S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9537
 
                           I N  A S S E M B L Y
 
                             January 24, 2020
                                ___________
 
 Introduced by M. of A. HEVESI -- read once and referred to the Committee
   on Economic Development
 
 AN ACT to amend the general business law and the tax law, in relation to
   enacting  the  "New York State Transparency in Supply Chains Act", and
   to require businesses within the state to disclose their  preventative
   measures against human trafficking

   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 state transparency in supply chains act".
   § 2. Legislative intent. The legislature hereby finds that human traf-
 ficking  is a crime under state, federal and international law, and that
 these crimes exist in every country, including the  United  States,  and
 the state of New York. As a result of the criminal nature of human traf-
 ficking,  this  crime  is often difficult to uncover and track.  Signif-
 icant legislative efforts have been  made  to  capture  and  punish  the
 perpetrators  of  this  crime  and  also to ensure that victims of human
 trafficking are provided with  the  necessary  rights  and  protections.
 However,  legislative  efforts  to  address  the  market  for  goods and
 products tainted by human trafficking have been lacking, with the market
 being a key impetus for these crimes. Studies have shown that  a  number
 of  goods  from all over the world are believed to be produced by forced
 labor or child  labor  in  violation  of  international  standards,  and
 consumers  and  businesses  are  inadvertently promoting and sanctioning
 these crimes through the purchase of goods and products that  have  been
 tainted  in  the  supply  chain.  Absent  public  available disclosures,
 consumers are at a disadvantage in being able to  distinguish  companies
 on the merits of their efforts to supply products free from the taint of
 human  trafficking.  Consumers  are  at  a disadvantage in being able to
 force the eradication of human trafficking by way  of  their  purchasing
 decisions. The purpose of this law is to ensure that large retailers and
 manufacturers  provide  consumers  with  accurate  information regarding
 their efforts to eradicate human trafficking  from  their  supply  chain
 processes,  to  educate  consumers  on how to purchase goods produced by
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
              

                       [ ] is old law to be omitted.
                                                            LBD11020-01-9

