S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   8857
 
                        2017-2018 Regular Sessions
 
                           I N  A S S E M B L Y
 
                             December 22, 2017
                                ___________
 
 Introduced by M. of A. THIELE, CAHILL, BRABENEC, JAFFEE -- read once and
   referred to the Committee on Education
 
 AN ACT to amend the education law, the real property tax law and the tax
   law,  in  relation  to  abolishing certain school taxes, providing for
   alternative taxes and state  distribution  to  school  districts;  and
   repealing  certain provisions of the real property tax law and the tax
   law relating to school taxes
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Title  5  of the education law is amended by adding a new
 article 71 to read as follows:
                                 ARTICLE 71
                       FINANCING OF SCHOOL DISTRICTS
 SECTION 3501. LEGISLATIVE INTENT.
         3502. BASIC QUALITY EDUCATION.
         3503. MINIMUM APPORTIONMENT.
         3504. LOCAL ENRICHMENT OPTIONS.
         3505. COLLECTION AND DISTRIBUTION.
         3506. CONSTRUCTION WITH OTHER LAWS.
         3507. SEVERABILITY.
   § 3501.  LEGISLATIVE INTENT.  IT IS THE INTENT OF THIS LEGISLATURE  TO
 FULFILL  ITS  OBLIGATIONS UNDER ARTICLE ELEVEN OF THE STATE CONSTITUTION
 WITH RESPECT TO THE FINANCING OF PUBLIC SCHOOLS WITHIN THIS  STATE  AND,
 AT  THE  SAME TIME, ELIMINATE THE INEQUITABLE AND REGRESSIVE REAL ESTATE
 TAX AS THE SUPPORT OF SUCH SCHOOLS.    THE  LEGISLATURE  HEREBY  FURTHER
 INTENDS  TO  GUARANTEE THE QUALITY AND EQUALITY OF EDUCATION FOR ALL OUR
 CHILDREN, WHILE LEAVING WITH THE INDIVIDUAL SCHOOL DISTRICTS THE PRESENT
 LEVEL OF LOCAL CONTROL INCLUDING THE AUTHORITY TO PERMIT OR PROHIBIT THE
 TRANSFER OF STUDENTS INTO OR OUT OF SUCH DISTRICTS  IN  ACCORDANCE  WITH
 THE  PROVISIONS  OF  THIS CHAPTER.   PRIOR TO THE IMPLEMENTATION OF THIS
 ARTICLE, IT IS IMPORTANT TO REVIEW  ITS  IMPACT  ON  MUNICIPALITIES  AND
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD13830-01-7

