|SAME AS||No Same As|
|COSPNSR||Mosley, Steck, Solages, Quart, Dickens|
|Add §4-b, St Fin L; amd §301, Fin Serv L; amd §5, UDC Act|
|Establishes the empire state inclusive value ledger establishment and administration act to create a master account and system of individual wallets to make and receive payments to state entities and residents of the state; authorizes the disbursement of a portion of unclaimed remittances to workers who have been furloughed or unable to work due to Coronavirus.|
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NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A8686A Revised 4/22/2020 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 inclusive value ledger establishment and administration act   PURPOSE OR GENERAL IDEA OF BILL: The bill seeks to establish the Empire State Inclusive Value Ledger, or Inclusive Value Ledger (IVL) 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 "Empire State Inclusive Value Ledger Establishment and Administration Act." Section 2 is the legislative intent. In New York State, many residents lack basic and non-extractive banking 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, as 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 establishing 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 the individual payment accounts. In this manner, the fifty-five billion dollars in New York State tax credits and social benefits 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. In the advent of the novel Coronavirus pandemic and the proliferation of COVID-19 cases in the State of New York, the state economy's vulnerabil- ities have been made apparent. Thousands of individuals, particularly wage-laborers and elderly people, are being hit with the worst of the economic fallout from the pandemic. The compounding of the absence of individual savings, the drastic rise in unemployment, lack of a sound social safety net, and the sheer fall in aggregate demand and consumer spending has made it apparent that a public payments and remuneration platform is needed. New York State currently has sixteen billion dollars in unclaimed remittances, up to five billion of which may be liquidated upon the Governor issuing an executive emergency declaration of disaster. 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 Labor, and the Department of Social Services with the establishment of the Inclusive Value Ledger, and directs state entities to disburse funds to residents' digital wallets. At least five billion and three hundred thirty million dollars of the State's sixteen billion in unclaimed remittances are to be made imme- diately available to furloughed workers; any surplus remaining is to be made available for remittance to small business in the State and distributed according to a pro rata formula that the State Comptroller is tasked with developing. The peer-to-peer mechanics are outlined in this section. Commercial financial institutions that are chartered to do business in New York State are also mandated to provide interoperability between the individual wallets. The Department of Taxation and Finance is tasked with the promotion of use of the Inclusive Value Ledger, with the objective of banking the unbanked population in New York, and maximizing inclusivity for the state's most marginalized residents for the endeavors of value creation, wealth accumulation, and commercial exchange. Lastly, the Department of Financial Services is obligated to develop a smartphone app for the Inclusive Value Ledger, ensuring compliance by private financial insti- tutions, compliance with state and federal banking, privacy, and regula- tory 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 Inclusive Value Ledger infrastructure. Specifically, activities and data on the Inclusive Value Ledger is not to be sold to nongovernmental entities, with such informa- tion 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): Two primary differences exist between A8686 and A8686A: 1. The legislative findings that reflect the economic realities of the novel Coronavirus pandemic in New York State, as well as the new policy outlined in Section 3 that directs the immediate availability of the sixteen billion in unclaimed remittances to New Yorkers 2. New policy to prescribe regulations that ensure the security and fidelity of the Inclusive Value Ledger's privacy regime   JUSTIFICATION: The Empire State Inclusive Value Ledger 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 liter- ally centuries. 