Senate Bill S2566

2011-2012 Legislative Session

Clarifies the exemption for cooperative housing corporations where there is no change in beneficial ownership

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 25, 2011	referred to investigations and government operations

2011-S2566 (ACTIVE) - Details

See Assembly Version of this Bill:: A3916
Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §1405, Tax L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S8446
2013-2014: A5866
2015-2016: A4111

2011-S2566 (ACTIVE) - Summary

Clarifies the exemption for cooperative housing corporations where there is no change in beneficial ownership.

2011-S2566 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S2566

TITLE OF BILL:
An act
to amend the tax law, in relation to clarifying the exemption for
cooperative housing corporations where there is no change in beneficial
ownership

PURPOSE:
This bill would clarify the exemption in the tax law for cooperative
housing corporations when there is no change in beneficial ownership.

JUSTIFICATION:
The intent of the Mitchell-Lama, when enacted, was to create much
needed affordable housing through the use of low interest loans and
reduced real estate taxes for fixed periods in order to create needed
housing. Once a cooperative had repaid its government loans, it would
cease to be a regulated cooperative and become standard cooperative.
The law intended for coops to evolve out of regulation.

Over the last several years, a number of cooperatives have met their
obligations, and have exited the Mitchell-Lama program. This process
includes approval of both the NYS Division of Housing and Community
Renewal and the New York State Attorney's General's office. The
Mitchell-Lama program is seen as one of the most cost-effective and
successful housing programs ever created.

Following the issuance of an advisory opinion in 2008, the NYS
Department of Taxation and Finance has opened audits of the many
former Mitchell-Lama buildings that have come out of the program in
recent years, and concluded that in a number of cases State tax was
due as a result of this conversion. This increase in audit activity
prompted additional examination by the Department on this retroactive
application of the tax. In April 2010, they issued an advisory
opinion which concludes that the conversion of a not for profit
housing company to a private cooperative housing corporation
constitutes a conveyance by the plan sponsor of the real property
comprising the cooperative dwelling, and would be subject to the real
estate transfer tax. This advisory opinion provides limited guidance
regarding the exemption provided if there is no change in the
beneficial ownership.

This bill would clarify that for certain conversions, in which there
is no change in the beneficial ownership of the property, would
qualify for this exemption.

LEGISLATIVE HISTORY:
New bill.

FISCAL IMPLICATIONS:
None.

EFFECTIVE DATE:
Immediately.

2011-S2566 (ACTIVE) - Bill Text download pdf

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

                                  2566

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 25, 2011
                               ___________

Introduced  by  Sen.  KRUGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to clarifying the exemption for
  cooperative housing corporations where there is no change  in  benefi-
  cial ownership

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Paragraph 6 of subdivision (b) of section 1405 of  the  tax
law, as amended by chapter 61 of the laws of 1989, is amended to read as
follows:
  6.  Conveyances  to  effectuate  a  mere change of identity or form of
ownership or organization where there is no change in beneficial  owner-
ship, other than conveyances to a cooperative housing corporation of the
real   property   comprising  the  cooperative  dwelling  or  dwellings,
PROVIDED, HOWEVER, THE CONVEYANCE OF SHARES  OF  A  COOPERATIVE  HOUSING
CORPORATION TO PARTICIPATING SHAREHOLDERS AS PART OF A VOLUNTARY DISSOL-
UTION  UNDER  THE  PRIVATE HOUSING FINANCE LAW IN WHICH SUCH DISSOLUTION
EFFECTS ONLY A MERE CHANGE IN THE IDENTITY OR FORM OF OWNERSHIP OF  SUCH
CORPORATION SHALL BE INCLUDED IN THIS EXEMPTION;
  S 2. This act shall take effect immediately, and shall be deemed to be
in effect for applicable conveyances occurring on or before such date.




 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD06397-01-1

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Senate Bill S2566

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

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2011-S2566 (ACTIVE) - Details

2011-S2566 (ACTIVE) - Summary

2011-S2566 (ACTIVE) - Sponsor Memo

2011-S2566 (ACTIVE) - Bill Text download pdf

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Sponsored By

Carl Kruger

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Actions

2011-S2566 (ACTIVE) - Details

2011-S2566 (ACTIVE) - Summary

2011-S2566 (ACTIVE) - Sponsor Memo

2011-S2566 (ACTIVE) - Bill Text download pdf

Comments