S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   4403
 
                        2021-2022 Regular Sessions
 
                             I N  S E N A T E
 
                             February 4, 2021
                                ___________
 
 Introduced  by  Sen.  PARKER -- 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 and the education law, in relation to educa-
   tion tax surcharge
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Legislative  intent.  The  legislature  hereby  finds and
 declares that an omnibus education financing plan is essential to effec-
 tively and comprehensively provide a sound  basic  education  to  public
 school  students  in  the city of New York. The "emergency in education"
 surcharge tax, grounded in  the  need  to  provide  immediate,  adequate
 support  for  public  education in the city of New York, is such a plan.
 The plan recognizes and addresses several factors:  (1)  that  increased
 operating aid is necessary to ensure New York city students are prepared
 to  achieve the higher standards implemented by the New York state board
 of regents, (2) that the city of New York is  committed  to  shouldering
 its  "fair  share"  of  the  cost  of  educating  students in its public
 schools, and (3) that students currently attending public schools in the
 city of New York cannot afford to  wait  as  litigation  concerning  the
 state of New York's education financing system is decided by the courts.
 The  mayor  and  the city council have agreed that the financing program
 provided for in this act will provide the funds necessary  to  implement
 the  "emergency  in  education"  plan.  The state must authorize the new
 revenue sources requested by the city of New York to enable the city  to
 effectively educate public school students.
   §  2. The tax law is amended by adding a new section 1304-e to read as
 follows:
   § 1304-E. EMERGENCY IN EDUCATION TAX SURCHARGE. (A) IN ADDITION TO THE
 TAXES AUTHORIZED BY ANY OTHER SECTION OF THIS ARTICLE, ANY CITY IMPOSING
 SUCH TAXES IS HEREBY AUTHORIZED AND EMPOWERED TO ADOPT AND  AMEND  LOCAL
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD09332-01-1

