senate Bill S3753B

2011-2012 Legislative Session

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

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Archive: Last Bill Status - In Committee


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

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Actions

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Assembly Actions - Lowercase
Senate Actions - UPPERCASE
Feb 14, 2012 print number 3753b
amend (t) and recommit to banks
Jan 04, 2012 referred to banks
Jun 24, 2011 committed to rules
Jun 01, 2011 advanced to third reading
May 25, 2011 2nd report cal.
May 24, 2011 1st report cal.854
Apr 25, 2011 print number 3753a
amend and recommit to finance
Mar 09, 2011 reported and committed to finance
Mar 03, 2011 referred to banks

Bill Amendments

Original
A
B (Active)
Original
A
B (Active)

Co-Sponsors

S3753 - Bill Details

Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§1452 & 1462, Tax L; amd §§11-640 & 11-646, NYC Ad Cd

S3753 - Bill Texts

view summary

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

view 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.

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                    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.

Co-Sponsors

S3753A - Bill Details

Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§1452 & 1462, Tax L; amd §§11-640 & 11-646, NYC Ad Cd

S3753A - Bill Texts

view summary

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

view sponsor memo
BILL NUMBER:S3753A

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 were 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:
New.

FISCAL IMPLICATIONS:

Enactment of this bill would preserves current revenue, and such
strategy is contained in the 2011-2012 proposed executive budget.

EFFECTIVE DATE:
Immediate.

view full text
download pdf
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                 3753--A

                       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 -- reported
  favorably from said  committee  and  committed  to  the  Committee  on
  Finance  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted to said committee

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 section 4 of part J of chapter 61 of the laws
of 2011, 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 eleven and was] subject to
tax under article nine-A of this chapter  [for  its  last  taxable  year
beginning  before January first, two thousand eleven], shall continue to
be taxable under such article [for all taxable  years  beginning  on  or
after  January  first, two thousand eleven and before January first, two
thousand thirteen].  The preceding sentence shall not apply to any taxa-
ble  year  during  which  such  corporation  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 thou-
sand eleven and] was subject to tax under this  article  [for  its  last
taxable year beginning before January first, two thousand eleven], shall
continue  to be taxable under this article [for all taxable years begin-
ning on or after January first, two thousand eleven and  before  January
first,  two  thousand thirteen or in which the corporation satisfies the

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09960-04-1

S. 3753--A                          2

requirements for a corporation to elect to be taxable under  this  arti-
cle]. 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  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 eleven but first becomes
a taxpayer in a taxable year beginning on or after  January  first,  two
thousand  eleven and before January first, two thousand thirteen,] 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 eleven] 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  eleven  but  first
becomes  a  taxpayer  in  a  taxable  year beginning on or after January
first, two thousand eleven and before January first, two thousand  thir-
teen,] 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 eleven]  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 eleven and before January first, two
thousand thirteen] 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 eleven and  before  January
first,  two thousand thirteen in which] IF either (i) sixty-five percent
or more of its voting stock is owned or controlled,  directly  or  indi-
rectly  by  a  financial holding company, provided the corporation whose
voting stock is so owned or controlled is principally engaged in  activ-
ities  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

S. 3753--A                          3

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
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 eleven and before January first, two thousand thir-
teen], provided that the stock  ownership  and  activities  requirements
described  in  subparagraph (i) of this paragraph are met or such corpo-
ration 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 5  of
part  J  of  chapter  61  of  the  laws  of 2011, 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 eleven and was] subject to
tax under subchapter two of this chapter  [for  its  last  taxable  year
beginning  before January first, two thousand eleven,] shall continue to
be taxable under such subchapter for all taxable years [beginning on  or
after  January  first, two thousand eleven and before January first, two
thousand thirteen].  The preceding sentence shall not apply to any taxa-
ble  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 corpo-
ration [or corporation that was in existence before January  first,  two
thousand  eleven  and  was  subject to tax under this subchapter for its
last taxable year beginning before January first, two thousand  eleven,]
shall continue to be taxable under this subchapter for all taxable years
[beginning  on  or  after  January first, two thousand eleven and before
January first, two thousand thirteen or] in which the corporation satis-
fies 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  consid-
ered  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 eleven but
first becomes a taxpayer in a taxable year beginning on or after January
first, two thousand eleven and before January first, two thousand  thir-
teen,]  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  eleven]  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

S. 3753--A                          4

corporation  [that  was  in existence before January first, two thousand
eleven but first becomes a taxpayer in a taxable year  beginning  on  or
after  January  first, two thousand eleven and before January first, two
thousand  thirteen,]  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 eleven] 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 eleven and before January  first,  two
thousand  thirteen] 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 eleven and before
January first, two thousand thirteen 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 eleven and before January first, two thousand thir-
teen], provided that the stock  ownership  and  activities  requirements
described  in  subparagraph (i) of this paragraph are met or such corpo-
ration 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 6 of part J of chapter 61  of
the laws of 2011, 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-

S. 3753--A                          5

ny, for the first taxable year [beginning on or after January first, two
thousand and before January first, two thousand thirteen]  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-
ning  after  January  first,  two thousand and before January first, two
thousand thirteen], 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 thir-
teen],  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 thirteen], 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  thirteen],
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 thirteen] 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  7  of  part  J of chapter 61 of the laws of 2011, 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

S. 3753--A                          6

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 thirteen] 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-
ning after January first, two thousand and  before  January  first,  two
thousand thirteen], 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 thir-
teen], 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 thirteen], 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 thirteen],
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 thirteen] 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.

