Bill Text: NY S04366 | 2017-2018 | General Assembly | Amended
Bill Title: Establishes the "education affordability act" and tax credit; provides credits against income and corporate franchise tax for various qualified education investments including scholarships, education funds and home-based instructional materials.
Spectrum: Bipartisan Bill
Status: (Introduced - Dead) 2018-01-03 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S04366 Detail]
Download: New_York-2017-S04366-Amended.html
STATE OF NEW YORK ________________________________________________________________________ 4366--A 2017-2018 Regular Sessions IN SENATE February 10, 2017 ___________ Introduced by Sens. GOLDEN, SAVINO, FELDER, ADDABBO, MARCHIONE, SERINO -- read twice and ordered printed, and when printed to be committed to the Committee on Investigations and Government Operations -- 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. The tax law is amended by adding a new section 44 to read as 4 follows: 5 § 44. Education affordability tax credit. (a) Definitions. For the 6 purposes of this section, the following terms shall have the same defi- 7 nition as provided for in article twenty-five of the education law: 8 "Authorized contribution"; 9 "Contribution"; 10 "Educational program"; 11 "Educational scholarship organization"; 12 "Eligible pupil"; 13 "Local education fund"; 14 "Nonpublic school"; 15 "Public education entity"; 16 "Public school"; 17 "Qualified contribution"; 18 "Qualified educator"; 19 "Qualified school"; 20 "Scholarship"; and 21 "School improvement organization". EXPLANATION--Matter in italics (underscored) is new; matter in brackets [] is old law to be omitted. LBD06396-06-7S. 4366--A 2 1 (b) Allowance of credit. A taxpayer subject to tax under article 2 nine-A or twenty-two of this chapter shall be allowed credit against 3 such tax, pursuant to the provisions referenced in subdivision (l) of 4 this section, with respect to qualified contributions made during the 5 taxable year. 6 (c) Amount of credit. For taxpayers whose federal adjusted gross 7 income is less than three hundred thousand dollars for the taxable year 8 during which such taxpayer made at least one qualified contribution, the 9 amount of the credit shall be ninety percent of the taxpayer's total 10 qualified contributions, capped at eight hundred seventy-five thousand 11 dollars. For taxpayers whose federal adjusted gross income is greater 12 than or equal to three hundred thousand dollars for the taxable year 13 during which such taxpayer made at least one qualified contribution, the 14 amount of credit shall be seventy-five percent of the taxpayer's total 15 qualified contributions, capped at eight hundred seventy-five thousand 16 dollars. A taxpayer that is a partner in a partnership, member of a 17 limited liability company or shareholder in an S corporation shall be 18 allowed to claim its pro rata share of the credit earned by the partner- 19 ship, limited liability company or S corporation, provided that such a 20 taxpayer shall not claim credit in excess of eight hundred seventy-five 21 thousand dollars. 22 (d) Information to be posted on the department's website. The commis- 23 sioner shall maintain on the department's website a running total of the 24 amount of available credit for which taxpayers may apply pursuant to 25 this section. Such running total shall be updated on a daily basis. 26 Additionally, the commissioner shall maintain on the department's 27 website a list of the school improvement organizations, local education 28 funds and educational scholarship organizations approved to issue 29 certificates of receipt pursuant to article twenty-five of the education 30 law. The commissioner shall also maintain on the department's website a 31 list of public education entities, school improvement organizations, 32 local education funds and educational scholarship organizations whose 33 approval to issue certificates of receipt has been revoked along with 34 the date of revocation. 35 (e) Applications for contribution authorization certificates. Prior to 36 making a contribution to a public education entity, school improvement 37 organization, local education fund, or educational scholarship organiza- 38 tion, the taxpayer shall apply to the department for a contribution 39 authorization certificate for such contribution. Such application shall 40 be in the form and manner prescribed by the department. The department 41 may allow taxpayers to make multiple applications on the same form, 42 provided that each contribution listed on such application shall be 43 treated as a separate application and that the department shall issue 44 separate contribution authorization certificates for each such applica- 45 tion. 46 (f) Contribution authorization certificates. 1. Issuance of certif- 47 icates. The commissioner shall issue contribution authorization certif- 48 icates in two phases. In phase one, which begins on the first day of 49 January and ends on the thirty-first day of January, the commissioner 50 shall accept applications for contribution authorization certificates. 