Add §4-b, St Fin L; amd §301, Fin Serv L; amd §5, UDC Act
Enacts the "the empire state enhanced public payment system act" directing the department of financial services to develop, establish, and maintain a value storage and payment platform consisting of a digital master account and coordinate a system of individual wallets that enable payments to move between such individual wallets or payment accounts for use of New York residents.
STATE OF NEW YORK
________________________________________________________________________
837
2025-2026 Regular Sessions
IN ASSEMBLY(Prefiled)
January 8, 2025
___________
Introduced by M. of A. KIM, DAVILA, SAYEGH, K. BROWN, TAYLOR,
BROOK-KRASNY -- 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 enhanced public payment system 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 "enhanced
2 public payment system act".
3 § 2. Legislative intent. Many New York residents, including individ-
4 uals who receive public benefits and payments related to nutrition and
5 social services, are targets of identity and consumer theft. Similarly,
6 many New York residents who rely on Medicaid home and community care
7 services are victims of exploitation by private intermediaries that
8 manage public payments.
9 A system of individual digital wallets or payment accounts, linked to
10 a single master account that enables payments to move between such indi-
11 vidual wallets or payment accounts, is now easy to construct and admin-
12 ister with the use of secure digital payment technologies. The state of
13 New York annually disburses more than thirty billion dollars of social
14 and health benefits, including home care services, and fifty-five
15 billion dollars in the form of tax credits, procurement payments,
16 pension payouts, and other program dispersals, all of which can readily
17 be disbursed via a system of individual wallets or accounts linked to a
18 master account. The state of New York also receives more than fifty-five
19 billion dollars annually in the form of service payments, tax monies,
20 licensing fees, civil fines and other remittances, all of which can be
21 readily paid into a master account from individual wallets or accounts
22 of the kind just described.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01882-01-5
A. 837 2
1 A system of individual digital wallets or payment accounts linked to a
2 master account could accordingly function as a state-provided and admin-
3 istered payment infrastructure, in and through which value could be
4 accumulated, stored, grown and exchanged in 'real-time,' with no need
5 for fees or other forms of exploitative value extraction, thereby assur-
6 ing that all New York residents are: (a) able to receive real-time
7 payments; (b) able to create, receive and grow wealth; and (c) empowered
8 to participate fully in a growing state economy suffering no shortage of
9 currency or forgoing of commerce.
10 § 3. The state finance law is amended by adding a new section 4-b to
11 read as follows:
12 § 4-b. Empire state enhanced public payment system. 1. Definitions.
13 As used in this section, the following terms shall have the following
14 meanings:
15 (a) "master account" means a digital account which enables payments to
16 be transferred between individual wallets;
17 (b) "individual wallet" means a digital account which:
18 (i) is linked to a master account;
19 (ii) enables a resident to send or receive payment to any entity of
20 the state or to another resident;
21 (iii) allows value to be accumulated, stored, grown and exchanged; and
22 (iv) is not subject to fees or other value extraction for use of the
23 individual wallet;
24 (c) "resident" means an individual or a domestic corporation or
25 foreign corporation authorized to do business in the state;
26 (d) "public payment system" means the empire state enhanced public
27 payment system established pursuant to subdivision two of this section;
28 (e) "state entity" means any department, board, bureau, division,
29 commission, committee, council, office of the state, or other govern-
30 mental entity with statewide jurisdiction;
31 (f) "payment service provider" means an entity which provides online
32 services for accepting electronic payments by a variety of methods,
33 including, but not limited to, credit card, direct debit, and bank
34 transfer; and
35 (g) "banked" means a payment network making real-time payments for
36 consumers, businesses and banks.
37 2. The department of financial services, in cooperation with the
38 department of taxation and finance, the office of the comptroller, the
39 New York state and local retirement system, the department of labor, the
40 department of health, the department of social services, and other state
41 agencies shall develop, establish, and maintain a value storage and
42 payment platform to be known as the empire state enhanced public payment
43 system. The empire state enhanced public payment system shall consist of
44 a digital master account and coordinate a system of individual wallets
45 which shall be maintained and administered by the urban development
46 corporation as described in subdivision thirty-one of section five of
47 section one of chapter one hundred seventy-four of the laws of nineteen
48 hundred sixty-eight, constituting the New York state urban development
49 corporation act.
