A04574 Summary:
BILL NO | A04574A |
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SAME AS | SAME AS S01297-A |
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SPONSOR | Steck |
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COSPNSR | Jacobson, Stirpe, Burke, Epstein, Simon, Lupardo, Hunter, Reyes, Williams, Kim, Benedetto, Rosenthal L, Joyner, Wallace, Fahy, Dinowitz, Cruz, Rivera, Taylor, Dickens, Gunther, Seawright, Carroll, Glick, Davila, Cook, Bronson, Bichotte Hermelyn, Darling, Anderson, Walker, Meeks, Kelles, Lunsford, Jean-Pierre, Zinerman, Clark, Burdick, Fall, Sillitti, Septimo, Simone, Conrad |
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MLTSPNSR | |
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Rpld §280-a, amd §270, Tax L; rpld §92-i, amd §§92-b & 93-b, St Fin L; rpld §11-503 sub (c), §11-604 sub 12, NYC Ad Cd; add §3-0323, En Con L | |
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Repeals the rebates for stock transfer tax paid; dedicates funds of the stock transfer tax fund and stock transfer incentive fund to various funds; establishes the safe water and infrastructure action program. |
A04574 Memo:
Go to topNEW YORK STATE ASSEMBLY
MEMORANDUM IN SUPPORT OF LEGISLATION
submitted in accordance with Assembly Rule III, Sec 1(f)   BILL NUMBER: A4574A SPONSOR: Steck
  TITLE OF BILL: An act to amend the state finance law, in relation to the repeal of the rebate for stock transfer tax paid and the funds of the stock transfer tax fund and the dedicated infrastructure investment fund; to amend the environmental conservation law, in relation to establishing the safe water infrastructure action program for the purpose of making payments toward the replacement and rehabilitation of existing local municipal- ly-owned and funded drinking water, storm water and sanitary sewer systems; to amend the tax law, in relation to taxes imposed in certain transactions; to repeal section 280-a of the tax law relating to the rebate for stock transfer tax paid; to repeal section 92-i of the state finance law relating to the stock transfer incentive fund; and to repeal certain provisions of the administrative code of the city of New York relating thereto   PURPOSE OR GENERAL IDEA OF BILL: To repeal the electronic rebate of the stock transfer tax, collect 100% of this tax and dedicate the funds to the state general fund commencing with the fiscal year and ending March 31, 2026, after which 100% of the funds collected will be deposited into the following: The Metropolitan Transportation Authority (MTA), the New York State Education Department (NYSED) to support Foundation Aid, the maint enance and repair of state and bridges (NYSDOT), the New Your City Housing Authority (NYCHA), the infrastructure, maintenance and dev elopment of passenger rail lines for AMTRAK in the northeast corridor, the Consol- idated Local Street and Highway Improvement Program (CHIPS), the munici- pal aid and incentives program (AIM), the safe water and infrastructure action program, the downstate and upstate transits systems, the Clean Energy Fund, the Department of Health, and the Department of Agriculture and Environmental Conservation and Parks for the proposes of reforesta- tion and soil conservation.   SUMMARY OF PROVISIONS: Section 1. To repeal the electronic rebate of the stock transfer tax, collect 100% of this tax and dedicate the funds to the state ge neral fund commencing with the fiscal year and ending March 31, 2023, after which 100% of the funds collected will be deposited into the following: i) ten percent shall be directed to the metropolitan transportation authority financial assistance fund established pursuant to section ninety-two-ff of this article, of which fifty percent shall be used for the purpose of operations and fifty percent shall be used for the purpose of capital projects; (ii) ten percent shall be directed to the division of housing and commu- nity renewal for the purpose of capital projects and other improvements to address issues relating to conditions of governance and habitability, including but not limited to, heating, mold, or lead, and other such conditions affecting the health and safety of tenants at housing devel- opments owned or operated by the New York city housing authority; (iii) five percent shall be directed to the highway and bridge capital account in the dedicated highway and bridge trust fund establi shed pursuant to section eighty-nine-b of this article; (iv) five percent shall be directed to the dedicated highway and bridge trust fund established pursuant to section eighty-nine-b of this arti- cle, to be directed towards the infrastructure, maintenance and develop- ment of rail lines for AMTRAK in the northeast corridor; (v) five percent shall be directed to the local infrastructure account of the general fund established pursuant to section seventy-two of this article to be directed to the Consolidated Local Street and Highway Improvement Program (CHIPS); (vi) five percent shall be directed to the local infrastructure account of the general fund to be dedicated to the safe water and infrastructure action program as established by section 3-0323 of the environmental conservation law; (vii) five percent shall be directed to the municipal assistance state aid fund established pursuant to section ninety-two-e of this article; (viii) five percent shall be directed to the dedicated mass transporta- tion