NY State Senate Bill 2011-S912B

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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Date of Action	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 13, 2012	print number 912b
Jan 13, 2012	amend and recommit to investigations and government operations
Jan 04, 2012	referred to investigations and government operations
Feb 01, 2011	print number 912a
Feb 01, 2011	amend and recommit to investigations and government operations
Jan 05, 2011	referred to investigations and government operations

Bill Amendments

Original

B (Active)

2011-S912 - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §606, Tax L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S4239
2013-2014: S3266
2015-2016: S3110
2017-2018: S4579
2019-2020: S3982
2021-2022: S1434
2023-2024: S1244
2025-2026: S2023

2011-S912 - Summary

Creates the middle class circuit breaker tax credit and a tax reform study commission.

2011-S912 - Sponsor Memo

                                BILL NUMBER:S912

TITLE OF BILL:
An  act to amend the tax law, in relation to creating the middle class
circuit breaker tax credit and creating a tax reform study commission

PURPOSE OR GENERAL IDEA OF BILL:
To provide a personal income tax credit for certain property taxpayers
who pay a disproportionate share of their income to property taxes.

SUMMARY OF SPECIFIC PROVISIONS:
SECTION 1: Adds a new subsection (qq) to section 606 of the tax law to
provide for a real property tax credit. The credit will  be  based  on
the  income  of  the  household and the percentage that said household
pays for real property taxes.

For Homeowners

For taxable years starting in 2009:
Household Adjusted Gross Income Tax    Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid in
                                       excess of 9% of said income
                                       can receive a personal income
                                       tax credit of 70% of the overage.

$100,001 +                             No credit.

For taxable years starting in 2010:
Household Adjusted Gross
Income Tax                             Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid
                                       in excess of 8.5% of said
                                       of said income can receive
                                       a personal income tax credit
                                       of 70% of the overage.

$100,001 +                             No credit.

For taxable years starting in 2011:
Household Adjusted Gross Income Tax    Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid in
                                       excess of 7.5% of said income
                                       can receive a personal income
                                       tax credit of 70% of the overage.

$100,001 - $150,000                    Real Property taxes paid in
                                       excess of 7.5% of the first
                                       $100,000 of said income PLUS
                                       8.5% of said income above
                                       $100,000 can receive a personal
                                       income tax credit of 70% of the
                                       overage.


$150,001 +                             No credit.

For taxable years starting in 2012:
Household Adjusted Gross
Income Tax                             Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid
                                       in excess of 6% of said
                                       income can receive a
                                       personal income tax credit
                                       of 70% of the overage.

$100,001 - $150,000                    Real Property taxes paid in
                                       excess of 6% if the first
                                       $100,000 of said income
                                       PLUS 7% of said income above
                                       $100,000 can receive a personal
                                       income tax credit of 70% of
                                       of the overage.

$150,001 - $250,000                    Real Property taxes paid in
                                       excess of 6% of the first
                                       $100,000 of said income
                                       PLUS 7% of the next $50,000
                                       of said income PLUS 8.5% of
                                       said income above $150,000
                                       can receive a personal
                                       income tax credit of 70%
                                       of the overage.

$250,000 +                             No credit.

To  qualify,  the  taxpayer must have resided in the home for not less
than five years. Also, the taxpayer may still benefit from  the  Basic
STAR  exemption  or  the  Enhanced STAR exemption for senior citizens.
The credit will equal seventy percent  of  the  taxes  paid  over  the
allowed percentage cap as provided in the bill.

The act would also provide for a "real property tax equivalent" in the
case  of  taxpayers  who  rent real property as their primary New York
State residence.

For taxable years starting in 2010 the "real property tax  equivalent"
equal  to  15% of the adjusted rent actually paid in the taxable year.
taxable years starting in 2011, the amount is increased to 20% of  the
adjusted rent actually paid in the taxable year.

SECTION  2:  Creates  a  tax reform study commission with appointments
from the Senate, Assembly  and  the  Executive.  The  commission  will
review  the  state's  existing property tax reform programs as well as
programs enacted in other states.

SECTION 3: Contains the effective date.

JUSTIFICATION:


The middle class property tax circuit breaker  program  is  a  concept
that  has  successfully  been used in several states to Provide relief
from a residential homeowner's property tax when it exceeds a  certain
portion  of their household income. It has been traditionally Used for
homeowners  with  very low incomes and low assessments. New York State
currently has  a  circuit  breaker  provision  that  has  existed  for
decades,  but the maximum eligible household income is $18,000 and the
maximum eligible home value is $85,000. This new program would  target
middle-class   New   Yorkers   who   have   financially   suffered  as
municipalities have had to rely more heavily on  real  property  taxes
for  local  government revenue. Many homeowners are facing sky-racking
real property tax bills as a result they  are  often  faced  with  the
serious  threat of defaulting on their property taxes and/or seriously
consider selling their homes.

Critics of the New  York's  STAR  program  have  claimed  that  it  is
inequitable because it does not draw a connection between a taxpayer's
household income and the amount of his tax bill. The Middle Class STAR
Rebate Checks program, which began in 1970 and was eliminated in 2009,
compounded  this  effect  because  it  calculated a household's rebate
amount as a percentage of  the  value  of  its  STAR  exemption.  This
legislation seeks to resolve these limitations and remain sensitive to
the  State's  current financial crisis.   Additionally, the bill would
add progressivity to property tax relief and extend  the  benefits  to
property  renters  who  are  often burdened with property taxes in the
cost of their rent. The bill is phased in over four years in order  to
take  the  state's  fiscal situation into consideration while ensuring
that the most overburdened property taxpayers, based on the percentage
of income they are paying in property tax  on  their  home,  will  get
relief quickly.

PRIOR LEGISLATIVE HISTORY:
None.

FISCAL IMPLICATIONS:
The  program  is  phased  in  over four years. and will cost the State
nothing in the first year. For year two the cost will be $1.1 billion;
year three will cost $1.8 billion and every year after will cost  $2.3
billion.

EFFECTIVE DATE:
Immediately after enactment.

2011-S912 - Bill Text download pdf

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

                                   912

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to creating  the  middle  class
  circuit breaker tax credit and creating a tax reform study commission

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

  Section 1. Section 606 of the tax law  is  amended  by  adding  a  new
subsection (ss) to read as follows:
  (SS)  MIDDLE  CLASS  CIRCUIT  BREAKER CREDIT. (1) DEFINITIONS. FOR THE
PURPOSES OF THIS SUBSECTION:
  (A) "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE  WHO
OWNS  OR RENTS THE RESIDENTIAL REAL PROPERTY IN WHICH HE OR SHE RESIDES,
AND HAS RESIDED IN SUCH RESIDENTIAL REAL PROPERTY FOR NOT LESS THAN FIVE
YEARS.
  (B) "HOUSEHOLD" OR  "MEMBERS  OF  THE  HOUSEHOLD"  MEANS  A  QUALIFIED
TAXPAYER  OR  QUALIFIED TAXPAYERS AND ALL OTHER PERSONS, NOT NECESSARILY
RELATED, WHO ALL RESIDE IN THE RESIDENTIAL REAL PROPERTY  OWNED  BY  THE
TAXPAYER  OR TAXPAYERS, AND SHARE ITS FURNISHINGS, FACILITIES AND ACCOM-
MODATIONS; PROVIDED THAT NO PERSON MAY BE A  MEMBER  OF  MORE  THAN  ONE
HOUSEHOLD AT ONE TIME.
  (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME
OF  ALL  MEMBERS  OF  THE HOUSEHOLD FOR THE TAXABLE YEAR AS REPORTED FOR
FEDERAL INCOME TAX PURPOSES, OR WHICH  WOULD  BE  REPORTED  AS  ADJUSTED
GROSS  INCOME  IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO BE FILED,
WITH THE MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX  HUNDRED  TWELVE
OF  THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF SUCH
SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP-
ERTY OTHERWISE EXCLUDED FROM SUCH AMOUNT;  EARNED  INCOME  FROM  SOURCES
WITHOUT  THE  UNITED  STATES  EXCLUDABLE  FROM  FEDERAL  GROSS INCOME BY

