senate Bill S2732

Amended

Establishes an education investment tax credit

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Bill Status


  • Introduced
  • In Committee
  • On Floor Calendar
    • Passed Senate
    • Passed Assembly
  • Delivered to Governor
  • Signed/Vetoed by Governor
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actions

  • 31 / Jan / 2011
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 02 / Jun / 2011
    • REPORTED AND COMMITTED TO FINANCE
  • 21 / Jun / 2011
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 21 / Jun / 2011
    • ORDERED TO THIRD READING CAL.1453
  • 21 / Jun / 2011
    • PASSED SENATE
  • 21 / Jun / 2011
    • DELIVERED TO ASSEMBLY
  • 21 / Jun / 2011
    • REFERRED TO WAYS AND MEANS
  • 04 / Jan / 2012
    • DIED IN ASSEMBLY
  • 04 / Jan / 2012
    • RETURNED TO SENATE
  • 04 / Jan / 2012
    • REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 13 / Jan / 2012
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 13 / Jan / 2012
    • PRINT NUMBER 2732A
  • 27 / Mar / 2012
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 27 / Mar / 2012
    • PRINT NUMBER 2732B
  • 17 / May / 2012
    • AMEND AND RECOMMIT TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
  • 17 / May / 2012
    • PRINT NUMBER 2732C
  • 12 / Jun / 2012
    • COMMITTEE DISCHARGED AND COMMITTED TO RULES
  • 12 / Jun / 2012
    • ORDERED TO THIRD READING CAL.1185
  • 12 / Jun / 2012
    • PASSED SENATE
  • 12 / Jun / 2012
    • DELIVERED TO ASSEMBLY
  • 12 / Jun / 2012
    • REFERRED TO WAYS AND MEANS

Summary

Establishes an education investment tax credit.

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Bill Details

Versions:
S2732
S2732A
S2732B
S2732C
Legislative Cycle:
2011-2012
Current Committee:
Law Section:
Tax Law
Laws Affected:
Amd ยงยง606, 210 & 171, Tax L
Versions Introduced in 2009-2010 Legislative Cycle:
S5146A

Sponsor Memo

BILL NUMBER:S2732

TITLE OF BILL:
An act
to amend the tax law, in relation to
enacting the "education investment incentives act"

PURPOSE:
This bill would authorize a personal tax credit up to $6,000 and a
corporate tax credit up to $15,000 for contributions to public
education entities, or to charitable organizations which offer
tuition assistance, or up to $75 for expenses incurred by school
personnel and parents who educate their children at home.

SUMMARY OF PROVISIONS:
This bill would permit individual public schools, including charter
schools, to accept and receive voluntary cash contributions. It also
amends section 606 of the tax law to define a "local education fund"
as a charitable organization in this state that is exempt from
federal taxation under section 501(c) (3) of the Internal Revenue
Code and is established for the specific purpose of supporting public
education within a specific public school district; a "school tuition
organization" as a charitable organization in this state that is
exempt from federal taxation under section 501(c) (3) of the Internal
Revenue Code, allocates at least eighty-seven percent of its annual
expenditures for financial assistance to students in order that they
may attend an eligible nonpublic school, and provides such assistance
to students in more than one such school. It adds subsections to
section 606 to allow a 60% tax credit up to $6,000 in any taxable
year for voluntary cash contributions to public education entities,
or to school tuition organizations, or up to $75 for the purchase of
instructional materials and classroom supplies for schools or
nonpublic home-based instruction. Contributions to local education
funds or to school tuition organizations
may not be designated for the direct benefit of any particular
student. It would also add a subsection to section 210 of the tax law
to allow a 60% credit up to $15,000 for cash contributions to public
education entities or to local education funds, or to school tuition
organizations. A subsection is also added to section 171 of the tax
law to establish an annual limit of two hundred million dollars for
such credits. Contributions exceeding this limit shall be applied to
the following tax year and the donor so notified.

JUSTIFICATION:
One of the most vexing problems facing policy makers and educators is
the funding of our educational system. When crafting annual school
budgets, school officials must grapple with rising costs, fluctuating
state and federal aid, and an often-unstable local tax base. These
ever-changing
dynamics result in valuable educational programs being reduced,
eliminated or never actually started. It is necessary to encourage
greater private sector support of educational opportunities for
children. Private sector resources, from both individuals and
businesses, not only to help stabilize the school budget process, but
allow schools to maintain, expand or begin worthwhile programs. An
education investment tax credit, as established by this act, will


involve the private sector, both individuals and corporations, and
may encourage donations to public education entities, along with
educational scholarship organizations benefitting students attending
independent and religious schools. The tax credit provided in this
act is merely one of many credits available to New York taxpayers.
The intended beneficiaries of the tax credit provided in this act are
the students who attend public schools, charter schools, and anyone
who furthers their education using tuition scholarships from
educational scholarship organizations, or who participates in a
home-based educational program. The tax credit does not constitute
public aid to non-public sectarian institutions; permitting school
personnel to claim a credit for the purchase of classroom
instructional materials and supplies will insure a wider
availability of such materials and supplies for all students.

LEGISLATIVE HISTORY:
Similar to S.5146 of 2009-10 - Reported from Investigations, Referred
to Finance.

