New York State has given a couple of breaks to community banks, their customers, and small-business clients.

Under legislation signed by Gov. George Pataki, small businesses no longer will have to pay a mortgage recording tax each time they draw from a line of credit secured by real estate. Instead they'll pay the tax once - the first time they withdraw against it - on the full line of credit.

The law applies only to lines of credit for less than $3 million, covering most small businesses.

Under the previous law, which covered residential and commercial mortgages, customers had to pay tax on the loan every time they took out a mortgage.

That wasn't a problem for residential borrowers, who only take out two or three mortgages in a lifetimes, said New York Bankers Association executive vice president Michael Smith.

Small-business borrowers, however, often had large lines of credit, drawing small amounts on a regular basis and then paying them as revenue came in. But they had to pay the tax each time, which eventually could cost more than if they had paid the tax once on the full line.

Separate legislation will let municipalities use courier services to take public deposits, often tax receipts, to the bank. Previously, a municipal finance officer had to deliver checks to the bank personally, often carrying checks for as much as several million dollars.

There had never been any thefts, but "clearly that was a concern," Mr. Smith said.

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