S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                  1434--A
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             January 12, 2021
                                ___________
 
 Introduced  by  Sens.  KRUEGER,  BAILEY,  LIU, SALAZAR -- read twice and
   ordered printed, and when printed to be committed to the Committee  on
   Budget  and  Revenue  --  recommitted  to  the Committee on Budget and
   Revenue in  accordance  with  Senate  Rule  6,  sec.  8  --  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 (nnn) to read as follows:
   (NNN) 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-
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD06575-02-2
              

 S. 1434--A                          2
 
 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 TWENTY-THREE, 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 TWENTY-THREE 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-
 S. 1434--A                          3

 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 TWENTY-THREE:
 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 TWENTY-FOUR:
 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 TWENTY-FIVE:
 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 TWENTY-SIX 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
 S. 1434--A                          4
 
   (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 TWENTY-SEVEN AND THER-
 EAFTER.
   (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.
   §  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, 2025,  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.
   § 3. This act shall take effect immediately.