FISCAL IMPLICATIONS:
The Department of Taxation & Finance has yet to project a first-year
revenue reduction. However, as it would affect only the Fourth
Quarter of FY 2011-12, it would be less than the $200 million allowed
when fully implemented. Since the bill allows only a partial credit,
it has the potential to generate $333 million in voluntary
contributions to support K-12 education in New York State.
Stabilizing the independent and religious sector will significantly
lessen the need for local school tax increases as well as for the
issuance of bonds for new public school construction, generating
further savings for the state.

EFFECTIVE DATE:
This act shall take effect on the first day of January next succeeding
the date on which it shall have become a law.

view bill text
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  2732

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                            January 31, 2011
                               ___________

Introduced by Sens. GOLDEN, GRISANTI, MARTINS, MAZIARZ -- read twice and
  ordered  printed, and when printed to be committed to the Committee on
  Investigations and Government Operations

AN ACT to amend the tax law, in  relation  to  enacting  the  "education
  investment incentives act"

  THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section 1. Short title. This act shall be known and may  be  cited  as
the "education investment incentives act".
  S 2. Legislative findings and intent. The legislature hereby finds and
declares that:
  a.  At  a  time when the state is considering ways of reducing the tax
burden for New York state residents and educators are seeking an  expan-
sion  of financial resources, charitable giving for educational purposes
should be stimulated;
  b. Permitting public education entities such as school  districts  and
individual  public  schools,  including  charter  schools, to accept and
receive voluntary cash contributions will lessen the need for additional
tax revenue;
  c. Encouraging voluntary support for education, without prejudice  for
or  against  any  state-sanctioned  educational enterprise, promotes the
state's interest in providing the highest quality education to all chil-
dren in the state;
  d. Requiring a sharing of resources among school districts will insure
a more equitable distribution of financial support;
  e. The tax credit provided in this act is merely one of  many  credits
available to New York taxpayers;
  f.  The  intended beneficiaries of the tax credit provided in this act
are the students who attend public schools, including  charter  schools,
or  who  further their educations using tuition scholarships from educa-
tional scholarship  organizations,  or  who  participate  in  home-based

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD05643-02-1

S. 2732                             2

educational  programs;  therefore  the  tax  credit  does not constitute
public aid to non-public sectarian institutions;
  g.  Permitting  school personnel to claim a credit for the purchase of
classroom instructional materials  and  supplies  will  insure  a  wider
availability of such materials and supplies for all students.