51 Commencing after the fifth day of February, the commissioner shall issue 52 contribution authorization certificates for applications received during 53 phase one, provided that if the aggregate total of the contributions for 54 which applications have been received during phase one exceeds the 55 amount of the credit cap in subdivision (h) of this section, then phase 56 one of the credit cap application shall be allocated in two steps. InS. 4366--A 3 1 step one, the allocation shall equal the contribution cap divided by the 2 total number of applications for contributions, rounded down to the 3 nearest cent. Each application requesting an amount which is less than 4 or equal to the allocation in step one shall receive the amount on their 5 application for contribution and the difference, which shall be referred 6 to as "excess distributions" for the purposes of this subdivision, shall 7 be available for allocation in step two. Each application requesting an 8 amount which exceeds the allocation in step one shall be allocated cred- 9 its in step two. In step two, if excess distributions equal zero then 10 each application shall receive the allocation amount from step one, 11 otherwise each application shall receive an amount equal to the sum of 12 the (i) the allocation amount in step one and (ii) a pro rata share of 13 aggregate excess distributions based on the difference between the 14 amount on their application for contribution and the allocation in step 15 one. For the purposes of this subdivision, multiple applications by the 16 same taxpayer shall be treated as one application. If the credit cap is 17 not exceeded, phase two commences on February twentieth and ends on 18 October thirty-first. During phase two the commissioner shall issue 19 contribution authorization certificates on a first-come first serve 20 basis based upon the date the department received the taxpayer's appli- 21 cation for such certificate. Contribution authorization certificates 22 for applications received during phase one shall be mailed no later than 23 the twentieth day of February. Contribution authorization certificates 24 for applications received during phase two shall be mailed within five 25 days of receipt of such applications. 26 2. Contribution authorization certificate contents. Each contribution 27 authorization certificate shall state (i) the date such certificate was 28 issued, (ii) the date by which the authorized contribution listed on the 29 certificate must be made, which shall be no later than December thirty- 30 first of the year for which the contribution authorization certificate 31 was issued, (iii) the amount of authorized contribution, (iv) the 32 certificate number, (v) the taxpayer's name and address, (vi) the name 33 and address of the public education entity, school improvement organiza- 34 tion, local education fund or educational scholarship organization to 35 which the taxpayer may make the authorized contribution, and (vii) any 36 other information that the commissioner deems necessary. 37 3. Notification of the issuance of a contribution authorization 38 certificate. Upon the issuance of a contribution authorization certif- 39 icate to a taxpayer, the commissioner shall notify the public education 40 entity, school improvement organization, local education fund or educa- 41 tional scholarship organization of the issuance of such contribution 42 authorization certificate. Such notification shall include (i) the 43 taxpayer's name and address, (ii) the date such certificate was issued, 44 (iii) the date by which the authorized contribution listed in the 45 notification must be made by the taxpayer, (iv) the amount of the 46 authorized contribution, (v) the contribution authorization certif- 47 icate's certificate number, and (vi) any other information that the 48 commissioner deems necessary. 49 (g) Certificate of receipt. 1. In general. No public education entity, 50 school improvement organization, local education fund, or educational 51 scholarship organization shall issue a certificate of receipt for any 52 contribution made by a taxpayer unless such public education entity, 53 school improvement organization, local education fund, or educational 54 scholarship organization has been approved to issue certificates of 55 receipt pursuant to article twenty-five of the education law. No public 56 education entity, school improvement organization, local education fund,S. 4366--A 4 1 or educational scholarship organization shall issue a certificate of 2 receipt for a contribution made by a taxpayer unless such public educa- 3 tion entity, school improvement organization, local education fund, or 4 educational scholarship organization has received notice from the 5 department that the department issued a contribution authorization 6 certificate to the taxpayer for such contribution. 7 2. Timely contribution. If a taxpayer makes an authorized contribution 8 to the public education entity, school improvement organization, local 9 education fund, or educational scholarship organization set forth on the 10 contribution authorization certificate issued to the taxpayer no later 11 than the date by which such authorized contribution is required to be 12 made, such public education entity, school improvement organization, 13 local education fund, or educational scholarship organization shall, 14 within thirty days of receipt of the authorized contribution, issue to 15 the taxpayer a certificate of receipt; provided, however, that if the 16 taxpayer contributes an amount that is less than the amount listed on 17 the taxpayer's contribution authorization certificate, the taxpayer 18 shall not be issued a certificate of receipt for such contribution. 