S T A T E   O F   N E W   Y O R K
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                                 9960--A

                          I N  A S S E M B L Y

                            February 19, 2010
                               ___________

Introduced by M. of A. LAVINE -- read once and referred to the Committee
  on  Ways  and  Means  --  committee  discharged, bill amended, ordered
  reprinted as amended and recommitted to said committee

AN ACT to amend the tax law, in relation to creating  a  taxpayer  abuse
  sanction,  and  to  amend the state finance law, in relation to estab-
  lishing the education taxpayer abuse penalty  fund  and  the  taxpayer
  abuse penalty fund

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

  Section 1. The tax law is amended by adding a new section 608 to  read
as follows:
  S 608. TAXPAYER ABUSE SANCTION.  (A) FOR PURPOSES OF THIS SECTION, THE
TERM  "PUBLIC  RETIREMENT  SYSTEM  OF THE STATE" SHALL MEAN THE NEW YORK
STATE EMPLOYEES' RETIREMENT SYSTEM, THE NEW YORK STATE  POLICEMEN'S  AND
FIREMEN'S  RETIREMENT  SYSTEM,  THE  NEW YORK STATE TEACHERS' RETIREMENT
SYSTEM, THE NEW YORK CITY EMPLOYEES' RETIREMENT  SYSTEM,  THE  NEW  YORK
CITY TEACHERS' RETIREMENT SYSTEM, THE NEW YORK CITY POLICE PENSION FUND,
THE  NEW YORK CITY FIRE DEPARTMENT PENSION FUND, THE NEW YORK CITY BOARD
OF EDUCATION RETIREMENT SYSTEM AND ANY OTHER RETIREMENT  SYSTEM  OF  THE
STATE OR CITY OF NEW YORK.
  (B)  FOR  TAXABLE YEARS BEGINNING ON OR AFTER JANUARY FIRST, TWO THOU-
SAND TEN, THERE SHALL BE A SANCTION IMPOSED AGAINST THE  INCOME  OF  ANY
MEMBER OF A PUBLIC RETIREMENT SYSTEM OF THE STATE, WHO WAS CONVICTED OF:
(1)  GRAND LARCENY IN THE FIRST DEGREE PURSUANT TO SECTION 155.42 OF THE
PENAL LAW; (2) GRAND LARCENY IN THE SECOND DEGREE  PURSUANT  TO  SECTION
155.40  OF  THE  PENAL LAW; OR (3) SCHEME TO DEFRAUD IN THE FIRST DEGREE
PURSUANT TO SECTION 190.65 OF THE PENAL LAW; WHERE SUCH  CONVICTION  WAS
BASED  UPON  ACTS COMMITTED WHICH RELATED TO THE NATURE OF SUCH MEMBER'S
PUBLIC SERVICE.
  (C) SUCH SANCTION SHALL BE IMPOSED FOR ANY TAXABLE YEAR  DURING  WHICH
SUCH  MEMBER  OF  A PUBLIC RETIREMENT SYSTEM OF THE STATE IS ELIGIBLE TO
RECEIVE A PENSION BENEFIT AND SHALL BE IN AN AMOUNT EQUAL TO THE  AMOUNT
OF ANY SUCH BENEFIT RECEIVED DURING SUCH TAXABLE YEAR.

