NY State Senate Bill 2023-S9401

Senate Bill S9401

2023-2024 Legislative Session

Establishes the New York workforce stabilization act requiring certain businesses to conduct artificial intelligence impact assessments on the application and use of such artificial intelligence

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Current Bill Status - In Senate Committee Labor Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 15, 2024	referred to labor

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2023-S9401 (ACTIVE) - Details

Current Committee:: Senate Labor
Law Section:: Labor Law
Laws Affected:: Add §201-j, Lab L; add §186-h, Tax L

2023-S9401 (ACTIVE) - Summary

Establishes the New York workforce stabilization act; requires certain businesses to conduct artificial intelligence impact assessments on the application and use of such artificial intelligence and to submit such impact assessments to the department of labor prior to the implementation of the artificial intelligence; establishes a surcharge on certain corporations that use artificial intelligence or data mining or have greater than fifteen employees displaced by artificial intelligence of a rate of 2% of the corporation's business income base; defines data mining.

2023-S9401 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9401

SPONSOR: HINCHEY
 
TITLE OF BILL:

An act to amend the labor law, in relation to requiring certain busi-
nesses to conduct artificial intelligence impact assessments; and to
amend the tax law, in relation to establishing a surcharge on certain
corporations that use artificial intelligence or data mining or have
greater than fifteen employees displaced by artificial intelligence

 
PURPOSE:

To require corporations that rely on artificial intelligence for data
mining or replace more than 15 of their employees with artificial intel-
ligence to pay an additional surcharge on their corporate income tax.
Also, to require corporations to produce impact assessments so that the
department of labor can begin to understand the impact of AI on employ-
ees in the private sector.

 
SUMMARY OF PROVISIONS:

Section one names the bill the "New York Workforce Stabilization Act"

Section two adds a new section 201-j to the labor law requiring, before
they utilize Al, all employers in the state with more than 100 employees
to conduct an impact assessment on their use of artificial intelligence
including: the objectives of their use of AI, a summary of the underly-
ing algorithms, computational modes and tools that are used within the
AI, the design and training data used, what data the AI will have access
to, and how many employees they expect to be displaced.

Section three adds a new section 186-h to the tax law to require that
any corporation that has 15 or more employees displaced due to the use
of algorithms, computational models, artificial intelligence techniques,
robotic hardware or a combination of those pay a surcharge of 2% of
their business income base. This section establishes a waiver for this
worker displacement surcharge for certain eligible businesses. It also
requires that any corporation that uses AI for data mining must pay a
surcharge of 2% of their business income base. All money collected from
this surcharge must be paid to the department of labor for worker
retraining programs, workforce development programs or the unemployment
insurance fund.

Section four states the effective date.

 
JUSTIFICATION:

The capabilities of AI have improved rapidly in recent years, promising
to fundamentally alter many industries in New York.  Improvements to
generative AI, for example, which can generate texts, images, and other
products in response to text prompts, will reshape how communications,
marketing, graphic design, and countless other industries do business. A
recent Pew Research Center report found that in 2022, 19% of American
workers had jobs that were at high risk of either being automated or
assisted by AI. To gather more information about how corporations in New
York will use AI and how it will impact workers, this bill would require
any corporation in the state that plans to use AI to submit an impact
assessment to the Department of Labor outlining how the technology will
be used, what data was used for the training of the AI, what data the AI
will have access to, and an estimate of the number of employees expected
to be displaced by its use.

By enabling corporations to automate the work performed by many of their
employees, AI could lead to even greater wealth disparity in New York.
New York State has a responsibility to prevent corporations from concen-
trating profits in the hands of the few through the unrestricted use of
AI. Accordingly, this bill would impose an additional 2% corporate
income tax on corporations that use AI for data mining or that displace
15 or more employees through the use of AI To help New Yorkers find
employment in a job market adjusting to the use of AI, the entirety of
the revenue gained through the 2 % surcharge would be used by the
Department of Labor to fund unemployment benefits, workforce develop-
ment, and workforce retraining.  Combined with the impact assessments,
this new surcharge will provide a starting point for the State to
confront the challenges that AI will bring to the labor market.

