Relates to creating the middle class circuit breaker tax credit; to amend the tax law, in relation to person income tax; to amend the state finance law, in relation to establishing the real property tax circuit breaker account and the education financing account; and directing the commissioner of taxation and finance to adjust certain withholding tables and methods.

---

S4171-2011 Actions

• Jan 4, 2012: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS
• Mar 22, 2011: REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS

S4171-2011 Memo

BILL NUMBER:S4171

TITLE OF BILL:
An act
to amend the tax law, in relation to personal income tax; to amend
the
state finance law, in relation to establishing the real property tax
circuit breaker account and the education financing account; and
directing the commissioner of taxation and finance to adjust certain
withholding tables and methods

PURPOSE:
To enact a fair and responsible measure to control and reduce
property taxes for New Yorkers.

SUMMARY OF PROVISIONS:
Provides for a "circuit breaker" for taxpayers earning up to $250,000
per year who pay a disproportionate share of their income in property
taxes. New Yorkers would receive a credit on their 2012 income taxes
depending on their income level and the percentage of property taxes
they pay as a portion of their income.

The tax credit would consist of 70% of any amount paid in property
taxes beyond the percentages and income levels are noted below:

HOUSEHOLD GROSS INCOME           MAXIMUM REAL PROPERTY TAX

$100,000 or Less                 6% of Household Gross Income

$100,000 - $150,000              6% of $100,000 Plus 7% of up to
                                 the Next $50,000

$150,000 - $250,000              6% of $100,000 Plus 7% of $50,000
                                 Plus 8.5% of Household Gross Income
                                 Above $150,000.

Provides  for  the  revenue  to pay for the circuit breaker portion of
this legislation, by maintaining the current income tax rate for those
earning $1 million of more, for the calendar years 2012 and 2013.

Provides that the revenue derived from the difference between the 2008
income tax rate for those earning over $1 million, and  the  2012/2013
rate,  would be deposited into two dedicated funds. The first would be
used to pay for the circuit breaker tax credit; and the  second  would
be for education.

EFFECTS OF PRESENT LAW WHICH THIS BILL WOULD ALTER:
The  legislation  maintains the 2011 income tax rate for those earning
$1 million or more through 2013 and provides  a  dedicated  source  of
revenue to fund property tax relief.

The  legislation  would  also  establish two dedicated funds under the
State Finance Law (for property tax relief and school aid).

JUSTIFICATION:


Depending on which study one were to  believe,  New  Yorkers  pay  the
first  or  second  highest  tax burden of any State in the nation. The
Public Policy Institute of New York State found New Yorkers paid  $2.3
billion more in property taxes in 2010, than in 2009.

A  report  from  State  Comptroller  Thomas DiNapoli, issued in March,
2011, indicates that suburban counties in New York, have  the  highest
foreclosure  rates  in the State. Property tax relief is important for
New York's middle class in every part of the State. In areas  of  high
unemployment,  the  issue  is an even greater concern.  Property taxes
are too high, and are not rationally related to income.    A  family's
property  tax  bill can easily be 25% of their mortgage payment, often
times a much higher  percentage.  In  these  recessionary  times,  the
government  must  make choices of tax fairness in order to keep middle
class New Yorkers in the State and  financially  viable  as  long-term
residents of New York.

In  the property tax system, there is no "check and balance" system to
account for job losses or other downtowns in  personal  income.  As  a
result,  during  even a short term financial crisis, struggling middle
class  families  may  be  forced  to  sell  their  lifetime's  biggest
investment  -  their  home.  The decision this legislation proposes to
make, would assist millions of middle class families, with  long  term
property  tax  relief.  The  middle  class  tax relief would be funded
initially, while the economy is recovering,  by  continuing  the  2011
income  tax  rates,  solely for persons who earn more than $1 million,
for two years, while the economy is struggling to recover.

LEGISLATIVE HISTORY:
New legislation.

FISCAL IMPLICATIONS:
The  fiscal  implications  of  the  circuit  breaker  legislation  are
estimated not to exceed $2.3 billion. The revenue derived by the State
by maintaining the current income tax rate, on those earning more than
$1 million, would equal an estimated $3.362 billion.

EFFECTIVE DATE:
Immediately.

