Add §43, amd §§208, 210-B, 606 & 615, Tax L; add Art 25 §§1209 - 1217, §1503-a, Ed L
Establishes the "education affordability act"; provides credits against income and corporate franchise tax for various qualified education investments including scholarships, education funds and instructional materials.
STATE OF NEW YORK
________________________________________________________________________
5862--A
2017-2018 Regular Sessions
IN ASSEMBLY
February 16, 2017
___________
Introduced by M. of A. CUSICK, ARROYO, BENEDETTO, COLTON, CRESPO,
CYMBROWITZ, DenDEKKER, FITZPATRICK, GIGLIO, GJONAJ, GOODELL, HEVESI,
HIKIND, KOLB, LALOR, McDONALD, McLAUGHLIN, M. G. MILLER, MOYA, ORTIZ,
PALMESANO, PERRY, PRETLOW, RA, SIMANOWITZ, SIMOTAS, STEC, WEPRIN,
MONTESANO -- Multi-Sponsored by -- M. of A. BLANKENBUSH, COOK, LOPEZ,
MAGEE, SCHIMMINGER -- read once and referred to the Committee on Ways
and Means -- committee discharged, bill amended, ordered reprinted as
amended and recommitted to said committee
AN ACT to amend the tax law and the education law, in relation to enact-
ing the "education affordability act"
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. Short title. This act shall be known and may be cited as
2 the "education affordability act".
3 § 2. Legislative findings and intent. The legislature hereby finds and
4 declares that:
5 a. The education of the children of this state is one of the founda-
6 tions of a strong society that requires an academically robust and
7 financially sound school system, both public and non-public;
8 b. At a time when the state is considering ways of reducing the tax
9 burden for New York state residents and educators are seeking an expan-
10 sion of financial resources, charitable giving for educational purposes
11 should be encouraged;
12 c. Permitting public education entities such as school districts and
13 individual public schools to accept and receive voluntary cash contrib-
14 utions will be beneficial to students, taxpayers and educators;
15 d. Encouraging voluntary support for education, without prejudice for
16 or against any state-sanctioned educational enterprise, promotes the
17 state's interest in providing the highest quality education to all chil-
18 dren in the state;
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08079-03-7
A. 5862--A 2
1 e. The tax credit provided in this act is merely one of many credits
2 available to New York taxpayers;
3 f. The intended beneficiaries of the tax credits provided in this act
4 are the students who attend public schools, students who further their
5 education using tuition scholarships from educational scholarship organ-
6 izations, and teachers who purchase with personal funds to supply their
7 students and classrooms, and who seek charitable donations for classroom
8 projects and initiatives;
9 g. Permitting educators to claim a credit for the purchase of class-
10 room instructional materials and supplies will insure a wider availabil-
11 ity of such materials and supplies for all students.
12 § 3. The tax law is amended by adding a new section 43 to read as
13 follows:
14 § 43. Education affordability credit. (a) For the purposes of this
15 section, the terms "authorized contribution", "contribution", "educa-
16 tional program", "educational scholarship organization", "eligible
17 pupil", "local education fund", "non-public school", "public education
18 entity", "public school", "qualified contribution", "qualified educa-
19 tor", "qualified school", "scholarship" and "school improvement organ-
20 ization" shall have the same meaning as those terms are defined in
21 section twelve hundred ten of the education law.
22 (b) Allowance of credit. A taxpayer subject to tax under article
23 nine-A or twenty-two of this chapter shall be allowed an education
24 affordability credit against such tax, pursuant to the provisions refer-
25 enced in subdivision (l) of this section, with respect to qualified
26 contributions made during the taxable year.
27 (c) Amount of credit. For taxpayers whose federal adjusted gross
28 income is less than three hundred thousand dollars in the year in which
29 they make a qualified contribution, the amount of the credit shall be
30 ninety percent of the taxpayer's total qualified contributions. For
31 taxpayers whose household income is equal to or exceeds three hundred
32 thousand dollars in the year in which they make a qualified contrib-
33 ution, the amount of the credit shall be seventy-five percent of the
34 taxpayer's total qualified contributions. In no case shall a taxpayer
35 obtain a credit more than eight hundred seventy-five thousand dollars in
36 a tax year for qualified contributions. A taxpayer that is a partner in
37 a partnership, member of a limited liability company or shareholder in
38 an S corporation shall be allowed to claim its pro rata share of the
39 credit earned by the partnership, limited liability company or S corpo-
40 ration, provided that such a taxpayer shall not claim credit in excess
41 of the limit imposed by this subdivision.