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

                                                           LBD03920-01-1

S. 912                              2

SECTION NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT  MONEY
NOT  INCLUDED  IN  ADJUSTED  GROSS  INCOME;  NONTAXABLE STRIKE BENEFITS;
SUPPLEMENTAL SECURITY INCOME PAYMENTS; THE GROSS AMOUNT OF  ANY  PENSION
OR  ANNUITY  BENEFITS  TO THE EXTENT NOT INCLUDED IN SUCH ADJUSTED GROSS
INCOME (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS  AND
ALL  PAYMENTS  RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT AND VETER-
ANS' DISABILITY PENSIONS); NONTAXABLE INTEREST RECEIVED FROM  THE  STATE
OF  NEW  YORK,  ITS AGENCIES, INSTRUMENTALITIES, PUBLIC CORPORATIONS, OR
POLITICAL SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED  PURSUANT
TO  AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS' COMPEN-
SATION; THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT  OF
CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE
NEEDY,  PAID  TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER OR MEMBERS
OF HIS OR HER HOUSEHOLD. HOUSEHOLD  GROSS  INCOME  SHALL    NOT  INCLUDE
SURPLUS  FOODS  OR  OTHER RELIEF IN KIND OR PAYMENTS MADE TO INDIVIDUALS
BECAUSE OF THEIR STATUS AS VICTIMS OF NAZI  PERSECUTION  AS  DEFINED  IN
PUBLIC  LAW  103-286 OR ANY DISABILITY COMPENSATION RECEIVED BY VETERANS
ON ACCOUNT OF INJURY OR ILLNESS INCURRED OR AGGRAVATED  DURING  MILITARY
SERVICE  IN  THE  WARS IN AFGHANISTAN AND IRAQ SINCE SEPTEMBER ELEVENTH,
TWO THOUSAND ONE.  PROVIDED, FURTHER, HOUSEHOLD GROSS INCOME SHALL  ONLY
INCLUDE  ALL  SUCH INCOME RECEIVED BY ALL MEMBERS OF THE HOUSEHOLD WHILE
MEMBERS OF SUCH HOUSEHOLD.
  (D) "ADJUSTED RENT" MEANS RENT PAID FOR THE RIGHT OF  OCCUPANCY  OF  A
RESIDENCE.
  (E)  "REAL PROPERTY TAX EQUIVALENT" MEANS (1) FOR TAXABLE YEARS BEGIN-
NING IN TWO THOUSAND TWELVE, FIFTEEN PERCENT OF THE ADJUSTED RENT  ACTU-
ALLY  PAID  IN  THE  TAXABLE YEAR BY A HOUSEHOLD SOLELY FOR THE RIGHT OF
OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR. IF (I) A RESI-
DENCE IS RENTED TO TWO OR MORE INDIVIDUALS AS COTENANTS, OR  SUCH  INDI-
VIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCUPANCY
OF  SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS  IS A MEMBER OF  A
DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH  RESI-
DENCE,  REAL  PROPERTY TAX EQUIVALENT IS THAT PORTION OF FIFTEEN PERCENT
OF THE ADJUSTED RENT PAID  IN  THE  TAXABLE  YEAR  WHICH  REFLECTS  THAT
PORTION  OF  THE  RENT  ATTRIBUTABLE  TO  THE QUALIFIED TAXPAYER AND THE
MEMBERS OF HIS OR HER HOUSEHOLD; AND (2) FOR TAXABLE YEARS BEGINNING  IN
TWO  THOUSAND  THIRTEEN  AND  THEREAFTER, TWENTY PERCENT OF THE ADJUSTED
RENT ACTUALLY PAID IN THE TAXABLE YEAR  BY A HOUSEHOLD  SOLELY  FOR  THE
RIGHT  OF  OCCUPANCY  OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR. IF
(I) A RESIDENCE IS RENTED TO TWO OR MORE INDIVIDUALS  AS  COTENANTS,  OR
SUCH  INDIVIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF
OCCUPANCY OF SUCH RESIDENCE, AND (II) EACH  OF  SUCH  INDIVIDUALS  IS  A
MEMBER OF A DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES
SUCH  RESIDENCE,  REAL PROPERTY TAX EQUIVALENT IS THAT PORTION OF TWENTY
PERCENT OF THE ADJUSTED RENT PAID IN THE  TAXABLE  YEAR  WHICH  REFLECTS
THAT  PORTION OF THE RENT ATTRIBUTABLE TO THE QUALIFIED TAXPAYER AND THE
MEMBERS OF HIS OR HER HOUSEHOLD.
  (F) "NET REAL PROPERTY TAX" MEANS THE REAL PROPERTY TAXES ASSESSED  ON
THE  RESIDENTIAL  REAL  PROPERTY  OWNED  AND OCCUPIED BY THE TAXPAYER OR
TAXPAYERS AFTER ANY EXEMPTION OR ABATEMENT RECEIVED PURSUANT TO THE REAL
PROPERTY TAX LAW.
  (2) CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE
TAXES IMPOSED BY THIS ARTICLE, EQUAL TO SEVENTY PERCENT OF THE AMOUNT BY
WHICH THE TAXPAYER'S NET REAL PROPERTY TAX OR THE TAXPAYER'S REAL  PROP-
ERTY TAX EQUIVALENT EXCEEDS THE TAXPAYER'S MAXIMUM REAL PROPERTY TAX, AS
DETERMINED BY PARAGRAPH THREE OF THIS SUBSECTION. IF SUCH CREDIT EXCEEDS

S. 912                              3

THE TAX FOR SUCH TAXABLE YEAR, AS REDUCED BY THE OTHER CREDITS PERMITTED
BY  THIS  ARTICLE,  THE  QUALIFIED  TAXPAYER  MAY RECEIVE, AND THE COMP-
TROLLER, SUBJECT TO A CERTIFICATE OF THE DEPARTMENT,  SHALL  PAY  AS  AN
OVERPAYMENT, WITHOUT INTEREST, ANY EXCESS BETWEEN SUCH TAX AS SO REDUCED
AND THE AMOUNT OF THE CREDIT. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO
FILE A RETURN PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE,
A  QUALIFIED  TAXPAYER  MAY  NEVERTHELESS  RECEIVE  AND THE COMPTROLLER,
SUBJECT TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN  OVERPAYMENT
THE FULL AMOUNT OF THE CREDIT, WITHOUT INTEREST.
  (3) MAXIMUM REAL PROPERTY TAX. (A) A QUALIFIED TAXPAYER'S MAXIMUM REAL
PROPERTY TAX SHALL BE DETERMINED AS FOLLOWS:
  (I) FOR TAX YEARS BEGINNING IN TWO THOUSAND ELEVEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 NINE PERCENT OF THE
DOLLARS OR LESS                      HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED                NO LIMITATION.
THOUSAND DOLLARS

