STATE OF NEW YORK
________________________________________________________________________
5410--B
2011-2012 Regular Sessions
IN SENATE
May 18, 2011
___________
Introduced by Sens. GALLIVAN, YOUNG -- read twice and ordered printed,
and when printed to be committed to the Committee on Investigations
and Government Operations -- committee discharged, bill amended,
ordered reprinted as amended and recommitted to said committee --
committee discharged, bill amended, ordered reprinted as amended and
recommitted to said committee
AN ACT to amend the tax law, in relation to authorizing an additional
real estate transfer tax within the county of Livingston and authoriz-
ing such county to expend such real estate transfer tax on necessary
county services; and providing for the repeal of such provisions upon
expiration thereof
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The tax law is amended by adding a new article 31-H to read
2 as follows:
3 ARTICLE 31-H
4 TAX ON REAL ESTATE TRANSFERS
5 IN THE COUNTY OF LIVINGSTON
6 Section 1449-aaaaaa. Definitions.
7 1449-bbbbbb. Imposition of tax.
8 1449-cccccc. Payment of tax.
9 1449-dddddd. Liability for tax.
10 1449-eeeeee. Exemptions.
11 1449-ffffff. Credit.
12 1449-gggggg. Cooperative housing corporation transfers.
13 1449-hhhhhh. Designation of agents.
14 1449-iiiiii. Liability of recording officer.
15 1449-jjjjjj. Refunds.
16 1449-kkkkkk. Deposit and disposition of revenue.
17 1449-llllll. Judicial review.
18 1449-mmmmmm. Apportionment.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD11478-05-1
S. 5410--B 2
1 1449-nnnnnn. Miscellaneous.
2 1449-oooooo. Returns to be secret.
3 § 1449-aaaaaa. Definitions. When used in this article, unless other-
4 wise expressly stated:
5 1. "Person" means an individual, partnership, society, association,
6 joint stock company, corporation, estate, receiver, trustee, assignee,
7 referee or any other person acting in a fiduciary or representative
8 capacity, whether appointed by a court or otherwise, any combination of
9 individuals, and any other form of unincorporated enterprise owned or
10 conducted by two or more persons.
11 2. "Controlling interest" means (a) in the case of a corporation,
12 either fifty percent or more of the total combined voting power of all
13 classes of stock of such corporation, or fifty percent or more of the
14 capital, profits or beneficial interest in such voting stock of such
15 corporation, and (b) in the case of a partnership, association, trust or
16 other entity, fifty percent or more of the capital, profits or benefi-
17 cial interest in such partnership, association, trust or other entity.
18 3. "Real property" means every estate or right, legal or equitable,
19 present or future, vested or contingent, in lands, tenements or heredi-
20 taments, including buildings, structures and other improvements thereon,
21 which are located in whole or in part within the county of Livingston.
22 It shall not include rights to sepulture.
23 4. "Consideration" means the price actually paid or required to be
24 paid for the real property or interest therein, including payment for an
25 option or contract to purchase real property, whether or not expressed
26 in the deed and whether paid or required to be paid by money, property,
27 or any other thing of value. It shall include the cancellation or
28 discharge of an indebtedness or obligation. It shall also include the
29 amount of any mortgage, purchase money mortgage, lien or other encum-
30 brance, whether or not the underlying indebtedness is assumed or taken
31 subject to.
32 (a) In the case of a creation of a leasehold interest or the granting
33 of an option with use and occupancy of real property, consideration
34 shall include, but not be limited to, the value of the rental and other
35 payments attributable to the use and occupancy of the real property or
36 interest therein, the value of any amount paid for an option to purchase
37 or renew and the value of rental or other payments attributable to the
38 exercise of any option to renew.
39 (b) In the case of a creation of a subleasehold interest, consider-
40 ation shall include, but not be limited to, the value of the sublease
41 rental payments attributable to the use and occupancy of the real prop-
42 erty, the value of any amount paid for an option to renew and the value
43 of rental or other payments attributable to the exercise of any option
44 to renew less the value of the remaining prime lease rental payments
45 required to be made.
