S3753B-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

S3753B-2011 Votes

S3753B-2011 Memo

BILL NUMBER:S3753B

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

PURPOSE:  This bill would extend for one year the provisions in the
State and City bank taxes relating to enactment and implementation of
the federal Gramm-Leach-Bliley Act. The provisions of the Gramm-Leach-
Bliley extender are presently expired for taxable years beginning on or
after January 1, 2013.

SUMMARY OF PROVISIONS:  This bill would amend section 1452 of the tax
law and section 11-640 of the administrative code of the City of New
York by extending the sunset provisions until January 1, 2014.

JUSTIFICATION:  Transitional provisions were added to the New York Tax
Law and the New York City Administrative Code 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 be more certain of their taxable status as they
exercised the expanded powers granted to them at the federal level. This
legislation extends the transitional provisions an additional year to
allow time for consideration of the legislature of an anticipated report
of the Executive on reform of corporate taxes.

LEGISLATIVE HISTORY: 2011 Rules Committee

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediate.

S3753B-2011 Text

 S T A T E   O F   N E W   Y O R K
 
 3753--B
 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  --  recommitted  to  the
 Committee on Banks in accordance with Senate Rule 6, sec. 8 -- commit
 tee  discharged, bill amended, ordered reprinted as amended and recom
 mitted to said committee
 

AN ACT to amend the tax law and the administrative code of the  city  of
 New  York,  in  relation  to  the  effectiveness of certain provisions
 relating to the federal Gramm-Leach-Bliley act
 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] TWELVE and was
 subject to tax under article nine-A of this chapter for its last taxable
 year beginning before January first, two thousand [eleven] TWELVE, shall
 continue to be taxable under such article for all taxable  years  begin
 ning  on or after January first, two thousand [eleven] TWELVE and before
 January first, two thousand [thirteen] FOURTEEN.  The preceding sentence
 shall not apply to any taxable 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 Janu
 ary first, two thousand [eleven] TWELVE and was  subject  to  tax  under
 this  article  for its last taxable year beginning before January first,
 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
 [ ] is old law to be omitted.
 LBD09960-05-2
 
       S. 3753--B                          2
 two thousand [eleven] TWELVE, shall continue to be  taxable  under  this
 article  for  all taxable years beginning on or after January first, two
 thousand [eleven] TWELVE and before January first, two  thousand  [thir-
 teen]  FOURTEEN  or  in which the corporation satisfies the requirements
 for a corporation to elect to be taxable under  this  article.  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] TWELVE but
 first becomes a taxpayer in a taxable year beginning on or after January
 first, two thousand [eleven] TWELVE and before January first, two  thou
 sand [thirteen] FOURTEEN, shall be considered for purposes of this para
 graph  to  have been subject to tax under article nine-A of this chapter
 for its last taxable year beginning before January first,  two  thousand
 [eleven] TWELVE 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] TWELVE but first becomes a taxpayer in  a  taxable
 year  beginning  on or after January first, two thousand [eleven] TWELVE
 and before January first, two thousand  [thirteen]  FOURTEEN,  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] TWELVE 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] TWELVE and before January
 first, two thousand [thirteen] FOURTEEN may elect to be subject  to  tax
 under this article or under article nine-A of this chapter for its first
 taxable  year beginning on or after January first, two thousand [eleven]
 TWELVE and before January first, two  thousand  [thirteen]  FOURTEEN  in
 which 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 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 reorgan
 ization, as defined in subsection (a) of section  368  of  the  internal
 revenue  code  of  1986, as amended, of a corporation described in para
 graph one of  this  subsection  if  both  corporations  were  sixty-five
 
       S. 3753--B                          3
 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 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] TWELVE and before January first, two thou
 sand [thirteen] FOURTEEN, provided that the stock ownership  and  activ
 ities  requirements  described in subparagraph (i) of this paragraph are
 met or such corporation 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]  TWELVE  and  was
 subject to tax under subchapter two of this chapter for its last taxable
 year beginning before January first, two thousand [eleven] TWELVE, shall
 continue  to  be  taxable  under  such  subchapter for all taxable years
 beginning on or after January first, two thousand  [eleven]  TWELVE  and
 before  January  first, two thousand [thirteen] FOURTEEN.  The preceding
 sentence shall not apply to any taxable year during  which  such  corpo
 ration  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 corporation or corporation that was in existence
 before January first, two thousand [eleven] TWELVE and  was  subject  to
 tax  under  this  subchapter  for its last taxable year beginning before
 January first, two thousand [eleven] TWELVE, shall continue to be  taxa
 ble  under  this  subchapter for all taxable years beginning on or after
 January first, two thousand [eleven] TWELVE and  before  January  first,
 two  thousand  [thirteen] FOURTEEN or in which the corporation satisfies
 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  considered  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] TWELVE but first  becomes  a
 taxpayer  in  a  taxable  year  beginning on or after January first, two
 
       S. 3753--B                          4
 thousand [eleven] TWELVE and before January first, two  thousand  [thir-
 teen]  FOURTEEN,  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]
 TWELVE 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 corporation that was in existence before January  first,
 two  thousand  [eleven] TWELVE but first becomes a taxpayer in a taxable
 year beginning on or after January first, two thousand  [eleven]  TWELVE
 and  before  January  first,  two thousand [thirteen] FOURTEEN, 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] TWELVE 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]  TWELVE  and  before  January
 first,  two  thousand [thirteen] FOURTEEN 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] TWELVE and before January first, two thousand [thirteen]  FOUR
 TEEN  in which 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 corpo
 ration 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] TWELVE and before January first, two thou
 sand [thirteen] FOURTEEN, provided that the stock ownership  and  activ
 ities  requirements  described in subparagraph (i) of this paragraph are
 met or such corporation 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:

 
       S. 3753--B                          5
 (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
 ny, for the first taxable year beginning on or after January first,  two
 thousand  and  before  January  first,  two thousand [thirteen] FOURTEEN
 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  beginning  after  January  first, two thousand and before
 January first, two thousand [thirteen] FOURTEEN, any such  bank  holding
 company  may  file on a combined basis without seeking the permission of
 the commissioner with any banking 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  holding  company if either such banking
 corporation is exercising its corporate franchise or doing  business  in
 the state 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 corporation is owned or controlled, direct
 ly 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 [thirteen] FOURTEEN, 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 franchise 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  sepa
 rate  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] FOURTEEN, 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 taxable 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]
 FOURTEEN, 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 January first, two thousand [thirteen] FOURTEEN  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. 3753--B                          6
 

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
 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]  FOURTEEN
 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 beginning after January  first,  two  thousand  and  before
 January  first,  two thousand [thirteen] FOURTEEN, any such bank holding
 company may file on a combined basis without seeking the  permission  of
 the  commissioner  with  any  banking 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  indi
 rectly,  by such bank holding company if either such banking corporation
 is exercising its corporate franchise or doing business in the city in a
 corporate or organized capacity for the first time  during  such  subse
 quent taxable year, or sixty-five percent or more of the voting stock of
 such banking corporation 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 begin
 ning after January first, two thousand and  before  January  first,  two
 thousand  [thirteen] FOURTEEN, 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 franchise or do business in the city  in  a  corporate  or
 organized capacity and sixty-five percent or more of such banking corpo
 ration'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] FOURTEEN, 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 taxable 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]
 FOURTEEN, 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
 
       S. 3753--B                          7
 any  taxable  year beginning on or after January first, two thousand and
 before January first, two thousand [thirteen] FOURTEEN  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.

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