Institutional Federal Compliance Report 2021

____________________________________________________________________________________________ STATE OF NEW YORK • 103

The State Finance Law requires the Abandoned Property Fund, a Private Purpose Trust Fund, to have a maximum cash balance of $750,000 at fiscal year- end. All Abandoned Property receipts are recorded in the General Fund and receipts recorded in the Abandoned Property Fund are for payment upon approval of a claim. At March 31, 2019, the Aban- doned Property Fund included $260 million of secu- rities not yet liquidated and not subject to the State Finance Law’s cash provisions. Net collections from inception (1942) to March 31, 2019 of approximately $16 billion, excluding interest, represent a contingent liability to the State since the owners of such property may file claims for refunds. Restricted net position, representing the probable amount of escheat property that will be reclaimed and paid to claimants, is reported in the Abandoned Prop- erty Fund (Fund). To the extent that assets in the Fund are less than the claimant liability, a receivable (due from other funds) is reported in that Fund and an equal liability (due to other funds) is reported in the General Fund. At March 31, 2019, the amount reported in the Fund for net position restricted for claimant liability is $3.2 billion and the amount reported in the General Fund as due to the Fund is $2.7 billion. Since receipts in the Fund are expected to be ade- quate to pay current claims, it is not expected that General Fund support for that purpose will be required. Claims paid from the Fund during the year totaled $405 million. The State is liable for costs relating to the closure and post-closure of landfills totaling $4 million, which is recorded in accrued liabilities. Closure and post- closure requirements are generally governed by Title 6, Part 360 of the New York Code of Rules and Reg- ulations. Since most landfills are inactive, the liability reflects the total estimated closure and post-closure cost at year-end. Liability estimates are based on engi- neering studies or on estimates by agency officials that are updated annually. GASBS No. 49, Accounting and Financial Reporting for Pollution Remediation Obligations , provides guidance for state and local governments in estimating and reporting the potential costs of pollution remediation. While GASBS 49 does not require the State to search for pollution, it does require the State to reasonably estimate and report a remediation liability when any of the following obligating events has occurred: Pollution poses an imminent danger to the public and the State is compelled to take action;

The State is in violation of a pollution-related permit or license; The State is named or has evidence that it will be named as responsible party by a regulator; The State is named or has evidence that it will be named in a lawsuit to enforce a cleanup; or The State commences or legally obligates itself to conduct remediation activities. Site investigation, planning and design, cleanup and site monitoring are typical remediation activities underway across the State. Several State agencies have dedicated programs, rules and regulations that rou- tinely deal with remediation-related issues; others become aware of pollution conditions in the fulfillment of their missions. The State has the knowledge and expertise to estimate its remediation obligations based upon prior experience in identifying and funding similar remediation activities. The standard requires the State to calculate pollution remediation liabilities using the expected cash flow technique. Where the State cannot reasonably estimate a pollution remedi- ation obligation, it does not report a liability; however, the State has not identified any such situation. The State’s estimated pollution remediation obligations are subject to change over time. Costs may vary due to price fluctuations, changes in technology, changes in potential responsible parties, results of envi- ronmental studies, changes to statutes or regulations and other factors that could result in revisions to these estimated obligations. Prospective recoveries from responsible parties may reduce the State’s obligation. Capital assets may be created when pollution remedi- ation outlays are made under specific circumstances. During the fiscal year, the State recognized esti- mated additional liabilities of $261 million, spent $163 million in activities related to pollution reme- diation obligations and recognized adjustments decreasing the liability by $2 million. The State recov- ered $28 million from other responsible parties. At March 31, 2019, the State had an outstanding pollu- tion remediation liability of $1.2 billion, with an esti- mated potential recovery of $90 million from other responsible parties. Several unions have not reached labor settlement agreements with the State at this time. Settlements may result in added costs to the State.