46 (c) In the case of a controlling interest in any entity that owns real
47 property, consideration shall mean the fair market value of the real
48 property or interest therein, apportioned based on the percentage of the
49 ownership interest transferred or acquired in the entity.
50 (d) In the case of an assignment or surrender of a leasehold interest
51 or the assignment or surrender of an option or contract to purchase real
52 property, consideration shall not include the value of the remaining
53 rental payments required to be made pursuant to the terms of such lease
54 or the amount to be paid for the real property pursuant to the terms of
55 the option or contract being assigned or surrendered.
S. 5410--B 3
1 (e) In the case of (1) the original conveyance of shares of stock in a
2 cooperative housing corporation in connection with the grant or transfer
3 of a proprietary leasehold by the cooperative corporation or cooperative
4 plan sponsor and (2) the subsequent conveyance by the owner thereof of
5 such stock in a cooperative housing corporation in connection with the
6 grant or transfer of a proprietary leasehold for a cooperative unit
7 other than an individual residential unit, consideration shall include a
8 proportionate share of the unpaid principal of any mortgage on the real
9 property of the cooperative housing corporation comprising the cooper-
10 ative dwelling or dwellings. Such share shall be determined by multiply-
11 ing the total unpaid principal of the mortgage by a fraction, the numer-
12 ator of which shall be the number of shares of stock being conveyed in
13 the cooperative housing corporation in connection with the grant or
14 transfer of a proprietary leasehold and the denominator of which shall
15 be the total number of shares of stock in the cooperative housing corpo-
16 ration.
17 5. "Conveyance" means the transfer or transfers of any interest in
18 real property by any method, including but not limited to, sale,
19 exchange, assignment, surrender, mortgage foreclosure, transfer in lieu
20 of foreclosure, option, trust indenture, taking by eminent domain,
21 conveyance upon liquidation or by a receiver, or transfer or acquisition
22 of a controlling interest in any entity with an interest in real proper-
23 ty. Transfer of an interest in real property shall include the creation
24 of a leasehold or sublease only where (a) the sum of the term of the
25 lease or sublease and any options for renewal exceeds forty-nine years,
26 (b) substantial capital improvements are or may be made by or for the
27 benefit of the lessee or sublessee, and (c) the lease or sublease is for
28 substantially all of the premises constituting the real property.
29 Notwithstanding the foregoing, conveyance of real property shall not
30 include the creation, modification, extension, spreading, severance,
31 consolidation, assignment, transfer, release or satisfaction of a mort-
32 gage; a mortgage subordination agreement, a mortgage severance agree-
33 ment, an instrument given to perfect or correct a recorded mortgage; or
34 a release of lien of tax pursuant to this chapter or the internal reven-
35 ue code.
36 6. "Interest in the real property" includes title in fee, a leasehold
37 interest, a beneficial interest, an encumbrance, development rights, air
38 space and air rights, or any other interest with the right to use or
39 occupancy of real property or the right to receive rents, profits or
40 other income derived from real property. It shall also include an option
41 or contract to purchase real property. It shall not include a right of
42 first refusal to purchase real property.
43 7. "Grantor" means the person making the conveyance of real property
44 or interest therein. Where the conveyance consists of a transfer or an
45 acquisition of a controlling interest in an entity with an interest in
46 real property, "grantor" means the entity with an interest in real prop-
47 erty or a shareholder or partner transferring stock or partnership
48 interest.
49 8. "Grantee" means the person who obtains real property or interest
50 therein as a result of a conveyance.
51 9. "Recording officer" means the county clerk of the county of Living-
52 ston.