 A. 8857                             2
 
 TAXPAYERS.    IT  IS  NECESSARY TO DEVELOP A SYSTEM WHEREBY BOTH MUNICI-
 PALITIES AND TAXPAYERS CAN COMPARE THEIR REVENUE  AND  COSTS  UNDER  THE
 CURRENT LAW TO SUCH REVENUES AND COSTS UNDER THIS ARTICLE.
   §  3502.    BASIC QUALITY EDUCATION.   1.   THE STATE SHALL ASSUME ALL
 COSTS OF BASIC QUALITY EDUCATION, IN ACCORDANCE WITH SECTION THIRTY-FIVE
 HUNDRED FIVE OF THIS ARTICLE, INCLUDING ALL GENERAL AND  SPECIAL  EDUCA-
 TIONAL  SERVICES WHICH THE COMMISSIONER, UNDER GUIDELINES ESTABLISHED BY
 THE LEGISLATURE, SHALL DEFINE AS NECESSARY.  BASIC QUALITY EDUCATION, AS
 DEFINED BY THE COMMISSIONER, SHALL ALLOW  SUFFICIENT  LATITUDE  SO  THAT
 CHOICES  MAY  BE  MADE  BY  LOCAL SCHOOL DISTRICTS WITH RESPECT TO THEIR
 INDIVIDUAL NEEDS.   AS USED IN THIS ARTICLE  "BASIC"  SHALL  MEAN  EQUAL
 SERVICES  TO  ALL  PUPILS REGARDLESS OF DIFFERENCES IN COST IN DIFFERENT
 DISTRICTS FOR SUCH SERVICES.
   2.  SUCH COSTS SHALL BE FUNDED AS PROVIDED FOR BY THE LEGISLATURE,  IN
 CONJUNCTION WITH THE ELIMINATION OF REAL ESTATE TAXES FOR THE SUPPORT OF
 EDUCATION.   WITHIN THE CITIES OF NEW YORK, BUFFALO, ROCHESTER, SYRACUSE
 AND YONKERS, THE TAX ON REAL PROPERTY SHALL BE  REDUCED  BY  THE  DOLLAR
 AMOUNT  OF  SUCH  CITY'S  SHARE  OF THE COST OF PUBLIC SCHOOL EDUCATION.
 SUCH REDUCTION SHALL BE APPORTIONED TO ALL REAL PROPERTY TAXPAYERS ON  A
 PRO-RATA  BASIS,  AND TENANTS SHALL RECEIVE TAX CREDITS, TAX REBATES, OR
 REDUCTIONS IN RENT AS PROVIDED IN SECTION FOUR HUNDRED SIXTY-SEVEN-G  OF
 THE REAL PROPERTY TAX LAW.
   3.  EACH SCHOOL DISTRICT SHALL SUBMIT A BASIC BUDGET TO THE DEPARTMENT
 FOR APPROVAL BY THE COMMISSIONER AS PROVIDED BY LAW.
   4.    THE  DEPARTMENT,  UNDER DIRECTION OF THE BOARD OF REGENTS, SHALL
 ESTABLISH A SCHEDULE OF MANDATORY BASIC SERVICES  AND  AUTHORIZED  COSTS
 THEREFOR  RELATED  TO  DIFFERING COSTS THROUGHOUT THE STATE.  SUCH BASIC
