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.
STATE OF NEW YORK
2019-2020 Regular Sessions
May 16, 2019
Introduced by Sen. CARLUCCI -- read twice and ordered printed, and when
printed to be committed to the Committee on Budget and Revenue
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
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
 is old law to be omitted.
S. 6102 2
1 (b) "Fund" means the New York data fund.
2 4. There is established the New York data fund board. The purpose of
3 the board is to manage and invest the assets of the data fund and other
4 funds designated by law pursuant to this section.
5 5. (a) The board consists of six members appointed by the governor.
6 Two of the members shall be commissioners of departments of state
7 government, one of whom shall be the commissioner of taxation and
8 finance. The remaining four members shall be appointed as follows: one
9 by the temporary president of the senate; one by the minority leader of
10 the senate; one by the speaker of the assembly; and one by the minority
11 leader of the assembly. Such members may not hold any other state or
12 federal office, position or employment, either elective or appointive,
13 except as a member of the armed forces of either the United States or of
14 this state.
15 (b) The four public members of the board must have recognized compe-
16 tence and wide experience in finance, investments, or other business
17 management-related fields.
18 (c) The board shall annually elect a chairman from among its members.
19 (d) The public members of the board shall be appointed for terms of
20 four years, and they may be reappointed. The terms of the public members
21 shall be staggered so that no more than one term of a public member
22 expires each year.
23 (i) A vacancy on the board shall be promptly filled by appointment by
24 the governor, subject to approval by the senate. An appointee to a
25 vacancy shall hold office for the balance of the term for which the
26 appointee's predecessor on the board was appointed.
27 (ii) A vacancy on the board does not impair the authority of a quorum
28 of the board to exercise all the powers and perform all the duties of
29 the board.
30 (e) Four members of the board constitute a quorum for the transaction
31 of business and the exercise of the powers and duties of the board.
32 Action may be taken only upon affirmative vote of a majority of the full
33 membership of the board.
34 (f) Public members of the board receive an honorarium of four hundred
35 dollars for each day spent at a meeting of the board or at a meeting of
36 a subcommittee of the board or at a public meeting as a representative
37 of the board. Members of the board are entitled to per diem and travel
38 allowances as provided by law for members of state boards and commis-
40 (g) If a member of the board or an employee of the corporation
41 acquires, owns, or controls an interest, direct or indirect, in an enti-
42 ty or project in which fund assets are invested, the member shall imme-
43 diately disclose the interest to the board. The disclosure is a matter
44 of public record and shall be included in the minutes of the board meet-
45 ing next following the disclosure.
46 (h) On or before the first of January each year, the commissioner of
47 taxation and finance shall provide a written report to the temporary
48 president of the senate, speaker of the assembly, chair of the senate
49 finance committee, chair of the assembly ways and means committee, chair
50 of the senate committee on codes, chair of the assembly codes committee,
51 the state comptroller and the public. Such report shall include how the
52 monies of the fund were utilized during the preceding calendar year, and
53 shall include, but not be limited to:
54 (i) the amount of money dispersed from the fund and the award process
55 used for such disbursements; and
56 (ii) the amount awarded to each taxpayer.
S. 6102 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
S. 6102 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
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.