53 10. "Treasurer" means the commissioner of finance of the county of
54 Livingston.
55 § 1449-bbbbbb. Imposition of tax. Notwithstanding any other
56 provisions of law to the contrary, the county of Livingston, acting
S. 5410--B 4
1 through its local legislative body, is hereby authorized and empowered
2 to adopt and amend local laws imposing in such county a tax on each
3 conveyance of real property or interest therein when the consideration
4 exceeds five hundred dollars, at the rate of one dollar for each five
5 hundred dollars or fractional part thereof. Such local law shall apply
6 to any conveyance occurring on or after the first day of a month to be
7 designated by such legislative body, which is not less than sixty days
8 after the enactment of such local laws, but shall not apply to convey-
9 ances made on or after such date pursuant to binding written contracts
10 entered into prior to such date, provided that the date of execution of
11 such contract is confirmed by independent evidence such as the recording
12 of the contract, payment of a deposit or other facts and circumstances
13 as determined by the treasurer.
14 § 1449-cccccc. Payment of tax. 1. The real estate transfer tax imposed
15 pursuant to this article shall be paid to the treasurer or the recording
16 officer acting as the agent of the treasurer upon designation as such
17 agent by the treasurer. Such tax shall be paid at the same time as the
18 real estate transfer tax imposed by article thirty-one of this chapter
19 is required to be paid. Such treasurer or recording officer shall
20 endorse upon each deed or instrument effecting a conveyance a receipt
21 for the amount of the tax so paid.
22 2. A return shall be required to be filed with such treasurer or
23 recording officer for purposes of the real estate transfer tax imposed
24 pursuant to this article at the same time as a return is required to be
25 filed for purposes of the real estate transfer tax imposed by article
26 thirty-one of this chapter. The return, for purposes of the real estate
27 transfer tax imposed pursuant to this article, shall be a photocopy or
28 carbon copy of the real estate transfer tax return required to be filed
29 pursuant to section fourteen hundred nine of this chapter. However,
30 when an apportionment is required to be made pursuant to section four-
31 teen hundred forty-nine-mmmmmm of this article, a supplemental form
32 shall also be required to be filed. The real estate transfer tax returns
33 and supplemental forms required to be filed pursuant to this section
34 shall be preserved for three years and thereafter until such treasurer
35 or recording officer orders them to be destroyed.
36 3. The recording officer shall not record an instrument effecting a
37 conveyance unless the return required by this section has been filed and
38 the tax imposed pursuant to this article shall have been paid as
39 provided in this section.
40 § 1449-dddddd. Liability for tax. 1. The real estate transfer tax
41 shall be paid by the grantor. If the grantor has failed to pay the tax
42 imposed pursuant to this article or if the grantor is exempt from such
43 tax, the grantee shall have the duty to pay the tax. Where the grantee
44 has the duty to pay the tax because the grantor has failed to pay, such
45 tax shall be the joint and several liability of the grantor and the
46 grantee.
47 2. For the purpose of the proper administration of this article and to
48 prevent evasion of the tax hereby authorized, it shall be presumed that
49 all conveyances are taxable. Where the consideration includes property
50 other than money, it shall be presumed that the consideration is the
51 fair market value of the real property or interest therein. These
52 presumptions shall prevail until the contrary is proven, and the burden
53 of proving the contrary shall be on the person liable for payment of the
54 tax.
55 § 1449-eeeeee. Exemptions. 1. The following shall be exempt from
56 payment of the real estate transfer tax:
S. 5410--B 5
1 (a) The state of New York, or any of its agencies, instrumentalities,
2 political subdivisions, or public corporations (including a public
3 corporation created pursuant to agreement or compact with another state
4 or the Dominion of Canada).
5 (b) The United Nations, the United States of America and any of its
6 agencies and instrumentalities.
7 The exemption of such governmental bodies or persons shall not, howev-
8 er, relieve a grantee from them of liability for the tax.
