Add §4-b, St Fin L; amd §301, Fin Serv L; amd §5, UDC Act
Enacts the "the empire state enhanced public payment system act" directing the department of financial services to develop, establish, and maintain a value storage and payment platform consisting of a digital master account and coordinate a system of individual wallets that enable payments to move between such individual wallets or payment accounts for use of New York residents.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A837
SPONSOR: Kim TITLE OF BILL:
An act to amend the state finance law, the financial services law and
the New York state urban development corporation act, in relation to
establishing the empire state enhanced public payment system act
PURPOSE OR GENERAL IDEA OF BILL:
The bill seeks to establish the Empire State Enhanced Public. Payment
System (EPP) for short, as a solution for providing a publicly-run,
not-for-profit means for value-creating activities to be remunerated and
for un- and underbanked New Yorkers to be included in the broader state
economy.
SUMMARY OF PROVISIONS:
Section 1 provides the short title and citation of the bill as the
"Enhanced Public Payment System Act."
Section 2 is the legislative intent. In New York State, many residents
lack basic, non-extractive, and safe public payment services that serve
as a means for the accumulation, storage, and transaction of value.
Consequently, far too many individuals and households in the state are
excluded from participating in the formal economy. A workable definition
for money and currency, namely, that "which counts in a system of value
accounting, storage, and payment" is also provided. This definition
enables one to see the material consequences of shortages in aggregate
currency supplies in states and local municipalities, in which the
remuneration of activities that add value to a community and the invest-
ment in public goods is made more difficult. The solution lies in estab-
lishing a publicly-run, not-for-profit system of digital wallets, all of
which are connected to a master account that facilitates peer-to-peer
transactions between individual payment accounts. In this manner, the
fifty-five billion dollars in New York State tax credits and social
benefits and thirty billion dollars of home and community care services
can be rendered fungible for disbursement to New Yorkers' accounts;
conversely, payments from the individual to the state (such as paying
taxes) can be done easily through such a payments infrastructure.
Section 3 amends the state finance law with a new section 4-b. The terms
"master account," "individual wallet," "resident," "value ledger,"
"state entity," and "payment service provider" are defined. The section
tasks the Department of Financial Services, the Department of Taxation
and Finance, the Office of the New York State Comptroller, the New York
State and Local Retirement System, the Department of Health, the Depart-
ment of Labor, and the Department of Social Services with the establish-
ment of the Enhanced Public Payment system, and directs state entities
to disburse funds to residents' digital wallets. The Department of Taxa-
tion and Finance is tasked with the promotion of the use of the Enhanced
Public Payment system, with the objective of banking the unbanked popu-
lation in New York and maximizing inclusivity for the state's most
marginalized residents for the endeavors of value creation, wealth accu-
mulation, and commercial exchange. Lastly, the Department of Financial
Services is obligated to develop a smartphone app for the Enhanced
Public Payment, ensuring compliance by private financial institutions,
compliance with state and federal banking, privacy, and regulatory laws,
and to prohibit the for-profit extractive activities by private entities
on the Inclusive Value Ledger.
Section 4 amends section 301 of the financial services law with the
addition of a new subsection (d) that directs the superintendent of
financial services of the state to coordinate with corresponding agen-
cies in other states and territories of the United States to resolve any
extant regulatory concerns.
Section 5 amends section 5 of section 1 of chapter 174 of the laws of
1968, colloquially known as the New York State Urban Development Corpo-
ration Act, by adding three new subdivisions that mandate the Empire
State Development Corporation, in conjunction with the aforementioned
agencies, to clarify the privacy regime of the Enhanced Public Payment
infrastructure. Specifically, activities and data on the Enhanced Public
Payment are not to be sold to nongovernmental entities, with such infor-
mation being cryptographically anonymized whenever possible. Moreover,
personal data is to be shared with law enforcement only on the strict
condition of compliance with the Fourth Amendment of the Constitution of
the United States of America. The Corporation is also responsible for
the exploration of the creation of potential value ledgers in other
states, as well as a pilot program of a nationwide value ledger in
consultation with the Federal Reserve Bank of New York, the Federal
Reserve Board of the United States, and the Department of Treasury of
the United States.
Section 6 provides the conditions for severability.
Section 7 provides the effective date.
DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION (IF APPLICABLE):
JUSTIFICATION:
The Empire State Enhanced Public Payment is a transformational new
savings and payments platform that will massively accelerate value
creation and commerce in the State of New York by steadily growing the
health and wealth of New York State citizens, businesses, and communi-
ties. The digital technology that undergirds it enables New Yorkers to
generate, capture, and exchange value that has gone untapped for centu-
ries. Presently we, our state, and our communities leave untold wealth,
health, and value potential "on the table," by denying ourselves the
means of being rewarded in spendable form for much of the value we add
in our day-to-day lives. This is especially true of so-called "soft
work" - educating and mentoring our youth, environmental cleanup and
preservation, community service and infrastructure provision, care of
the ailing and elderly, and more that now goes monetarily uncompensated,
especially when done by women, young people, retirees, and other
concerned citizens. The Enhanced Public Payment will capture and mone-
tize the work of a stay-at-home, parent taking care of the family, a
mentor looking after a distressed youth, a volunteer cleaning up public
parks, etc., and transform it into spendable foam by crediting those who
do such work with "care points" on a secure, smartphone-accessible
digital ledger. These points can then be liquidated for other credits,
services, or needed products on the same platform; or can be "cashed in"
for end-of-year tax and other state remittance credits. The new technol-
ogy underlying this "Public Venmo" is a universally trusted digital
debit-credit ledger system through which citizens can accumulate and
trade tax and other state remittance credits with businesses and one
another for the products and services that make up the day-to-day busi-
ness of life. This will amount to a "complementary currency" system that
fills all the gaps left by dollar scarcity in presently overlooked
regions and sectors of New York and its economy. This will in turn
massively boost commerce, productive activity, and wealth generation,
throughout our state.
PRIOR LEGISLATIVE HISTORY:
2023-2024: A9561/Kim, Referred to Banks
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
None.
EFFECTIVE DATE:
This act shall take effect immediately.
