# Petition — Chase Manhattan Bank, N. A. v. Finance Administration of New York > Briefs, arguments, decisions, and more. URL: https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1045%3A1 ## Record - **Collection:** Supreme Court brief - **Document type:** Petition - **Published:** January 1, 1979 - **Citation:** 440 U.S. 447 ## Text IN THE ICHAEL R Supreme Court of the United States OCTOBER TERM, 1977 No. “@?¢-1659 Tre Cuase MANHATTAN Bank, N.A. and Ciripank, N.A Petitioners v. Tur Frvancre ADMINISTRATION OF THE CITY or New York anp THe Finance ADMINISTRATOR or THE Crry or New York, eapenennntp. PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF APPEALS OF THe STATE OF NEW YORK — J. Paut McGrata Attorney for Petitioner The Chase Manhattan Bank, N.A 140 Broadway New York, New York 1000 Joun T. Kiva Attorney for Petitioner Citibank, N.A. 53 Wall Street Of Counsel: Bos D. Mannis Dewey, Ballantine, Bushby, Palmer & Wood W. Foster WoLiten Shearman & Sterling New York, New York 10005 IE TID ciiichinnsichiniitsistincnpetediiicbiciaeeiecinsihitadaeaiiditasictnizen FN TEs TI aE OS DOA Oe 2 ON AT LOTTE LTS I I icscicccentineciemmsndsscterisebstisesienebmidetbiesinadbeetties I EEE TT RE TE SER OT Reasons for Granting the Writ -...........220.2----.----- 1. The Court of Appeals’ decision conflicts with this Court’s decisions concerning state taxation of national banks and the language of Pub. L. Be IEE sscihisctaesaincessnageinentiesienvnciadciniatiadesnniensatitionn The Court of Appeals’ decision erroneously looks to state, rather than federal, law in char- I IE TI ican icsetnstlileteaterrcnnnenricaeaiiiinidh i Appendices A. Judgments of the Court of Appeals of the State 2 6 pC eee ee Bb. Opinions of the Court of Appeals of the State SI siaithahchccicetiacceictendhinstacienticettaediaenesnailahies C. Order of the Court of Appeals of the State of New York Denying Reargument .......................... D. Decision of the Appellate Division of the Su- preme Court of the State of New York, First Ie IID icecieectendeiictientisscetaniacentsnchccdeatciies EK. Final Determinations, Findings of Fact, Con- clusions of Law and Decisions of the Finance Administration of the City of New York -........... F. Section 5219 of the Revised Statutes of the United States, 12 U.S.C. $548 (1957) 2. G. Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 434, as amended by Act of December 22, 1971, Pub. L. No. 92-213, § 4(a), 85 Stat. 775 H. Laws of New York, 1963, ch. 257, as amended by Laws of New York, 1970, ch. 166, N.Y. Uneonsol. Laws § 9447 (McKinney 1974) ~..0.000002.....-.. il Authorities Cited Cases: PAGE Diamond National Corp. y. State Board of Equaliza- oe Oe ee oe 7,13, 15 First Agricultural National Bank vy. State Tax Com- mission, 392 U.S. 339 (1968): ...................0.-.0..2. 4,7,8,11,13 First National City Bank vy. City of New York Finance Administration, 36 N.Y.2d 87 (1975) .0.2...e..eeeeeeeeeee 10n lowa-Des Moines National Bank vy. Bennett, 284 U.S. I I i 8 Jerome v. United States, 318 U.S. 101 (1943) 2000000... 14-15 Kentucky Tax Commission vy. Jefferson Motel, Inc., ee CE ae Pe Cs CIID ccteitiecsneeenactnninatnntisieninittnindeniene 15 M’Culloch vy. Maryland, 17 U.S. 415, 4 Wheat. 316 7 ER et ES EY 7 Owensboro National Bank v. Owensboro, 173 U.S. 664 Fe. Ev) es: ee Bk ee 8 Society for Savings v. Bowers, 349 U.S. 148 (1955) .... 13, 15 Statutes: Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 454, as amended by Act of December 22, 1971, Pub. L. No. 92-213, $ 4(a), 85 Stat. 775 ...........00......... 2-10, 12-15 Act of June 3, 1864, ch. 106, § 41, 13 Stat. 111 2000000.. 7 Laws of New York, 1963, ch. 257, as amended by Laws of New York, 1970, ch. 166, N.Y. Uneonsol. Laws 99047 (MeMimmoy 19746) n.n..n....n..c.c.ccccccccn-sceeede 3, 10n, 11 N.J. Stat. Ann. § 54:4-2.3 (West 1960) 00 15 Section 5219 of the Revised Statutes of the United States, 12 U.S.C. $548 (1957) 00... 2-5, 8, 11, 12, 15 ay Marder UCU a” 2 iii Other Authorities: H.R. Rep. No. 91-728, 91st Cong., Ist Sess. 5 (1969) ; 1969 US. Code Congressional and Administrative SIT nneritnedilacanensireecnncennsiensisstvageiidintinesmmniertaidinaieiniatgietcelnjapnvens Rand MeNally & Co., Jnternational Bankers Directory 8 RR en IE PAGE 10 9-10 IN THE Supreme Court of the United States OCTOBER TERM, 1977 No. Tae Cuase Manwattran Bank, N.A. and Crrmank, N.A,, Petitioners, Vv. Tae Frxnance ADMINISTRATION OF THE CITY or New York anp THe Finance ADMINISTRATOR or THE Crry or New York, Respondents. Scena ee PETITION FOR A WRIT OF CERTIORARI TO THE COURT OF APPEALS OF THE STATE OF NEW YORK Petitioners The Chase Manhattan Bank, N.A. and Citi- bank, N.A. petition for a writ of certiorari to review the judgments of the Court of Appeals of the State of New York dated and entered December 21, 1977. Separate judgments were entered as to Chase and Citibank, but the eases were consolidated for purposes of briefing and oral argument, and only one opinion was written by the Court of Appeals. Because the cases involve identical questions, a single petition has been filed under Rule 25(5) of the Rules of this Court. Opinions Below The majority and dissenting opinions of the Court of Appeals of the State of New York are reported at 45 N.Y.2d 425, 372 N.F.2d 789 and 401 N.Y.S.2d 1001, and 2 appear in Appendix B. The decision of the Appellate Division of the Supreme Court of the State of New York, First Judicial Department, is reported at 55 A.D.2d 531 and 389 N.Y.S.2d 547, 1021, and appears in Appendix D. The Finance Administration of the City of New York issued separate final determinations, findings of fact, conclusions of law and decisions as to each petitioner, none of which has been reported but which appear in Appendix E. Jurisdiction The judgments of the Court of Appeals were entered on December 21, 1977. A timely motion for reargument was denied (Appendix C) on February 22, 1978, and this peti- tion for certiorari is being filed within 90 days of that date. This Court’s jurisdiction is invoked under 28 U.S.C. § 1257(3) (1966). Questions Presented Whether the New York City commercial rent or occu- pancy tax is invalid for the periods in question as applied to petitioners, national banks, because Section 5219 of the Revised Statutes of the United States, 12 U.S.C. § 548, a. amended by Pub. L. No. 91-156, 83 Stat. 434 and Pub. L. No, 92-213, § 4(a), 85 Stat. 775, prohibited the application of such tax to national banks absent state legislation affirmatively imposing that tax on national banks. This question involves the following subsidiary questions : 1. Whether the requirement in Pub. L. No. 91-156 of affirmative legislative action authorizing the im- position on national banks of certain taxes was com- plied with by the New York State legislature when the legislature only increased the general rate of taxation but took no action to change the incidence of taxation to inelude national banks. 2. Whether in construing the language of Pub. L. No. 91-156, the Court of Appeals properly charac- terized the commercial rent or occupancy tax as one on tangible personal property under state law in disregard of the terms of Pub. L. No. 91-156 and pertinent decisions of this Court as to the interpre- tation of federal statutes. Statutes Involved The federal statutes involved are Section 5219 of the Revised Statutes of the United States, 12 U.S.C. $548 (1957); and the Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 454, as amended by Act of December 22, 1971, Pub. L. No. 92-213, §4(a), 85 Stat. 775. These statutes are set forth in Appendices F and G. The New York statute involved is Laws of New York, 1963, ch. 257, as amended by Laws of New York, 1970, ch. 166, N.Y. Unconsol. Laws § 9447 (MeKinney 1974), set forth in Appendix HH, Statement of the Case The Chase Manhattan Bank, N.A. and Citibank, N.A. are national banks that lease and occupy premises in New York City for the purposes of business. During 1973, the Finance Administration of the City of New York sent Chase and Citibank notices of determination which included assessments for alleged deficiencies in pay- ment of the New York City commercial rent or oceupancy tax (the “Commercial Rent Tax”) for the tax vears ended May 31, 1971 and May 31, 1972. The Commercial Rent Tax is a tax levied on persous occupying premises for commer- cial purposes based on the rent paid for such oceupaney. Laws of New York, 1963, ch. 257, as amended by Laws of New York, 1970, ch. 166, N.Y. Uneonsol. Laws § 9447 (McKinney 1974). e 4 At hearings requested by the banks and held before the Finance Administration, the banks argued that they are inunune from the Commercial Rent Tax for the periods in question under applicable federal laws, i.e., 12 U.S.C. § 548 and Pub. L. No. 91-156, as amended, which govern the ex- tent to which national banks may be taxed by state and local governments, and this Court’s decision in First Agri- cultural National Bank vy. State Tax Commission, 392 U.S. 339 (1968). In December 1975 and March 1976, the Finance Admin- istration’s referee issued separate findings of fact, conclu- sions of law and decisions with respect to Citibank and Chase. (Appendix E) The referee concluded that notwitl- standing their status as national banks, the banks are liable for the Commercial Rent Tax. Final determinations were issued by the Finance Administration in an aggregate amount of $4,197,907.99, plus interest. (Appendix E) Chase and Citibank commenced proceedings in the Supreme Court, New York County, to reverse and annul the determinations of deficiencies, again relying on the fed- eral statutes and First Agricultural National Bank vy. State Tax Commission. The proceedings were transferred for hearing to the Appellate Division of the Supreme Court and consolidated for purposes of oral argument. In the Appellate Division, the banks argued that in 12 U.S.C. 9548 Congress enumerated the only ways in which states and their subdivisions could tax national banks and that the Commercial Rent Tax was not one of the per- missible inethods of taxation. Although in 1969 Congress amended 12 U.S.C. § 548 to permit national banks to be gen- erally subject to the same state and local taxes as state banks, prior to January 1, 1973, any tax in effect before the enactment of Pub. L. No. 91-156 (the legislation amending 12 U.S.C. $548) and not previously imposed on national hanks—.e., a tax such as the Commercial Rent Tax—could be imposed only if its imposition was authorized by affirma- tive state legislative action. Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 434, as amended by Act of December 22, 1971, Pub. L. No. 92-213, § 4(a), 85 Stat. 775. No such affirmative action had occurred and, aceordingly, Chase and Citibank argued that the Commercial Rent Tax could not be lawfully imposed on national banks, On December 6, L976, by a four-to-one vote, the Appellate Division confirmed without opinion the final determinations of the Finance Administration. (Appendix D) The dissent- ing judge, however, found that under 12 U.S.C. § 548 and Pub. L. No. 91-156 the Commercial Rent Tax was illegally imposed on national banks. In a consolidated appeal before the Court of Appeals, the banks again argued that under applicable federal law for the period in question national banks are namune from taxes such as the Commercial Rent Tax. In a four-to-three decision (opinion by Judge Fuchsberg), the Court of Ap- peals held that the Commercial Rent Tax can be lawfully imposed on national banks for the period prior to January 1, 1973. (Appendix B) That decision is based on the Court of Appeals’ erroneous construction of two key provisions in Pub. L. No. 91-156. First, the Court of Appeals decided that the “affirmative action” mandated by Pub. L. No. 91-156 does not require a conscious or positive decision by the legislature to impose a tax on national hanks previously immune from sueh tax. Thus that court was able to find that a 1970 amendment by the state legislature to the Commercial Rent Tax which merely raises the rate of taxation for those taxpayers already subject to the tax, but which gives no hint of any consideration of Pub. L. No, 91-156 or imposition of the tax on previously-immune national banks, constitutes the requisite affirmative action. Second, the Court of Appeals decided that the Commer- cial Reat Tax is exempt under section 3(b) of Pub. L. No. Y1-156 because it is a tax on tangible personai property under New York state law, so that the tax can be imposed on national banks even in the absence of affirmative action of the state legislature. The three dissenting judges in the Court of Appeals disagreed with the majority on both grounds. Concluding that the affirmative action required by Pub. L. No. 91-156 is “a conscious and manifested determination on the part of the state legislature to subject national banks to the imposition of the permitted state taxes,” the dissent would have held that the 1970 rate amendment of the Commercial Rent Tax does not constitute such affirmative action. The dissent also disagreed with the majority’s characterization of the Commercial Rent Tax as a tax on tangible persona! property, saying that the question is how the tax is to be regarded under federal, not state, law. A motion for reargument, timely filed by the banks, was denied on February 22, 1978. (Appendix C) Reasons for Granting the Writ The New York State Court of Appeals has erroneously decided an important question of federal law concerning the extent to which states and their subdivisions may tax national banks. That decision is in conflict in principle with numerous decisions by this Court that national banks may be taxed by the states and their subdivisions only as ex- pressly permitted by Congress; it is also in direct conflict with the explicit language chosen by Congress to express how national banks can be taxed. The Court of Appeals has made a nullity of Congress’ requirement in section 3(a) of Pub. L. No. 91-156 of “affirmative action” by state legislatures by permitting a tax such as the Commercial Rent Tax to be imposed on national banks for the period prior to January 1, 1973, even in the absence of affirmative action. 7 The Court of Appeals also erroneously applied state, rather than federal, standards in characterizing the tax for purposes of determining whether federal immunity exists for petitioners. For more than a century Congress and this Court have been deeply concerned with the problem of state taxation of national banks and have frequently addressed the issue. See, e.g., Diamond National Corp. v. State Board of Equalization, 425 U.S. 268 (1976); First Agricultural National Bank y. State Tax Commission, supra; M’Culloch v. Maryland, 17 U.S. 415, 4 Wheat. 316 (1819); Act of June 3, 1864, ch. 106, § 41, 18 Stat. 111. By looking to New York state law to construe Pub, L. No. 91-156, the Court of Appeals has ignored this Court’s firmly established rule concerning the application of federal law in determining a federally-granted right, privilege or immunity. It has also ignored the distinction clearly manifested by Congress on the face of Pub. L. No. 91-156 between a tax on the occu- pancy of real property and a tax on tangible personal property. If allowed to stand, the narrow impact of the decision will he the effect on petitioners’ tax liability for the Commercial Rent Tax for the period prior to January 1, 1973. The broader impact of the decision, however, falls on the at least 13 other national banks with main or branch offices! in New York City? whose liability for the Commer- cial Rent Tax may still be open. Moreover, there are 4,722 national hanks in this country’ whose tax liability is poten- tially affected by the questions raised by this petition con- cerning the nature of the affirmative action required by section 3(a) of Pub. L. No. 91-156 and the proper charac- terization of a tax under federal law for purposes of state taxation of national banks. 1. Rand MeNally & Co., International Bankers Directory--New York State 94-182, 193-215 (1st 1977 ed.). 2. The state levislation for the Commercial Rent Tax applies only to cities with populations of 1,000,000 persons or more; New York City is the only city in the state with the requisite population. 3. International Bankers Directory, supra at P60. 8 1. The Court of Appeals’ decision conflicts with this Court’s decisions concerning state taxation of national banks and the language of Pub. L. No. 91- 156. This Court has repeatedly held that the states can tax national banks only as expressly authorized by Congress. E.g., First Agricultural National Bank v. State Tax Com- mission, supra; Iowa-Des Moines National Bank v. Ben- nett, 284 U.S. 239 (1931); Owensboro National Bank vy. Owensboro, 173 U.S. 664 (1899). That authorization is found in Section 5219 of the Revised Statutes of the United States, 12 U.S.C. § 548, which, prior to its amendinent in 1969, allowed states to tax national banks only by imposing a tax on the hank’s equity, dividends, or income, or meas- ured by its net income. The Commercial Rent Tax is not ineluded within those permitted methods of taxation. In 1969, Congress amended 12 U.S.C. §548 to permit states to impose on national hanks generally the same state and local taxes ag are imposed on state hanks. However, that expanded authority took effect only after January 1, 1973. Aet of December 24. 1969, Pub. I. No. 91-156, 83 Stat. 434, as amended by Act of December 22, 1971, Pub. L. No. 92-213, §4(a), 85 Stat. 775. For the period prior to January 1, 1973, section 3(a) of Pub. L. No. 91-156, the “Saving Provision”, restricted state and local taxation of national banks as follows: “(a) *** [P]rior to January 1, [1973],4 no tax may be imposed on any class of hanks by or under authority of any State legislation in effect prior to the enactment of this Act unless “(1) the tax was imposed on that class of banks prior to the enactment of this Act, or 4. Athough originally to have expired on December 31, 1971, the Saving Provision of Pub. L. No. 91-156 was extended to Decem- ber 31, 1972. Act of December 22, 1971, supra. 9 “(2) the imposition of the tax is authorized by affirmative action of the State legislature after Ui enactment of this Act.” ‘The Saving Provision was enacted to preclude immediate imposition on national banks of taxes from which the banks were previously immune. Otherwise, in states where tax structures had been devised to provide equal tax treatinent of national and state banks based on national bank immu- nity from certain taxes, national banks would be unfairly overtaxed if they were suddenly subject to additional taxes. S. Rep. No. 91-530, 91st Cong., Ist Sess. 6 (1969). There- fore, if national banks were to be subject to taxes from which they had previously been immune, Congress wanted the imposition of such taxes to be the product of a positive and consvious decision by the state legislature, and it imposed the requirement of affirmative action. “he importance that Congress placed on the need for affirmative action and its intention that the decision to tax national banks be manifested in a positive and unmistakable manner are revealed in the legislative history of Pub. L. No. 91-156. The Report of the Senate Committee on Bank- ing and Curreney includes the following: - “The committee realizes that for many years the tax structure within the States has heen drawn in recognition of the different positions of State and National banks with respect to liability for State taxes. In effect, the States have adopted many different formulas in an attempt to equalize the total tax burden between State and National banks. I! by congressional action hanks were automatically subject to taxes which they had not heen previously paying, in addition to the taxes which they are now paying, the effect may be to destroy the degree of equality that the State legislature, by conscious effort, attempted to achieve. Accordingly, the com- mittee believes it wise to require positive State leqgis- lative action as a prerequisite to the imposition on 10 banks of the additional taxes authorized by the bill.” S. Rep. No. 91-530, 91st Cong., Ist Sess. 6 (1969) ; 1969 U.S. Code, Congressional and Administrative News 1594, 1598-99. (Emphasis supplied.) Similarly, in the final Conference Report, the managers on the part of the House of Representatives stated: “('W Jhile at the same time very firmly committing to the several States responsibility for their own tax policies, the conference substitute includes a saving provision to the effect that except for sales taxes, documentary taxes, and property taxes, a tax may not be applied to a bank after the enactment of this legislation unless either the tax was applicable before the enactment of this legislation, or the State legis. lature authorizes its imposition by affirmative action taken after the enactment of this legislation.” II.M. Rep. No. 91-728, 91st Cong., 1st Sess. 5 (1969); 1969 U.S. Code Congressional and Administrative News 1602-03. (Emphasis supplied.) Because the Commercial Rent Tax is imposed under authority of state legislation in effect prior to the enact- ment of Pub. L. No. 91-1565 and was not imposed on national banks prior to that enactment,’ it is a tax which ean only be imposed by affirmative action of the state legis- lature according to the Saving Provision. Notwithstanding the explicit statutory requirement that the imposition of the tax on national banks be authorized by affirmative action and the equally clear legislative historv eited above, the Court of Appeals has construed the federal statute as not requiring a conscious decision by the state legislature to impose a pre-existing tax on national banks for the first time. Instead, the Court has decided that 5. Laws of New York, 1963, ch. 257, as amended by Laws of New York, 1970, ch. 166, N.Y. Unconsol. Laws § 9447 (McKinnev 1974) (rate amendment). 6. First National City Bank v. City of New York Finance Administration, 36 N.Y.2d 87, 91-92 (1975). 