S T A T E   O F   N E W   Y O R K
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                                  8372

                          I N  A S S E M B L Y

                             January 9, 2014
                               ___________

Introduced  by  M. of A. THIELE, CAHILL -- 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.
  S  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
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.

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

                                                           LBD11188-02-4

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  S 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.
  S 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.
  S 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.
  3.  THE  LOCAL  ENRICHMENT  OPTION  BUDGET SHALL NOT EXCEED TWENTY PER
CENTUM OF THE BASIC BUDGET FOR EACH DISTRICT ELECTING SUCH OPTION.

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  S 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.
  S 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.
  S 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.
  S 2.  Article 13 of the real property tax law is REPEALED.
  S  3.    The  real property tax law is amended by adding a new section
467-h to read as follows:
  S 467-H. 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.
  S  4.    The  tax  law is amended by adding two new sections 601-b and
601-c to read as follows:
  S 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  THIRTEEN,  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.
  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

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RECEIVED AND RETAIN THE SAME SUBJECT TO DISBURSEMENT IN ACCORDANCE  WITH
THE PROVISIONS OF THE EDUCATION LAW.
  S  601-C.    ENRICHMENT OPTION TAX.  IN ADDITION TO THE TAX IMPOSED BY
SECTION SIX HUNDRED ONE-B OF THIS ARTICLE FOR TAXABLE YEARS  OR  PERIODS
ENDING  ON  OR AFTER DECEMBER THIRTY-FIRST, TWO THOUSAND THIRTEEN, 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 ARTICLE 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 ARTICLE.  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.
  S 5. Sections 1204, 1211 and 1212 of the tax law are REPEALED.
  S 6. The tax law is amended by adding a new section 1200  to  read  as
follows:
  S 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.
  S 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:
  S  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.
  S 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:
  S  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

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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.
  S  9.  Section 1222 of the tax law, as added by chapter 93 of the laws
of 1965, is amended to read as follows:
  S 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.
  S 10.  Section 1256 of the tax law, as amended by chapter 575  of  the
laws of 1965, is amended to read as follows:
  S  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 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  commission'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 rele-
vant to the duties of the [tax commission] COMMISSIONER under such arti-
cles twenty-eight and twenty-nine OF THIS CHAPTER.
  S 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.
  S 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.
  S  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.