 SCHEDULE SHALL REFLECT GUIDELINES ESTABLISHED FOR THIS  PURPOSE  BY  THE
 LEGISLATURE.
   §  3503.    MINIMUM APPORTIONMENT.   IN ANY SCHOOL YEAR A DISTRICT MAY
 ELECT TO RECEIVE AS ITS BASIC BUDGET THE HIGHEST OF:
   1.  THE DISTRICT BUDGET OF THE SCHOOL YEAR DURING WHICH  THIS  ARTICLE
 SHALL  TAKE  EFFECT,  EXCEPT  THAT THIS APPORTIONMENT OPTION SHALL EXIST
 ONLY FOR THE PERIOD NOT EXCEEDING  THE  FIVE  SCHOOL  YEARS  IMMEDIATELY
 AFTER THIS ARTICLE SHALL TAKE EFFECT.
   2.    THE PRODUCT OF (A) THE DISTRICT BUDGET OF THE SCHOOL YEAR DURING
 WHICH THIS ARTICLE SHALL TAKE EFFECT DIVIDED BY THE  ENROLLMENT  AT  THE
 START  OF  SUCH  YEAR  AND (B) THE ENROLLMENT AT THE START OF THE SCHOOL
 YEAR FOR WHICH THE BUDGET  IS  BEING  DETERMINED.    THIS  APPORTIONMENT
 OPTION  SHALL  EXIST  ONLY  FOR THE PERIOD NOT EXCEEDING THE FIVE SCHOOL
 YEARS IMMEDIATELY AFTER THIS ARTICLE SHALL BECOME LAW.
   3.  THE BASIC BUDGET SUBMITTED IN ACCORDANCE WITH SUBDIVISION THREE OF
 SECTION THIRTY-FIVE HUNDRED TWO OF THIS ARTICLE, EXCEPT THAT IN NO  CASE
 SHALL  THE PER PUPIL APPORTIONMENT EXCEED THE PER PUPIL APPORTIONMENT OF
 THE PREVIOUS YEAR BY MORE THAN THE AVERAGE  STATEWIDE  INCREASE  OF  PER
 PUPIL  BUDGETS PLUS TEN PER CENTUM OF THE PER PUPIL APPORTIONMENT OF THE
 PREVIOUS YEAR.
   § 3504.  LOCAL ENRICHMENT OPTIONS.  1.  ANY SCHOOL DISTRICT, INCLUDING
 THE CITY SCHOOL DISTRICTS OF THE CITIES OF NEW YORK, BUFFALO, ROCHESTER,
 SYRACUSE AND YONKERS, MAY ELECT A LOCAL ENRICHMENT OPTION  FOR  SERVICES
 NOT  COVERED  BY  THE BASIC STATE SUPPORT.  SUCH LOCAL ENRICHMENT OPTION
 BUDGET SHALL BE APPROVED BY THE VOTERS OF THE DISTRICT.
   2.  THE LOCAL ENRICHMENT OPTION BUDGET SHALL BE FUNDED AS PROVIDED FOR
 BY THE LEGISLATURE AS A  SUPPLEMENTARY  EDUCATION  TAX  ON  INDIVIDUALS,
 ESTATES,  TRUSTS,  UNINCORPORATED  BUSINESSES  AND CORPORATIONS HAVING A
 RESIDENCE OR SITUS WITHIN EACH SCHOOL DISTRICT ELECTING SUCH OPTION.