  S  3.  Section  606  of  the  tax  law  is  amended by adding five new
subsections (u), (v), (w), (w-1) and (w-2) to read as follows:
  (U) DEFINITIONS. AS USED IN SUBSECTIONS (V), (W), (W-1) AND  (W-2)  OF
THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (1) "PUBLIC EDUCATION ENTITY" SHALL MEAN ANY PUBLIC SCHOOL DISTRICT OR
ANY INDIVIDUAL PUBLIC SCHOOL, INCLUDING ANY CHARTER SCHOOL.
  (2)  "LOCAL  EDUCATION  FUND"  SHALL MEAN A CHARITABLE ORGANIZATION IN
THIS STATE THAT:
  (A) IS EXEMPT FROM FEDERAL TAXATION UNDER SECTION 501  (C)(3)  OF  THE
INTERNAL REVENUE CODE; AND
  (B)  IS  ESTABLISHED  FOR  THE  EXPLICIT  PURPOSE OF SUPPORTING PUBLIC
EDUCATION WITHIN A SPECIFIC PUBLIC SCHOOL DISTRICT.
  (3) "EDUCATIONAL SCHOLARSHIP ORGANIZATION"  SHALL  MEAN  A  CHARITABLE
ORGANIZATION IN THIS STATE THAT:
  (A)  IS  EXEMPT  FROM FEDERAL TAXATION UNDER SECTION 501 (C)(3) OF THE
INTERNAL REVENUE CODE; AND
  (B) ALLOCATES AT LEAST EIGHTY-SEVEN PERCENT OF ITS ANNUAL EXPENDITURES
FOR EDUCATIONAL SCHOLARSHIPS OR TUITION GRANTS TO CHILDREN ALLOWING THEM
TO ATTEND ANY ELIGIBLE RELIGIOUS OR INDEPENDENT SCHOOL AND/OR TO RECEIVE
TUTORING AND MENTORING SERVICES IN AN ELIGIBLE RELIGIOUS OR  INDEPENDENT
SCHOOL, OR FOR OTHER EDUCATIONAL PURPOSES; AND
  (C) MAKES EDUCATIONAL SCHOLARSHIPS, WHICH MAY INCLUDE SCHOLARSHIPS FOR
TUTORING AND MENTORING SERVICES, OR TUITION GRANTS AVAILABLE TO CHILDREN
FROM  MORE  THAN ONE PUBLIC OR ELIGIBLE RELIGIOUS OR INDEPENDENT SCHOOL;
AND
  (D) REPORTS ANNUALLY TO THE DEPARTMENT THE GROSS  RECEIPTS  AND  GROSS
AMOUNT EXPENDED FOR SCHOLARSHIPS AND TUITION GRANTS, MENTORING SERVICES,
AND OTHER EDUCATIONAL PURPOSES.
  (4)  "ELIGIBLE  RELIGIOUS  OR INDEPENDENT SCHOOL" SHALL MEAN ANY RELI-
GIOUS OR INDEPENDENT PRIMARY OR SECONDARY SCHOOL THAT IS LOCATED IN THIS
STATE, THAT SATISFIES  THE  REQUIREMENTS  PRESCRIBED  BY  LAW  FOR  SUCH
SCHOOLS  IN THIS STATE, AND THAT HAS QUALIFIED FOR FEDERAL TAX EXEMPTION
UNDER SECTION 501 (C)(3) OF THE INTERNAL REVENUE CODE.
  (5) "AUTHORIZED CERTIFICATE  OF  RECEIPT"  SHALL  MEAN  A  CERTIFICATE
DESIGNED BY THE COMMISSIONER FOR THE PURPOSE OF ACKNOWLEDGING RECEIPT OF
A  CHARITABLE  CONTRIBUTION  BY  THE CHIEF EXECUTIVE OFFICER OF A PUBLIC
EDUCATION ENTITY, OR OF A LOCAL EDUCATION  FUND  OR  OF  AN  EDUCATIONAL
SCHOLARSHIP ORGANIZATION.
  (V) CONTRIBUTIONS TO PUBLIC EDUCATION CREDIT. FOR TAXABLE YEARS BEGIN-
NING ON OR AFTER JANUARY FIRST, TWO THOUSAND TWELVE, A CREDIT IS ALLOWED
AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR VOLUNTARY CASH CONTRIBUTIONS
MADE BY THE TAXPAYER DURING THE TAXABLE YEAR TO A PUBLIC EDUCATION ENTI-
TY. ACCEPTANCE AND RECEIPT OF ALL SUCH CONTRIBUTIONS SHALL BE PERMITTED.
A  TAXPAYER WHO SUBMITS WITH HIS OR HER TAX RETURN AN AUTHORIZED CERTIF-
ICATE OF RECEIPT SHALL BE ALLOWED A CREDIT, TO BE COMPUTED   AS  HEREIN-
AFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (1) THE AMOUNT OF THE CREDIT.
  (A)  THIS  CREDIT  SHALL  BE  VALUED AT SIXTY PERCENT OF SUCH CONTRIB-
UTIONS, NOT TO EXCEED SIX THOUSAND DOLLARS IN ANY TAXABLE YEAR.
  (B) A SHAREHOLDER OF A NEW YORK S CORPORATION OR A PARTNER OF A  PART-
NERSHIP  (OR  OTHER  ENTITY  TREATED  AS  A  PARTNERSHIP  FOR INCOME TAX