 
LEGISLATIVE HISTORY:

New Bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately; provided, however, that section
three of this act shall take effect January 1, 2025.

2023-S9401 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9401
 
                             I N  S E N A T E
 
                               May 15, 2024
                                ___________
 
 Introduced by Sens. HINCHEY, GONZALEZ -- read twice and ordered printed,
   and when printed to be committed to the Committee on Labor
 
 AN  ACT  to  amend the labor law, in relation to requiring certain busi-
   nesses to conduct artificial intelligence impact assessments;  and  to
   amend  the tax law, in relation to establishing a surcharge on certain
   corporations that use artificial intelligence or data mining  or  have
   greater than fifteen employees displaced by artificial intelligence
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Short title. This act shall be known and may  be  cited  as
 the "New York workforce stabilization act".
   § 2. The labor law is amended by adding a new section 201-j to read as
 follows:
   §  201-J.  ARTIFICIAL  INTELLIGENCE IMPACT ASSESSMENTS. 1. NO EMPLOYER
 SHALL UTILIZE OR APPLY ANY ARTIFICIAL INTELLIGENCE UNLESS THE  EMPLOYER,
 OR  AN ENTITY ACTING ON BEHALF OF SUCH EMPLOYER, SHALL HAVE CONDUCTED AN
 IMPACT ASSESSMENT FOR THE APPLICATION AND USE OF SUCH ARTIFICIAL  INTEL-
 LIGENCE.  FOLLOWING  THE  FIRST  IMPACT ASSESSMENT, AN IMPACT ASSESSMENT
 SHALL BE CONDUCTED AT LEAST ONCE EVERY TWO YEARS. AN  IMPACT  ASSESSMENT
 SHALL BE CONDUCTED PRIOR TO ANY MATERIAL CHANGE TO THE ARTIFICIAL INTEL-
 LIGENCE  THAT  MAY  CHANGE  THE  OUTCOME  OR EFFECT OF SUCH SYSTEM. SUCH
 IMPACT ASSESSMENTS SHALL INCLUDE:
   (A) A DESCRIPTION OF THE OBJECTIVES OF THE ARTIFICIAL INTELLIGENCE;
   (B) AN EVALUATION OF THE ABILITY OF  THE  ARTIFICIAL  INTELLIGENCE  TO
 ACHIEVE ITS STATED OBJECTIVES;
   (C)  A DESCRIPTION AND EVALUATION OF THE OBJECTIVES AND DEVELOPMENT OF
 THE ARTIFICIAL INTELLIGENCE INCLUDING:
   (I) A SUMMARY OF THE UNDERLYING ALGORITHMS, COMPUTATIONAL  MODES,  AND
 TOOLS THAT ARE USED WITHIN THE ARTIFICIAL INTELLIGENCE; AND
   (II)  THE  DESIGN  AND  TRAINING  DATA  USED TO DEVELOP THE ARTIFICIAL
 INTELLIGENCE PROCESS;
   (D) THE EXTENT TO WHICH THE  DEPLOYMENT  AND  USE  OF  THE  ARTIFICIAL
 INTELLIGENCE  REQUIRES  INPUT  OF  SENSITIVE AND PERSONAL DATA, HOW THAT
 DATA IS USED AND STORED, AND ANY CONTROL USERS MAY HAVE OVER THEIR DATA;
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.

