Relates to the use of funds and payments from the IOLA fund; provides that funds and payments shall not be used for any other purpose other than as stated in section 97-v of the state finance law.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A1194
SPONSOR: Solages TITLE OF BILL:
An act to amend the state finance law, in relation to the use of funds
and payments from the IOLA fund
PURPOSE:
To allow IOLA appropriations to occur outside the budget process, ensur-
ing that the original legislative intent of IOLA is adhered to.
SUMMARY:
Section 1. Amends paragraph f of subdivision 3 of section 97-v of the
state finance law, as added by chapter 659 of the laws of 1983.
Section 2. Amends paragraph h of subdivision 3 of section 97-v of the
state finance law, as added by chapter 659 of the laws of 1983.
Section 3. Sets the effective date.
JUSTIFICATION:
The Interest on Lawyers Trust Accounts Fund (IOLA Fund) is a state
created means of providing additional financial support to civil legal
organizations, which in turn, increases access to justice across New
York State. While the IOLA Fund is state created, the money in the fund
does not come from the state. As its name implies, the money in the IOLA
Fund comes from the interest generated on accounts in the care of attor-
neys on behalf of their clients. When attorneys act as fiduciaries for
their clients' money, they must put this money into an interest bearing
account, either for the benefit of the clients or for the IOLA fund. The
interest from the accounts to benefit the IOLA fund is pooled and used
to support legal services organizations across the state.
These organizations provide crucial civil legal services to low-income
New Yorkers, across areas including consumer protection, education,
employment, family, health, housing, immigration, income maintenance,
and individual rights. This bill will ensure that the IOLA board of
trustees is able to act on their authority to make appropriations to the
legal services organizations, in line with the state's intentions when
IOLA was created, and to do so outside of the budget process.
SOCIAL JUSTICE IMPACT:
TBD.
LEGISLATIVE HISTORY:
2024: A10253A; referred to governmental operations.
FISCAL IMPLICATIONS:
None.
EFFECTIVE DATE:
This act shall take effect on the first of April next succeeding the
date on which it shall have become a law.
STATE OF NEW YORK
________________________________________________________________________
1194
2025-2026 Regular Sessions
IN ASSEMBLY
January 9, 2025
___________
Introduced by M. of A. SOLAGES, ROSENTHAL, RAGA, SIMONE, LUPARDO -- read
once and referred to the Committee on Governmental Operations
AN ACT to amend the state finance law, in relation to the use of funds
and payments from the IOLA fund
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Paragraph f of subdivision 3 of section 97-v of the state
2 finance law, as added by chapter 659 of the laws of 1983, is amended to
3 read as follows:
4 f. The board shall insure that grants and contracts are made with
5 not-for-profit providers of civil legal services for the poor to provide
6 stable, economical and high quality delivery of civil legal services to
7 the poor throughout the state. Notwithstanding any provision of law,
8 rule or regulation to the contrary, funds shall not be used for any
9 other purpose other than as stated in this section.
10 § 2. Paragraph h of subdivision 3 of section 97-v of the state finance
11 law, as added by chapter 659 of the laws of 1983, is amended to read as
12 follows:
13 h. All payments from the IOLA fund shall be made by the state comp-
14 troller upon certification and authorization of the board of trustees of
15 the fund. Notwithstanding any provision of law, rule or regulation to
16 the contrary, payments shall not be used for any other purpose other
17 than as stated in this section.
18 § 3. This act shall take effect on the first of April next succeeding
19 the date on which it shall have become a law.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD03321-01-5