 S. 4403                             2
 
 LAWS  IMPOSING  IN ANY SUCH CITY TAX SURCHARGES ON (1) THE NEW YORK CITY
 ADJUSTED GROSS INCOME, AND  (2)  THE  TAX  DUE  UNDER  SECTION  THIRTEEN
 HUNDRED  FOUR  OF THIS ARTICLE OF EVERY CITY RESIDENT INDIVIDUAL, ESTATE
 AND  TRUST,  AS SET FORTH IN SUBSECTIONS (B), (C), (D), (E), (F) AND (G)
 OF THIS SECTION.
   (B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND  TWENTY-ONE,  THE  TAX
 SURCHARGES  IMPOSED  PURSUANT  TO THE AUTHORITY OF THIS SECTION SHALL BE
 DETERMINED AS FOLLOWS: (1) A TAX OF ONE PERCENT ON THE  PORTION  OF  THE
 NEW YORK CITY SOURCE ADJUSTED GROSS INCOME OF EVERY RESIDENT INDIVIDUAL,
 ESTATE  OR TRUST AND OF EVERY NONRESIDENT OR PART-YEAR RESIDENT INDIVID-
 UAL, ESTATE OR TRUST, ABOVE ONE HUNDRED THOUSAND DOLLARS, (2) A  TAX  OF
 ONE  PERCENT  ON  THE  PORTION OF SUCH INCOME ABOVE TWO HUNDRED THOUSAND
 DOLLARS, AND (3) A SURCHARGE OF  TWELVE  AND  ONE-HALF  PERCENT  ON  THE
 AMOUNT  OF  TAX DUE BY EVERY RESIDENT INDIVIDUAL, ESTATE OR TRUST AND OF
 EVERY NONRESIDENT OR PART-YEAR  RESIDENT  INDIVIDUAL,  ESTATE  OR  TRUST
 PURSUANT TO SECTION THIRTEEN HUNDRED FOUR OF THIS ARTICLE.
   (C)  FOR  TAXABLE  YEARS BEGINNING IN TWO THOUSAND TWENTY-TWO, THE TAX
 SURCHARGES IMPOSED PURSUANT TO THE AUTHORITY OF THIS  SECTION  SHALL  BE
 DETERMINED  AS  FOLLOWS:  (1) A TAX OF NINE-TENTHS OF ONE PERCENT ON THE
 PORTION OF THE NEW YORK CITY SOURCE ADJUSTED GROSS INCOME OF EVERY RESI-
 DENT INDIVIDUAL, ESTATE OR TRUST AND OF EVERY NONRESIDENT  OR  PART-YEAR
 RESIDENT  INDIVIDUAL,  ESTATE  OR  TRUST,  ABOVE  ONE  HUNDRED  THOUSAND
 DOLLARS, (2) A TAX OF NINE-TENTHS OF ONE PERCENT ON THE PORTION OF  SUCH
 INCOME ABOVE TWO HUNDRED THOUSAND DOLLARS, AND (3) A SURCHARGE OF ELEVEN
 AND ONE-QUARTER PERCENT ON THE AMOUNT OF TAX DUE BY EVERY RESIDENT INDI-
 VIDUAL,  ESTATE  OR TRUST AND OF EVERY NONRESIDENT OR PART-YEAR RESIDENT
 INDIVIDUAL, ESTATE OR TRUST PURSUANT TO SECTION THIRTEEN HUNDRED FOUR OF
 THIS ARTICLE.