42 (d) Information to be posted on the department's website. The commis-
43 sioner shall maintain on the department's website a running total of the
44 amount of available credit for which taxpayers may apply pursuant to
45 this section. Such running total shall be updated on a daily basis.
46 Additionally, the commissioner shall maintain on the department's
47 website a list of the school improvement organizations, local education
48 funds and educational scholarship organizations approved to issue
49 certificates of receipt pursuant to article twenty-five of the education
50 law. The commissioner shall also maintain on the department's website a
51 list of public education entities, school improvement organizations,
52 local education funds and educational scholarship organizations whose
53 approval to issue certificates of receipt has been revoked along with
54 the date of revocation.
55 (e) Applications for contribution authorization certificates. Prior to
56 making a contribution to a public education entity, school improvement
A. 5862--A 3
1 organization, local education fund, or educational scholarship organiza-
2 tion, the taxpayer shall apply to the department for a contribution
3 authorization certificate for such contribution. Such application shall
4 be in the form and manner prescribed by the department. The department
5 may allow taxpayers to make multiple applications on the same form,
6 provided that each contribution listed on such application shall be
7 treated as a separate application and that the department shall issue
8 separate contribution authorization certificates for each such applica-
9 tion.
10 (f) Contribution authorization certificates. 1. Issuance of certif-
11 icates. The commissioner shall issue contribution authorization certif-
12 icates in two phases. In phase one, which begins on the first day of
13 January and ends on the thirty-first day of January, the commissioner
14 shall accept applications for contribution authorization certificates.
15 Commencing after the fifth day of February, the commissioner shall issue
16 contribution authorization certificates for applications received during
17 phase one, provided that if the aggregate total of the contributions for
18 which applications have been received during phase one exceeds the
19 amount of the credit cap in subdivision (h) of this section, the author-
20 ized contribution amount listed on each contribution authorization
21 certificate shall equal the pro-rata share of the credit cap. If the
22 credit cap is not exceeded, phase two commences on February first and
23 ends on December thirty-first. The commissioner shall issue contribution
24 authorization certificates on a first-come, first serve basis based upon
25 the date the department received the taxpayer's application for such
26 certificate. Contribution authorization certificates for applications
27 received during phase one shall be mailed no later than the twentieth
28 day of February. Contribution authorization certificates for applica-
29 tions received during phase two shall be mailed within twenty days of
30 receipt of such applications. Provided however, that no contribution
31 authorization certificates for applications received during phase two
32 shall be issued until all of the contribution authorization certificates
33 for applications received during phase one have been issued.
34 2. Contribution authorization certificate contents. Each contribution
35 authorization certificate shall state (i) the date such certificate was
36 issued, (ii) the date by which the authorized contributions listed in
37 the certificate must be made, which shall be no later than December
38 thirty-first of the year for which the contribution authorization
39 certificate was issued, (iii) the taxpayer's name and address, (iv) the
40 amount of authorized contributions, (v) the contribution authorization
41 certificate's certificate number, (vi) the name and address of the
42 public education entity, school improvement organization, local educa-
43 tion fund or educational scholarship organization for which the taxpayer
44 may make the authorized contribution, and (vii) any other information
45 that the commissioner deems necessary.
46 3. Notification of the issuance of a contribution authorization
47 certificate. Upon issuance of a contribution authorization certificate,
48 the commissioner shall notify the educational scholarship organization,
49 public education entity, school improvement organization or local educa-
50 tion fund of the issuance of the contribution authorization certificate
51 to a taxpayer. Such notification shall include (i) the taxpayer's name
52 and address, (ii) the date such certificate was issued, (iii) the date
53 by which the authorized contribution listed in the notification must be
54 made by the taxpayer, (iv) the amount of the authorized contribution,
55 (v) contribution authorization certificate, and (vi) any other informa-
56 tion that the commissioner deems necessary.
A. 5862--A 4
1 (g) Certificate of receipt. 1. In general. No public education entity,
2 school improvement organization, local education fund, or educational
3 scholarship organization shall issue a certificate of receipt for any
4 contribution made by a taxpayer unless such public education entity,
5 school improvement organization, local education fund, or educational
6 scholarship organization has been approved to issue certificates of
7 receipt pursuant to article twenty-five of the education law. No public
8 education entity, school improvement organization, local education fund,
9 or educational scholarship organization shall issue a certificate of
10 receipt for a contribution made by a taxpayer unless such public educa-
11 tion entity, school improvement organization, local education fund, or
12 educational scholarship organization has received notice from the
13 department that the department issued a credit authorization certificate
14 to the taxpayer for such contribution.
