senate Bill S3561

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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  • 05 / Feb / 2013
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 08 / Jan / 2014
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

Summary

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

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Bill Details

Versions:
S3561
Legislative Cycle:
2013-2014
Current Committee:
Senate Investigations And Government Operations
Law Section:
Tax Law
Laws Affected:
Amd §§1452 & 1462, Tax L; amd §§11-640 & 11-646, NYC Ad Cd
Versions Introduced in 2011-2012 Legislative Cycle:
S3753B

Sponsor Memo

BILL NUMBER:S3561

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 tax laws relating to enactment and implementation of
the federal Gramm-Leach-Bliley Act. These transitional provisions are
presently scheduled to expire for taxable years beginning on or after
January 1, 2015.

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 the taxable year beginning
January 1, 2016.

JUSTIFICATION: Transitional provisions were added in 2000 to the New
York Tax Law and the New York City Administrative Code to address the
tax uncertainties created by the federal Gramm-Leach-Bliley Act of 1999
(which removed prohibitions against the affiliation of banks, securities
firms and insurance companies). These transitional provisions allowed
banks, insurance companies 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 help provide these companies with
better guidance and predictability regarding their tax status as they
conduct business and make investment decisions.

LEGISLATIVE HISTORY: 2011-12 S. 3753b - Banks Committee.

FISCAL IMPLICATIONS: None.

EFFECTIVE DATE: Immediate.

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

                                  3561

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                            February 5, 2013
                               ___________

Introduced  by  Sens.  GRIFFO, FARLEY -- read twice and ordered printed,
  and when printed to be committed to the  Committee  on  Investigations
  and Government Operations

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 1 of part R of chapter 59 of the laws
of 2012, 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 [twelve] THIRTEEN  and  was
subject to tax under article nine-A of this chapter for its last taxable
year  beginning  before  January  first, two thousand [twelve] THIRTEEN,
shall continue to be taxable under such article for  all  taxable  years
beginning  on or after January first, two thousand [twelve] THIRTEEN and
before January first, two thousand [fifteen]  SIXTEEN.    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  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 thousand [twelve] THIRTEEN and was subject to
tax under this article for its last taxable year beginning before  Janu-
ary  first, two thousand [twelve] THIRTEEN, shall continue to be taxable
under this article for all taxable years beginning on or  after  January
first,  two  thousand  [twelve]  THIRTEEN  and before January first, two
thousand [fifteen] SIXTEEN only if the corporation is a  banking  corpo-
ration  as  defined in subsection (a) of this section or 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

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07266-01-3

S. 3561                             2

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  [twelve]  THIRTEEN  but
first becomes a taxpayer in a taxable year beginning on or after January
first,  two  thousand  [twelve]  THIRTEEN  and before January first, two
thousand [fifteen] SIXTEEN, shall be considered  for  purposes  of  this
paragraph to have been subject to tax under article nine-A of this chap-
ter  for its last taxable year beginning before January first, two thou-
sand [twelve] THIRTEEN 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  [twelve]  THIRTEEN  but  first becomes a
taxpayer in a taxable year beginning on  or  after  January  first,  two
thousand  [twelve]  THIRTEEN  and  before  January  first,  two thousand
[fifteen] SIXTEEN, 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 [twelve] THIRTEEN 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 [twelve] THIRTEEN and  before  January
first,  two  thousand  [fifteen]  SIXTEEN 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  [twelve]
THIRTEEN  and  before  January  first, two thousand [fifteen] SIXTEEN 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
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

S. 3561                             3

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  [twelve]  THIRTEEN  and before January first, two
thousand [fifteen] SIXTEEN, 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 3  of
part  R  of  chapter  59  of  the  laws  of 2012, 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 [twelve] THIRTEEN and was
subject to tax under subchapter two of this chapter for its last taxable
year beginning before January first,  two  thousand  [twelve]  THIRTEEN,
shall continue to be taxable under such subchapter for all taxable years
beginning  on or after January first, two thousand [twelve] THIRTEEN and
before January first, two thousand [fifteen]  SIXTEEN.    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 [twelve] THIRTEEN and was subject to
tax under this subchapter for its last  taxable  year  beginning  before
January  first,  two  thousand  [twelve]  THIRTEEN, shall continue to be
taxable under this subchapter for all  taxable  years  beginning  on  or
after  January  first, two thousand [twelve] THIRTEEN and before January
first, two thousand [fifteen] SIXTEEN only if the corporation is a bank-
ing corporation as defined in subdivision (a) of  this  section  or  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 subdi-
vision  (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  [twelve]  THIRTEEN
but  first  becomes  a  taxpayer in a taxable year beginning on or after
January first, two thousand [twelve] THIRTEEN and before January  first,
two thousand [fifteen] SIXTEEN, shall be considered for purposes of this
paragraph to have been subject to tax under subchapter two of this chap-
ter  for its last taxable year beginning before January first, two thou-
sand [twelve] THIRTEEN if such corporation would have  been  subject  to
tax under such subchapter for such taxable year if it had been a taxpay-

S. 3561                             4

er  during such taxable year. A corporation that was in existence before
January first, two  thousand  [twelve]  THIRTEEN  but  first  becomes  a
taxpayer  in  a  taxable  year  beginning on or after January first, two
thousand  [twelve]  THIRTEEN  and  before  January  first,  two thousand
[fifteen] SIXTEEN, 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 [twelve] THIRTEEN  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 [twelve] THIRTEEN and before January
first, two thousand [fifteen] SIXTEEN 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
[twelve]  THIRTEEN  and  before  January  first,  two thousand [fifteen]
SIXTEEN 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 [twelve] THIRTEEN  and  before  January  first,  two
thousand [fifteen] SIXTEEN, 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 2 of part R of chapter 59 of
the laws of 2012, 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

S. 3561                             5

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 [fifteen] SIXTEEN 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 [fifteen] SIXTEEN, 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, 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 Janu-
ary first, two thousand and before January first, two thousand [fifteen]
SIXTEEN,  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 begin-
ning  after  January  first,  two thousand and before January first, two
thousand [fifteen] SIXTEEN, 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 [fifteen]
SIXTEEN, 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  [fifteen] SIXTEEN 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  4  of  part  R of chapter 59 of the laws of 2012, 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

S. 3561                             6

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 [fifteen] SIXTEEN 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 [fifteen] SIXTEEN, 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  indirectly,  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 subsequent 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 beginning after Janu-
ary first, two thousand and before January first, two thousand [fifteen]
SIXTEEN, 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 begin-
ning after January first, two thousand and  before  January  first,  two
thousand [fifteen] SIXTEEN, 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  [fifteen]
SIXTEEN, 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  [fifteen]  SIXTEEN  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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