S. 2732                             3

PURPOSES) SHALL BE TREATED AS THE TAXPAYER WITH RESPECT TO  HIS  OR  HER
PRO-RATA  SHARE  OF  THE  TAX  CREDIT ALLOWABLE TO SUCH S CORPORATION OR
PARTNERSHIP, DETERMINED FOR THE S CORPORATION'S OR PARTNERSHIP'S TAXABLE
YEAR  ENDING WITH OR WITHIN THE SHAREHOLDER'S OR PARTNER'S TAXABLE YEAR.
THE MAXIMUM AMOUNT OF THE CREDIT FOR SUCH S CORPORATION  OR  PARTNERSHIP
SHALL  BE  THE SAME AS THAT ALLOWABLE TO CORPORATIONS UNDER SUBDIVISIONS
FORTY-FOUR AND FORTY-FIVE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER.
  (2) A HUSBAND AND WIFE WHO FILE SEPARATE RETURNS FOR A TAXABLE YEAR IN
WHICH THEY COULD HAVE FILED A JOINT RETURN MAY EACH CLAIM ONLY  ONE-HALF
OF THE TAX CREDIT THAT WOULD HAVE BEEN ALLOWED FOR A JOINT RETURN.
  (3)  IF THE ALLOWABLE TAX CREDIT EXCEEDS THE TAXES OTHERWISE DUE UNDER
THIS ARTICLE ON THE TAXPAYER'S INCOME, OR IF  THERE  ARE  NO  TAXES  DUE
UNDER  THIS ARTICLE, THE TAXPAYER MAY CARRY THE AMOUNT OF THE CREDIT NOT
USED TO OFFSET THE TAXES UNDER THIS ARTICLE FORWARD FOR  NOT  MORE  THAN
FIVE YEARS INCOME TAX LIABILITY.
  (4)  CONTRIBUTIONS OF TEN THOUSAND DOLLARS OR LESS IN ANY TAXABLE YEAR
SHALL NOT BE CONSIDERED ELIGIBLE DEDUCTIONS AS ALLOWED UNDER THIS  ARTI-
CLE  FOR  CHARITABLE CONTRIBUTIONS. CONTRIBUTIONS IN EXCESS OF TEN THOU-
SAND DOLLARS IN ANY TAXABLE YEAR SHALL BE CONSIDERED ELIGIBLE DEDUCTIONS
AS ALLOWED UNDER THIS ARTICLE FOR CHARITABLE CONTRIBUTIONS.
  (5) SUCH CONTRIBUTIONS SHALL BE DEPOSITED IN A SEPARATE ACCOUNT.
  (6) IF MADE TO A PUBLIC SCHOOL DISTRICT SUCH  CONTRIBUTIONS  SHALL  BE
SUPERVISED  BY  A  PERSON SO DESIGNATED BY THE CHANCELLOR OR SUPERINTEN-
DENT. IF MADE TO A PARTICULAR SCHOOL THEY SHALL  BE  SUPERVISED  BY  THE
SCHOOL PRINCIPAL. REPORTS OF DEPOSITS AND DISBURSEMENTS SHALL BE MADE TO
THE  LOCAL  BOARD OF EDUCATION ANNUALLY. CHARTER SCHOOLS SHALL MAKE SUCH
REPORTS TO THE STATE EDUCATION DEPARTMENT.
  (W) CONTRIBUTIONS TO LOCAL EDUCATION FUND CREDIT. IN LIEU OF  CONTRIB-
UTIONS IN SUBSECTION (V) OF THIS SECTION, A CREDIT IS ALLOWED:
  (1) FOR THE AMOUNT OF VOLUNTARY CASH CONTRIBUTIONS MADE BY THE TAXPAY-
ER  DURING  THE  TAXABLE  YEAR TO A LOCAL EDUCATION FUND. A TAXPAYER WHO
SUBMITS WITH HIS OR HER TAX RETURN AN AUTHORIZED CERTIFICATE OF  RECEIPT
SHALL  BE  ALLOWED  A  CREDIT,  TO  BE COMPUTED AS HEREINAFTER PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (A) THIS CREDIT SHALL BE VALUED AT  SIXTY  PERCENT  OF  SUCH  CONTRIB-
UTIONS, NOT TO EXCEED SIX THOUSAND DOLLARS IN ANY TAXABLE YEAR. A SHARE-
HOLDER  OF  A  NEW  YORK S CORPORATION OR A PARTNER OF A PARTNERSHIP (OR
OTHER ENTITY TREATED AS A PARTNERSHIP FOR INCOME TAX PURPOSES) SHALL  BE
TREATED AS THE TAXPAYER WITH RESPECT TO HIS OR HER PRO-RATA SHARE OF THE
TAX  CREDIT  ALLOWABLE  TO SUCH S CORPORATION OR PARTNERSHIP, DETERMINED
FOR THE S CORPORATION'S OR PARTNERSHIP'S TAXABLE  YEAR  ENDING  WITH  OR
WITHIN  THE  SHAREHOLDER'S OR PARTNER'S TAXABLE YEAR. THE MAXIMUM AMOUNT
OF THE CREDIT FOR SUCH S CORPORATION OR PARTNERSHIP SHALL BE THE SAME AS
THAT ALLOWABLE TO CORPORATIONS UNDER SUBDIVISIONS FORTY-FOUR AND  FORTY-
FIVE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER.
  (B) A HUSBAND AND WIFE WHO FILE SEPARATE RETURNS FOR A TAXABLE YEAR IN
WHICH  THEY COULD HAVE FILED A JOINT RETURN MAY EACH CLAIM ONLY ONE-HALF
OF THE TAX CREDIT THAT WOULD HAVE BEEN ALLOWED FOR A JOINT RETURN.
  (C) IF THE ALLOWABLE TAX CREDIT EXCEEDS THE TAXES OTHERWISE DUE  UNDER
THIS  ARTICLE  ON THE TAXPAYER'S INCOME, OR IF THERE ARE TAXES DUE UNDER
THIS ARTICLE, THE TAXPAYER MAY CARRY THE AMOUNT OF THE CREDIT  NOT  USED
TO  OFFSET  THE  TAXES UNDER THIS ARTICLE FORWARD FOR NOT MORE THAN FIVE
YEARS' INCOME TAX LIABILITY.
  (D) CONTRIBUTIONS IN EXCESS OF TEN THOUSAND  DOLLARS  IN  ANY  TAXABLE
YEAR SHALL BE CONSIDERED ELIGIBLE DEDUCTIONS AS ALLOWED UNDER THIS ARTI-
CLE FOR CHARITABLE CONTRIBUTIONS.