15 2. Timely contribution. If a taxpayer makes an authorized contribution
16 to the public education entity, school improvement organization, local
17 education fund, or educational scholarship organization set forth on the
18 authorization certificate issued to the taxpayer no later than the date
19 by which such authorized contribution is required to be made, such
20 public education entity, school improvement organization, local educa-
21 tion fund, or educational scholarship organization shall, within thirty
22 days of receipt of the authorized contribution, issue to the taxpayer a
23 written certificate of receipt; provided, however, that if the taxpayer
24 contributes an amount that is less than the amount listed on the taxpay-
25 er's contribution authorization certificate, the taxpayer shall not be
26 issued a certificate of receipt for such contribution.
27 3. Certificate of receipt contents. Each certificate of receipt shall
28 state (i) the name and address of the issuing public education entity,
29 school improvement organization, local education fund, or educational
30 scholarship organization, (ii) the taxpayer's name and address, (iii)
31 the date for each contribution, (iv) the amount of each contribution and
32 the corresponding contribution authorization certificate number, (v) the
33 total amount of contributions, and (vi) any other information that the
34 commissioner may deem necessary.
35 4. Notification to the department for the issuance of a certificate of
36 receipt. Upon the issuance of a certificate of receipt, the issuing
37 public education entity, school improvement organization, local educa-
38 tion fund, or educational scholarship organization shall, within thirty
39 days of issuing the certificate of receipt, provide the department with
40 notification of the issuance of such certificate in the form and manner
41 prescribed by the department.
42 5. Notification to the department of the non-issuance of a certificate
43 of receipt. Each public education entity, school improvement organiza-
44 tion, local education fund, or educational scholarship organization that
45 received notification from the department pursuant to subdivision (d) of
46 this section regarding the issuance of a contribution authorization
47 certificate to a taxpayer shall, within thirty days of the expiration
48 date for such authorized contribution, provide notification to the
49 department for each taxpayer that failed to make the authorized contrib-
50 ution to such public education entity, school improvement organization,
51 local education fund, or educational scholarship organization in the
52 form and manner prescribed by the department.
53 6. Failure to notify the department. Within thirty days of discovery
54 of the failure of any public education entity, school improvement organ-
55 ization, local education fund, or educational scholarship organization
56 to comply with the notification requirements prescribed by paragraphs
A. 5862--A 5
1 four and five of this subdivision, the commissioner shall issue a notice
2 of compliance failure to such entity, program fund or organization. Such
3 entity, program fund or organization shall have thirty days from the
4 date of such notice to make the notifications prescribed by paragraphs
5 four and five of this subdivision. Such period may be extended for an
6 additional thirty days upon the request of the entity, program fund or
7 organization. Upon the expiration of the period for compliance set forth
8 in the notice prescribed by this paragraph, the commissioner shall noti-
9 fy the board of regents and the commissioner of education that such
10 entity, program fund or organization failed to make the notifications
11 prescribed by paragraphs four and five of this subdivision.
12 (h) Credit cap. The maximum permitted credits under this section
13 available to all taxpayers for qualified contributions for calendar year
14 two thousand eighteen shall be one hundred fifty million dollars. In
15 calendar year two thousand nineteen, the maximum permitted credits under
16 this section available to all taxpayers shall be two hundred twenty-five
17 million dollars plus any amounts that are required to be added to the
18 cap pursuant to subdivision (i) of this section. For calendar year two
19 thousand twenty and each calendar year thereafter, the maximum permitted
20 credits under this section available to all taxpayers shall be three
21 hundred million dollars, plus any amounts that are required to be added
22 to the cap pursuant to subdivision (i) of this section. The maximum
23 permitted credits under this section for qualified contributions shall
24 be allocated fifty percent to public education entities, school improve-
25 ment organizations, and local education funds and fifty percent to
26 educational scholarship organizations.
27 (i) Additions to the credit cap. Unissued certificates of receipt. Any
28 amounts for which the department receives notification of non-issuance
29 of a certificate of receipt shall be added to the cap prescribed in
30 subdivision (h) of this section for the immediately following year.
31 (j) Regulations. The commissioner is hereby authorized to promulgate
32 and adopt on an emergency basis regulations necessary for the implemen-
33 tation of this section.