9 2. The tax shall not apply to any of the following conveyances:
10 (a) Conveyances to the United Nations, the United States of America,
11 the state of New York, or any of their instrumentalities, agencies or
12 political subdivisions (or any public corporation, including a public
13 corporation created pursuant to agreement or compact with another state
14 or the Dominion of Canada);
15 (b) Conveyances which are or were used to secure a debt or other obli-
16 gation;
17 (c) Conveyances which, without additional consideration, confirm,
18 correct, modify or supplement a prior conveyance;
19 (d) Conveyances of real property without consideration and otherwise
20 than in connection with a sale, including conveyances conveying realty
21 as bona fide gifts;
22 (e) Conveyances given in connection with a tax sale;
23 (f) Conveyances to effectuate a mere change of identity or form of
24 ownership or organization where there is no change in beneficial owner-
25 ship, other than conveyances to a cooperative housing corporation of the
26 real property comprising the cooperative dwelling or dwellings;
27 (g) Conveyances which consist of a deed of partition;
28 (h) Conveyances given pursuant to the federal bankruptcy act;
29 (i) Conveyances of real property which consist of the execution of a
30 contract to sell real property without the use or occupancy of such
31 property or the granting of an option to purchase real property without
32 the use or occupancy of such property; and
33 (j) Conveyances of an option or contract to purchase real property
34 with the use or occupancy of such property where the consideration is
35 less than two hundred thousand dollars and such property was used solely
36 by the grantor as his personal residence and consists of a one, two or
37 three-family house, an individual residential condominium unit or the
38 sale of stock in a cooperative housing corporation in connection with
39 the grant or transfer of a proprietary leasehold covering an individual
40 residential cooperative unit.
41 § 1449-ffffff. Credit. A grantor shall be allowed a credit against
42 the tax due on a conveyance of real property to the extent tax was paid
43 by such grantor on a prior creation of a leasehold of all or a portion
44 of the same real property or on the granting of an option or contract to
45 purchase all or a portion of the same real property, by such grantor.
46 Such credit shall be computed by multiplying the tax paid on the
47 creation of the leasehold or on the granting of the option or contract
48 by a fraction, the numerator of which is the value of the consideration
49 used to compute such tax paid which is not yet due to such grantor on
50 the date of the subsequent conveyance (and which such grantor will not
51 be entitled to receive after such date), and the denominator of which is
52 the total value of the consideration used to compute such tax paid.
53 § 1449-gggggg. Cooperative housing corporation transfers. 1. Notwith-
54 standing the definition of "controlling interest" contained in subdivi-
55 sion two of section fourteen hundred forty-nine-aaaaaa of this article
56 or anything to the contrary contained in subdivision five of section
S. 5410--B 6
1 fourteen hundred forty-nine-aaaaaa of this article, the tax imposed
2 pursuant to this article shall apply to (a) the original conveyance of
3 shares of stock in a cooperative housing corporation in connection with
4 the grant or transfer of a proprietary leasehold by the cooperative
5 corporation or cooperative plan sponsor, and (b) the subsequent convey-
6 ance of such stock in a cooperative housing corporation in connection
7 with the grant or transfer of a proprietary leasehold by the owner ther-
8 eof. With respect to any such subsequent conveyance where the property
9 is an individual residential unit, the consideration for the interest
10 conveyed shall exclude the value of any liens on certificates of stock
11 or other evidences of an ownership interest in and a proprietary lease
12 from a corporation or partnership formed for the purpose of cooperative
13 ownership of residential interest in real estate remaining thereon at
14 the time of conveyance. In determining the tax on a conveyance described
15 in paragraph (a) of this subdivision, a credit shall be allowed for a
16 proportionate part of the amount of any tax paid upon the conveyance to
17 the cooperative housing corporation of the real property comprising the
18 cooperative dwelling or dwellings to the extent that such conveyance
19 effectuated a mere change of identity or form of ownership of such prop-
20 erty and not a change in the beneficial ownership of such property. The
21 amount of the credit shall be determined by multiplying the amount of
22 tax paid upon the conveyance to the cooperative housing corporation by a
23 percentage representing the extent to which such conveyance effectuated
24 a mere change of identity or form of ownership and not a change in the
25 beneficial ownership of such property, and then multiplying the result-
26 ing product by a fraction, the numerator of which shall be the number of
27 shares of stock conveyed in a transaction described in paragraph (a) of
28 this subdivision and the denominator of which shall be the total number
29 of shares of stock of the cooperative housing corporation (including any
30 stock held by the corporation). In no event, however, shall such credit
31 reduce the tax, on a conveyance described in paragraph (a) of this
32 subdivision, below zero, nor shall any such credit be allowed for a tax
33 paid more than twenty-four months prior to the date on which occurs the
34 first in a series of conveyances of shares of stock in an offering of
35 cooperative housing corporation shares described in paragraph (a) of
36 this subdivision.