19 3. Certificate of receipt contents. Each certificate of receipt shall 20 state (i) the name and address of the issuing public education entity, 21 school improvement organization, local education fund, or educational 22 scholarship organization, (ii) the taxpayer's name and address, (iii) 23 the date for each contribution, (iv) the amount of each contribution and 24 the corresponding contribution authorization certificate number, (v) the 25 total amount of contributions, (vi) certificate of receipt number and 26 (vii) any other information that the commissioner may deem necessary. 27 4. Notification to the department for the issuance of a certificate of 28 receipt. Upon the issuance of a certificate of receipt, the issuing 29 public education entity, school improvement organization, local educa- 30 tion fund, or educational scholarship organization shall, within thirty 31 days of issuing the certificate of receipt, provide the department with 32 notification of the issuance of such certificate in the form and manner 33 prescribed by the department. 34 5. Notification to the department of the non-issuance of a certificate 35 of receipt. Each public education entity, school improvement organiza- 36 tion, local education fund, or educational scholarship organization that 37 received notification from the department pursuant to subdivision (f) of 38 this section regarding the issuance of a contribution authorization 39 certificate to a taxpayer shall, within thirty days of the expiration 40 date for such authorized contribution, provide notification to the 41 department for each taxpayer that failed to make the authorized contrib- 42 ution to such public education entity, school improvement organization, 43 local education fund, or educational scholarship organization in the 44 form and manner prescribed by the department. 45 6. Failure to notify the department. Within thirty days of the discov- 46 ery of the failure of any public education entity, school improvement 47 program, local education fund, or educational scholarship organization 48 to comply with the notification requirements prescribed by paragraphs 49 four and five of this subdivision, the commissioner shall issue a notice 50 of compliance failure to such entity, program, fund, or organization. 51 Such entity, program, fund, or organization shall have thirty days from 52 the date of such notice to make the notifications prescribed by para- 53 graphs four and five of this subdivision. Such period may be extended 54 for an additional thirty days upon the request of the entity, program, 55 fund, or organization. Upon the expiration of period for compliance set 56 forth in the notice prescribed by this paragraph, the commissioner shallS. 4366--A 5 1 notify the commissioner of education that such entity, program, fund, or 2 organization failed to make the notifications prescribed by paragraphs 3 four and five of this subdivision. 4 (h) Credit cap. The maximum permitted credits under this section 5 available to all taxpayers for qualified contributions for calendar year 6 two thousand nineteen shall be one hundred fifty million dollars. In 7 calendar year two thousand twenty, the maximum permitted credits under 8 this section available to all taxpayers shall be two hundred twenty-five 9 million dollars plus any amounts that are required to be added to the 10 cap pursuant to subdivision (i) of this section. For calendar year two 11 thousand twenty-one and each calendar year thereafter, the maximum 12 permitted credits available to all taxpayers shall be three hundred 13 million dollars plus any amounts that are required to be added to the 14 cap pursuant to subdivision (i) of this section. The maximum permitted 15 credits under this section for qualified contributions shall be allo- 16 cated fifty percent to public education entities, school improvement 17 organizations, and local education funds and fifty percent to educa- 18 tional scholarship organizations. 19 (i) Additions to credit cap. Unissued certificates of receipt. Any 20 amounts for which the department receives notification of non-issuance 21 of a certificate of receipt shall be added to the cap prescribed in 22 subdivision (h) of this section for the immediately following year. 23 (j) Regulations. The commissioner is hereby authorized to promulgate 24 and adopt on an emergency basis regulations necessary for the implemen- 25 tation of this section. 26 (k) Written report. On or before the last day of June for each calen- 27 dar year, for the immediately preceding year, the commissioner and the 28 commissioner of education shall jointly submit a written report to the 29 governor, the temporary president of the senate, the speaker of the 30 assembly, the chairman of the senate finance committee and the chairman 31 of the assembly ways and means committee regarding the education afford- 32 ability tax credit. Such report shall contain information for articles 33 nine-A and twenty-two, respectively, regarding: (i) the number of appli- 34 cations received; (ii) the number of and aggregate value of the contrib- 35 ution authorization certificates issued for contributions to public 36 education entities, school improvement organizations, local education 37 funds, and scholarship organizations, respectively; (iii) the geograph- 38 ical distribution by county of (A) the applications for contribution 39 authorization certificates, distribution by county of (B) the public 40 education entities, school improvement