S4171-2011 Text

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

                                    4171

                         2011-2012 Regular Sessions

                              I N  SENATE

                               March 22, 2011
                                 ___________

  Introduced  by  Sen. BONACIC -- 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  personal  income  tax;  to
    amend  the  state  finance  law,  in relation to establishing the real
    property tax circuit  breaker  account  and  the  education  financing
    account;  and  directing  the  commissioner of taxation and finance to
    adjust certain withholding tables and methods

    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.    THE DEPARTMENT MAY REQUIRE SUCH PROOF AS IT DEEMS NECESSARY TO
  ESTABLISH CRITERIA SUFFICIENT TO DEMONSTRATE THAT A TAXPAYER  MEETS  AND
  HAS  MET  THESE  QUALIFICATIONS  FOR  A  PERIOD  OF AT LEAST FIVE YEARS.
  EVIDENCE OF RESIDENCE SHALL REQUIRE THE TAXPAYER TO HAVE RESIDED ON  THE
  RESIDENTIAL PROPERTY AT LEAST ONE HUNDRED NINETY DAYS A YEAR AND, UNLESS
  GOOD  CAUSE IS SHOWN PURSUANT TO A DETERMINATION OF THE COMMISSIONER, TO
  HAVE LIVED AT SUCH RESIDENCE AT LEAST ONE HUNDRED TWENTY DAYS  PER  YEAR
  CONSECUTIVELY FOR EACH OF THOSE YEARS. EVIDENCE MAY ALSO INCLUDE, BUT IS
  NOT  LIMITED  TO,  DRIVER'S LICENSE, WORKPLACE LOCATION IN COMPARISON TO
  OTHER PROPERTY WHERE SUCH TAXPAYER MAY RESIDE AT OR BE DOMICILED AT, AND
  VOTER REGISTRATION STATUS.
    (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

   EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                        [ ] is old law to be omitted.
                                                             LBD10316-02-1

 S. 4171                             2

  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 FOR TAXABLE YEARS BEGINNING
  IN TWO THOUSAND TWELVE 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
  (1)  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  (2)  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 FOR THE YEAR TWO THOUSAND TWELVE AND
  THEREAFTER 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  PROPERTY  TAX  EQUIVALENT

 S. 4171                             3

  EXCEEDS THE TAXPAYER'S MAXIMUM REAL PROPERTY TAX, AS DETERMINED BY PARA-
  GRAPH  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 COMPTROLLER, 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; PROVIDED,  HOWEVER,  THAT  THERE
  SHALL  BE NO OBLIGATION OF THE COMPTROLLER TO PAY SUCH OVERPAYMENT UNTIL
  THE REVENUE NECESSARY  TO  MAKE  SUCH  OVERPAYMENT  IS  IN  THE  ACCOUNT
  PROVIDED FOR IN SECTION NINETY-NINE-T OF THE STATE FINANCE LAW.
    (3) MAXIMUM REAL PROPERTY TAX. (A) A QUALIFIED TAXPAYER'S MAXIMUM REAL
  PROPERTY TAX SHALL BE DETERMINED AS FOLLOWS:

    FOR TAX YEARS BEGINNING IN TWO THOUSAND TWELVE 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 SUBPARA-
  GRAPH (A) OF THIS PARAGRAPH SHALL BE INDEXED FOR INFLATION FOR TAX YEARS
  BEGINNING IN TWO THOUSAND FOURTEEN AND THEREAFTER.
    (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. Paragraph 1 of subsection (a) of section 601 of the  tax  law  is
  renumbered  paragraph  1-a  and  a  new  paragraph 1 is added to read as
  follows:

    (1) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE AND BEFORE  TWO
  THOUSAND FOURTEEN:


  IF THE NEW YORK TAXABLE INCOME IS:    THE TAX IS:

  NOT OVER $16,000                      4% OF THE NEW YORK TAXABLE INCOME
  OVER $16,000 BUT NOT OVER $22,000     $640 PLUS 4.5% OF EXCESS OVER
                                        $16,000
  OVER $22,000 BUT NOT OVER $26,000     $910 PLUS 5.25% OF EXCESS OVER
                                        $22,000
  OVER $26,000 BUT NOT OVER $40,000     $1,120 PLUS 5.9% OF EXCESS OVER
                                        $26,000
  OVER $40,000 BUT NOT OVER $1,000,000  $1,946 PLUS 6.85% OF EXCESS OVER
                                        $40,000
  OVER $1,000,000                       $67,706 PLUS 8.97% OF EXCESS OVER

 S. 4171                             4

                                        $1,000,000
    S  3.  Paragraph  1 of subsection (b) of section 601 of the tax law is
  renumbered paragraph 1-a and a new paragraph  1  is  added  to  read  as
  follows:

    (1)  FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE AND BEFORE TWO
  THOUSAND FOURTEEN:


  IF THE NEW YORK TAXABLE INCOME IS:    THE TAX IS:

  NOT OVER $11,000                      4% OF THE NEW YORK TAXABLE INCOME
  OVER $11,000 BUT NOT OVER $15,000     $440 PLUS 4.5% OF EXCESS OVER
                                         $11,000
  OVER $15,000 BUT NOT OVER $17,000     $620 PLUS 5.25% OF EXCESS OVER
                                         $15,000
  OVER $17,000 BUT NOT OVER $30,000     $725 PLUS 5.9% OF EXCESS OVER
                                         $17,000
  OVER $30,000 BUT NOT OVER $1,000,000  $1,492 PLUS 6.85% OF EXCESS OVER
                                         $30,000
  OVER $1,000,000                       $67,937 PLUS 8.97% OF EXCESS OVER
                                         $1,000,000
    S 4. Paragraph 1 of subsection (c) of section 601 of the  tax  law  is
  renumbered  paragraph  1-a  and  a  new  paragraph 1 is added to read as
  follows:

    (1) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE AND BEFORE  TWO
  THOUSAND FOURTEEN:


  IF THE NEW YORK TAXABLE INCOME IS:    THE TAX IS:

  NOT OVER $8,000                       4% OF THE NEW YORK TAXABLE INCOME
  OVER $8,000 BUT NOT OVER $11,000      $320 PLUS 4.5% OF EXCESS OVER
                                         $8,000
  OVER $11,000 BUT NOT OVER $13,000     $455 PLUS 5.25% OF EXCESS OVER
                                         $11,000
  OVER $13,000 BUT NOT OVER $20,000     $560 PLUS 5.9% OF EXCESS OVER
                                         $13,000
  OVER $20,000 BUT NOT OVER $1,000,000  $973 PLUS 6.85% OF EXCESS OVER
                                         $20,000
  OVER $1,000,000                       $68,103 PLUS 8.97% OF EXCESS OVER
                                         $1,000,000
    S  5.  Subparagraphs  (B)  and (C) of paragraph 2 of subsection (d) of
  section 601 of the tax law, as amended by section 2 of part Z1 of  chap-
  ter 57 of the laws of 2009, are amended to read as follows:

    (B)  For taxable years beginning after two thousand two and before two
  thousand six, the fraction is computed as follows: the numerator is  the
  lesser  of  fifty  thousand  dollars  or the excess of New York adjusted
  gross income for the  taxable  year  over  one  hundred  fifty  thousand
  dollars and the denominator is fifty thousand dollars. For taxable years
  beginning  after  two thousand eight and before two thousand twelve, the
  fraction is computed as follows: the numerator is the  lesser  of  fifty
  thousand dollars or the excess of New York adjusted gross income for the
  taxable  year over three hundred thousand dollars and the denominator is
  fifty thousand dollars.  FOR TAXABLE YEARS BEGINNING AFTER TWO  THOUSAND
  ELEVEN  AND  BEFORE  TWO  THOUSAND FOURTEEN, THE FRACTION IS COMPUTED AS
  FOLLOWS: THE NUMERATOR IS THE LESSER OF FIFTY THOUSAND  DOLLARS  OR  THE
  EXCESS  OF  NEW YORK ADJUSTED GROSS INCOME FOR THE TAXABLE YEAR OVER ONE
  MILLION DOLLARS AND THE DENOMINATOR IS FIFTY THOUSAND DOLLARS.

 S. 4171                             5

    (C) This paragraph shall only apply to taxable years  beginning  after
  two  thousand  two  and  before  two thousand six and after two thousand
  eight and before two thousand [twelve] FOURTEEN.
    S  6.  Subparagraphs  (B)  and (C) of paragraph 3 of subsection (d) of
  section 601 of the tax law, as amended by section 3 of part Z1 of  chap-
  ter 57 of the laws of 2009, are amended to read as follows:

    (B)  For  such  taxpayers with adjusted gross income over five hundred
  thousand dollars, for taxable years beginning after two  thousand  eight
  and before two thousand twelve, the fraction is computed as follows: the
  numerator  is  the lesser of fifty thousand dollars or the excess of New
  York adjusted gross income for the taxable year over five hundred  thou-
  sand  dollars  and  the denominator is fifty thousand dollars.  FOR SUCH
  TAXPAYERS WITH ADJUSTED GROSS INCOME OVER ONE MILLION DOLLARS, FOR TAXA-
  BLE YEARS BEGINNING AFTER TWO THOUSAND ELEVEN AND  BEFORE  TWO  THOUSAND
  FOURTEEN,  THE  FRACTION  IS  COMPUTED  AS FOLLOWS: THE NUMERATOR IS THE
  LESSER OF FIFTY THOUSAND DOLLARS OR THE  EXCESS  OF  NEW  YORK  ADJUSTED
  GROSS  INCOME  FOR  THE  TAXABLE  YEAR  OVER ONE MILLION DOLLARS AND THE
  DENOMINATOR IS FIFTY THOUSAND DOLLARS. Provided, however, that the total
  tax prior to the application of any tax credits  shall  not  exceed  the
  highest rate of tax set forth in the tax table in subsection (a) of this
  section multiplied by the taxpayer's taxable income.
    (C)  This  paragraph shall only apply to taxable years beginning after
  two thousand two and before two thousand  six  and  after  two  thousand
  eight and before two thousand [twelve] FOURTEEN.
    S  7. Notwithstanding any provision of law to the contrary, the method
  of determining the amount to be deducted  and  withheld  from  wages  on
  account  of  taxes imposed by or pursuant to the authority of article 22
  of the tax law in connection with the implementation of  the  provisions
  of  this  act  shall be prescribed by regulations of the commissioner of
  taxation and finance with due consideration to the effect such withhold-
  ing tables and methods would have on the receipt and amount of  revenue.
  The  commissioner  of taxation and finance shall adjust such withholding
  tables and methods in regard to taxable  years  beginning  in  2011  and
  after in such manner as to result, so far as practicable, in withholding
  from  an  employee's wages an amount substantially equivalent to the tax
  reasonably estimated to be due for such taxable years as a result of the
  provisions of this act. Provided, however, for tax year 2011  the  with-
  holding  tables  shall  reflect  as  accurately  as practicable the full
  amount of tax year 2011 liability so that such  amount  is  withheld  by
  December  31,  2011. Any such regulations to implement a change in with-
  holding tables and methods for tax year 2011 shall be adopted and effec-
  tive as soon as practicable and the commissioner of taxation and finance
  may  adopt  such  regulations  on  an  emergency  basis  notwithstanding
  anything  to  the  contrary  in  section 202 of the state administrative
  procedure act. In carrying out his or her  duties  and  responsibilities
  under  this section, the commissioner of taxation and finance may accom-
  pany such a rule making procedure with a similar procedure with  respect
  to the taxes required to be deducted and withheld by local laws imposing
  taxes pursuant to the authority of articles 30, 30-A and 30-B of the tax
  law,  the provisions of any other law in relation to such a procedure to
  the contrary notwithstanding.
    S 8. 1. Notwithstanding any provision of law to the contrary, no addi-
  tion to tax required shall be imposed for failure to pay  the  estimated
  tax  in subsection (c) of section 685 of the tax law with respect to any
  underpayment of a required installment due prior to,  or  within  thirty
  days  of,  the effective date of this act to the extent that such under-

 S. 4171                             6

  payment was created or increased by the  amendments  made  by  this  act
  provided,  however, that the taxpayer remits the amount of the underpay-
  ment with his or her next quarterly estimated tax payment.
    2. The commissioner of taxation and finance shall take steps to publi-
  cize  the  necessary  adjustments  to  estimated  tax and, to the extent
  reasonably possible, to inform the taxpayer of the tax liability changes
  made by this act.
    S 9. The state finance law is amended by adding two new sections  99-t
  and 99-u to read as follows:

    S  99-T. REAL PROPERTY TAX CIRCUIT BREAKER ACCOUNT. 1. THERE IS HEREBY
  ESTABLISHED IN THE JOINT  CUSTODY  OF  THE  STATE  COMPTROLLER  AND  THE
  COMMISSIONER  OF  TAXATION  AND  FINANCE AN ACCOUNT OF THE MISCELLANEOUS
  SPECIAL REVENUE FUND TO BE KNOWN AS THE REAL PROPERTY TAX CIRCUIT BREAK-
  ER ACCOUNT.
    2. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE  CONTRARY,
  THE  STATE  COMPTROLLER IS HEREBY AUTHORIZED AND DIRECTED TO RECEIVE, ON
  AND AFTER JANUARY FIRST, TWO THOUSAND TWELVE, FOR DEPOSIT TO THE  CREDIT
  OF  THE  REAL  PROPERTY TAX CIRCUIT BREAKER ACCOUNT IN THE DEPARTMENT OF
  TAXATION AND FINANCE, TO BE UTILIZED TO PAY ALL  COSTS  ASSOCIATED  WITH
  THE  CREDIT ESTABLISHED BY SUBSECTION (SS) OF SECTION SIX HUNDRED SIX OF
  THE TAX LAW, THAT PORTION OF PERSONAL INCOME TAX RECEIPTS  WHICH  RESULT
  FROM  THE TEMPORARY SURCHARGE ON TAXPAYERS WITH A NEW YORK STATE TAXABLE
  INCOME IN EXCESS OF ONE MILLION DOLLARS WHICH  ARE  RECEIVED  AFTER  THE
  COMMENCEMENT  OF  THE  TWO  THOUSAND TWELVE--TWO THOUSAND THIRTEEN STATE
  FISCAL YEAR. SUCH SURCHARGE SHALL BE DEFINED  AS  THE  DIFFERENCE  WHICH
  WOULD  BE  GENERATED BY TAXABLE INCOME OVER ONE MILLION DOLLARS WHEN THE
  TAX RATE IS 8.97% AS COMPARED TO THE AMOUNT SUCH TAXABLE  REVENUE  WOULD
  OTHERWISE  GENERATE,  AT THE RATE PROVIDED FOR BY LAW, EFFECTIVE JANUARY
  FIRST, TWO THOUSAND FOURTEEN.   SUCH FUNDS SHALL  BE  EXPENDED  FOR  THE
  PURPOSE  OF  FUNDING  A  REAL  PROPERTY  TAX  CIRCUIT BREAKER CREDIT, TO
  PROVIDE A STATE FINANCED OFFSET TO SUCH RESIDENTIAL PROPERTY  TAXES.  IF
  THE  DIRECTOR  OF THE DIVISION OF THE BUDGET CERTIFIES THAT THE RECEIPTS
  WHICH RESULT FROM THE TEMPORARY SURCHARGE AS SET FORTH IN  THIS  SECTION
  SHALL  EXCEED THE AMOUNT NECESSARY FOR THE STATE TO MEET THE OBLIGATIONS
  PROVIDED FOR UNDER SUBSECTION (SS) OF SECTION SIX HUNDRED SIX OF THE TAX
  LAW, SUCH EXCESS AMOUNT AS DETERMINED BY THE DIRECTOR OF THE BUDGET, AND
  AS OTHERWISE CERTIFIED TO BE AVAILABLE BY THE STATE  COMPTROLLER,  SHALL
  BE  ALLOCATED TO THE PUBLIC SCHOOLS OF THE STATE IN THE FORMULA UTILIZED
  BY THE LEGISLATURE TO  ESTABLISH  THE  TOTAL  FOUNDATION  BASE  AID,  AS
  DEFINED BY SECTION THIRTY-SIX HUNDRED TWO OF THE EDUCATION LAW.
    S 99-U. EDUCATION FINANCING ACCOUNT. 1. THERE IS HEREBY ESTABLISHED IN
  THE JOINT CUSTODY OF THE STATE COMPTROLLER AND THE COMMISSIONER OF TAXA-
  TION AND FINANCE AN ACCOUNT OF THE MISCELLANEOUS SPECIAL REVENUE FUND TO
  BE KNOWN AS THE EDUCATION FINANCING ACCOUNT.
    2.  NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE CONTRARY,
  THE STATE COMPTROLLER IS HEREBY AUTHORIZED AND DIRECTED TO  RECEIVE,  ON
  AND  AFTER JANUARY FIRST, TWO THOUSAND TWELVE, FOR DEPOSIT TO THE CREDIT
  OF THE EDUCATION FINANCING ACCOUNT IN THE STATE EDUCATION DEPARTMENT ANY
  AMOUNT OF TAX RECEIPTS  FROM  THE  REAL  PROPERTY  TAX  CIRCUIT  BREAKER
  ACCOUNT UNDER SECTION NINETY-NINE-T OF THIS ARTICLE WHICH ARE DETERMINED
  BY  THE  DIRECTOR OF THE BUDGET TO BE IN EXCESS OF THE AMOUNTS NECESSARY
  FOR THE STATE TO MEET THE OBLIGATIONS PROVIDED FOR UNDER SUBSECTION (SS)
  OF SECTION SIX HUNDRED SIX OF THE TAX LAW, AS SET FORTH  IN  SUBDIVISION
  TWO OF SECTION NINETY-NINE-T OF THIS ARTICLE.
    S 10. This act shall take effect immediately.