Two of the Assembly's main policy goals have been reducing tax burdens on New York's working families and job creation. During the past several years, legislation designed to provide targeted relief to working families has been enacted. The Assembly's initiative to establish an Earned Income Tax Credit became a reality in 1994. Since then, the Assembly has been instrumental in enacting legislation to increase the percentage of the Federal Credit from the original 7.5 percent to 30 percent by Tax Year 2003. The Assembly has also pushed to increase the value of the Child and Dependent Care Credit for New York's working families. Legislation enacted in 2000 substantially increased the value of the Child and Dependent Care Credit, which was an Assembly initiative.

The Assembly has persistently worked to enact legislation aimed at creating jobs, which continues to make New York State an attractive place for businesses to locate or expand. The Assembly's Empire Zones Program initiative was enacted in 2000, providing a broad spectrum of tax credits and exemptions for qualifying businesses in certain designated areas of the State. The Certified Capital Companies (CAPCO) program has provided tax credits to insurance companies that invest in venture capital companies. This program helps to provide the cash flow necessary for new companies to grow and develop into successful New York businesses.

The Assembly 2001 Tax Plan continues the policy goals of job creation and providing tax relief to New York's working families. The Plan includes an expansion of both the Empire Zones Program and the Certified Capital Companies (CAPCO) program to spur job growth, along with a tax credit on fuel used during intrastate flights to make transportation within the State more affordable. Relief for working families is proposed in the form of a new Child Tax Credit, and in completing the elimination of the marriage penalty. The Assembly also proposes to help New York's working families by eliminating the remaining portion of the Gross Receipts Tax on residential energy. The Assembly Tax Plan will save taxpayers approximately $25 million in State Fiscal Year 2001-02 and $519 million when fully implemented.

Working Families

• Provide a refundable Child Tax Credit based on the current Federal credit of $500 per qualified child. The credit would be 20 percent of the Federal credit for taxpayers with income of up to $25,000, and would be phased-out for taxpayers with income between $25,000 and $55,000.

• Fulfill the initiative put forth by the Assembly last year by eliminating the marriage penalty under the Personal Income Tax. The standard deduction for married filing joint taxpayers would be increased from $14,600 to $15,000.

• Eliminate the remaining portion of the Gross Receipts Tax on residential energy. Last year's tax reduction plan eliminated the Gross Receipts Tax for industrial and commercial users, and lowered the tax on the transmission and distribution portion of residential energy to 2.0 percent.

• Authorize the gradual expansion of all 52 existing zones from two to four square miles. Current zones would be allowed to expand by one-half mile initially, with further expansion subject to an application process.

• Authorize 8 new zones in addition to the 6 new zones allowed under current authorization. The newly designated zones would start out at two square miles, and would be eligible for expansion by an additional two square miles after a three-year period.

• Extend for an additional year the application window for qualified business certification.

• Provide $30 million in tax relief to promote the remediation of brownfields, and to help promote economic development initiatives relating to these sites.

• Expand the Low Income Housing Tax Credit, enacted last year, to increase the current allocation from $2 million to $4 million.

• Provide an additional $2 million allocation to areas that are currently experiencing a limited benefit from the current program.

• Provide a credit under the Petroleum Business Tax for qualified users of Kero-Jet fuel. The credit would be based on the cost of fuel consumed during intrastate flights.

• Allocate an additional $100 million in tax credits to insurance companies that invest in certified capital companies. The program would be amended so that investments in a Federal Empowerment Zone are treated as investments in an Empire Zone.

• Clarify that brokers and dealers who specialize in certain financial transactions (SWAP Dealers) are eligible for the allocation of receipts rule used by brokers and dealers.

• Continue transition provisions ensuring that Financial Service Holding Companies will continue to be taxed under the same article of the Tax Law for Tax Year 2001.

• Provide local property tax relief for the railroad industry. The method by which railroad ceilings are calculated would be amended; A ten-year property tax exemption for new construction and capital improvements would be provided; and the schedule of exemption ratios for intrastate and interstate railroads would be changed.

• Repeal the requirement that New York City municipal employees add back to Federal Adjusted Gross income the value of pre-tax flexible benefit plans.

• Provide a credit against the Personal Income Tax for certain qualified expenditures incurred in the rehabilitation of historic homes. The credit would equal either 15 percent or 25 percent of qualified rehabilitation expenditures, up to a maximum of $50,000.

• Clarify that the credit applies to only those taxpayers who remove or permanently close a fuel oil storage tank and replace it with a new tank.

• Provide technical amendments to legislation enacted in 2000 in relation to the College Tuition Tax Credit/Deduction and the Empire Zones Program.

MTA Surcharge Extension

• Extend the Metropolitan Transportation Authority Tax Surcharge imposed on businesses operating in the Metropolitan Commuter Transportation District for a four-year period.

Bank Tax Extension

• Extend the current provisions of the Bank Tax for a one-year period.