S. 2732                             4

  (E) THIS TAX CREDIT MAY NOT BE CLAIMED FOR ANY CONTRIBUTION TO A LOCAL
EDUCATION FUND FOR THE BENEFIT OF A DESIGNATED STUDENT.
  (2) FOR THE AMOUNT OF VOLUNTARY CASH CONTRIBUTIONS MADE BY THE TAXPAY-
ER DURING THE TAXABLE YEAR TO AN EDUCATIONAL SCHOLARSHIP ORGANIZATION. A
TAXPAYER  WHO  SUBMITS  WITH HIS OR HER TAX RETURN AN AUTHORIZED CERTIF-
ICATE OF RECEIPT SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFT-
ER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (A) THIS CREDIT SHALL BE VALUED AT  SIXTY  PERCENT  OF  SUCH  CONTRIB-
UTIONS, NOT TO EXCEED SIX THOUSAND DOLLARS IN ANY TAXABLE YEAR. A SHARE-
HOLDER  OF  A  NEW  YORK S CORPORATION OR A PARTNER OF A PARTNERSHIP (OR
OTHER ENTITY TREATED AS A PARTNERSHIP FOR INCOME TAX PURPOSES) SHALL  BE
TREATED AS THE TAXPAYER WITH RESPECT TO HIS OR HER PRO-RATA SHARE OF THE
TAX  CREDIT  ALLOWABLE  TO SUCH S CORPORATION OR PARTNERSHIP, DETERMINED
FOR THE S CORPORATION'S OR PARTNERSHIP'S TAXABLE  YEAR  ENDING  WITH  OR
WITHIN  THE  SHAREHOLDER'S OR PARTNER'S TAXABLE YEAR. THE MAXIMUM AMOUNT
OF THE CREDIT FOR SUCH S CORPORATION OR PARTNERSHIP SHALL BE THE SAME AS
THAT ALLOWABLE TO CORPORATIONS UNDER SUBDIVISIONS FORTY-FOUR AND  FORTY-
FIVE OF SECTION TWO HUNDRED TEN OF THIS CHAPTER.
  (B) A HUSBAND AND WIFE WHO FILE SEPARATE RETURNS FOR A TAXABLE YEAR IN
WHICH  THEY COULD HAVE FILED A JOINT RETURN MAY EACH CLAIM ONLY ONE-HALF
OF THE TAX CREDIT THAT WOULD HAVE BEEN ALLOWED FOR A JOINT RETURN.
  (C) IF THE ALLOWABLE TAX CREDIT EXCEEDS THE TAXES OTHERWISE DUE  UNDER
THIS  ARTICLE  ON  THE  TAXPAYER'S  INCOME, OR IF THERE ARE NO TAXES DUE
UNDER THIS ARTICLE, THE TAXPAYER MAY CARRY THE AMOUNT OF THE CREDIT  NOT
USED  TO  OFFSET  THE TAXES UNDER THIS ARTICLE FORWARD FOR NOT MORE THAN
FIVE YEARS' INCOME TAX LIABILITY.
  (D) CONTRIBUTIONS IN EXCESS OF TEN THOUSAND  DOLLARS  IN  ANY  TAXABLE
YEAR SHALL BE CONSIDERED ELIGIBLE DEDUCTIONS AS ALLOWED UNDER THIS ARTI-
CLE FOR CHARITABLE CONTRIBUTIONS.
  (E)  THIS  TAX  CREDIT  MAY  NOT BE CLAIMED FOR ANY CONTRIBUTION TO AN
EDUCATIONAL SCHOLARSHIP ORGANIZATION FOR THE  BENEFIT  OF  A  DESIGNATED
STUDENT.
  (W-1)  HOME-BASED  INSTRUCTIONAL MATERIALS CREDIT. IN LIEU OF CONTRIB-
UTIONS IN SUBSECTIONS (V) AND (W) OF THIS SECTION, A CREDIT  IS  ALLOWED
FOR  THE  PURCHASE  OF INSTRUCTIONAL MATERIALS FOR NON-PUBLIC HOME-BASED
EDUCATIONAL PROGRAMS. THIS CREDIT SHALL BE VALUED AT  SIXTY  PERCENT  OF
SUCH PURCHASES.
  (1) THE AMOUNT OF SUCH CREDIT SHALL NOT EXCEED SEVENTY-FIVE DOLLARS IN
ANY TAXABLE YEAR.
  (2) A HUSBAND AND WIFE WHO FILE SEPARATE RETURNS FOR A TAXABLE YEAR IN
WHICH  THEY COULD HAVE FILED A JOINT RETURN MAY EACH CLAIM ONLY ONE-HALF
OF THE TAX CREDIT THAT WOULD HAVE BEEN ALLOWED FOR A JOINT RETURN.
  (3) IF THE ALLOWABLE TAX CREDIT EXCEEDS THE TAXES OTHERWISE DUE  UNDER
THIS  ARTICLE  ON  THE  TAXPAYER'S  INCOME, OR IF THERE ARE NO TAXES DUE
UNDER THIS ARTICLE, THE TAXPAYER MAY CARRY THE AMOUNT OF THE CREDIT  NOT
USED  TO  OFFSET  THE TAXES UNDER THIS ARTICLE FORWARD FOR NOT MORE THAN
FIVE YEARS' INCOME TAX LIABILITY.
  (4) IF THE TAXPAYER SHALL BE RESPONSIBLE FOR NOTIFYING THE COMMISSION-
ER OF THE INTENTION TO CLAIM THE ALLOWABLE CREDIT, NO LATER THAN  DECEM-
BER THIRTY-FIRST.
  (W-2)  CLASSROOM INSTRUCTIONAL MATERIALS AND SUPPLIES CREDIT. A CREDIT
IS ALLOWED FOR THE PURCHASE OF  CLASSROOM  INSTRUCTIONAL  MATERIALS  AND
SUPPLIES  FOR  PERSONNEL  EMPLOYED  IN  ANY PUBLIC SCHOOL, INCLUDING ANY
CHARTER SCHOOL, OR IN ANY ELIGIBLE RELIGIOUS OR INDEPENDENT SCHOOL.