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15780-08-0
              

A. 9960--A                          2

  (D)  MONIES  RECEIVED  FROM SANCTIONS IMPOSED PURSUANT TO THIS SECTION
SHALL:
  (1)  FOR  MONIES RECEIVED FROM SANCTIONS IMPOSED FOR A CONVICTION OF A
PERSON WHO IS A MEMBER  OF  THE  NEW  YORK  STATE  TEACHERS'  RETIREMENT
SYSTEM;  THE  NEW  YORK CITY TEACHERS' RETIREMENT SYSTEM OR THE NEW YORK
CITY BOARD OF EDUCATION RETIREMENT SYSTEM, BE DEPOSITED IN THE EDUCATION
TAXPAYER  ABUSE   PENALTY   FUND   ESTABLISHED   PURSUANT   TO   SECTION
NINETY-NINE-T  OF  THE STATE FINANCE LAW AND DISTRIBUTED PURSUANT TO THE
PROVISIONS OF SUCH SECTION; OR
  (2) FOR MONIES RECEIVED FROM SANCTIONS IMPOSED FOR A CONVICTION  OF  A
PERSON  WHO  IS  A  MEMBER  OF  THE NEW YORK STATE EMPLOYEES' RETIREMENT
SYSTEM, THE NEW YORK STATE POLICEMEN'S AND FIREMEN'S RETIREMENT  SYSTEM,
THE NEW YORK CITY EMPLOYEES' RETIREMENT SYSTEM, THE NEW YORK CITY POLICE
PENSION  FUND,  THE  NEW  YORK CITY FIRE DEPARTMENT PENSION FUND, OR ANY
OTHER RETIREMENT SYSTEM OF THE STATE OR CITY OF NEW YORK  OTHER  THAN  A
RETIREMENT  SYSTEM  SET  FORTH  IN PARAGRAPH ONE OF THIS SUBDIVISION, BE
DEPOSITED IN THE TAXPAYER ABUSE PENALTY  FUND  ESTABLISHED  PURSUANT  TO
SECTION  NINETY-NINE-U OF THE STATE FINANCE LAW AND DISTRIBUTED PURSUANT
TO THE PROVISIONS OF SUCH SECTION.
  S 2. The state finance law is amended by adding two new sections  99-t
and 99-u to read as follows:
  S  99-T.  EDUCATION  TAXPAYER  ABUSE  PENALTY FUND. 1. THERE IS HEREBY
ESTABLISHED IN THE JOINT CUSTODY OF THE  COMMISSIONER  OF  TAXATION  AND
FINANCE  AND  THE COMPTROLLER, A SPECIAL FUND TO BE KNOWN AS THE "EDUCA-
TION TAXPAYER ABUSE PENALTY FUND".
  2. SUCH FUND SHALL CONSIST OF ALL REVENUES RECEIVED BY THE  DEPARTMENT
OF  TAXATION AND FINANCE, PURSUANT TO THE PROVISIONS OF PARAGRAPH ONE OF
SUBDIVISION (D) OF SECTION SIX HUNDRED EIGHT OF  THE  TAX  LAW  AND  ALL
OTHER  MONEYS  APPROPRIATED,  CREDITED,  OR TRANSFERRED THERETO FROM ANY
OTHER FUND OR SOURCE PURSUANT TO LAW. NOTHING CONTAINED IN THIS  SECTION
SHALL PREVENT THE STATE FROM RECEIVING GRANTS, GIFTS OR BEQUESTS FOR THE
PURPOSES OF THE FUND AS DEFINED IN THIS SECTION AND DEPOSITING THEM INTO
THE  FUND  ACCORDING TO LAW. ANY INTEREST RECEIVED BY THE COMPTROLLER ON
MONEYS ON DEPOSIT IN SUCH FUND SHALL BE RETAINED IN AND BECOME  PART  OF
SUCH FUND.
  3. MONEYS IN SUCH FUND SHALL BE DISTRIBUTED TO SCHOOL DISTRICTS IN THE
STATE  WHERE  PERSONS  SUBJECT  TO  THE PROVISIONS OF SUBDIVISION (B) OF
SECTION SIX HUNDRED EIGHT OF THE TAX LAW WERE EMPLOYED AT  THE  TIME  OF
THE  COMMISSION OF THE ACT OR ACTS UPON WHICH SUCH CONVICTION WAS BASED.
THE AMOUNT OF MONEYS IN THE FUND THAT SHALL BE DISTRIBUTED TO  A  SCHOOL
DISTRICT  PURSUANT  TO  THIS  SUBDIVISION  SHALL  BE EQUAL TO THE DOLLAR
AMOUNT OF THE SANCTION IMPOSED UPON SUCH CONVICTED  PERSON.  ANY  MONEYS
RECEIVED  BY THE FUND FROM A SOURCE OTHER THAN A SANCTION IMPOSED PURSU-
ANT TO THE PROVISIONS OF SUBDIVISION (B) OF SECTION SIX HUNDRED EIGHT OF
THE TAX LAW SHALL BE DISTRIBUTED EQUALLY AMONG SCHOOL DISTRICTS  LOCATED
IN THE STATE.
  4.  MONEYS  SHALL BE PAYABLE FROM THE FUND ON THE AUDIT AND WARRANT OF
THE STATE COMPTROLLER ON VOUCHERS APPROVED AND CERTIFIED BY THE  COMMIS-
SIONER OF TAXATION AND FINANCE.
  5.  TO THE EXTENT PRACTICABLE, MONEYS OF THE FUND SHALL BE DISTRIBUTED
TO SCHOOL DISTRICTS AT LEAST ONCE ANNUALLY.
  S 99-U. TAXPAYER ABUSE PENALTY FUND. 1. THERE IS HEREBY ESTABLISHED IN
THE JOINT CUSTODY OF THE COMMISSIONER OF TAXATION AND  FINANCE  AND  THE
COMPTROLLER,  A  SPECIAL FUND TO BE KNOWN AS THE "TAXPAYER ABUSE PENALTY
FUND".

