BILL NUMBER:S5140A

TITLE OF BILL:
An act
to amend the tax law, in relation to
establishing the taxpayer refund choice act and
affirming the right of state
residents to receive personal income tax refunds
by paper check
and requiring the department of taxation and finance to
fully describe any debit card or direct deposit program

PURPOSE:
To ensure the right of state residents to continue to receive personal
income tax refunds by paper check in addition to any other options
that may be offered.

SUMMARY OF PROVISIONS:
Adds a new section 3013 to the Tax Law to provide that,
notwithstanding the adoption by the Tax Commissioner of any prepaid
debit card or direct deposit program for payment of personal income
tax refunds, all taxpayers are entitled: (1) to receive their
personal income tax refund by paper check; and (2) to opt out of any
prepaid debit card or direct deposit program.

The Department shall provide taxpayers with a clear written statement
              

setting forth these rights. If the Department implements a program to
pay refunds by prepaid debit card or direct deposit, the income tax
forms shall indicate that the taxpayer has the option of receiving
his or her refund by various methods, including by personal check,
and boxes shall be provided on the income tax forms to allow the
person to select the desired option.

In any written notice regarding prepaid debit cards, the Tax Department
shall describe all features of such program, such as provisions and
fees regarding making withdrawals at ATMs or making purchases at the
point of sale.

JUSTIFICATION:
Every year millions of New Yorkers overpay their state and local taxes
on the wages they receive. These overpaid funds remain the rightful
property of the taxpayers. Taxpayers are entitled to the timely
refund of their overpayment and should be able to receive their
refunds in a manner that is most convenient, understandable and best
suited to their individual financial needs.

Currently, the New York State Department of Taxation and Finance plans
to transition all personal income tax refund payments to a mandatory
direct deposit/prepaid debit card platform.
Although prepaid card programs may appear to be attractive due to
potential cost savings to the agency itself, they include fees and

costs to taxpayers which may be difficult to understand or keep track
of, including ATM usage fees, negative balance fees, bank fees and
other charges.
Additionally, many taxpayers do not have bank accounts or convenient
access to bank branches in their communities. Due to minimum balance
requirements, overdraft fees, and other requirements, many low and
moderate income consumers are unable to maintain bank accounts, and
likely do not have access to direct deposit accounts. Thus, any
program that forces New Yorkers to receive tax refunds in a manner
that is not suited to their individual circumstances will negatively
and disproportionately impact low-and moderate-income citizens and
their communities.

It is the existing policy of the State of New York that its citizens
have the choice to receive their wages in the manner which best suits
their needs. Existing state law requires that private employers, who
seek to utilize prepaid debit "payroll" cards for delivery of
employee wages, must offer their employees the ability to "opt-out"
of such payroll card programs and the right to continue to receive
paper checks. Likewise, these same considerations should also be
extended to taxpayers who are owed personal income tax refunds.

FISCAL IMPLICATIONS:
This legislation should not result in additional
costs, since refunds are already being paid via direct deposit and
personal checks.

EFFECTIVE DATE:
The ninetieth day after it shall have become law.

                                BILL NUMBER:S5140B

TITLE OF BILL:
An act
to amend the tax law, in relation to
establishing the taxpayer refund choice act and
affirming the right of state
residents to receive personal income tax refunds
by paper check
and requiring the department of taxation and finance to
fully describe any debit card or direct deposit program; and
providing for the repeal of such provisions upon expiration thereof

PURPOSE:
To ensure the right of state residents to continue to receive personal
income tax refunds by paper check in addition to any other options
that may be offered.

SUMMARY OF PROVISIONS:
Adds a new section 3013 to the Tax Law to provide that,
notwithstanding the adoption by the Tax Commissioner of any prepaid
debit card or direct deposit program for payment of personal income
tax refunds, all taxpayers are entitled: (1) to receive their
personal income tax refund by paper check; and (2) to opt out of any
prepaid debit card or direct deposit program.

              

The Department shall provide taxpayers with a clear written statement
setting forth these rights. If the Department implements a program to
pay refunds by prepaid debit card or direct deposit, the income tax
forms shall indicate that the taxpayer has the option of receiving
his or her refund by various methods, including by personal check,
and boxes shall be provided on the income tax forms to allow the
person to select the desired option.

In any written notice regarding prepaid debit cards, the Tax
Department shall describe all features of such program, such as
provisions and fees regarding making withdrawals at ATMs or making
purchases at the point of sale.

JUSTIFICATION:
Every year millions of New Yorkers overpay their state and local taxes
on the wages they receive. These overpaid funds remain the rightful
property of the taxpayers. Taxpayers are entitled to the timely
refund of their overpayment and should be able to receive their
refunds in a manner that is most convenient, understandable and best
suited to their individual financial needs.

Currently, the New York State Department of Taxation and Finance plans
to transition all personal income tax refund payments to a mandatory
direct deposit/prepaid debit card platform.
Although prepaid card programs may appear to be attractive due to

potential cost savings to the agency itself, they include fees and
costs to taxpayers which may be difficult to understand or keep track
of, including ATM usage fees, negative balance fees, bank fees and
other charges.
Additionally, many taxpayers do not have bank accounts or convenient
access to bank branches in their communities. Due to minimum balance
requirements, overdraft fees, and other requirements, many low and
moderate income consumers are unable to maintain bank accounts, and
likely do not have access to direct deposit accounts. Thus, any
program that forces New Yorkers to receive tax refunds in a manner
that is not suited to their individual circumstances will negatively
and disproportionately impact low-and moderate-income citizens and
their communities.

It is the existing policy of the State of New York that its citizens
have the choice to receive their wages in the manner which best suits
their needs. Existing state law requires that private employers, who
seek to utilize prepaid debit "payroll" cards for delivery of
employee wages, must offer their employees the ability to "opt-out"
of such payroll card programs and the right to continue to receive
paper checks. Likewise, these same considerations should also be
extended to taxpayers who are owed personal income tax refunds.

FISCAL IMPLICATIONS:
This legislation should not result in additional
costs, since refunds are already being paid via direct deposit and
personal checks.

EFFECTIVE DATE:
The ninetieth day after it shall have become law, and
shall expire and be deemed repealed five years after such effective
date.