A09041 Summary:

BILL NOA09041
 
SAME ASSAME AS S07231
 
SPONSOREpstein
 
COSPNSRCruz, Richardson, Simon, Rosenthal L, D'Urso, Mosley, Reyes, Glick, Barron, Simotas, Gottfried
 
MLTSPNSRCook, Frontus, Lentol
 
Add 291-k, RP L; amd 250, 253, 257 & 261, Tax L
 
Relates to requiring the recording of mezzanine debt and including mezzanine debt in the mortgage recording tax; defines mezzanine debt.
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A09041 Actions:

BILL NOA09041
 
01/10/2020referred to judiciary
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A09041 Committee Votes:

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A09041 Floor Votes:

There are no votes for this bill in this legislative session.
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A09041 Text:



 
                STATE OF NEW YORK
        ________________________________________________________________________
 
                                          9041
 
                   IN ASSEMBLY
 
                                    January 10, 2020
                                       ___________
 
        Introduced  by M. of A. EPSTEIN -- read once and referred to the Commit-
          tee on Judiciary
 
        AN ACT to amend the real property law,  in  relation  to  requiring  the
          recording  of  mezzanine  debt;  and 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:
 
     1    Section  1.  The  real property law is amended by adding a new section
     2  291-k to read as follows:
     3    § 291-k. Recording of mezzanine debt. Whenever a  mortgage  instrument
     4  is  recorded  in  the office of the recording officer of any county, any
     5  mezzanine debt related to the real  property  upon  which  the  mortgage
     6  instrument  is  filed  shall also be recorded with such mortgage instru-
     7  ment. For the purposes of this section, "mezzanine debt" shall mean debt
     8  carried by a borrower that may be subordinate to the primary lien and/or
     9  common shares and reported as assets for the purposes of financing  such
    10  primary lien.
    11    § 2. Section 250 of the tax law is amended by adding a new subdivision
    12  4 to read as follows:
    13    4.  The  term "mezzanine debt" shall have the same meaning as provided
    14  in section two hundred ninety-one-k of the real property law.
    15    § 3. Section 253 of the tax law, as amended by chapter 350 of the laws
    16  of 1969, subdivision 1-a as added by chapter 788 of the  laws  of  1978,
    17  paragraph  (a)  of subdivision 1-a as amended by chapter 522 of the laws
    18  of 2008, subdivision 2 as amended by chapter 151 of the  laws  of  1971,
    19  paragraph  (a) of subdivision 2 as amended by chapter 394 of the laws of
    20  2016 and subdivision 3 as amended by chapter 527 of the laws of 2007, is
    21  amended to read as follows:
    22    § 253. Recording tax. 1. A tax of fifty cents  for  each  one  hundred
    23  dollars  and  each remaining major fraction thereof of the total sum of:
    24  (a) the principal debt or obligation which is, or under any  contingency
    25  may be secured at the date of the execution thereof or at any time ther-
    26  eafter by a mortgage on real property situated within the state recorded
    27  on or after the first day of July, nineteen hundred and six, and (b) any
 