  (II) FOR TAX YEARS BEGINNING IN TWO THOUSAND TWELVE:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 EIGHT AND ONE-HALF PERCENT OF THE
DOLLARS OR LESS                      HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED                NO LIMITATION.
THOUSAND DOLLARS

  (III) FOR TAX YEARS BEGINNING IN TWO THOUSAND THIRTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND DOLLARS         SEVEN AND ONE-HALF PERCENT OF
OR LESS                              HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED THOUSAND       SEVEN AND ONE-HALF PERCENT OF
DOLLARS, BUT LESS THAN OR EQUAL TO   ONE HUNDRED THOUSAND DOLLARS
ONE HUNDRED FIFTY THOUSAND DOLLARS   PLUS EIGHT AND ONE-HALF PERCENT OF
                                     HOUSEHOLD GROSS INCOME ABOVE
                                     ONE HUNDRED THOUSAND DOLLARS
MORE THAN ONE HUNDRED FIFTY          NO LIMITATION.
THOUSAND DOLLARS

  (IV) FOR TAX YEARS BEGINNING IN TWO THOUSAND FOURTEEN AND THEREAFTER:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 SIX PERCENT OF HOUSEHOLD GROSS
DOLLARS OR LESS                      INCOME
MORE THAN ONE HUNDRED THOUSAND       SIX PERCENT OF ONE HUNDRED
DOLLARS, BUT LESS THAN OR EQUAL TO   THOUSAND DOLLARS PLUS SEVEN
ONE HUNDRED FIFTY THOUSAND DOLLARS   PERCENT OF HOUSEHOLD GROSS INCOME
                                     ABOVE ONE HUNDRED THOUSAND DOLLARS
MORE THAN ONE HUNDRED FIFTY          SIX PERCENT OF ONE HUNDRED THOUSAND
THOUSAND DOLLARS, BUT LESS THAN      DOLLARS PLUS SEVEN
OR EQUAL TO TWO HUNDRED FIFTY        PERCENT OF FIFTY THOUSAND DOLLARS
THOUSAND DOLLARS                     PLUS EIGHT AND ONE-HALF PERCENT OF
                                     HOUSEHOLD GROSS INCOME ABOVE ONE
                                     HUNDRED FIFTY THOUSAND DOLLARS
MORE THAN TWO HUNDRED FIFTY          NO LIMITATION.
THOUSAND DOLLARS
  (B)  THE  THRESHOLDS  OF  HOUSEHOLD GROSS INCOME ESTABLISHED BY CLAUSE
(IV) OF  SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH  SHALL  BE  INDEXED  FOR

S. 912                              4

INFLATION  FOR TAX YEARS BEGINNING IN TWO THOUSAND FIFTEEN AND THEREAFT-
ER.
  (4) EXCLUSIONS FROM ELIGIBILITY. NO CREDIT SHALL BE GRANTED UNDER THIS
SUBSECTION  IF  THE  QUALIFIED  TAXPAYER  CLAIMS  THE  REAL PROPERTY TAX
CIRCUIT BREAKER CREDIT, PURSUANT TO  SUBSECTION  (E)  OF  THIS  SECTION,
DURING THE TAXABLE YEAR.
  S  2.  There  is  hereby  established a tax reform study commission to
provide the governor and the  legislature  with  a  long  run  plan  for
reforming  the state and local tax systems. The tax reform study commis-
sion shall consist of five  members  appointed  by  the  governor,  four
members  each appointed by the speaker of the assembly and the temporary
president of the senate, and one member each appointed by  the  minority
leader  of  the senate and the minority leader of the assembly. In addi-
tion, on or before January 1, 2013,  the  tax  reform  study  commission
shall  provide  the governor and the legislature with recommendations on
any changes that should be made in the definitions of income used in the
various property tax relief programs authorized by the laws of the state
of New York. Such recommendations shall be based on  an  examination  of
such  laws and of such laws in other states. In preparing such recommen-
dations, the tax reform study commission shall review the distributional
impact of the items of income included in the  definition  of  household
income for purposes of the circuit breaker and other property tax relief
programs established by state law and make recommendations to the gover-
nor and the legislature for any changes in any of these definitions that
the  tax  reform study commission deems appropriate. The commissioner of
taxation and finance and the director of the  office  of  real  property
services  shall  provide  the tax reform study commission with such data
and analysis as it may require.
  S 3. This act shall take effect immediately.

2011-S912A - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §606, Tax L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S4239
2013-2014: S3266
2015-2016: S3110
2017-2018: S4579
2019-2020: S3982
2021-2022: S1434
2023-2024: S1244
2025-2026: S2023

2011-S912A - Summary

Creates the middle class circuit breaker tax credit and a tax reform study commission.

2011-S912A - Sponsor Memo

                                BILL NUMBER:S912A

TITLE OF BILL:
An act
to amend the tax law, in relation to creating the middle class circuit
breaker tax credit
and creating a tax reform study commission

PURPOSE OR GENERAL IDEA OF BILL:
To provide a personal income tax credit for certain property taxpayers
who pay a disproportionate share of their income to property taxes.

SUMMARY OF SPECIFIC PROVISIONS:
SECTION 1: Adds a new subsection (qq) to section 606 of the tax law to
provide for a real property tax credit. The credit will be based on
the income of the household and the percentage that said household
pays for real property taxes.

FOR HOMEOWNERS

For taxable years starting in 2013:
Household Adjusted Gross Income Tax    Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid in
                                       excess of 9% of said income
                                       can receive a personal income

                                       tax credit of 70% of the overage.

$100,001 +                             No credit.

For taxable years starting in 2014:
Household Adjusted Gross
Income Tax                             Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid
                                       in excess of 8.5% of said
                                       income can receive
                                       a personal income tax credit
                                       of 70% of the overage.

$100,001 +                             No credit.

For taxable years starting in 2015:
Household Adjusted Gross Income Tax    Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid in
                                       excess of 7.5% of said income
                                       can receive a personal income
                                       tax credit of 70% of the overage.

$100,001 - $150,000                    Real Property taxes paid in

                                       excess of 7.5% of the first
                                       $100,000 of said income PLUS
                                       8.5% of said income above
                                       $100,000 can receive a personal
                                       income tax credit of 70% of the
                                       overage.

$150,001 +                             No credit.
For taxable years starting in 2016:
Household Adjusted Gross
Income Tax                             Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid
                                       in excess of 6% of said
                                       income can receive a
                                       personal income tax credit
                                       of 70% of the overage.

$100,001 - $150,000                    Real Property taxes paid in
                                       excess of 6% if the first
                                       $100,000 of said income
                                       PLUS 7% of said income above
                                       $100,000 can receive a personal
                                       income tax credit of 70% of
                                       of the overage.

$150,001 - $250,000                    Real Property taxes paid in
                                       excess of 6% of the first
                                       $100,000 of said income
                                       PLUS 7% of the next $50,000
                                       of said income PLUS 8.5%
                                       of said income above
                                       $150,000 can receive a
                                       personal income tax credit
                                       of 70% of the overage.

$250,000 +                             No credit.

To qualify, the taxpayer must have resided in the home for not less than
five  years.  Also,  the  taxpayer may still benefit from the Basic STAR
exemption or the Enhanced STAR exemption for senior citizens.  The cred-
it will equal seventy  percent  of  the  taxes  paid  over  the  allowed
percentage cap as provided in the bill.

The  act  would also provide for a "real property tax equivalent" in the
case of taxpayers who rent real property as their primary New York State
residence.