11 action in general with respect to the tax, rather than affirma- tive action imposing the tax on national banks, will suffice. Specifically, the Court of Appeals held that Chapter 166 of the Laws of New York, 1970, authorizing a general rate increase in the Commercial Rent Tax, satisfied the require- ment of the Saving Provision. In its opinion, however, the state court was only able to say that the rate increase was “action” that “necessarily invelved ‘affirmative’ conduct” because the amendment took the form of republishing the original Commercial Rent 'l'ax statute with uew rates. The Court of Appeals was unable to cite any evidence whatsoever of a legislative decision to impose the Commer- cial Rent Tax on national banks, and, indeed, no such evi- dence exists. As the dissent (per Judge Jones) stated: “No shred of contemporaneous proof suggests that either the city administration or the State Legis- lature was even aware that section 5219 had been amended or that thereby the Congress had granted authority for expanded State taxation of national banks. “Tn such circumstances IT cannot eoneclude that legislative action, taken wholly without reference to the Federal statute, constitutes the ‘affirmative ac- tion’ contemplated by the Congress when it author- ized additional State taxation of national banks.” 43 N.Y.2d at 435: 372 N.e.2d at 794; 401 N.Y.S.2d at 1006. In First Agricultural National Bank vy. State Tax Com- mission, supra, one of this Court’s most recent cases con- cerning state taxation of national banks, it was decided that the Massachusetts sales tax and use tax were invalid as applied to national banks because the taxes were not among those permitted by 12 U.S.C. 9 048. Rejecting the argument that national banks could be taxed in ways other than those permitted by 12 U.S.C. $548, this Court said: “Now this Court is asked to change what legislative history and prior decisions have established is the precise meaning of an Act of Congress. This we cannot do. For, as we pointed out above, the banking field has traditionally been an area of particular congressional concern inarked by legislation respon- sive to new problems.” 392 U.S. at 345. Yet, by deciding that a mere rate change, enacted with- out any consideration of national banks, authorized imposi- tion of a new tax on national banks, the Court of Appeals has done what this Court would not do. The Court of Appeals has changed the precise meaning of Pub. I. No. 91-156 by disregarding the requirement of affirmative legis- lative action. Under the state court's decision, Congress could have merely permitted national banks to be subject to a new tax by any amendment to the taxing statute without regard to whether the amendment was related to national bank immunity. Instead, having used the words “affirma- tive action”, Congress clearly indicated a conscious decision by the legislature, manifested in positive terms, is required before a tax such as the Commercial Rent Tax ean be im- posed on national banks for the period in question. The decision of the Court of Appeals is clearly wrong and should be remedied by this Court in order properly to restrict the power of states and their political subdivi- sions to tax national banks and to restore the meaning of the words “aflirmative action” in Pub. L. No. 91-156, 13 2. The Court of Appeals’ decision erroneously looks to state, rather than federal, law in characterizing the tax. As a second ground for its decision, the Court of Appeals relied on subsection (b) of the Saving Provision of Pub. L. No. 91-156 which excuses certain taxes from the require- ment of affirmative action. That subsection provides: “b) The prohibition of subseetion (a) of this see- tion does not apply to (1} any sales tax or use tax complementary thereto, (2) any tax (including a documentary stamp tax) on the execution, delivery, or recordation of documents, or (3) any tax on tangible personal property (not including cash or currency), or for any license, registration, transfer, excise or other fee or tax imposed on the ownership, use or transfer of tangible personal property, imposed by a State which does not impose a tax, or an increased rate of tax, in lieu thereof.” The Court of Appeals held that because the Commercial Rent Tax is regarded under New York law as one on tangi- ble personal property it falls within subsection (b)(3) and the requirement for affirmative action does not apply to it. The Court’s error lies in characterizing the tax under state law. Because the question is whether national banks are immune from the tax under federal law, state law is not determinative as to the nature of the tax and this Court is not bound by the Court of Appeals’ characterization of the tax. Diamond National Corp. v. State Board of Equali- cation, supra; First Agricultural National Bank vy. State Tax Commission, supra at 347; Society for Savings v. Bowers, 349 U.S. 148 (1955). ' 14 Pub. L. No. 91-156 clearly reveals on its face that Con- gress did not intend that a tax on the occupancy of real property, such as the Commercial Rent Tax, be considered a tax on tangible personal property or that it be excluded from the Saving Provision. In section 1(a) of Pub. L. No. 91-156, Congress listed categories of taxes which a state could impose for the first time on a national bank with its principal office outside the state. Two of those categories are: “*(2) Taxes on real property or on the oceupaney of real property located within such jurisdiction. oe e * ‘(4) Taxes on tangible personal property (not in- eluding cash or currency) located within such juris- diction.” Thus, in section 1(a) of Pub. L. No. 91-156, Congress expressly distinguished taxes on the oceupancy of real prop- erty from taxes on tangible personal property. Then, in section 3(b) of the same statute, Congress designated three of the five categories of taxes found in section 1(a) te be excused from the Saving Provision and the requirement of affirmative action. Although taxes on tangible personal property were excused, taxes on the oceupaney of real prop- erty—such as the Commercial Ret Tax—were not. Only by ignoring the terms of the federal statute itself and erroneously applying state law instead could the Court of Appeals reach its decision. But as this Court stated in Jerome vy. United States, 318 U.S. 101 (1948), where the question was also whether terms in a federal statute could be assigned their meaning under state law: “... We must generally assume, in the absence of a plain indication to the contrary, that Congress whe it enacts a statute is not making the application of the federal act dependent on state law. That assump- 15 tion is based on the fact that the application of fed- eral legislation is nationwide. (United States v. Pel- cer, 312 U.S. 399, 402) and at times on the faet that the federal program would be impaired if state law were to control.” 318 U.S, at 104. Similarly, in Society for Savings v. Bowers, supra, where the issue was whether a state property tax, essentially measured by the value of United States bonds held by two savings banks, was imposed on the banks and was therefore invalid as a direct tax on federal obligations, or on the banks’ depositors and their intangible property interests in the banks, this Court stated: “The [state] court’s mere conclusion that the tax is imposed on the depositors is no more than a charac- terization of the tax. ‘Where a federal right is eon- cerned we are not bound by the characterization given to a state tax by state courts or legislatures, or relieved by it from the duty of considering the real nature of the tax and its effect upon the federal right asserted.’ ” 549 U.S. at 151. In Diamond National Corp. v. State Board of Equaliza- tion, supra, this Court refused to accept a state court’s characterization as to the incidence of state and local taxes designed to undermine national bank immunity under fed- eral law and reatlirmed their immunity under 12 U.S.C, § 548. The necessity here for the rule set forth in these cases is illustrated by the differences among the states in their classification of certain taxes. For example, in Kentucky, a leasehold is considered intangible personal property, while in New Jersey, in some circumstances it may be assessed as real estate. Compare Kentucky Tax Commis- sion v. Jefferson Motel, Inc., 387 S.W.2d 293, 295 (Ky. 1965) with N.J. Stat. Ann. § 54:4-2.3 (West 1960). Obviously, for Pub. L. No. 91-156 to have uniform application throughout ee 16 the country, federal law must govern the proper characteri- zation of taxes. Thas, in applying principles of state law, the Court of Appeals has disregarded applicable decisions of this Court and has impermissibly expanded the power of the states to tax national banks. Conclusion The petition for a writ of certiorari should be granted. Dated: May 22, 1978 Respectfully submitted, J. Paut McGrara .lttorney for Petitioner The Chase Manhattan Bank, N.A. 140 Broadway New York, New York 10005 Joan T. Kive Attorney for Petitioner Citibank, N.A. 53 Wall Street New York, New York 10005 Of Counsel: Bos D. Mannts Dewey, Ballantine, Bushby, Palmer & Wood W. Fosver Woiien Shearinan & Sterling Appendices A-1 APPENDIX A Judgment of the Court of Appeals— The Chase Manhattan Bank, N.A. Remittitur COURT OF APPEALS STATE OF NEW YORW The Hon. Charles D. Breitel, Chief Judge, Presiding No. 457 Enna Ture Chase Manuarran Bank, N.A., Appellant, us. Tur Froxaxce ApMINISTRATION OF rHe City or New York, &aAno., &c., Respondents. ——r ae The appellant in the above entitled appeal appeared by Dewey, Ballantine, Bushby, Palmer & Wood: the respondent(s) appeared by W. Bernard Richland, Corpo- ration Counsel. The Court, after due deliberation, orders and ad judges that the judgment is aflirmed, with costs. Opinion by uchsberg, J. All coneur except Jones, J., who dissents and votes to reverse in an opinion in whieh Jasen and Wachtler, JJ., concur. The Court further orders that the papers required to be filed and this record of the proceedings in this Court be remitted to the Supreme Court, New York County, there to be proceeded upon according to law. I certify that the preceding contains a correct record of the proceedings in this appeal in the Court of A ppeals and that the papers required to be filed are attached. /s/ Donato M. Siteraw Deputy Clerk of the Court Court of Appeals, Clerk’s Office, Albany, December 21, 1977. A-2 Judgment of the Court of Appeals—Citibank, N.A. Remittitur COURT OF APPEALS STATE OF NEW YORK The Hon. Charles D. Breitel, Chief Judge, Presiding No. 456 i Citipank, N.A. (FORMERLY KNOWN AS First NarionaL Crry Bank), Appellant. ws, Tue Crry or New York FINance ADMINISTRATION, Respondent. ee The appellant in the above entitled appeal appeared by Shearman & Sterling; the respondent appeared by W. Bernard Richland, Corporation Counsel. The Court, after due deliberation, orders and adjudges thet the judgment is affirmed, with costs. Opinion by Fuchsberg, J. All coneur except Jones, J., who dissents and votes to reverse in an opinion in which Jasen and Wachtler, JJ., coneur. The Court further orders that the papers required to be filed and this record of the proceedings in this Court be remitted to the Supreme Court, New York County, there to be proceeded upon according to law. I certify that the preceding contains a correct record of the proceedings in this appeal in the Court of Appeals and that the papers required to be filed are attached. /s/ Donato M. Sueraw Deputy Clerk of the Court Court of Appeals, Clerk’s