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14340-02-9

        A. 9041                             2
 
     1  mezzanine  debt  related  to  such  real  property  recorded pursuant to
     2  section two hundred ninety-one-k of the real  property  law,  is  hereby
     3  imposed  on  [each] such [mortgage] total amount, and shall be collected
     4  and  paid  as  provided  in this article. If the principal debt or obli-
     5  gation which is or by any contingency may be secured  by  such  mortgage
     6  recorded  on or after the first day of July, nineteen hundred and seven,
     7  and any mezzanine debt is less than one hundred dollars, a tax of  fifty
     8  cents  is  hereby imposed on such mortgage and mezzanine debt, and shall
     9  be collected and paid as provided in this article.
    10    1-a. (a) In addition to the tax imposed by  subdivision  one  of  this
    11  section, there shall be imposed on the total sum of (i) each mortgage of
    12  real  property  situated  within  the  state and (ii) any mezzanine debt
    13  related to such property recorded pursuant to section two hundred  nine-
    14  ty-one-k  of the real property law, except mortgages wherein the mortga-
    15  gee is a natural person or persons, or is a credit union as  defined  in
    16  section  two  of the banking law, and in either case the mortgaged prem-
    17  ises consist of real property improved by  a  structure  containing  six
    18  residential  dwelling  units or less, each with separate cooking facili-
    19  ties, a special additional tax of twenty-five cents for each one hundred
    20  dollars and each remaining major fraction thereof of principal  debt  or
    21  obligation which is, or under any contingency may be secured at the date
    22  of  execution  thereof or at anytime thereafter by such mortgage and any
    23  mezzanine debt.  The tax, if any, imposed by this subdivision  shall  in
    24  cases  of real property principally improved or to be improved by one or
    25  more structures containing in the aggregate not more than  six  residen-
    26  tial  dwelling units, each dwelling unit having its own separate cooking
    27  facilities, be paid by the mortgagee, and such tax shall not be paid  or
    28  payable,  directly  or  indirectly, by the mortgagor except as otherwise
    29  provided in sections two hundred fifty-eight and two hundred  fifty-nine
    30  of  this  article and except such tax shall be paid in such cases by the
    31  mortgagor where the mortgagee is an  exempt  organization  described  in
    32  paragraph (b) of this subdivision. In all other cases, such tax shall be
    33  paid by the mortgagor except that the tax shall be paid by the mortgagee
    34  where the mortgagor is an exempt organization described in paragraph (b)
    35  of  this  subdivision. All of the provisions of this article shall apply
    36  with respect to the special additional tax imposed by  this  subdivision
    37  to the same extent as if it were imposed by said subdivision one of this
    38  section, except as otherwise expressly provided in this article.
    39    (b)  An organization organized other than for profit which is operated
    40  on a nonprofit basis no part of the net earnings of which inures to  the
    41  benefit  of  any  officer,  director  or member and which is exempt from
    42  federal income taxation pursuant  to  subsection  (a)  of  section  five
    43  hundred  one  of  the  internal  revenue  code  shall be exempt from the
    44  special additional tax imposed by this subdivision.
    45    2. (a) In addition to the taxes imposed by subdivisions one and  one-a
    46  of  this  section,  there  shall be imposed on the total sum of (i) each
    47  mortgage of real property situated within the state recorded on or after
    48  the first day of July, nineteen hundred sixty-nine, and (ii) any  mezza-
    49  nine  debt  related  to  such  property recorded pursuant to section two
    50  hundred ninety-one-k of the real property  law,  an  additional  tax  of
    51  twenty-five  cents  for  counties  outside  of the metropolitan commuter
    52  transportation district, as defined pursuant to section  twelve  hundred
    53  sixty-two  of  the public authorities law, and thirty cents for counties
    54  within such metropolitan commuter transportation district for  each  one
    55  hundred  dollars  and each remaining major fraction thereof of principal
    56  debt or obligation which is, or under any contingency may be secured  at