For taxable years starting in 2014 the "real  property  tax  equivalent"
equal  to  15%  of  the adjusted rent actually paid in the taxable year.
taxable years starting in 2015, the amount is increased to  20%  of  the
adjusted rent actually paid in the taxable year.

SECTION  2: Creates a tax reform study commission with appointments from
the Senate, Assembly and the Executive. The commission will  review  the
state's  existing  property  tax  reform  programs  as  well as programs
enacted in other states.

SECTION 3: Contains the effective date.

JUSTIFICATION:
The  middle class property tax circuit breaker program is a concept that
has successfully been used in several states to Provide  relief  from  a
residential  homeowner's  property tax when it exceeds a certain portion
of their household income. It has been traditionally Used for homeowners
with very low incomes and low assessments. New York State currently  has
a  circuit breaker provision that has existed for decades, but the maxi-
mum eligible household income is $18,000 and the maximum  eligible  home
value is $85,000. This new program would target middle-class New Yorkers
who  have  financially  suffered as municipalities have had to rely more
heavily on real property taxes for local government revenue. Many  home-
owners  are  facing sky-racking real property tax bills as a result they
are often faced with the serious threat of defaulting on their  property
taxes and/or seriously consider selling their homes.

Critics of the New York's STAR program have claimed that it is inequita-
ble because it does not draw a connection between a taxpayer's household
income  and  the  amount  of  his tax bill. The Middle Class STAR Rebate
Checks program,  which  began  in  1970  and  was  eliminated  in  2009,
compounded this effect because it calculated a household's rebate amount
as  a  percentage  of  the value of its STAR exemption. This legislation
seeks to resolve these limitations and remain sensitive to  the  State's
current financial crisis.  Additionally, the bill would add progressivi-
ty  to  property  tax relief and extend the benefits to property renters
who are often burdened with property taxes in the cost  of  their  rent.
The  bill  is  phased  in  over  four years in order to take the state's
fiscal situation into consideration while ensuring that the  most  over-
burdened  property taxpayers, based on the percentage of income they are
paying in property tax on their home, will get relief quickly.

PRIOR LEGISLATIVE HISTORY:
None.

FISCAL IMPLICATIONS:
The program is phased in over four years and will cost the State nothing
in the first year. For year two the cost  will  be  $1.1  billion;  year
three  will  cost  $1.8  billion  and  every  year  after will cost $2.3
billion.

EFFECTIVE DATE:
Immediately after enactment.

2011-S912A - Bill Text download pdf

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

                                 912--A

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment  Operations  --  committee  discharged,  bill  amended,   ordered
  reprinted as amended and recommitted to said committee

AN  ACT  to  amend the tax law, in relation to creating the middle class
  circuit breaker tax credit and creating a tax reform study commission

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

  Section  1.  Section  606  of  the  tax law is amended by adding a new
subsection (ss) to read as follows:
  (SS) MIDDLE CLASS CIRCUIT BREAKER CREDIT.  (1)  DEFINITIONS.  FOR  THE
PURPOSES OF THIS SUBSECTION:
  (A)  "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE WHO
OWNS OR RENTS THE RESIDENTIAL REAL PROPERTY IN WHICH HE OR SHE  RESIDES,
AND HAS RESIDED IN SUCH RESIDENTIAL REAL PROPERTY FOR NOT LESS THAN FIVE
YEARS.
  (B)  "HOUSEHOLD"  OR  "MEMBERS  OF  THE  HOUSEHOLD"  MEANS A QUALIFIED
TAXPAYER OR QUALIFIED TAXPAYERS AND ALL OTHER PERSONS,  NOT  NECESSARILY
RELATED,  WHO  ALL  RESIDE IN THE RESIDENTIAL REAL PROPERTY OWNED BY THE
TAXPAYER OR TAXPAYERS, AND SHARE ITS FURNISHINGS, FACILITIES AND  ACCOM-
MODATIONS;  PROVIDED  THAT  NO  PERSON  MAY BE A MEMBER OF MORE THAN ONE
HOUSEHOLD AT ONE TIME.
  (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME
OF ALL MEMBERS OF THE HOUSEHOLD FOR THE TAXABLE  YEAR  AS  REPORTED  FOR
FEDERAL  INCOME  TAX  PURPOSES,  OR  WHICH WOULD BE REPORTED AS ADJUSTED
GROSS INCOME IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO  BE  FILED,
WITH  THE  MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX HUNDRED TWELVE
OF THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF  SUCH
SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP-
ERTY  OTHERWISE  EXCLUDED  FROM  SUCH AMOUNT; EARNED INCOME FROM SOURCES

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

                                                           LBD03920-02-1

S. 912--A                           2

WITHOUT THE UNITED  STATES  EXCLUDABLE  FROM  FEDERAL  GROSS  INCOME  BY
SECTION  NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT MONEY
NOT INCLUDED IN  ADJUSTED  GROSS  INCOME;  NONTAXABLE  STRIKE  BENEFITS;
SUPPLEMENTAL  SECURITY  INCOME PAYMENTS; THE GROSS AMOUNT OF ANY PENSION
OR ANNUITY BENEFITS TO THE EXTENT NOT INCLUDED IN  SUCH  ADJUSTED  GROSS
INCOME  (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS AND
ALL PAYMENTS RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT  AND  VETER-
ANS'  DISABILITY  PENSIONS); NONTAXABLE INTEREST RECEIVED FROM THE STATE
OF NEW YORK, ITS AGENCIES, INSTRUMENTALITIES,  PUBLIC  CORPORATIONS,  OR
POLITICAL  SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED PURSUANT
TO AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS'  COMPEN-
SATION;  THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT OF
CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE
NEEDY, PAID TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER  OR  MEMBERS
OF  HIS  OR  HER  HOUSEHOLD.  HOUSEHOLD GROSS INCOME SHALL   NOT INCLUDE
SURPLUS FOODS OR OTHER RELIEF IN KIND OR PAYMENTS  MADE  TO  INDIVIDUALS
BECAUSE  OF  THEIR  STATUS  AS VICTIMS OF NAZI PERSECUTION AS DEFINED IN
PUBLIC LAW 103-286 OR ANY DISABILITY COMPENSATION RECEIVED  BY  VETERANS
ON  ACCOUNT  OF INJURY OR ILLNESS INCURRED OR AGGRAVATED DURING MILITARY
SERVICE IN THE WARS IN AFGHANISTAN AND IRAQ  SINCE  SEPTEMBER  ELEVENTH,
TWO  THOUSAND ONE.  PROVIDED, FURTHER, HOUSEHOLD GROSS INCOME SHALL ONLY
INCLUDE ALL SUCH INCOME RECEIVED BY ALL MEMBERS OF THE  HOUSEHOLD  WHILE
MEMBERS OF SUCH HOUSEHOLD.
  (D)  "ADJUSTED  RENT"  MEANS RENT PAID FOR THE RIGHT OF OCCUPANCY OF A
RESIDENCE.
  (E) "REAL PROPERTY TAX EQUIVALENT" MEANS (1) FOR TAXABLE YEARS  BEGIN-
NING  IN  TWO  THOUSAND  FOURTEEN,  FIFTEEN PERCENT OF THE ADJUSTED RENT
ACTUALLY PAID IN THE TAXABLE YEAR BY A HOUSEHOLD SOLELY FOR THE RIGHT OF
OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR. IF (I) A RESI-
DENCE IS RENTED TO TWO OR MORE INDIVIDUALS AS COTENANTS, OR  SUCH  INDI-
VIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCUPANCY
OF  SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS  IS A MEMBER OF  A
DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH  RESI-
DENCE,  REAL  PROPERTY TAX EQUIVALENT IS THAT PORTION OF FIFTEEN PERCENT
OF THE ADJUSTED RENT PAID  IN  THE  TAXABLE  YEAR  WHICH  REFLECTS  THAT
PORTION  OF  THE  RENT  ATTRIBUTABLE  TO  THE QUALIFIED TAXPAYER AND THE
MEMBERS OF HIS OR HER HOUSEHOLD; AND (2) FOR TAXABLE YEARS BEGINNING  IN
TWO THOUSAND FIFTEEN AND THEREAFTER, TWENTY PERCENT OF THE ADJUSTED RENT
ACTUALLY  PAID  IN THE TAXABLE YEAR  BY A HOUSEHOLD SOLELY FOR THE RIGHT
OF OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR.  IF  (I)  A
RESIDENCE  IS  RENTED  TO  TWO OR MORE INDIVIDUALS AS COTENANTS, OR SUCH
INDIVIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCU-
PANCY OF SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS IS  A  MEMBER
OF  A  DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH
RESIDENCE, REAL PROPERTY  TAX  EQUIVALENT  IS  THAT  PORTION  OF  TWENTY
PERCENT  OF  THE  ADJUSTED  RENT PAID IN THE TAXABLE YEAR WHICH REFLECTS
THAT PORTION OF THE RENT ATTRIBUTABLE TO THE QUALIFIED TAXPAYER AND  THE
MEMBERS OF HIS OR HER HOUSEHOLD.
  (F)  "NET REAL PROPERTY TAX" MEANS THE REAL PROPERTY TAXES ASSESSED ON
THE RESIDENTIAL REAL PROPERTY OWNED AND  OCCUPIED  BY  THE  TAXPAYER  OR
TAXPAYERS AFTER ANY EXEMPTION OR ABATEMENT RECEIVED PURSUANT TO THE REAL
PROPERTY TAX LAW.
  (2) CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE
TAXES IMPOSED BY THIS ARTICLE, EQUAL TO SEVENTY PERCENT OF THE AMOUNT BY
WHICH  THE TAXPAYER'S NET REAL PROPERTY TAX OR THE TAXPAYER'S REAL PROP-
ERTY TAX EQUIVALENT EXCEEDS THE TAXPAYER'S MAXIMUM REAL PROPERTY TAX, AS

