Yes, New York State is one of two US states in which e-bikes are illegal, the other being Illinois. Whereas Illinois have always rigidly enforced that, NYC has been so lax that one of the country's largest e-bike dealers, Nycewheels, has been established there for years. We have NYC regular city commuter members in this forum, notably RobNYC.
It's good to learn that they are changing the law so as to permit them. The fact that the NYC Senate is amending the 1000 watt proposal probably means they'll end up with the Federal law limits, 750 watts and 20 mph.
Being isolated then could mean Illinois will have to shift it's rigid opposition to e-bikes.