not required to do so under the Fourth Department’s decision in Goodwin v. Pretorius (105 AD3d 107 [4th Dept 2013]).  Applying the First Department’s decision in Alvarez v. City of New York (134 AD3d 599 [1st Dept 2015]), Justice Kotler wrote she was “bound to follow appellate precedent,” which required dismissal of all claims against all the individually-named police officers because they were not named in the Notice of Claim.

The New York Law Journal has published an article on the Flowers v. City of New York decision in which Harris Beach Associate Bradley Wanner was quoted. In explaining a Notice of Claim, Wanner stated that a Notice of Claim “is supposed to give the city and the municipalities an idea of what the claim is, who is involved in the claim, how the claim came to be”.  We therefore anticipate that the split in the departments will be resolved in favor of requiring claimants to identify officers when they file notices of claim.

Second Circuit Court of Appeals Extinguishes Municipality’s Tax Lien...

By Wendy A. Kinsella and Brian D. Roy

The Second Circuit Court of Appeals issued a decision in August 2015 that may affect a municipality’s tax lien on property that is subject to a bankruptcy proceeding. In City of Concord, N.H. v. New Eng. Tel. Operations LLC (In re N. New Eng. Tel Operations LLC), 795 F.3d 343 (2d Cir. 2015), Northern New England Telephone Operations, LLC (NNETO) owned several parcels of property in Concord, New Hampshire. The City of Concord (the City) would bill NNETO for property taxes on a quarterly basis. At the time of NNETO’s filing in October 2009, the City had already issued property tax bills for Quarters 1 and 2 (Q1 and Q2, respectively). The City filed timely proofs of claim for Q1 and Q2 property taxes, which had been billed pre-petition, but did not file proofs of claim with respect to Quarters 3 and 4 (Q3 and Q4, respectively) property taxes. A single lien secured payment of the entire tax burden, including Q3 and Q4 property taxes.

The bankruptcy court allowed the City’s claims for Q1 and Q2 tax bills, after reducing certain amounts. With respect to the Q3 and Q4 property taxes, the City filed a Motion two years after plan confirmation for Allowance and Payment of Tax Claims that were not filed. The Bankruptcy Court held that the now-confirmed Chapter 11 plan extinguished the lien, citing the plan provision that “all property of NNETO be free and clear of creditor’s interests.” The district court affirmed the ruling of the bankruptcy court.

While the general rule is that liens pass through bankruptcy unaffected, see Dewsnup v. Timm, 502 U.S. 410, 417 (1992), the Second Circuit held that a lien is extinguished by a Chapter 11 reorganization plan pursuant to § 1141(c) if four factors are met:

  • The text of the plan does not preserve the lien;
  • The plan is confirmed;
  • The property subject to the lien is “dealt with” under the terms of the plan; and
  • The lienholder participates in the bankruptcy proceedings.

The City conceded factors (1) and (2), but argued that the property subject to the lien was not “dealt with” under the terms of the plan, and that the City did not adequately participate in the bankruptcy proceedings. In regards to factor (3) the City argued that the property subject to the lien was not “dealt with” because the language used by NNETO in the confirmed Chapter 11 plan was not specific enough. The Second Circuit held that the property was adequately “dealt with” in the plan through the language that “all property” of the Debtor would vest in the reorganized debtor free and clear of creditor’s interests.  The court found the City’s argument without merit.

The City then argued, in relation to factor (4), that their participation in the bankruptcy proceeding was not of a kind that would allow its lien to be extinguished by the plan. The court held that the City, as lienholder, did sufficiently participate in the bankruptcy proceedings, and reasoned that although the City did not file proofs of claim for the Q3 and Q4 tax bills, the City did file proofs of claim for the Q1 and Q2 property tax bills with respect to the same six parcels of real property at issue. The court went further and noted that “[a]n inference of sufficient participation follows the fact that a single lien secured payment of tax bills as to which the City participated and tax bills as to which the City stayed silent.”

Notably, the NNETO case and its rationale was cited by a bankruptcy court in the Northern District of Texas in a decision denying a school district’s request for more than $130,000 in property tax penalties and fees. That decision was affirmed by the Fifth Circuit Court of Appeals on August 8, 2016.

Is New York State Facing an Annual $5 Billion Budget Gap?...

By David M. Rothman

NYMuniBlog has been following the financial difficulties of municipalities nationwide. Recently, the Office of the New York State Comptroller issued a report projecting a potential budget gap of nearly $5 billion annually starting in state fiscal year 2017-18.  The report also notes lower than expected personal income tax receipts to date.

New York School Districts Required to Test Drinking Water...

By Douglas E. Gerhardt and Anne M. McGinnis, Ph.D.

As is always the case at the end of the New York State Legislative session, a flurry of bills are passed. One of particular note to school districts picks up on guidance Harris Beach provided just a month ago in “Testing Water in School District Buildings is a Best Practice and Worthy Investment” and follows many issues of concern related to testing drinking water in school buildings.

Senate Bill 8158/Assembly Bill 10740 passed both houses on June 17 and will be sent to Governor Cuomo for signature. The bill will mandate water testing for lead in all school buildings in the state. The legislation also allows school districts to be reimbursed for the costs of these tests. This bill is set apart from other traditionally unfunded mandates, as it enables schools to recoup costs associated with water testing and other requirements under the law. While some have been critical of the reimbursement mechanism this is much better than no funding at all.

Under what will soon be a new law, school districts are required to take action including conducting “periodic testing for lead contamination” in their drinking water in accordance with regulations from the Department of Health. Further, schools must provide parents and guardians written notice of all test results and post results on the school district’s website.

To read Harris Beach’s full legal alert, please visit our Insights page


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