 A. 9537                             2
 
 companies that responsibly manage their supply chains, and, thereby,  to
 improve the lives of victims of human trafficking.
   §  3. The general business law is amended by adding a new section 399-
 mm to read as follows:
   § 399-MM. HUMAN TRAFFICKING SUPPLY CHAIN TRANSPARENCY. 1. AS  USED  IN
 THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
   (A) "DOING BUSINESS IN THIS STATE" SHALL MEAN ACTIVELY ENGAGING IN ANY
 TRANSACTION FOR THE PURPOSE OF FINANCIAL OR PECUNIARY GAIN OR PROFIT;
   (B)  "GROSS RECEIPTS" SHALL MEAN THE GROSS AMOUNTS REALIZED, OTHERWISE
 KNOWN AS THE SUM OF MONEY AND THE FAIR MARKET VALUE OF OTHER PROPERTY OR
 SERVICES RECEIVED, ON THE SALE OR EXCHANGE OF PROPERTY, THE  PERFORMANCE
 OF  SERVICES, OR THE USE OF PROPERTY OR CAPITAL, INCLUDING RENTS, ROYAL-
 TIES, INTEREST, AND DIVIDENDS, IN A TRANSACTION THAT  PRODUCES  BUSINESS
 INCOME,  IN  WHICH  THE INCOME, GAIN, OR LOSS IS RECOGNIZED, OR WOULD BE
 RECOGNIZED IF THE TRANSACTION WERE  IN  THE  UNITED  STATES,  UNDER  THE
 INTERNAL  REVENUE  CODE,  AS  APPLICABLE  FOR  PURPOSES OF THIS SECTION.
 AMOUNTS REALIZED ON THE SALE  OR  EXCHANGE  OF  PROPERTY  SHALL  NOT  BE
 REDUCED  BY  THE COST OF GOODS SOLD OR THE BASIS OF PROPERTY SOLD. GROSS
 RECEIPTS, EVEN IF BUSINESS  INCOME,  SHALL  NOT  INCLUDE  THE  FOLLOWING
 ITEMS:
   (1)  REPAYMENT,  MATURITY,  OR  REDEMPTION OF THE PRINCIPAL OF A LOAN,
 BOND, MUTUAL FUND, CERTIFICATE OF DEPOSIT, OR SIMILAR MARKETABLE INSTRU-
 MENT;
   (2) THE PRINCIPAL AMOUNT RECEIVED  UNDER  A  REPURCHASE  AGREEMENT  OR
 OTHER TRANSACTION PROPERLY CHARACTERIZED AS A LOAN;
   (3) PROCEEDS FROM ISSUANCE OF THE TAXPAYER'S OWN STOCK OR FROM SALE OF
 TREASURY STOCK;
   (4) DAMAGES AND OTHER AMOUNTS RECEIVED AS THE RESULT OF LITIGATION;
   (5) PROPERTY ACQUIRED BY AN AGENT ON BEHALF OF ANOTHER;
   (6) TAX REFUNDS AND OTHER TAX BENEFIT RECOVERIES;
   (7) PENSION REVERSIONS;
   (8)  CONTRIBUTIONS TO CAPITAL (EXCEPT FOR SALES OF SECURITIES BY SECU-
 RITIES DEALERS);
   (9) INCOME FROM DISCHARGE OF INDEBTEDNESS;
   (10) AMOUNTS REALIZED FROM EXCHANGES OF INVENTORY THAT ARE NOT  RECOG-
 NIZED UNDER THE INTERNAL REVENUE CODE;
   (11)  AMOUNTS  RECEIVED FROM TRANSACTIONS IN INTANGIBLE ASSETS HELD IN
 CONNECTION WITH A TREASURY FUNCTION OF THE TAXPAYER'S  UNITARY  BUSINESS
 AND  THE GROSS RECEIPTS AND OVERALL NET GAINS FROM THE MATURITY, REDEMP-
 TION, SALE, EXCHANGE, OR OTHER DISPOSITION OF THOSE  INTANGIBLE  ASSETS;
 AND
   (12)  AMOUNTS  RECEIVED FROM HEDGING TRANSACTIONS INVOLVING INTANGIBLE
 ASSETS. A "HEDGING TRANSACTION"  MEANS  A  TRANSACTION  RELATED  TO  THE
 TAXPAYER'S  TRADING  FUNCTION INVOLVING FUTURES AND OPTIONS TRANSACTIONS
 FOR THE PURPOSE OF HEDGING PRICE RISK OF  THE  PRODUCTS  OR  COMMODITIES
 CONSUMED, PRODUCED, OR SOLD BY THE TAXPAYER;
   (C)  "MANUFACTURER"  SHALL MEAN A BUSINESS ENTITY WHICH LISTS MANUFAC-
 TURING AS ITS PRINCIPAL BUSINESS ACTIVITY IN THE STATE OF NEW  YORK,  AS
 REPORTED ON THE ENTITY'S STATE BUSINESS TAX RETURN;
   (D)  "RETAIL  SELLER"  SHALL MEAN A BUSINESS ENTITY WHICH LISTS RETAIL
 TRADE AS ITS PRINCIPAL BUSINESS ACTIVITY IN THE STATE OF  NEW  YORK,  AS
 REPORTED ON THE ENTITY'S STATE BUSINESS TAX RETURN.
   2.  EVERY  RETAIL  SELLER AND MANUFACTURER DOING BUSINESS IN THE STATE
 AND HAVING ANNUAL WORLDWIDE  GROSS  RECEIPTS  THAT  EXCEED  ONE  HUNDRED
 MILLION  DOLLARS  SHALL  DISCLOSE,  AS SET FORTH IN SUBDIVISION THREE OF