Office, Albany, December 21, 1977. B-1 APPENDIX B Opinions of the Court of Appeals STATE OF NEW YORK COURT OF APPEALS No. 456 ——E a Ciripank, N.A. (formerly known as First National City Bank), Appellant, vs. Tue Crry or New York Frxance ADMINISTRATION, Respondent. enn No. 457 Tae Cuase Manaatrran bank, N.A., Appellant, vs. THe Finance ApMINISTRATION OF THE City or New York, &ano., &e., Respondents. rr Se Argued September 6, 1977; decided December 21, 1977. (456) W. Foster Wollen & John T. Klug, NYCity, for appellant. W. Bernard Richland, NYC Corporation Counsel (Samuel J. Warms of counsel) for respondent. (457) J. Paul McGrath & Bob D. Mannis, NYC, for appellant. B-2 Opinions of the Court of Appeals W. Bernard Richland, NYC Corporation Counsel (Samuel J. Warms of counsel) for respondent. Fucuseerc, J. The two petitioners, who each lease and occupy premises in the City of New York, where they have their principal places of business, are banking associations chartered under the laws of the national Government. In separate proceedings, brought under CPLR article 78 and considered together, they challenge imposition upou them of the city’s conumercial rent tax (Administrative Code of City of New York, ch 46, tit L) covering the period from June 1, 1970 through May 31, 1972.' The appeals to us are from judgments of the Appellate Division, which, one Justice dissenting, confirmed final determinations of the New York City Finance Administra- tion adverse to the banks and dismissed their petitions. The pivotal issue is whether, because of the provisions of applicable Federal law, the appellants, as national banks, were immune from the tax assessed for the period in ques- tion. In particular, the resolution of this case turns on an analysis of the effect on New York tax laws of the enact- ment of United States Public Law No. 91-156 (83 US Stat #4), which in essence permitted States and their sub- divisions to tax national banks on an equal footing with State banks, Adopted in 1969, United States Public Law No. 91-156 constituted the then latest exercise of the Federal Govern- ment’s authority, recognized since the historie decision in McCulloch v Maryland (17 US 316, 482, 489), to allow States to tax national hanks (Agricwtural Bank v Tax Comm., 392 US 339, 343, Owensboro Nat. Bank v Owens- 3 Correctness of the amounts assessed ($2,702,909.84 in peti- tioner Citibank’s case and $3,097 ,732.94 in that of petitioner Chase) dues not appear to be in dispute. B-3 Opinions of the Court of Appeals boro, 173 US 664; see, also, Liberty Nat. Bank & Trust Co. v Buscaglia, 26 AD2d 97, revd 21 NY2d 357, affd upon rearg 23 NY2d 933). As its legislative history makes clear, the passage of the 1969 statute was precipitated by State reaction to the United States Supreme Court decision in the Agricultural Bank case (supra). In its holding that Massachusetts could not apply its sales tax to purchases made by national banks within its boundaries the court there reiterated that ederal statutory enumeration of the taxes States might levy on national banks carried with it a prohibition on the imposition of any others (see 115 Congressional Record 19909 [1969]; HR Rep No. 91-290, 91st Cong, Ist Sess, pp 6-7 [1969]). In the wake of that decision, a large number of States and localities found themselves deprived of tax sources on which they had come to rely; representatives of the overwhelming majority of these pressed Congress to relieve their plight (see Testimony Received in Considera- tion of HR 7491 and Related Bills: Hearings Before the House Committee on Banking and Currency, 91st Cong, Ist Sess 6-27 [1969]: for the effects in New York see Liberty Nat. Bank & Trust Co. v Buscaglia, supra). Public Law No. 91-156 brought a two-stage change in section 5219 of the United States Revised Statutes (US Code, tit 12, $548); it provided for “temporary” and “permanent” amendments. The “permanent” change elimi- nated the exemption of national banks from taxes to which State banks were subject in the State where the national banks’ prineipal offices were located; this change, to go into elfeet on January 1, 1972 (Public Law No. 91-156, § 2, subds [a], [b}), subsequently was delayed until January 1, 1973 (Public Law No. 92-213, § 4, subd [a]; 85 US Stat B-4 Opinions of the Court of Appeals 775). The “temporary” one (Publie Law No, 91-156, § 1) and a “saving provision” ($3) were (as amd by Publie Law No. 92-215) to govern taxation of National banks during the transition period between December 24, 1969, the enactment date of the new law, and January 1, 1973. It is on subdivision (a) of section 3 of the saving provi- sion that appellants rely. They point out that, during the temporary period, that section protected national banks from losing any pre-existing immunity from State tax laws unless and until the Legislature of a State took “aflirma- tive action” to apply such taxes to them. The banks also assert that the New York City commercial rent tax, which had been in force since 1963, when it was authorized by chapter 257 of the Laws of New York of that year, was neither newly enacted nor the object of the requisite “affirmative action” of the Legislature before the tax assessments in litigation here were levied. For its part, the city’s position is that its exercise of “affirmative action” is to be found in the passage by the New York State Legis- lature of chapter 166 of the Laws of 1970 which modified the original State law authorizing the rent tax, this thouch the 1970 enactment did not expressly refer to national banks. 2. It is agreed that appellants have been subject to the New York City rent tax since that time and therefore this litigation encom- passes no subsequent period, 3. The pertinent text of subdivision (a) of section 3 of the Public law No, 91-156 reads as follows: “(a) * * * [Prior to January 1, [1973], no tax may be imposed on any class of banks by or under authority of any State legislation in effect prior to the enactment of this Act unless “(1) the tax was imposed on that class of banks prior to the enact- ment of this Act, or “(2) the imposition of the tax is authorized by affirmative action of the State legislature after the enactment of this Act.” B-5 Opinions of the Court of Appeals Having fully considered these contentions, and, in the course of doing so, other pertinent provisions of Public Law No. 91-156 as well, we hold, on two independent grounds, that the rent tax was properly levied on the petitioners for the period in question. Because the parties have preferred to focus on whether there was “affirmative action”, we initially discuss the effeet of legislation by which the city’s commercial rent tax was amended to increase its rates significantly as of June, 1970 (1, 1970, ch 166, amdge Administrative Code of City of New York, § L46-1.0, subd 3).4 We conclude that its passage constituted such action. The hanks seek to read into the Federal statute a require- ment that. before imposition of State taxes on national banks, even though the levying statute is a general one, a conscious and explicit decision had to be made to subject these hanks to the tax. But the Federal statute contains no such requirement. And, since even legislative decisions to allow existing rules of law to stand may be dynamic in their effect, where they bring meaningful increases in the rates of a revenue measure it is diffienlt to perceive how they can be regarded as anything but permeated with “action”. Moreover, the mode of enacting amendments is to re-enact the statnte as amended much as a codicil republishes a will. Tt is a well-established proposition of law that an amend- 4. Ina graduated scale, the rates were increased up to a maxi- mum of 50° over the immediately pre-existing ones. 5S While the city mav not have gone through the formality of expressing an intent to regard the amendment to the tax law as “affirmative action”. it had already made known its ongoing concern with the auestion of the tax’s continued viabilitv in a letter submitted to the relevant Congressional Committee by a Representative who had authored remedial legislation (Testimony fon] HR 7491, pp. 14-15). B-6 Opinions of the Court of Appeals ment is a re-enactment of the statute amended, albeit with- out any break in the continuity between the statute before amendment and the statute after amendment (see Lyon v Manhattan Ry. Co., 142 NY 298, 303-304). In fact, drafts- men of bills and other interested members of Legislatures, in considering bills providing for amendments, read them against existing law. And an amendment is enacted exactly like a wholly new statute. Thus, the amendment to the tax statute here, passed by the New York State Legislature and signed by the Governor, necessarily involved “affirmative” conduct. From the point of view of Congress, it was the possibility that inequitable or double taxation might be imposed imme- diately on national hanks that was the crux of its concern. There was certainly nothing in the legislative history to suggest an intention to postpone taxation on national hanks under general statutes like New York City’s commercial rent tax law. To the contrary, the saving provision was designed to avoid upsetting sophisticated, delicately hal- anced State statutes enacted to equalize taxation hetween hank and nonhank entities: the Congressional Managers’ Conference Report makes that most evident (1969 TS Code. Congressional and Administrative News. vol 2. pp 1594, 1598-1599, 1602). Since anv State legislative attempt to amend such a statnte unavoidahly would alert the Tvegisla- ture to enactment of the new Federal statnte. the savine provision therefore conld he effected without reqnirine the States to mention national hanks explicitly in amendatory tax legislation. We. therefore, tnrn now to the other. and at least eqnallv dienositive gronnd for our determination. Tt derives fram enhdivision (h). rather than snhdivision (a). of ceetinn 2 B-7 Opinions of the Court of Appeals of Public Law No. 91-156. Subdivision (b) of section 3 expressly provides that the prohibition of (a) “does not apply to * * * any tax on tangible personal property * * * or for any license, registration, transfer, excise or other fee or tax imposed on the ownership, use or transfer of tangibl personal property imposed by a State”. Such taxes are by its terms excused entirely from the requirement for either allirmative action or new enactment. For these excepted taxes, the “temporary” amendment of section 5219 allowed antomatie imposition of nondiscriminatory State taxes withont any further legislative input. New York City’s commercial rent tax from its inception has been and continues to be regarded as one on tangible personal property. Judge (later Chief Judge) Fur, in Ampco Printing-Advertisers’ Offset Corp. v Citu of New York (14 NY2d 11). spelled ont the precise nature of the property interest of commercial tenants embraced by this local law. After describing the tax as one “imposed on a tenant of taxable premises according to his base rent for the tax vear”. and noting that “‘tenant’ is defined as anyone who pavs rent as lessee, sublessee, licensee or conces- sionaire”, he continues, more generally, “ ‘Tt is significant to note that nowhere in the Tax Law has the Legislature char- acterized a leasehold as taxable real property. Such omis- sion is understandable, as a lease for years is deemed nersonalty [eases cited]? * * * Tn anv event, thongh, the tax could not he considered a tax on ‘intangible’ personal pronertv. A leasehold has consistently heen rerarded as tanaihle, ‘See, e¢.. People ex rel. American Tee Co, » State Rd. of Tar Comrs., 153 App. Div.. 532, 539 [majority oninion?], 541 [minority opinion]. mod. 207 N. Y. 766 * * *.)” (Amneo Printina-Advertisers’ Offset Corp. » City of New York. 14 NV 11, M, 21, 22. supra. ann dsmd 379 TS 5.) B-8 Opinions of the Court of Appeals The proposition that a leasehold constitutes tangible per- sonal property for tax purposes has cut both ways. In the Ampco ease, it resulted in validation of a tax liability: in Matter of Fort Hamilton Manor v Boyland (4 NY2d 192) and in Matter of Grumman Aircraft Eng. Corp. v Board of Assessors of Town of Riverhead (2 NY2d 500, 507, cert den 3595 US 814) it led to mitigation or removal of a tax burden. Also pertinent, in light of subdivision (b) of section 3’s reference not only to “any tax on tangible personal prop- erty” but to an “excise * * * tax imposed on the ownership [or] use” of such property as well, is that, in Ampco (supra, at pp 21, 23), the court characterizes the tax here as an excise tax on the use of property. (See, also, Matter of Penney Co. v Lewisohn, 40 A1D2d 67, affd 33 NY2d 528; 2 Powell, Real Property, par 221, subd[2].) The correctness of this conceptualization of a leasehold interest as tangible personal property in the context of Public Law No. 91-156 is underscored upon further research of that statute’s legislative history. Thus, while our attention has not been directed to any report separately discussing a State-imposed rent tax on facilities used by a national bank in the State where its principal office is located, we find it significant that subdivision (a) of sec- tion 1 explicitly validates such taxes when imposed by a State on a national bank whose principal office is in another jurisdiction. It does so, inter alia, by authorizing a tax on “the occupancy of real property” of such out-of-State national banks (Public Law No, 91-156, § 1, subd [a], amdg US Rev Stat, § 5219, subd 5 par [b], el [2]). Furthermore, referring to this amendment, the Senate Committee on Banking and Currency minced no words in reporting that “the taxes listed in the new section 5 (b) * * * B-9 Opinions of the Court of Appeals are not considered to be taxes on intangible personal prop- erty as that term is used in the new section 5 (a), and they could be imposed on national banks by the States during the period up to January 1, L972, as well as after that date” (US Sen Rep No. 91-530, Yist Cong., Ist Sess 3 [1969] ; 1969 US Code, Congressional and Administrative News, vol 2, pp 1595-1596). We do not regard this comment as any the less telling because it occurred in the course of an explanation of the effect of the amendment on taxes on out-of-State national banks, since the undeniable over-all design of the amend- ments to the then existing Federal legislative scheme was to give States expanded power to subject national banks headquartered within their borders to all nondiscriminatory taxes rather than to a limited “laundry list” (115 Con- gressional Record 19912 [1969]). There is consequently no reason to believe that the express equating of “occupancy of real property” with “tangible personal property” did not apply. Accordingly, we conclude that Public Law No, 91-156 did not immunize petitioners from liability for New York City commercial rent taxes during the years at issue. It follows that the judgments from which the appeals are taken should each be affirmed. Jones, J. (dissenting). | would reverse the judgment of the Appellate Division in each case and annul the deter- mination of the City Finance Administration imposing the New York City couamercial rent and occupancy tax on peti- tioners national banks for the period prior to January 1, 1973. In 1969 the Congress amended section 5219 of the Revised Statutes of the United States (US Code, tit 12, B-10 Opmions of the Court of Appeals y 548) specifically to authorize State taxation of national banks im prescribed ways. Broad authorization was granted on a permanent basis beguiming in 1972 (later deferred to 1973); interim provisions were prescribed with respect to the transitional period prior to 1973. We are here concerned only with such interim provisions. | read section 3 (subd [aj, par [2}) of the amendatory federal statute (US Public Law No. 91-156), authorizing State taxation in the period prior to January 1, 1973 in the event of “aflirmative action of the State legislature”, as requiring a conscious and manifested determination on the part of the State legislature to subject national banks to the imposition of the permitted State taxes. The record of the deliberations of the Senate Committee on Banking and Curreney supports this conelusion: “The committee realizes that for many years the tax structure within the States has been drawn in recognition of the different posi- tions of State and National banks with respeet to Nability for State taxes. In effect, the States have adopted many different formulas in an attempt to equalize the total tax burden between State and National banks. If by congres- sional action banks were automatically subject to taxes which they had not heen previously paving, in addition to the taxes which they are now paying, the effect may be tc destroy the degree of equality that the State legislature, by conscious effort, attempted to achieve. Accordingly, the committee believes it wise to require positive State leq- islative action as a prereqnite to the imposition on banks of the additional taxes anthorized by the bill.” (Sen Rep 91-530, 91st Cone, Ist Sess 6 119691: 1969 TTS Code, Con- gressional and Administrative News, vol 2, 1594, 1598.1599- emphasis supplied.) (See, also, the final conference report B-11 Opinions of the Court of Appeals vi the managers ou the part of the Llouse of Representa- tives: Lik Rep No. Y1-725, Yist Cong, lst Sess 5 [1969]; 1969 LS Code, Congressional and Administrative News, vol 2, pp LOUL-L6U3.) Lhe enactment of chapter 166 of the Laws of 1970 by our State Legislature constituted no such “aflirimative action”. it served only to increase the rates of the pre-existing tax. Nothing in the record before us reveals that the City of New York, the sole beneficiary of the increased rates, in secking the amendment of the State Legislature in enacting it had extension of the tax to national banks even remotely in mind. The Governor's message of necessity on which enactment of chapter 166 was predicated makes no refer- ence to taxation of national banks. Notwithstanding par- ticularized postargument requests to the city therefor, no statement of estimated revenue to be realized from the amendment or other document submitted by the city in sup- port of the enactment of chapter 166 has been furnished in which any reference is made to estimated income to be derived from taxes to be paid by national banks or to any other aspect of taxation of national banks. No shred of contemporaneous proof suggests that either the city admin- istration or the State Legislature was even aware that sec- tion 5219 had been amended or that thereby the Congress had granted authority for expanded State taxation of national banks. In such cireumstances I cannot conclude that legislative action, taken wholly without reference to the Federal stat- ute, constitutes the “affirmative action” contemplated by the Congress when it authorized additional State taxation of national banks. Nor can IT conelude that the enactment of the 1970 increase in rates may be so construed as to B-12 Opwmions of the Court of Appeals support the city’s alternative contention that the “saving provision” of the Federal siatute had no application inas- much as the taxes in question were not imposed under the authority of pre-existing State legislation but rather were unposed under the authority of the 1970 amendiment only. 1 must also disagree with respect to the second ground proffered by the majority to sustain imposition of the New York City commercial rent and occupancy tax on petition- ers, Viz., application of subdivision (b) of section 3 of Pub- lic Law No. 91-156. The decision in Ampco Printing- Advertisers’ Offset Corp. v City of New York (14 NY2d 11, app dsmd 379 US 5), heavily relied on, is by no means conclusive that in the present context the commercial rent tax is a tax on tangible personal property. What was necessarily decided by the court in Ampco, which dealt with the validity of the commercial rent and occupancy tax under our State Constitution, was that the tax there was not a prohibited ad valorem tax on intangible personal property. Even if that ease be read, however, as character- izing the tax for State constitutional purposes as a tax on tangible personal property—which was not necessarily - there determined—such a description could not and should not be binding for present purposes or classification within the contemplation of Congressional statutes. Nothing sug- gests that the opinion in Ampco was written with a Federal statute like Public Law No. 91-156 in mind. There was not then posed or considered the question now before this court —how the commercial rent and oeceupancy tax is to be regarded for purposes of Federal, not New York, law auth- orizing local taxation of national banks. Similarly Matter of Fort Hamilton Manor v Boyland (4 NY2d 192) and B-13 Opinions of the Court of Appeals Matter of Grumman Aircraft Eng. Corp. v Board of Asses- sors of Town of Rwerhead (2 NY2d 500, cert den 355 US S14) arose in a totally distinguishabie context. Finally, even the City of New York itself has never asserted that authorization for the present tax is to be found in subdivi- sion (b). | Chief Judge Brerre. and Judges Gaprretti and Cooker soneur with Judge Fucnusserc; Judge Jones dissents and votes to reverse in a separate opinion in which Judges Jasen and WacHTLER concur. Tn each case: Judgment affirmed, with costs. C-1 APPENDIX C Order of the Court of Appeals Denying Reargument STATE OF NEW YORK, COURT OF APPEALS At a session of the Court, held at Court of Appeals Hall in the City of Albany on the twenty-second day of February A.D. 1978. Present—Hon. Cuanves D. Brerrer, Chief Judge, presiding. Mo. No. 126 Crripank, N.A, (FORMERLY KNOWN AS First Narionau City Bank), Appellant, vs. Tue Crry or New York Frxance ADMINISTRATION, Respondent, To review &e. Tue Cuaset Mannatran Bank, N.A., Appellant, vs. THe Frxancr ADMINISTRATION OF THE Crry or New York, kT AL., Respondents, For a Judgment &e. A motion for reargument in the above cause having here- tofore been made upon the part of the appellants herein and C-2 Order of the Court of Appeals Denying Reargument papers having been submitted thereon and due deliberation having been thereupon had, it is Orverep, that the said motion be and the same hereby is denied with twenty dollars costs and necessary reprodue- tion disbursements. /s/ Joseru W. BELiacosa Joseph W. Bellacosa Clerk of the Court D-1 APPENDIX D Decision of the Appellate Division At a term of the Appellate Division of the Supreme Court held in and for the First Judicial Department in the County of New York, on December 6, 1976. Present—Hon. THeroporre R. Kuprerman, Justice Presiding, Francis T. Murpny, Jr., Vincent A. LupIano, SaMvue. J. SILVERMAN, Emimio Nunez, Justices. 