        A. 9041                             3
 
     1  the  date  of  execution thereof or at any time thereafter by such mort-
     2  gage, and any mezzanine debt, saving and excepting the first  ten  thou-
     3  sand  dollars  of such principal debt or obligation in any case in which
     4  the  related  mortgage is of real property principally improved or to be
     5  improved by a one  or  two  family  residence  or  dwelling.    All  the
     6  provisions  of  this  article shall apply with respect to the additional
     7  tax imposed by this subdivision to the same extent as if it were imposed
     8  by the said  subdivision  one  of  this  section,  except  as  otherwise
     9  expressly  provided  in this article. Notwithstanding article eighteen-A
    10  of the general municipal law and titles eleven and  fifteen  of  article
    11  eight  of the public authorities law, no mortgage of real property situ-
    12  ated within the state in counties located within the metropolitan commu-
    13  ter  transportation  district,  the  Niagara   Frontier   transportation
    14  district,  the  Rochester-Genesee  transportation  district, the capital
    15  district transportation district, and  the  central  New  York  regional
    16  transportation   district  executed,  given,  made,  or  transferred  or
    17  assigned by or to an agency created  under  article  eighteen-A  of  the
    18  general  municipal  law,  an  authority  created  under  title eleven or
    19  fifteen of article eight of the public  authorities  law,  an  agent  or
    20  agent  of  such  agent  of  such agency or authority, a project operator
    21  receiving financial assistance from such agency or authority, a  project
    22  occupant of such agency or authority, or an owner of a project receiving
    23  financial  assistance from such agency or authority shall be exempt from
    24  the additional tax imposed by this subdivision. For the purposes of this
    25  subdivision the term "financial assistance" shall have the same  meaning
    26  as  defined in section eight hundred fifty-four of the general municipal
    27  law. The imposition of this additional tax on  mortgages  and  mezzanine
    28  debt  recorded  in a county outside the city of New York, other than one
    29  of the counties from time to time comprising the  metropolitan  commuter
    30  transportation  district,  the Niagara Frontier transportation district,
    31  the Rochester-Genesee  transportation  district,  the  capital  district
    32  transportation  district or the central New York regional transportation
    33  district may be suspended for a specified  period  of  time  or  without
    34  limitation  as  to  time  by  a  local law, ordinance or resolution duly
    35  adopted by the local legislative body of such county.
    36    (b) Any local law, ordinance or resolution suspending  the  imposition
    37  of this additional tax as provided in paragraph (a) of this subdivision,
    38  or  amending or repealing such local law, ordinance or resolution, shall
    39  take effect only on the first day of  the  third  month  succeeding  the
    40  month  in which such local law, ordinance or resolution is duly adopted.
    41  Such a local law, ordinance or resolution shall not be effective  unless
    42  a  certified  copy  thereof is mailed by registered or certified mail to
    43  the state tax commission at its office in Albany  at  least  sixty  days
    44  prior  to  the  date  the  local law, ordinance or resolution shall take
    45  effect. However, the tax commission may waive and reduce such  sixty-day
    46  notice  requirement  to a requirement that such certified copy be mailed
    47  by registered or certified mail within a period of not less than  thirty
    48  days prior to such effective date if it deems such action to be consist-
    49  ent  with  its  duties under this article. A certified copy of any local
    50  law, ordinance or resolution adopted pursuant to this subdivision  shall
    51  also be filed with the state comptroller within five days after the date
    52  it is duly adopted.
    53    3.  Notwithstanding  any  other  provision of law to the contrary, the
    54  mortgage recording tax shall not be imposed upon any  mortgage  executed
    55  by a voluntary nonprofit hospital corporation, fire company or voluntary
    56  ambulance  service  as  defined  in  section  one hundred of the general