50 3. All funds disbursed to residents by a state entity or any other
51 state instrumentality shall be made out of the master account to indi-
52 vidual wallets linked to the master account via enhanced public payment
53 system and any remittance made to a state entity or other state instru-
54 mentality by a resident shall be permitted to be made, at the option of
55 the resident making the remittance, from the resident's individual
56 wallet.
A. 837 3
1 4. All residents shall have the ability to make payments to, and
2 receive payments from, other residents through links among individual
3 wallets on the value ledger. Each payment shall be effected by a simul-
4 taneous crediting of the payee's individual wallet and an equal debiting
5 of the payer's individual wallet. Such payments shall be able to be
6 directed by the means of payment cards, wire services, smart-device
7 apps, or other electronic funds transfer.
8 5. Any resident making payment to, or receiving payment from, any
9 other resident may require that the payee or payer accept or make
10 payment via the system of individual wallets on the enhanced public
11 payment system; provided, however, that residents who make payments to,
12 or receive payments from, other residents shall not be required to tran-
13 sact with each other on the public payment system in the event that no
14 party to the transaction opts to do so and further provided that no
15 transacting party's opting not to do so is coerced by any other trans-
16 acting party or associates of such transacting party.
17 6. Any commercial bank, other financial institution, or payment
18 service provider doing business in the state shall be required to:
19 (a) provide for full interoperability between individual wallets on
20 the enhanced public payment system and any demand deposit or transaction
21 account maintained by the commercial bank, other financial institution,
22 or payment service provider for the holders of such individual wallets;
23 and
24 (b) permit all holders of individual wallets to make deposits into and
25 withdrawals from such individual wallet via any automated teller
26 machine, teller window, or other deposit or withdrawal facility the
27 bank, financial institution, or payment service provider offers to
28 customers. There shall be no pecuniary or other charge assessed for
29 access to individual wallets; any costs associated with access to and
30 use of individual wallets shall be considered an incident of such
31 commercial bank, other financial institution, or payment service provid-
32 er's status as a publicly licensed financial utility.
33 7. The department of financial services shall also develop and make
34 available at no cost a downloadable smart-device application to be known
35 as the empire state enhanced public payment app through which residents
36 can access and receive and make payments into and out of individual
37 wallets. All entities operating in the state that accept payments via
38 smart-device applications of any kind shall be required to accept
39 payments via the enhanced public payment application at the option of
40 any payer wishing to pay via such enhanced public payment application.
41 8. The department of taxation and finance, the New York state and
42 local retirement system, the department of health and the department of
43 social services, as the state's principal disbursers and receivers of
44 funds, credits, and remittances, shall exercise special care in assist-
45 ing with and promoting the establishment and wide use of the enhanced
46 public payment system, in order to hasten both:
47 (a) the full banking of the state's unbanked and vulnerable individ-
48 uals; and
49 (b) inclusion of the state's currently marginalized residents in the
50 process of value creation, wealth accumulation, and commercial exchange.
51 9. The department of financial services shall:
52 (a) ensure compliance by all banks, other financial institutions, and
53 payment service providers with the requirements of this section;
54 (b) prohibit and prevent any other person or company in the financial
55 services or payments industries from exploiting enhanced public payment
56 wallet holders or otherwise subverting the value-creating and commerce-
A. 837 4
1 promoting purposes of this section, including by offering advances on
2 anticipated state remittances for fees; and
3 (c) ensure compliance with state banking, regulatory, and digital and
4 financial privacy laws by all entities that oversee or transact via the
5 enhanced public payment system. The department, in coordination with the
6 urban development corporation, shall also coordinate with any relevant
7 regulatory agency of the United States to ensure compliance with federal
8 banking, regulatory, employee benefit and any other applicable federal
9 laws.
10 10. The department of financial services shall be authorized to coor-
11 dinate with its counterpart agencies in other states and territories of
12 the United States in connection with any common regulatory needs impli-
13 cated or challenges raised by state enhanced public payment systems.
