Senate Bill S1560

                            
                    S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  1560

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                            February 3, 2009
                               ___________

Introduced  by Sens. LAVALLE, ALESI, FLANAGAN, LITTLE, MORAHAN, ONORATO,
  PARKER, SAMPSON, SEWARD, VOLKER -- read twice and ordered printed, and
  when printed to be committed to the Committee on Corporations, Author-
  ities and Commissions

AN ACT to amend the public authorities law, the education  law  and  the
  tax  law,  in  relation  to  the I live New York student loan and loan
  forgiveness program

  THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
BLY, DO ENACT AS FOLLOWS:

  Section  1.  The  public  authorities  law  is amended by adding a new
section 1679-c to read as follows:
  S 1679-C. I LIVE NEW YORK STUDENT LOAN AND LOAN  FORGIVENESS  PROGRAM.
1.  THE PURPOSE OF THE I LIVE NEW YORK STUDENT LOAN AND LOAN FORGIVENESS
PROGRAM IS TO MAKE AVAILABLE TO STUDENTS WHO ARE RESIDING  IN  NEW  YORK
STATE  AND  IN  FULL-TIME  ATTENDANCE IN A NEW YORK STATE ASSOCIATE'S OR
BACHELOR'S  DEGREE-GRANTING  INSTITUTION  OR  REGISTERED  NOT-FOR-PROFIT
BUSINESS  SCHOOL  QUALIFIED FOR TAX EXEMPTION UNDER SECTION 501(C)(3) OF
THE INTERNAL REVENUE CODE FOR  FEDERAL  INCOME  TAX  PURPOSES  FINANCIAL
ASSISTANCE BEYOND THE GRANTS AND LOANS AVAILABLE FROM STATE, FEDERAL AND
PRIVATE  SOURCES  WHERE  SUCH  STUDENTS  DEMONSTRATE REMAINING FINANCIAL
NEED.
  2. IN FURTHERANCE OF ITS POWERS UNDER THIS TITLE WITH RESPECT TO THE I
LIVE NEW YORK STUDENT LOAN AND LOAN FORGIVENESS PROGRAM,  THE  AUTHORITY
IS AUTHORIZED:
  (A)  TO  RECEIVE  AND  ACCEPT  FROM ANY SOURCE LOANS, CONTRIBUTIONS OR
GRANTS FOR OR IN AID OF AN  I  LIVE  NEW  YORK  STUDENT  LOAN  AND  LOAN
FORGIVENESS  PROGRAM  OR ANY PORTION THEREOF AND, WHEN DESIRABLE, TO USE
SUCH FUNDS, PROPERTY OR LABOR ONLY FOR THE PURPOSES  FOR  WHICH  IT  WAS
LOANED, CONTRIBUTED OR GRANTED;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD07838-01-9