S. 912--A                           3

DETERMINED BY PARAGRAPH THREE OF THIS SUBSECTION. IF SUCH CREDIT EXCEEDS
THE TAX FOR SUCH TAXABLE YEAR, AS REDUCED BY THE OTHER CREDITS PERMITTED
BY THIS ARTICLE, THE QUALIFIED  TAXPAYER  MAY  RECEIVE,  AND  THE  COMP-
TROLLER,  SUBJECT  TO  A  CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN
OVERPAYMENT, WITHOUT INTEREST, ANY EXCESS BETWEEN SUCH TAX AS SO REDUCED
AND THE AMOUNT OF THE CREDIT. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO
FILE A RETURN PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE,
A QUALIFIED TAXPAYER  MAY  NEVERTHELESS  RECEIVE  AND  THE  COMPTROLLER,
SUBJECT  TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN OVERPAYMENT
THE FULL AMOUNT OF THE CREDIT, WITHOUT INTEREST.
  (3) MAXIMUM REAL PROPERTY TAX. (A) A QUALIFIED TAXPAYER'S MAXIMUM REAL
PROPERTY TAX SHALL BE DETERMINED AS FOLLOWS:
  (I) FOR TAX YEARS BEGINNING IN TWO THOUSAND THIRTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 NINE PERCENT OF THE
DOLLARS OR LESS                      HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED                NO LIMITATION.
THOUSAND DOLLARS

  (II) FOR TAX YEARS BEGINNING IN TWO THOUSAND FOURTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 EIGHT AND ONE-HALF PERCENT OF THE
DOLLARS OR LESS                      HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED                NO LIMITATION.
THOUSAND DOLLARS

  (III) FOR TAX YEARS BEGINNING IN TWO THOUSAND FIFTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND DOLLARS         SEVEN AND ONE-HALF PERCENT OF
OR LESS                              HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED THOUSAND       SEVEN AND ONE-HALF PERCENT OF
DOLLARS, BUT LESS THAN OR EQUAL TO   ONE HUNDRED THOUSAND DOLLARS
ONE HUNDRED FIFTY THOUSAND DOLLARS   PLUS EIGHT AND ONE-HALF PERCENT OF
                                     HOUSEHOLD GROSS INCOME ABOVE
                                     ONE HUNDRED THOUSAND DOLLARS
MORE THAN ONE HUNDRED FIFTY          NO LIMITATION.
THOUSAND DOLLARS

  (IV) FOR TAX YEARS BEGINNING IN TWO THOUSAND SIXTEEN AND THEREAFTER:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 SIX PERCENT OF HOUSEHOLD GROSS
DOLLARS OR LESS                      INCOME
MORE THAN ONE HUNDRED THOUSAND       SIX PERCENT OF ONE HUNDRED
DOLLARS, BUT LESS THAN OR EQUAL TO   THOUSAND DOLLARS PLUS SEVEN
ONE HUNDRED FIFTY THOUSAND DOLLARS   PERCENT OF HOUSEHOLD GROSS INCOME
                                     ABOVE ONE HUNDRED THOUSAND DOLLARS
MORE THAN ONE HUNDRED FIFTY          SIX PERCENT OF ONE HUNDRED THOUSAND
THOUSAND DOLLARS, BUT LESS THAN      DOLLARS PLUS SEVEN
OR EQUAL TO TWO HUNDRED FIFTY        PERCENT OF FIFTY THOUSAND DOLLARS
THOUSAND DOLLARS                     PLUS EIGHT AND ONE-HALF PERCENT OF
                                     HOUSEHOLD GROSS INCOME ABOVE ONE
                                     HUNDRED FIFTY THOUSAND DOLLARS
MORE THAN TWO HUNDRED FIFTY          NO LIMITATION.
THOUSAND DOLLARS
  (B) THE THRESHOLDS OF HOUSEHOLD GROSS  INCOME  ESTABLISHED  BY  CLAUSE
(IV)  OF  SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH  SHALL  BE  INDEXED FOR

S. 912--A                           4

INFLATION FOR TAX YEARS BEGINNING IN TWO THOUSAND SEVENTEEN  AND  THERE-
AFTER.
  (4) EXCLUSIONS FROM ELIGIBILITY. NO CREDIT SHALL BE GRANTED UNDER THIS
SUBSECTION  IF  THE  QUALIFIED  TAXPAYER  CLAIMS  THE  REAL PROPERTY TAX
CIRCUIT BREAKER CREDIT, PURSUANT TO  SUBSECTION  (E)  OF  THIS  SECTION,
DURING THE TAXABLE YEAR.
  S  2.  There  is  hereby  established a tax reform study commission to
provide the governor and the  legislature  with  a  long  run  plan  for
reforming  the state and local tax systems. The tax reform study commis-
sion shall consist of five  members  appointed  by  the  governor,  four
members  each appointed by the speaker of the assembly and the temporary
president of the senate, and one member each appointed by  the  minority
leader  of  the senate and the minority leader of the assembly. In addi-
tion, on or before January 1, 2015,  the  tax  reform  study  commission
shall  provide  the governor and the legislature with recommendations on
any changes that should be made in the definitions of income used in the
various property tax relief programs authorized by the laws of the state
of New York. Such recommendations shall be based on  an  examination  of
such  laws and of such laws in other states. In preparing such recommen-
dations, the tax reform study commission shall review the distributional
impact of the items of income included in the  definition  of  household
income for purposes of the circuit breaker and other property tax relief
programs established by state law and make recommendations to the gover-
nor and the legislature for any changes in any of these definitions that
the  tax  reform study commission deems appropriate. The commissioner of
taxation and finance and the director of the  office  of  real  property
services  shall  provide  the tax reform study commission with such data
and analysis as it may require.
  S 3. This act shall take effect immediately.

