S T A T E   O F   N E W   Y O R K
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                                    837
 
                        2025-2026 Regular Sessions
 
                           I N  A S S E M B L Y
 
                                (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:
 
   Section  1.  This act shall be known and may be cited as the "enhanced
 public payment system act".
   § 2. Legislative intent. Many New York residents,  including  individ-
 uals  who  receive public benefits and payments related to nutrition and
 social services, are targets of identity and consumer theft.  Similarly,
 many  New  York  residents  who rely on Medicaid home and community care
 services are victims of  exploitation  by  private  intermediaries  that
 manage public payments.
   A  system of individual digital wallets or payment accounts, linked to
 a single master account that enables payments to move between such indi-
 vidual wallets or payment accounts, is now easy to construct and  admin-
 ister  with the use of secure digital payment technologies. The state of
 New York annually disburses more than thirty billion dollars  of  social
 and  health  benefits,  including  home  care  services,  and fifty-five
 billion dollars in  the  form  of  tax  credits,  procurement  payments,
 pension  payouts, and other program dispersals, all of which can readily
 be disbursed via a system of individual wallets or accounts linked to  a
 master account. The state of New York also receives more than fifty-five
 billion  dollars  annually  in the form of service payments, tax monies,
 licensing fees, civil fines and other remittances, all of which  can  be
 readily  paid  into a master account from individual wallets or accounts
 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
 
   A system of individual digital wallets or payment accounts linked to a
 master account could accordingly function as a state-provided and admin-
 istered payment infrastructure, in and  through  which  value  could  be
 accumulated,  stored,  grown  and exchanged in 'real-time,' with no need
 for fees or other forms of exploitative value extraction, thereby assur-
 ing  that  all  New  York  residents  are: (a) able to receive real-time
 payments; (b) able to create, receive and grow wealth; and (c) empowered
 to participate fully in a growing state economy suffering no shortage of
 currency or forgoing of commerce.
   § 3. The state finance law is amended by adding a new section  4-b  to
 read as follows:
   §  4-B.  EMPIRE STATE ENHANCED PUBLIC PAYMENT SYSTEM.  1. DEFINITIONS.
 AS USED IN THIS SECTION, THE FOLLOWING TERMS SHALL  HAVE  THE  FOLLOWING
 MEANINGS:
   (A) "MASTER ACCOUNT" MEANS A DIGITAL ACCOUNT WHICH ENABLES PAYMENTS TO
 BE TRANSFERRED BETWEEN INDIVIDUAL WALLETS;
   (B) "INDIVIDUAL WALLET" MEANS A DIGITAL ACCOUNT WHICH:
   (I) IS LINKED TO A MASTER ACCOUNT;
   (II)  ENABLES  A  RESIDENT TO SEND OR RECEIVE PAYMENT TO ANY ENTITY OF
 THE STATE OR TO ANOTHER RESIDENT;
   (III) ALLOWS VALUE TO BE ACCUMULATED, STORED, GROWN AND EXCHANGED; AND
   (IV) IS NOT SUBJECT TO FEES OR OTHER VALUE EXTRACTION FOR USE  OF  THE
 INDIVIDUAL WALLET;
   (C)  "RESIDENT"  MEANS  AN  INDIVIDUAL  OR  A  DOMESTIC CORPORATION OR
 FOREIGN CORPORATION AUTHORIZED TO DO BUSINESS IN THE STATE;
   (D) "PUBLIC PAYMENT SYSTEM" MEANS THE  EMPIRE  STATE  ENHANCED  PUBLIC
 PAYMENT SYSTEM ESTABLISHED PURSUANT TO SUBDIVISION TWO OF THIS SECTION;
   (E)  "STATE  ENTITY"  MEANS  ANY  DEPARTMENT, BOARD, BUREAU, DIVISION,
 COMMISSION, COMMITTEE, COUNCIL, OFFICE OF THE STATE,  OR  OTHER  GOVERN-
 MENTAL ENTITY WITH STATEWIDE JURISDICTION;
   (F)  "PAYMENT  SERVICE PROVIDER" MEANS AN ENTITY WHICH PROVIDES ONLINE
 SERVICES FOR ACCEPTING ELECTRONIC PAYMENTS  BY  A  VARIETY  OF  METHODS,
 INCLUDING,  BUT  NOT  LIMITED  TO,  CREDIT  CARD, DIRECT DEBIT, AND BANK
 TRANSFER; AND
   (G) "BANKED" MEANS A PAYMENT NETWORK  MAKING  REAL-TIME  PAYMENTS  FOR
 CONSUMERS, BUSINESSES AND BANKS.
