S3753A-2011 - NY Senate Open Legislation - Makes permanent the provisions relating to the Gramm-Leach-Bliley act

Makes permanent the provisions relating to the Gramm-Leach-Bliley act.

Sponsor: GRIFFO / Co-sponsor(s): FARLEY / Committee: BANKS
Law Section: Tax Law / Law: Amd SS1452 & 1462, Tax L; amd SS11-640 & 11-646, NYC Ad Cd

S3753A-2011 Actions

Feb 14, 2012: PRINT NUMBER 3753B
Feb 14, 2012: AMEND (T) AND RECOMMIT TO BANKS
Jan 4, 2012: REFERRED TO BANKS
Jun 24, 2011: COMMITTED TO RULES
Jun 1, 2011: ADVANCED TO THIRD READING
May 25, 2011: 2ND REPORT CAL.
May 24, 2011: 1ST REPORT CAL.854
Apr 25, 2011: PRINT NUMBER 3753A
Apr 25, 2011: AMEND AND RECOMMIT TO FINANCE
Mar 9, 2011: REPORTED AND COMMITTED TO FINANCE
Mar 3, 2011: REFERRED TO BANKS

S3753A-2011 Meetings

Finance: May 24, 2011

S3753A-2011 Calendars

Floor Calendar: May 25, 2011 , Floor Calendar: Jun 1, 2011 , Floor Calendar: Jun 2, 2011 , Floor Calendar: Jun 6, 2011 , Floor Calendar: Jun 7, 2011 , Floor Calendar: Jun 13, 2011 , Floor Calendar: Jun 14, 2011 , Floor Calendar: Jun 15, 2011 , Floor Calendar: Jun 16, 2011 , Floor Calendar: Jun 17, 2011 , Floor Calendar: Jun 21, 2011 , Floor Calendar: Jun 22, 2011 , Floor Calendar: Jun 23, 2011 , Floor Calendar: Jun 24, 2011

S3753A-2011 Votes

VOTE: COMMITTEE VOTE: - Banks - Mar 9, 2011

Ayes (16): Griffo, Farley, Bonacic, DeFrancisco, Gallivan, Golden, Johnson, O'Mara, Marcellino, Ranzenhofer, Smith, Breslin, Rivera, Carlucci, Savino, Valesky
Ayes W/R (3): Diaz, Kruger, Serrano

VOTE: COMMITTEE VOTE: - Finance - May 24, 2011

Ayes (24): DeFrancisco, Johnson, Alesi, Bonacic, Farley, Flanagan, Fuschillo, Golden, Griffo, Hannon, Lanza, Larkin, LaValle, Little, Marcellino, Nozzolio, Robach, Saland, Seward, Young, Diaz, Dilan, Gianaris, Stavisky
Ayes W/R (3): Duane, Peralta, Perkins
Nays (8): Krueger, Breslin, Kruger, Montgomery, Oppenheimer, Parker, Rivera, Stewart-Cousins

S3753A-2011 Memo

BILL NUMBER:S3753A

TITLE OF BILL:
An act
to amend the tax law and the
administrative code of the city of New York, in relation to making
transitional provisions relating to the federal Gramm-Leach-Bliley act
permanent

PURPOSE:
This bill would make permanent the provisions in the State and City
bank taxes relating to enactment and implementation of the federal
Gramm- Leach-Bliley Act.

SUMMARY OF PROVISIONS:
This bill would amend section 1452 of the tax law by deleting the
sunset provisions which were contained in that law's effective date
with respect to the transitional provisions relating to the federal
Gramm- Leach-Bliley Act. The law currently provides that the
provisions shall not apply to taxable years beginning on or after
January 1, 2011.
This bill would remove all reference with respect to such dates in
order to make such provisions permanent.

This bill would also amend section 11-640 of the administrative code
of the City of New York by deleting the sunset provisions which were
contained in that law's effective date.
The law currently provides that the provisions shall not apply to
taxable years beginning on or after January 1, 2011. This bill would
also remove all reference with respect to such dates in order to make
such provisions permanent.