A. 9960--A                          3

  2. SUCH FUND SHALL CONSIST OF ALL REVENUES RECEIVED BY THE  DEPARTMENT
OF  TAXATION AND FINANCE, PURSUANT TO THE PROVISIONS OF PARAGRAPH TWO OF
SUBDIVISION (D) OF SECTION SIX HUNDRED EIGHT OF  THE  TAX  LAW  AND  ALL
OTHER  MONEYS  APPROPRIATED,  CREDITED,  OR TRANSFERRED THERETO FROM ANY
OTHER  FUND OR SOURCE PURSUANT TO LAW. NOTHING CONTAINED IN THIS SECTION
SHALL PREVENT THE STATE FROM RECEIVING GRANTS, GIFTS OR BEQUESTS FOR THE
PURPOSES OF THE FUND AS DEFINED IN THIS SECTION AND DEPOSITING THEM INTO
THE FUND ACCORDING TO LAW. ANY INTEREST RECEIVED BY THE  COMPTROLLER  ON
MONEYS  ON  DEPOSIT IN SUCH FUND SHALL BE RETAINED IN AND BECOME PART OF
SUCH FUND.
  3. MONEYS IN SUCH FUND SHALL BE DISTRIBUTED TO MUNICIPALITIES  IN  THE
STATE  WHERE  PERSONS  SUBJECT  TO  THE PROVISIONS OF SUBDIVISION (B) OF
SECTION SIX HUNDRED EIGHT OF THE TAX LAW WERE EMPLOYED AT  THE  TIME  OF
THE  COMMISSION  OF THE ACT OR ACTS UPON WHICH SUCH CONVICTION WAS BASED
OR TO THE STATE IF SUCH PERSON WAS EMPLOYED BY THE STATE. THE AMOUNT  OF
MONEYS IN THE FUND THAT SHALL BE DISTRIBUTED TO A MUNICIPALITY OR TO THE
STATE  PURSUANT  TO THIS SUBDIVISION SHALL BE EQUAL TO THE DOLLAR AMOUNT
OF THE SANCTION IMPOSED UPON SUCH CONVICTED PERSON. ANY MONEYS  RECEIVED
BY  THE FUND FROM A SOURCE OTHER THAN A SANCTION IMPOSED PURSUANT TO THE
PROVISIONS OF SUBDIVISION (B) OF SECTION SIX HUNDRED EIGHT  OF  THE  TAX
LAW  SHALL  BE  DISTRIBUTED  EQUALLY AMONG MUNICIPALITIES LOCATED IN THE
STATE.
  4. MONEYS SHALL BE PAYABLE FROM THE FUND ON THE AUDIT AND  WARRANT  OF
THE  STATE COMPTROLLER ON VOUCHERS APPROVED AND CERTIFIED BY THE COMMIS-
SIONER OF TAXATION AND FINANCE.
  5. TO THE EXTENT PRACTICABLE, MONEYS OF THE FUND SHALL BE  DISTRIBUTED
TO MUNICIPALITIES AT LEAST ONCE ANNUALLY.
  S 3. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2010.