Senate Bill S5457

2013-2014 Legislative Session

Relates to the computation of entire net income of thrift institutions

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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 08, 2014	referred to investigations and government operations
May 16, 2013	referred to investigations and government operations

2013-S5457 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §1453, Tax L

2013-S5457 (ACTIVE) - Summary

Relates to the computation of entire net income of thrift institutions.

2013-S5457 (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S5457

TITLE OF BILL:  An act to amend the tax law, in relation to the
computation of entire net income of thrift institutions

PURPOSE:

To update the Tax Law and provide comparable tax treatment to smaller
commercial banks and thrift institutions which have similar
investments and portfolios.

SUMMARY OF PROVISIONS:

Amends Section 1453(h) of the Tax Law to provide that these tax
provisions which are currently applicable to thrift institutions may
also be applicable to a qualified community bank with assets of less
than $8 billion.

JUSTIFICATION:

Under the current tax law, qualified thrift institutions are allowed
deductions for bad debts under rules which are more favorable than
accorded to other financial institutions. To qualify for this
deduction, a thrift must meet an asset test which requires 60% of
their assets to be qualifying assets including cash, government
obligations and residential mortgage loans. Many small community

commercial banks have assets on their balance sheet which would meet
the asset test for qualified thrifts. Community banks, whether
operating as a thrift or commercial bank, have very similar balance
sheets and missions.

There are no longer any material distinctions between community
commercial banks and community thrift institutions. They both have
similar loan portfolios and investments in the communities which they
serve. However, they are subject to different tax provisions which can
place them at a competitive disadvantage. This bill creates a level
playing field between community banks.

Community banks are an important source of funding for small business
and farm loans, as was recently highlighted by a Department of
Financial Services report. This proposed change would help encourage
community banks. Mergers and acquisitions have depleted the ranks of
these important community growth engines. This bill would provide a
positive inducement for these institutions to function in the current
competitive environment, and to strengthen their local economies.

FISCAL IMPLICATIONS:

To be determined

EFFECTIVE DATE:

This act shall take effect January 1st next succeeding the date on
which it shall have become a law.

2013-S5457 (ACTIVE) - Bill Text download pdf

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

                                  5457

                       2013-2014 Regular Sessions

                            I N  S E N A T E

                              May 16, 2013
                               ___________

Introduced  by  Sen.  FARLEY -- 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 the  computation  of  entire
  net income of thrift institutions

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

  Section 1. The opening paragraph and subparagraph (A) of  paragraph  1
of  subsection (h) of section 1453 of the tax law, as amended by chapter
411 of the laws of 1996, is amended to read as follows:
  For purposes of this subsection, a "thrift institution" is  a  banking
corporation  which  satisfies the requirements of [subparagraphs] CLAUSE
(I) OF SUBPARAGRAPH (A) and SUBPARAGRAPH (B) of this  paragraph,  AND  A
"QUALIFIED  COMMUNITY BANK" IS A BANKING CORPORATION WHICH SATISFIES THE
REQUIREMENTS OF CLAUSES (II) AND (III) OF SUBPARAGRAPH (A) AND  SUBPARA-
GRAPH (B) OF THIS PARAGRAPH.
  (A)  (I)  Such  banking corporation must be [(i)] (I) a banking corpo-
ration as defined in paragraph one of subsection (a) of section fourteen
hundred fifty-two of this article created or authorized to  do  business
under  article  six  or  ten  of  the banking law, [(ii)] (II) a banking
corporation as defined in paragraph two or seven of  subsection  (a)  of
section  fourteen  hundred  fifty-two  of  this article which is doing a
business substantially similar to the business which  a  corporation  or
association may be created to do under article six or ten of the banking
law  or any business which a corporation or association is authorized by
such article to do, or [(iii)] (III) a banking corporation as defined in
paragraph four or five of subsection (a)  of  section  fourteen  hundred
fifty-two of this article.
  (II)  TO  BE A QUALIFIED COMMUNITY BANK, A TAXPAYER MUST BE (I) A BANK
OR TRUST COMPANY ORGANIZED UNDER OR SUBJECT TO THE PROVISIONS OF ARTICLE

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD10841-02-3

S. 5457                             2

THREE OF THE BANKING LAW OR A COMPARABLE PROVISION OF THE LAWS OF ANOTH-
ER STATE OR (II) A NATIONAL BANKING ASSOCIATION.
  (III)  THE  AVERAGE VALUE DURING THE TAXABLE YEAR OF THE ASSETS OF THE
TAXPAYER OR THE ASSETS OF THE AFFILIATED GROUP OF THE TAXPAYER MUST  NOT
EXCEED  EIGHT  BILLION  DOLLARS. FOR PURPOSES OF THIS CLAUSE, THE AFFIL-
IATED GROUP OF THE TAXPAYER INCLUDES  ANY  CORPORATION  THAT  MEETS  THE
OWNERSHIP REQUIREMENTS TO BE INCLUDED IN A COMBINED REPORT UNDER ARTICLE
THIRTY-TWO OF THIS CHAPTER.
  S  2. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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Senate Bill S5457

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

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2013-S5457 (ACTIVE) - Details

2013-S5457 (ACTIVE) - Summary

2013-S5457 (ACTIVE) - Sponsor Memo

2013-S5457 (ACTIVE) - Bill Text download pdf

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Sponsored By

Hugh T. Farley

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

Actions

2013-S5457 (ACTIVE) - Details

2013-S5457 (ACTIVE) - Summary

2013-S5457 (ACTIVE) - Sponsor Memo

2013-S5457 (ACTIVE) - Bill Text download pdf

Comments