                                                            LBD14384-04-4
 S. 9401                             2
 
   (E) AN ESTIMATE OF THE NUMBER OF EMPLOYEES ALREADY  DISPLACED  DUE  TO
 ARTIFICIAL INTELLIGENCE; AND
   (F) AN ESTIMATE OF THE NUMBER OF EMPLOYEES EXPECTED TO BE DISPLACED OR
 OTHERWISE  AFFECTED  DUE TO THE INCREASED USE OF ARTIFICIAL INTELLIGENCE
 IN THE WORKPLACE.
   2. ANY IMPACT ASSESSMENT CONDUCTED PURSUANT TO THIS SUBDIVISION  SHALL
 BE  SUBMITTED TO THE DEPARTMENT AT LEAST THIRTY DAYS PRIOR TO THE IMPLE-
 MENTATION OF THE ARTIFICIAL INTELLIGENCE THAT IS  THE  SUBJECT  OF  SUCH
 ASSESSMENT.
   3. FOR THE PURPOSES OF THIS SECTION:
   (A)  "EMPLOYER"  MEANS  A BUSINESS THAT: (I) IS RESIDENT IN THE STATE,
 (II) IS NOT A SMALL BUSINESS, AND (III) EMPLOYS MORE  THAN  ONE  HUNDRED
 PEOPLE.
   (B)  "SMALL  BUSINESS"  MEANS  A BUSINESS THAT: (I) IS RESIDENT IN THE
 STATE, (II) IS INDEPENDENTLY OWNED AND OPERATED, (III) IS  NOT  DOMINANT
 IN ITS FIELD, AND (IV) EMPLOYS ONE HUNDRED OR LESS PEOPLE.
   §  3.  The tax law is amended by adding a new section 186-h to read as
 follows:
   § 186-H. ARTIFICIAL INTELLIGENCE SURCHARGE. 1.  IMPOSITION  OF  WORKER
 DISPLACEMENT  SURCHARGE.  (A) A SURCHARGE ON CORPORATIONS THAT TERMINATE
 THE EMPLOYMENT OR SUBSTANTIALLY REDUCE THE  HOURS  OF  FIFTEEN  OR  MORE
 EMPLOYEES  DUE  TO  ANY SYSTEM OR PROCESS THAT USES ALGORITHMS, COMPUTA-
 TIONAL MODELS, ARTIFICIAL INTELLIGENCE TECHNIQUES, ROBOTIC HARDWARE,  OR
 A  COMBINATION  THEREOF, TO AUTOMATE, SUPPORT, OR REPLACE HUMAN LABOR IS
 IMPOSED AT THE RATE OF TWO PERCENT OF THE CORPORATION'S BUSINESS  INCOME
 BASE.
   (B)  THE  SURCHARGE  SHALL BE REPORTED AND PAID TO THE COMMISSIONER NO
 LESS FREQUENTLY THAN ON AN ANNUAL BASIS.  THE PAYMENTS SHALL BE ACCOMPA-
 NIED BY A RETURN IN THE FORM AND CONTAINING THE INFORMATION THE  COMMIS-