3691 Cirmank, N.A. (FORMERLY KNOWN AS First Nationan Crry Bank), Petitioner, —against— Tue Crry or New York Frxance ADMINISTRATION, Respondent, To review, pursuant to Article 78 CPLR, a Final Determination, ete. 3692 THe Cuase MANHATTAN Bank, N.A, , ’ — Petitioner, —against— Tae Fovance ADMINISTRATION OF THE Crty or New York anp Ivan KE. Irizzary as FINAnce ADMINISTRATOR OF THE City or New York, Respondents, For a Judgment under Article 78 of the Civil Practice Law and Rules. D-2 Decision of the Appellate Division Determinations of respondents, dated December 8, 1975 and March 29, 1976, respectively, confirmed and the peti- tions dismissed. Respondents shall recover of petitioners $60 costs and disbursements of this proceeding. Coneur-— Kupferman, J. P., Murphy, Lupiano and Nunez, JJ., Silver- man, J., dissents in the following memorandum: In my view, as a matter of law the amendatory legislation of 1970 remained “state legislation in effect prior to the enactment” of the 1969 amendment of section 5219 of the United States Revised Statutes (US Code, tit 12, § 548), and did not eon- stitute that “affirmative action of the State Legislature after the enactment of this Act,” required by Publie Law No. 91-156 (83 US Stat 484), as amended by Publie Law No. 92-213 (85 US Stat 775). Aecordingly, I would annul the determination of the City Finance Administration imposing the New York City commercial rent and occupancy tax on petitioners national hanks for the period prior to January 1, 1973. E-1 APPENDIX E Final Determination—The Chase Manhattan Bank, N.A. LETTERHEAD OF THE CITY OF NEW YORK FINANCE ADMINISTRATION OFFICE OF LEGAL AFFAIRS HEARING BUREAU 225, Broadway, New York, N.Y. 10007 FINAL DETERMINATION Dare March 29, 1976 In Re: Commercial Rent or Oceupaney Tax Aupir No. UC-41221 Rec. No. M-500829-8 — 1-500329-6 2633612 NAME The Chase Manhattan Bank, N.A. Appress One Chase Manhattan Plaza New York, New York 10015 Emp. Ipent. No. 13 The Chase Manhattan Bank, N.A. One Chase Manhattan Plaza New York, New York 10015 Notice is hereby given, pursuant to the Administrative Code of the City of New York, that there is due and pay- able to the City of New York a Commercial Rent Tax E-2 Final Determination—The Chase Manhattan Bank, N.A. Deficiency in the amounts and for the periods set forth below. Summary of Tax Deficiency Periods Principal Int.-Pen Total 6/1/69-5/31/70 $ —O- $ —)- $ —-) 6/1/70-5/31/71 1,054,573.74 = 494,531.44 — 1,548,905.18 6/1/71-5/31/72 1,123.357.94 425,469.82 1,548,827.76 (4/20/76) Total Amount Due $2,177,931.68 $919,801.26 — $3,097,732.94 This determination is final and irrevocable. Additional interest accrues at the rate of 1° per month unless pay- ment is received within ten (10) days from the date hereof. Failure to remit promptly will cause the Finance Adminis- tration of the City of New York to issue and docket a warrant as provided for by law. Mar. YOUR REMITTANCE TO THE Orrice or THE Crry Cot- LecTOR At 79 WortH Street, New Yorx, N. Y. Tn order to obtain proper credit for payment, please attach thereto a copy of this notice. IN REPLY REFER TO: HeArrna Burrav—17th Floor. Very truly yours, Finance Administrator by: /s/ Lawrence M. GeretmMan Acting Chief, Hearing Bureau ee: J. Paut McGrarn, Esa, Dewey, Ballantine, Bushby, Palmer & Wood 140 Broadway New York, New York 10005 K-3 Findings of Fact, Conclusions of Law and Decision— The Chase Manhattan Bank, N.A. The Chase Manhattan Bank, N.A. One Chase Manhattan Plaza New York, New York 10015 Audit No. UC-41221 Registration No. M-500329-8 1-500329-6 Employer Ident, No. 13-2633-612 FINDINGS Facts: 1. The Chase Manhattan Bank, N.A., the taxpayer herein, is and was during the audit period of June 1, 1969 to May 31, 1972 a national banking association. 2. Taxpayer filed annual Commercial Rent or Occupancy Tax returns for each of the tax years within the audit period on June 19, 1970, June 21, 1971 and June 20, 1972, respectively, indicating the amount of base rent subject to tax but reporting no tax due on the grounds that it was exempt from such tax. 3. Upon audit by the City, a Notice of Determination dated July 10, 1973 was issued showing a deficiency in Commercial Rent Tax for the audit period as follows: Period: 6/1/69—5/31/72 IEE TIE | cicecssctenccnctensecsorenseesvccees $2,659,345.33 Interest to 7/20/73 ..........2---...0--0--00 530,603.17 2. 2 een $3,189,948.50 K-4 Findings of Fact, Conclusions of Law and Decision— The Chase Manhattan Bank, N.A. 4. Hearing was requested and scheduled. Formal Hear- ing was held and concluded. 0. At the formal hearing, taxpayer couteided that even iS it were liable for the Commercial Rent or Occupancy ‘Tax during the audit period, the assessment for the period from June 1, 1969 to May 31, 1970 was barred by the Statute of Limitations, pursuant to Section L46-17.0 (b) of the Administrative Code of the City of New York, since the tax return for that period was filed on June 19, 1970 and the Notice of Determination was not issued until July 10, 1975. 6. Section L46-17.0 (b) of the Administrative Code of the City of New York provides in part that“... except in the case of a wilfully false or fraudulent return with intent to evade the tax, no assessment of additional tax shall be made after the expiration of more than three years from the date of the final return for the tax year to which the assessment relates. ...” ¢. The attorney for the taxpayer conceded the accuracy of the figures and the mathematics used by the City’s auditor in computing the total Commercial Rent or Occu- pancy Tax deficiency herein. 8S. The taxpayer failed to show that it was not liable for Conunercial Rent or Occupaney Tax as a tenant that oecu- pied and used premises within the City of New York, for which it paid rent, for the purpose of carrying on its busi- ness and its commercial activities, from June 1, 1970 to May 31, 1972. E-5 Findings of Fact, Conclusions of Law and Decision— The Chase Manhattan Bank, N.A. Conelusion: 1. The taxpayer, The Chase Manhattan Bank, N.A., as a tenant, occupied and used various premises within the City of New York for the purpose of carrying on its busi- ness and its commercial activities. 2 The Chase Manhattan Bank, N.A., the taxpayer here- in, is subject to the Commercial Rent or Occupancy Tax pursuant to Title 1, of Chapter 46 of the Aciministrative Code of the City of New York, as authorized by the legis- lature of the State of New York. 3. Pursuant to Section L46-17.0 (b) of the Administra- tive Code of ithe City of New York the Coniuuercial Rent or Occupancy Vax for the period from June 1, 1969 to May 31, 1970 is barred by the Statute of Limitations and, therefore, should be abated as to principal and interest thereon. Decision: 1. he Commercial Rent or Occupancy Tax determina- tion should be affirmed as follows: Period: June 1, 1970 to May 31, 1972 TINNED cocececcssverscesesncccescoevesseessersess 2,177,931.68 Interest to 4/20/76 ................-...... deed 919,801.26 ST TTTED ccsisussssssceatcosssecccsceseces $8,097,732.94 2 The Commercial Rent or Occupancy Tax determina- tion should be abated for the period from June 1, 1969 to May 31, 1970 in the principal amount of $481,413.65 and the interest thereon. E-6 Final Determination—Citibank, N.A. LETTERHEAD OF THE CITY OF NEW YORK FINANCE ADMINISTRATION OFFICE OF LEGAL AFFAIRS HEARING BUREAU 225 Broadway, New York, N. Y. 10007 FINAL DETERMINATION Date December 8, 1975 In Re: Commercial Rent or Oceupaney Tax Avoir No. UE-1090 Ree. No. 1-666743; M-666743-0 Emr. Ipbent. No. 13 | 5266470 Name First National City Bank Appress 399 Park Avenue New York, New York 10022 First National City Bank 399 Park Avenue New York, New York 10022 Notice is hereby given, pursuant to the Administrative Code of the City of New York, that there is due and pay- able to the City of New York a Commercial Rent or Oceu- E-7 Final Determination—Citibank, N.A. pancy Tax Deficiency in the amounts and for the periods set forth below. Summary of Tax Deficiency Periods Principal Int.-Pen. Total 6/1/69-5 31/70 $ +e $ -—- $ —-O- G/1/70-5/31/71 939,070.33 362,715.91 1,301,786.24 6/1/71-5/31/72 1,080,905.38 320,218.22 1,401,123.60 See attached schedule for locations (5/20/75) Total Amount Due 2,019,975.71 $682,934.13 $2,702,909.84 This determination is final and irrevocable. Additional interest accrues at the rate of 1% per month unless pay- ment is received within ten (10) days from the date hereof. Failure to remit promptly will cause the Finance Adminis- tration of the City of New York to issue and docket a warrant as provided for by law. Maw your REMITTANCE TO THE Orrice oF THE Crry CoL- tector at 79 Worrn Srreer, New York, N. Y. In order to obtain proper credit for payment, please attach thereto a | copy of this notice. I~ Repty Rerer to: Hearinc BurEAu—l17TH FLOOR Very truly yours, Finanee Administrator by: /s/ Lawrence M. GeTeLMan Acting Chief, Hearing Bureau ce: Shearman & Sterling, Esqs. 53 Wall Street New York, New York 10005 Att: Epwarp J. Boyir, Ese. K-8 Findings of Fact, Conclusions of Law and Decision— Citibank, N.A. First National City Bank 399 Park Avenue New York, New York 10022 Audit Number: UE-1090 Registration Number: 1-666743-0 M-666743-0 Employer’s Identification Number: 13-5266470 FINDINGS Facts: 1. First National City Bank, the taxnayer herein, is a national banking association, which was assessed by the City of New York, for a Commercial Rent or Oceupancy Tax deficiency, pursuant to a notice of determination dated February 1, 1973, as follows: Period: 6/1/69-5/31/72 ER a $2,484,947.11 Interest to 11/20/72 .000 345,087.86 Total Tax Due ...000 2.899 334.97 2. Pursuant to a letter, received by the Finance Admin- istration on February 23, 1973, the taxpayer applied for a hearing in this matter. 3. A formal hearing was held to a conclusion on April 28, 1975. E-9 Findings of Fact, Conclusions of Law and Decision— Citibank, NA. 4. \t the formal hearing, the attorney for the taxpayer conceded the accuracy of the figures and the mathematics used by the City’s auditor in computing the total Com- mercial Rent or Occupancy Tax deficiency herein. >. The taxpayer failed to show that it was not liable for commercial rent or occupancy tax as a tenant, that occupied and used premises within the City of New York, for which it paid rent, for the purpose of carrying on its business and its commercial activities, for June 1, 1970 to May 31, 1972. Conelusion: 1. The taxpayer, First National City Bank, as a tenant, occupied and used various premises within the City of New York for the purpose of carrying on its business and its commercial activities. 