   (D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWENTY-THREE, THE  TAX
 SURCHARGES  IMPOSED  PURSUANT  TO THE AUTHORITY OF THIS SECTION SHALL BE
 DETERMINED AS FOLLOWS: (1) A TAX OF EIGHT-TENTHS OF ONE PERCENT  ON  THE
 PORTION OF THE NEW YORK CITY SOURCE ADJUSTED GROSS INCOME OF EVERY RESI-
 DENT  INDIVIDUAL,  ESTATE OR TRUST AND OF EVERY NONRESIDENT OR PART-YEAR
 RESIDENT  INDIVIDUAL,  ESTATE  OR  TRUST,  ABOVE  ONE  HUNDRED  THOUSAND
 DOLLARS, (2) A TAX OF EIGHT-TENTHS OF ONE PERCENT ON THE PORTION OF SUCH
 INCOME  ABOVE  TWO  HUNDRED THOUSAND DOLLARS, AND (3) A SURCHARGE OF TEN
 PERCENT ON THE AMOUNT OF TAX DUE BY EVERY RESIDENT INDIVIDUAL, ESTATE OR
 TRUST AND OF EVERY NONRESIDENT OR PART-YEAR RESIDENT INDIVIDUAL,  ESTATE
 OR TRUST PURSUANT TO SECTION THIRTEEN HUNDRED FOUR OF THIS ARTICLE.
   (E)  FOR  TAXABLE YEARS BEGINNING IN TWO THOUSAND TWENTY-FOUR, THE TAX
 SURCHARGES IMPOSED PURSUANT TO THE AUTHORITY OF THIS  SECTION  SHALL  BE
 DETERMINED  AS  FOLLOWS: (1) A TAX OF SEVEN-TENTHS OF ONE PERCENT ON THE
 PORTION OF THE NEW YORK CITY SOURCE ADJUSTED GROSS INCOME OF EVERY RESI-
 DENT INDIVIDUAL, ESTATE OR TRUST AND OF EVERY NONRESIDENT  OR  PART-YEAR
 RESIDENT  INDIVIDUAL,  ESTATE  OR  TRUST,  ABOVE  ONE  HUNDRED  THOUSAND
 DOLLARS, (2) A TAX OF SEVEN-TENTHS OF ONE PERCENT ON THE PORTION OF SUCH
 INCOME ABOVE TWO HUNDRED THOUSAND DOLLARS, AND (3) A SURCHARGE OF  EIGHT
 AND  THREE-QUARTERS  PERCENT  ON THE AMOUNT OF TAX DUE BY EVERY RESIDENT
 INDIVIDUAL, ESTATE OR TRUST AND OF EVERY NONRESIDENT OR PART-YEAR  RESI-
 DENT  INDIVIDUAL,  ESTATE  OR TRUST PURSUANT TO SECTION THIRTEEN HUNDRED
 FOUR OF THIS ARTICLE.
   (F) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWENTY-FIVE,  THE  TAX
 SURCHARGES  IMPOSED  PURSUANT  TO THE AUTHORITY OF THIS SECTION SHALL BE
 DETERMINED AS FOLLOWS: (1) A TAX OF SIX-TENTHS OF  ONE  PERCENT  ON  THE
 PORTION OF THE NEW YORK CITY SOURCE ADJUSTED GROSS INCOME OF EVERY RESI-
 DENT  INDIVIDUAL,  ESTATE OR TRUST AND OF EVERY NONRESIDENT OR PART-YEAR