   2.  THE  DEPARTMENT  OF  FINANCIAL  SERVICES,  IN COOPERATION WITH THE
 DEPARTMENT OF TAXATION AND FINANCE, THE OFFICE OF THE  COMPTROLLER,  THE
 NEW YORK STATE AND LOCAL RETIREMENT SYSTEM, THE DEPARTMENT OF LABOR, THE
 DEPARTMENT OF HEALTH, THE DEPARTMENT OF SOCIAL SERVICES, AND OTHER STATE
 AGENCIES  SHALL  DEVELOP,  ESTABLISH,  AND  MAINTAIN A VALUE STORAGE AND
 PAYMENT PLATFORM TO BE KNOWN AS THE EMPIRE STATE ENHANCED PUBLIC PAYMENT
 SYSTEM. THE EMPIRE STATE ENHANCED PUBLIC PAYMENT SYSTEM SHALL CONSIST OF
 A DIGITAL MASTER ACCOUNT AND COORDINATE A SYSTEM OF  INDIVIDUAL  WALLETS
 WHICH  SHALL  BE  MAINTAINED  AND  ADMINISTERED BY THE URBAN DEVELOPMENT
 CORPORATION AS DESCRIBED IN SUBDIVISION THIRTY-ONE OF  SECTION  FIVE  OF
 SECTION  ONE OF CHAPTER ONE HUNDRED SEVENTY-FOUR OF THE LAWS OF NINETEEN
 HUNDRED SIXTY-EIGHT, CONSTITUTING THE NEW YORK STATE  URBAN  DEVELOPMENT
 CORPORATION ACT.
   3.  ALL  FUNDS  DISBURSED  TO RESIDENTS BY A STATE ENTITY OR ANY OTHER
 STATE INSTRUMENTALITY SHALL BE MADE OUT OF THE MASTER ACCOUNT  TO  INDI-
 VIDUAL  WALLETS LINKED TO THE MASTER ACCOUNT VIA ENHANCED PUBLIC PAYMENT
 SYSTEM AND ANY REMITTANCE MADE TO A STATE ENTITY OR OTHER STATE  INSTRU-
 MENTALITY  BY A RESIDENT SHALL BE PERMITTED TO BE MADE, AT THE OPTION OF
 THE RESIDENT MAKING  THE  REMITTANCE,  FROM  THE  RESIDENT'S  INDIVIDUAL
 WALLET.
 A. 837                              3
 
   4.  ALL  RESIDENTS  SHALL  HAVE  THE  ABILITY TO MAKE PAYMENTS TO, AND
 RECEIVE PAYMENTS FROM, OTHER RESIDENTS THROUGH  LINKS  AMONG  INDIVIDUAL
 WALLETS  ON THE VALUE LEDGER. EACH PAYMENT SHALL BE EFFECTED BY A SIMUL-
 TANEOUS CREDITING OF THE PAYEE'S INDIVIDUAL WALLET AND AN EQUAL DEBITING
 OF  THE  PAYER'S  INDIVIDUAL  WALLET.  SUCH PAYMENTS SHALL BE ABLE TO BE
 DIRECTED BY THE MEANS OF  PAYMENT  CARDS,  WIRE  SERVICES,  SMART-DEVICE
 APPS, OR OTHER ELECTRONIC FUNDS TRANSFER.