34 (k) Reports. 1. Reports to the commissioner. On or before the last day
35 of February for each calendar year, each public education entity, school
36 improvement organization, local education fund, and educational scholar-
37 ship organization that issued one or more certificates of receipt shall
38 report to the commissioner the number of such certificates issued and
39 the aggregate amount of qualified contributions made to such entity,
40 fund, or organization during the immediately preceding calendar year.
41 2. Joint annual report. On or before the last day of June for each
42 calendar year, for the immediately preceding year, the commissioner and
43 the commissioner of education shall jointly submit a written report to
44 the governor, the temporary president of the senate, the speaker of the
45 assembly, the chairman of the senate finance committee and the chairman
46 of the assembly ways and means committee regarding the credit. Such
47 report shall contain information for articles nine-A and twenty-two,
48 respectively, regarding: (i) the number of applications received; (ii)
49 the number of and aggregate value of the contribution authorization
50 certificates issued for contributions to public education entities,
51 school improvement organizations, local education funds, and scholarship
52 organizations, respectively; (iii) the geographical distribution by
53 county of (A) the applications for contribution authorization certif-
54 icates, distribution by county of (B) the public education entities,
55 school improvement organizations, local education funds, and educational
56 scholarship organizations listed on the issued contribution authori-
A. 5862--A 6
1 zation certificates; and (iv) information, including geographical
2 distribution by county, of the number of eligible pupils that received
3 scholarships, the number of eligible pupils that reside in a household
4 that has an income not to exceed one hundred fifty percent of the income
5 qualification required for the reduced price school lunches under the
6 National School Lunch Act, the number of qualified schools attended by
7 eligible pupils that received such scholarships, and the average value
8 of scholarships received by such eligible pupils. The commissioner and
9 designated employees of the state education department, the board of
10 regents and all members of the board of regents, including the commis-
11 sioner of education and designated employees of the state education
12 department, shall be allowed and are directed to share and exchange
13 information regarding the school improvement organizations, local educa-
14 tion funds and educational scholarship organizations that applied for
15 approval to be authorized to receive qualified contributions; and the
16 public education entities, school improvement organizations, local
17 education funds, and educational scholarship organizations authorized to
18 issue certificates of receipt, including information contained in or
19 derived from application forms and reports submitted to the state educa-
20 tion department or board of regents.
21 (l) Cross references. For application of the credit provided for in
22 this section, see the following provisions of this chapter:
23 1. Article 9-A: section 210-B; subdivision 49;
24 2. Article 22: section 606; subsections (i) and (ccc).
25 § 4. Paragraph (b) of subdivision 9 of section 208 of the tax law is
26 amended by adding a new subparagraph 22 to read as follows:
27 (22) The amount of any deduction allowed pursuant to section one
28 hundred seventy of the internal revenue code for which credit is claimed
29 pursuant to subdivision forty-nine of section two hundred ten-B of this
30 article.
31 § 5. Section 210-B of the tax law is amended by adding a new subdivi-
32 sion 49 to read as follows:
33 49. Education affordability credit. (a) Allowance of credit. A taxpay-
34 er shall be allowed a credit, to be computed as provided in section
35 forty-three of this chapter, against the tax imposed by this article.
36 (b) Application of credit. The credit allowed under this subdivision
37 for any taxable year shall not reduce the tax due for that year to less
38 than the higher of the amounts prescribed in paragraph (d) of subdivi-
39 sion one of section two hundred ten of this article. However, if the
40 amount of credit allowed under this subdivision for qualified contrib-
41 utions for any taxable year reduces the tax to such amount, any amount
42 of credit thus not deductible in such taxable year may be carried over
43 to the succeeding five years and may be deducted from the taxpayer's tax
44 for such year or years.
45 § 6. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
46 of the tax law is amended by adding a new clause (xliii) to read as
47 follows:
48 (xliii) EducationAmount of credit under subdivision
49 affordability credit underforty-nine of section two hundred
50 subsection (ccc)ten-B
51 § 7. Section 606 of the tax law is amended by adding a new subsection
52 (w) to read as follows:
53 (w) Instructional materials and supplies credit. (1) For taxable years
54 beginning on and after January first, two thousand eighteen, a taxpayer
55 shall be allowed a credit in the amount paid by the taxpayer during the
56 taxable year for instructional materials and supplies with respect to
A. 5862--A 7
1 classroom based instruction in a qualified school, or two hundred
2 dollars, whichever is less; provided that the taxpayer is a teacher or
3 instructor in a qualified school, as defined in section forty-three of
4 this chapter, for at least nine hundred hours during a school year. For
5 purposes of this subsection, the term "materials and supplies" means
6 amounts paid for instructional materials or supplies that are designated
7 for classroom use in any qualified school.
