|SAME AS||SAME AS S06792|
|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.|
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STATE OF NEW YORK ________________________________________________________________________ 8686 2019-2020 Regular Sessions IN ASSEMBLY October 23, 2019 ___________ Introduced by M. of A. KIM -- read once and referred to the Committee on Banks 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 20 public goods. As a result, the failures of access discourage such valu- 21 able activities from being undertaken at all. 22 A system of individual digital wallets or payment accounts, linked to 23 a single master account that enables payments to move between such indi- 24 vidual wallets or payment accounts, is now easy to construct and admin- 25 ister with the use of secure digital payment technologies. The state of 26 New York annually disburses more than fifty-five billion dollars in the EXPLANATION--Matter in italics (underscored) is new; matter in brackets [ ] is old law to be omitted. LBD13914-01-9A. 8686 2 1 form of tax credits, procurement payments, pension payouts, and other 2 program disbursals, all of which can readily be disbursed via a system 3 of individual wallets or accounts linked to a master account. The state 4 of New York also receives billions of dollars annually in the form of 5 service payments, tax monies, licensing fees, civil fines and other 6 remittances, all of which can be readily paid into a master account from 7 individual wallets or accounts of the kind just described. 8 A system of individual digital wallets or payment accounts linked to a 9 master account could accordingly function as a state-provided and admin- 10 istered payment infrastructure, in and through which value could be 11 accumulated, stored, grown and exchanged in 'real-time,' with no need 12 for fees or other forms of exploitative value extraction, thereby assur- 13 ing that all New Yorkers are (a) 'banked,' (b) able to create, receive 14 and grow wealth, and (c) empowered to participate fully in a growing 15 state economy suffering no shortage of currency or forgoing of commerce. 16 § 3. The state finance law is amended by adding a new section 4-b to 17 read as follows: 18 § 4-b. Empire state inclusive value ledger establishment and adminis- 19 tration. 1. Definitions. As used in this section, the following terms 20 shall have the following meanings: 21 a. "Master account" means a digital account which enables payments to 22 be transferred between individual wallets. 23 b. "Individual wallet" means a digital account which: (i) is linked to 24 a master account; (ii) enables a resident to send or receive payment to 25 any entity of the state or to another resident; (iii) allows value to be 26 accumulated, stored, grown and exchanged; and 27 (iv) is not subject to fees or other value extraction for use of the 28 individual wallet. 29 c. "Resident" means an individual or a domestic corporation or foreign 30 corporation authorized to do business in the state. 31 d. "Value ledger" means the empire state inclusive value ledger estab- 32 lished pursuant to subdivision two of this section. 33 e. "State entity" means any department, board, bureau, division, 34 commission, committee, council, office of the state, or other govern- 35 mental entity with statewide jurisdiction. 36 f. "Payment service provider" means an entity which provides online 37 services for accepting electronic payments by a variety of methods, 38 including, but not limited to, by credit card, direct debit, and bank 39 transfer. 40 2. The department of financial services, in cooperation with the 41 department of taxation and finance, the office of the New York state 42 comptroller, the New York state and local retirement system, the depart- 43 ment of labor, and the department of social services shall develop, 44 establish, and maintain a value storage and payment platform to be known 45 as the empire state inclusive value ledger. The empire state inclusive 46 value ledger shall consist of a digital master account and coordinate a 47 system of individual wallets which shall be maintained and administered 48 by the urban development corporation as described herein. 49 3. All funds disbursed to residents by a state entity or any other 50 state instrumentality shall be made out of the master account to indi- 51 vidual wallets linked to the master account via the value ledger and any 52 remittance made to a state entity or other state instrumentality by a 53 resident shall be permitted to be made, at the option of the resident 54 making the remittance, from the resident's individual wallet. 55 4. All residents shall have the ability to make payments to, and 56 receive payments from, other residents through links among individualA. 8686 3 1 wallets on the value ledger. Each payment shall be effected by a simul- 2 taneous crediting of the payee's individual wallet and an equal debiting 3 of the payer's individual wallet. Such payments shall be able to be 4 directed by the means of payment cards, wire services, smart-device 5 apps, or other electronic funds transfer. 6 5. Any resident making payment to, or receiving payment from, any 7 other resident may require that the payee or payer accept or make 8 payment via the system of individual wallets on the value ledger; 9 provided, however, that residents who make payments to, or receive 10 payments from, other residents shall not be required to transact with 11 each other on the value ledger in the event that no party to the trans- 12 action opts to do so and further provided that no transacting party's 13 opting not to do so is coerced by any other transacting party or associ- 14 ates of such transacting party. 