S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4164
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             February 1, 2017
                                ___________
 
 Introduced  by  M.  of  A.  ROSENTHAL  --  read once and referred to the
   Committee on Ways and Means
 
 AN ACT to amend the tax law, in relation to  the  provision  of  certain
   financial services to debt evading foreign states
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:

   Section 1. The tax law is amended by adding a new article 15  to  read
 as follows:
 
                                ARTICLE 15
    TAX ON THE PROVISION OF CERTAIN FINANCIAL SERVICES TO DEBT EVADING
                              FOREIGN STATES
 
 SECTION 330. DEFINITIONS.
         331. IMPOSITION OF TAX.
         332. REPORTS AND ADDITIONAL MEASURES.
   § 330. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
 HAVE THE FOLLOWING MEANINGS:
   1. "AGENCY OR INSTRUMENTALITY OF A FOREIGN STATE" MEANS ANY ENTITY:
   (A) WHICH IS A SEPARATE LEGAL PERSON, CORPORATE OR OTHERWISE, AND
   (B)  WHICH  IS  AN ORGAN OF A FOREIGN STATE OR A PROVINCE OR POLITICAL
 SUBDIVISION THEREOF, OR A MAJORITY OF WHOSE SHARES  OR  OTHER  OWNERSHIP
 INTEREST IS OWNED BY A FOREIGN STATE OR A PROVINCE OR POLITICAL SUBDIVI-
 SION THEREOF, AND
   (C)  WHICH  IS  NEITHER A CITIZEN OF A STATE OF THE UNITED STATES, NOR
 CREATED UNDER THE LAWS OF ANY THIRD COUNTRY.
   2. "FINAL JUDGMENT" MEANS ANY JUDGMENT THAT IS NO LONGER  ELIGIBLE  TO
 BE APPEALED TO ANY COURT.
   3.  "FINANCIAL  INSTITUTION" MEANS THE OFFICE OR BRANCH IN NEW YORK OF
 ANY BANK OR BANKING ORGANIZATION, WHETHER FOREIGN OR DOMESTIC,  THAT  IS
 REGULATED  BY  THE DEPARTMENT OF FINANCIAL SERVICES OF THIS STATE OR ANY
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD05477-01-7