S. 2732                             5

  (1) THIS CREDIT SHALL BE VALUED AT SIXTY PERCENT  OF  SUCH  PURCHASES.
THE  AMOUNT  OF SUCH CREDIT SHALL NOT EXCEED SEVENTY-FIVE DOLLARS IN ANY
TAXABLE YEAR.
  (2)  THE  TAXPAYER SHALL BE RESPONSIBLE FOR NOTIFYING THE COMMISSIONER
OF THE INTENTION TO CLAIM THE ALLOWABLE CREDIT, NO LATER  THAN  DECEMBER
THIRTY-FIRST,  INDICATING  WHETHER  THE  PURCHASE  WAS MADE FOR USE IN A
PUBLIC SCHOOL, INCLUDING A CHARTER SCHOOL, OR AN ELIGIBLE  RELIGIOUS  OR
INDEPENDENT SCHOOL.
  S 4. Section 210 of the tax law is amended by adding four new subdivi-
sions 43, 44, 45 and 46 to read as follows:
  43.  DEFINITIONS. AS USED IN SUBDIVISIONS FORTY-FOUR AND FORTY-FIVE OF
THIS SECTION THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
  (A) "PUBLIC EDUCATION ENTITY" SHALL MEAN ANY PUBLIC SCHOOL DISTRICT OR
ANY INDIVIDUAL PUBLIC SCHOOL, INCLUDING ANY CHARTER SCHOOL.
  (B) "LOCAL EDUCATION FUND" SHALL MEAN  A  CHARITABLE  ORGANIZATION  IN
THIS STATE THAT:
  (1)  IS  EXEMPT  FROM FEDERAL TAXATION UNDER SECTION 501(C) (3) OF THE
INTERNAL REVENUE CODE; AND
  (2) IS ESTABLISHED FOR  THE  EXPLICIT  PURPOSE  OF  SUPPORTING  PUBLIC
EDUCATION WITHIN A SPECIFIC PUBLIC SCHOOL DISTRICT; AND
  (3)  REPORTS  ANNUALLY  TO THE DEPARTMENT THE GROSS RECEIPTS AND GROSS
AMOUNT EXPENDED IN SUPPORT OF PUBLIC EDUCATION.
  (C) "EDUCATIONAL SCHOLARSHIP ORGANIZATION"  SHALL  MEAN  A  CHARITABLE
ORGANIZATION IN THIS STATE THAT:
  (1)  IS  EXEMPT  FROM  FEDERAL TAXATION UNDER SECTION 501(C)(3) OF THE
INTERNAL REVENUE CODE; AND
  (2) ALLOCATES AT LEAST EIGHTY-SEVEN PERCENT OF ITS ANNUAL EXPENDITURES
FOR EDUCATIONS SCHOLARSHIPS OR TUITION GRANTS TO CHILDREN ALLOWING  THEM
TO ATTEND ANY ELIGIBLE RELIGIOUS OR INDEPENDENT SCHOOL AND/OR TO RECEIVE
TUTORING  AND MENTORING SERVICES IN AN ELIGIBLE RELIGIOUS OR INDEPENDENT
SCHOOL, OR FOR OTHER EDUCATIONAL PURPOSES; AND
  (3) MAKES EDUCATIONAL SCHOLARSHIPS, WHICH MAY INCLUDE SCHOLARSHIPS FOR
TUTORING AND MENTORING SERVICES, OR TUITION GRANTS AVAILABLE TO CHILDREN
FROM MORE THAN ONE PUBLIC OR ELIGIBLE RELIGIOUS OR  INDEPENDENT  SCHOOL;
AND
  (4)  REPORTS  ANNUALLY  TO THE DEPARTMENT THE GROSS RECEIPTS AND GROSS
AMOUNT EXPENDED FOR SCHOLARSHIPS AND TUITION GRANTS.
  (D) "ELIGIBLE RELIGIOUS OR INDEPENDENT SCHOOL" SHALL  MEAN  ANY  RELI-
GIOUS OR INDEPENDENT PRIMARY OR SECONDARY SCHOOL THAT IS LOCATED IN THIS
STATE,  THAT  SATISFIES  THE  REQUIREMENTS  PRESCRIBED  BY  LAW FOR SUCH
SCHOOLS IN THIS STATE, AND THAT HAS QUALIFIED FOR FEDERAL TAX  EXEMPTION
UNDER SECTION 501(C)(3) OF THE INTERNAL REVENUE CODE.
  (E)  "AUTHORIZED  CERTIFICATE  OF  RECEIPT"  SHALL  MEAN A CERTIFICATE
DESIGNED BY THE COMMISSIONER FOR THE PURPOSE OF ACKNOWLEDGING RECEIPT OF
A CHARITABLE CONTRIBUTION BY THE CHIEF EXECUTIVE  OFFICER  OF  A  PUBLIC
EDUCATION  ENTITY,  OR  OF  A  LOCAL EDUCATION FUND OR OF AN EDUCATIONAL
SCHOLARSHIP ORGANIZATION.
  44. CONTRIBUTIONS TO PUBLIC EDUCATION CREDIT. (A)  FOR  TAXABLE  YEARS
BEGINNING  ON  OR  AFTER JANUARY FIRST, TWO THOUSAND TWELVE, A CREDIT IS
ALLOWED AGAINST THE TAX IMPOSED  BY  THIS  ARTICLE  FOR  VOLUNTARY  CASH
CONTRIBUTIONS  MADE  BY THE TAXPAYER DURING THE TAXABLE YEAR TO A PUBLIC
EDUCATION ENTITY. ACCEPTANCE AND RECEIPT OF ALL SUCH CONTRIBUTIONS SHALL
BE PERMITTED. A TAXPAYER WHO SUBMITS WITH HIS OR HER TAX CREDIT,  TO  BE
COMPUTED  AS HEREINAFTER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTI-
CLE. THIS CREDIT SHALL BE VALUED AT SIXTY PERCENT OF SUCH CONTRIBUTIONS,
NOT TO EXCEED FIFTEEN THOUSAND DOLLARS IN ANY TAXABLE YEAR.

