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

                                  8463

                            I N  S E N A T E

                             August 2, 2010
                               ___________

Introduced  by  Sen.  FOLEY  -- read twice and ordered printed, and when
  printed to be committed to the Committee on Rules

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.
  S 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 NEW YORK BANKING DEPARTMENT OR ANY 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.

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

                                                           LBD18043-01-0

S. 8463                             2

  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.
  S 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
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

S. 8463                             3

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.
  S  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.
  S 2. The tax law is amended by adding a new section 1816  to  read  as
follows:
  S 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.
  S  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.