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.
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.