JUSTIFICATION:
Transitional provisions were added to the New York Tax Law and the New
York City Administrative Code in order to comply with the federal
Gramm-Leach-Bliley Act beginning in 2000. These provisions removed
prohibitions against the affiliation of banks, securities firms and
insurance companies. Removal of these prohibitions allowed banks and
securities firms to make certain their taxable status as they
exercised the expanded powers granted to them at the federal level.
The provisions were set to expire on or after January 1. 2011. Making
permanent the provisions relating to the Gramm-Leach-Bliley Act will
provide filing and accounting continuity and efficiency for bank and
insurance taxpayers, while allowing for more comprehensive tax reform
in the future.

LEGISLATIVE HISTORY:
New.

FISCAL IMPLICATIONS:

Enactment of this bill would preserves current revenue, and such
strategy is contained in the 2011-2012 proposed executive budget.

EFFECTIVE DATE:
Immediate.

S3753A-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 3753--A
 2011-2012 Regular Sessions
 I N  SENATE
 March 3, 2011
 
 Introduced  by  Sens.  GRIFFO, FARLEY -- read twice and ordered printed,
 and when printed to be committed to the Committee on Banks -- reported
 favorably from said  committee  and  committed  to  the  Committee  on
 Finance  --  committee  discharged, bill amended, ordered reprinted as
 amended and recommitted to said committee
 

AN ACT to amend the tax law and the administrative code of the  city  of
 New  York,  in  relation to making transitional provisions relating to
 the federal Gramm-Leach-Bliley act permanent
 THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM
 BLY, DO ENACT AS FOLLOWS:

 

Section  1.    Paragraphs 1 and 2 of subsection (m) of section 1452 of
 the tax law, as amended by section 4 of part J of chapter 61 of the laws
 of 2011, are amended to read as follows:

 (1) Notwithstanding anything to the contrary contained in this section
 other than subsection (n) of this section, a corporation  [that  was  in
 existence  before January first, two thousand eleven and was] subject to
 tax under article nine-A of this chapter  [for  its  last  taxable  year
 beginning  before January first, two thousand eleven], shall continue to
 be taxable under such article [for all taxable  years  beginning  on  or
 after  January  first, two thousand eleven and before January first, two
 thousand thirteen].  The preceding sentence shall not apply to any taxa
 ble  year  during  which  such  corporation  is  a  banking  corporation
 described  in  paragraphs  one  through  eight of subsection (a) of this
 section. Notwithstanding anything to  the  contrary  contained  in  this
 section other than subsection (n) of this section, a banking corporation
 [or  corporation] that [was in existence before January first, two thou-
 sand eleven and] was subject to tax under this  article  [for  its  last
 taxable year beginning before January first, two thousand eleven], shall
 continue  to be taxable under this article [for all taxable years begin-
 ning on or after January first, two thousand eleven and  before  January
 first,  two  thousand thirteen or in which the corporation satisfies the
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD09960-04-1
        S. 3753--A                          2
 requirements for a corporation to elect to be taxable under  this  arti-
 cle]. Provided further, that nothing in this subsection shall prohibit a
 corporation  that  elected pursuant to subsection (d) of this section to
 be  taxable  under  article  nine-A  of  this chapter from revoking that
 election in accordance with such subsection (d).
 For purposes of this paragraph, a corporation shall be  considered  to
 be  subject  to  tax  under article nine-A of this chapter for a taxable
 year if such corporation was not a taxpayer but was properly included in
 a combined report filed pursuant to section two hundred eleven  of  this
 chapter  for  such taxable year and a corporation shall be considered to
 be subject to tax under this article for a taxable year if  such  corpo
 ration was not a taxpayer but was properly included in a combined return
 filed  pursuant  to  subsection  (f)  or (g) of section fourteen hundred
 sixty-two of this article for such taxable year. A corporation [that was
 in existence before January first, two thousand eleven but first becomes
 a taxpayer in a taxable year beginning on or after  January  first,  two
 thousand  eleven and before January first, two thousand thirteen,] shall
 be considered for purposes of this paragraph to have been subject to tax
 under article nine-A of this chapter for its last taxable  year  [begin-
 ning  before  January  first,  two  thousand eleven] if such corporation
 would have been subject to tax under such article for such taxable  year
 if  it had been a taxpayer during such taxable year. A corporation [that
 was in existence before January first, two  thousand  eleven  but  first
 becomes  a  taxpayer  in  a  taxable  year beginning on or after January
 first, two thousand eleven and before January first, two thousand  thir-
 teen,] shall be considered, for purposes of this paragraph, to have been
 subject  to  tax under this article [for its last taxable year beginning
 before January first, two thousand eleven]  if  such  corporation  would
 have  been subject to tax under this article for such taxable year if it
 had been a taxpayer during such taxable year.
 (2) Notwithstanding anything to the contrary contained in this section
 other than subsection (n) of this section, a corporation [formed  on  or
 after  January  first, two thousand eleven and before January first, two
 thousand thirteen] may elect to be subject to tax under this article  or
 under  article nine-A of this chapter [for its first taxable year begin-
 ning on or after January first, two thousand eleven and  before  January
 first,  two thousand thirteen in which] IF either (i) sixty-five percent
 or more of its voting stock is owned or controlled,  directly  or  indi
 rectly  by  a  financial holding company, provided the corporation whose
 voting stock is so owned or controlled is principally engaged in  activ
 ities  that  are  described in section 4(k)(4) or 4(k)(5) of the federal
 bank holding company act of nineteen hundred fifty-six, as  amended  and
 the  regulations  promulgated pursuant to the authority of such section,
 or (ii) it is a financial subsidiary. An election under  this  paragraph
 may  not  be  made  by a corporation described in paragraphs one through
 eight of subsection (a) of this section or in  subsection  (e)  of  this
 section.   In addition, an election under this paragraph may not be made
 by a corporation that is a party to  a  reorganization,  as  defined  in
 subsection  (a)  of section 368 of the internal revenue code of 1986, as
 amended, of a corporation described in paragraph one of this  subsection
 if   both   corporations  were  sixty-five  percent  or  more  owned  or
 controlled, directly or indirectly, by the same interests at the time of
 the reorganization.
 An election under this paragraph must be made by the  taxpayer  on  or
 before  the  due  date  for filing its return (determined with regard to
 extensions of time for filing) for  the  applicable  taxable  year.  The
        S. 3753--A                          3
 election  to be taxed under article nine-A of this chapter shall be made
 by the taxpayer by filing the report required pursuant  to  section  two
 hundred  eleven  of this chapter and the election to be taxed under this
 article  shall  be  made  by  the taxpayer by filing the return required
 pursuant to section fourteen hundred  sixty-two  of  this  article.  Any
 election  made pursuant to this paragraph shall be irrevocable and shall
 apply to each subsequent taxable year [beginning  on  or  after  January
 first,  two thousand eleven and before January first, two thousand thir-
 teen], provided that the stock  ownership  and  activities  requirements
 described  in  subparagraph (i) of this paragraph are met or such corpo
 ration described in subparagraph (ii) of this paragraph continues  as  a
 financial subsidiary.
 

S  2.  Paragraphs  1 and 2 of subdivision (l) of section 11-640 of the
 administrative code of the city of New York, as amended by section 5  of
 part  J  of  chapter  61  of  the  laws  of 2011, are amended to read as
 follows:

 (1) Notwithstanding anything to the contrary contained in this section
 other than subdivision (m) of this section, a corporation [that  was  in
 existence  before January first, two thousand eleven and was] subject to
 tax under subchapter two of this chapter  [for  its  last  taxable  year
 beginning  before January first, two thousand eleven,] shall continue to
 be taxable under such subchapter for all taxable years [beginning on  or
 after  January  first, two thousand eleven and before January first, two
 thousand thirteen].  The preceding sentence shall not apply to any taxa
 ble  year  during  which  such  corporation  is  a  banking  corporation
 described  in  paragraphs  one  through eight of subdivision (a) of this
 section.  Notwithstanding anything to the  contrary  contained  in  this
 section  other  than  subdivision  (m) of this section, a banking corpo
 ration [or corporation that was in existence before January  first,  two
 thousand  eleven  and  was  subject to tax under this subchapter for its
 last taxable year beginning before January first, two thousand  eleven,]
 shall continue to be taxable under this subchapter for all taxable years
 [beginning  on  or  after  January first, two thousand eleven and before
 January first, two thousand thirteen or] in which the corporation satis
 fies the requirements for a corporation to elect  to  be  taxable  under
 this  subchapter.  Provided  further,  that  nothing in this subdivision
 shall prohibit a corporation that elected pursuant to subdivision (d) of
 this section to be taxable under subchapter two  of  this  chapter  from
 revoking  that  election  in  accordance  with  subdivision  (d) of this
 section. For purposes of this paragraph, a corporation shall be  consid
 ered  to  be  subject  to tax under subchapter two of this chapter for a
 taxable year if such corporation was not a  taxpayer  but  was  properly
 included  in  a  combined  report  filed pursuant to subdivision four of
 section 11-605 of this chapter for such taxable year and  a  corporation
 shall  be  considered  to  be subject to tax under this subchapter for a
 taxable year if such corporation was not a  taxpayer  but  was  properly
 included  in  a combined report filed pursuant to subdivision (f) or (g)
 of section 11-646 of this part for  such  taxable  year.  A  corporation
 [that  was  in  existence  before January first, two thousand eleven but
 first becomes a taxpayer in a taxable year beginning on or after January
 first, two thousand eleven and before January first, two thousand  thir-
 teen,]  shall  be considered for purposes of this paragraph to have been
 subject to tax under subchapter two of this chapter for its last taxable
 year [beginning before January  first,  two  thousand  eleven]  if  such
 corporation  would  have  been  subject to tax under such subchapter for
 such taxable year if it had been a taxpayer during such taxable year.  A
        S. 3753--A                          4
 corporation  [that  was  in existence before January first, two thousand
 eleven but first becomes a taxpayer in a taxable year  beginning  on  or
 after  January  first, two thousand eleven and before January first, two
 thousand  thirteen,]  shall be considered for purposes of this paragraph
 to have been subject to tax under this subchapter for its  last  taxable
 year  [beginning  before  January  first,  two  thousand eleven] if such
 corporation would have been subject to tax  under  this  subchapter  for
 such taxable year if it had been a taxpayer during such taxable year.
 (2) Notwithstanding anything to the contrary contained in this section
 other  than subdivision (m) of this section, a corporation [formed on or
 after January first, two thousand eleven and before January  first,  two
 thousand  thirteen] may elect to be subject to tax under this subchapter
 or under subchapter two of this  chapter  for  its  first  taxable  year
 [beginning  on  or  after  January first, two thousand eleven and before
 January first, two thousand thirteen in which] IF either (i)  sixty-five
 percent  or more of its voting stock is owned or controlled, directly or
 indirectly by a financial  holding  company,  provided  the  corporation
 whose  voting  stock is so owned or controlled is principally engaged in
 activities that are described in  section  4(k)(4)  or  4(k)(5)  of  the
 federal  bank  holding  company  act  of  nineteen hundred fifty-six, as
 amended and the regulations promulgated pursuant  to  the  authority  of
 such  section  or  (ii)  it is a financial subsidiary. An election under
 this paragraph may not be made by a corporation described in  paragraphs
 one  through  eight of subdivision (a) of this section or in subdivision
 (e) of this section. In addition, an election under this  paragraph  may
 not  be  made  by  a corporation that is a party to a reorganization, as
 defined in subsection (a) of section 368 of the internal revenue code of
 1986, as amended, of a corporation described in paragraph  one  of  this
 subdivision  if  both corporations were sixty-five percent or more owned
 or controlled, directly or indirectly by the same interests at the  time
 of the reorganization.
 An  election  under  this paragraph must be made by the taxpayer on or
 before the due date for filing its return  (determined  with  regard  to
 extensions  of  time  for  filing)  for the applicable taxable year. The
 election to be taxed under subchapter two of this chapter shall be  made
 by  the  taxpayer  by filing the return required pursuant to subdivision
 one of section 11-605 of this chapter and the election to be taxed under
 this subchapter shall be made by  the  taxpayer  by  filing  the  return
 required pursuant to subdivision (a) of section 11-646 of this part. Any
 election  made pursuant to this paragraph shall be irrevocable and shall
 apply to each subsequent taxable year [beginning  on  or  after  January
 first,  two thousand eleven and before January first, two thousand thir-
 teen], provided that the stock  ownership  and  activities  requirements
 described  in  subparagraph (i) of this paragraph are met or such corpo
 ration described in subparagraph (ii) of this paragraph continues  as  a
 financial subsidiary.
 

