(a) Whenever money collected pursuant to an order of support is remitted with sufficient identifying information to associate the funds with an existing or previously existing account, the person entitled to the funds is not deceased, and the funds are unclaimed for four months or more, the SCU shall commence diligent efforts to locate the payee thereof.

(b) When such funds have remained unclaimed for not less than two years after diligent efforts to locate the person entitled to such funds, the [commissioner, as administrator of the SCU, shall report the facts to the appropriate Family Court. The commissioner shall request the Family Court to enter, in the court's discretion, an order] funds shall be paid to the state comptroller pursuant to section 111-h[(5)] (7) of the Social Services Law; provided, however, that such funds may be paid to the state comptroller pursuant to such subdivision without two years of diligent efforts if the person entitled to such funds is deceased and an estate cannot be located for such person or the estate does not claim the funds.

1. Statutory authority:

Title 42 of the United States Code (42 USC) §§ 651–657, 660, 663–664, and 666–667 sets forth authority for the Title IV-D program (IV-D) and requires states, in part, to establish and maintain a state plan for child and spousal support, and sets forth guidelines for the establishment, modification and enforcement of support obligations as well as collection and distribution of child support funds.

Title 45 of the Code of Federal Regulations (CFR) § 302.15 requires the state plan for child and spousal support to provide that the IV-D agency will maintain records necessary for the proper and efficient operation of the plan, including but not limited to records regarding the amount and sources of support collections and the distribution of those collections.

45 CFR § 302.51 requires the state plan for child and spousal support to provide for the distribution of amounts collected in a IV-D case.

Social Services Law (SSL) § 17(a)-(b) and (k) provide, in part, that the Commissioner of the Office of Temporary and Disability Assistance (OTDA) shall “determine the policies and principles upon which public assistance, services and care shall be provided within the state both by the state itself and by the local governmental units ….”, shall “make known his policies and principles to local social services officials and to public and private institutions and welfare agencies subject to his regulatory and advisory powers …”, and shall “exercise such other powers and perform such other duties as may be imposed by law.”

SSL § 20(3)(d) authorizes OTDA to promulgate regulations to carry out its powers and duties.

SSL § 34(3)(f) requires the Commissioner of OTDA to establish regulations for the administration of public assistance and care within the State.

SSL § 111-a requires OTDA to promulgate regulations necessary to obtain and retain approval of its child support state plan, required to be submitted to the federal Department of Health and Human Services by Part D of Title IV of the federal Social Security Act.

SSL § 111-c provides that each social services district (district) shall establish a single organizational unit which shall be responsible, in part, for such district’s activities in assisting the State in the enforcement and collection of support.

Pursuant to Chapter 316 of the Laws of 2021, effective July 30, 2021, SSL § 111-h(5)-(7) provides an administrative procedure for the annual transfer of unclaimed child or combined child and spousal support funds from the support collection unit directly to the state comptroller.

Pursuant to Chapter 316 of the Laws of 2021, effective July 30, 2021, Abandoned Property Law § 1318 includes within the definition of “abandoned property” unclaimed child or combined child and spousal support delivered to the state comptroller pursuant to the newly enacted SSL § 111-h(7).

2. Legislative objectives:

It was the intent of the Legislature in enacting the above statutes that OTDA establish rules, regulations, and policies so that child support services are provided to eligible persons to ensure that, to the greatest extent possible, parents provide financial support for their children.

3. Needs and benefits:

The proposed regulatory amendments to 18 NYCRR § 346.6 are being advanced as the existing regulation for unclaimed funds is inconsistent with revised state laws. Effective July 30, 2021, Chapter 316 of the Laws of 2021 amended SSL § 111-h to repeal subdivisions 5–7 and 12–17, renumber existing subdivisions 18–20 as subdivisions 12–14, and add new subdivisions 5–7 to permit a streamlined administrative procedure utilizing the functions and capabilities of the automated child support system which is compliant with mandatory federal distribution rules governing the disbursement of support collections; and amends the Abandoned Property Law to repeal §§ 600(1)(c) and 602(3), respectively, both of which are obsolete provisions applying to the support bureau of the Family Court; and adds § 1318 to provide that funds delivered to the state comptroller pursuant to SSL § 111-h(7) would be deemed abandoned property.

The proposed regulatory amendments to 18 NYCRR § 346.6 are being advanced to conform the state regulations with state law by reflecting the elimination of the requirement to make an application to the Family Court regarding the disposition of unclaimed funds paid to the support collection unit and the institution of an administrative procedure for the transfer of these funds directly to the state comptroller.

4. Costs:

The proposed regulatory amendments would not require the districts to incur any initial capital costs or annual costs for maintaining compliance with the adopted rule. The Division of Child Support Services within OTDA continues to assume all administrative cost and responsibility for the systematic programming for implementing the state automated child support management system, including the portions which support the distribution functions of districts. The cost of any necessary system changes is anticipated to be minimal.