 S. 4403                             3
 
 RESIDENT  INDIVIDUAL,  ESTATE  OR  TRUST,  ABOVE  ONE  HUNDRED  THOUSAND
 DOLLARS,  (2)  A TAX OF SIX-TENTHS OF ONE PERCENT ON THE PORTION OF SUCH
 INCOME ABOVE TWO HUNDRED THOUSAND DOLLARS, AND (3) A SURCHARGE OF  SEVEN
 AND ONE-HALF PERCENT ON THE AMOUNT OF TAX DUE BY EVERY RESIDENT INDIVID-
 UAL,  ESTATE  OR  TRUST  AND  OF EVERY NONRESIDENT OR PART-YEAR RESIDENT
 INDIVIDUAL, ESTATE OR TRUST PURSUANT TO SECTION THIRTEEN HUNDRED FOUR OF
 THIS ARTICLE.
   (G) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWENTY-SIX AND  THERE-
 AFTER,  THE  TAX  SURCHARGES  IMPOSED  PURSUANT TO THE AUTHORITY OF THIS
 SECTION SHALL BE DETERMINED AS FOLLOWS: (1) A TAX  OF  ONE-HALF  OF  ONE
 PERCENT ON THE PORTION OF THE NEW YORK CITY SOURCE ADJUSTED GROSS INCOME
 OF  EVERY  RESIDENT INDIVIDUAL, ESTATE OR TRUST AND OF EVERY NONRESIDENT
 OR PART-YEAR RESIDENT INDIVIDUAL, ESTATE OR  TRUST,  ABOVE  ONE  HUNDRED
 THOUSAND DOLLARS, (2) A TAX OF ONE-HALF OF ONE PERCENT ON THE PORTION OF
 SUCH  INCOME  ABOVE TWO HUNDRED THOUSAND DOLLARS, AND (3) A SURCHARGE OF
 SIX AND ONE-QUARTER PERCENT ON THE AMOUNT OF TAX DUE BY  EVERY  RESIDENT
 INDIVIDUAL,  ESTATE OR TRUST AND OF EVERY NONRESIDENT OR PART-YEAR RESI-
 DENT INDIVIDUAL, ESTATE OR TRUST PURSUANT TO  SECTION  THIRTEEN  HUNDRED
 FOUR OF THIS ARTICLE.
   (H)  THE  COMMISSIONER IN COOPERATION WITH THE COMPTROLLER SHALL MAIN-
 TAIN SUCH RECORDS AS ARE NECESSARY TO  DETERMINE  WHAT  PORTION  OF  THE
 INCOME  TAX REVENUES COLLECTED ON BEHALF OF A CITY IMPOSING TAXES PURSU-
 ANT TO THIS ARTICLE ARE ATTRIBUTABLE TO THE EMERGENCY IN  EDUCATION  TAX
 SURCHARGE  ESTABLISHED  BY THIS SECTION AND SHALL TRANSMIT SUCH FUNDS TO
 SUCH CITY IN A MANNER THAT ALLOWS SUCH FUNDS TO  BE  CLEARLY  SEGREGATED
 FROM ALL OTHER FUNDS AND ACCOUNTED FOR SEPARATELY. SUCH CITY SHALL MAIN-
 TAIN  SUCH FUNDS IN A SEPARATE FUND TO BE CALLED THE EMERGENCY IN EDUCA-
 TION TAX SURCHARGE REVENUE ACCOUNT AND SHALL PUBLISH MONTHLY REPORTS  ON
 SUCH  FUND'S  RECEIPTS, DISBURSEMENTS AND BALANCES IN A MANNER THAT WILL
 ALLOW FOR A CLEAR UNDERSTANDING OF THE FINANCIAL CONDITION OF SUCH  FUND
 AND  OF THE USES THAT HAVE BEEN MADE OF THE FUND'S RESOURCES.  DISBURSE-
 MENTS FROM THIS FUND SHALL BE IN ADDITION TO THE FUNDS THAT SUCH CITY IS
 REQUIRED TO MAKE FOR EDUCATIONAL PURPOSES PURSUANT TO SUBDIVISION FIVE-C
 OF SECTION TWENTY-FIVE HUNDRED SEVENTY-SIX OF THE EDUCATION LAW  AND  NO
 DISBURSEMENTS  FROM  THIS FUND OR OTHER FINANCIAL TRANSACTIONS INVOLVING
 THIS FUND SHALL BE TAKEN INTO CONSIDERATION IN ANY MANNER WHATSOEVER  IN
 DETERMINING  SUCH CITY'S COMPLIANCE WITH THE REQUIREMENTS OF SUCH SUBDI-
 VISION FIVE-C OF SECTION TWENTY-FIVE HUNDRED SEVENTY-SIX OF  THE  EDUCA-
 TION LAW.
   (I)  ANY  MONIES  GENERATED  BY  THIS SECTION SHALL BE USED FOR PUBLIC
 EDUCATION PURPOSES ONLY, INCLUDING HIRING AND RETAINING TEACHERS, TEACH-
 ER TRAINING, DECREASING CLASS SIZES, AND EQUIPPING AND BUILDING  FACILI-
 TIES.
   § 3. The education law is amended by adding a new section 2589 to read
 as follows:
   §  2589.  EMERGENCY  IN EDUCATION OPERATING AID. 1. IN ADDITION TO THE
 GENERAL OPERATING AID AUTHORIZED BY ANY OTHER SECTION OF LAW,  ANY  CITY
 IMPOSING  AN  EMERGENCY  IN  EDUCATION TAX SURCHARGE PURSUANT TO SECTION
 THIRTEEN HUNDRED FOUR-E OF THE TAX LAW SHALL RECEIVE  ADDITIONAL  APPOR-
 TIONMENTS  OF  PUBLIC  MONEY  FOR  GENERAL OPERATING AID PURPOSES, TO BE
 KNOWN AS EMERGENCY IN EDUCATION OPERATING AID, FOR SCHOOL YEARS COMMENC-
 ING ON AND AFTER JULY FIRST, TWO THOUSAND TWENTY-TWO  AS  SET  FORTH  IN
 SUBDIVISIONS TWO, THREE, FOUR, FIVE, SIX AND SEVEN OF THIS SECTION. SUCH
 APPORTIONMENTS SHALL BE IN ADDITION TO AND NOT IN LIEU OF THE APPORTION-
 MENTS  OF  PUBLIC  MONEY TO SUCH CITY FOR GENERAL OPERATING AID PURPOSES
 MADE AVAILABLE TO SUCH CITY  PURSUANT  TO  OTHER  SECTIONS  OF  LAW  AND