        A. 9041                             4
 
     1  municipal law, or upon any mortgage executed by or granted to the dormi-
     2  tory authority.
     3    § 4. Section 257 of the tax law is amended to read as follows:
     4    §  257.  Payment  of taxes. The taxes imposed by this article shall be
     5  payable on the recording of each mortgage of  real  property,  including
     6  any  mezzanine  debt,  subject  to taxes thereunder. Such taxes shall be
     7  paid to the recording officer of any county in which the  real  property
     8  or any part thereof is situated.  It shall be the duty of such recording
     9  officer  to  indorse  upon each mortgage and any mezzanine debt included
    10  with such mortgage a receipt for the amount of  the  tax  so  paid.  Any
    11  mortgage  so  indorsed  may  thereupon  or thereafter be recorded by any
    12  recording officer and the receipt for such tax indorsed upon each  mort-
    13  gage  shall  be  recorded therewith. The record of such receipt shall be
    14  conclusive proof that the amount of tax stated  therein  has  been  paid
    15  upon such mortgage, including any mezzanine debt.
    16    §  5. Subdivision 3 of section 261 of the tax law, as amended by chap-
    17  ter 443 of the laws of 2017, is amended to read as follows:
    18    3. On or before the tenth day of each month the recording  officer  of
    19  each  county  shall pay over to the county treasurer of said county, and
    20  in the counties of New York, Kings, Queens, Richmond and  Bronx  to  the
    21  commissioner of finance of the city of New York for credit to the gener-
    22  al  fund  of  such  city,  the balance of the moneys received during the
    23  preceding month upon account of taxes paid  to  him  or  her  as  herein
    24  prescribed,  after deducting the necessary expenses of his or her office
    25  as provided in section two hundred sixty-two  of  this  article,  except
    26  taxes  paid  upon  mortgages  which  under the provisions of section two
    27  hundred sixty of this article are first to be apportioned by the commis-
    28  sioner, which taxes and money shall be paid over by the commissioner  of
    29  finance  of the city of New York as provided by the determination of the
    30  commissioner and except  taxes  paid  upon  any  mortgage  with  related
    31  recorded mezzanine debt, which taxes and money shall be paid over to the
    32  county  treasurer  or  to the commissioner of finance of the city of New
    33  York for the development, maintenance, or management of  public  housing
    34  and/or  affordable  housing  in such officer's county or the city of New
    35  York. In each county not within the city of New York, the whole  of  the
    36  net  amount of such balance, after the deduction by the county treasurer
    37  of the necessary expenses of his or her office provided in  section  two
    38  hundred sixty-two of this article, shall be held by him or her and shall
    39  be  allocated  to  the  tax  districts  of  the  county according to the
    40  location of the real property covered by the respective  mortgages  upon
    41  which  the tax was collected. The recording officer and county treasurer
    42  shall prepare a joint semi-annual report on or before May fifteenth  and
    43  on  or  before November fifteenth in each year showing the amounts to be
    44  credited to each tax district of the  county  of  the  moneys  collected
    45  under this article during the preceding periods of six months each which
    46  ended  respectively  on March thirty-first and September thirtieth. Such
    47  report shall be made in duplicate in accordance with the rules and regu-
    48  lations of the commissioner and filed with the clerk  of  the  board  of
    49  supervisors and the commissioner. The board of supervisors, on or before
    50  the fifteenth day of June and on or before the fifteenth day of December
    51  in  each year, shall issue its warrant for the payment to the respective
    52  tax districts of the amounts so credited, provided, however, that  in  a
    53  county  in  which  a  town  contains  within  its limits an incorporated
    54  village, or portion thereof, the board of supervisors shall apportion to
    55  such village so much of the share credited to the town as  the  assessed
    56  value  of  said  village  or  portion  thereof  bears to twice the total

        A. 9041                             5
 
     1  assessed valuation of the town, and  provided,  further,  that,  at  the
     2  option  of  the  governing  board  of the county, the county may instead
     3  prepare and file such a joint report and make such payments on a monthly
     4  or  quarterly  basis.  Where the county elects to make monthly payments,
     5  the recording officer and county treasurer shall prepare a joint  report
     6  on  or  before the fifteenth day of each month showing the amounts to be
     7  credited to each tax district of the county  and  the  moneys  collected
     8  under  this  article for the month preceding the most recently concluded
     9  month, and the board of supervisors shall issue its warrant for  payment
    10  on  or before the fifteenth day of the following month. Where the county
    11  elects to make quarterly payments,  the  recording  officer  and  county
    12  treasurer  shall  prepare such a joint report on or before the fifteenth
    13  day of May, August, November, and February, showing the  amounts  to  be
    14  credited  to  each  tax district of the county of moneys collected under
    15  this article for the preceding three-month period ending  March  thirty-
    16  first,  June  thirtieth, September thirtieth, and December thirty-first,
    17  respectively and the board of supervisors shall issue  its  warrant  for
    18  payment on or before the fifteenth day of June, September, December, and
    19  March, respectively. The warrant shall direct payment to the city treas-
    20  urer  of  the  amount due the city, to the town supervisor of the amount
    21  due the town, and to the village treasurer of the amount  to  which  the
    22  village shall be entitled. Mortgage tax moneys allotted to cities, towns
    23  and  villages  shall  be  applied to the payment of the general expenses
    24  thereof. The commissioner shall prescribe the method of  adjustment  and
    25  correction of errors heretofore or hereafter made in the distribution of
    26  moneys  collected under this article. Provided, however that in the town
    27  of Ossining, county of Westchester, monies  due  to  the  unincorporated
    28  portion  of  the  town  shall  be placed in the unincorporated town fund
    29  instead of into the general fund of such town.
    30    § 6. This act shall take effect on the ninetieth day  after  it  shall
    31  have become a law.
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