S  3.  Subparagraph  (iv) of paragraph 2 of subdivision (f) of section
 1462 of the tax law, as amended by section 6 of part J of chapter 61  of
 the laws of 2011, is amended to read as follows:

 (iv)  (A)  Notwithstanding  any  provision of this paragraph, any bank
 holding company exercising its corporate franchise or doing business  in
 the  state  may  make  a  return on a combined basis without seeking the
 permission of the commissioner with any banking  corporation  exercising
 its corporate franchise or doing business in the state in a corporate or
 organized  capacity  sixty-five percent or more of whose voting stock is
 owned or controlled, directly or indirectly, by such bank holding compa
        S. 3753--A                          5
 ny, for the first taxable year [beginning on or after January first, two
 thousand and before January first, two thousand thirteen]  during  which
 such bank holding company registers for the first time under the federal
 bank  holding company act, as amended, and also elects to be a financial
 holding company. In addition, for each subsequent taxable  year  [begin-
 ning  after  January  first,  two thousand and before January first, two
 thousand thirteen], any such bank holding company may file on a combined
 basis without seeking the permission of the commissioner with any  bank
 ing  corporation  that  is  exercising  its corporate franchise or doing
 business in the state and sixty-five percent or  more  of  whose  voting
 stock is owned or controlled, directly or indirectly, by such bank hold
 ing  company if either such banking corporation is exercising its corpo
 rate franchise or doing business in the state in a corporate  or  organ
 ized capacity for the first time during such subsequent taxable year, or
 sixty-five  percent  or  more of the voting stock of such banking corpo
 ration is owned or controlled, directly  or  indirectly,  by  such  bank
 holding  company for the first time during such subsequent taxable year.
 Provided however, for each  subsequent  taxable  year  [beginning  after
 January first, two thousand and before January first, two thousand thir-
 teen],  a  banking  corporation described in either of the two preceding
 sentences which filed on a combined basis with  any  such  bank  holding
 company  in a previous taxable year, must continue to file on a combined
 basis with such bank holding company if such banking corporation, during
 such subsequent taxable year, continues to exercise its corporate  fran
 chise  or  do business in the state in a corporate or organized capacity
 and sixty-five percent or more  of  such  banking  corporation's  voting
 stock  continues  to  be owned or controlled, directly or indirectly, by
 such bank holding company, unless the permission of the commissioner has
 been obtained to file on a separate basis for  such  subsequent  taxable
 year.  Provided  further,  however,  for  each  subsequent  taxable year
 [beginning after January first, two thousand and before  January  first,
 two thousand thirteen], a banking corporation described in either of the
 first  two  sentences  of  this  clause which did not file on a combined
 basis with any such bank holding company in a previous taxable year, may
 not file on a combined basis with such bank holding company  during  any
 such  subsequent  taxable year unless the permission of the commissioner
 has been obtained to file on a combined basis for such subsequent  taxa
 ble year.
 (B)  Notwithstanding any provision of this paragraph other than clause
 (A) of this subparagraph, the commissioner may not require a bank  hold
 ing  company which, during a taxable year [beginning on or after January
 first, two thousand and before January first,  two  thousand  thirteen],
 registers  for the first time during such taxable year under the federal
 bank holding company act, as amended, and also elects to be a  financial
 holding  company,  to  make a return on a combined basis for any taxable
 year [beginning on or after January first, two thousand and before Janu-
 ary first, two thousand thirteen] with a banking corporation  sixty-five
 percent  or  more of whose voting stock is owned or controlled, directly
 or indirectly, by such bank holding company.
 