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 of our youth, environ- mental cleanup and preservation, community service and infrastructure- provision, care of the ailing and elderly, etc. that now goes monetarily uncompensated, especially when done by women, young people, retirees, and other concerned citizens. The Inclusive Value Ledger will capture and monetize 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 trans- form it into spendable form by crediting those who do such work with "care points" on a secure, smartphone-accessible digital ledger. These points then can then be liquidated for other credits, services, or need- ed products on the same platform; or can be "cashed in" for end-of-year tax and other state remittance credits. The new technology 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 business 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. And this will in turn massively boost commerce, productive activity, and wealth-generation, throughout our state. Tax Credits and Benefits Estimate Tax Credit or Benefit Approximate Value of Disbursement/Cost of Service Office of Temporary and Disabled Assistance(OTDA); Including public assistance, NYS SSI/SSP, SNAP $1,404,346,000 Earned Income Tax Credits(NYS+NYC) $2,069,164,000 Noncustodial Earned Income Tax Credits NYS+NYC) $2,467,000 Real Property Tax Credit $20,539,000 School Tax Relief Program (STAR) $2,175,995,000 Child and Dependent Care Tax Credits $155,127,000 Student Grant and Award Programs $1,184,945,000 Medicaid $47,551,153,000 AIDS Institute $103,495,000 Essential Plan $431,367,000 Children's Health Insurance $482,087,000 Elderly Pharmaceutical Insurance Coverage $132,580,000 Total Sum: $55,713,265,000 (approx. $55.7 billion) Like fertile soil that has long gone unwatered, New York's "care econo- my," "community economies," and broader economy will bloom into abun- dance abundance that just isn't possible when pervasive community-work, care-work, and so-called "women's work" goes uncompensated and non- transferrable. By enabling all forms of value to be stored, saved and transferred in spendable form, the Inclusive Value Ledger will boost commerce and care, enabling all New Yorkers and their communities not only to grow, but to flourish.   PRIOR LEGISLATIVE HISTORY: 10/23/2019 referred to banks 01/08/2020 referred to banks   FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS: None.   EFFECTIVE DATE: Immediately upon passage.
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STATE OF NEW YORK ________________________________________________________________________ 8686--A 2019-2020 Regular Sessions IN ASSEMBLY October 23, 2019 ___________ Introduced by M. of A. KIM, MOSLEY, STECK, SOLAGES, QUART, DICKENS -- read once and referred to the Committee on Banks -- recommitted to the Committee on Banks in accordance with Assembly Rule 3, sec. 2 -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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 inclusive value ledger establishment and administration act The People of the State of New York, represented in Senate and Assem- bly, do enact as follows: 1 Section 1. This act shall be known and may be cited as the "empire 2 state inclusive value ledger establishment and administration act". 3 § 2. Legislative intent. Many New Yorkers, be they individuals or 4 small businesses, lack access to retail banking services that can enable 5 them to accumulate, store, and transfer value in simple commercial, 6 financial, testamentary and gift transactions on non-exploitative terms. 7 Many New Yorkers also lack access to basic retail payment services that 8 can enable them to exchange value for value in retail and other trans- 9 actions on non-exploitative terms. The aforementioned failures of access 10 operate not only to marginalize and exclude large numbers of New Yorkers 11 from ordinary interactions of the kind that underwrite full membership 12 in society, but also to impede or obstruct multiple commercial and other 13 transactions that determine the size and scope of the state's economy 14 and the prosperity of its residents. Since a money or currency is what 15 'counts' in a system of value accounting, storage, and payment, the 16 aforementioned failures of access also operate to limit the state and 17 its localities' aggregate currency supplies, which in turn prevents the 18 remuneration of many value-adding activities, including care of the 19 needy, maintenance of local infrastructures, and provision of other EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13914-02-0A. 8686--A 2 1 public goods. As a result, the failures of access discourage such valu- 2 able activities from being undertaken at all. 3 A system of individual digital wallets or payment accounts, linked to 4 a single master account that enables payments to move between such indi- 5 vidual wallets or payment accounts, is now easy to construct and admin- 6 ister with the use of secure digital payment technologies. The state of 7 New York annually disburses more than fifty-five billion dollars in the 8 form of tax credits, procurement payments, pension payouts, and other 9 program disbursals, all of which can readily be disbursed via a system 10 of individual wallets or accounts linked to a master account. The state 11 of New York also receives more than fifty-five billion dollars annually 12 in the form of service payments, tax monies, licensing fees, civil fines 13 and other remittances, all of which can be readily paid into a master 14 account from individual wallets or accounts of the kind just described. 