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A09112 Summary:

SPONSORPheffer Amato
Amd §209, Tax L; add §99-hh, St Fin L
Requires a five percent tax on gross income upon every corporation which derives income from the data individuals of this state share with such corporations; establishes the New York data fund to distribute the earnings of the five percent to each taxpayer of the state.
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A09112 Text:

                STATE OF NEW YORK
                   IN ASSEMBLY
                                    January 21, 2020
        Introduced  by  M.  of A. PHEFFER AMATO -- read once and referred to the
          Committee on Ways and Means
        AN ACT to amend the tax law, in relation to a tax on gross  income  upon
          every  corporation  which  derives income from the data individuals of
          this state share with  such  corporations;  and  to  amend  the  state
          finance law, in relation to establishing the New York data fund

          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. Section 209 of the tax law  is  amended  by  adding  a  new
     2  subdivision 13 to read as follows:
     3    13.  Notwithstanding  any  other  provision of this chapter, or of any
     4  other law, a tax equal to five percent tax on the gross income is hereby
     5  imposed upon every corporation which derives income from the data  indi-
     6  viduals of this state share with such corporations.
     7    § 2. The state finance law is amended by adding a new section 99-hh to
     8  read as follows:
     9    §  99-hh.  Data  fund.  1. A special fund to be known as the "New York
    10  data fund" is hereby established in the custody of the state comptroller
    11  and the commissioner of taxation and finance.
    12    2. The fund shall consist of  all  monies  transferred  to  such  fund
    13  pursuant  to law, all monies required by any provision of law to be paid
    14  into or credited to the fund, all moneys derived by subdivision thirteen
    15  of section two hundred nine of the tax law  and  any  interest  earnings
    16  which  may  accrue  from the investment of monies in the fund. Such fund
    17  shall be divided into an earnings reserve account and a  dividend  fund.
    18  Nothing contained in this section shall prevent the state from receiving
    19  grants,  gifts  or  bequests  for the purposes of the fund as defined in
    20  this section and depositing them into the fund according to law.
    21    3. For the purposes of this section:
    22    (a) "Board" means the board of trustees of  the  New  York  data  fund
    23  board.
    24    (b) "Fund" means the New York data fund.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        A. 9112                             2
     1    4.  There  is established the New York data fund board. The purpose of
     2  the board is to manage and invest the assets of the data fund and  other
     3  funds designated by law pursuant to this section.
     4    5.  (a)  The  board consists of six members appointed by the governor.
     5  Two of the members  shall  be  commissioners  of  departments  of  state
     6  government,  one  of  whom  shall  be  the  commissioner of taxation and
     7  finance. The remaining four members shall be appointed as  follows:  one
     8  by  the temporary president of the senate; one by the minority leader of
     9  the senate; one by the speaker of the assembly; and one by the  minority
    10  leader  of  the  assembly.  Such members may not hold any other state or
    11  federal office, position or employment, either elective  or  appointive,
    12  except as a member of the armed forces of either the United States or of
    13  this state.
    14    (b)  The  four public members of the board must have recognized compe-
    15  tence and wide experience in finance,  investments,  or  other  business
    16  management-related fields.
    17    (c) The board shall annually elect a chairman from among its members.
    18    (d)  The  public  members of the board shall be appointed for terms of
    19  four years, and they may be reappointed. The terms of the public members
    20  shall be staggered so that no more than one  term  of  a  public  member
    21  expires each year.
    22    (i)  A vacancy on the board shall be promptly filled by appointment by
    23  the governor, subject to approval by  the  senate.  An  appointee  to  a
    24  vacancy  shall  hold  office  for  the balance of the term for which the
    25  appointee's predecessor on the board was appointed.
    26    (ii) A vacancy on the board does not impair the authority of a  quorum
    27  of  the  board  to exercise all the powers and perform all the duties of
    28  the board.
    29    (e) Four members of the board constitute a quorum for the  transaction
    30  of  business  and  the  exercise  of the powers and duties of the board.
    31  Action may be taken only upon affirmative vote of a majority of the full
    32  membership of the board.
    33    (f) Public members of the board receive an honorarium of four  hundred
    34  dollars  for each day spent at a meeting of the board or at a meeting of
    35  a subcommittee of the board or at a public meeting as  a  representative
    36  of  the  board. Members of the board are entitled to per diem and travel
    37  allowances as provided by law for members of state  boards  and  commis-
    38  sions.
    39    (g)  If  a  member  of  the  board  or  an employee of the corporation
    40  acquires, owns, or controls an interest, direct or indirect, in an enti-
    41  ty or project in which fund assets are invested, the member shall  imme-
    42  diately  disclose  the interest to the board. The disclosure is a matter
    43  of public record and shall be included in the minutes of the board meet-
    44  ing next following the disclosure.
    45    (h) On or before the first of January each year, the  commissioner  of
    46  taxation  and  finance  shall  provide a written report to the temporary
    47  president of the senate, speaker of the assembly, chair  of  the  senate
    48  finance committee, chair of the assembly ways and means committee, chair
    49  of the senate committee on codes, chair of the assembly codes committee,
    50  the  state comptroller and the public. Such report shall include how the
    51  monies of the fund were utilized during the preceding calendar year, and
    52  shall include, but not be limited to:
    53    (i) the amount of money dispersed from the fund and the award  process
    54  used for such disbursements; and
    55    (ii) the amount awarded to each taxpayer.