co-Sponsors

2011-S912B (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Amd §606, Tax L
Versions Introduced in Other Legislative Sessions:: 2009-2010: S4239
2013-2014: S3266
2015-2016: S3110
2017-2018: S4579
2019-2020: S3982
2021-2022: S1434
2023-2024: S1244
2025-2026: S2023

2011-S912B (ACTIVE) - Summary

Creates the middle class circuit breaker tax credit and a tax reform study commission.

2011-S912B (ACTIVE) - Sponsor Memo

                                BILL NUMBER:S912B

TITLE OF BILL:
An act to amend the tax law, in relation to creating the middle class
circuit breaker tax credit and creating a tax reform study commission

PURPOSE OR GENERAL IDEA OF BILL:
To provide a personal income tax credit for certain property taxpayers
who pay a disproportionate share of their income to property taxes.

SUMMARY OF SPECIFIC PROVISIONS:
SECTION 1: Adds a new subsection (qq) to section 606 of the tax law to
provide for a real property tax credit. The credit will be based on
the income of the household and the percentage that said household
pays for real property taxes.

FOR HOMEOWNERS

For taxable years starting in 2013:
Household Adjusted Gross Income Tax    Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid in
                                       excess of 9% of said income
                                       can receive a personal income
                                       tax credit of 70% of the overage.

$100,001 +                             No credit.

For taxable years starting in 2014:
Household Adjusted Gross
Income Tax                             Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid
                                       in excess of 8.5% of said
                                       income can receive
                                       a personal income tax credit
                                       of 70% of the overage.

$100,001 +                             No credit.

For taxable years starting in 2015:
Household Adjusted Gross Income Tax    Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid in
                                       excess of 7.5% of said income
                                       can receive a personal income
                                       tax credit of 70% of the overage.

$100,001 - $150,000                    Real Property taxes paid in
                                       excess of 7.5% of the first
                                       $100,000 of said income PLUS
                                       8.5% of said income above
                                       $100,000 can receive a personal
                                       income tax credit of 70% of the
                                       overage.


$150,001 +                             No credit.
For taxable years starting in 2016:
Household Adjusted Gross
Income Tax                             Maximum Real Property Tax

$100,000 or less                       Real Property taxes paid
                                       in excess of 6% of said
                                       income can receive a
                                       personal income tax credit
                                       of 70% of the overage.

$100,001 - $150,000                    Real Property taxes paid in
                                       excess of 6% if the first
                                       $100,000 of said income
                                       PLUS 7% of said income above
                                       $100,000 can receive a personal
                                       income tax credit of 70% of
                                       of the overage.

$150,001 - $250,000                    Real Property taxes paid in
                                       excess of 6% of the first
                                       $100,000 of said income
                                       PLUS 7% of the next $50,000
                                       of said income PLUS 8.5%
                                       of said income above
                                       $150,000 can receive a
                                       personal income tax credit
                                       of 70% of the overage.

$250,000 +                             No credit.

To  qualify,  the  taxpayer must have resided in the home for not less
than five years. Also, the taxpayer may still benefit from  the  Basic
STAR  exemption  or  the  Enhanced STAR exemption for senior citizens.
The credit will equal seventy percent  of  the  taxes  paid  over  the
allowed percentage cap as provided in the bill.

The act would also provide for a "real property tax equivalent" in the
case  of  taxpayers  who  rent real property as their primary New York
State residence.

For taxable years starting in 2014 the "real property tax  equivalent"
equal  to  15% of the adjusted rent actually paid in the taxable year.
taxable years starting in 2015, the amount is increased to 20% of  the
adjusted rent actually paid in the taxable year.

SECTION  2:  Creates  a  tax reform study commission with appointments
from the Senate, Assembly  and  the  Executive.  The  commission  will
review  the  state's  existing property tax reform programs as well as
programs enacted in other states.

SECTION 3: Contains the effective date.

JUSTIFICATION:
The middle class property tax circuit breaker  program  is  a  concept
that  has  successfully  been used in several states to Provide relief
from a residential homeowner's property tax when it exceeds a  certain


portion  of their household income. It has been traditionally Used for
homeowners with very low incomes and low assessments. New  York  State
currently  has  a  circuit  breaker  provision  that  has  existed for
decades,  but the maximum eligible household income is $18,000 and the
maximum eligible home value is $85,000. This new program would  target
middle-class   New   Yorkers   who   have   financially   suffered  as
municipalities have had to rely more heavily on  real  property  taxes
for  local  government revenue. Many homeowners are facing sky-racking
real property tax bills as a result they  are  often  faced  with  the
serious  threat of defaulting on their property taxes and/or seriously
consider selling their homes.

Critics of the New  York's  STAR  program  have  claimed  that  it  is
inequitable because it does not draw a connection between a taxpayer's
household income and the amount of his tax bill. The Middle Class STAR
Rebate Checks program, which began in 1970 and was eliminated in 2009,
compounded  this  effect  because  it  calculated a household's rebate
amount as a percentage of  the  value  of  its  STAR  exemption.  This
legislation seeks to resolve these limitations and remain sensitive to
the  State's  current financial crisis.   Additionally, the bill would
add progressivity to property tax relief and extend  the  benefits  to
property  renters  who  are  often burdened with property taxes in the
cost of their rent. The bill is phased in over four years in order  to
take  the  state's  fiscal situation into consideration while ensuring
that the most overburdened property taxpayers, based on the percentage
of income they are paying in property tax  on  their  home,  will  get
relief quickly.

FISCAL IMPLICATIONS:
The  program  is  phased  in  over  four years and will cost the State
nothing in the first year. For year two the cost will be $1.1 billion;
year three will cost $1.8 billion and every year after will cost  $2.3
billion.

EFFECTIVE DATE:
Immediately after enactment.

