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A06301 Summary:

BILL NOA06301
 
SAME ASNo Same As
 
SPONSORBrook-Krasny
 
COSPNSRNovakhov
 
MLTSPNSR
 
Amd §1405, Tax L
 
Clarifies the exemption for cooperative housing corporations where there is no change in beneficial ownership.
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A06301 Actions:

BILL NOA06301
 
04/03/2023referred to ways and means
06/08/2023held for consideration in ways and means
01/03/2024referred to ways and means
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A06301 Memo:

NEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)
 
BILL NUMBER: A6301
 
SPONSOR: Brook-Krasny
  TITLE OF BILL: An act to amend the tax law, in relation to clarifying the exemption for cooperative housing corporations where there is no change in beneficial ownership   PURPOSE: This bill would clarify the exemption in the tax law for cooperative housing corporations when there is no change in beneficial ownership.   SUMMARY OF SPECIFIC PROVISIONS: Section 1 seeks a clarification of exemptions in the tax law for cooper- ative housing corporations wherein there is no change in beneficial ownership and shares are conveyed to the participating shareholders as part of a voluntary dissolution in which the only changes made are the identity or form of ownership of the corporation. Section 2 This act takes effect immediately and is retroactive for applicable conveyances   JUSTIFICATION: The intent of the Mitchell-Lama, •when enacted, was to create much need- ed affordable housing through the use of low interest loans and reduced real estate taxes for fixed periods in order to create needed housing. Once a cooperative had repaid its government loans, it would cease to be a regulated cooperative and become standard cooperative. The law intended for coops to evolve out of regulation. Over the last several years, a number of cooperatives have met their obligations, and have exited the Mitchell-Lama program. This process includes approval of both the NYS Division of Housing and Community ReneWal and the New York State Attorney's General's office. The Mitc- hell-Lama program is seen as one of the most cost-effective and success- ful housing programs ever created. Following the issuance of an advisory opinion in 2008, the NYS Depart- ment of Taxation and Finance has opened audits of the many former Mitc- hell-Lama buildings that have come out of the program in recent years, and concluded that in a number of cases State tax was due as a result of this conversion. This increase in audit .activity prompted additional examination by the Department on this retroactive application of the tax. In April 2010, they issued an advisory opinion which concludes that the conversion of a not for profit housing company to a private cooper- ative housing corporation constitutes a conveyance by the plan sponsor of the real property comprising the cooperative dwelling, and would be subject to the real estate transfer tax. This advisory opinion provides' limited guidance regarding the exemption provided if there is no change in the beneficial ownership. This bill would clarify that for certain conversions, in which there is no change in the beneficial ownership of the property, would qualify for this exemption.   LEGISLATIVE HISTORY: 2015-2016: A 4111 - Referred to Ways and Means 2013-2014: A 5866 - Referred to Ways and Means/ Held for Consideration in Way and Means, 2011-2012: A 3916- Referred to Ways and Means   FISCAL IMPLICATIONS: None.   EFFECTIVE DATE: Immediately.
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A06301 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          6301
 
                               2023-2024 Regular Sessions
 
                   IN ASSEMBLY
 
                                      April 3, 2023
                                       ___________
 
        Introduced  by M. of A. BROOK-KRASNY, NOVAKHOV -- read once and referred
          to the Committee on Ways and Means
 
        AN ACT to amend the tax law, in relation to clarifying the exemption for
          cooperative housing corporations where there is no change  in  benefi-
          cial ownership
 
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
 
     1    Section 1. Paragraph 6 of subdivision (b) of section 1405 of  the  tax
     2  law, as amended by chapter 61 of the laws of 1989, is amended to read as
     3  follows:
     4    6.  Conveyances  to  effectuate  a  mere change of identity or form of
     5  ownership or organization where there is no change in beneficial  owner-
     6  ship, other than conveyances to a cooperative housing corporation of the
     7  real   property   comprising  the  cooperative  dwelling  or  dwellings,
     8  provided, however, the conveyance of shares  of  a  cooperative  housing
     9  corporation to participating shareholders as part of a voluntary dissol-
    10  ution  under  the  private housing finance law in which such dissolution
    11  effects only a mere change in the identity or form of ownership of  such
    12  corporation shall be included in this exemption;
    13    § 2. This act shall take effect immediately, and shall be deemed to be
    14  in effect for applicable conveyances occurring on or before such date.
 
 
 
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10278-01-3
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