S. 1560                             2
              

  (B)  TO  MAKE EDUCATION LOANS TO STUDENTS, FUNDING RESERVES, PROVIDING
FOR CAPITALIZED INTEREST AND PAYING OTHER COSTS  AND  FEES  INVOLVED  IN
MAKING STUDENT LOANS OR ISSUING BONDS;
  (C)  TO  ISSUE  BONDS  NOT  IN  EXCESS  OF SEVEN HUNDRED FIFTY MILLION
DOLLARS FOR THE PURPOSE OF PROVIDING STUDENT LOANS, AND THE  PURCHASING,
ACQUIRING  OR  TAKING  BY  ASSIGNMENT  OR  OTHERWISE  OF  STUDENT LOANS,
PROVIDED, HOWEVER, THAT EACH SUCH SALE OF BONDS SHALL BE SUBJECT TO  THE
APPROVAL OF THE PUBLIC AUTHORITIES CONTROL BOARD; AND
  (D) TO PURCHASE STUDENT LOANS.
  3.  THE  AUTHORITY  SHALL ADOPT GUIDELINES CONSISTENT WITH FEDERAL LAW
AND REGULATIONS TO THE EXTENT APPLICABLE WHICH SHALL INCLUDE BUT NOT  BE
LIMITED  TO: (A) ELIGIBILITY CRITERIA FOR MAKING I LIVE NEW YORK STUDENT
LOANS; (B) LIMITATIONS UPON THE PRINCIPAL AMOUNT AND THE TERMS OF  AN  I
LIVE NEW YORK STUDENT LOAN WITH THE AGGREGATE MAXIMUM AMOUNT PER BORROW-
ER  NOT  TO  EXCEED  THIRTY THOUSAND DOLLARS; AND (C) QUALIFICATIONS AND
CHARACTERISTICS OF BORROWERS.  SUCH GUIDELINES SHALL ALSO  INCLUDE  SUCH
ELIGIBILITY STANDARDS FOR BORROWERS AS THE AUTHORITY SHALL DETERMINE ARE
NECESSARY  OR  DESIRABLE  IN  ORDER  TO  EFFECTUATE THE PURPOSES OF THIS
SECTION INCLUDING THE  FOLLOWING:  (I)  EACH  STUDENT  SHALL  HAVE  BEEN
ACCEPTED  FOR REGULAR, NON-PROBATIONARY ENROLLMENT AT AN ELIGIBLE INSTI-
TUTION AND IS ADJUDGED BY THE INSTITUTION TO HAVE THE ABILITY TO BENEFIT
FROM THE INSTRUCTION OR TRAINING TO BE PROVIDED; OR, IN THE  CASE  OF  A
STUDENT  ALREADY  ATTENDING SUCH INSTITUTION, IS IN GOOD STANDING AND IS
MAKING SATISFACTORY PROGRESS TOWARD HIS  OR  HER  EDUCATIONAL  GOALS  AS
DETERMINED BY THE AUTHORITY AND SHALL BE ENROLLED IN AN APPROVED PROGRAM
BY THE DEPARTMENT UNDER THE PROVISIONS OF SECTION SIX HUNDRED ONE OF THE
EDUCATION  LAW, AND SHALL HAVE A CERTIFICATE OF ENROLLMENT OR ACCEPTANCE
FOR ENROLLMENT AT A SPECIFIC PARTICIPATING INSTITUTION FOR HIGHER EDUCA-
TION; PROVIDED HOWEVER, THAT I LIVE NEW  YORK  STUDENT  LOANS  SHALL  BE
GRANTED  TO  STUDENTS  ENROLLED IN THEIR FIRST ACADEMIC YEAR OF STUDY IN
THE FALL SEMESTER OF TWO THOUSAND TEN, TO  STUDENTS  ENROLLED  IN  THEIR
FIRST  AND  SECOND  ACADEMIC  YEARS OF STUDY IN THE FALL SEMESTER OF TWO
THOUSAND ELEVEN, TO STUDENTS ENROLLED IN THEIR FIRST, SECOND, AND  THIRD
YEARS  OF  STUDY IN THE FALL SEMESTER OF TWO THOUSAND TWELVE, AND TO ALL
STUDENTS THEREAFTER; (II) EACH  STUDENT  SHALL  SATISFY  SUCH  FINANCIAL
QUALIFICATIONS  AS  THE  AUTHORITY  SHALL  ESTABLISH  TO  EFFECTUATE THE
PURPOSES OF THIS SECTION; AND  (III)  EACH  STUDENT  SHALL  SUBMIT  SUCH
INFORMATION  AS  MAY BE REQUIRED BY THE AUTHORITY TO HIS OR HER INSTITU-
TION FOR HIGHER EDUCATION. SUCH GUIDELINES SHALL ALSO ESTABLISH SPECIFIC
CRITERIA GOVERNING  THE  MAKING  OF  I  LIVE  NEW  YORK  STUDENT  LOANS,
PROVISIONS  FOR DEFAULT, THE ESTABLISHMENT OF DEFAULT RESERVE FUNDS, THE
PURCHASE OF DEFAULT INSURANCE, AND THE PROVISION OF DEBT SERVICE RESERVE
FUNDS, ALL OF SUCH CRITERIA TO BE ESTABLISHED TO ASSURE THE MARKETABILI-
TY OF THE BONDS AND THE ADEQUACY OF THE SECURITY FOR THE BONDS.
  4. THE AUTHORITY SHALL CONTRACT WITH FINANCIAL INSTITUTIONS,  THE  NEW
YORK  STATE  HIGHER  EDUCATION  SERVICES  CORPORATION ESTABLISHED BY THE
PROVISIONS OF SECTION SIX HUNDRED FIFTY-TWO  OF  THE  EDUCATION  LAW  OR
OTHER  QUALIFIED LOAN ORIGINATION AND SERVICING ORGANIZATIONS, WHICH MAY
ASSIST IN PRE-QUALIFYING BORROWERS FOR I LIVE NEW YORK STUDENT LOANS AND
WHICH MAY SERVICE AND ADMINISTER EACH STUDENT LOAN. THE FEES OR INTEREST
COSTS OF EACH STUDENT LOAN SHALL INCLUDE A  PORTION,  IF  NECESSARY,  TO
COVER THE APPLICABLE PRO RATA COST OF SUCH A SERVICING ORGANIZATION.
  5. THE MAXIMUM AMOUNT OF A STUDENT LOAN SHALL NOT EXCEED THE STUDENT'S
COST  OF  ATTENDANCE  FOR THE PERIOD OF TIME FOR WHICH THE LOAN IS MADE,
MINUS THE FOLLOWING AMOUNTS APPLICABLE TO SUCH PERIOD OF TIME:

S. 1560                             3

  (A) THE AMOUNT OF GRANT WHICH THE STUDENT RECEIVES, OR  WOULD  RECEIVE
HAD  THE  STUDENT MADE APPLICATION, UNDER THE FEDERAL PELL GRANT PROGRAM
AUTHORIZED UNDER TITLE IV, PART A,  OF  THE  "HIGHER  EDUCATION  ACT  OF
1965", AS NOW OR HEREAFTER AMENDED;
  (B) THE MAXIMUM NET LOAN PROCEEDS WHICH THE STUDENT RECEIVES UNDER THE
FEDERAL  GUARANTEED  STUDENT LOAN PROGRAM AS DEFINED UNDER (I) TITLE IV,
PART B, OF THE "HIGHER EDUCATION ACT  OF  1965",  AS  NOW  OR  HEREAFTER
AMENDED, AND (II) RELEVANT FEDERAL REGULATIONS; AND
  (C)  THE  AMOUNT OF SCHOLARSHIPS, GRANTS OR OTHER NONREPAYABLE ASSIST-
ANCE RECEIVED FROM  GOVERNMENT  AGENCIES,  EDUCATIONAL  INSTITUTIONS  OR
PRIVATE INSTITUTIONS OR ORGANIZATIONS.
  6.  NOTWITHSTANDING  ANY OTHER PROVISIONS CONTAINED IN THIS TITLE, BUT
PURSUANT TO GUIDELINES, THE AUTHORITY MAY COMMINGLE AND PLEDGE AS  SECU-
RITY  FOR A SERIES OR ISSUE OF BONDS, THE STUDENT LOAN SERIES PORTFOLIOS
AND SOME OR ALL FUTURE STUDENT  LOAN  SERIES  PORTFOLIOS  PROVIDED  THAT
STUDENT  LOAN  SERIES PORTFOLIOS AND OTHER SECURITY AND MONEYS SET ASIDE
IN ANY FUND OR FUNDS PLEDGED FOR ANY SERIES OF BONDS OR ISSUE  OF  BONDS
SHALL  BE HELD FOR THE SOLE BENEFIT OF SUCH SERIES OR ISSUE SEPARATE AND
APART FROM STUDENT LOAN SERIES PORTFOLIOS AND OTHER SECURITY AND  MONEYS
PLEDGED  FOR  ANY OTHER SERIES OR ISSUE OF BONDS OF THE AUTHORITY. BONDS
MAY BE ISSUED IN SERIES UNDER ONE OR MORE RESOLUTIONS IN THE  DISCRETION
OF THE AUTHORITY.
  7.  ANY STUDENT OTHERWISE ELIGIBLE FOR AN I LIVE NEW YORK STUDENT LOAN
SHALL NOT BE DISQUALIFIED BY REASON OF HIS OR HER BEING UNDER THE AGE OF
EIGHTEEN YEARS AND, FOR THE PURPOSES  OF  APPLYING  FOR,  RECEIVING  AND
REPAYING  SUCH  A  LOAN,  ANY  SUCH STUDENT SHALL BE DEEMED TO HAVE FULL
LEGAL CAPACITY TO ACT SUBJECT TO GUIDELINES ESTABLISHED BY THE  AUTHORI-
TY.
  8. THE AUTHORITY MAY CHARGE TO STUDENTS ITS ADMINISTRATIVE AND OPERAT-
ING COSTS AND EXPENSES INCURRED IN THE EXERCISE OF THE POWERS AND DUTIES
CONFERRED BY THIS SECTION.
  THE  AUTHORITY  SHALL PARTICIPATE IN THE DEVELOPMENT OF AND REVIEW THE
PROGRAM GUIDELINES TO BE ESTABLISHED BY THE  AUTHORITY  AS  REQUIRED  BY
THIS  SECTION  AND  MAY MAKE RECOMMENDATIONS ON, COMMENT UPON AND ADVISE
THE MEMBERS OF THE BOARD OF THE AUTHORITY WITH RESPECT  TO  SUCH  GUIDE-
LINES.
  9.  THE AUTHORITY SHALL REPORT ANNUALLY TO THE GOVERNOR AND THE LEGIS-
LATURE ON OR BEFORE FEBRUARY FIRST CONCERNING ITS FINDINGS,  CONCLUSIONS
AND  RECOMMENDATIONS  WITH  RESPECT  TO  THE  OPERATION  OF  THE PROGRAM
PROVIDED FOR IN THIS SECTION.
  S 2. The education law is amended by adding a new article 14-B to read
as follows:
                               ARTICLE 14-B
            I LIVE NEW YORK STUDENT LOAN FORGIVENESS PROGRAM
SECTION 698. I LIVE NEW YORK STUDENT LOAN FORGIVENESS PROGRAM.
  S 698. I LIVE NEW YORK STUDENT LOAN FORGIVENESS PROGRAM. 1.  THERE  IS
HEREBY  ESTABLISHED AN I LIVE NEW YORK STUDENT LOAN FORGIVENESS PROGRAM.
SUCH PROGRAM SHALL ESTABLISH A PERSONAL INCOME TAX CREDIT EQUAL  TO  TEN
PERCENT  OF THE CUMULATIVE I LIVE NEW YORK STUDENT LOAN BALANCE, AND ANY
INTEREST THEREON DURING EACH TAXABLE YEAR FOR THE TEN CONSECUTIVE  YEARS
IMMEDIATELY FOLLOWING GRADUATION FROM ANY NEW YORK STATE PUBLIC OR INDE-
PENDENT  COLLEGE  OR  UNIVERSITY.  SUCH  TAX  CREDIT SHALL APPLY ONLY TO
PERSONS WHO ARE RESIDENTS OF THE STATE AND ARE  EMPLOYED  IN  THE  STATE
FOLLOWING GRADUATION.

