Senate Bill S6041

                            
 
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
     S. 6041                                                  A. 7704
 
                        2017-2018 Regular Sessions
 
                       S E N A T E - A S S E M B L Y
 
                               May 10, 2017
                                ___________
 
 IN SENATE -- Introduced by Sen. LAVALLE -- read twice and ordered print-
   ed,  and  when  printed  to  be committed to the Committee on Investi-
   gations and Government Operations
 
 IN ASSEMBLY -- Introduced by M. of A. THIELE -- read once  and  referred
   to the Committee on Ways and Means

 AN ACT to amend the tax law in relation to taxable conveyances under the
   real  estate  transfer  tax  in  the Peconic Bay Region; and to repeal
   certain provisions of such law relating thereto
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Subdivision 4 of section 1449-aa of the tax law is amended
 by adding a new paragraph (f) to read as follows:
   (F) IN THE CASE OF A TRANSFER OF AN INTEREST IN A PARTNERSHIP, LIMITED
 LIABILITY CORPORATION, S CORPORATION OR  NON-PUBLICLY  TRADED  C  CORPO-
 RATION  WITH  ONE  HUNDRED OR FEWER SHAREHOLDERS THAT OWNS REAL PROPERTY
 THAT IS LOCATED IN A TOWN AND HAS A FAIR MARKET  VALUE  THAT  EQUALS  OR
 EXCEEDS FIFTY PERCENT OF ALL THE ASSETS OF THE ENTITY ON THE DATE OF THE
 TRANSFER OF AN INTEREST IN THE ENTITY, THE CONSIDERATION FOR THE CONVEY-
 ANCE SHALL BE CALCULATED BY MULTIPLYING (1) THE FAIR MARKET VALUE OF THE
 REAL  PROPERTY THAT IS LOCATED IN A TOWN THAT IS OWNED BY THE ENTITY AND
 (2) THE PERCENTAGE OF THE ENTITY THAT IS TRANSFERRED.
   § 2. Subdivision 5 of section 1449-aa of the tax law is REPEALED and a
 new subdivision 5 is added to read as follows:
   5. "CONVEYANCE" MEANS THE TRANSFER OR TRANSFERS  OF  ANY  INTEREST  IN
 REAL  PROPERTY  BY  ANY  METHOD,  INCLUDING,  BUT  NOT  LIMITED TO SALE,
 EXCHANGE, ASSIGNMENT, SURRENDER, MORTGAGE FORECLOSURE, TRANSFER IN  LIEU
 OF  FORECLOSURE,  OPTION,  TRUST  INDENTURE,  TAKING  BY EMINENT DOMAIN,
 CONVEYANCE UPON LIQUIDATION OR BY A RECEIVER, OR TRANSFER OR ACQUISITION
 OF A CONTROLLING INTEREST IN ANY ENTITY WITH AN INTEREST IN REAL PROPER-
 TY.  CONVEYANCE ALSO INCLUDES THE TRANSFER OF AN INTEREST IN A  PARTNER-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD10767-01-7

 S. 6041                             2                            A. 7704
 
 SHIP, LIMITED LIABILITY CORPORATION, S CORPORATION OR NON-PUBLICLY TRAD-
 ED  C  CORPORATION WITH FEWER THAN ONE HUNDRED SHAREHOLDERS THAT OWNS AN
 INTEREST IN REAL PROPERTY THAT IS LOCATED IN NEW YORK  AND  HAS  A  FAIR
 MARKET  VALUE  THAT EQUALS OR EXCEEDS FIFTY PERCENT OF ALL THE ASSETS OF
 THE ENTITY ON THE DATE OF THE TRANSFER OF AN  INTEREST  IN  THE  ENTITY.
 ONLY  THOSE  ASSETS  THAT THE ENTITY OWNED FOR AT LEAST TWO YEARS BEFORE
 THE DATE OF THE TRANSFER OF THE TAXPAYER'S INTEREST IN THE ENTITY  SHALL
 BE  USED  IN  DETERMINING THE FAIR MARKET VALUE OF ALL THE ASSETS OF THE
 ENTITY ON THE DATE OF THE TRANSFER. TRANSFER  OF  AN  INTEREST  IN  REAL
 PROPERTY  SHALL  INCLUDE  THE  CREATION  OF A LEASEHOLD OR SUBLEASE ONLY
 WHERE (I) THE SUM OF THE TERM OF THE LEASE OR SUBLEASE AND  ANY  OPTIONS
 FOR  RENEWAL EXCEEDS FORTY-NINE YEARS, (II) SUBSTANTIAL CAPITAL IMPROVE-
 MENTS ARE OR MAY BE MADE BY OR FOR THE BENEFIT OF THE LESSEE OR  SUBLES-
 SEE,  AND  (III)  THE  LEASE OR SUBLEASE IS FOR SUBSTANTIALLY ALL OF THE
 PREMISES CONSTITUTING THE REAL PROPERTY.  NOTWITHSTANDING THE FOREGOING,
 CONVEYANCE OF REAL PROPERTY SHALL NOT INCLUDE A CONVEYANCE  PURSUANT  TO
 DEVISE,  BEQUEST  OR INHERITANCE; THE CREATION, MODIFICATION, EXTENSION,
 SPREADING, SEVERANCE, CONSOLIDATION, ASSIGNMENT,  TRANSFER,  RELEASE  OR
 SATISFACTION  OF A MORTGAGE; A MORTGAGE SUBORDINATION AGREEMENT, A MORT-
 GAGE SEVERANCE AGREEMENT, AN INSTRUMENT GIVEN TO PERFECT  OR  CORRECT  A
 RECORDED  MORTGAGE; OR A RELEASE OF A LIEN OF TAX PURSUANT TO THIS CHAP-
 TER OR THE INTERNAL REVENUE CODE.
   § 3. Section 1449-nn of the tax law is amended by adding a new  subdi-
 vision 5 to read as follows:
   5.  THE TOWN IS AUTHORIZED TO TREAT AS SUBJECT TO TAX UNDER THIS ARTI-
 CLE ANY CONVEYANCE OF AN INTEREST IN REAL PROPERTY MADE PURSUANT  TO  AN
 AGREEMENT, UNDERSTANDING OR ARRANGEMENT THAT RESULTS IN THE AVOIDANCE OR
 EVASION OF THE TAX IMPOSED BY THIS SECTION.
   §  4.  This act shall take effect immediately; provided, however, that
 the amendments to paragraph (f) of subdivision 4 of section  1449-aa  of
 the  tax law made by section one of this act shall not affect the repeal
 of such subdivision and shall be deemed to repeal  therewith;  provided,
 further,  that the amendments to subdivision 5 of section 1449-aa of the
 tax law made by section two of this act shall not affect the  repeal  of
 such  section and shall be deemed to repeal therewith; provided, further
 that the amendments to subdivision 5 of section 1449-nn of the  tax  law
 made  by  section  three of this act shall not affect the repeal of such
 section and shall be deemed to repeal therewith.