United States District Court, W.D. New York
DECISION AND ORDER
WILLIAM M. SKRETNY, Chief District Judge.
The County of Erie contends that Defendants - the government-sponsored enterprises commonly known as Fannie Mae and Freddie Mac, and their conservator, the Federal Housing Finance Agency ("FHFA") - failed to pay transfer taxes to the County. It also seeks a declaratory judgment, which, if granted, would order Defendants to pay these taxes in the future.
Defendants move to dismiss the complaint, arguing that they are exempt from the tax. For the following reasons, that motion is granted.
1. The Parties
Erie County is a municipal corporation, organized and existing under the laws of the State of New York.
Fannie Mae is a government-sponsored enterprise chartered by Congress to "establish secondary market facilities for residential mortgages, " to "provide stability in the secondary market for residential mortgages, " and to "promote access to mortgage credit throughout the Nation." 12 U.S.C. § 1716. Freddie Mac is also a corporation chartered by Congress for substantially the same mission. Id . § 1451. Essentially, Fannie and Freddie buy home loans from approved mortgage sellers, package them into mortgage-backed securities, and sell them in a secondary market. "The aim is to increase the amount of funds available to financial institutions for home loans and, in turn, to increase American home ownership." Montgomery Cnty. Comm'n v. FHFA, No. 2:12CV885-MHT , 2013 WL 1896256, at *1 (M.D. Ala. May 6, 2013).
FHFA is an independent federal agency, created by the Housing and Economic Recovery Act of 2008, Pub. L. No. 110-289, 122 Stat. 2654, codified at 12 U.S.C. § 4617 et seq., with regulatory and oversight authority over Fannie Mae and Freddie Mac.
Having suffered great losses in the wake of the 2008 financial crisis, Frannie and Freddie were placed into FHFA's conservatorship. The Conservator has the statutory power to "operate" the two enterprises and "to conduct all [of their] business, " with the statutory mission of, among other things, "preserv[ing] and conserv[ing] the[ir] assets and property." Id . § 4617(b)(2)(B).
2. The Transfer Tax
The State of New York imposes a tax on the conveyance of real property - a "transfer tax" - at a rate of $2 for each $500. N.Y. Tax Law § 1402(a). New York further authorizes Erie County to collect its own transfer tax at a rate of $2.50 for each $500. N.Y. Tax Law § 1425; Erie Cnty. Local Law 4-1990 § 3 (instituting such a tax). Accordingly, the tax on the conveyance of real property in Erie County is $4 per $1, 000 for New York State and $5 per $1, 000 for the County of Erie, for a total of $9 per $1, 000 of value. The County of Erie alleges that Defendants have "wrongfully not paid the above stated taxes on the transfer of real property as is required by New York State and Erie County Law." (Pl.'s Br. at 1.) Although it is not specifically spelled out in the complaint, presumably Fannie Mae and ...