2. First National City Bank, the taxpayer herein, is sub- ject to the Commercial Rent or Occupancy Tax pursuant to Title L of Chapter 46 of the Administrative Code of the City of New York, as authorized by the legislature of the State of New York. 8. Pursuant to Federal Taw, the Commercial Rent or Oceupancy Tax for the period June 1, 1969 to May 31, 1970 should be abated as to principal and interest thereon. Decision: 1. The Commercial Rent or Occupancy Tax Determina- tion should be affirmed as follows: Period: June 1, 1970 to May 31, 1972 PII sciencccecersecsetsincictns silane $2,019,975.71 Interest to 5/20/75 .................. 682,934.13 Total Tax Due ...................--..-- $2,702,909.84 E-10 Findings of Fact, Conclusions of Law and Decision— Citibank, N.A. 2. The Commercial Rent cr Occupany Tax determina- tion should be abated for the period from June 1, 1969 to Mav 31, 1970 in the principal amount. of $464,271.40 and the interest thereon. F-1 Section 5219 of the Revised Statutes of the United States, 12 U.S.C. §548 (1957) The legislature of each State may determine and direct, subject to the provisions of this seetion, the manner and place of taxing all the shares of national banking associa- tions located within its limits. The several States may (1) tax said shares, or (2) include dividends derived therefrom in the taxable income of an owner or holder tnereof, or (3) tax such associations on their net income, or (4) according to or measured by their net income, provided the following conditions are complied with: 1. (a) The imposition by any State of any one of the above four forms of taxation shall be in lieu of the others, except as hereinafter provided in subdivision (c) of this clause. (b) In the case of a tax on said shares the tax imposed shall not be at a greater rate than is assessed upon other moneyed capital in the hands of individual citizens of such State coming into competition with the business of national banks: Provided, That bonds, notes, or other evidences of indebtedness in the hands of individual citizens not employed or engaged in the banking or investment business and representing merely personal investments not made in competition with such business, shall not be deemed moneyed capital within the meaning of this section. (¢) In ease of a tax on or according to or measured by the net income of an association, the taxing State may, except in case of a fax on net income, include the entire net income received from all sources, but the rate shall not be higher than the rate assessed upon other financial corpora- tions nor higher than the highest of the rates assessed by the taxing State upon mercantile, manufacturing, and busi- ness corporations doing business within its limits: Pro. vided, however, That a State which imposes a tax on or F-2 Section 5219 of the Revised Statutes of the United States, 12 U.S.C. §548 (1957) according to or measured by the net income of, or a fran- chise or excise tax on, financial, mercantile, manufacturing, and business corporations organized under its own laws or laws of other States and also imposes a tax upon the income of individuals, may include in such individual income divi- dends from national banking associations located within the State on condition that it also includes dividends from domestic corporations and may likewise include dividends from national banking associations located without the State on condition that it also includes dividends from foreign corporations, but at no higher rate than is imposed on dividends from such other corporations. (d) In ease the dividends derived from the said shares are taxed, the tax shall not be at a greater rate than is assessed upon the net income from other moneyed capital. 2. The shares of any national banking association owned by nonresidents of any State shall be taxed by the taxing district or by the State where the association is located and not elsewhere; and such association shall make return of such shares and pay the tax thereon as agent ot such nonresident shareholders. 3. Nothing herein shall be construed to exempt the real property of associations from taxation in any State or in any subdivision thereof, to the same extent, according to its value, as other real property is taxed. 4. The provisions of section 5219 of the Revised stat- utes of the United States as in force prior to March 25, 1926, shall not prevent the legalizing, ratifying, or confirm- ing by the States of any tax heretofore paid, levied, or assessed upon the shares of national banks, or the collect- ing thereof, to the extent that such tax would be valid under said section. G-1 APPENDIX G Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 434 AN ACT ‘To clarify the liability of national banks for certain taxes. Be it enacted by the Senate and llouse of Representa tives of the United States of America im Congress assembled, §1. Temporary amendment of section 5219, Revised Statutes (a) Section 5219 of the Revised Statutes (12 U.S.C, 548) is amended by adding at the end thereof the following: “5. (a) In addition to the other methods of taxation authorized by the foregoing provisions of this section and subject to the limitations and restrictions specifically set forth in such provisions, a State or political subdivision thereof may impose any tax which is imposed generally on a nondiseriminatory basis throughout the jurisdiction of such State or political subdivision (other than a tax on intangible personal property) on a national bank having its principal office within sueh State in the same manner and to the same extent as such tax is imposed on a bank organized and existing under the laws of such State. “(b) Except as otherwise herein provided, the legisla- ture of each State may impose, and may authorize any political subdivision thereof to impose, the following taxes on a national bank not having its principal office located within the jurisdiction of such State, if such taxes are imposed generally throughout such jurisdiction on a non- diseriminatory basis: G-2 Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 434 “(1) Sales taxes and use taxes complementary thereto upon purchases, sales, and use within such jurisdiction. “(2) ‘Taxes on real property or on the occupancy of real property located within such jurisdiction. “(3) Taxes (including documentary stamp taxes) on the execution, delivery, or recordation of docu- ments within such jurisdiction. “(4) Taxes on tangible personal property (not including cash or currency) located within such jurisdiction. “(5) License, registration, transfer, excise, or other fees or taxes imposed on the ownership, use, or transfer of tangible personal property located within such jurisdiction. “(e) No sales tax or use tax complementary thereto shall be imposed pursuant to this paragraph 5 upon purchases, sales, and use within the taxing jurisdiction of tangible per- sonal property which is the subject matter of a written contract of purchase entered into by a national bank prior to September 1, 1969. “(d) As used in this paragraph 5, the term ‘State’ means any of the several States of the United States, the District of Columbia, the Commonwealth of Puerto Rico, the Virgin Islands, and Guam.” (b) The amendment made by subsection (a) of this sec- tion shall be effective from the date of enactment of this Act until the effective date of the amendment made by section 2(a) of this Act. G-3 Act of December 24, 1969, Pub. L. No. 91-156, 83 Stat. 434 $2. Permanent amendment of section 5219, Revised Statutes (a) Section 5219 of the Revised Statutes (12 U.S.C. 548) is amended to read: “Sec. 5219. For the purposes of any tax law enacted under authority of the United States or any State, a national bank shall be treated as a bank organized and existing under the laws of the State or other jurisdiction within which its principal office is located.” (b) The amendment made hy subsection (a) becomes effective on January 1, 1972. §3. Saving provision (a) Except as provided in subsection (b) of this section, prior to Jannary 1, 1972, no tax may he imposed on any class of banks by or under authority of any State legisla- tion in effect prior to the enactment of this Act unless (1) the tax was imposed on that class of banks prior to the enactment of this Act, or (2) the imposition of the tax is authorized by affirmative action of the State legislature after the enactment of this Act. (b) The prohibition of subsection (a) of this section does not apply to (1) any sales tax or use tax complementary thereto, (2) any tax (including a documentary stamp tax) on the exeention, delivery, or recordation of docu- ments, or G-4 Act of December 21, 1969, Pub. L. No. 91-156, 83 Stat. 434 (3) any tax on tangible personal property (not including cash or currency), or for any license, regis- tration, transfer, excise or other fee or tax imposed on the ownership, use or transfer of tangible per- sonal property, imposed by a State which does not impose a tax, or an increased rate of tax, in lien thereof, § 4. Study by Board of Governors of the Federal Reserve System (a) The Board of Governors of the Federal Reserve System (hereinafter referred to as the “Board”) shall make a study to determine the probable impact on the banking systems and other economic effects of the changes in exist- ing law to he made by section 2 of this Act governing income taxes, intangible property taxes, so-called doing business taxes, and any other similar taxes which are or may be imposed on banks. In conducting the study the Board shall consult with the Secretary of the Treasury and appropriate State banking and taxing authorities. (b) The Board shall make a report of the results of its study to the Congress not later than December 31, 1970. The report shall include the Board’s recommendations as to what additional Federal legislation, if any, may be needed to reconcile the promotion of the economie efficiency of the banking systems of the Nation with the achievement of effectiveness and local autonomy in meeting the fiseal needs of the States and their political subdivisions. G-5 Act of December 22, 1971, Pub. L. No. 92-213, §4(a), 85 Stat. 775 EXTENSION OF DATES APPLICABLE TO CERTAIN PROVISIONS OF LAW RELATING TO THE TAXATION OF NATIONAL, BANKS Sec. 4. (a) The Act entitled "An Act to clarify the lia- bility of national banks for certain taxes”, approved Decem- ber 24, 1969 (85 Stat. 454), is amended by striking out “1972” in sections 2(b) and 3S(a) and inserting in lieu thereof “1973”. H-1 APPENDIX H Laws of New York, 1963, ch. 257 Au Aectv.to enable any city having a population of one million or more to impose and collect taxes on rent or occupancy, Became a law April 3, 1963, with the approval of the Ciovernor, Effective as shown in § 2. The People of the State of New York, represented in Senate and Assembly, do enact as follows: Section 1. (1) Notwithstanding any other provision of law to the contrary, any city having a population of one million or more is hereby authorized and empowered to adopt and amend local laws imposing in any such city a tax such as the legislature has or would have the power and authority to impose on persons occupying premises in such city for the purpose of carrying on or exercising any trade, business, profession, vocation or commercial activity, meas- ured by the rent paid for the