senate Bill S7416

Establishes a commission to study the feasibility of establishing a bank owned by the state of New York and report thereon within 2 years

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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  • 14 / May / 2014
    • REFERRED TO BANKS

Summary

Establishes a commission to study the feasibility of establishing a bank owned by the state of New York or an authority constituted by the state of New York and report thereon.

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Bill Details

See Assembly Version of this Bill:
A1696
Versions:
S7416
Legislative Cycle:
2013-2014
Current Committee:
Senate Banks
Law Section:
Banks
Versions Introduced in 2011-2012 Legislative Cycle:
A6737, A6737

Sponsor Memo

BILL NUMBER:S7416

TITLE OF BILL: An act to establish a commission to study the feasibil-
ity of establishing a bank owned by the state of New York or by a public
authority constituted by the state of New York; and providing for the
repeal of such provisions upon expiration thereof

PURPOSE OR GENERAL IDEA OF BILL: The purpose of this bill is to estab-
lish a commission to study the feasibility of establishing a bank owned
by the state of New York and report thereon within 2 years.

SUMMARY OF PROVISIONS: Section 1. Creates the New York State Commission
on Establishing a Bank Owned by New York State, known as the Commission.
This study will analyze the feasibility of establishing, a bank owned by
the State of New York or by a public authority constituted by the State
of New York.

Section 2.

a. The Commission should include 15 members:

(i-vi) Six are appointed by the Governor of which, one shall be a repre-
sentative of the New York State Banking Department, one shall represent
the New York State Department of Taxation and Finance and the remaining
four shall be employees of the Executive Branch and at least one must
represent the banking and financial industries, and at least one shall
represent community banking, and no more than one member may be a repre-
sentative of any financial service firm located within the State; One
shall the Comptroller, or his designee; Three shall be appointed by the
Temporary President of the Senate, one of which must be a Senator; One
shall be appointed by the Minority Leader of the Senate; Three shall be
appointed by the Speaker of the Assembly, one of which must be a member
of the Assembly; and one shall be appointed by the Minority Leader of
the Assembly.

b. The Governor shall designate one of his/her appointees to chair the
Commission.

c. The members of the Commission shall be appointed no later than ninety
days after the effective date.

Section 3. This Commission shall:

(i-ix) examine the technical, legal and financial feasibility of estab-
lishing a state-owned bank, including but not limited to the purpose of
infrastructure investments; seek participation in its deliberations from
the President of the Federal Reserve Bank of New York or the President's
designee; evaluate the experiences of other states with state-owned
banks, identifying their performances and evaluating their lending prac-
tices to determine their success in filling lending caps not filled by
the private sector; evaluate the manner in which public funds are
invested or deposited by the State and its political subdivisions

including funds managed by the State Comptroller including state and
local pension funds; examine the infrastructure investment activities
conducted by other states with state-owned banks; examine the lending
practices, including lending to support infrastructure, of the existing
public agencies in the commonwealth that perform lending service. Any
other public authority in the State that lends money shall cooperate
fully with the Commission and shall supply information reasonably
required by the Commission to carry out its charge; investigate how a
State Bank may promote the agriculture, education, community develop-
ment, economic development, commerce and industry within the State; hold
at least three public hearings; and publish its findings and recommenda-
tions in a written report no later than one year after the effective
date of this act.

Section 4. States the effective date of the law.

JUSTIFICATION: This legislation is modeled on 2010 legislation in
Connecticut that created a Task Force to examine the technical, legal,
and financial feasibility of establishing a state-owned bank for infras-
tructure purposes. The interest in exploring the feasibility of state-
owned banks has grown because of the recent national fiscal crisis
including the bank bail-outs and ongoing recession, all of which has had
a detrimental impact on every state, particularly New York.

North Dakota, escaped much of the financial crisis. Many attribute North
Dakota's sound economy to its state-owned bank. The Bank of North Dakota
(Bank) was created in 1919 with the mission of promoting agriculture,
commerce and industry in North Dakota. The State of North Dakota places
all public revenues into the Bank, which are governed by strict regu-
lations. The Bank was not established to compete with commercial or
community banks so it partners with 100 other financial institutions to
help the North Dakota citizenry. The Bank is an economic development
bank, helping large, small and medium sized businesses within the state,
It also provides student loans and special assistance to start-ups. The
Bank has emerged as a model for other states because it did not engage
in the risky financial strategies that contributed to the catastrophic
bank failures throughout the country. Many candidates for public office,
from both political parties in states such as Oregon, Illinois, Califor-
nia, Florida, Idaho, Vermont, and Washington have proposed the estab-
lishment of state-owned banks citing numerous advantages. For example,
state banks are depositories of public funds operating more conserva-
tively than for-profit banks, eschewing the riskier moneymaking schemes,
State-owned banks have a primary mission to develop the state and local
economy, investing in infrastructure and providing loans to businesses,
not to generate profits for shareholders.