8 (2) A husband and wife who file separate returns for a taxable year in
9 which they could have filed a joint return may each claim only one-half
10 of the tax credit that would have been allowed for a joint return.
11 (3) If the amount of the credit allowed under this subsection for any
12 taxable year shall exceed the taxpayer's tax for such year, the excess
13 shall be treated as an overpayment of tax to be credited or refunded in
14 accordance with the provisions of section six hundred eighty-six of this
15 article, provided, however, that no interest shall be paid thereon.
16 § 8. Section 606 of the tax law is amended by adding a new subsection
17 (ccc) to read as follows:
18 (ccc) Education affordability credit. (1) Allowance of credit. A
19 taxpayer shall be allowed a credit to be computed as provided in section
20 forty-three of this chapter, against the tax imposed by this article.
21 (2) Application of credit. If the amount of the credit allowed under
22 this subsection for any qualified contributions for any taxable year
23 exceeds the taxpayer's tax for such year, the excess may be carried over
24 to the succeeding five years and may be deducted from the taxpayer's tax
25 for such year or years.
26 § 9. Subsection (c) of section 615 of the tax law is amended by adding
27 a new paragraph 9 to read as follows:
28 (9) The amount of any federal deduction for contributions made for
29 which a taxpayer claims a credit under subsection (kk) of section six
30 hundred six of this article.
31 § 10. Section 606 of the tax law is amended by adding a new subsection
32 (hhh) to read as follows:
33 (hhh) Family choice education credit. (1) General. A resident taxpayer
34 shall be allowed a credit, to be computed as provided in paragraph four
35 of this subsection, against the tax imposed by this article, for quali-
36 fied primary or secondary education tuition expenses.
37 (2) Definitions. For the purposes of this subsection:
38 (A) The term "eligible student" shall mean any dependent of the
39 taxpayer with respect to whom the taxpayer is allowed an exemption under
40 section six hundred sixteen of this article for the taxable year.
41 (B) The term "qualified primary or secondary education tuition
42 expenses" shall mean the tuition required for the enrollment or attend-
43 ance of an eligible student at a qualified school, as defined in section
44 forty-three of this chapter. Provided, however, tuition payments made
45 pursuant to the receipt of any scholarships or financial aid shall be
46 excluded from the definition of "qualified primary or secondary educa-
47 tion tuition expenses".
48 (3) Eligibility. To be eligible for this credit, taxable income, as
49 found on line 43 of the internal revenue service form 1040 of the
50 taxpayer may not exceed one hundred ten thousand dollars for households
51 with up to one dependent, provided, however, that such income amounts
52 shall increase by twenty-two thousand seven hundred seventy dollars for
53 each additional dependent.
54 (4) Joint return filers. A husband and wife who file separate returns
55 for a taxable year in which they could have filed a joint return may
A. 5862--A 8
1 each claim only one-half of the tax credit that would have been allowed
2 for a joint return.
3 (5) Amount of credit. The amount of the credit shall be equal to the
4 lesser of twelve hundred dollars or the actual amount of qualified
5 primary or secondary education tuition expenses paid by the taxpayer for
6 all eligible students during the taxable year, provided that such credit
7 shall increase at the same percentage increase in state aid to public
8 schools as reported in the New York state enacted budget financial plan.
9 (6) Application of credit. If the amount of the credit allowed under
10 this subsection for any taxable year shall exceed the taxpayer's tax for
11 such year, the excess shall be treated as an overpayment of tax to be
12 credited or refunded in accordance with the provisions of section six
13 hundred eighty-six of this article, provided, however, that no interest
14 shall be paid thereon.
15 § 11. The education law is amended by adding a new article 25 to read
16 as follows:
17 ARTICLE 25
18 EDUCATION AFFORDABILITY CREDIT PROGRAM
19 Section 1209. Short title.
20 1210. Definitions.
21 1211. Approval to issue certificates of receipt.
22 1212. Applications for approval to issue certificates of
23 receipt.
24 1213. Application approval.
25 1214. Revocation of approval to issue certificates of receipt.
26 1215. Reporting and recordkeeping.
27 1216. Joint annual report.
28 1217. Commissioner; powers.
29 § 1209. Short title. This article shall be known and may be cited as
30 the "education affordability credit program".