   5.  ANY  RESIDENT  MAKING  PAYMENT  TO, OR RECEIVING PAYMENT FROM, ANY
 OTHER RESIDENT MAY REQUIRE THAT  THE  PAYEE  OR  PAYER  ACCEPT  OR  MAKE
 PAYMENT  VIA  THE  SYSTEM  OF  INDIVIDUAL WALLETS ON THE ENHANCED PUBLIC
 PAYMENT SYSTEM; PROVIDED, HOWEVER, THAT RESIDENTS WHO MAKE PAYMENTS  TO,
 OR RECEIVE PAYMENTS FROM, OTHER RESIDENTS SHALL NOT BE REQUIRED TO TRAN-
 SACT  WITH  EACH OTHER ON THE PUBLIC PAYMENT SYSTEM IN THE EVENT THAT NO
 PARTY TO THE TRANSACTION OPTS TO DO SO  AND  FURTHER  PROVIDED  THAT  NO
 TRANSACTING  PARTY'S  OPTING NOT TO DO SO IS COERCED BY ANY OTHER TRANS-
 ACTING PARTY OR ASSOCIATES OF SUCH TRANSACTING PARTY.
   6. ANY  COMMERCIAL  BANK,  OTHER  FINANCIAL  INSTITUTION,  OR  PAYMENT
 SERVICE PROVIDER DOING BUSINESS IN THE STATE SHALL BE REQUIRED TO:
   (A)  PROVIDE  FOR  FULL INTEROPERABILITY BETWEEN INDIVIDUAL WALLETS ON
 THE ENHANCED PUBLIC PAYMENT SYSTEM AND ANY DEMAND DEPOSIT OR TRANSACTION
 ACCOUNT MAINTAINED BY THE COMMERCIAL BANK, OTHER FINANCIAL  INSTITUTION,
 OR  PAYMENT SERVICE PROVIDER FOR THE HOLDERS OF SUCH INDIVIDUAL WALLETS;
 AND
   (B) PERMIT ALL HOLDERS OF INDIVIDUAL WALLETS TO MAKE DEPOSITS INTO AND
 WITHDRAWALS  FROM  SUCH  INDIVIDUAL  WALLET  VIA  ANY  AUTOMATED  TELLER
 MACHINE,  TELLER  WINDOW,  OR  OTHER  DEPOSIT OR WITHDRAWAL FACILITY THE
 BANK, FINANCIAL INSTITUTION,  OR  PAYMENT  SERVICE  PROVIDER  OFFERS  TO
 CUSTOMERS.  THERE  SHALL  BE  NO  PECUNIARY OR OTHER CHARGE ASSESSED FOR
 ACCESS TO INDIVIDUAL WALLETS; ANY COSTS ASSOCIATED WITH  ACCESS  TO  AND
 USE  OF  INDIVIDUAL  WALLETS  SHALL  BE  CONSIDERED  AN INCIDENT OF SUCH
 COMMERCIAL BANK, OTHER FINANCIAL INSTITUTION, OR PAYMENT SERVICE PROVID-
 ER'S STATUS AS A PUBLICLY LICENSED FINANCIAL UTILITY.
   7. THE DEPARTMENT OF FINANCIAL SERVICES SHALL ALSO  DEVELOP  AND  MAKE
 AVAILABLE AT NO COST A DOWNLOADABLE SMART-DEVICE APPLICATION TO BE KNOWN
 AS  THE EMPIRE STATE ENHANCED PUBLIC PAYMENT APP THROUGH WHICH RESIDENTS
 CAN ACCESS AND RECEIVE AND MAKE PAYMENTS  INTO  AND  OUT  OF  INDIVIDUAL
 WALLETS.  ALL  ENTITIES  OPERATING IN THE STATE THAT ACCEPT PAYMENTS VIA
 SMART-DEVICE APPLICATIONS OF  ANY  KIND  SHALL  BE  REQUIRED  TO  ACCEPT
 PAYMENTS  VIA  THE  ENHANCED PUBLIC PAYMENT APPLICATION AT THE OPTION OF
 ANY PAYER WISHING TO PAY VIA SUCH ENHANCED PUBLIC PAYMENT APPLICATION.