14 § 4. Section 301 of the financial services law is amended by adding a
15 new subsection (d) to read as follows:
16 (d) The superintendent shall have the power to direct the department
17 to develop, establish, and maintain the empire state enhanced public
18 payment system established pursuant to section four-b of the state
19 finance law. The superintendent shall also have the power to direct the
20 department to coordinate with agencies in other states and territories
21 of the United States the regulatory needs or challenges raised by state
22 enhanced public payment systems.
23 § 5. Section 5 of section 1 of chapter 174 of the laws of 1968,
24 constituting the New York state urban development corporation act, is
25 amended by adding three new subdivisions 31, 32 and 33 to read as
26 follows:
27 (31) To maintain and administer, in consultation with the department
28 of financial services, the department of labor, the department of health
29 and the department of social services, the empire state enhanced public
30 payment system established pursuant to section four-b of the state
31 finance law, with a view to encouraging the expansion of commerce and
32 the broad growth and accumulation of wealth in the state. The corpo-
33 ration, in consultation and coordination with the department of finan-
34 cial services, the department of labor, the department of health, the
35 department of social services, the department of taxation and finance
36 and the New York state and local retirement system, shall observe and
37 build into the empire state enhanced public payment system strict
38 compliance with the highest standards of commercial and financial data
39 privacy. Such standards shall establish, at a minimum, that:
40 (a) no wealth accumulation or spending activity of any sort that makes
41 use of the enhanced public payment system shall be shared with, inti-
42 mated to, or sold to any non-governmental person or entity;
43 (b) any sharing of information with governmental entities shall be
44 solely for purposes of optimizing administration of the empire state
45 enhanced public payment system or for law enforcement purposes;
46 (c) any personal data that is not being used solely to assist the
47 person whose data is being accessed and that is being used for adminis-
48 trative purposes shall be cryptographically anonymized;
49 (d) any personal data shared with law enforcement authorities shall be
50 shared solely in strict compliance with the fourth amendment to the
51 United States constitution and any and all other state, federal and
52 local legal constraints that protect the rights of suspected or accused
53 persons and the empire state enhanced public payment system shall not
54 lessen the degree of legally assured data privacy of New York residents;
55 and
A. 837 5
1 (e) any and all practicable measures possible shall be taken to
2 prevent accidental data privacy breaches stemming from outside or inad-
3 vertent disclosure.
4 (32) To explore and negotiate possible interstate compacts enabling
5 the growth of enhanced public payment systems across multiple states,
6 regions, and territories of the United States. The corporation, as the
7 principal administrator of the enhanced public payment system, shall
8 reach out to and consult with counterpart agencies in other states, with
9 a view to assisting with the development of similar value storage and
10 payment platforms in such states and with the goal of the possible
11 interoperability of such platforms with the empire state enhanced public
12 payment system.
13 (33) To explore and negotiate possible pilot programs enabling the
14 growth and spread of an enhanced public payment system across the broad-
15 er United States. As the principal administrator of the enhanced public
16 payment system established pursuant to section four-b of the state
17 finance law, the corporation shall be authorized to reach out to and
18 consult with the federal reserve bank of New York, the federal reserve
19 board of the United States, and the department of treasury of the United
20 States, with a view to possibly assisting such entities with the devel-
21 opment of a national value storage and payment platform similar to the
22 enhanced public payment system.
23 § 6. Severability. If any clause, sentence, paragraph, subdivision,
24 section or part of this act shall be adjudged by any court of competent
25 jurisdiction to be invalid, such judgment shall not affect, impair, or
26 invalidate the remainder thereof, but shall be confined in its operation
27 to the clause, sentence, paragraph, subdivision, section or part thereof
28 directly involved in the controversy in which such judgment shall have
29 been rendered. It is hereby declared to be the intent of the legislature
30 that this act would have been enacted even if such invalid provisions
31 had not been included herein.
32 § 7. This act shall take effect immediately. Effective immediately,
33 the addition, amendment and/or repeal of any rule or regulation neces-
34 sary for the implementation of this act on its effective date are
35 authorized to be made and completed on or before such effective date.