organizations, local education 41 funds, and educational scholarship organizations listed on the issued 42 contribution authorization certificates; and (iv) information, including 43 geographical distribution by county, of the number of eligible pupils 44 that received scholarships, the number of qualified schools attended by 45 eligible pupils that received such scholarships, and the average value 46 of scholarships received by such eligible pupils. The commissioner and 47 designated employees of the department, the commissioner of education 48 and designated employees of the state education department, shall be 49 allowed and are directed to share and exchange information regarding the 50 school improvement organizations, local education funds and educational 51 scholarship organizations that applied for approval to be authorized to 52 receive qualified contributions; and the public education entities, 53 school improvement organizations, local education funds, and educational 54 scholarship organizations authorized to issue certificates of receipt, 55 including information contained in or derived from application forms and 56 reports submitted to the commissioner of education.S. 4366--A 6 1 (l) Cross references. For application of the credit provided for in 2 this section, see the following provisions of this chapter: 3 1. Article 9-A: section 210-B; subdivision 53; 4 2. Article 22: section 606; subsections (i) and (jjj). 5 § 3. Paragraph (b) of subdivision 9 of section 208 of the tax law is 6 amended by adding a new subparagraph 23 to read as follows: 7 (23) The amount of any deduction allowed pursuant to section one 8 hundred seventy of the internal revenue code for which a credit is 9 claimed pursuant to subdivision fifty-three of section two hundred ten-B 10 of this article. 11 § 4. Section 210-B of the tax law is amended by adding a new subdivi- 12 sion 53 to read as follows: 13 53. Education affordability tax credit. (a) Allowance of credit. A 14 taxpayer shall be allowed a credit, to be computed as provided in 15 section forty-four of this chapter, against the tax imposed by this 16 article. 17 (b) Application of credit. The credit allowed under this subdivision 18 for any taxable year shall not reduce the tax due for such year to less 19 than the sixth dollar minimum amount prescribed in paragraph (d) of 20 subdivision one of section two hundred ten of this article. However, if 21 the amount of credit allowed under this subdivision for qualified 22 contributions for any taxable year reduces the tax to such amount, any 23 amount of credit not deductible in such taxable year 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 § 5. Subparagraph (B) of paragraph 1 of subsection (i) of section 606 27 of the tax law is amended by adding a new clause (xliv) to read as 28 follows: 29 (xliv) Education affordability Amount of credit under 30 tax credit under subsection (jjj) subdivision fifty-three of section 31 two hundred ten-B 32 § 6. Section 606 of the tax law is amended by adding two new 33 subsections (w) and (w-1) to read as follows: 34 (w) Home-based instructional materials credit. (1) For taxable years 35 beginning on or after January first, two thousand nineteen, a taxpayer 36 shall be allowed a credit against the tax imposed by this article for 37 the purchase of instructional materials approved by the education 38 department for use in non-public home-based educational programs; 39 provided, that the amount of credit claimed does not exceed the lesser 40 of two hundred dollars or one hundred percent of the cost of such 41 purchases made by the taxpayer during the taxable year. 42 (2) A husband and wife who file separate returns for a taxable year in 43 which they could have filed a joint return may each claim only one-half 44 of the tax credit that would have been allowed for a joint return. 45 (3) If the amount of the credit allowed under this subsection for any 46 taxable year shall exceed the taxpayer's tax for such year, the excess 47 shall be treated as an overpayment of tax to be credited or refunded in 48 accordance with the provisions of section six hundred eighty-six of this 49 article, provided, however, that no interest shall be paid thereon. 50 (w-1) Instructional materials and supplies credit. (1) For taxable 51 years beginning on and after January first, two thousand nineteen, a 52 taxpayer shall be allowed a credit equal to the lesser of the amount 53 paid by the taxpayer during the taxable year for instructional materials 54 and supplies, or two hundred dollars; provided that the taxpayer is a 55 teacher or instructor in a qualified school, as defined in section 56 forty-four of this chapter, for at least nine hundred hours during aS. 4366--A 7 1 school year. For purposes of this subsection, the term "materials and 2 supplies" means instructional materials or supplies that are used in the 3 classroom in any qualified school. 4 (2) A husband and wife who file separate returns for a taxable year in 5 which they could have filed a joint return may each claim only one-half 6 of the tax credit that would have been allowed for a joint return. 7 (3) If the amount of the credit allowed under this subsection for any 8 taxable year shall exceed the taxpayer's tax for such year, the excess 9 shall be treated as an overpayment of tax to be credited or refunded in 10 accordance with the provisions of section six hundred eighty-six of this 11 article, provided, however, that no interest shall be paid thereon. 