 A. 4164                             2
 
 AGENCY OR DEPARTMENT OF THE UNITED STATES, OR ANY TRUST COMPANY  OR  ANY
 OTHER  PROVIDER  OF PAYING AGENT SERVICES, FISCAL AGENT SERVICES, OR ANY
 OTHER SIMILAR SERVICES.
   4.  "PAYING  AGENT  AND  FISCAL  AGENT  SERVICES" MEANS THE PAYMENT OR
 DISBURSEMENT IN NEW YORK BY  A  FINANCIAL  INSTITUTION  OF  ALL  OR  ANY
 PORTION  OF  PRINCIPAL  OR INTEREST ON A BOND, NOTE AND OTHER OBLIGATION
 ISSUED BY DEBT EVADING FOREIGN STATES.
   5. "FOREIGN STATE" MEANS ANY GOVERNMENTAL UNIT OTHER THAN  THE  UNITED
 STATES,  OR  ANY  STATE,  DISTRICT,  COMMONWEALTH,  TERRITORY OR INSULAR
 POSSESSION THEREOF, AND INCLUDES A PROVINCE OR POLITICAL SUBDIVISION  OF
 A FOREIGN STATE.
   6. (A) "DEBT EVADING FOREIGN STATE" MEANS ANY FOREIGN STATE THAT:
   (I) HAS ONE OR MORE FINAL JUDGMENTS ENTERED AGAINST IT BY ANY STATE OR
 FEDERAL  COURT  LOCATED  IN  NEW  YORK,  INCLUDING  ANY  FINAL  JUDGMENT
 ORIGINALLY ISSUED IN A FOREIGN COURT THAT IS FILED OR REGISTERED IN  NEW
 YORK,  IN  THE  COMBINED  AMOUNT  OF  WHICH JUDGMENTS EXCEED ONE HUNDRED
 MILLION DOLLARS;
   (II) FAILS TO SATISFY IN FULL ANY SUCH JUDGMENT FOR A PERIOD  OF  MORE
 THAN  TWO  YEARS AFTER THE JUDGMENT BECOMES A FINAL JUDGMENT, REGARDLESS
 OF WHETHER SUCH JUDGMENT BECAME A FINAL JUDGMENT BEFORE THE DATE OF  THE
 ENACTMENT OF THIS SUBDIVISION; AND
   (III) IS NOT A FOREIGN STATE ELIGIBLE FOR:
   (1) FINANCING THROUGH THE INTERNATIONAL DEVELOPMENT ASSOCIATION UNLESS
 SUCH  STATE  IS  ELIGIBLE  FOR FINANCING FROM THE INTERNATIONAL BANK FOR
 RECONSTRUCTION AND DEVELOPMENT; OR
   (2) DEBT RELIEF UNDER THE  ENHANCED  HIPC  INITIATIVE  AS  DEFINED  IN
 SECTION  1625(E)(3)  OF THE UNITED STATES INTERNATIONAL FINANCIAL INSTI-
 TUTIONS ACT; OR
   (3) DEBT RELIEF UNDER THE MULTILATERAL DEBT RELIEF INITIATIVE  OF  THE
 INTERNATIONAL MONETARY FUND.
   (B)  FOR  PURPOSES  OF  THIS  ARTICLE,  REFERENCES  TO A 'DEBT EVADING
 FOREIGN STATE' SHALL INCLUDE 'AGENCY OR  INSTRUMENTALITY  OF  A  FOREIGN
 STATE' AND 'STATE-OWNED CORPORATION OF A DEBT EVADING FOREIGN STATE,' AS
 DEFINED IN THIS SECTION.
   7. "STATE-OWNED CORPORATION OF A DEBT EVADING FOREIGN STATE" MEANS ANY
 CORPORATION  OR  ENTITY  OTHER  THAN A NATURAL PERSON, A MAJORITY OF THE
 SHARES OR OTHER OWNERSHIP INTEREST OF WHICH IS HELD, EITHER DIRECTLY  OR
 INDIRECTLY,  BY  A DEBT EVADING FOREIGN STATE OR BY AN AGENCY OR INSTRU-
 MENTALITY OF A DEBT EVADING FOREIGN STATE.
   8. "STATE" MEANS EACH OF THE SEVERAL STATES, THE DISTRICT OF COLUMBIA,
 AND ANY COMMONWEALTH, TERRITORY OR POSSESSION OF THE UNITED STATES.
   § 331. IMPOSITION OF TAX. 1. THERE IS HEREBY IMPOSED AND SHALL BE PAID
 A TAX ON EACH PROVISION IN NEW YORK OF INITIAL PAYING AGENT SERVICES  OR
 FISCAL  AGENT  SERVICES  BY  A  FINANCIAL  INSTITUTION TO A DEBT EVADING
 FOREIGN STATE.
   2. THE TAX IMPOSED SHALL BE AT A RATE OF FOUR  PERCENT  OF  THE  GROSS
 AMOUNT  DISBURSED BY THE FINANCIAL INSTITUTION IN RELATION TO AND AT THE
 TIME OF EACH PROVISION OF SUCH SERVICE.
   3. THE ULTIMATE INCIDENCE OF AND LIABILITY FOR THE TAX SHALL  BE  UPON
 THE  DEBT  EVADING  FOREIGN  STATE  ON BEHALF OF WHICH SUCH PAYING AGENT
 SERVICE OR FISCAL AGENT SERVICE IS PROVIDED.  EACH FINANCIAL INSTITUTION
 THAT PROVIDES THE INITIAL PAYING AGENT OR FISCAL AGENT SERVICES  IN  NEW
 YORK  WITH  RESPECT  TO  ALL  OR ANY PORTION OF AN INTEREST OR PRINCIPAL
 PAYMENT ON BEHALF OF A DEBT EVADING FOREIGN STATE SHALL  BE  RESPONSIBLE
 FOR THE COLLECTION OF THE TAX FROM SUCH DEBT EVADING FOREIGN STATE ALLO-
 CABLE TO THE GROSS AMOUNT OF FUNDS IT DISBURSES AND FOR THE REMISSION OF

