Senate Bill S5146

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

                                 5146--A

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by Sens. C. JOHNSON, ADDABBO, DIAZ, GOLDEN, PARKER, STACHOW-
  SKI -- read twice and ordered printed, and when printed to be  commit-
  ted  to  the  Committee on Investigations and Government Operations --
  recommitted to the Committee on Investigations  and  Government  Oper-
  ations  in  accordance  with  Senate  Rule  6,  sec.  8  --  committee
  discharged, bill amended, ordered reprinted as amended and recommitted
  to said committee

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.  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. As a result
of these ever-changing dynamics, valuable educational programs are often
reduced, eliminated or never actually started;
  b. The legislature further finds it  necessary  to  encourage  greater
private  sector  support  of  educational  opportunities  for  children.
Private sector resources, from both individuals  and  businesses,  would
not  only  help  stabilize  the  school  budget  process but would allow
schools to maintain, expand or begin worthwhile programs;
  c. In pursuance of the foregoing objectives  an  education  investment
tax  credit  is  established  by this act to involve the private sector,
both individuals and corporations, by encouraging  donations  to  public
education  entities,  and to educational scholarship organizations bene-
fitting students attending independent and religious schools;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11565-04-0
              

S. 5146--A                          2

  d. The tax credit provided in this act is merely one of  many  credits
available to New York taxpayers;
  e.  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
educational  programs;  therefore  the  tax  credit  does not constitute
public aid to non-public sectarian institutions; and
  f. 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 PROPOSES.
  (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 ELEVEN, 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-

S. 5146--A                          3

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
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-TWO AND FORTY-THREE 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 IN EXCESS OF TEN THOUSAND  DOLLARS  IN  ANY  TAXABLE
YEAR SHALL BE CONSIDERED ELIGIBLE DEDUCTIONS AS ALLOWED UNDER THIS ARTI-
CLE 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-TWO  AND
FORTY-THREE 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

S. 5146--A                          4

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 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-TWO  AND
FORTY-THREE 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.

S. 5146--A                          5

  (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.
  (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 three new subdi-
visions 41, 42 and 43 to read as follows:
  41. DEFINITIONS. AS USED IN SUBDIVISIONS FORTY-TWO AND FORTY-THREE  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.
  42.  CONTRIBUTIONS  TO  PUBLIC EDUCATION CREDIT. (A) FOR TAXABLE YEARS
BEGINNING ON OR AFTER JANUARY FIRST, TWO THOUSAND ELEVEN,  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

S. 5146--A                          6

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.
  (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.
  43.  CONTRIBUTIONS TO LOCAL EDUCATION FUND CREDIT. IN LIEU OF CONTRIB-
UTIONS IN SUBDIVISION FORTY-TWO 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.
  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-ONE, FORTY-TWO AND  FORTY-THREE  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
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

S. 5146--A                          7

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.  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  41,  42 and 43 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 commit-
tee. 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  7. This act shall take effect on the first of January next succeed-
ing the date on which it shall have become a law.