2011-S912B (ACTIVE) - Bill Text download pdf

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

                                 912--B

                       2011-2012 Regular Sessions

                            I N  S E N A T E

                               (PREFILED)

                             January 5, 2011
                               ___________

Introduced  by  Sen. KRUEGER -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment  Operations  --  committee  discharged,  bill  amended,   ordered
  reprinted  as amended and recommitted to said committee -- recommitted
  to the  Committee  on  Investigations  and  Government  Operations  in
  accordance  with  Senate  Rule 6, sec. 8 -- committee discharged, bill
  amended, ordered reprinted as amended and recommitted to said  commit-
  tee

AN  ACT  to  amend the tax law, in relation to creating the middle class
  circuit breaker tax credit and creating a tax reform study commission

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

  Section  1.  Section  606  of  the  tax law is amended by adding a new
subsection (uu) to read as follows:
  (UU) MIDDLE CLASS CIRCUIT BREAKER CREDIT.  (1)  DEFINITIONS.  FOR  THE
PURPOSES OF THIS SUBSECTION:
  (A)  "QUALIFIED TAXPAYER" MEANS A RESIDENT INDIVIDUAL OF THE STATE WHO
OWNS OR RENTS THE RESIDENTIAL REAL PROPERTY IN WHICH HE OR SHE  RESIDES,
AND HAS RESIDED IN SUCH RESIDENTIAL REAL PROPERTY FOR NOT LESS THAN FIVE
YEARS.
  (B)  "HOUSEHOLD"  OR  "MEMBERS  OF  THE  HOUSEHOLD"  MEANS A QUALIFIED
TAXPAYER OR QUALIFIED TAXPAYERS AND ALL OTHER PERSONS,  NOT  NECESSARILY
RELATED,  WHO  ALL  RESIDE IN THE RESIDENTIAL REAL PROPERTY OWNED BY THE
TAXPAYER OR TAXPAYERS, AND SHARE ITS FURNISHINGS, FACILITIES AND  ACCOM-
MODATIONS;  PROVIDED  THAT  NO  PERSON  MAY BE A MEMBER OF MORE THAN ONE
HOUSEHOLD AT ONE TIME.
  (C) "HOUSEHOLD GROSS INCOME" MEANS THE AGGREGATE ADJUSTED GROSS INCOME
OF ALL MEMBERS OF THE HOUSEHOLD FOR THE TAXABLE  YEAR  AS  REPORTED  FOR
FEDERAL  INCOME  TAX  PURPOSES,  OR  WHICH WOULD BE REPORTED AS ADJUSTED
GROSS INCOME IF A FEDERAL INCOME TAX RETURN WERE REQUIRED TO  BE  FILED,

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

                                                           LBD03920-04-2

S. 912--B                           2

WITH  THE  MODIFICATIONS IN SUBSECTION (B) OF SECTION SIX HUNDRED TWELVE
OF THIS ARTICLE BUT WITHOUT THE MODIFICATIONS IN SUBSECTION (C) OF  SUCH
SECTION, PLUS ANY PORTION OF THE GAIN FROM THE SALE OR EXCHANGE OF PROP-
ERTY  OTHERWISE  EXCLUDED  FROM  SUCH AMOUNT; EARNED INCOME FROM SOURCES
WITHOUT THE UNITED  STATES  EXCLUDABLE  FROM  FEDERAL  GROSS  INCOME  BY
SECTION  NINE HUNDRED ELEVEN OF THE INTERNAL REVENUE CODE; SUPPORT MONEY
NOT INCLUDED IN  ADJUSTED  GROSS  INCOME;  NONTAXABLE  STRIKE  BENEFITS;
SUPPLEMENTAL  SECURITY  INCOME PAYMENTS; THE GROSS AMOUNT OF ANY PENSION
OR ANNUITY BENEFITS TO THE EXTENT NOT INCLUDED IN  SUCH  ADJUSTED  GROSS
INCOME  (INCLUDING, BUT NOT LIMITED TO, RAILROAD RETIREMENT BENEFITS AND
ALL PAYMENTS RECEIVED UNDER THE FEDERAL SOCIAL SECURITY ACT  AND  VETER-
ANS'  DISABILITY  PENSIONS); NONTAXABLE INTEREST RECEIVED FROM THE STATE
OF NEW YORK, ITS AGENCIES, INSTRUMENTALITIES,  PUBLIC  CORPORATIONS,  OR
POLITICAL  SUBDIVISIONS (INCLUDING A PUBLIC CORPORATION CREATED PURSUANT
TO AGREEMENT OR COMPACT WITH ANOTHER STATE OR CANADA); WORKERS'  COMPEN-
SATION;  THE GROSS AMOUNT OF "LOSS-OF-TIME" INSURANCE; AND THE AMOUNT OF
CASH PUBLIC ASSISTANCE AND RELIEF, OTHER THAN MEDICAL ASSISTANCE FOR THE
NEEDY, PAID TO OR FOR THE BENEFIT OF THE QUALIFIED TAXPAYER  OR  MEMBERS
OF  HIS  OR  HER  HOUSEHOLD.  HOUSEHOLD GROSS INCOME SHALL   NOT INCLUDE
SURPLUS FOODS OR OTHER RELIEF IN KIND OR PAYMENTS  MADE  TO  INDIVIDUALS
BECAUSE  OF  THEIR  STATUS  AS VICTIMS OF NAZI PERSECUTION AS DEFINED IN
PUBLIC LAW 103-286 OR ANY DISABILITY COMPENSATION RECEIVED  BY  VETERANS
ON  ACCOUNT  OF INJURY OR ILLNESS INCURRED OR AGGRAVATED DURING MILITARY
SERVICE IN THE WARS IN AFGHANISTAN AND IRAQ  SINCE  SEPTEMBER  ELEVENTH,
TWO  THOUSAND ONE.  PROVIDED, FURTHER, HOUSEHOLD GROSS INCOME SHALL ONLY
INCLUDE ALL SUCH INCOME RECEIVED BY ALL MEMBERS OF THE  HOUSEHOLD  WHILE
MEMBERS OF SUCH HOUSEHOLD.
  (D)  "ADJUSTED  RENT"  MEANS RENT PAID FOR THE RIGHT OF OCCUPANCY OF A
RESIDENCE.
  (E) "REAL PROPERTY TAX EQUIVALENT" MEANS (1) FOR TAXABLE YEARS  BEGIN-
NING  IN  TWO  THOUSAND  FOURTEEN,  FIFTEEN PERCENT OF THE ADJUSTED RENT
ACTUALLY PAID IN THE TAXABLE YEAR BY A HOUSEHOLD SOLELY FOR THE RIGHT OF
OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR. IF (I) A RESI-
DENCE IS RENTED TO TWO OR MORE INDIVIDUALS AS COTENANTS, OR  SUCH  INDI-
VIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCUPANCY
OF  SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS  IS A MEMBER OF  A
DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH  RESI-
DENCE,  REAL  PROPERTY TAX EQUIVALENT IS THAT PORTION OF FIFTEEN PERCENT
OF THE ADJUSTED RENT PAID  IN  THE  TAXABLE  YEAR  WHICH  REFLECTS  THAT
PORTION  OF  THE  RENT  ATTRIBUTABLE  TO  THE QUALIFIED TAXPAYER AND THE
MEMBERS OF HIS OR HER HOUSEHOLD; AND (2) FOR TAXABLE YEARS BEGINNING  IN
TWO THOUSAND FIFTEEN AND THEREAFTER, TWENTY PERCENT OF THE ADJUSTED RENT
ACTUALLY  PAID  IN THE TAXABLE YEAR  BY A HOUSEHOLD SOLELY FOR THE RIGHT
OF OCCUPANCY OF ITS NEW YORK RESIDENCE FOR THE TAXABLE YEAR.  IF  (I)  A
RESIDENCE  IS  RENTED  TO  TWO OR MORE INDIVIDUALS AS COTENANTS, OR SUCH
INDIVIDUALS SHARE IN THE PAYMENT OF A SINGLE RENT FOR THE RIGHT OF OCCU-
PANCY OF SUCH RESIDENCE, AND (II) EACH OF SUCH INDIVIDUALS IS  A  MEMBER
OF  A  DIFFERENT HOUSEHOLD, ONE OR MORE OF WHICH INDIVIDUALS SHARES SUCH
RESIDENCE, REAL PROPERTY  TAX  EQUIVALENT  IS  THAT  PORTION  OF  TWENTY
PERCENT  OF  THE  ADJUSTED  RENT PAID IN THE TAXABLE YEAR WHICH REFLECTS
THAT PORTION OF THE RENT ATTRIBUTABLE TO THE QUALIFIED TAXPAYER AND  THE
MEMBERS OF HIS OR HER HOUSEHOLD.
  (F)  "NET REAL PROPERTY TAX" MEANS THE REAL PROPERTY TAXES ASSESSED ON
THE RESIDENTIAL REAL PROPERTY OWNED AND  OCCUPIED  BY  THE  TAXPAYER  OR
TAXPAYERS AFTER ANY EXEMPTION OR ABATEMENT RECEIVED PURSUANT TO THE REAL
PROPERTY TAX LAW.