S. 1560                             4

  2.  THE  DORMITORY  AUTHORITY  AND  THE  COMMISSIONER  OF TAXATION AND
FINANCE SHALL JOINTLY PROMULGATE ALL RULES AND REGULATIONS NECESSARY  TO
IMPLEMENT THE PROVISIONS OF THIS SECTION.
  S  3. Section 606 of the tax law is amended by adding a new subsection
(qq) to read as follows:
  (QQ) I LIVE NEW YORK STUDENT LOAN FORGIVENESS CREDIT.  TEN PERCENT  OF
THE  TAXPAYER'S  CUMULATIVE I LIVE NEW YORK STUDENT LOAN BALANCE AND ANY
INTEREST THEREIN SUBJECT TO THE PROVISIONS OF  SECTION  SIXTEEN  HUNDRED
SEVENTY-NINE-C  OF  THE  PUBLIC  AUTHORITIES LAW AND SECTION SIX HUNDRED
NINETY-EIGHT OF THE EDUCATION LAW.
  S 4. This act shall take effect on the first of January next  succeed-
ing  the  date  on  which it shall have become a law; provided, however,
that effective immediately, the addition, amendment and/or repeal of any
rule or regulation necessary for the implementation of this act  on  its
effective  date is authorized to be made and completed on or before such
date.