37 2. Every cooperative housing corporation shall be required to file an
38 information return with the treasurer by July fifteenth of each year
39 covering the preceding period of January first through June thirtieth
40 and by January fifteenth of each year covering the preceding period of
41 July first through December thirty-first. The return shall contain such
42 information regarding the conveyance of shares of stock in the cooper-
43 ative housing corporation as the treasurer may deem necessary, includ-
44 ing, but not limited to, the names, addresses and employee identifica-
45 tion numbers or social security numbers of the grantor and the grantee,
46 the number of shares conveyed, the date of the conveyance and the
47 consideration paid for such conveyance.
48 § 1449-hhhhhh. Designation of agents. The treasurer is authorized to
49 designate the recording officer to act as its agent for purposes of
50 collecting the tax authorized by this article. The treasurer shall
51 provide for the manner in which such person may be designated as its
52 agent subject to such terms and conditions as it shall prescribe. The
53 real estate transfer tax shall be paid to such agent as provided in
54 section fourteen hundred forty-nine-cccccc of this article.
55 § 1449-iiiiii. Liability of recording officer. A recording officer
56 shall not be liable for any inaccuracy in the amount of tax imposed
S. 5410--B 7
1 pursuant to this article that he or she shall collect so long as he or
2 she shall compute and collect such tax on the amount of consideration or
3 the value of the interest conveyed as such amounts are provided to him
4 or her by the person paying the tax.
5 § 1449-jjjjjj. Refunds. Whenever the treasurer shall determine that
6 any moneys received under the provisions of the local law enacted pursu-
7 ant to this article were paid in error, it may cause such moneys to be
8 refunded pursuant to such rules and regulations it may prescribe,
9 provided any application for such refund is filed with the treasurer
10 within two years from the date the erroneous payment was made.
11 § 1449-kkkkkk. Deposit and disposition of revenue. All taxes collected
12 or received by the treasurer or his or her duly authorized agent under
13 the provisions of the local law enacted pursuant to this article shall
14 be deposited in accordance with provisions of a local law adopted by the
15 legislative body of the county of Livingston which local law shall
16 designate proper officers to be responsible for deposit of revenue
17 collected or received under this article. Such local law shall also
18 provide that any officer designated to collect, receive, or deposit such
19 revenue shall maintain a system of accounts showing the revenue
20 collected or received from the tax imposed pursuant to this article.
21 Such local law shall also provide that all revenue derived from the
22 imposition of such tax shall be deposited into the general fund of the
23 county of Livingston.
24 § 1449-llllll. Judicial review. 1. Any final determination of the
25 amount of any tax payable under section fourteen hundred forty-nine-
26 cccccc of this article shall be reviewable for error, illegality or
27 unconstitutionality or any other reason whatsoever by a proceeding under
28 article seventy-eight of the civil practice law and rules if application
29 therefor is made to the supreme court within four months after the
30 giving of the notice of such final determination, provided, however,
31 that any such proceeding under article seventy-eight of the civil prac-
32 tice law and rules shall not be instituted unless (a) the amount of any
33 tax sought to be reviewed, with such interest and penalties thereon as
34 may be provided for by local law shall be first deposited and there is
35 filed an undertaking, issued by a surety company authorized to transact
36 business in this state and approved by the superintendent of insurance
37 of this state as to solvency and responsibility, in such amount as a
38 justice of the supreme court shall approve to the effect that if such
39 proceeding be dismissed or the tax confirmed the petitioner will pay all
40 costs and charges which may accrue in the prosecution of such proceeding
41 or (b) at the option of the petitioner, such undertaking may be in a sum
42 sufficient to cover the taxes, interest and penalties stated in such
43 determination, plus the costs and charges which may accrue against it in
44 the prosecution of the proceeding, in which event the petitioner shall
45 not be required to pay such taxes, interest or penalties as a condition
46 precedent to the application.