This legislation creates a Commission with a broad mandate. It will
examine all aspects of a state-owned bank, including how it can promote
the agriculture, education, economic development, commerce and industry
in New York State.

PRIOR LEGISLATIVE HISTORY: A6737 of 2011/2012.

FISCAL IMPLICATIONS: Unknown at this time.

EFFECTIVE DATE: This act shall take effect immediately and shall expire
and be deemed repealed one year after such effective date.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  7416

                            I N  S E N A T E

                              May 14, 2014
                               ___________

Introduced  by  Sen. SANDERS -- read twice and ordered printed, and when
  printed to be committed to the Committee on Banks

AN ACT to establish a commission to study the feasibility of  establish-
  ing  a  bank  owned  by the state of New York or by a public authority
  constituted by the state of New York; and providing for the repeal  of
  such provisions upon expiration thereof

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. A temporary state commission, to be known as the  New  York
state commission on establishing a bank owned by New York state, herein-
after  referred to as the commission, is hereby established to study the
feasibility of establishing a bank owned by the state of New York or  by
a public authority constituted by the state of New York.
  S  2.  a.  The  commission  shall  consist  of  fifteen members, to be
appointed as follows:
  (i) six members shall be appointed by the governor, one of whom  shall
be  a representative of the New York state banking department, one shall
be a representative from the New York state department of  taxation  and
finance, the remaining four governor's appointees shall not be employees
of  the  executive  branch  and  at least one member shall represent the
banking and financial industries of the state including, but not limited
to, the New York Bankers Association, at least one member  shall  repre-
sent  community  banking, and no more than one member may be a represen-
tative of any financial services firm located within the state,  includ-
ing,  but  not limited to, the New York state small business development
center;
  (ii) one member shall be the New York state comptroller or  the  comp-
troller's designee;
  (iii)  three  members shall be appointed by the temporary president of
the senate, one of whom shall be a member of the senate;
  (iv) one member shall be appointed  by  the  minority  leader  of  the
senate;
  (v)  three  members shall be appointed by the speaker of the assembly,
one of whom shall be a member of the assembly; and

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD04857-01-3

S. 7416                             2

  (vi) one member shall be appointed  by  the  minority  leader  of  the
assembly.
  b.  The  governor  shall designate one of his or her appointees as the
chair of the commission.
  c. The members of the commission shall  be  appointed  no  later  than
ninety days after the effective date of this act.
  S 3. The commission shall:
  (i)  examine  the technical, legal and financial feasibility of estab-
lishing a state-owned bank, including but not limited to  a  state-owned
bank for infrastructure investment purposes;
  (ii) seek participation in its deliberations from the president of the
Federal Reserve Bank of New York or the president's designee;
  (iii) evaluate the experiences of other states with state-owned banks,
identifying  the  financial performance of such banks and evaluating the
lending practices of such banks to show whether such banks  successfully
fill lending gaps not filled by the private sector;
  (iv)  evaluate the manner in which public funds are invested or depos-
ited by the state and its political subdivisions including funds managed
by the state comptroller including state and local pension funds;
  (v) examine the  infrastructure  investment  activities  conducted  by
other states with state-owned banks;
  (vi)  examine  the  lending  practices,  including  lending to support
infrastructure, of the existing public agencies in the commonwealth that
perform lending services. Any other public authority in the  state  that
lends  money  shall cooperate fully with the commission and shall supply
information reasonably required by  the  commission  to  carry  out  its
charge;
  (vii) investigate how a state bank can promote the agriculture, educa-
tion, community development, economic development, commerce and industry
within the state;
  (viii)  hold  at  least  three  public hearings in distinct geographic
regions of the state; and
  (ix) publish its findings and recommendations, together with drafts of
legislation, if any,  necessary  to  carry  those  recommendations  into
effect,  in a written report not later than one year after the effective
date of this act. The report shall be published on the official  website
of  the  state,  and  shall  be  contemporaneously filed with the senate
finance committee and the assembly ways and means committee.
  S 4. This act shall take effect immediately and shall  expire  and  be
deemed repealed one year after such effective date.

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