31 § 1210. Definitions. As used in this article, the following terms
32 shall have the following meanings:
33 1. "Authorized contribution" means the contribution amount listed on
34 the contribution authorization certificate issued to a taxpayer.
35 2. "Contribution" means a donation paid by cash, check, electronic
36 funds transfer, debit card or credit card made by the taxpayer during
37 the tax year.
38 3. "Educational program" means an academic program of a public school
39 that enhances the curriculum or academic program of the public school,
40 or provides or expands a pre-kindergarten program or an after school
41 program to the public school. For purposes of this definition, the
42 instruction, materials, programs or other activities offered by or
43 through an educational program may include, but are not limited to, the
44 following features: (a) instruction or materials promoting health, phys-
45 ical education, and family and consumer sciences; literary, performing
46 and visual arts; mathematics, social studies, technology and scientific
47 achievement; (b) instruction or programming to meet the education needs
48 of at-risk students or students with disabilities, including tutoring or
49 counseling; or (c) use of specialized instructional materials, instruc-
50 tors or instruction not provided by a public school.
51 4. "Educational scholarship organization" means a not-for-profit enti-
52 ty which (i) is exempt from taxation under paragraph three of subsection
53 (c) of section five hundred one of the internal revenue code, (ii)
54 commits for the expenditure of or designates at least ninety percent of
55 the revenue from qualified contributions received during the calendar
56 year and any income derived from qualified contributions for scholar-
A. 5862--A 9
1 ships, (iii) provides more than fifty percent of its scholarships during
2 a calendar year to eligible pupils who reside in a household that has an
3 income not to exceed one hundred fifty percent of the income qualifica-
4 tion required for the reduced price school lunches under the National
5 School Lunch Act, provided however for the purposes of an educational
6 scholarship organization fulfilling such requirement, an educational
7 scholarship organization may enter into an agreement with another educa-
8 tional scholarship organization or organizations to jointly report their
9 scholarship information to meet such requirement; (iv) deposits and
10 holds qualified contributions and any income derived from qualified
11 contributions in an account that is separate from the organization's
12 operating or other funds until such qualified contributions or income
13 are withdrawn for use, and (v) provides scholarships to eligible pupils
14 for use at not fewer than three non-public schools.
15 5. "Eligible pupil" means a child who (i) is a resident of this state,
16 (ii) is school age in accordance with subdivision one of section thir-
17 ty-two hundred two of this chapter or who is four years of age on or
18 before December first of the year in which they are enrolled in a pre-
19 kindergarten program, (iii) attends or is about to attend a qualified
20 school, and (iv) resides in a household which has a federal adjusted
21 gross income of two hundred fifty thousand dollars or less, provided
22 however, for households with three or more dependent children, such
23 income level shall be increased by ten thousand dollars per dependent
24 child in excess of two children, not to exceed three hundred thousand
25 dollars.
26 6. "Local education fund" means a not-for-profit entity which (i) is
27 exempt from taxation under paragraph three of subsection (c) of section
28 five hundred one of the internal revenue code, (ii) is established for
29 the purpose of supporting at least one public school, or a public school
30 district, (iii) uses at least ninety percent of the qualified contrib-
31 utions received during the calendar year and any income derived from
32 such qualified contributions to support the public school or schools or
33 public school district or districts that such fund has been established
34 to support, and (iv) deposits and holds qualified contributions and any
35 income derived from qualified contributions in an account that is sepa-
36 rate from the fund's operating or other funds until such qualified
37 contributions or income are withdrawn for use.
38 7. "Non-public school" means any not-for-profit pre-kindergarten
39 program or elementary, secondary sectarian or nonsectarian school, other
40 than a public school, that is providing instruction at one or more
41 locations to an eligible pupil in accordance with subdivision two of
42 section thirty-two hundred four of this chapter.
43 8. "Public education entity" means a public school district or a
44 public school, provided that such public school district or public
45 school deposits and holds qualified contributions and any income derived
46 from qualified contributions in an account that is separate from the
47 public school or public school district's operating or other funds until
48 such qualified contributions or income are withdrawn for use from oper-
49 ating or other funds and is approved to receive authorized contributions
50 and issue certificates of receipt pursuant to this article.
51 9. "Public school" means any free elementary or secondary school in
52 this state pursuant to article eleven of the New York constitution, but
53 shall not include a charter school authorized by article fifty-six of
54 this chapter.
