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S06792 Summary:

BILL NOS06792
 
SAME ASSAME AS A08686
 
SPONSORSALAZAR
 
COSPNSR
 
MLTSPNSR
 
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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S06792 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6792
 
                               2019-2020 Regular Sessions
 
                    IN SENATE
 
                                    October 23, 2019
                                       ___________
 
        Introduced  by  Sen. SALAZAR -- read twice and ordered printed, and when
          printed to be committed to the Committee on Rules
 
        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.
                                                                   LBD13914-01-9

        S. 6792                             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 individual

        S. 6792                             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; and

        S. 6792                             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.
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