trust fund to the credit of the non-MTA account for payment to downstate transit systems other than those transit systems operated by the metropolitan transportation authority; (ix) five percent shall be directed to the dedicated mass transportation trust fund to the credit of the non-MTA account for payment to upstate transit systems; (x) ten percent shall be directed to the energy research development operating fund pursuant to the provisions of section eighteen hundred fifty-nine of the public authorities law, to be directed to the clean energy fund and shall be divided equally among the four investment port- folios that make up such fund; (xi) two and one-half percent shall be directed to the city university of New York, of which fifty percent shall be used for the purp ose of capital improvements and infrastructure projects and fifty percent shall be used for the purpose of supporting academic programs at city of New York institutions; (xii) two and one-half percent shall be directed to the state university of New York institutions, of which fifty percent shall be used for the purposes of supporting and expanding services and care at state univer- sity of New York hospitals, state university of New York academic medical centers and fifty percent shall be used for the purpose of supporting academic programs at state university of New York insti- tutions; (xiii) ten percent shall be directed to the department of education for the purpose of supporting foundation aid; (xiv) ten percent shall be directed to the department of health to support health care; and (xv) ten percent shall be directed to the department of agriculture, department of environmental conservation, and office of parks, r ecrea- tion and historic preservation for the purposes of reforestation, soil conservation, sustainable agriculture, local parks and open space, Section 8: Establishes the Safe Water and Infrastructure Action Program; a stream of funding to local governments state-wide for the repair, maintenance and capital improvement of drinking water, storm water and sewer systems Section 9: Provides for the stock transfer tax to be collected should any activity in furtherance of the transaction occur in the State of New York or if any party involved in the transaction satisfies a nexus with New York State which shall be defined as broadly as it is permitted under the United States constitution. Section 10: Effective Date.   JUSTIFICATION: From 1905 to 1981, New York State imposed a tax on the sale of securi- ties. The State began rebating the tax in 1979 so that it is now 100% rebated back to the industry. As explained below, the 100% rebate is no longer justifiable. To transform New York, we must commit to raising revenue. Conservative- ly, the stock transfer tax will raise approximately $13 billion annually (based upon a 10-year average of collections). There is no other revenue stream, with the exception of the raising the state income tax, that will immediately raise this level of revenue. For years New York State has not committed to raising the revenue neces- sary to fund such basic programs as Education, CHIPS and AIM to a level that can actually achieve results. Our passenger rail system is multiple decades behind those of Europe, and our public tra nsportation system in the city of New York is being supported by fees and taxes on low- and middle-income individuals. The stock transfer tax is a revenue generator that operates as an indi- rect tax, rather than a direct tax, such as property or income. Stocks are also predominantly owned by the wealthiest of Americans. The top 10% of American households, as defined by total wealth, now own 84% of all stocks in 2016, according to a recent paper by NYU economist Edward N. Wolff. Furthermore, while virtually all (94 %) of the very rich reported having significant stock holdings-as defined as $10,000 or more in shares-only 27% of the middle class did. (The study framed that middle class as the group between the poorest 20% and the richest 20% of Americans.)1 The stock transfer tax is infinitesimal, as the schedule from the New York State Department of Taxation and Finance shows below: Sale or agreement to sell at less than1 1/4 C $5 per share Sale at $5 or more but less than $102 1/2 per share Sale at $10 or more but less than $203 % C per share Sale at $20 or more per share 5 C Transfers of stock or certificates of2 1/2 C interest other than by sale While the tax itself is infinitesimal, the volume of trading is what drives this revenue stream to at least $13 billion. During financial crises, trading volume increases (thus increasing the stock transfer tax revenue), while income and property tax revenues decrea se. This revenue will offset decreased state income tax collections and local property tax collections and has the potential to stabi lize our state budget when our direct tax revenues are falling, which, according to Comp- troller DiNapoli, is happening now. Due to recent global events, New York State finds itself in a fiscal crisis that must be addressed, and makes this legislation is all the more necessary. Additional benefits of this legislation would be the economic boom created by this revenue stream in employment, construction, and ot her ancillary businesses. With significant investment in education, health- care, infrastructure, and the lie, property values increase benefiting local governments.