Gov. David Paterson signed legislation that cracks down on attorneys in the state pension system.

The legislation, first introduced in late June, represents the state's response to separate investigations by the state comptroller and state attorney general into alleged abuses of the state's $153.9 billion pension fund.

Lawyers across the state have been accused of being "erroneously" listed as employees of school districts or educational co-ops, enabling them to accrue pension credits or receive state health benefits.

The legislation:

• Elevates pension fraud from a misdemeanor to a felony offense.

• Creates a criminal penalty for lawyers who "improperly" receive benefits from the pension system.

• Gives the attorney general's office the power to seek penalties equal to three times a person's salary or other benefits "fraudulently" received.

• Imposes more frequent and more detailed disclosure and reporting requirements on school districts.

"At a time when the state is facing an unprecedented fiscal crisis, we must be honest about flaws in current operations," Paterson said in a statement.

Most of the new regulations take effect in early January, 90 days after Paterson signed the legislation.

In their separate investigations, state Comptroller Thomas DiNapoli and Attorney General Andrew Cuomo have contended that lawyers who perform contract negotiations and other work for school districts and BOCES educational co-ops should be classified as independent contractors, which would prevent them from accruing years of pension benefits.

So far, Cuomo has collected $1.24 million in settlements with individual lawyers and entire law firms, involving more than 65 attorneys in all.

DiNapoli, meanwhile, has issued new regulations dictating when someone, including an attorney, can be correctly classified as a public employee and not an independent contractor.

Some lawyers are trying to fight back in a class-action lawsuit.

James Roemer Jr., a partner at Roemer Wallens & Mineaux LLP in Albany, is litigating a case in state Supreme Court in Albany to try to stop the investigations. Roemer did not return a call seeking comment.

The lawsuit calls Cuomo's investigation "a politically motivated gambit." It also says that DiNapoli "has embarked upon his own illegal and unconstitutional course of action whereby long-standing, qualified members of the (retirement system) are summarily, and without due process of law, stripped of said rights."