|Assembly Actions - Lowercase
Senate Actions - UPPERCASE
|Jan 27, 2021||referred to judiciary|
senate Bill S3074
Current Bill Status - In Senate Committee Judiciary Committee
- In Committee
- On Floor Calendar
- Passed Senate
- Passed Assembly
- Delivered to Governor
- Signed/Vetoed by Governor
S3074 (ACTIVE) - Details
S3074 (ACTIVE) - Sponsor Memo
BILL NUMBER: S3074 SPONSOR: SALAZAR TITLE OF BILL: An act to amend the real property law and the uniform commercial code, in relation to requiring the recording of mezzanine debt and preferred equity investments; and to amend the tax law, in relation to including mezzanine debt in the mortgage recording tax PURPOSE OR GENERAL IDEA OF BILL: This bill would treat mezzanine debt and preferred equity investments used to finance real estate purchases like a mortgage, subjecting it to the same recording and taxation requirements. SUMMARY OF PROVISIONS: Section 1 amends the real property law by adding a new section 291-k that defines "mezzanine debt" and "preferred equity investments" and requires that they be recorded concurrently with a mortgage instrument
S3074 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K ________________________________________________________________________ 3074 2021-2022 Regular Sessions I N S E N A T E January 27, 2021 ___________ Introduced by Sens. SALAZAR, BIAGGI, BRISPORT, HOYLMAN, JACKSON, MYRIE, RIVERA -- read twice and ordered printed, and when printed to be committed to the Committee on Judiciary AN ACT to amend the real property law and the uniform commercial code, in relation to requiring the recording of mezzanine debt and preferred equity investments; and to amend the tax law, in relation to including mezzanine debt in the mortgage recording tax THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM- BLY, DO ENACT AS FOLLOWS: Section 1. The real property law is amended by adding a new section 291-k to read as follows: § 291-K. RECORDING OF MEZZANINE DEBT AND PREFERRED EQUITY INVESTMENTS. 1. WHENEVER A MORTGAGE INSTRUMENT IS RECORDED IN THE OFFICE OF THE RECORDING OFFICER OF ANY COUNTY, ANY MEZZANINE DEBT OR PREFERRED EQUITY INVESTMENT RELATED TO THE REAL PROPERTY UPON WHICH THE MORTGAGE INSTRU- MENT IS FILED SHALL ALSO BE RECORDED WITH SUCH MORTGAGE INSTRUMENT. FOR THE PURPOSES OF THIS SECTION, "MEZZANINE DEBT" AND "PREFERRED EQUITY INVESTMENTS" SHALL MEAN DEBT CARRIED BY A BORROWER THAT MAY BE SUBORDI- NATE TO THE PRIMARY LIEN AND IS SENIOR TO THE COMMON SHARES OF AN ENTITY OR THE BORROWER'S EQUITY AND REPORTED AS ASSETS FOR THE PURPOSES OF FINANCING SUCH PRIMARY LIEN. THIS SHALL INCLUDE NON-TRADITIONAL FINANC- ING TECHNIQUES SUCH AS A DIRECT OR INDIRECT INVESTMENT BY A FINANCING SOURCE IN AN ENTITY THAT OWNS THE EQUALITY INTERESTS OF THE UNDERLYING MORTGAGE WHERE THE FINANCING SOURCE HAS SPECIAL RIGHTS OR PREFERRED RIGHTS SUCH AS: (I) THE RIGHT TO RECEIVE A SPECIAL OR PREFERRED RATE OF RETURN ON ITS CAPITAL INVESTMENT; AND (II) THE RIGHT TO AN ACCELERATED REPAYMENT OF THE INVESTORS CAPITAL CONTRIBUTION. 2. THIS SECTION SHALL APPLY TO BOTH MEZZANINE DEBT AND PREFERRED EQUI- TY INVESTMENTS IF BOTH USED BY THE BORROWER OR MORTGAGOR, OR EITHER MEZZANINE DEBT OR PREFERRED DEBT, IF EITHER IS USED BY THE BORROWER OR MORTGAGOR. EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets [ ] is old law to be omitted.
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