 S. 4403                             4
 
 PROVIDED  THAT  THE AMOUNTS MADE AVAILABLE TO SUCH CITY PURSUANT TO SUCH
 OTHER PROVISIONS OF LAW SHALL NOT IN ANY SCHOOL YEAR  COMMENCING  ON  OR
 AFTER  JULY  FIRST, TWO THOUSAND TWENTY-TWO BE LESS THAN THE AMOUNT MADE
 AVAILABLE  TO SUCH CITY FOR SUCH PURPOSES, WITH THE CATEGORIES OF AID TO
 BE COVERED BY THIS REQUIREMENT TO BE  DETERMINED  BY  THE  COMMISSIONER,
 DURING THE SCHOOL YEAR COMMENCING ON JULY FIRST, TWO THOUSAND TWENTY-ONE
 TIMES  A  NUMBER DETERMINED BY DIVIDING THE CONSUMER PRICE INDEX FOR ALL
 URBAN CONSUMERS FOR THE CALENDAR YEAR PRECEDING THE COMMENCEMENT OF  THE
 SCHOOL  YEAR  FOR  WHICH  SUCH  APPORTIONMENT  IS  BEING PROVIDED BY THE
 CONSUMER PRICE INDEX FOR ALL URBAN CONSUMERS FOR THE TWO THOUSAND  EIGH-
 TEEN CALENDAR YEAR.
   2.  FOR THE SCHOOL YEAR COMMENCING ON JULY FIRST, TWO THOUSAND TWENTY-
 TWO, SUCH EMERGENCY IN EDUCATION OPERATING AID SHALL BE AN AMOUNT  EQUAL
 TO  TWENTY  PERCENT OF THE AMOUNT TRANSMITTED TO SUCH A CITY PURSUANT TO
 SUBSECTION (H) OF SECTION THIRTEEN HUNDRED FOUR-E OF THE TAX LAW  DURING
 THE TWO THOUSAND EIGHTEEN CALENDAR YEAR.
   3.  FOR THE SCHOOL YEAR COMMENCING ON JULY FIRST, TWO THOUSAND TWENTY-
 THREE, SUCH EMERGENCY IN EDUCATION OPERATING  AID  SHALL  BE  AN  AMOUNT
 EQUAL  TO TWENTY PERCENT OF THE AMOUNT TRANSMITTED TO SUCH A CITY PURSU-
 ANT TO SUBSECTION (H) OF SECTION THIRTEEN HUNDRED FOUR-E OF THE TAX  LAW
 DURING THE TWO THOUSAND NINETEEN CALENDAR YEAR.
   4.    FOR THE SCHOOL YEAR COMMENCING ON JULY FIRST, TWO THOUSAND TWEN-
 TY-FOUR, SUCH EMERGENCY IN EDUCATION OPERATING AID SHALL  BE  AN  AMOUNT
 EQUAL TO FORTY PERCENT OF THE AMOUNT TRANSMITTED TO SUCH A CITY PURSUANT
 TO  SUBSECTION  (H)  OF  SECTION  THIRTEEN HUNDRED FOUR-E OF THE TAX LAW
 DURING THE TWO THOUSAND TWENTY CALENDAR YEAR.
   5. FOR THE SCHOOL YEAR COMMENCING ON JULY FIRST, TWO THOUSAND  TWENTY-
 FIVE, SUCH EMERGENCY IN EDUCATION OPERATING AID SHALL BE AN AMOUNT EQUAL
 TO  SIXTY  PERCENT  OF THE AMOUNT TRANSMITTED TO SUCH A CITY PURSUANT TO
 SUBSECTION (H) OF SECTION THIRTEEN HUNDRED FOUR-E OF THE TAX LAW  DURING
 THE TWO THOUSAND TWENTY-ONE CALENDAR YEAR.
   6.  FOR THE SCHOOL YEAR COMMENCING ON JULY FIRST, TWO THOUSAND TWENTY-
 SIX, SUCH EMERGENCY IN EDUCATION OPERATING AID SHALL BE AN AMOUNT  EQUAL
 TO  EIGHTY  PERCENT OF THE AMOUNT TRANSMITTED TO SUCH A CITY PURSUANT TO
 SUBSECTION (H) OF SECTION THIRTEEN HUNDRED FOUR-E OF THE TAX LAW  DURING
 THE TWO THOUSAND TWENTY-TWO CALENDAR YEAR.
   7.  FOR  THE SCHOOL YEAR COMMENCING ON AND AFTER JULY FIRST, TWO THOU-
 SAND TWENTY-SEVEN, SUCH EMERGENCY IN EDUCATION OPERATING AID SHALL BE AN
 AMOUNT EQUAL TO THE AMOUNT  TRANSMITTED  TO  SUCH  A  CITY  PURSUANT  TO
 SUBSECTION  (H) OF SECTION THIRTEEN HUNDRED FOUR-E OF THE TAX LAW DURING
 THE PRECEDING CALENDAR YEAR.
   8. THE MONEYS GENERATED BY THIS  SECTION  SHALL  BE  USED  FOR  PUBLIC
 EDUCATION PURPOSES ONLY, INCLUDING HIRING AND RETAINING TEACHERS, TEACH-
 ER  TRAINING,  DECREASING  CLASS SIZES AND EQUIPPING AND BUILDING CLASS-
 ROOMS.
   § 4. Section 2576 of the education law is  amended  by  adding  a  new
 subdivision 5-c to read as follows:
   5-C.  A.  IF THE TOTAL AMOUNT REQUESTED IN SUCH ESTIMATE IS NOT APPRO-
 PRIATED, EACH CITY HAVING A POPULATION OF ONE MILLION OR  MORE  INHABIT-
 ANTS SHALL APPROPRIATE AN AMOUNT NOT LESS THAN THE GREATER OF:
   (I)  THE  PRODUCT  OF  THE  CITY  SHARE IN THE BASE YEAR AND THE PUPIL
 CHANGE INDEX, AS SUCH TERMS ARE DEFINED IN PARAGRAPH C OF THIS  SUBDIVI-
 SION, OR
   (II)  AN  AMOUNT  EQUAL TO THE AVERAGE PROPORTION OF THE TOTAL EXPENSE
 BUDGET OF SUCH CITY, AS AMENDED,  NOT  INCLUDING  THE  PORTION  OF  SUCH
 EXPENSE BUDGET EQUAL TO THE TOTAL STATE AND FEDERAL AID APPROPRIATED FOR