   8. THE DEPARTMENT OF TAXATION AND FINANCE,  THE  NEW  YORK  STATE  AND
 LOCAL  RETIREMENT SYSTEM, THE DEPARTMENT OF HEALTH AND THE DEPARTMENT OF
 SOCIAL SERVICES, AS THE STATE'S PRINCIPAL DISBURSERS  AND  RECEIVERS  OF
 FUNDS,  CREDITS, AND REMITTANCES, SHALL EXERCISE SPECIAL CARE IN ASSIST-
 ING WITH AND PROMOTING THE ESTABLISHMENT AND WIDE USE  OF  THE  ENHANCED
 PUBLIC PAYMENT SYSTEM, IN ORDER TO HASTEN BOTH:
   (A)  THE  FULL BANKING OF THE STATE'S UNBANKED AND VULNERABLE INDIVID-
 UALS; AND
   (B) INCLUSION OF THE STATE'S CURRENTLY MARGINALIZED RESIDENTS  IN  THE
 PROCESS OF VALUE CREATION, WEALTH ACCUMULATION, AND COMMERCIAL EXCHANGE.
   9. THE DEPARTMENT OF FINANCIAL SERVICES SHALL:
   (A)  ENSURE COMPLIANCE BY ALL BANKS, OTHER FINANCIAL INSTITUTIONS, AND
 PAYMENT SERVICE PROVIDERS WITH THE REQUIREMENTS OF THIS SECTION;
   (B) PROHIBIT AND PREVENT ANY OTHER PERSON OR COMPANY IN THE  FINANCIAL
 SERVICES  OR PAYMENTS INDUSTRIES FROM EXPLOITING ENHANCED PUBLIC PAYMENT
 WALLET HOLDERS OR OTHERWISE SUBVERTING THE VALUE-CREATING AND  COMMERCE-
 A. 837                              4
 
 PROMOTING  PURPOSES  OF  THIS SECTION, INCLUDING BY OFFERING ADVANCES ON
 ANTICIPATED STATE REMITTANCES FOR FEES; AND
   (C)  ENSURE COMPLIANCE WITH STATE BANKING, REGULATORY, AND DIGITAL AND
 FINANCIAL PRIVACY LAWS BY ALL ENTITIES THAT OVERSEE OR TRANSACT VIA  THE
 ENHANCED PUBLIC PAYMENT SYSTEM. THE DEPARTMENT, IN COORDINATION WITH THE
 URBAN  DEVELOPMENT  CORPORATION, SHALL ALSO COORDINATE WITH ANY RELEVANT
 REGULATORY AGENCY OF THE UNITED STATES TO ENSURE COMPLIANCE WITH FEDERAL
 BANKING, REGULATORY, EMPLOYEE BENEFIT AND ANY OTHER  APPLICABLE  FEDERAL
 LAWS.
   10.  THE DEPARTMENT OF FINANCIAL SERVICES SHALL BE AUTHORIZED TO COOR-
 DINATE WITH ITS COUNTERPART AGENCIES IN OTHER STATES AND TERRITORIES  OF
 THE  UNITED STATES IN CONNECTION WITH ANY COMMON REGULATORY NEEDS IMPLI-
 CATED OR CHALLENGES RAISED BY STATE ENHANCED PUBLIC PAYMENT SYSTEMS.