Co-Sponsors

S3753B (ACTIVE) - Bill Details

Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd §§1452 & 1462, Tax L; amd §§11-640 & 11-646, NYC Ad Cd

S3753B (ACTIVE) - Bill Texts

view summary

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

view sponsor memo
BILL NUMBER:S3753B

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 taxes relating to enactment and implementation of
the federal Gramm-Leach-Bliley Act. The provisions of the Gramm-Leach-
Bliley extender are presently expired for taxable years beginning on or
after January 1, 2013.

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 January 1, 2014.

JUSTIFICATION: Transitional provisions were added to the New York Tax
Law and the New York City Administrative Code 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 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
allow time for consideration of the legislature of an anticipated report
of the Executive on reform of corporate taxes.

LEGISLATIVE HISTORY: 2011 Rules 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
________________________________________________________________________

                                 3753--B

                       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 -- reported
  favorably from said  committee  and  committed  to  the  Committee  on
  Finance  --  committee  discharged, bill amended, ordered reprinted as
  amended and recommitted  to  said  committee  --  recommitted  to  the
  Committee on Banks in accordance with Senate Rule 6, sec. 8 -- commit-
  tee  discharged, bill amended, ordered reprinted as amended and recom-
  mitted to said committee

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 4 of part J of chapter 61 of the laws
of 2011, 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 [eleven] TWELVE and was
subject to tax under article nine-A of this chapter for its last taxable
year beginning before January first, two thousand [eleven] TWELVE, shall
continue to be taxable under such article for all taxable  years  begin-
ning  on or after January first, two thousand [eleven] TWELVE and before
January first, two thousand [thirteen] FOURTEEN.  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. 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 Janu-
ary first, two thousand [eleven] TWELVE and was  subject  to  tax  under
this  article  for its last taxable year beginning before January first,

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD09960-05-2

S. 3753--B                          2

two thousand [eleven] TWELVE, shall continue to be  taxable  under  this
article  for  all taxable years beginning on or after January first, two
thousand [eleven] TWELVE and before January first, two  thousand  [thir-
teen]  FOURTEEN  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  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 [eleven] TWELVE but
first becomes a taxpayer in a taxable year beginning on or after January
first, two thousand [eleven] TWELVE and before January first, two  thou-
sand [thirteen] FOURTEEN, shall be considered for purposes of this para-
graph  to  have been subject to tax under article nine-A of this chapter
for its last taxable year beginning before January first,  two  thousand
[eleven] TWELVE 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 [eleven] TWELVE but first becomes a taxpayer in  a  taxable
year  beginning  on or after January first, two thousand [eleven] TWELVE
and before January first, two thousand  [thirteen]  FOURTEEN,  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 [eleven] TWELVE 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 [eleven] TWELVE and before January
first, two thousand [thirteen] FOURTEEN 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 [eleven]
TWELVE and before January first, two  thousand  [thirteen]  FOURTEEN  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

S. 3753--B                          3

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
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 [eleven] TWELVE and before January first, two thou-
sand [thirteen] FOURTEEN, 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 5 of
part J of chapter 61 of the  laws  of  2011,  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  [eleven]  TWELVE  and  was
subject to tax under subchapter two of this chapter for its last taxable
year beginning before January first, two thousand [eleven] TWELVE, shall
continue  to  be  taxable  under  such  subchapter for all taxable years
beginning on or after January first, two thousand  [eleven]  TWELVE  and
before  January  first, two thousand [thirteen] FOURTEEN.  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 [eleven] TWELVE and  was  subject  to
tax  under  this  subchapter  for its last taxable year beginning before
January first, two thousand [eleven] TWELVE, shall continue to be  taxa-
ble  under  this  subchapter for all taxable years beginning on or after
January first, two thousand [eleven] TWELVE and  before  January  first,
two  thousand  [thirteen] FOURTEEN 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  taxable year. A corporation that was in existence
before January first, two thousand [eleven] TWELVE but first  becomes  a
taxpayer  in  a  taxable  year  beginning on or after January first, two

S. 3753--B                          4

thousand [eleven] TWELVE and before January first, two  thousand  [thir-
teen]  FOURTEEN,  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 [eleven]
TWELVE 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  [eleven] TWELVE but first becomes a taxpayer in a taxable
year beginning on or after January first, two thousand  [eleven]  TWELVE
and  before  January  first,  two thousand [thirteen] FOURTEEN, 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 [eleven] TWELVE 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 [eleven]  TWELVE  and  before  January
first,  two  thousand [thirteen] FOURTEEN 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
[eleven] TWELVE and before January first, two thousand [thirteen]  FOUR-
TEEN  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 [eleven] TWELVE and before January first, two thou-
sand [thirteen] FOURTEEN, 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 6 of part J of chapter 61 of
the laws of 2011, is amended to read as follows:

S. 3753--B                          5

  (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 [thirteen] FOURTEEN
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 [thirteen] FOURTEEN, 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, direct-
ly 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 [thirteen] FOURTEEN, 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 franchise 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  sepa-
rate  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 [thirteen] FOURTEEN, 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 taxable 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 [thirteen]
FOURTEEN, 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 [thirteen] FOURTEEN  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. 3753--B                          6

  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 7 of part J of chapter 61 of the laws of  2011,  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  [thirteen]  FOURTEEN
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 [thirteen] FOURTEEN, 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  indi-
rectly,  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  subse-
quent 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 begin-
ning after January first, two thousand and  before  January  first,  two
thousand  [thirteen] FOURTEEN, 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 franchise or do business in the city  in  a  corporate  or
organized capacity and sixty-five percent or more of such banking corpo-
ration'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 [thirteen] FOURTEEN, 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 taxable 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 [thirteen]
FOURTEEN, 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

S. 3753--B                          7

any  taxable  year beginning on or after January first, two thousand and
before January first, two thousand [thirteen] FOURTEEN  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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