 A. 4164                             3
 
 THE  TAX  TO  THE  TAX  COMMISSION. IN THE EVENT A FINANCIAL INSTITUTION
 DISBURSES ANY FUNDS IN RELATION TO  THE  PROVISION  OF  A  PAYING  AGENT
 SERVICE  OR FISCAL AGENT SERVICE WITHOUT REMITTING THE TAX IMPOSED BY OR
 PURSUANT  TO THIS ARTICLE TO THE TAX COMMISSION, SUCH FINANCIAL INSTITU-
 TION SHALL BE LIABLE FOR THE FULL AMOUNT OF SUCH TAX IMPOSED WHICH SHALL
 BE IMMEDIATELY DUE AND PAYABLE TO THE TAX COMMISSION.
   § 332. REPORTS AND ADDITIONAL MEASURES. 1. THE DEPARTMENT SHALL, ON  A
 MONTHLY  BASIS,  REVIEW  THE RECORDS OF UNSATISFIED JUDGMENTS ENTERED IN
 ALL FEDERAL AND STATE COURTS LOCATED IN THIS STATE TO IDENTIFY ALL  DEBT
 EVADING FOREIGN STATES.
   2.  THE  DEPARTMENT SHALL, ON A MONTHLY BASIS, POST TO ITS WEBSITE THE
 IDENTITIES OF ALL DEBT EVADING FOREIGN STATES OR OTHERWISE PUBLISH  SUCH
 IDENTITIES  IN  ANY OTHER MANNER REASONABLY CALCULATED TO GIVE NOTICE TO
 FINANCIAL INSTITUTIONS IN NEW YORK.  ANY FINANCIAL  INSTITUTION  SUBJECT
 TO  THIS  ARTICLE SHALL HAVE THE ABSOLUTE RIGHT TO RELY UPON THE LIST OF
 DEBT EVADING FOREIGN STATES POSTED OR PUBLISHED BY  THE  DEPARTMENT  FOR
 THE PURPOSE OF COMPLYING WITH THIS ARTICLE.
   3.  THE DEPARTMENT SHALL REPORT TO THE OFFICE OF THE NEW YORK ATTORNEY
 GENERAL THE NAMES OF ANY  FINANCIAL  INSTITUTIONS  THAT  THE  DEPARTMENT
 DETERMINES IS NOT COMPLYING WITH THIS ARTICLE.
   4.  THE DEPARTMENT AND THE ATTORNEY GENERAL MAY CONSIDER DOCUMENTS AND
 OTHER INFORMATION RECEIVED FROM THIRD  PARTIES,  FINANCIAL  INSTITUTIONS
 AND  DEBT EVADING FOREIGN STATES TO DETERMINE WHETHER A FOREIGN STATE IS
 A DEBT EVADING FOREIGN STATE.
   5. AT SUCH TIME AS THE DEPARTMENT DETERMINES THAT A FOREIGN  STATE  NO
 LONGER  QUALIFIES  AS A DEBT EVADING FOREIGN STATE, IT SHALL REMOVE FROM
 ITS WEBSITE THE DESIGNATION OF THE  FOREIGN  STATE  AS  A  DEBT  EVADING
 FOREIGN  STATE  OR TAKE SUCH OTHER ACTION AS IS REASONABLY CALCULATED TO
 GIVE NOTICE TO FINANCIAL INSTITUTIONS IN  NEW  YORK  THAT  SUCH  FOREIGN
 STATE IS NO LONGER DESIGNATED AS A DEBT EVADING FOREIGN STATE.
   §  2.  The  tax law is amended by adding a new section 1816 to read as
 follows:
   § 1816. ATTEMPT TO EVADE OR DEFEAT CERTAIN TAXES. ANY FINANCIAL INSTI-
 TUTION THAT WILLFULLY ATTEMPTS IN ANY MANNER TO EVADE OR DEFEAT ANY  TAX
 IMPOSED BY OR PURSUANT TO ARTICLE FIFTEEN OF THIS CHAPTER OR THE PAYMENT
 THEREOF SHALL, IN ADDITION TO OTHER PENALTIES PROVIDED BY LAW, BE GUILTY
 OF  A  MISDEMEANOR  PUNISHABLE  BY  A FINE OF NOT MORE THAN TEN THOUSAND
 DOLLARS PER OCCURRENCE.
   § 3. This act shall take effect on the thirtieth day  after  it  shall
 have  become  a  law  and  shall  apply  to any disbursement of funds in
 connection with the provision of a paying agent service or fiscal  agent
 service occurring on or after such effective date.