        A. 9112                             3
     1    6. (a) The board shall adopt rules and regulations specifically desig-
     2  nating the types of income-producing investments eligible for investment
     3  of  fund assets.  When adopting rules and regulations authorized by this
     4  section or managing and investing fund assets, the prudent-investor rule
     5  shall  be  applied by the board. The prudent-investor rule as applied to
     6  investment activity of the fund means that the board shall exercise  the
     7  judgment and care under the circumstances then prevailing that an insti-
     8  tutional  investor  of  ordinary  prudence, discretion, and intelligence
     9  exercises  in  the  designation  and  management  of  large  investments
    10  entrusted  to  it,  not  in  regard to speculation, but in regard to the
    11  permanent disposition of funds, considering preservation of the purchas-
    12  ing power of the fund over time  while  maximizing  the  expected  total
    13  return from both income and the appreciation of capital.
    14    (b)  The board may not borrow money or guarantee from principal of the
    15  fund the obligations of others, except as provided in this  subdivision.
    16  With  respect to investments of the fund, the board may, either directly
    17  or through an entity in which the investment is made,  borrow  money  if
    18  the borrowing is nonrecourse to the board and the fund.
    19    (c)  The  board  shall  maintain  a  reasonable  diversification among
    20  investments unless, under the circumstances, it is clearly  prudent  not
    21  to  do  so.  The  board  shall invest the assets of the fund in in-state
    22  investments to the extent that in-state investments are available and if
    23  the in-state investments:
    24    (i) have a risk level and  expected  return  comparable  to  alternate
    25  investment opportunities; and
    26    (ii) are eligible for investment of fund assets.
    27    (d)  The  board  may  enter  into and enforce all contracts necessary,
    28  convenient, or desirable for managing the fund's  assets  and  corporate
    29  operations,  including  contracts for future delivery to implement asset
    30  allocation strategies or to hedge an existing equivalent ownership posi-
    31  tion in an investment.
    32    7. Net income of the fund includes income of this fund. Net income  of
    33  the  fund  shall  be  computed annually as of the last day of the fiscal
    34  year  in  accordance  with  generally  accepted  accounting  principles,
    35  excluding  any unrealized gains or losses. Income available for distrib-
    36  ution equals twenty-one percent of the net income of the  fund  for  the
    37  last  five  fiscal  years, including the fiscal year just ended, but may
    38  not exceed net income of the fund for the fiscal year  just  ended  plus
    39  the balance in this fund.
    40    8.  (a)  The  earnings  reserve  account  is established as a separate
    41  account in the fund. Income from the fund  shall  be  deposited  by  the
    42  board  into  the account as soon as it is received. Money in the account
    43  shall be invested in investments authorized  under  subdivision  six  of
    44  this section.
    45    (b)  At the end of each fiscal year, the board shall transfer from the
    46  earnings reserve account to the dividend  fund  established  under  this
    47  section, fifty percent of the income available for distribution.
    48    (c)  After  the  transfer under paragraph (b) of this subdivision, the
    49  board shall transfer from the earnings reserve account to the  principal
    50  of  the  fund  an amount sufficient to offset the effect of inflation on
    51  principal of the fund during that fiscal year. The board shall calculate
    52  the amount to transfer to the principal under this subdivision by:
    53    (i) computing the average of the monthly United States Consumer  Price
    54  Index  for  all  urban  consumers  for each of the two previous calendar
    55  years;

        A. 9112                             4
     1    (ii) computing the percentage change  between  the  first  and  second
     2  calendar year average; and
     3    (iii)  applying that rate to the value of the principal of the fund on
     4  the last day of the fiscal year just ended.
     5    9. The board shall determine  and  distribute  such  amounts  to  each
     6  taxpayer of the state.
     7    10.  The resources of the board or the fund may not be used to finance
     8  or influence political activities.
     9    11. Monies of the fund, when allocated,  shall  be  available  to  the
    10  department  of taxation and finance for distribution to taxpayers of the
    11  state.
    12    12. Monies shall be payable from the fund on the audit and warrant  of
    13  the comptroller on vouchers approved and certified by board, in conjunc-
    14  tion with the commissioner of taxation and finance.
    15    § 3. This act shall take effect on the one hundred eightieth day after
    16  it shall have become a law.  Effective immediately, the addition, amend-
    17  ment and/or repeal of any rule or regulation necessary for the implemen-
    18  tation  of  this act on its effective date are authorized to be made and
    19  completed on or before such effective date.
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