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A02873 Summary:

BILL NOA02873A
 
SAME ASSAME AS S05621-A
 
SPONSORKelles
 
COSPNSRSimon
 
MLTSPNSR
 
Amd §73-a, Pub Off L
 
Relates to reporting of cryptocurrency holdings on the annual statement of financial disclosure filed with the legislative ethics commission or the joint commission on public ethics.
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A02873 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A2873A
 
SPONSOR: Kelles
  TITLE OF BILL: An act to amend the public officers law, in relation to reporting of cryptocurrency holdings on the annual statement of financial disclosure   PURPOSE: The purpose of this bill is to close the loophole on cryptocurrency, assets on the state's financial disclosure statement and add transpar- en-; cy regarding individuals' interest in this type of digital finan- cial property.   SUMMARY OF PROVISIONS: A new paragraph 16-a is added to subdivision 3 of section 73-a of the public officers law to require the reporting of type and market value of cryptocurrencies held by the reporting individual, in excess of $1,000 at the close of the taxable year prior to the date of filing. For purposes of the bill, "cryptocurrency" is defined as a digital currency in which encryption techniques are used to regulate the generation of units and currency and verify the transfer of funds, operating. inde- pendently of a central bank.   DIFFERENCE BETWEEN ORIGINAL AND AMENDED VERSION: Technical amendments.   JUSTIFICATION: In 2014 the Internal Revenue Service (IRS) ruled that the first non-cen- tral bank digital cryptocurrency, known as bitcoin, be treated as prop- erty for tax purposes. This meant that bitcoin would, henceforth, be subject to capital gains tax. In July 2019, the IRS started sending letters to cryptocurrency owners warning them to amend their returns and pay taxes,. Additionally, academic research has shown that bitcoin has some characteristics more like the precious metals market than tradi- tional currencies, signaling agreement with the IRS decision even if based on different reasons. Source: https://en.wikipedia.org/wiki/Cryptocurrency Because cryptocurrency transactions can be made anonymously, they are difficult to track and to regulate. They are increasingly popular tools for cybercrimes and "ransomware," a kind of digital hijacking. The recent shutdown of the Colonial natural gas pipeline in the US southeast was an international cyberattack by hackers who demanded payment via cryptocurrency. This type of digital asset is designed.to work as a medium of exchange of units called "coins". The coins are stored in a ledger existing in a form of a computerized database-and is called a "blockchain". Cryptocurrency does not exist in physical form (like paper money) and is typically not issued by a central authority. Bitcoin is the first decentralized cryptocurrency. Since the release of bitcoin, many other cryptocurrencies have been created.   LEGISLATIVE HISTORY: 2022: A9086 referred to governmental operations   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: January 1st after enactment.
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A02873 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                         2873--A
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                    January 27, 2023
                                       ___________
 
        Introduced  by  M.  of A. KELLES, SIMON -- read once and referred to the
          Committee on Governmental Operations  --  committee  discharged,  bill
          amended,  ordered reprinted as amended and recommitted to said commit-
          tee
 
        AN ACT to amend the public officers law, in  relation  to  reporting  of
          cryptocurrency  holdings  on the annual statement of financial disclo-
          sure
 
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
 
     1    Section 1. Subdivision 3 of section 73-a of the public officers law is
     2  amended by adding a new paragraph 16-a to read as follows:
     3    16-a. List below the type and market value of cryptocurrencies held by
     4  the reporting individual or such individual's spouse or domestic partner
     5  in  EXCESS  of  $1,000  at  the close of the taxable year last occurring
     6  prior to the date of filing. Whenever an  interest  in  cryptocurrencies
     7  exists  through  a  beneficial interest in a trust, the cryptocurrencies
     8  held in such trust shall be listed ONLY IF the reporting individual  has
     9  knowledge thereof except where the reporting individual or the reporting
    10  individual's  spouse  or domestic partner has transferred assets to such
    11  trust for his or her benefit in which event such cryptocurrencies  shall
    12  be  listed unless they are not ascertainable by the reporting individual
    13  because the trustee is under an obligation or  has  been  instructed  in
    14  writing not to disclose the contents of the trust to the reporting indi-
    15  vidual.    Cryptocurrencies  of  which  the  reporting individual or the
    16  reporting individual's spouse or domestic partner is the owner of record
    17  but in which such individual or the  reporting  individual's  spouse  or
    18  domestic  partner  has  no beneficial interest shall not be listed. Also
    19  list cryptocurrencies owned for investment  purposes  by  a  corporation
    20  more  than  fifty  percent  (50%)  of  the  stock  of  which is owned or
    21  controlled by the reporting individual or such  individual's  spouse  or
    22  domestic  partner. For the purposes of this item the term "cryptocurren-
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD03465-02-3

        A. 2873--A                          2
 
     1  cy" shall mean a digital currency in  which  encryption  techniques  are
     2  used  to  regulate  the  generation of units and currency and verify the
     3  transfer of funds, operating independently from a central bank.

     4                                          Category of
     5                                          Market Value
     6                                          as of the close
     7                                          of the taxable
     8                                          year last
     9                                          occurring
    10                                          prior to
    11    Self/        Type of                  the filing of
    12    Spouse or    Cryptocurrency           this statement
    13    Domestic                              (In Table II)
    14    Partner
    15  _______________________________________________________________________
    16  _______________________________________________________________________
    17  _______________________________________________________________________
    18  _______________________________________________________________________
    19  _______________________________________________________________________
    20    §  2. This act shall take effect on the first of January next succeed-
    21  ing the date upon which it shall have become a law.
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