senate Bill S3753

Amended

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

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 03 / Mar / 2011
    • REFERRED TO BANKS
  • 09 / Mar / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 25 / Apr / 2011
    • AMEND AND RECOMMIT TO FINANCE
  • 25 / Apr / 2011
    • PRINT NUMBER 3753A
  • 24 / May / 2011
    • 1ST REPORT CAL.854
  • 25 / May / 2011
    • 2ND REPORT CAL.
  • 01 / Jun / 2011
    • ADVANCED TO THIRD READING
  • 24 / Jun / 2011
    • COMMITTED TO RULES
  • 04 / Jan / 2012
    • REFERRED TO BANKS
  • 14 / Feb / 2012
    • AMEND (T) AND RECOMMIT TO BANKS
  • 14 / Feb / 2012
    • PRINT NUMBER 3753B

Summary

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

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Bill Details

Versions:
S3753
S3753A
S3753B
Legislative Cycle:
2011-2012
Current Committee:
Senate Banks
Law Section:
Tax Law
Laws Affected:
Amd §§1452 & 1462, Tax L; amd §§11-640 & 11-646, NYC Ad Cd

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Sponsor 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.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  3753

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                              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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09960-03-1

S. 3753                             2

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

S. 3753                             3

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

S. 3753                             4

[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-

S. 3753                             5

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

S. 3753                             6

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.

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