 SIONER MAY PRESCRIBE.
   (C)  THE  COMMISSIONER,  IN CONSULTATION WITH THE DEPARTMENT OF LABOR,
 MAY WAIVE THE SURCHARGE SET FORTH BY PARAGRAPH (A) OF  THIS  SUBDIVISION
 FOR  AN ELIGIBLE CORPORATION. THE COMMISSIONER, IN CONSULTATION WITH THE
 DEPARTMENT OF LABOR, SHALL ESTABLISH A PROCESS WHEREBY  ELIGIBLE  CORPO-
 RATIONS MAY APPLY TO HAVE THE SURCHARGE WAIVED. FOR THE PURPOSES OF THIS
 SECTION, AN ELIGIBLE CORPORATION SHALL BE:
   (I)  A BUSINESS THAT IS FOUND BY THE DEPARTMENT OF LABOR TO BE EXPERI-
 ENCING OR ANTICIPATING A LABOR SHORTAGE;
   (II) A BUSINESS THAT DEMONSTRATES THAT IT REQUIRES THE  USE  OF  ALGO-
 RITHMS, COMPUTATIONAL MODELS, ARTIFICIAL INTELLIGENCE TECHNIQUES, ROBOT-
 IC  HARDWARE,  OR  A  COMBINATION  THEREOF,  TO  PROTECT  OR IMPROVE THE
 PRODUCTION OF AGRICULTURAL COMMODITIES WITHIN THE STATE; OR
   (III) A SMALL BUSINESS, AS DEFINED BY SECTION ONE  HUNDRED  THIRTY-ONE
 OF  THE ECONOMIC DEVELOPMENT LAW, THAT DEMONSTRATES THAT IT REQUIRES THE
 USE OF ALGORITHMS, COMPUTATIONAL MODELS, ARTIFICIAL  INTELLIGENCE  TECH-
 NIQUES,  ROBOTIC  HARDWARE,  OR A COMBINATION THEREOF, TO REMAIN ECONOM-
 ICALLY VIABLE.
   (D) THE DEPARTMENT OF LABOR SHALL ANNUALLY REPORT TO  THE  LEGISLATURE
 ON  THE  NUMBER OF WAIVERS THAT IT HAS GRANTED PURSUANT TO PARAGRAPH (C)
 OF THIS SUBDIVISION, IN THE PRECEDING YEAR AND THE JUSTIFICATION FOR WHY
 EACH WAIVER WAS GRANTED. SUCH REPORT SHALL  BE  SENT  TO  THE  TEMPORARY
 PRESIDENT  OF THE SENATE, THE MINORITY LEADER OF THE SENATE, THE SPEAKER
 OF THE ASSEMBLY, AND THE MINORITY LEADER OF THE ASSEMBLY  AND  SHALL  BE
 MADE AVAILABLE TO THE PUBLIC ON THE WEBSITE OF THE DEPARTMENT.
   2.  IMPOSITION  OF  DATA  MINING  SURCHARGE. (A) A SURCHARGE ON CORPO-
 RATIONS THAT USE ARTIFICIAL INTELLIGENCE FOR DATA MINING IS  IMPOSED  AT
 S. 9401                             3
 