15 A system of individual digital wallets or payment accounts linked to a 16 master account could accordingly function as a state-provided and admin- 17 istered payment infrastructure, in and through which value could be 18 accumulated, stored, grown and exchanged in 'real-time,' with no need 19 for fees or other forms of exploitative value extraction, thereby assur- 20 ing that all New Yorkers are (a) 'banked,' (b) able to create, receive 21 and grow wealth, and (c) empowered to participate fully in a growing 22 state economy suffering no shortage of currency or forgoing of commerce. 23 The state of New York now has the highest number of COVID-19 cases in 24 the nation, while the novel Coronavirus outbreak that is spreading this 25 grave illness has just been designated a global pandemic by the World 26 Health Organization. New York's elderly and wage-laboring communities 27 are already being especially hard-hit by the Coronavirus outbreak, and 28 will be much harder-hit in the weeks to come, as the elderly are espe- 29 cially vulnerable to COVID-19 and wage-laborers have few options to work 30 from home, few healthcare options in the event that working in public 31 exposes them to Coronavirus, and virtually no accumulated savings to 32 fall back upon in the event that they either have to leave work to be 33 hospitalized or are furloughed from work as New York's, the nation's, 34 and the world's economies contract in response to diminished consumer 35 spending while the Coronavirus outbreak continues. 36 New York's local economies are especially vulnerable both to the 37 aforementioned contraction itself and to the further contraction that 38 will occur if wage-laborers become ill or are furloughed in large 39 numbers, meaning that measures that buttress or boost consumer spending 40 will be especially important to New York's economy in the days, weeks, 41 and months just ahead. New York currently has sixteen billion dollars in 42 unclaimed remittances according to the New York State comptroller, of 43 which one-third, or just over five billion dollars, can legally be 44 liquidated at once in the event that the governor should issue an execu- 45 tive emergency declaration of disaster. 46 § 3. The state finance law is amended by adding a new section 4-b to 47 read as follows: 48 § 4-b. Empire state inclusive value ledger establishment and adminis- 49 tration. 1. Definitions. As used in this section, the following terms 50 shall have the following meanings: 51 a. "Master account" means a digital account which enables payments to 52 be transferred between individual wallets. 53 b. "Individual wallet" means a digital account which: (i) is linked to 54 a master account; (ii) enables a resident to send or receive payment to 55 any entity of the state or to another resident; (iii) allows value to be 56 accumulated, stored, grown and exchanged; andA. 8686--A 3 1 (iv) is not subject to fees or other value extraction for use of the 2 individual wallet. 3 c. "Resident" means an individual or a domestic corporation or foreign 4 corporation authorized to do business in the state. 5 d. "Value ledger" means the empire state inclusive value ledger estab- 6 lished pursuant to subdivision two of this section. 7 e. "State entity" means any department, board, bureau, division, 8 commission, committee, council, office of the state, or other govern- 9 mental entity with statewide jurisdiction. 10 f. "Payment service provider" means an entity which provides online 11 services for accepting electronic payments by a variety of methods, 12 including, but not limited to, by credit card, direct debit, and bank 13 transfer. 14 2. The department of financial services, in cooperation with the 15 department of taxation and finance, the office of the New York state 16 comptroller, the New York state and local retirement system, the depart- 17 ment of labor, and the department of social services shall develop, 18 establish, and maintain a value storage and payment platform to be known 19 as the empire state inclusive value ledger. The empire state inclusive 20 value ledger shall consist of a digital master account and coordinate a 21 system of individual wallets which shall be maintained and administered 22 by the urban development corporation as described herein. 23 3. All funds disbursed to residents by a state entity or any other 24 state instrumentality shall be made out of the master account to indi- 25 vidual wallets linked to the master account via the value ledger and any 26 remittance made to a state entity or other state instrumentality by a 27 resident shall be permitted to be made, at the option of the resident 28 making the remittance, from the resident's individual wallet. 