senate Bill S6565

2013-2014 Legislative Session

Enacts the property tax relief act

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Archive: Last Bill Status - In Committee


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

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Feb 06, 2014 referred to education

S6565 - Bill Details

Current Committee:
Senate Education
Law Section:
Education Law
Laws Affected:
Amd §2, add §§1510-a & 2023-b; Ed L; amd §606, Tax L

S6565 - Bill Texts

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Enacts the property tax relief act; provides a circuit breaker credit and caps administrative services costs.

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BILL NUMBER:S6565

TITLE OF BILL: An act to amend the education law, in relation to
capping expenditures for administrative services; and to amend the tax
law, in relation to creating the middle class circuit breaker tax credit

PURPOSE: To reduce the cost of education so that New York can lower the
cost to do business and provide tax relief for property owners.

SUMMARY OF PROVISIONS:

Section 1 titles this as the Property Tax Relief Act.

Section 2 amends Section 2 the education law by adding a new subdivision
to define "central administration services."

Section 3 amends the education law to add a new section 1510-a to cap
school district spending on central administration services at three
percent of its total budget.

Section 4 amends education law to require all school districts to
decrease 2014-15 school budget by the amount of administrative costs
reduced under section 3 of this bill.

Section 5 amends section 606 of the tax law to create a circuit breaker
to offer property tax relief to those whose property taxes are becoming
too large a portion of their income.

Section 6 sets forth that this act shall take effect immediately.

JUSTIFICATION: Our current 17th century method of funding public educa-
tion in New York State is outdated and broken. It has led to the highest
property taxes in the nation and has unnecessarily increased the cost of
doing business in New York. Unaffordable property taxes are driving
people away from our communities and making it more of a struggle to
raise a family in New York. If we do not change this unsustainable
course, New York will not be able to attract the workers and the busi-
nesses it needs to succeed in the 21st century economy. We need to
reduce the cost of living in New York State to help attract the best and
the brightest from around the nation and across the world to become
members of our communities to help grow our economy and enrich our
communities.

One way to reduce costs in our public education system is by reducing
school administrative costs. Some school districts expend almost ten
percent of their budget on administration. This is unacceptable as it
takes away resources from students and teachers in the classroom. This
legislation proposes to cap those expenses and to reduce the tax levy in
proportion to those decreased expenses. Homeowners and business owners
deserve to have their education dollars actually spent in the classroom.

Another way of providing much needed tax relief is through a real prop-
erty tax circuit breaker program. This would be a State income tax cred-
it to eligible homeowners who pay a disproportional amount of property
tax in relation to their household income. Many older New Yorkers are
being forced out of their homes because their fixed incomes cannot
support their increasing real property taxes. This circuit breaker would
rightly shift the burden of paying for education to the state and away
from localities and those who can least afford to pay.

LEGISLATIVE HISTORY: This is a new bill.

FISCAL IMPLICATIONS: This bill will offer tax relief to those whose
property taxes are slowly eating away all of their income. This program
would require New York State to forego tax revenues that it would have
raised. It would also offer immediate tax relief to home owners of $1.1
billion in years two and three and $2.3 billion in years four and every
year thereafter.

EFFECTIVE DATE: This act shall take effect immediately.

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

                                  6565

                            I N  S E N A T E

                            February 6, 2014
                               ___________

Introduced  by  Sen.  GIPSON -- read twice and ordered printed, and when
  printed to be committed to the Committee on Education

AN ACT to amend the education law, in relation to  capping  expenditures
  for  administrative services; and to amend the tax law, in relation to
  creating the middle class circuit breaker tax credit

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

  Section  1.  This act shall be known and may be cited as the "Property
Tax Relief Act".
  S 2. Section 2 of the education law is amended by adding a new  subdi-
vision 25 to read as follows:
  25.  CENTRAL ADMINISTRATION SERVICES. THE TERM "CENTRAL ADMINISTRATION
SERVICES" MEANS  ALL  CENTRAL  ADMINISTRATION  SERVICES  PROVIDED  BY  A
COMMON,  UNION  FREE,  CENTRAL  SCHOOL  DISTRICT, OR CENTRAL HIGH SCHOOL
DISTRICT INCLUDING, BUT NOT LIMITED TO EXPENDITURES, SALARIES AND OTHER-
WISE, FOR THE CHIEF SCHOOL OFFICER, THE SCHOOL PRINCIPAL,  THE  BUSINESS
OFFICE, THE PURCHASING OFFICE, THE PERSONNEL OFFICE, THE RECORDS MANAGE-
MENT  OFFICE,  PUBLIC  INFORMATION AND SERVICES, FEES FOR FISCAL AGENTS,
THE DISTRICT CLERK'S OFFICE, THE DISTRICT  MEETING,  AUDITING  SERVICES,
THE  TREASURER'S OFFICE, THE TAX COLLECTOR'S OFFICE, LEGAL SERVICES, THE
SCHOOL CENSUS, THE SUPPORT STAFF AND CLERICAL STAFF FOR  SUCH  SERVICES,
OFFICERS  AND OFFICES AND INDIRECT COSTS AND OTHER UNCLASSIFIED EXPENDI-
TURES. "CENTRAL ADMINISTRATION SERVICES" SHALL NOT INCLUDE TEACHER SALA-
RIES, TRANSPORTATION SERVICES OR CAPITAL COSTS.
  S 3. The education law is amended by adding a new  section  1510-a  to
read as follows:
  S  1510-A.  CENTRAL  ADMINISTRATION  SERVICES.  NO COMMON, UNION FREE,
CENTRAL SCHOOL DISTRICT, OR CENTRAL HIGH SCHOOL DISTRICT SHALL,  IN  ANY
FISCAL  YEAR,  EXPEND  MORE  THAN  THREE PERCENT OF ITS TOTAL BUDGET FOR
CENTRAL ADMINISTRATION SERVICES, AS SUCH TERM  IS  DEFINED  PURSUANT  TO
SUBDIVISION TWENTY-FIVE OF SECTION TWO OF THIS CHAPTER.
  S  4.  The  education law is amended by adding a new section 2023-b to
read as follows:

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD13916-01-4

S. 6565                             2

  S 2023-B. CENTRAL ADMINISTRATION SERVICES. IN THE TWO  THOUSAND  FOUR-
TEEN--TWO  THOUSAND  FIFTEEN  SCHOOL  YEAR,  EVERY SCHOOL DISTRICT SHALL
DECREASE THE TAX LEVY BY THE AMOUNT OF THE  DECREASE  IN  ADMINISTRATIVE
SERVICES  FROM  THE  PREVIOUS  YEAR  REQUIRED BY SECTION FIFTEEN HUNDRED
TEN-A OF THIS CHAPTER.
  S  5.  Subsections  (yy)  and  (zz)  of section 606 of the tax law, as
relettered by section 5 of part H of chapter 1 of the laws of 2003,  are
relettered  subsections  (yyy)  and  (zzz)  and a new subsection (xx) is
added to read as follows:
  (XX) 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
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 FIFTEEN, FIFTEEN PERCENT OF THE ADJUSTED RENT ACTU-

S. 6565                             3

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  SEVENTEEN  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
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 FIFTEEN:
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 SIXTEEN:
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 SEVENTEEN:
HOUSEHOLD GROSS INCOME               MAXIMUM REAL PROPERTY TAX

S. 6565                             4

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 EIGHTEEN 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
INFLATION FOR TAX YEARS BEGINNING IN TWO THOUSAND NINETEEN 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 6. This act shall take effect immediately.

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