15 6. Any commercial bank, other financial institution, or payment 16 service provider doing business in the state shall be required to: 17 a. provide for full interoperability between individual wallets on the 18 value ledger and any demand deposit or transaction account maintained by 19 the commercial bank, other financial institution, or payment service 20 provider for the holders of such individual wallets; and 21 b. permit all holders of individual wallets to make deposits into and 22 withdrawals from such individual wallet via any automated teller 23 machine, teller window, or other deposit or withdrawal facility the 24 bank, financial institution, or payment service provider offers to 25 customers. There shall be no pecuniary or other charge assessed for 26 access to individual wallets; any costs associated with access to and 27 use of individual wallets shall be considered an incident of such 28 commercial bank, other financial institution, or payment service provid- 29 er's status as a publicly licensed financial utility. 30 7. The department of financial services shall also develop and make 31 available at no cost a downloadable smart-device application to be known 32 as the empire state inclusive value ledger app through which residents 33 can access and receive and make payments into and out of individual 34 wallets. All entities operating in the state that accept payments via 35 smart-device applications of any kind shall be required to accept 36 payments via the value ledger application at the option of any payer 37 wishing to pay via such value ledger application. 38 8. The department of taxation and finance, the New York state and 39 local retirement system, and the department of social services, as the 40 state's principal disbursers and receivers of funds, credits, and remit- 41 tances, shall exercise special care in assisting with and promoting the 42 establishment and wide use of the value ledger payments system, in order 43 to hasten both: 44 a. the full 'banking' of the state's 'unbanked' individuals and small 45 businesses; and 46 b. inclusion of the state's currently marginalized residents in the 47 process of value creation, wealth accumulation, and commercial exchange. 48 9. The department of financial services shall: 49 a. ensure compliance by all banks, other financial institutions, and 50 payment service providers with the requirements of this section; 51 b. prohibit and prevent any other person or company in the financial 52 services or payments industries from exploiting value ledger wallet 53 holders or otherwise subverting the value-creating and commerce-promot- 54 ing purposes of this section, including by offering advances on antic- 55 ipated state remittances for fees; andA. 8686 4 1 c. ensure compliance with state banking, regulatory, and digital and 2 financial privacy laws by all entities that oversee or transact via the 3 value ledger. The department, in coordination with the urban development 4 corporation, shall also coordinate with any relevant regulatory agency 5 of the United States to ensure compliance with federal banking, regula- 6 tory, employee benefit and any other applicable federal laws. 7 10. The department of financial services shall be authorized to coor- 8 dinate with its counterpart agencies in other states and territories of 9 the United States in connection with any common regulatory needs impli- 10 cated or challenges raised by state value ledgers. 11 § 4. Section 301 of the financial services law is amended by adding a 12 new subdivision (d) to read as follows: 13 (d) The superintendent shall have the power to direct the department 14 to develop, establish, and maintain the empire state inclusive value 15 ledger established pursuant to section four-b of the state finance law. 16 The superintendent shall also have the power to direct the department to 17 coordinate with agencies in other states and territories of the United 18 States the regulatory needs or challenges raised by state value ledgers. 19 § 5. Section 5 of section 1 of chapter 174 of the laws of 1968, 20 constituting the New York state urban development corporation act, is 21 amended by adding three new subdivisions 31, 32 and 33 to read as 22 follows: 23 (31) To maintain and administer, in consultation with the department 24 of financial services, the department of labor, and the department of 25 social services, the empire state inclusive value ledger established 26 pursuant to section four-b of the state finance law, with a view to 27 encouraging the expansion of commerce and the broad growth and accumu- 28 lation of wealth in the state. 29 (32) To explore and negotiate possible interstate compacts enabling 30 the growth of a value ledger system across multiple states, regions, and 31 territories of the United States. The corporation, as the principal 32 administrator of the empire state inclusive value ledger, shall reach 33 out to and consult with counterpart agencies in other states, with a 34 view to assisting with the development of similar value storage and 35 payment platforms in such states and with the goal of the possible 36 interoperability of such platforms with the empire state inclusive value 37 ledger. 38 (33) To explore and negotiate possible pilot programs enabling the 39 growth and spread of a value ledger system across the broader United 40 States. As the principal administrator of the empire state inclusive 41 value ledger established pursuant to section four-b of the state finance 42 law, the corporation shall be authorized to reach out to and consult 43 with the federal reserve bank of New York, the federal reserve board of 44 the United States, and the department of treasury of the United States, 45 with a view to possibly assisting such entities with the development of 46 a national value storage and payment platform similar to the empire 47 state inclusive value ledger. 48 § 6. Severability. If any provision of this act, or any application of 49 any provision of this act, is held to be invalid, that shall not affect 50 the validity or effectiveness of any other provision of this act, or of 51 any other application of any provision of this act, which can be given 52 effect without that provision or application; and to that end, the 53 provisions and applications of this act are severable. 54 § 7. This act shall take effect immediately.