S 4. Subparagraph (iv) of paragraph 2 of subdivision  (f)  of  section
 11-646 of the administrative code of the city of New York, as amended by
 section  7  of  part  J of chapter 61 of the laws of 2011, is amended to
 read as follows:

 (iv) (A) Notwithstanding any provision of  this  paragraph,  any  bank
 holding  company exercising its corporate franchise or doing business in
 the city may make a return on  a  combined  basis  without  seeking  the
        S. 3753--A                          6
 permission  of  the commissioner with any banking corporation exercising
 its corporate franchise or doing business in the city in a corporate  or
 organized  capacity  sixty-five percent or more of whose voting stock is
 owned or controlled, directly or indirectly, by such bank holding compa
 ny, for the first taxable year [beginning on or after January first, two
 thousand  and  before January first, two thousand thirteen] during which
 such bank holding company registers for the first time under the federal
 bank holding company act, as amended, and also elects to be a  financial
 holding  company.  In addition, for each subsequent taxable year [begin-
 ning after January first, two thousand and  before  January  first,  two
 thousand thirteen], any such bank holding company may file on a combined
 basis  without seeking the permission of the commissioner with any bank
 ing corporation that is exercising  its  corporate  franchise  or  doing
 business  in  the  city  and  sixty-five percent or more of whose voting
 stock is owned or controlled, directly or indirectly, by such bank hold
 ing company if either such banking corporation is exercising its  corpo
 rate franchise or doing business in the city in a corporate or organized
 capacity  for  the  first  time  during such subsequent taxable year, or
 sixty-five percent or more of the voting stock of  such  banking  corpo
 ration  is  owned  or  controlled,  directly or indirectly, by such bank
 holding company for the first time during such subsequent taxable  year.
 Provided  however,  for  each  subsequent  taxable year [beginning after
 January first, two thousand and before January first, two thousand thir-
 teen], a banking corporation described in either of  the  two  preceding
 sentences  which  filed  on  a combined basis with any such bank holding
 company in a previous taxable year, must continue to file on a  combined
 basis with such bank holding company if such banking corporation, during
 such  subsequent taxable year, continues to exercise its corporate fran
 chise or do business in the city in a corporate  or  organized  capacity
 and  sixty-five  percent  or  more  of such banking corporation's voting
 stock continues to be owned or controlled, directly  or  indirectly,  by
 such bank holding company, unless the permission of the commissioner has
 been  obtained  to  file on a separate basis for such subsequent taxable
 year. Provided  further,  however,  for  each  subsequent  taxable  year
 [beginning  after  January first, two thousand and before January first,
 two thousand thirteen], a banking corporation described in either of the
 first two sentences of this clause which did  not  file  on  a  combined
 basis with any such bank holding company in a previous taxable year, may
 not  file  on a combined basis with such bank holding company during any
 such subsequent taxable year unless the permission of  the  commissioner
 has  been obtained to file on a combined basis for such subsequent taxa
 ble year.
 (B) Notwithstanding any provision of this paragraph other than  clause
 (A)  of this subparagraph, the commissioner may not require a bank hold
 ing company which, during a taxable year [beginning on or after  January
 first,  two  thousand  and before January first, two thousand thirteen],
 registers for the first time during such taxable year under the  federal
 bank  holding company act, as amended, and also elects to be a financial
 holding company, to make a return on a combined basis  for  any  taxable
 year [beginning on or after January first, two thousand and before Janu-
 ary  first, two thousand thirteen] with a banking corporation sixty-five
 percent or more of whose voting stock is owned or  controlled,  directly
 or indirectly, by such bank holding company.
 

S 5. This act shall take effect immediately.

S3753A-2011: Makes permanent the provisions relating to the Gramm-Leach-Bliley act