 A. 9537                             3
 
 THIS SECTION, ITS EFFORTS TO ERADICATE HUMAN TRAFFICKING FROM ITS DIRECT
 SUPPLY CHAIN FOR TANGIBLE GOODS OFFERED FOR SALE.
   3.  THE  DISCLOSURE DESCRIBED IN SUBDIVISION TWO OF THIS SECTION SHALL
 BE POSTED ON THE RETAIL SELLER'S OR MANUFACTURER'S INTERNET WEBSITE WITH
 CLEAR AND EASILY UNDERSTOOD LINK TO THE REQUIRED INFORMATION  PLACED  ON
 THE  BUSINESS'  HOMEPAGE. IN THE EVENT THE RETAIL SELLER OR MANUFACTURER
 DOES NOT HAVE AN INTERNET WEBSITE, CONSUMERS SHALL BE PROVIDED THE WRIT-
 TEN DISCLOSURE WITHIN THIRTY DAYS OF RECEIVING A WRITTEN REQUEST FOR THE
 DISCLOSURE FROM A CONSUMER.
   4. THE DISCLOSURE DESCRIBED IN SUBDIVISION TWO OF THIS SECTION  SHALL,
 AT A MINIMUM, DISCLOSE TO WHAT EXTENT, IF ANY, THAT THE RETAIL SELLER OR
 MANUFACTURER DOES EACH OF THE FOLLOWING:
   (A)  ENGAGES  IN VERIFICATION OF PRODUCT SUPPLY CHAINS TO EVALUATE AND
 ADDRESS RISKS OF HUMAN TRAFFICKING. SUCH DISCLOSURE SHALL SPECIFY IF THE
 VERIFICATION WAS NOT CONDUCTED BY A THIRD PARTY;
   (B) CONDUCTS AUDITS OF SUPPLIERS TO EVALUATE SUPPLIER COMPLIANCE  WITH
 COMPANY  STANDARDS  FOR HUMAN TRAFFICKING IN SUPPLY CHAINS. SUCH DISCLO-
 SURE SHALL SPECIFY IF THE VERIFICATION WAS  NOT  AN  INDEPENDENT,  UNAN-
 NOUNCED AUDIT;
   (C)  REQUIRES  DIRECT SUPPLIERS TO CERTIFY THAT MATERIALS INCORPORATED
 INTO THE PRODUCT COMPLY WITH THE LAWS REGARDING HUMAN TRAFFICKING OF THE
 COUNTRY OR COUNTRIES IN WHICH THEY ARE DOING BUSINESS;
   (D) MAINTAINS INTERNAL ACCOUNTABILITY  STANDARDS  AND  PROCEDURES  FOR
 EMPLOYEES  OR  CONTRACTORS  FAILING  TO MEET COMPANY STANDARDS REGARDING
 HUMAN TRAFFICKING;
   (E) PROVIDES COMPANY EMPLOYEES AND MANAGEMENT, WHO HAVE DIRECT RESPON-
 SIBILITY FOR SUPPLY CHAIN MANAGEMENT,  TRAINING  ON  HUMAN  TRAFFICKING,
 PARTICULARLY WITH RESPECT TO MITIGATING RISKS WITHIN THE SUPPLY CHAIN OF
 PRODUCTS; AND
   5.  THE  EXCLUSIVE  REMEDY FOR A VIOLATION OF THIS SECTION SHALL BE AN
 ACTION BROUGHT BY THE ATTORNEY GENERAL FOR INJUNCTIVE RELIEF. NOTHING IN
 THIS SECTION SHALL LIMIT REMEDIES AVAILABLE FOR A VIOLATION OF ANY OTHER
 STATE OF FEDERAL LAW.
   § 4. The tax law is amended by adding a new section  220  to  read  as
 follows:
   §  220.  HUMAN  TRAFFICKING  REPORTS REQUIRED BY BUSINESS ENTITIES. 1.
 NOTWITHSTANDING ANY PROVISION OF LAW, THE COMMISSIONER SHALL MAKE AVAIL-
 ABLE TO THE ATTORNEY GENERAL A LIST OF RETAIL SELLERS AND  MANUFACTURERS
 REQUIRED  TO DISCLOSE EFFORTS TO ERADICATE HUMAN TRAFFICKING PURSUANT TO
 SECTION THREE HUNDRED NINETY-NINE-MM OF THE GENERAL  BUSINESS  LAW.  THE
 LIST  SHALL  BE  BASED  ON  THE  TAX RETURN FILED BY THE BUSINESS IN THE
 PREVIOUS TAX YEAR.
   2. EACH LIST REQUIRED BY THIS SECTION SHALL BE SUBMITTED  ANNUALLY  TO
 THE  ATTORNEY  GENERAL  BY  THE THIRTIETH OF NOVEMBER. THE LIST SHALL BE
 DERIVED ANNUALLY FROM ORIGINAL TAX RETURNS RECEIVED BY THE STATE  ON  OR
 BEFORE THE THIRTY-FIRST OF DECEMBER.
   3. EACH ANNUAL LIST REQUIRED BY THIS SECTION SHALL INCLUDE THE FOLLOW-
 ING:
   (A) THE ENTITY'S NAME; AND
   (B) THE STATE TAX IDENTIFICATION NUMBER.
   § 5. This act shall take effect immediately.