S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1244
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             January 11, 2023
                                ___________
 
 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
 
 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 (bbb) to read as follows:
   (BBB) 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-
 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
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03735-01-3
              

 S. 1244                             2
 
 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 (I) FOR TAXABLE YEARS  BEGIN-
 NING  IN  TWO THOUSAND TWENTY-FIVE, 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 (I) FOR TAXABLE YEARS BEGINNING  IN
 TWO  THOUSAND TWENTY-FIVE 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-
 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
 S. 1244                             3
 
 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-FIVE:
 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-SIX:
 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-SEVEN:
 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-EIGHT AND THERE-
 AFTER:
 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  CLAUSE
 (IV)  OF  SUBPARAGRAPH  (A)  OF  THIS  PARAGRAPH  SHALL  BE  INDEXED FOR
 S. 1244                             4
 
 INFLATION FOR TAX YEARS BEGINNING IN TWO THOUSAND TWENTY-NINE AND THERE-
 AFTER.
   (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, 2027,  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.