Section 31. Participation by public or quasi-public organizations

a. Any
  public or quasi-public organization created wholly or partly or deriving
  its powers by the  legislature  of  the  state  and  which  organization
  employs  persons engaged in service to the public or any state agency as
  defined in section fifty-three-a of the state finance law,  or  the  New
  York  state association of town superintendents of highways, inc. or any
  school board association, by resolution legally adopted by its governing
  body and approved by the comptroller, may elect to have its officers and
  employees become eligible  to  participate  in  the  retirement  system.
  Acceptance  of  the  officers  and  employees  of  such  an employer for
  membership  in  the  retirement  system  shall  be  optional  with   the
  comptroller. If he shall approve their participation, such organization,
  except  as  specifically provided in this article to the contrary, shall
  thereafter be treated as a participating employer.   Any  election  made
  pursuant  to  this  subdivision  by  a school board association shall be
  applicable to current employees of such association.
    b. The officers and employees of such organization shall  be  credited
  with  such  periods  of  prior  service  as  shall be certified by their
  employer for service rendered to it, or its predecessor, or  the  state,
  or  in any other capacity approved by such employer and the comptroller.
  Service for such employer after  the  date  on  which  it  commences  to
  participate  in  the  retirement  system  and  on  account of which such
  employer pays contributions shall be considered as  member  service.  An
  officer  or  employee  of  such  employer  who,  as of the date he is so
  approved for membership in the retirement system, is  already  a  member
  thereof,  shall not have his total credit reduced by such approval.  Any
  reserve held on account of any such officer or employee in  the  pension
  accumulation  fund  shall  be  used  as an offset against the deficiency
  contribution payable thereafter by such  employer  on  account  of  such
  officer  or  employee for any prior service credit and any such previous
  credit. Except as otherwise provided in  this  article,  an  officer  or
  employee of such employer who, by reason of this service, is a member of
  any  other  governmental retirement system shall not participate in this
  retirement system on that part of his compensation so covered. The  term
  "governmental  retirement  system",  as  used in this subdivision, shall
  include any retirement system wholly or partly maintained by this state,
  by  a  municipality  of  this  state,  by  another  state  or  political
  subdivision  thereof, by the United States government, or by any foreign
  country or political subdivision thereof.
    c. An agreement, made by such an employer pursuant to this section, to
  contribute  on  account  of  its  officers  and   employees   shall   be
  irrevocable.  In  the  event  that  such employer for any reason becomes
  financially unable to make the contributions required on account of  its
  officers  and  employees,  it  shall  be  deemed  to  be  in  default. A
  certificate to such effect thereupon shall be sent by the comptroller to
  the employer and to the state superintendent of insurance. Every  member
  of  the  retirement  system,  who  was  an  officer  or employee of such
  employer at the time of default, upon demand  made  within  ninety  days
  thereafter,  shall  be  entitled  to  discontinue  his membership in the
  retirement system and to a refund of his accumulated  contributions.  As
  of a date ninety days following the date of such certificate of default,
  the  actuary  of  the  retirement  system, by actuarial valuation, shall
  determine the amount of the reserves held  on  account  of  each  active
  member  and  pensioner  of  such  employer. He shall credit to each such
  member and pensioner the amount of reserve so held. In the event such an
  active member does  not  discontinue  his  membership  and  thus  become
  entitled  to the refund of his accumulated contributions, the reserve so
  credited, together with the  amount  of  his  accumulated  contributions

  shall be used to provide for him a paid up deferred annuity beginning at
  age sixty. The reserve of each pensioner shall be used in providing such
  part  of his existing pension as the reserve so held will provide, which
  pension,  together with his annuity, shall thereafter be payable to him.
  The rights and privileges of both active members and pensioners of  such
  employer  shall  thereupon  terminate  except  as  to the payment of the
  deferred annuities so provided for the previous active members  and  the
  annuities   and  the  pensions,  or  parts  thereof,  provided  for  the
  pensioners.
    d. Notwithstanding anything to the  contrary,  the  retirement  system
  shall not be liable for the payment of any pensions or other benefits on
  account  of  the officers, employees or pensioners of any employer under
  this section, for which reserves have not been previously  created  from
  funds contributed by such employer or its officers or employees for such
  benefits.  This  provision  shall  not  apply  to any municipality which
  elected to participate in the retirement  system  under  former  section
  seventy-five-a  of  this  law  prior  to  July  first,  nineteen hundred
  forty-eight.
    e. 1. Any public organization  not  participating  in  the  retirement
  system  prior  to October first, nineteen hundred fifty-three, and which
  has not provided  old-age  and  survivors  insurance  coverage  for  its
  employees,  may,  at the time of making election to participate, exclude
  from eligibility for membership in the retirement system such  class  or
  classes  of  offices or positions for which membership in the retirement
  system is not made mandatory by this article, as the public organization
  may specify in the resolution adopted pursuant to subdivision a of  this
  section. Participation by any such public organization which may exclude
  from  eligibility  for membership any class or classes of its offices or
  positions shall not become  effective  until  such  public  organization
  shall  have  entered  into an agreement to provide old-age and survivors
  insurance coverage for such class or classes of offices or positions  in
  the manner and to the extent provided by article three of this chapter.
    2.  Any  public  organization  participating  in the retirement system
  prior to October  first,  nineteen  hundred  fifty-three,  may,  by  the
  adoption of a resolution in the manner provided in subdivision a of this
  section  and  filed  with  the comptroller prior to the time such public
  organization  makes  an  agreement  to  provide  old-age  and  survivors
  insurance  coverage for its employees, elect to exclude from eligibility
  for membership in the retirement system any class or classes of  offices
  or  positions  for which membership in the retirement system is not made
  mandatory by this article. Public notice of the proposed adoption of any
  such resolution shall be given  at  least  three  months  prior  to  the
  adoption thereof. Officers and employees holding offices or positions in
  any  such  excluded  class  or  classes, however, who are members of the
  retirement system at the time of the filing  of  such  resolution  shall
  continue  to  be  members  of  the  retirement  system.  Such resolution
  providing for such exclusion from eligibility for membership  shall  not
  become  effective,  however,  until  such public organization shall have
  entered into an agreement to provide  old-age  and  survivors  insurance
  coverage  for  the  class or classes of offices or positions so excluded
  from eligibility for membership in the retirement system in  the  manner
  and to the extent provided by article three of this chapter.
    3.  The  power to exclude employees from eligibility for membership in
  the retirement system pursuant to paragraph one or paragraph two of this
  subdivision  e  shall  terminate  on  the  day  after  the  modification
  extending  the  old-age  and  survivors insurance system to any position
  covered  by  such  system  and  held  by  an  employee  of  a  political

  subdivision of the state (exclusive of one in a policeman's or firemen's
  position) is executed.