   § 4. Section 301 of the financial services law is amended by adding  a
 new subsection (d) to read as follows:
   (D)  THE  SUPERINTENDENT SHALL HAVE THE POWER TO DIRECT THE DEPARTMENT
 TO DEVELOP, ESTABLISH, AND MAINTAIN THE  EMPIRE  STATE  ENHANCED  PUBLIC
 PAYMENT  SYSTEM  ESTABLISHED  PURSUANT  TO  SECTION  FOUR-B OF THE STATE
 FINANCE LAW. THE SUPERINTENDENT SHALL ALSO HAVE THE POWER TO DIRECT  THE
 DEPARTMENT  TO  COORDINATE WITH AGENCIES IN OTHER STATES AND TERRITORIES
 OF THE UNITED STATES THE REGULATORY NEEDS OR CHALLENGES RAISED BY  STATE
 ENHANCED PUBLIC PAYMENT SYSTEMS.
   §  5.  Section  5  of  section  1  of chapter 174 of the laws of 1968,
 constituting the New York state urban development  corporation  act,  is
 amended  by  adding  three  new  subdivisions  31,  32 and 33 to read as
 follows:
   (31) TO MAINTAIN AND ADMINISTER, IN CONSULTATION WITH  THE  DEPARTMENT
 OF FINANCIAL SERVICES, THE DEPARTMENT OF LABOR, THE DEPARTMENT OF HEALTH
 AND  THE DEPARTMENT OF SOCIAL SERVICES, THE EMPIRE STATE ENHANCED PUBLIC
 PAYMENT SYSTEM ESTABLISHED PURSUANT  TO  SECTION  FOUR-B  OF  THE  STATE
 FINANCE  LAW,  WITH  A VIEW TO ENCOURAGING THE EXPANSION OF COMMERCE AND
 THE BROAD GROWTH AND ACCUMULATION OF WEALTH IN  THE  STATE.  THE  CORPO-
 RATION,  IN  CONSULTATION AND COORDINATION WITH THE DEPARTMENT OF FINAN-
 CIAL SERVICES, THE DEPARTMENT OF LABOR, THE DEPARTMENT  OF  HEALTH,  THE
 DEPARTMENT  OF  SOCIAL  SERVICES, THE DEPARTMENT OF TAXATION AND FINANCE
 AND THE NEW YORK STATE AND LOCAL RETIREMENT SYSTEM,  SHALL  OBSERVE  AND
 BUILD  INTO  THE  EMPIRE  STATE  ENHANCED  PUBLIC  PAYMENT SYSTEM STRICT
 COMPLIANCE WITH THE HIGHEST STANDARDS OF COMMERCIAL AND  FINANCIAL  DATA
 PRIVACY.  SUCH STANDARDS SHALL ESTABLISH, AT A MINIMUM, THAT:
   (A) NO WEALTH ACCUMULATION OR SPENDING ACTIVITY OF ANY SORT THAT MAKES
 USE  OF  THE  ENHANCED PUBLIC PAYMENT SYSTEM SHALL BE SHARED WITH, INTI-
 MATED TO, OR SOLD TO ANY NON-GOVERNMENTAL PERSON OR ENTITY;
   (B) ANY SHARING OF INFORMATION WITH  GOVERNMENTAL  ENTITIES  SHALL  BE
 SOLELY  FOR  PURPOSES  OF  OPTIMIZING ADMINISTRATION OF THE EMPIRE STATE
 ENHANCED PUBLIC PAYMENT SYSTEM OR FOR LAW ENFORCEMENT PURPOSES;
   (C) ANY PERSONAL DATA THAT IS NOT BEING  USED  SOLELY  TO  ASSIST  THE
 PERSON  WHOSE DATA IS BEING ACCESSED AND THAT IS BEING USED FOR ADMINIS-
 TRATIVE PURPOSES SHALL BE CRYPTOGRAPHICALLY ANONYMIZED;
   (D) ANY PERSONAL DATA SHARED WITH LAW ENFORCEMENT AUTHORITIES SHALL BE
 SHARED SOLELY IN STRICT COMPLIANCE WITH  THE  FOURTH  AMENDMENT  TO  THE
 UNITED  STATES  CONSTITUTION  AND  ANY  AND ALL OTHER STATE, FEDERAL AND
 LOCAL LEGAL CONSTRAINTS THAT PROTECT THE RIGHTS OF SUSPECTED OR  ACCUSED
 PERSONS  AND  THE  EMPIRE STATE ENHANCED PUBLIC PAYMENT SYSTEM SHALL NOT
 LESSEN THE DEGREE OF LEGALLY ASSURED DATA PRIVACY OF NEW YORK RESIDENTS;
 AND
 A. 837                              5
 
   (E) ANY AND ALL  PRACTICABLE  MEASURES  POSSIBLE  SHALL  BE  TAKEN  TO
 PREVENT  ACCIDENTAL DATA PRIVACY BREACHES STEMMING FROM OUTSIDE OR INAD-
 VERTENT DISCLOSURE.