S. 2732                             6

  (B) SUCH CONTRIBUTIONS SHALL BE DEPOSITED IN A SEPARATE ACCOUNT.
  (C)  IF  MADE  TO A PUBLIC SCHOOL DISTRICT SUCH CONTRIBUTIONS SHALL BE
SUPERVISED BY A PERSON SO DESIGNATED BY THE  CHANCELLOR  OR  SUPERINTEN-
DENT.  IF  MADE  TO  A PARTICULAR SCHOOL THEY SHALL BE SUPERVISED BY THE
SCHOOL PRINCIPAL. REPORTS OF DEPOSITS AND DISBURSEMENTS SHALL BE MADE TO
THE LOCAL BOARD OF EDUCATION ANNUALLY. CHARTER SCHOOLS SHALL  MAKE  SUCH
REPORTS TO THE STATE EDUCATION DEPARTMENT.
  45.  CONTRIBUTIONS TO LOCAL EDUCATION FUND CREDIT. IN LIEU OF CONTRIB-
UTIONS IN SUBDIVISION FORTY-FOUR OF THIS SECTION, A CREDIT IS ALLOWED:
  (A) FOR THE AMOUNT OF VOLUNTARY CASH CONTRIBUTIONS MADE BY THE TAXPAY-
ER DURING THE TAXABLE YEAR TO A LOCAL EDUCATION  FUND.  A  TAXPAYER  WHO
SUBMITS  WITH HIS OR HER TAX RETURN AN AUTHORIZED CERTIFICATE OF RECEIPT
SHALL BE ALLOWED A CREDIT,  TO  BE  COMPUTED  AS  HEREINAFTER  PROVIDED,
AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (1) THE AMOUNT OF SUCH CREDIT SHALL BE VALUED AT SIXTY PERCENT OF SUCH
CONTRIBUTIONS,  NOT  TO  EXCEED  FIFTEEN THOUSAND DOLLARS IN ANY TAXABLE
YEAR.
  (2) THIS TAX CREDIT MAY NOT BE CLAIMED FOR ANY CONTRIBUTION TO A LOCAL
EDUCATION FUND FOR THE BENEFIT OF A DESIGNATED STUDENT.
  (B) FOR THE AMOUNT OF VOLUNTARY CASH CONTRIBUTIONS MADE BY THE TAXPAY-
ER DURING THE TAXABLE YEAR TO AN EDUCATIONAL SCHOLARSHIP ORGANIZATION. A
TAXPAYER WHO SUBMITS WITH HIS OR HER TAX RETURN  AN  AUTHORIZED  CERTIF-
ICATE OF RECEIPT SHALL BE ALLOWED A CREDIT, TO BE COMPUTED AS HEREINAFT-
ER PROVIDED, AGAINST THE TAX IMPOSED BY THIS ARTICLE.
  (1) THE AMOUNT OF SUCH CREDIT SHALL BE VALUED AT SIXTY PERCENT OF SUCH
CONTRIBUTIONS,  NOT  TO  EXCEED  FIFTEEN THOUSAND DOLLARS IN ANY TAXABLE
YEAR.
  (2) THIS TAX CREDIT MAY NOT BE CLAIMED  FOR  ANY  CONTRIBUTION  TO  AN
EDUCATIONAL  SCHOLARSHIP  ORGANIZATION  FOR  THE BENEFIT OF A DESIGNATED
STUDENT.
  46. SCHOOL DISTRICTS RECEIVING CONTRIBUTIONS IN EXCESS OF ONE  PERCENT
OF  THEIR PREVIOUS YEAR'S BUDGET SHALL BE REQUIRED TO REMIT A MINIMUM OF
THIRTY-FIVE PERCENT OF ANY SUCH EXCESS AMOUNT TO A FUND ADMINISTERED  BY
THE  COMMISSIONER,  TO BE DISTRIBUTED TO SCHOOL DISTRICTS RECEIVING LESS
THAN ONE-HALF OF ONE PERCENT OF THEIR PREVIOUS YEAR'S BUDGET.   CONTRIB-
UTIONS TO SCHOOL DISTRICTS, TO INDIVIDUAL SCHOOLS (NOT INCLUDING CHARTER
SCHOOLS)  AND  TO  LOCAL  EDUCATION  FUNDS  SHALL  BE AGGREGATED FOR THE
PURPOSES OF THIS SECTION. SUCH PAYMENTS SHALL BE CALCULATED ON A  CALEN-
DAR  YEAR  BASIS  AND  SHALL  BE  MADE  NO LATER THAN MARCH FIRST OF THE
FOLLOWING YEAR.
  S 5. Section 171 of the tax law is amended by adding a new subdivision
twenty-ninth to read as follows:
  TWENTY-NINTH. FOR  THE  PURPOSE  OF  IMPLEMENTING  THE  PROVISIONS  OF
SUBSECTIONS  (U),  (V),  (W), (W-1) AND (W-2) OF SECTION SIX HUNDRED SIX
AND SUBDIVISIONS FORTY-THREE, FORTY-FOUR, FORTY-FIVE  AND  FORTY-SIX  OF
SECTION TWO HUNDRED TEN OF THIS CHAPTER THE COMMISSIONER SHALL:
  (1)  REGISTER  PUBLIC  SCHOOL  DISTRICTS,  INDIVIDUAL  PUBLIC SCHOOLS,
INCLUDING CHARTER SCHOOLS, LOCAL EDUCATION FUNDS, AND EDUCATIONAL SCHOL-
ARSHIP ORGANIZATIONS; AND
  (2) UPON NOTIFICATION BY THE CHIEF EXECUTIVE OFFICER OF ANY  EDUCATION
ENTITY SO REGISTERED THAT A CONTRIBUTION HAS BEEN RECEIVED, SUCH NOTIFI-
CATION  BEING WITHIN ONE BUSINESS DAY OF SAID RECEIPT, RECORD THE AMOUNT
AND DATE OF THE CONTRIBUTION, THE NAME AND ADDRESS OF  THE  CONTRIBUTOR;
AND
  (3)  UPON NOTIFICATION THAT A CREDIT FOR THE PURCHASE OF INSTRUCTIONAL
MATERIALS FOR NON-PUBLIC HOME-BASED  EDUCATIONAL  PROGRAMS,  RECORD  THE