55 10. "Qualified contribution" means the authorized contribution made by
56 a taxpayer to a public education entity, local education fund, school
A. 5862--A 10
1 improvement district or educational scholarship organization that is
2 listed on the contribution authorization certificate issued to the
3 taxpayer and for which the taxpayer has received a certificate of
4 receipt from such entity, fund, or organization. A contribution does
5 not qualify if the taxpayer designates the taxpayer's contribution to an
6 entity or organization for the direct benefit of any particular or spec-
7 ified student.
8 11. "Qualified educator" means an individual who is a teacher or
9 instructor in a qualified school for at least nine hundred hours during
10 a school year.
11 12. "Qualified school" means a public school or non-public school
12 located in this state.
13 13. "Scholarship" means an educational scholarship which provides a
14 tuition grant awarded to an eligible pupil to attend a qualified school
15 in an amount not to exceed the tuition charged to attend such school
16 less any other educational scholarship received by such eligible pupil
17 or his or her parent, parents, legal guardian or legal guardians for
18 such eligible pupil's tuition; provided, however, in the case of an
19 eligible pupil attending a public school in a district of which such
20 pupil is not a resident, the amount of the educational scholarship
21 awarded may not exceed the tuition charged by the public school pursuant
22 to paragraph d of subdivision four of section thirty-two hundred two of
23 this chapter less any other educational scholarship or tuition grant
24 received by such eligible pupil or his or her parent, parents, legal
25 guardian or legal guardians for such eligible pupil's tuition, but only
26 if the school district of which such pupil is a resident is not required
27 to pay for such tuition.
28 14. "School improvement organization" means a not-for-profit entity
29 which (i) is exempt from taxation under paragraph three of subsection
30 (c) of section five hundred one of the internal revenue code, (ii) uses
31 at least ninety percent of the qualified contributions received during
32 the calendar year and any income derived from qualified contributions
33 during such months to assist public schools or public school districts
34 located in this state in their provision of educational programs, either
35 by making contributions to one or more public schools or public school
36 districts located in this state or providing educational programs to, or
37 in conjunction with, one or more public schools or public school
38 districts located in this state, (iii) deposits and holds qualified
39 contributions and any income derived from qualified contributions in an
40 account that is separate from the organization's operating or other
41 funds until such qualified contributions or income are withdrawn for
42 use, and (iv) is approved to issue certificates of receipt pursuant to
43 this article. Such term includes a pre-kindergarten program or not-for-
44 profit entity that allows the taxpayer to choose to donate to a program,
45 project or initiative identified by a qualified educator for use in a
46 public school.
47 § 1211. Approval to issue certificates of receipt. 1. Public schools
48 and public school districts. All public schools and public school
49 districts shall be approved to issue certificates of receipt provided,
50 that a public school or public school district shall not be approved if
51 either (i) such public school or public school district fails to deposit
52 and hold qualified contributions and any income derived from qualified
53 contributions in an account that is separate from the school or school
54 district's operating or other funds until such qualified contributions
55 or income are withdrawn for use, or (ii) the board of regents has
A. 5862--A 11
1 revoked such approval for such public school or public school district
2 pursuant to section twelve hundred fourteen of this article.
3 2. School improvement organizations, educational scholarship organiza-
4 tions and local education funds. No school improvement organization,
5 educational scholarship organization or local education fund shall issue
6 any certificates of receipt without filing an application pursuant to
7 section twelve hundred twelve and receiving approval pursuant to section
8 twelve hundred thirteen of this article.
9 § 1212. Applications for approval to issue certificates of receipt.
10 Each school improvement organization, educational scholarship organiza-
11 tion and local education fund shall submit an application to the board
12 of regents for approval to issue certificates of receipt in the form and
13 manner prescribed by the board of regents, provided that such applica-
14 tion shall include: (1) submission of documentation that such school
15 improvement organization, local education fund or educational scholar-
16 ship organization has been granted exemption from taxation under para-
17 graph three of subsection (c) of section five hundred one of the inter-
18 nal revenue code; (2) the most recent annual financial audit, which
19 shall be completed by an independent certified public accountant, and a
20 list of names and addresses of all members of the governing board of the
21 school improvement organization, local education fund or educational
22 scholarship organization; and (3) an educational scholarship organiza-
23 tion shall provide criteria for the awarding of scholarships to eligible
24 students. The board of regents, commissioner or department shall not
25 require any other information for such application except as authorized
26 in this article or by section forty-three of the tax law.