29 4. One-third of the sixteen billion dollars in unclaimed remittances 30 to the state, or at least five billion three hundred thirty million 31 dollars, shall be made immediately available for remittance to New York- 32 ers who have been furloughed or otherwise unable to work due to the 33 Coronavirus outbreak of two thousand twenty. Any excess funds remaining 34 after disbursements to such furloughed and otherwise unable to work New 35 Yorkers shall be made available for remittance to small local businesses 36 pursuant to a pro rata formula to be developed by the state comptroller. 37 Additional one-third increments of the unclaimed remittances shall be 38 made as permitted by laws, rules, and regulations governing the uses of 39 such funds as and if necessary. 40 5. All residents shall have the ability to make payments to, and 41 receive payments from, other residents through links among individual 42 wallets on the value ledger. Each payment shall be effected by a simul- 43 taneous crediting of the payee's individual wallet and an equal debiting 44 of the payer's individual wallet. Such payments shall be able to be 45 directed by the means of payment cards, wire services, smart-device 46 apps, or other electronic funds transfer. 47 6. Any resident making payment to, or receiving payment from, any 48 other resident may require that the payee or payer accept or make 49 payment via the system of individual wallets on the value ledger; 50 provided, however, that residents who make payments to, or receive 51 payments from, other residents shall not be required to transact with 52 each other on the value ledger in the event that no party to the trans- 53 action opts to do so and further provided that no transacting party's 54 opting not to do so is coerced by any other transacting party or associ- 55 ates of such transacting party.A. 8686--A 4 1 7. Any commercial bank, other financial institution, or payment 2 service provider doing business in the state shall be required to: 3 a. provide for full interoperability between individual wallets on the 4 value ledger and any demand deposit or transaction account maintained by 5 the commercial bank, other financial institution, or payment service 6 provider for the holders of such individual wallets; and 7 b. permit all holders of individual wallets to make deposits into and 8 withdrawals from such individual wallet via any automated teller 9 machine, teller window, or other deposit or withdrawal facility the 10 bank, financial institution, or payment service provider offers to 11 customers. There shall be no pecuniary or other charge assessed for 12 access to individual wallets; any costs associated with access to and 13 use of individual wallets shall be considered an incident of such 14 commercial bank, other financial institution, or payment service provid- 15 er's status as a publicly licensed financial utility. 16 8. The department of financial services shall also develop and make 17 available at no cost a downloadable smart-device application to be known 18 as the empire state inclusive value ledger app through which residents 19 can access and receive and make payments into and out of individual 20 wallets. All entities operating in the state that accept payments via 21 smart-device applications of any kind shall be required to accept 22 payments via the value ledger application at the option of any payer 23 wishing to pay via such value ledger application. 24 9. The department of taxation and finance, the New York state and 25 local retirement system, and the department of social services, as the 26 state's principal disbursers and receivers of funds, credits, and remit- 27 tances, shall exercise special care in assisting with and promoting the 28 establishment and wide use of the value ledger payments system, in order 29 to hasten both: 30 a. the full 'banking' of the state's 'unbanked' individuals and small 31 businesses; and 32 b. inclusion of the state's currently marginalized residents in the 33 process of value creation, wealth accumulation, and commercial exchange. 34 10. The department of financial services shall: 35 a. ensure compliance by all banks, other financial institutions, and 36 payment service providers with the requirements of this section; 37 b. prohibit and prevent any other person or company in the financial 38 services or payments industries from exploiting value ledger wallet 39 holders or otherwise subverting the value-creating and commerce-promot- 40 ing purposes of this section, including by offering advances on antic- 41 ipated state remittances for fees; and 42 c. ensure compliance with state banking, regulatory, and digital and 43 financial privacy laws by all entities that oversee or transact via the 44 value ledger. The department, in coordination with the urban development 45 corporation, shall also coordinate with any relevant regulatory agency 46 of the United States to ensure compliance with federal banking, regula- 47 tory, employee benefit and any other applicable federal laws. 48 11. The department of financial services shall be authorized to coor- 49 dinate with its counterpart agencies in other states and territories of 50 the United States in connection with any common regulatory needs impli- 51 cated or challenges raised by state value ledgers. 