use or oceupaney of sueli premises, but not to exceed two and one-half percentum of such rent where the rent is not in excess of twenty-five hun- dred dollars per vear or where the rent is for a period of less than one vear and would not exceed twenty-five hun- dred dollars for the year if it were paid on an equivalent basis for the entire year and not to exceed five percentum of such rent where the rent is in excess of twenty-five hundred dollars per year or where the rent is for a period of less than one vear and would exceed twenty-five hundred dollars for the vear if it were paid on an equivalent basis for the entire vear. H-2 Laws of New York, 1963, ch. 257 (2) Such tax may be collected and administered by thie director of finance or other fiscal officers of such city by such means and in such manner as other taxes which are now collected and administered by such oflicers in aceord- ance with the charter or administrative code of any such city or as otherwise may be provided by such local law. (3) When used in this act the following terms and expres. sions shall mean and include: a. “Person.” An individual, partnership, society, asso- ciation, joint stock company, corporation, estate, receiver, trustee, assignee, or any other person acting in a fiduciary capacity, whether appointed by a court or otherwise, and any combination of individuals. b. “Premises.” Any real property or part thereof, and any structure thereon or space therein. ec. “Rent.” The amount, whether received in money or otherwise, paid by any lessee, sublessee, licensee or con- cessionaire for the right or permission to oceupy the prem- ises, including the amount so paid even though based on a share of profits. (4) Such local laws may provide that any tax imposed shall be paid by the person liable therefor to the owner of the premises occupied or to the person entitled to be paid the rent for the premises occupied for and on account of the city imposing the tax and that such owner or person entitled to be paid the rent shall be liable for the collection and pay- ment of the tax; and that such owner or person entitled to he paid the rent shall have the same right in respect to eol- lecting the tax from the person oceupying the premises, or in respect to non-payment of the tax by the person oecupy- ing the premises, as if the tax were a part of the rent and H-3 Laws of New York, 1963, ch. 257 payable at the same time as the rent; provided, however, that the director of finance or other fiscal officers of such city, specified in such local law, shall be joined as a party in any action or proceeding brought to collect the tax by the owner or by the person entitled to be paid the rent. (5) Such loeal laws may provide that the lower rate or rates of tax provided therein for rents not in excess of twenty-five hundred dollars shall be applicable to rents in excess of that amount and may provide for different rates of tax, not in excess of those specified in subdivision one hereof, for rents in excess of twenty-live hundred dollars or for rents not in excess of that amount; and may provide for exclusions or exemptions from such tax other than those specified in this aet. (6) Such local laws may provide for the filing of returns and the payment of the tax on a monthly basis or on the basis of any longer or shorter period of time. (7) This act shall not authorize the imposition of such tax upon the following: a. The state of New York, or any public corporation (including a public corporation created pursuant to agree- ment or compact with another state or the Dominion of Canada), improvement district or other political subdivi- sion of the state; hb. The United States of America, imsofar as it is immune from taxation; e. The United Nations or other world-wide international organizations of which the United States of America is a member: and d. Any corporation, or association, or trust, or com- munity chest, fund or foundation, organized and operated H-4 Laws of New York, 1963, ch. 257 exclusively for religious, charitable, or educational pur- poses, or for the prevention of cruelty to children or animals, and no part of the net earnings of which inures to the benefit of any private shareholder or individual and no substantial part of the activities of which is carrying on propaganda, or otherwise attempting to influence legisla- tion; provided, however, that nothing in this paragraph shall include an organization operated for the primary purpose of carrying on a trade or business for profit, whether or not all of its profits are payable to one or more organizations deseribed in this paragraph. (8) Any final determination of the amount of any tax payable hereunder shall be reviewable for error, illegality or unconstitutionality or any other reason whatsoever by a proceeding under article seventy-eight of the civil prac- tice act if application therefor is made to the supreme court within thirty days after the giving of the notice of such final determination, provided, however, that any such proceeding under article seventy-eight of the civil practice act shall not be instituted unless (a) the amount of any tax sought to be reviewed, with such interest and penalties thereon as may be provided for by local law or regulation, shall be first deposited and there is filed an undertaking, issued by a surety company authorized to transact business in this state and approved by the superintendent of insur- ance of this state as to solveney and responsibility, in such amount as a justice of the supreme court shall approve to the effect that if such proceeding be dismissed or the tax confirmed the petitioner will pay all costs and charges which may accrue in the prosecution of such proceeding or (b) at the option of the petitioner such undertaking may be in a sum sufficient to cover the taxes, interest and penalties H-5 Laws of New York, 1963, ch. 257 stated in such determination plus the costs and charges which may acerue against it in the prosecution of the pro- ceeding, in which event the petitioner shall not be required to pay such taxes, interest or penalties as a condition prece- dent to the application. (9) Where any tax imposed hereunder shall have been erroneously, illegally or unconstitutionally collected and application for the refund thereof duly made to the proper fiscal officer or officers, and such officer or officers shall have made a determination denying such refund, such determination shall be reviewable by a proceeding under article seventy-eight of the civil practice act, provided, how- ever, that such proceeding is instituted within thirty days after the giving of the notice of such denial, that a final determination of tax due was not previously made, and that an undertaking is filed with the proper fiscal officer or officers in such amount and with such sureties as a justice of the supreme court shall approve to the effect that if such proceeding be dismissed or the tax confirmed, the petitioner will pay all costs and charges which may accrue in the prosecution of such proceeding. (10) Except in the ease of a wilfully false or fraudulent return with intent to evade the tax, no assessment of addi- tional tax shall be made after the expiration of more than three years from the date of the filing of a return, provided, however, that where no return has been filed as provided by law the tax may be assessed at any time. (11) Revenues resulting from the imposition of tax authorized by this act shall be paid into the treasury of any such city and shall be credited to and deposited in the general fund of any such city. H-6 Laws of New York, 1963, ch. 257 (12) If any provision of this act or the application thereof to any person or circumstance shall be held invalid, the remainder of this aet and the application of such provision to other persons or ciremnistances shall not be affected thereby. §2. This act shall take effect June first, nineteen hun- dred sixty-three, except that local laws may be adopted or amended pursuant to this act before such date to take effect on or after June first, nineteen hundred sixty-three, H-7 Laws of New York, 1970, ch. 166 An Act to amend chapter two hundred fifty-seven of the laws of nineteen hundred sixty-three, entitled “An Act to enable any city having a population of one million or more to impose and collect taxes on rent or occupancy,” in rela- tion to restructuring the rates of such taxes and to increase the rate of taxes in certain instances and repealing a por- tion in relation thereto. Approved and effective April 22, 1970. Passed on message of necessity. See Const. art. LX, §2(b) (2), and MecKinney’s Legislative Law § 44. The People of the State of New York, represented in Senate and Assembly, do enact as follows: Section 1. Subdivision one of section one of chapter two hundred fifty-seven of the laws of nineteen hundred sixty-three, entitled “An act to enable any city having a population of one million or more to impose and collect taxes on rent or occupancy,” is hereby amended to read as follows: (1) Notwithstanding any other provision of law to the contrary, any city having a population of one million or more is hereby authorized and empowered to adopt and amend local laws imposing in any such city a tax such as the legislature has or would have the power and authority to impose on persons occupying premises in such city for the purpose of carrying on or exercising any trade, busi- ness, profession, vocation or commercial activity, meas- ured hy the rent paid for the use [or] oceupancy of such premises, but, for periods embraced in the period beginning June first, vineteen hundred sixty-three and ending May thirty-first, nineteen hundred seventy, not to exceed two and Changes or additions in text are indicated by underline, deletions by strikeouts. H-8 Laws of New York, 1970, ch. 166 one-half pereentum of such rent where the rent is not in excess of twenty-five hundred dollars per year or where the rent is .or a period of less than one year and would not exceed twenty-five hundred dollars for the year if it were paid on an equivalent basis for the entire year and not to exceed five perecentum of such rent where the rent is in excess of twenty-five hundred dollars per year or where the rent is for a period of less than one year and would exceed twenty-five hundred dollars for the year if it were paid on an equivalent basis for the entire year. For periods begin- ning after May thirty-first, nineteen hundred seventy such tax shall he imposed at the rates shown in the following table. Where the rent is for a period of less than one year, the rate shall he determined by assuming that the rent is on an equivalent basis for the entire year. Where the annual But not rent is: more than: The rate shall be: 0 $ 2499 21% of the rent $ 2500 or over $ 4999 5% of the rent $ 5000 or over $ 7999 614% of the rent $ S000 or over $10999 7% of the rent $11000 and over eres 714% of the rent §2. Subdivision five of section one of such chapter is hereby repealed. §3. This act shall take effect immediately. --- Source: Frix Law Library, https://www.frixlaw.com/law-library/documents/brief%3Amicro_IA40385005_1045%3A1. Public record. Not legal advice.