27 § 1213. Application approval. In general. The board of regents shall
28 review each application to issue certificates of receipt pursuant to
29 this article. Approval or denial of an application shall be made at the
30 next scheduled meeting of the board of regents that follows receipt of
31 such application, but not later than the next meeting thereafter.
32 § 1214. Revocation of approval to issue certificates of receipt. The
33 board of regents, in consultation with the commissioner of taxation and
34 finance, may revoke the approval of a school improvement organization,
35 educational scholarship organization, local education fund, public
36 school or public school district to issue certificates of receipt upon a
37 finding that such organization, fund, school or school district has
38 violated this article or section forty-three of the tax law. These
39 violations shall include, but not be limited to, any of the following:
40 (1) failure to meet the requirements of this article or section forty-
41 three of the tax law, (2) the failure to maintain full and adequate
42 records with respect to the receipt of qualified contributions, (3) the
43 failure to supply such records to the commissioner, department of taxa-
44 tion and finance, the department or the board of regents when requested
45 by the department or board of regents, or (4) the failure to provide
46 notice to the department of taxation and finance of the issuance or
47 non-issuance of certificates of receipt pursuant to section forty-three
48 of the tax law; provided, however, that the board of regents shall not
49 revoke approval pursuant to this section based upon a violation of the
50 tax law unless the commissioner of taxation and finance agrees that
51 revocation is warranted; and provided further that the board of regents
52 shall not revoke approval pursuant to this section when the failure to
53 comply is due to clerical error and not negligence or intentional disre-
54 gard for the law. Within five days of the determination revoking
55 approval, the commissioner shall provide notice of such revocation to
56 the educational scholarship organization, school improvement organiza-
A. 5862--A 12
1 tion, local education fund, public school, or public school district and
2 to the department of taxation and finance.
3 § 1215. Reporting and recordkeeping. 1. Reporting. Each educational
4 scholarship organization, school improvement organization, local educa-
5 tion fund, public school and public school district that receives quali-
6 fied contributions shall report to the commissioner and the board of
7 regents by the last day of February of each calendar year. Such report
8 shall be in the form and manner prescribed by the commissioner in
9 consultation with the board of regents, which shall include an annual
10 financial audit from an independent certified public accountant and
11 shall not exceed the requirements necessary to produce the information
12 pursuant to section twelve hundred sixteen of this article.
13 2. Recordkeeping. Each educational scholarship organization, school
14 improvement organization, local education fund, public school and public
15 school district that issued at least one certificate of receipt shall
16 maintain records including (a) notifications received from the depart-
17 ment of taxation and finance, (b) notifications made to the department
18 of taxation and finance, (c) copies of qualified contributions received,
19 (d) copies of the deposit of such qualified contributions, (e) copies of
20 issued certificates of receipt, (f) annual financial statements, (g) in
21 the case of school improvement organizations, educational scholarship
22 organizations and local education funds, the application submitted
23 pursuant to section twelve hundred twelve of this article and the
24 approval issued by the board of regents, and (h) any other information
25 as prescribed by regulation promulgated by the commissioner or rule
26 promulgated by the board of regents.
27 § 1216. Joint annual report. On or before the last day of June for
28 each calendar year, the commissioner of taxation and finance and the
29 commissioner, jointly, shall submit a written report as provided in
30 paragraph two of subdivision (j) of section forty-three of the tax law.
31 § 1217. Commissioner; powers. The commissioner shall promulgate on an
32 emergency basis regulations necessary for the implementation of this
33 section. The commissioner shall make any application required to be
34 filed pursuant to this article available to applicants within sixty days
35 of the effective date of this article.
36 § 12. The education law is amended by adding a new section 1503-a to
37 read as follows:
38 § 1503-a. Power to accept and solicit gifts and donations. 1. All
39 school districts organized by special laws or pursuant to the provisions
40 of a general law are hereby authorized and empowered to accept gifts,
41 donations, and contributions to the district and to solicit the same.
42 2. Notwithstanding any other provision of this chapter or of any other
43 general or special law to the contrary, the receipt of such gifts,
44 donations, contributions and other funds, and any income derived there-
45 from, shall be disregarded for the purposes of all apportionments,
46 computations, and determinations of state aid.
47 § 13. Severability. If any provision of this section or the applica-
48 tion thereof to any person or circumstances is held invalid, such inva-
49 lidity shall not affect other provisions or applications of the section
50 which can be given effect without the invalid provision or application,
51 and to this end the provisions of this section are declared to be sever-
52 able.
53 § 14. This act shall take effect immediately and shall apply to taxa-
54 ble years beginning after December 31, 2017.