 S. 4403                             5
 
 EDUCATION  PURPOSES,  APPROPRIATED  FOR THE PURPOSES OF SUCH CITY SCHOOL
 DISTRICT IN THE THREE FISCAL YEARS OF SUCH  CITY  IMMEDIATELY  PRECEDING
 THE YEAR FOR WHICH SAID ESTIMATE IS FILED.
   B.  IF  THE TOTAL AMOUNT REQUESTED IN THE ESTIMATE EXCEEDS THE GREATER
 OF THE TWO AMOUNTS COMPUTED IN PARAGRAPH A  OF  THIS  SUBDIVISION,  SUCH
 EXCESS  SHALL  BE  SUBJECT  TO SUCH CONSIDERATION AND SUCH ACTION BY THE
 APPROPRIATE CITY LEGISLATIVE BODY AND/OR CITY OFFICER AS THAT TAKEN UPON
 OTHER DEPARTMENTAL ESTIMATES.  THE CITY IS AUTHORIZED TO MAKE ADDITIONAL
 APPROPRIATIONS FOR EDUCATIONAL PURPOSES AUTHORIZED BY THIS CHAPTER.
   C. FOR THE PURPOSES OF THIS SUBDIVISION, THE TERMS:
   (I) "CITY SHARE" SHALL MEAN:  THE  TOTAL  APPROPRIATION  OF  ANY  CITY
 HAVING  A  POPULATION  OF ONE MILLION OR MORE INHABITANTS FOR ELEMENTARY
 AND SECONDARY EDUCATION PURPOSES AS DEFINED BY  THE  COMMISSIONER  MINUS
 THE  TOTAL  AMOUNT  OF FEDERAL AND STATE AID APPROPRIATED FOR ELEMENTARY
 AND SECONDARY EDUCATION PURPOSES;
   (II) "BASE YEAR" SHALL MEAN: THE FISCAL YEAR IMMEDIATELY PRECEDING THE
 FISCAL YEAR FOR WHICH THE ESTIMATE IS FILED;
   (III) "PUPIL CHANGE INDEX" SHALL MEAN: THE RATIO COMPUTED BY  DIVIDING
 THE  TOTAL PUBLIC SCHOOL ENROLLMENT OF THE CITY SCHOOL DISTRICT, INCLUD-
 ING ALL STUDENTS WHOLLY OR PARTIALLY SUPPORTED BY SUCH CITY'S FUNDS,  IN
 THE  YEAR  IN WHICH THE ESTIMATE IS FILED BY THE ENROLLMENT OF SUCH CITY
 SCHOOL DISTRICT IN THE YEAR IMMEDIATELY PRECEDING THE YEAR IN WHICH  THE
 ESTIMATE IS FILED.
   § 5. This act shall take effect immediately.