S. 2732                             7

AMOUNT  AND DATE OF THE NOTIFICATION, THE NAME AND ADDRESS OF THE CLAIM-
ANT; AND
  (4)  UPON NOTIFICATION THAT A CREDIT FOR THE PURCHASE OF THE CLASSROOM
INSTRUCTIONAL MATERIALS AND SUPPLIES, RECORD THE AMOUNT AND DATE OF  THE
NOTIFICATION,  THE  NAME  AND  ADDRESS  OF THE CLAIMANT, AND WHETHER THE
PURCHASE WAS MADE FOR USE  IN  A  PUBLIC  SCHOOL,  INCLUDING  A  CHARTER
SCHOOL, OR AN ELIGIBLE RELIGIOUS OR INDEPENDENT SCHOOL; AND
  (5) MAKE NO MORE THAN TWO HUNDRED MILLION DOLLARS IN CREDITS AVAILABLE
IN  ANY  SINGLE  TAX  YEAR,  PROVIDED FURTHER THAT FIFTY PERCENT OF SUCH
CREDITS SHALL BE AFFORDED TO TAXPAYERS  WHO  MAKE  DONATIONS  TO  PUBLIC
EDUCATION  ENTITIES  AND  LOCAL EDUCATION FUNDS, AND FOR THE PURCHASE OF
CLASSROOM INSTRUCTIONAL MATERIALS AND  SUPPLIES  FOR  USE  IN  A  PUBLIC
SCHOOL OR A CHARTER SCHOOL, AND THAT FIFTY PERCENT OF SUCH CREDITS SHALL
BE  AFFORDED  TO  EDUCATION  SCHOLARSHIP ORGANIZATIONS OR FOR HOME-BASED
INSTRUCTIONAL MATERIALS, AND FOR THE PURCHASE OF CLASSROOM INSTRUCTIONAL
MATERIALS AND SUPPLIES FOR USE IN AN ELIGIBLE RELIGIOUS  OR  INDEPENDENT
SCHOOL; AND
  (6)  ISSUE TO TAXPAYERS ALL AUTHORIZED CERTIFICATES OF RECEIPT FOR ALL
ELIGIBLE CREDITS NO LATER THAN JANUARY THIRTY-FIRST FOR CREDITS  CLAIMED
FOR THE PREVIOUS CALENDAR YEAR.
  S  6. Excess contributions. Contributions exceeding the allowed annual
maximum of one hundred million dollars  to  public  education  entities,
local  education  funds  and for the purchase of classroom instructional
materials and supplies for use in a public school or a  charter  school,
or  the  allowed annual maximum of one hundred million dollars to educa-
tion scholarship organizations, for home-based  instructional  materials
and  for  the purchase of classroom instructional materials and supplies
for use in an eligible religious or independent school, shall be applied
to the following tax year, and the donor so notified within one business
day.
  S 7. The department of taxation and finance shall  prepare  a  written
report  before  January  31  of  each calendar year, which shall contain
statistical  information  regarding  the  credits  allowed  pursuant  to
subsections  (u),  (v), (w), (w-1) and (w-2) of section 606 and subdivi-
sions 43, 44, 45 and 46 of section 210  of  the  tax  law  as  added  by
sections  three  and  four  of this act, for the previous calendar year.
Copies of such report shall be submitted to the governor, the  temporary
president  of  the senate, the speaker of the assembly, the chair of the
senate finance committee and the chair of the assembly  ways  and  means
committee.  Such  reports shall contain, but need not be limited to, the
number of credits by type and the amount  of  such  credits  allowed  to
taxpayers.
  S  8. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.

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