12 § 7. Section 606 of the tax law is amended by adding a new subsection 13 (jjj) to read as follows: 14 (jjj) Education affordability tax credit. (1) Allowance of credit. A 15 taxpayer shall be allowed a credit to be computed as provided in section 16 forty-four of this chapter, against the tax imposed by this article. 17 (2) Application of credit. If the amount of the credit allowed under 18 this subsection for any qualified contributions for any taxable year 19 exceeds the taxpayer's tax for such year, the excess may be carried over 20 to the succeeding five years and may be deducted from the taxpayer's tax 21 for such year or years. 22 § 8. Subsection (c) of section 615 of the tax law is amended by adding 23 a new paragraph 10 to read as follows: 24 (10) The amount of any federal deduction for contributions made for 25 which a taxpayer claims a credit under subsection (jjj) of section six 26 hundred six of this article. 27 § 9. The education law is amended by adding a new article 25 to read 28 as follows: 29 ARTICLE 25 30 EDUCATION AFFORDABILITY PROGRAM 31 Section 1209. Short title. 32 1210. Definitions. 33 1211. Approval to issue certificates of receipt. 34 1212. Applications for approval to issue certificates of 35 receipt. 36 1213. Application approval. 37 1214. Revocation of approval to issue certificates of receipt. 38 1215. Recordkeeping. 39 1216. Joint annual report. 40 1217. Commissioner; powers. 41 § 1209. Short title. This article shall be known and may be cited as 42 the "education affordability program". 43 § 1210. Definitions. As used in this article, the following terms 44 shall have the following meanings: 45 1. "Authorized contribution" means the contribution amount listed on 46 the contribution authorization certificate issued to a taxpayer. 47 2. "Contribution" means a donation paid by cash, check, electronic 48 funds transfer, debit card or credit card made by the taxpayer during 49 the tax year. 50 3. "Educational program" means an academic program of a public school 51 that enhances the curriculum, or provides or expands a pre-kindergarten 52 program or an after-school program to the public school. For purposes of 53 this definition, the instruction, materials, programs or other activ- 54 ities offered by or through an educational program may include, but are 55 not limited to, the following features: (a) instruction or materials 56 promoting health, physical education, and family and consumer sciences;S. 4366--A 8 1 literary, performing and visual arts; mathematics, social studies, tech- 2 nology and scientific achievement; (b) instruction or programming to 3 meet the education needs of at-risk students or students with disabili- 4 ties, including tutoring or counseling; or (c) use of specialized 5 instructional materials, instructors or instruction not provided by a 6 public school. 7 4. "Educational scholarship organization" means a not-for-profit enti- 8 ty which (a) is exempt from taxation under paragraph three of subsection 9 (c) of section five hundred one of the internal revenue code, (b) 10 commits for the expenditure of at least ninety percent of the revenue 11 from qualified contributions received during the calendar year and any 12 income derived from qualified contributions for scholarships, (c) depos- 13 its and holds qualified contributions and any income derived from quali- 14 fied contributions in an account that is separate from the organiza- 15 tion's operating or other funds until such qualified contributions or 16 income are withdrawn for use, and (d) provides scholarships to eligible 17 pupils for use at no fewer than three qualified schools. 18 5. "Eligible pupil" means a child who (a) is a resident of this state, 19 (b) is school age in accordance with subdivision one of section thirty- 20 two hundred two of this chapter or who is four years of age on or before 21 December first of the year in which they are enrolled in a pre-kinder- 22 garten program, (c) attends or is about to attend a qualified school, 23 and (d) resides in a household that has a federal adjusted gross income 24 of five hundred thousand dollars or less, provided however, for house- 25 holds with three or more dependent children, such income level shall be 26 increased by ten thousand dollars per dependent child in excess of two, 27 not to exceed five hundred fifty thousand dollars. 28 6. "Local education fund" means a not-for-profit entity which (a) is 29 exempt from taxation under paragraph three of subsection (c) of section 30 five hundred one of the internal revenue code, (b) is established for 31 the purpose of supporting an educational program in at least one public 32 school, or public school district, (c) uses at least ninety percent of 33 the qualified contributions received during the calendar year and any 34 income derived from qualified contributions to support the public school 35 or schools or public school district or districts that such fund has 36 been established to support, and (d) deposits and holds qualified 37 contributions and any income derived from qualified contributions in an 38 account that is separate from the fund's operating or other funds until 39 such qualified contributions or income are withdrawn for use. 40 7. "Nonpublic school" means any not-for-profit pre-kindergarten 41 program or elementary, secondary sectarian or nonsectarian school 42 located in this state, other than a public school, that is providing 43 instruction at one or more locations to a student in accordance with 44 subdivision two of section thirty-two hundred four of this chapter. 