52 § 4. Section 301 of the financial services law is amended by adding a 53 new subsection (d) to read as follows: 54 (d) The superintendent shall have the power to direct the department 55 to develop, establish, and maintain the empire state inclusive value 56 ledger established pursuant to section four-b of the state finance law.A. 8686--A 5 1 The superintendent shall also have the power to direct the department to 2 coordinate with agencies in other states and territories of the United 3 States the regulatory needs or challenges raised by state value ledgers. 4 § 5. Section 5 of section 1 of chapter 174 of the laws of 1968, 5 constituting the New York state urban development corporation act, is 6 amended by adding three new subdivisions 31, 32 and 33 to read as 7 follows: 8 (31) To maintain and administer, in consultation with the department 9 of financial services, the department of labor, and the department of 10 social services, the empire state inclusive value ledger established 11 pursuant to section four-b of the state finance law, with a view to 12 encouraging the expansion of commerce and the broad growth and accumu- 13 lation of wealth in the state. The corporation, in consultation and 14 coordination with the department of financial services, the department 15 of labor, the department of social services, the department of taxation 16 and finance and the New York state and local retirement system, shall 17 observe and build into the empire state inclusive value ledger strict 18 compliance with the highest standards of commercial and financial data 19 privacy. Such standards shall establish, at a minimum, that: (a) no 20 wealth accumulation or spending activity of any sort that makes use of 21 the empire state inclusive value ledger shall be shared with, intimated 22 to, or sold to any non-governmental person or entity; (b) any sharing of 23 information with governmental entities shall be solely for purposes of 24 optimizing administration of the empire state inclusive value ledger or 25 for law enforcement purposes; (c) any personal data that is not being 26 used solely to assist the person whose data is being accessed and that 27 is being used for administrative purposes shall be cryptographically 28 anonymized; (d) any personal data shared with law enforcement authori- 29 ties shall be shared solely in strict compliance with the fourth amend- 30 ment to the United States constitution and any and all other state, 31 federal and local legal constraints that protect the rights of suspected 32 or accused persons and the empire state inclusive value ledger shall not 33 lessen the degree of legally assured data privacy of New Yorkers; and 34 (e) any and all practicable measures possible shall be taken to prevent 35 accidental data privacy breaches stemming from outside or inadvertent 36 disclosure. 37 (32) To explore and negotiate possible interstate compacts enabling 38 the growth of a value ledger system across multiple states, regions, and 39 territories of the United States. The corporation, as the principal 40 administrator of the empire state inclusive value ledger, shall reach 41 out to and consult with counterpart agencies in other states, with a 42 view to assisting with the development of similar value storage and 43 payment platforms in such states and with the goal of the possible 44 interoperability of such platforms with the empire state inclusive value 45 ledger. 46 (33) To explore and negotiate possible pilot programs enabling the 47 growth and spread of a value ledger system across the broader United 48 States. As the principal administrator of the empire state inclusive 49 value ledger established pursuant to section four-b of the state finance 50 law, the corporation shall be authorized to reach out to and consult 51 with the federal reserve bank of New York, the federal reserve board of 52 the United States, and the department of treasury of the United States, 53 with a view to possibly assisting such entities with the development of 54 a national value storage and payment platform similar to the empire 55 state inclusive value ledger.A. 8686--A 6 1 § 6. Severability. If any provision of this act, or any application of 2 any provision of this act, is held to be invalid, that shall not affect 3 the validity or effectiveness of any other provision of this act, or of 4 any other application of any provision of this act, which can be given 5 effect without that provision or application; and to that end, the 6 provisions and applications of this act are severable. 7 § 7. This act shall take effect immediately.