47 2. Where any tax imposed hereunder shall have been erroneously, ille-
48 gally or unconstitutionally assessed or collected and application for
49 the refund or revision thereof duly made to the proper fiscal officer or
50 officers, and such officer or officers shall have made a determination
51 denying such refund or revision, such determination shall be reviewable
52 by a proceeding under article seventy-eight of the civil practice law
53 and rules; provided, however, that (a) such proceeding is instituted
54 within four months after the giving of the notice of such denial, (b) a
55 final determination of tax due was not previously made, and (c) an
56 undertaking is filed with the proper fiscal officer or officers in such
S. 5410--B 8
1 amount and with such sureties as a justice of the supreme court shall
2 approve to the effect that if such proceeding be dismissed or the tax
3 confirmed, the petitioner will pay all costs and charges which may
4 accrue in the prosecution of such proceeding.
5 § 1449-mmmmmm. Apportionment. The local law adopted by the legislative
6 body of the county of Livingston shall provide for a method of appor-
7 tionment for determining the amount of tax due whenever the real proper-
8 ty or interest therein is situated within and without the county of
9 Livingston.
10 § 1449-nnnnnn. Miscellaneous. The local law adopted by the legislative
11 body of the county of Livingston may contain such other provisions as
12 such legislative body deems necessary for the proper administration of
13 the tax imposed pursuant to this article, including provisions concern-
14 ing the determination of tax, the imposition of interest on underpay-
15 ments and overpayments and the imposition of civil penalties. Such
16 provisions shall be identical to the corresponding provisions of the
17 real estate transfer tax imposed by article thirty-one of this chapter,
18 so far as such provisions can be made applicable to the tax imposed
19 pursuant to this article.
20 § 1449-oooooo. Returns to be secret. 1. Except in accordance with
21 proper judicial order or as otherwise provided by law, it shall be
22 unlawful for the treasurer or any officer or employee of the county of
23 Livingston or any person engaged or retained by such county on an inde-
24 pendent contract basis to divulge or make known in any manner the
25 particulars set forth or disclosed in any return required under a local
26 law enacted pursuant to this article. However, that nothing in this
27 section shall prohibit the recording officer from making a notation on
28 an instrument effecting a conveyance indicating the amount of tax paid.
29 No recorded instrument effecting a conveyance shall be considered a
30 return for purposes of this section.
31 2. The officers charged with the custody of such returns shall not be
32 required to produce any of them or evidence of anything contained in
33 them in any action or proceeding in any court, except on behalf of the
34 county in any action or proceeding involving the collection of a tax due
35 under a local law enacted pursuant to this article to which such county
36 or an officer or employee of such county is a party or a claimant, or on
37 behalf of any party to any action or proceeding under the provisions of
38 a local law enacted pursuant to this article when the returns or facts
39 shown thereby are directly involved in such action or proceeding, in any
40 of which events the court may require the production of, and may admit
41 in evidence, so much of said returns or of the facts shown thereby, as
42 are pertinent to the action or proceeding and no more.
43 3. Nothing herein shall be construed to prohibit the delivery to a
44 grantor or grantee of an instrument effecting a conveyance or the duly
45 authorized representative of a grantor or grantee of a certified copy of
46 any return filed in connection with such instrument or to prohibit the
47 publication of statistics so classified as to prevent the identification
48 of particular returns and the items thereof, or the inspection by the
49 legal representatives of such county of the return of any taxpayer who
50 shall bring action to set aside or review the tax based thereon.
51 4. Any officer or employee of such county who willfully violates the
52 provisions of this section shall be dismissed from office and be incapa-
53 ble of holding any public office in this state for a period of five
54 years thereafter.
55 § 2. This act shall take effect immediately and shall expire and be
56 deemed repealed December 31, 2013.