   (32)  TO  EXPLORE  AND NEGOTIATE POSSIBLE INTERSTATE COMPACTS ENABLING
 THE GROWTH OF ENHANCED PUBLIC PAYMENT SYSTEMS  ACROSS  MULTIPLE  STATES,
 REGIONS,  AND  TERRITORIES OF THE UNITED STATES. THE CORPORATION, AS THE
 PRINCIPAL ADMINISTRATOR OF THE ENHANCED  PUBLIC  PAYMENT  SYSTEM,  SHALL
 REACH OUT TO AND CONSULT WITH COUNTERPART AGENCIES IN OTHER STATES, WITH
 A  VIEW  TO  ASSISTING WITH THE DEVELOPMENT OF SIMILAR VALUE STORAGE AND
 PAYMENT PLATFORMS IN SUCH STATES AND  WITH  THE  GOAL  OF  THE  POSSIBLE
 INTEROPERABILITY OF SUCH PLATFORMS WITH THE EMPIRE STATE ENHANCED PUBLIC
 PAYMENT SYSTEM.
   (33)  TO  EXPLORE  AND  NEGOTIATE POSSIBLE PILOT PROGRAMS ENABLING THE
 GROWTH AND SPREAD OF AN ENHANCED PUBLIC PAYMENT SYSTEM ACROSS THE BROAD-
 ER UNITED STATES. AS THE PRINCIPAL ADMINISTRATOR OF THE ENHANCED  PUBLIC
 PAYMENT  SYSTEM  ESTABLISHED  PURSUANT  TO  SECTION  FOUR-B OF THE STATE
 FINANCE LAW, THE CORPORATION SHALL BE AUTHORIZED TO  REACH  OUT  TO  AND
 CONSULT  WITH  THE FEDERAL RESERVE BANK OF NEW YORK, THE FEDERAL RESERVE
 BOARD OF THE UNITED STATES, AND THE DEPARTMENT OF TREASURY OF THE UNITED
 STATES, WITH A VIEW TO POSSIBLY ASSISTING SUCH ENTITIES WITH THE  DEVEL-
 OPMENT  OF  A NATIONAL VALUE STORAGE AND PAYMENT PLATFORM SIMILAR TO THE
 ENHANCED PUBLIC PAYMENT SYSTEM.
   § 6. Severability. If any clause,  sentence,  paragraph,  subdivision,
 section  or part of this act shall be adjudged by any court of competent
 jurisdiction to be invalid, such judgment shall not affect,  impair,  or
 invalidate the remainder thereof, but shall be confined in its operation
 to the clause, sentence, paragraph, subdivision, section or part thereof
 directly  involved  in the controversy in which such judgment shall have
 been rendered. It is hereby declared to be the intent of the legislature
 that this act would have been enacted even if  such  invalid  provisions
 had not been included herein.
   §  7.  This  act shall take effect immediately. Effective immediately,
 the addition, amendment and/or repeal of any rule or  regulation  neces-
 sary  for  the  implementation  of  this  act  on its effective date are
 authorized to be made and completed on or before such effective date.