45 8. "Public education entity" means a public school or a public school 46 district, provided that such public school, or public school district 47 deposits and holds qualified contributions and any income derived from 48 qualified contributions in an account that is separate from the public 49 school or public school district's operating or other funds until such 50 qualified contributions or income are withdrawn for use, and is approved 51 to issue certificates of receipt pursuant to this article. 52 9. "Public school" means any free elementary or secondary school in 53 this state guaranteed by article eleven of the constitution or charter 54 school authorized by article fifty-six of this chapter. 55 10. "Qualified contribution" means the authorized contribution made by 56 a taxpayer to the public education entity, school improvement organiza-S. 4366--A 9 1 tion, local education fund, or educational scholarship organization that 2 is 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 nonpublic school. 12 13. "Scholarship" means an educational scholarship which provides a 13 tuition grant awarded to an eligible pupil to attend a qualified school 14 in an amount not to exceed the tuition charged to attend such school 15 less any other educational scholarship received by such eligible pupil 16 or his or her parent, parents or guardian for such eligible pupil's 17 tuition; provided, however, in the case of an eligible pupil attending a 18 public school in a public school district of which such pupil is not a 19 resident, the amount of the educational scholarship awarded may not 20 exceed the tuition charged by the public school pursuant to paragraph d 21 of subdivision four of section thirty-two hundred two of this chapter 22 less any other educational scholarship received by such eligible pupil 23 or his or her parent, parents or guardian for such eligible pupil's 24 tuition, but only if the public school district of which such pupil is a 25 resident is not required to pay for such tuition. 26 14. "School improvement organization" means a not-for-profit entity 27 which (i) is exempt from taxation under paragraph three of subsection 28 (c) of section five hundred one of the internal revenue code, (ii) uses 29 at least ninety percent of the qualified contributions received during 30 the calendar year and any income derived from such qualified contrib- 31 utions to assist public schools or public school districts located in 32 this state in their provision of educational programs, either by making 33 contributions to one or more public schools or public school districts 34 located in this state or providing educational programs to, or in 35 conjunction with, one or more public schools or public school districts 36 located in this state, (iii) deposits and holds qualified contributions 37 and any income derived from such qualified contributions in an account 38 that is separate from the organization's operating or other funds until 39 such qualified contributions or income are withdrawn for use, and (iv) 40 is approved to issue certificates of receipt pursuant to this article. 41 Such entity may allow the taxpayer to choose to donate to a program, 42 project or initiative identified by a qualified educator for use in a 43 public school. 44 § 1211. Approval to issue certificates of receipt. 1. Public schools 45 and public school districts. All public schools and public school 46 districts shall be approved to issue certificates of receipt provided, 47 that a public school or public school district shall not be approved if 48 either (a) the public school or public school district fails to deposit 49 and hold qualified contributions and any income derived from qualified 50 contributions in an account that is separate from the school or school 51 district's operating or other funds until such qualified contributions 52 or income are withdrawn for use, or (b) the commissioner has revoked 53 such approval for such public school or public school district pursuant 54 to section twelve hundred fourteen of this article. 55 2. School improvement organizations, educational scholarship organiza- 56 tions and local education funds. No school improvement organization,S. 4366--A 10 1 educational scholarship organization or local education fund shall issue 2 any certificates of receipt without filing an application pursuant to 3 section twelve hundred twelve of this article and receiving approval 4 pursuant to section twelve hundred thirteen of this article. 5 § 1212. Applications for approval to issue certificates of receipt. 6 Each school improvement organization, educational scholarship organiza- 7 tion, and local education fund shall submit an application to the 8 commissioner for approval to issue certificates of receipt in the form 9 and manner prescribed by the commissioner; provided that such applica- 10 tion shall include: (a) submission of documentation that such school 11 improvement organization, local education fund or educational scholar- 12 ship organization has been granted exemption from taxation under para- 13 graph three of subsection (c) of section five hundred one of the inter- 14 nal revenue code; (b) the most recent annual financial audit, which 15 shall be completed by an independent certified public accountant and a 16 list of names and addresses of all members of the governing board of the 17 school improvement organization, local education fund or educational 18 scholarship organization; and (c) an educational scholarship organiza- 19 tion shall provide criteria for the awarding of scholarships to eligible 20 students. Neither the commissioner or the department shall require any 21 other information for such application except as authorized in this 22 article or by section forty-four of the tax law. 23 § 1213. Application approval. The commissioner shall review each 24 application to issue certificates of receipt pursuant to this article. 