Institutional Federal Compliance Report 2021

128 • Notes to Basic Financial Statements _________________________________________________________________________

Long Island Power Authority The Long Island Power Authority (LIPA) was estab- lished in 1985 as a corporate municipal instrumentality of the State. On May 28, 1998, the LIPA Acquisition Corporation, a wholly owned subsidiary of LIPA, was merged with and into the Long Island Lighting Company (LILCO) pursuant to an Agreement and Plan of Merger dated as of June 26, 1997. LIPA financed the cost of the merger and the refinancing of certain of LILCO’s outstanding debt through the issuance of $6.7 billion aggregate principal amount of Electric System General Revenue Bonds and Electric System Subordinated Revenue Bonds. In addition, LIPA assumed responsibility for $1.2 billion of LILCO’s General and Refunding Bonds, which were defeased immediately upon the closing of the merger. The excess of the acquisition costs over the fair value of net position acquired ($3.5 billion) has been reported as an “intangible asset,” which is being amor- tized through 2026. Chapter 173 of the Laws of 2013 established the Utility Debt Securitization Authority (UDSA) for the sole purpose of retiring certain outstanding indebt- edness of LIPA through the issuance of restructuring bonds by UDSA. In accordance with GASBS No. 61, The Financial Reporting Entity: Omnibus, an amendment of GASB Statements No. 14 and No. 34 , UDSA is con- sidered a blended component unit of LIPA. On March 30, 2015, the Securitization Law was amended to allow for a total issuance of up to $4.5 billion of UDSA restructuring bonds, inclusive of the $2 billion of restructuring bonds issued in December 2013. Between October 15, 2015 and December 31, 2017 the remaining restructuring bonds were issued, exhausting the statutory authority allowed under the Securitization Law. LIPA, as owner of the transmission and distribu- tion (T&D) system located in Nassau, Suffolk and a small portion of Queens counties, is responsible for supplying electricity to customers in the service area. Under a contract starting January 1, 2014, responsi- bility for major operational and policy-making services for the T&D system effectively shifted from LIPA to PSEG Long Island LLC for a period of twelve years. Financial statements can be obtained by contacting LIPA at www.lipower.org . Urban Development Corporation The New York State Urban Development Corpora- tion (UDC) was established by legislative act in 1968 as a corporate governmental agency of the State. UDC conducts business as Empire State Develop- ment. UDC is engaged in various activities for the State, three of which are: promoting economic devel- opment and job creation; financing special projects

throughout the State with revenue bonds; and mar- keting the State as a great place to do business and as a vacation destination. UDC is the State’s primary agent for economic development and works in partnership with the public and private sectors to create an environment that spurs innovation and economic development while enhanc- ing the State’s competitive advantage as the world capital for many industries, ranging from finance and media to technology and agriculture. UDC continues its efforts to foster economic devel- opment through the State. Its mission is to promote a vigorous and growing State economy, encourage business investment and job creation, and support diverse, prosperous local economies across the State through efficient use of loans, grants, tax credits, real estate development, marketing and other forms of assistance. Financial assistance is provided primarily through State appropriated funds received by the UDC and State supported bonds issued by UDC which are disbursed to projects. UDC continues to administer and manage a robust marketing program to help strengthen the State economy. The program has multiple components, which are broadly focused on two areas: (1) increasing the State’s tourism through consumer and trade pro- grams that heighten the visibility of New York’s tourism attractions as vacation destinations; and (2) attracting companies looking to expand, move or begin their operations in New York. UDC is also the administrative agency for the New York State Film Tax Credit Program, which is designed to increase the film pro- duction and post-production industry presence in and overall economic benefits to the State. The financial statements of the UDC are available at www.esd.ny.gov . State Insurance Fund The State Insurance Fund (SIF) was created in 1914 and comprises the Workers’ Compensation Fund and the Disability Benefits Fund and is primarily engaged in providing workers’ compensation and disability benefit insurance for employers in the State of New York. During previous fiscal years, the SIF transferred approximately $1.3 billion to the State’s General Fund and Other Governmental Funds. The statutes autho- rizing these transfers required that the State appro- priate amounts annually for the potential repayment of the transfers. Such repayment is required only to maintain the solvency, as defined, of the Workers’ Compensation Fund. The entire receivable and equity related to these transfers were eliminated from the presentation of the SIF. Further, after recognizing the total OPEB liability noted below, the resulting fund balance is approximately $5.2 billion.