 A. 8857                             3
 
   3. THE LOCAL ENRICHMENT OPTION BUDGET  SHALL  NOT  EXCEED  TWENTY  PER
 CENTUM OF THE BASIC BUDGET FOR EACH DISTRICT ELECTING SUCH OPTION.
   §  3505.  COLLECTION AND DISTRIBUTION.  NOTWITHSTANDING THE PROVISIONS
 OF ANY OTHER LAW, CODE, RULE OR REGULATION, THE STATE SHALL, WITHIN FIVE
 YEARS FROM THE EFFECTIVE DATE OF THIS ARTICLE, COLLECT AND DISTRIBUTE TO
 SCHOOL DISTRICTS ALL MONEYS RELATING TO THE FINANCING OF  PUBLIC  EDUCA-
 TION,  EXCLUSIVE  OF HIGHER EDUCATION, WITHIN THIS STATE, AS PROVIDED BY
 THE LEGISLATURE.  THIS ASSUMPTION BY THE STATE OF  ALL  COSTS  OF  BASIC
 QUALITY  EDUCATION  SHALL  BE ACCOMPLISHED IN APPROXIMATELY EQUAL INCRE-
 MENTS OVER A FIVE YEAR PERIOD FROM THE EFFECTIVE DATE OF  THIS  ARTICLE.
 DURING  THIS PERIOD, THE AMOUNT OF MONEY DERIVED BY EACH SCHOOL DISTRICT
 FROM REAL PROPERTY TAXES SHALL BE REDUCED ACCORDINGLY.  AFTER FIVE YEARS
 FROM THE EFFECTIVE DATE OF  THIS  ARTICLE,  MONEYS  DISTRIBUTED  TO  ANY
 SCHOOL  DISTRICT SHALL BE REDUCED BY THE AMOUNT OF ANY REVENUES RECEIVED
 BY SUCH SCHOOL DISTRICT FROM TAXES IMPOSED ON REAL  PROPERTY  BY  OR  ON
 BEHALF OF SUCH SCHOOL DISTRICT.
   § 3506.  CONSTRUCTION WITH OTHER LAWS.  THE PROVISIONS OF THIS ARTICLE
 SHALL  BE  CONTROLLING, NOTWITHSTANDING THE PROVISIONS OF ANY OTHER LAW,
 CODE, RULE OR REGULATION TO THE CONTRARY.  HOWEVER, NO EXISTING RIGHT OR
 REMEDY OF ANY CHARACTER SHALL BE LOST, IMPAIRED OR AFFECTED BY REASON OF
 THIS ARTICLE, NOR SHALL THE VALIDITY OF ANY ACTION TAKEN BY  ANY  PUBLIC
 OFFICIAL UNDER THE LAW IN FORCE IMMEDIATELY PRIOR TO THE TIME THIS ARTI-
 CLE  SHALL  TAKE  EFFECT  BE  AFFECTED BY THE ENACTMENT OF THIS ARTICLE.
 COLLECTION OF ALL  OUTSTANDING  TAX  LIENS  SHALL  BE  PURSUANT  TO  THE
 PROVISIONS OF THE REAL PROPERTY TAX LAW.
   § 3507.  SEVERABILITY.  IF ANY CLAUSE, SENTENCE, PARAGRAPH, SECTION OR
 PART  OF THIS ARTICLE SHALL BE ADJUDGED BY ANY COURT OF COMPETENT JURIS-
 DICTION TO BE INVALID, SUCH JUDGMENT SHALL NOT AFFECT, IMPAIR OR INVALI-
 DATE THE REMAINDER THEREOF, BUT SHALL BE CONFINED IN  ITS  OPERATION  TO
 THE  CLAUSE,  SENTENCE,  PARAGRAPH,  SECTION  OR  PART  THEREOF DIRECTLY
 INVOLVED IN THE CONTROVERSY IN  WHICH  SUCH  JUDGMENT  SHALL  HAVE  BEEN
 RENDERED.
   § 2.  Article 13 of the real property tax law is REPEALED.
   §  3.    The  real property tax law is amended by adding a new section
 467-k to read as follows:
   § 467-K. PROVISIONS FOR TENANTS.  IN EVERY CASE WHERE  TAXES  ON  REAL
 PROPERTY  ARE REDUCED DUE TO THE REDUCTION OF SCHOOL TAXES ON SUCH PROP-
 ERTY, THE AMOUNT OF SUCH REDUCTION SHALL BE PRO-RATED AMONG THE TENANTS,
 IF ANY, OF SUCH REAL PROPERTY, AND THE TOTAL RENTS REDUCED IN AN  AMOUNT
 EQUAL TO SUCH REAL PROPERTY TAX REDUCTION.  WHERE SUCH RENT REDUCTION IS
 PRECLUDED  BY  A  LEASE  OR  OTHER  AGREEMENT,  SUCH  REAL  PROPERTY TAX
 REDUCTION SHALL ENTITLE SUCH TENANTS TO A  TAX  CREDIT  IN  THAT  AMOUNT
 AGAINST  INCOME  TAXES  DUE,  OR TO A REBATE FOR ANY AMOUNT IN EXCESS OF
 INCOME TAXES DUE, UNTIL THE EXPIRATION OF SUCH LEASE  OR  AGREEMENT,  AT
 WHICH TIME THE RENT SHALL BE REDUCED ACCORDINGLY.
   §  4.    The  tax  law is amended by adding two new sections 601-b and
 601-c to read as follows:
   § 601-B.  ADDITIONAL TAXES FOR EDUCATION.   1.   IN  ADDITION  TO  THE
 TAXES  ON  INCOME  IMPOSED  BY THIS CHAPTER FOR TAXABLE YEARS OR PERIODS
 ENDING ON OR AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND  EIGHTEEN,  THERE
 SHALL  BE  IMPOSED A TAX EQUAL TO A PERCENT OF THE TAXES IMPOSED BY SUCH
 SECTIONS AND ARTICLES AS IS NECESSARY TO  FULFILL  THE  REQUIREMENTS  OF
 SECTION THIRTY-FIVE HUNDRED TWO OF THE EDUCATION LAW.  SUCH A TAX MAY BE
 LEVIED  EITHER  AS  A  SURTAX, OR BY READJUSTMENT OF THE APPROPRIATE TAX
 SCHEDULES.