 THE  RATE  OF TWO PERCENT OF THE CORPORATION'S BUSINESS INCOME BASE. FOR
 THE PURPOSES OF THIS SUBDIVISION, THE TERM "DATA MINING"  SHALL  MEAN  A
 PROCESS  INVOLVING PATTERN-BASED QUERIES, SEARCHES, OR OTHER ANALYSES OF
 ONE OR MORE ELECTRONIC DATABASES.
   (B)  THE  SURCHARGE  SHALL BE REPORTED AND PAID TO THE COMMISSIONER NO
 LESS FREQUENTLY THAN ON AN ANNUAL BASIS.  SURCHARGE  PAYMENTS  SHALL  BE
 ACCOMPANIED  BY  A RETURN IN THE FORM AND CONTAINING THE INFORMATION THE
 COMMISSIONER MAY PRESCRIBE.
   3. APPLICABLE PROVISIONS. (A) EXCEPT AS  OTHERWISE  PROVIDED  IN  THIS
 SECTION, THE SURCHARGES IMPOSED UNDER THIS SECTION SHALL BE ADMINISTERED
 AND  COLLECTED BY THE COMMISSIONER IN A LIKE MANNER AS THE TAXES IMPOSED
 BY ARTICLE TWENTY-EIGHT OF THIS CHAPTER. ALL THE PROVISIONS  OF  ARTICLE
 TWENTY-EIGHT OF THIS CHAPTER, INCLUDING THE PROVISIONS RELATING TO DEFI-
 NITIONS, EXEMPTIONS, RETURNS, PERSONAL LIABILITY FOR THE TAX, COLLECTION
 OF  TAX FROM THE CUSTOMER, PAYMENT OF TAX, AND THE ADMINISTRATION OF THE
 TAXES IMPOSED BY SUCH ARTICLE, SHALL APPLY  TO  THE  SURCHARGES  IMPOSED
 UNDER  THE  AUTHORITY  OF THIS SECTION SO FAR AS THOSE PROVISIONS CAN BE
 MADE APPLICABLE TO THE SURCHARGES IMPOSED BY  THIS  SECTION,  WITH  SUCH
 MODIFICATIONS  AS  MAY  BE  NECESSARY  IN ORDER TO ADAPT THE LANGUAGE OF
 THOSE PROVISIONS TO  THE  SURCHARGES  IMPOSED  BY  THIS  SECTION.  THOSE
 PROVISIONS SHALL APPLY WITH THE SAME FORCE AND EFFECT AS IF THE LANGUAGE
 OF  THOSE  PROVISIONS HAD BEEN SET FORTH IN FULL IN THIS SECTION, EXCEPT
 TO THE EXTENT THAT ANY OF THOSE PROVISIONS IS EITHER INCONSISTENT WITH A
 PROVISION OF THIS SECTION OR IS NOT RELEVANT TO THE SURCHARGE IMPOSED BY
 THIS SECTION. FOR PURPOSES OF THIS SECTION, ANY REFERENCE IN THIS  CHAP-
 TER  TO A TAX OR THE TAXES IMPOSED BY ARTICLE TWENTY-EIGHT OF THIS CHAP-
 TER SHALL BE DEEMED ALSO TO REFER TO  THE  SURCHARGES  IMPOSED  BY  THIS
 SECTION UNLESS A DIFFERENT MEANING IS CLEARLY REQUIRED.
   (B)  NOTWITHSTANDING  THE PROVISIONS OF PARAGRAPH (A) OF THIS SUBDIVI-
 SION:
   (1) THE EXEMPTIONS PROVIDED FOR IN SECTION ELEVEN HUNDRED  SIXTEEN  OF
 THIS CHAPTER, OTHER THAN THE EXEMPTIONS IN PARAGRAPHS ONE, TWO AND THREE
 OF  SUBDIVISION  (A)  OF SUCH SECTION, SHALL NOT APPLY TO THE SURCHARGES
 IMPOSED BY THIS SECTION.
   (2) THE CREDIT PROVIDED IN SUBDIVISION (F) OF SECTION  ELEVEN  HUNDRED
 THIRTY-SEVEN OF THIS CHAPTER SHALL NOT APPLY TO THIS SECTION.
   4. DEPOSITS OF SURCHARGE MONIES COLLECTED AND RECEIVED.  NOTWITHSTAND-
 ING ANY PROVISION OF LAW TO THE CONTRARY, ALL SURCHARGE MONIES COLLECTED
 AND  RECEIVED  BY THE COMMISSIONER UNDER THIS SECTION SHALL BE DEPOSITED
 DAILY TO THE CREDIT OF THE COMPTROLLER  WITH  THOSE  RESPONSIBLE  BANKS,
 BANKING  HOUSES  OR TRUST COMPANIES THE COMPTROLLER MAY DESIGNATE. THOSE
 DEPOSITS SHALL BE KEPT SEPARATE AND APART FROM ALL OTHER MONIES  IN  THE
 POSSESSION  OF  THE  COMPTROLLER. THE COMPTROLLER SHALL REQUIRE ADEQUATE
 SECURITY FROM ALL SUCH DEPOSITORIES. ALL SURCHARGE MONIES COLLECTED  AND
 RECEIVED  UNDER THIS SECTION SHALL BE PAID TO THE DEPARTMENT OF LABOR TO
 BE USED, IN A MANNER PRESCRIBED BY THE COMMISSIONER OF THE DEPARTMENT OF
 LABOR, FOR WORKER RETRAINING PROGRAMS ADMINISTERED  BY  THE  DEPARTMENT,
 WORKFORCE  DEVELOPMENT  PROGRAMS ADMINISTERED BY THE DEPARTMENT OR TO BE
 PAID TO THE UNEMPLOYMENT INSURANCE FUND.
   § 4. This act shall take effect immediately; provided,  however,  that
 section three of this act shall take effect January 1, 2025.

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Senate Bill S9401

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Sponsored By

Michelle Hinchey