S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   6615
 
                        2017-2018 Regular Sessions
 
                             I N  S E N A T E
 
                               June 7, 2017
                                ___________
 
 Introduced  by  Sen.  GOLDEN -- read twice and ordered printed, and when
   printed to be committed to the Committee on Rules
 
 AN ACT to amend the administrative code of the  city  of  New  York,  in
   relation to the taxation of business corporations
 
   THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section 1. Section 11-640 of the administrative code of  the  city  of
 New York is amended by adding a new subdivision (n) to read as follows:
   (N)  TRANSITIONAL PROVISIONS RELATING TO THE ENACTMENT AND IMPLEMENTA-
 TION OF THE FEDERAL GRAMM-LEACH-BLILEY ACT.
   (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 SEVENTEEN AND WAS SUBJECT
 TO TAX UNDER SUBCHAPTER TWO OF THIS CHAPTER FOR ITS  LAST  TAXABLE  YEAR
 BEGINNING  BEFORE  JANUARY FIRST, TWO THOUSAND SEVENTEEN, SHALL CONTINUE
 TO BE TAXABLE UNDER SUCH SUBCHAPTER FOR ALL TAXABLE YEARS  BEGINNING  ON
 OR AFTER JANUARY FIRST, TWO THOUSAND SEVENTEEN AND BEFORE JANUARY FIRST,
 TWO THOUSAND TWENTY. 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 SEVENTEEN AND WAS SUBJECT TO TAX UNDER THIS SUBCHAPTER FOR  ITS
 LAST  TAXABLE  YEAR  BEGINNING BEFORE JANUARY FIRST, TWO THOUSAND SEVEN-
 TEEN, SHALL CONTINUE TO BE TAXABLE UNDER THIS SUBCHAPTER FOR ALL TAXABLE
 YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO  THOUSAND  SEVENTEEN  AND
 BEFORE  JANUARY  FIRST, TWO THOUSAND TWENTY ONLY IF THE CORPORATION IS A
 BANKING CORPORATION AS DEFINED IN SUBDIVISION (A) OF THIS SECTION OR THE
 CORPORATION SATISFIES THE REQUIREMENTS FOR A CORPORATION TO ELECT TO  BE
 TAXABLE  UNDER  THIS  SUBCHAPTER. PROVIDED FURTHER, THAT NOTHING IN THIS
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD11821-04-7

 S. 6615                             2
 
 SUBDIVISION SHALL PROHIBIT A CORPORATION THAT ELECTED PURSUANT TO SUBDI-
 VISION (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 CONSID-
 ERED 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 SEVENTEEN BUT FIRST BECOMES
 A TAXPAYER IN A TAXABLE YEAR BEGINNING ON OR AFTER  JANUARY  FIRST,  TWO
 THOUSAND  SEVENTEEN AND BEFORE JANUARY FIRST, TWO THOUSAND TWENTY, 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 SEVENTEEN 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 SEVENTEEN BUT FIRST
 BECOMES A TAXPAYER IN A TAXABLE  YEAR  BEGINNING  ON  OR  AFTER  JANUARY
 FIRST,  TWO  THOUSAND  SEVENTEEN  AND BEFORE JANUARY FIRST, TWO THOUSAND
 TWENTY, 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 SEVENTEEN 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 SEVENTEEN AND  BEFORE  JANUARY  FIRST,
 TWO THOUSAND TWENTY 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 SEVENTEEN  AND  BEFORE
 JANUARY  FIRST,  TWO  THOUSAND  TWENTY  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 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 MUSH 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

 S. 6615                             3
 
 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  SEVENTEEN  AND BEFORE JANUARY FIRST, TWO THOUSAND
 TWENTY, 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.
   (3)  FOR  PURPOSES OF THIS SUBDIVISION, A FINANCIAL SUBSIDIARY MEANS A
 CORPORATION (I) SIXTY-FIVE PERCENT OR MORE  OF  WHOSE  VOTING  STOCK  IS
 OWNED  OR  CONTROLLED,  DIRECTLY  OR INDIRECTLY BY A BANKING CORPORATION
 DESCRIBED IN PARAGRAPH ONE, TWO OR THREE  OF  SUBDIVISION  (A)  OF  THIS
 SECTION  AND  (II) IS DESCRIBED IN SECTION 5136A(G) OF THE REVISED STAT-
 UTES OF THE UNITED STATES OR SECTION 46 OF THE FEDERAL DEPOSIT INSURANCE
 ACT. FOR PURPOSES OF THIS SUBCHAPTER,   THE TERM  "BANKING  CORPORATION"
 SHALL  INCLUDE  A CORPORATION ELECTING TO BE TAXED UNDER THIS SUBCHAPTER
 PURSUANT TO PARAGRAPH TWO OF  THIS  SUBDIVISION  FOR  SO  LONG  AS  SUCH
 ELECTION SHALL BE IN EFFECT.
   §  2.  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 111 of part A of chapter 59 of the laws of 2014, 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  [seventeen]  TWENTY
 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 [seventeen] TWENTY, 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  [seventeen]  TWENTY, 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

 S. 6615                             4
 
 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 [seventeen] TWENTY, 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  [seventeen]
 TWENTY,  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 [seventeen] TWENTY 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.
   § 3. This act shall take effect immediately.