5. Local government mandates:

Districts would be required to comply with the proposed regulatory amendments by ensuring that unclaimed child or combined child and spousal support funds are transferred to the state comptroller in full compliance with federal and state requirements. The proposed regulatory amendments would be consistent with federal and state laws.

6. Paperwork:

The proposed regulatory amendments are specifically designed to simplify paperwork as compared to the former court-based process for the disposition of unclaimed funds paid to the support collection unit.

7. Duplication:

The proposed regulatory amendments would not duplicate, overlap or conflict with any existing federal or state law or regulation.

8. Alternatives:

There are no significant alternatives that would afford greater flexibility to districts than the proposed regulatory amendments. The proposed regulatory amendments are necessary to align state regulations concerning the disposition of unclaimed child and combined child and spousal support funds with federal and recently-enacted state statutory requirements.

9. Federal standards:

The proposed regulatory amendments would not exceed minimum federal standards for the same subject.

10. Compliance schedule:

It is anticipated that districts would already be in compliance with the proposed regulatory amendments upon the effective date of the proposed regulatory amendments.

1. Effect of rule:

The proposed regulatory amendments would apply to each of the 58 social services districts (districts) in New York State. However, the proposed regulatory amendments would not impact small businesses.

2. Compliance requirements:

Districts would be required to comply with the proposed regulatory amendments by ensuring certain undistributed child or combined child and spousal support monies are transferred as unclaimed funds to the state comptroller annually in the month of April, on or before April 10. The proposed regulatory amendments would update state regulations to render the current state regulations consistent with recent changes to § 111-h of the Social Services Law and § 1318 of the Abandoned Property Law effectuated by Chapter 316 of the Laws of 2021.

3. Professional services:

To the extent districts already comply with the current requirements regarding the transfer of unclaimed funds, the proposed regulatory amendments would not require the districts to obtain additional professional services.

4. Compliance costs:

The proposed regulatory amendments would not require the districts to incur any initial capital costs or annual costs for maintaining compliance with the proposed rule.

5. Economic and technological feasibility:

The Division of Child Support Services within the Office of Temporary and Disability Assistance (OTDA) continues to assume all administrative cost and responsibility for the systematic programming for implementing the state automated child support management system, including the portions which support the distribution functions of the districts. Consequently, economic and technological feasibility would not present concerns for districts relative to the implementation of the proposed regulatory amendments.

6. Minimizing adverse impact:

The proposed regulatory amendments would not have an adverse economic impact on districts or small businesses.

7. Small business and local government participation:

The requirement for districts to transfer unclaimed funds is already contained in state regulations. The proposed regulatory amendments would ensure that state regulations are consistent with federal and recently-enacted state requirements, without placing additional administrative burdens on districts.

The statutes upon which the proposed regulatory amendments are predicated have been discussed with the districts. On December 28, 2021, OTDA discussed the state requirements pertinent to the proposed regulatory amendments with districts via webinar. The districts provided feedback regarding their current practices in relation to these requirements.

1. Types and estimated numbers of rural areas:

The proposed regulations would apply to the 44 rural social services districts (rural districts) in New York State.

2. Reporting, recordkeeping and other compliance requirements; and professional services:

Rural districts would be required to comply with the proposed regulatory amendments by ensuring certain undistributed child or combined child and spousal support monies are transferred as unclaimed funds to the state comptroller annually in the month of April, on or before April 10. The proposed regulatory amendments would update state regulations to render the current state regulations consistent with recent changes to § 111-h of the Social Services Law and § 1318 of the Abandoned Property Law effectuated by Chapter 316 of the Laws of 2021.

3. Costs:

The proposed regulatory amendments would not require the rural districts to incur any initial capital costs or annual costs for maintaining compliance with the proposed rule.

4. Minimizing adverse impact:

The proposed regulatory amendments would not have an adverse economic impact on rural districts.

5. Rural area participation:

The requirement for rural districts to transfer unclaimed funds is already contained in state regulations. The proposed regulatory amendments would ensure that state regulations are consistent with federal and recently-enacted state requirements, without placing additional administrative burdens on rural districts.

The statutes upon which the proposed regulatory amendments are predicated have been discussed with the rural districts. On December 28, 2021, the Office of Temporary and Disability Assistance (OTDA) discussed the state requirements pertinent to the proposed regulatory amendments with all districts, including rural districts, via webinar. The rural districts provided feedback regarding their current practices in relation to these requirements.

A JIS is not required for the proposed regulatory amendments. It is apparent from the nature and the purpose of the proposed regulatory amendments to 18 NYCRR § 346.6 that they would have no substantive impacts on jobs and employment opportunities in either the public or private sectors of New York State (NYS). The proposed regulatory amendments are necessary to render the existing state regulations consistent with recent changes to § 111-h of the Social Services Law and § 1318 of the Abandoned Property Law. Thus, the proposed regulatory amendments would not have any adverse impact on public or private sector jobs and employment opportunities in NYS.