25 Approval or denial of an application shall be made within sixty days of 26 receipt of such application. 27 § 1214. Revocation of approval to issue certificates of receipt. The 28 commissioner, in consultation with the commissioner of taxation and 29 finance, may revoke the approval of a school improvement organization, 30 educational scholarship organization, local education fund, public 31 school or public school district to issue certificates of receipt upon a 32 finding that such organization, fund, school or school district has 33 violated this article or section forty-four of the tax law. These 34 violations shall include, but not be limited to, any of the following: 35 (a) failure to meet the requirements of this article or section forty- 36 four of the tax law, (b) the failure to maintain full and adequate 37 records with respect to the receipt of qualified contributions, (c) the 38 failure to supply such records to the commissioner or the department of 39 taxation and finance when requested by the department or the department 40 of taxation and finance, or (d) the failure to provide notice to the 41 department of taxation and finance of the issuance or nonissuance of 42 certificates of receipt pursuant to section forty-four of the tax law; 43 provided however, that the commissioner shall not revoke approval pursu- 44 ant to this section based upon a violation of the tax law unless the 45 commissioner of taxation and finance agrees that revocation is 46 warranted; and provided further that the commissioner shall not revoke 47 approval pursuant to this section when the failure to comply is due to 48 clerical error and not negligence or intentional disregard for the law. 49 Within five days of the determination revoking approval, the commission- 50 er shall provide notice of such revocation to the educational scholar- 51 ship organization, school improvement organization, local education 52 fund, public school, or public school district and to the department of 53 taxation and finance. 54 § 1215. Recordkeeping. Each school improvement organization, educa- 55 tional scholarship organization, local education fund, public school and 56 public school district that issued at least one certificate of receiptS. 4366--A 11 1 shall maintain records including (a) notifications received from the 2 department of taxation and finance, (b) notifications made to the 3 department of taxation and finance, (c) copies of qualified contrib- 4 utions received, (d) copies of the deposit of such qualified contrib- 5 utions, (e) copies of issued certificates of receipt, (f) annual finan- 6 cial statements, (g) in the case of school improvement organizations, 7 educational scholarship organizations and local education funds, the 8 application submitted pursuant to section twelve hundred twelve of this 9 article and the approval issued by the commissioner, and (h) any other 10 information as prescribed by regulation promulgated by the commissioner. 11 § 1216. Joint annual report. On or before the last day of June for 12 each calendar year, the commissioner of taxation and finance and the 13 commissioner, jointly, shall submit a written report as provided in 14 subdivision (k) of section forty-four of the tax law. 15 § 1217. Commissioner; powers. The commissioner shall promulgate on an 16 emergency basis regulations necessary for the implementation of this 17 section. The commissioner shall make any application required to be 18 filed pursuant to this article available to applicants within sixty days 19 of the effective date of this article. 20 § 10. The education law is amended by adding a new section 1503-a to 21 read as follows: 22 § 1503-a. Power to accept and solicit gifts and donations. 1. All 23 school districts organized by special laws or pursuant to the provisions 24 of a general law are hereby authorized and empowered to accept gifts, 25 donations, and contributions to the district and to solicit the same. 26 2. Notwithstanding any other provision of this chapter or of any other 27 general or special law to the contrary, the receipt of such gifts, 28 donations, contributions and other funds, and any income derived there- 29 from, shall be disregarded for the purposes of all apportionments, 30 computations, and determinations of state aid. 31 § 11. Severability. If any provision of this section or the applica- 32 tion thereof to any person or circumstances is held invalid, such inva- 33 lidity shall not affect other provisions or applications of the section 34 which can be given effect without the invalid provision or application, 35 and to this end the provisions of this section are declared to be sever- 36 able. 37 § 12. This act shall take effect immediately and shall apply to taxa- 38 ble years beginning after December 31, 2018.
