This bill has been amended

Bill S3753-2011

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

Extends certain provisions relating to the Gramm-Leach-Bliley act.

Details

Actions

  • Mar 9, 2011: REPORTED AND COMMITTED TO FINANCE
  • Mar 3, 2011: REFERRED TO BANKS

Meetings

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

Memo

BILL NUMBER:S3753

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 are 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:

This is a new bill.

FISCAL IMPLICATIONS:

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

EFFECTIVE DATE:

This act would take effect immediately.


Text

STATE OF NEW YORK ________________________________________________________________________ 3753 2011-2012 Regular Sessions IN 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 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 chapter 24 of the laws of 2010, 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 ten and was] subject to tax under article nine-A of this chapter [for its last taxable year begin- ning before January first, two thousand ten], shall continue to be taxa- ble under such article [for all taxable years beginning on or after January first, two thousand ten and before January first, two thousand eleven]. 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. Notwith- standing 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 thousand ten and] was subject to tax under this article [for its last taxable year beginning before January first, two thousand ten], shall continue to be taxable under this article [for all taxable years beginning on or after January first, two thousand ten and before January first, two thousand eleven 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 ten but first becomes a taxpayer in a taxable year beginning on or after January first, two thousand ten and before January first, two thousand eleven,] 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 ten] 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 ten but first becomes a taxpayer in a taxable year beginning on or after January first, two thousand ten and before January first, two thousand eleven,] 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 ten] 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 ten and before January first, two thousand eleven] 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 ten and before January first, two thousand eleven 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 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 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 ten and before January first, two thousand eleven], provided that the stock ownership and activities requirements described in subparagraph (i) of this paragraph are met or such corporation described in subparagraph (ii) of this paragraph continues as a finan- cial 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 chapter 24 of the laws of 2010, 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 ten and was] subject to tax under subchapter two of this chapter [for its last taxable year begin- ning before January first, two thousand ten,] shall continue to be taxa- ble under such subchapter for all taxable years [beginning on or after January first, two thousand ten and before January first, two thousand eleven]. 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 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 corpo- ration that was in existence before January first, two thousand ten and was subject to tax under this subchapter for its last taxable year beginning before January first, two thousand ten,] shall continue to be taxable under this subchapter for all taxable years [beginning on or after January first, two thousand ten and before January first, two thousand eleven 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 taxa- ble year. A corporation [that was in existence before January first, two thousand ten but first becomes a taxpayer in a taxable year beginning on or after January first, two thousand ten and before January first, two thousand eleven,] 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 ten] 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 ten but first becomes a taxpayer in a taxable year beginning on or after January first, two thousand ten and before January first, two thousand eleven,] 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 ten] 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 ten and before January first, two thousand eleven] may elect to be subject to tax under this subchapter or under subchapter two of this chapter for its first taxable year [begin- ning on or after January first, two thousand ten and before January first, two thousand eleven 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 ten and before January first, two thousand eleven], provided that the stock ownership and activities requirements described in subparagraph (i) of this paragraph are met or such corporation described in subparagraph (ii) of this paragraph continues as a finan- cial subsidiary. S 3. Subparagraph (iv) of paragraph 2 of subdivision (f) of section 1462 of the tax law, as amended by chapter 24 of the laws of 2010, 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- ny, for the first taxable year [beginning on or after January first, two thousand and before January first, two thousand eleven] 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 eleven]
, 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 elev- en], 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 eleven], 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 eleven], 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 eleven] 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 chapter 24 of the laws of 2010, 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 eleven] 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 eleven], 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 elev- en], 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 eleven], 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 eleven], 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 eleven] 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.

Comments

Open Legislation comments facilitate discussion of New York State legislation. All comments are subject to moderation. Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity or hate speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Comment moderation is generally performed Monday through Friday.

By contributing or voting you agree to the Terms of Participation and verify you are over 13.

Discuss!

blog comments powered by Disqus