S. 912--B                           3

  (2) CREDIT. A QUALIFIED TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE
TAXES IMPOSED BY THIS ARTICLE, EQUAL TO SEVENTY PERCENT OF THE AMOUNT BY
WHICH  THE TAXPAYER'S NET REAL PROPERTY TAX OR THE TAXPAYER'S REAL PROP-
ERTY TAX EQUIVALENT EXCEEDS THE TAXPAYER'S MAXIMUM REAL PROPERTY TAX, AS
DETERMINED BY PARAGRAPH THREE OF THIS SUBSECTION. IF SUCH CREDIT EXCEEDS
THE TAX FOR SUCH TAXABLE YEAR, AS REDUCED BY THE OTHER CREDITS PERMITTED
BY  THIS  ARTICLE,  THE  QUALIFIED  TAXPAYER  MAY RECEIVE, AND THE COMP-
TROLLER, SUBJECT TO A CERTIFICATE OF THE DEPARTMENT,  SHALL  PAY  AS  AN
OVERPAYMENT, WITHOUT INTEREST, ANY EXCESS BETWEEN SUCH TAX AS SO REDUCED
AND THE AMOUNT OF THE CREDIT. IF A QUALIFIED TAXPAYER IS NOT REQUIRED TO
FILE A RETURN PURSUANT TO SECTION SIX HUNDRED FIFTY-ONE OF THIS ARTICLE,
A  QUALIFIED  TAXPAYER  MAY  NEVERTHELESS  RECEIVE  AND THE COMPTROLLER,
SUBJECT TO A CERTIFICATE OF THE DEPARTMENT, SHALL PAY AS AN  OVERPAYMENT
THE FULL AMOUNT OF THE CREDIT, WITHOUT INTEREST.
  (3) MAXIMUM REAL PROPERTY TAX. (A) A QUALIFIED TAXPAYER'S MAXIMUM REAL
PROPERTY TAX SHALL BE DETERMINED AS FOLLOWS:
  (I) FOR TAX YEARS BEGINNING IN TWO THOUSAND THIRTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 NINE PERCENT OF THE
DOLLARS OR LESS                      HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED                NO LIMITATION.
THOUSAND DOLLARS

  (II) FOR TAX YEARS BEGINNING IN TWO THOUSAND FOURTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 EIGHT AND ONE-HALF PERCENT OF THE
DOLLARS OR LESS                      HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED                NO LIMITATION.
THOUSAND DOLLARS

  (III) FOR TAX YEARS BEGINNING IN TWO THOUSAND FIFTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND DOLLARS         SEVEN AND ONE-HALF PERCENT OF
OR LESS                              HOUSEHOLD GROSS INCOME
MORE THAN ONE HUNDRED THOUSAND       SEVEN AND ONE-HALF PERCENT OF
DOLLARS, BUT LESS THAN OR EQUAL TO   ONE HUNDRED THOUSAND DOLLARS
ONE HUNDRED FIFTY THOUSAND DOLLARS   PLUS EIGHT AND ONE-HALF PERCENT OF
                                     HOUSEHOLD GROSS INCOME ABOVE
                                     ONE HUNDRED THOUSAND DOLLARS
MORE THAN ONE HUNDRED FIFTY          NO LIMITATION.
THOUSAND DOLLARS

  (IV) FOR TAX YEARS BEGINNING IN TWO THOUSAND SIXTEEN AND THEREAFTER:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX
ONE HUNDRED THOUSAND                 SIX PERCENT OF HOUSEHOLD GROSS
DOLLARS OR LESS                      INCOME
MORE THAN ONE HUNDRED THOUSAND       SIX PERCENT OF ONE HUNDRED
DOLLARS, BUT LESS THAN OR EQUAL TO   THOUSAND DOLLARS PLUS SEVEN
ONE HUNDRED FIFTY THOUSAND DOLLARS   PERCENT OF HOUSEHOLD GROSS INCOME
                                     ABOVE ONE HUNDRED THOUSAND DOLLARS
MORE THAN ONE HUNDRED FIFTY          SIX PERCENT OF ONE HUNDRED THOUSAND
THOUSAND DOLLARS, BUT LESS THAN      DOLLARS PLUS SEVEN
OR EQUAL TO TWO HUNDRED FIFTY        PERCENT OF FIFTY THOUSAND DOLLARS
THOUSAND DOLLARS                     PLUS EIGHT AND ONE-HALF PERCENT OF
                                     HOUSEHOLD GROSS INCOME ABOVE ONE

S. 912--B                           4

                                     HUNDRED FIFTY THOUSAND DOLLARS
MORE THAN TWO HUNDRED FIFTY          NO LIMITATION.
THOUSAND DOLLARS
  (B)  THE  THRESHOLDS  OF  HOUSEHOLD GROSS INCOME ESTABLISHED BY CLAUSE
(IV) OF  SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH  SHALL  BE  INDEXED  FOR
INFLATION  FOR  TAX YEARS BEGINNING IN TWO THOUSAND SEVENTEEN AND THERE-
AFTER.
  (4) EXCLUSIONS FROM ELIGIBILITY. NO CREDIT SHALL BE GRANTED UNDER THIS
SUBSECTION IF THE  QUALIFIED  TAXPAYER  CLAIMS  THE  REAL  PROPERTY  TAX
CIRCUIT  BREAKER  CREDIT,  PURSUANT  TO  SUBSECTION (E) OF THIS SECTION,
DURING THE TAXABLE YEAR.
  S 2. There is hereby established a  tax  reform  study  commission  to
provide  the  governor  and  the  legislature  with  a long run plan for
reforming the state and local tax systems. The tax reform study  commis-
sion  shall  consist  of  five  members  appointed by the governor, four
members each appointed by the speaker of the assembly and the  temporary
president  of  the senate, and one member each appointed by the minority
leader of the senate and the minority leader of the assembly.  In  addi-
tion,  on  or  before  January  1, 2015, the tax reform study commission
shall provide the governor and the legislature with  recommendations  on
any changes that should be made in the definitions of income used in the
various property tax relief programs authorized by the laws of the state
of  New  York.  Such recommendations shall be based on an examination of
such laws and of such laws in other states. In preparing such  recommen-
dations, the tax reform study commission shall review the distributional
impact  of  the  items of income included in the definition of household
income for purposes of the circuit breaker and other property tax relief
programs established by state law and make recommendations to the gover-
nor and the legislature for any changes in any of these definitions that
the tax reform study commission deems appropriate. The  commissioner  of
taxation  and  finance  and  the director of the office of real property
services shall provide the tax reform study commission  with  such  data
and analysis as it may require.
  S 3. This act shall take effect immediately.

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Senate Bill S912B

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Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

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Sponsored By

Liz Krueger

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

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Velmanette Montgomery

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