Senate Bill S318

2023-2024 Legislative Session

Requires the recording of mezzanine debt and preferred equity investments and includes mezzanine debt in the mortgage recording tax

download bill text pdf

Sponsored By

Current Bill Status - In Senate Committee Judiciary 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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2023-S318 (ACTIVE) - Details

See Assembly Version of this Bill:
A407
Current Committee:
Senate Judiciary
Law Section:
Real Property Law
Laws Affected:
Add §291-k, RP L; amd §§250, 253, 253-a, 255, 257 & 258, Tax L; amd §9-601, UCC
Versions Introduced in Other Legislative Sessions:
2019-2020: S7231, A9041
2021-2022: S3074, A3139

2023-S318 (ACTIVE) - Summary

Relates to requiring the recording of mezzanine debt and preferred equity investments and including mezzanine debt in the mortgage recording tax; defines mezzanine debt.

2023-S318 (ACTIVE) - Sponsor Memo

2023-S318 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                    318
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                                (PREFILED)
 
                              January 4, 2023
                                ___________
 
 Introduced  by  Sens. SALAZAR, 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD00036-01-3
              

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