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 within 2 years.
NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A6737
SPONSOR: Galef TITLE OF BILL: An act to establish a commission to study the feasi-
bility 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 SPECIFIC 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 arc
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.
JUSTIFICATION: This legislation is modeled span 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
is the exception; it is debt-free and on strong fiscal footing. 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 regulations. The Bank was not established to compete
with commercial or community banks so it partners with 100 other finan-
cial institutions to help the North Dakota citizenry. The Bank is an
economic development bank, helping large, small and medium sized busi-
nesses 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 panics in states such as Oregon,
Illinois, California, Florida, Idaho, Vermont, and Washington have
proposed the establishment of state-owned banks citing numerous advan-
tages. For example, state banks are depositories of public funds operat-
ing more conservatively 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: This is new legislation.
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.
STATE OF NEW YORK
________________________________________________________________________
6737
2011-2012 Regular Sessions
IN ASSEMBLY
March 28, 2011
___________
Introduced by M. of A. GALEF -- read once and referred 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:
1 Section 1. A temporary state commission, to be known as the New York
2 state commission on establishing a bank owned by New York state, herein-
3 after referred to as the commission, is hereby established to study the
4 feasibility of establishing a bank owned by the state of New York or by
5 a public authority constituted by the state of New York.
6 § 2. a. The commission shall consist of fifteen members, to be
7 appointed as follows:
8 (i) six members shall be appointed by the governor, one of whom shall
9 be a representative of the New York state banking department, one shall
10 be a representative from the New York state department of taxation and
11 finance, the remaining four governor's appointees shall not be employees
12 of the executive branch and at least one member shall represent the
13 banking and financial industries of the state including, but not limited
14 to, the New York Bankers Association, at least one member shall repre-
15 sent community banking, and no more than one member may be a represen-
16 tative of any financial services firm located within the state, includ-
17 ing, but not limited to, the New York state small business development
18 center;
19 (ii) one member shall be the New York state comptroller or the comp-
20 troller's designee;
21 (iii) three members shall be appointed by the temporary president of
22 the senate, one of whom shall be a member of the senate;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD09739-01-1
A. 6737 2
1 (iv) one member shall be appointed by the minority leader of the
2 senate;
3 (v) three members shall be appointed by the speaker of the assembly,
4 one of whom shall be a member of the assembly; and
5 (vi) one member shall be appointed by the minority leader of the
6 assembly.
7 b. The governor shall designate one of his or her appointees as the
8 chair of the commission.
9 c. The members of the commission shall be appointed no later than
10 ninety days after the effective date of this act.
11 § 3. The commission shall:
12 (i) examine the technical, legal and financial feasibility of estab-
13 lishing a state-owned bank, including but not limited to a state-owned
14 bank for infrastructure investment purposes;
15 (ii) seek participation in its deliberations from the president of the
16 Federal Reserve Bank of New York or the president's designee;
17 (iii) evaluate the experiences of other states with state-owned banks,
18 identifying the financial performance of such banks and evaluating the
19 lending practices of such banks to show whether such banks successfully
20 fill lending gaps not filled by the private sector;
21 (iv) evaluate the manner in which public funds are invested or depos-
22 ited by the state and its political subdivisions including funds managed
23 by the state comptroller including state and local pension funds;
24 (v) examine the infrastructure investment activities conducted by
25 other states with state-owned banks;
26 (vi) examine the lending practices, including lending to support
27 infrastructure, of the existing public agencies in the commonwealth that
28 perform lending services. Any other public authority in the state that
29 lends money shall cooperate fully with the commission and shall supply
30 information reasonably required by the commission to carry out its
31 charge;
32 (vii) investigate how a state bank can promote the agriculture, educa-
33 tion, community development, economic development, commerce and industry
34 within the state;
35 (viii) hold at least three public hearings in distinct geographic
36 regions of the state; and
37 (ix) publish its findings and recommendations, together with drafts of
38 legislation, if any, necessary to carry those recommendations into
39 effect, in a written report not later than one year after the effective
40 date of this act. The report shall be published on the official website
41 of the state, and shall be contemporaneously filed with the senate
42 finance committee and the assembly ways and means committee.
43 § 4. This act shall take effect immediately and shall expire and be
44 deemed repealed one year after such effective date.