 A. 8857                             4

   2.  THE COMMISSIONER SHALL ESTABLISH A SEPARATE ACCOUNT OR ACCOUNTS TO
 RECEIVE THE ADDITIONAL TAX IMPOSED BY SUBSECTION ONE OF THIS SECTION AND
 SHALL PAY INTO SUCH ACCOUNT OR ACCOUNTS THE TOTAL OF ALL SUCH TAXES WHEN
 RECEIVED AND RETAIN THE SAME SUBJECT TO DISBURSEMENT IN ACCORDANCE  WITH
 THE PROVISIONS OF THE EDUCATION LAW.
   §  601-C.    ENRICHMENT OPTION TAX.  IN ADDITION TO THE TAX IMPOSED BY
 SECTION SIX HUNDRED ONE-B OF THIS PART  FOR  TAXABLE  YEARS  OR  PERIODS
 ENDING  ON  OR AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND EIGHTEEN, THERE
 SHALL BE IMPOSED ON INDIVIDUALS, ESTATES, TRUSTS,  UNINCORPORATED  BUSI-
 NESSES  AND CORPORATIONS, HAVING A RESIDENCE OR SITUS WITHIN EACH SCHOOL
 DISTRICT ELECTING A LOCAL ENRICHMENT OPTION PURSUANT  TO  THE  EDUCATION
 LAW,  A TAX EQUAL TO A PERCENT OF THE TAX IMPOSED BY SECTION SIX HUNDRED
 ONE-B OF THIS PART AS  IS  NECESSARY  TO  FULFILL  THE  REQUIREMENTS  OF
 SECTION  THIRTY-FIVE  HUNDRED FOUR OF THE EDUCATION LAW.  THIS TAX SHALL
 NOT EXCEED THIRTY PERCENT OF THE TAX  IMPOSED  BY  SECTION  SIX  HUNDRED
 ONE-B  OF  THIS PART.  IN ANY DISTRICT WHERE SUCH TAX IS INSUFFICIENT TO
 SATISFY BUDGET REQUIREMENTS AS PROVIDED IN SECTION  THIRTY-FIVE  HUNDRED
 FOUR OF THE EDUCATION LAW, SUCH DEFICIENCY SHALL BE PAID BY THE STATE IN
 ACCORDANCE WITH THE EDUCATION LAW.
   § 5. Sections 1204, 1211 and 1212 of the tax law are REPEALED.
   §  6.  Subpart  A of part 1 of article 29 of the tax law is amended by
 adding a new section 1200 to read as follows:
   § 1200.  CERTAIN TAXES REDUCED.  NOTWITHSTANDING THE PROVISIONS OF ANY
 OTHER SECTION OF THIS ARTICLE, ON AND AFTER THE EFFECTIVE DATE  OF  THIS
 SECTION,  THE PROVISIONS OF THIS ARTICLE RELATING TO TAXES FOR THE BENE-
 FIT OF SCHOOL DISTRICTS OR SCHOOL PURPOSES SHALL BE  DEEMED  REDUCED  IN
 ACCORDANCE WITH SECTION THIRTY-FIVE HUNDRED FIVE OF THE EDUCATION LAW.
   §  7.  Section 1213 of the tax law, as amended by section 2 of part WW
 of chapter 57 of the laws of 2010, is amended to read as follows:
   § 1213. Deliveries outside the jurisdiction where sale is made.  Where
 a  sale  of  tangible  personal  property or services, including prepaid
 telephone calling services, but not including other  services  described
 in  subdivision  (b)  of  section  eleven  hundred five of this chapter,
 including an agreement therefor, is made in any city[,]  OR  county  [or
 school  district],  but  the  property sold, the property upon which the
 services were performed or prepaid telephone calling or other service is
 or will be delivered to the purchaser elsewhere, such sale shall not  be
 subject  to tax by such city[,] OR county [or school district]. However,
 if delivery occurs or will occur in  a  city[,]  OR  county  [or  school
 district]  imposing  a  tax on the sale or use of such property, prepaid
 telephone calling or other services, the vendor  shall  be  required  to
 collect  from  the  purchaser,  as  provided  in  section twelve hundred
 fifty-four of this article, the  aggregate  sales  or  compensating  use
 taxes  imposed  by the city, if any, AND county [and school district] in
 which delivery occurs or will occur, for distribution by the commission-
 er to such taxing jurisdiction or jurisdictions.  For  the  purposes  of
 this  section delivery shall be deemed to include transfer of possession
 to the purchaser and the receiving of the property or  of  the  service,
 including  prepaid telephone calling service, by the purchaser. Notwith-
 standing the foregoing, where  a  transportation  service  described  in
 paragraph  ten of subdivision (c) of section eleven hundred five of this
 chapter begins in one jurisdiction but ends in another jurisdiction, any
 tax imposed pursuant to the authority of this article shall be  due  the
 jurisdiction or jurisdictions where the service commenced.
   §  8.  Section 1220 of the tax law, as amended by section 39 of part Y
 of chapter 63 of the laws of 2000, is amended to read as follows:

 A. 8857                             5
 
   § 1220. Territorial limitations. Any tax imposed under  the  authority
 of  this  article  shall apply only within the territorial limits of the
 city[,] OR county [or school district] imposing  the  tax,  except  that
 where  the  taxes described in subdivision (b) of section eleven hundred
 five  and  clauses (E), (G) and (H) of subdivision (a) of section eleven
 hundred ten or the tax described in subdivision (e)  of  section  eleven
 hundred five is imposed by a city, as provided in section twelve hundred
 ten  [or  twelve  hundred  eleven]  of  this  chapter, any establishment
 located partially within such city and partially within a town or  towns
 and  receiving  or  using any services or utilities provided by the city
 shall be deemed to be wholly within such city for the purposes  of  such
 taxes.
   §  9.  Section 1222 of the tax law, as added by chapter 93 of the laws
 of 1965, is amended to read as follows:
   § 1222.   Taxes to be in addition to  others.    Except  as  expressly
 otherwise  provided in this article, any tax imposed under the authority
 of this article shall be in addition to any and all other taxes  author-
 ized  or  imposed  under any other provision of law.  This article shall
 not be construed as limiting the power of  any  city[,]  OR  county  [or
 school  district]  to  impose  any  other  tax which it is authorized to
 impose under any other provision of law.
   § 10.  Section 1256 of the tax law, as amended by chapter 575  of  the
 laws of 1965, is amended to read as follows:
   §  1256.    Cooperation by localities.   Every city[,] AND county [and
 school district] shall cooperate with the [state tax commission] COMMIS-
 SIONER to enable [it] HIM OR HER to carry out [its] HIS  OR  HER  duties
 under [articles] THIS ARTICLE AND ARTICLE twenty-eight [and twenty-nine]
 of this chapter.  Every such locality shall furnish to such [commission]
 COMMISSIONER those returns, reports and other information which the [tax
 commission]  COMMISSIONER  deems  necessary  to  carry  out such duties,
 except that cities having a population of one million or more,  may,  in
 their  discretion,  furnish  instead copies of such returns, reports and
 other information.  Such copies shall be furnished at the  [tax  commis-
 sion's]  COMMISSIONER'S expense, such expenses to be charged to the cost
 of administration.  Notwithstanding any other law to the  contrary,  the
 duty to furnish returns, reports and other information or copies thereof
 shall  apply  to [those returns and reports filed under taxes authorized
 under chapter eight  hundred  seventy-three  of  the  laws  of  nineteen
 hundred  thirty-four, as amended, chapter three hundred forty-one of the
 laws of nineteen hundred forty-six, as amended,  article  two-B  of  the
 general  city  law  and chapter two hundred seventy-eight of the laws of
 nineteen hundred forty-seven, as amended, and to] such other information
 which is relevant to the duties of  the  [tax  commission]  COMMISSIONER
 under  [such  articles] THIS ARTICLE AND ARTICLE twenty-eight [and twen-
 ty-nine] OF THIS CHAPTER.
   § 11.   In order to  provide  for  continuity  of  funding  to  school
 districts,  fifty  percent  of the school taxes due on July first in the
 second year preceding the effective date of this act shall  be  paid  as
 heretofore required by law.
   § 12.  The commissioners of education and taxation and finance and the
 chairman  of  the state board of real property services shall present to
 the legislature a report stating the methodology  for  implementing  the
 provisions  of  this act.   The report shall include a system for demon-
 strating the impact of the act on municipalities and taxpayers for a one
 year period preceding the implementation of the act.  Such report  shall
 be due 90 days after this act becomes law.

 A. 8857                             6
 
   §  13.    This  act  shall  take  effect  on the first of January next
 succeeding the date on which it shall have become a law provided, howev-
 er, that sections two, five, seven, eight, nine  and  ten  of  this  act
 shall take effect 3 years after such effective date.