What's happening
Writing a plain-English summary… Track this bill to get it by email.
Why it matters
Albany, before your first meeting.
Every bill that moved yesterday, summarized in a sentence and ranked by impact. The Albany Scorecard follows on Sundays.
Free. Unsubscribe in one click. Want alerts on specific bills? Create an account.
Who cares
Headline styles
Sponsors
No co-sponsors yet.
History
- Reported and committed to rules
- Referred to finance
Full text
The text isn't available here yet. Check nysenate.gov.
Sponsor's memo
Title of bill
An act to amend the New York state financial emergency act for the city of New York, in relation to a variation from generally accepted accounting principles
Summary of provisions
This bill would amend paragraph a of subdivision 1 of section 8 of the New York State Financial Emergency Act for the City of New York (§2 of Chapter 868 of the Laws of 1975) ("FEA") to provide that, notwithstanding the provisions of such paragraph and of any general or special state law or local law, including but not limited to the New York City Charter, all costs that would be capital costs in accordance with generally accepted accounting principles but for the application of Government Accounting Standards Statement number 49 shall continue to be capital costs for purposes of any general or special state law or local law, including but not limited to the New York City Charter.
Reasons for support
This bill addresses the financing of pollution remediation costs. Currently, such costs are part of the City's capital budget and are financed substantially through the proceeds of bonds. In 2006, however, the Governmental Accounting Standards Board ("GASB") issued its Statement No. 49 ("GASB 49"), which requires that certain pollution remediation costs be accounted for as expense items. This change to Generally Accepted Accounting Principles ("GAAP"), introduced for financial reporting purposes, applied, with respect to the City, on July 1, 2008. On April 30, 2008, the New York State Financial Control Board ("FCB") authorized the City, pursuant to subdivision 2-a of Section 8 of the Financial Emergency Act ("FEA"), to continue to include in its capital budget, and finance with the proceeds of bonds, pollution remediation costs associated with any capital project that has been authorized prior to July 1, 2010. Under the current provisions of the FEA in conjunction with the FCB's determination, pollution remediation costs associated with capital projects authorized after July 1, 2010 could no longer be included in the City's capital budget or financed through the issuance of bonds.
Read the full memo (611 words)
Pollution remediation costs are a significant component of many critical City capital projects. Moreover, the inclusion of such costs in the City's capital budget appropriately reflects their contribution to the usefulness and functionality of the City's underlying assets over time. The removal of pollution remediation from the capital to the expense budget would result in significant reductions in the funds available for such projects, including lead paint and asbestos remediation and cleanup of brownfields sites to prepare them for productive use, This would certainly be at odds with the public's health and safety and with the public policy of the City and the State. In light of these considerations, the FCB's power under existing law (subdivision 2-a of Section 8 of the FEA) to postpone the implementation of changes to GAAP for a limited period is not a long-term solution to the difficulties that would be caused by the application of GASB 49 to the City's budget.
In fiscal year 2009, when GASB 49 was implemented by the City for financial reporting purposes, the City reported pollution remediation expenditures in the amount of $236 million. The City estimates that pollution remediation costs associated with City capital projects that could no longer be financed with bonds under GASB 49 would total approximately $200 million per year starting in fiscal year 2011. Shifting costs of this magnitude from the capital to the expense budget would substantially burden the City's finances, which are already suffering from the effects of the current recession.
Accordingly, the Mayor urges the earliest possible favorable consideration of this proposal by the Legislature.
Effective date
Immediately.
Summaries, headlines and scores are AI-generated from the official bill text. How we score bills. Source: NYS Open Legislation.