NY State Senate Bill 2009-S5344

Senate Bill S5344

2009-2010 Legislative Session

Allows individuals utilizing financial aid in the form of student loans to have a portion of their state income tax refunds to be paid over to the lending institution

download bill text pdf

Archive: Last Bill Status - In Senate Committee Investigations And Government Operations Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 06, 2010	referred to investigations and government operations
Apr 27, 2009	referred to investigations and government operations

2009-S5344 (ACTIVE) - Details

Current Committee:: Senate Investigations And Government Operations
Law Section:: Tax Law
Laws Affected:: Add §630-b, Tax L

2009-S5344 (ACTIVE) - Summary

Allows individuals utilizing financial aid in the form of student loans to have a portion of their state income tax refunds to be paid over the the lending institution.

2009-S5344 (ACTIVE) - Sponsor Memo

                                 BILL NUMBER:  S5344              REVISED 05/11/09

 TITLE OF BILL :

An act to amend the tax law, in relation to allowing individuals
utilizing financial aid in the form of student loans, to have a
portion or all of their state income tax refunds to be paid over to
the student's lending institution


 PURPOSE :

To establish a program of economic support to students enrolled in
institutions of higher education. Whereby a student attending college
and utilizing financial aid, and who is entitled to a state income tax
refund, has the option to have a portion of or all of the refund to be
distributed directly to the lender.

The student will elect participation in this program by selecting the
option on the student's income tax return; the state will then pay
over that amount directly to the student's lender. As an incentive for
their participation, the student may be entitled to an additional
contribution by the State, also to be paid directly to the student's
loan provider.

 SUMMARY OF PROVISIONS :

Section 1 permits an individual to contribute a portion or the entire
amount of their State income tax refund to be paid over to the lender
of their federally backed student loan(s). The contribution shall be
in any whole dollar amount and shall not reduce the amount of state
tax owed by such individual. This section further details the optional
incentive to the student by permitting the Governor to designate a
percentage of the student's State income taxes paid to the student's
loan lender, in addition to the student's contribution.  The maximum
contribution by the State shall be no more than five hundred dollars
per student, per year. Also under this section the Governor also has
the right to nullify the State's contribution in times where the State
is under financial hardship.

Section 2: This act shall take effect immediately.

 JUSTIFICATION :

New York State does not currently have a state supported loan system
to assist students with the various expenses associated with earning a
college degree. This bill will enable those students who are employed,
with the ability to offset federally subsidized and unsubsidized
student loans incurred by the student. By doing so, the student frees
themselves of some of the financial burdens associated with the
repayment of the debts in order to fund their education.

Furthermore, the prospect of assisting qualified students with the
funding of their education will attract more students to enroll in
institutions of higher education, which will result in the abundance
of educated individuals.  The abundance of educated individuals is
attractive to businesses making New York a more desirable location for
their place of business. In addition, the freeing up of anticipated
financial burdens allows the working student to focus more on current
expenses and contribute more towards consumer spending.

 LEGISLATIVE HISTORY :

2009 - New Bill.

 FISCAL IMPLICATIONS :
To be determined.

 EFFECTIVE DATE :
This act shall take effect immediately.

2009-S5344 (ACTIVE) - Bill Text download pdf

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

                                  5344

                       2009-2010 Regular Sessions

                            I N  S E N A T E

                             April 27, 2009
                               ___________

Introduced  by  Sen. MORAHAN -- read twice and ordered printed, and when
  printed to be committed to the Committee on Investigations and Govern-
  ment Operations

AN ACT to amend the tax law, in relation to allowing individuals utiliz-
  ing financial aid in the form of student loans, to have a  portion  or
  all of their state income tax refunds to be paid over to the student's
  lending institution

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

  Section 1. The tax law is amended by adding a  new  section  630-b  to
read as follows:
  S  630-B.  OPTIONAL  OFFSET OF STUDENT LOANS. 1. EFFECTIVE FOR ANY TAX
YEAR COMMENCING ON OR AFTER JANUARY FIRST, TWO THOUSAND TEN, ANY  QUALI-
FIED  INDIVIDUAL  IN A TAXABLE YEAR MAY ELECT TO CONTRIBUTE A PORTION OR
THE ENTIRE AMOUNT OF THEIR STATE INCOME TAX REFUND TO BE  PAID  OVER  TO
THE  LENDER OF SUCH INDIVIDUAL'S FEDERALLY BACKED STUDENT LOAN OR LOANS.
SUCH CONTRIBUTION SHALL BE IN WHOLE DOLLAR AMOUNT AND SHALL  NOT  REDUCE
THE  AMOUNT  OF  STATE TAX OWED BY SUCH INDIVIDUAL. THE PARTICIPANT WILL
HAVE THE ADDITIONAL OPTION TO REFUSE THE STATE'S PORTION OF THE CONTRIB-
UTION PER TAX YEAR. THE COMMISSIONER SHALL INCLUDE SPACE ON THE PERSONAL
INCOME TAX RETURN TO ENABLE A STUDENT TO MAKE SUCH ELECTIONS AND PROVIDE
THE LENDER'S INFORMATION SUCH AS THE LENDER'S  NAME,  ADDRESS,  AND  THE
STUDENT'S ACCOUNT NUMBER.
  2.  AS AN INCENTIVE FOR PARTICIPATION, THE STATE, AT THE DISCRETION OF
THE GOVERNOR AND HIS OR HER EXECUTIVE BUDGET,  SHALL  PAY  OVER  TO  THE
INDIVIDUAL'S  STUDENT LOAN PROVIDER AN AMOUNT EQUIVALENT TO NO LESS THAN
TEN PERCENT, BUT NOT GREATER THAN TWENTY-FIVE PERCENT OF THE TOTAL TAXES
PAID BY THE INDIVIDUAL FOR THE TERM WHICH THE STUDENT IS FILING  HIS  OR
HER  STATE  INCOME TAXES. THE MAXIMUM CONTRIBUTION BY THE STATE SHALL BE
FIVE HUNDRED DOLLARS PER STUDENT, PER  YEAR.  UNDER  THIS  SECTION,  THE
GOVERNOR SHALL HAVE THE ADDITIONAL RIGHT TO NULLIFY THE STATE'S CONTRIB-

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD11673-01-9

S. 5344                             2

UTION  AMOUNT FOR ANY GIVEN TAX YEAR, IN THE EVENT THAT THE STATE IS NOT
FISCALLY SOUND. THE GOVERNOR SHALL PUBLISH  SUCH  DECLARATION  NO  LATER
THAN THE DATE OF PUBLISHING THE EXECUTIVE BUDGET, AND UPON SUCH PUBLICA-
TION, SHALL NOT BE SUBJECT TO ADJUSTMENT.
  3.  PARTICIPATION  UNDER  THIS  SECTION IS VOLUNTARY AND LIMITED TO AN
INDIVIDUAL WHO IS A LEGAL RESIDENT OF THE STATE OF NEW YORK AND WHO  HAS
FILED,  OR  WOULD  HAVE BEEN ELIGIBLE TO FILE AN INDIVIDUAL OR JOINT NEW
YORK STATE INCOME TAX RETURN FOR AT LEAST TWO PREVIOUS YEARS,  PRIOR  TO
THE  PARTICIPATION  YEAR. AN INDIVIDUAL SHALL ONLY BECOME ELIGIBLE FOR A
STATE CONTRIBUTION ONLY IF THEY ELECT TO HAVE  ONE  HUNDRED  PERCENT  OF
THEIR  STATE  INCOME TAX RETURN FOR THE YEAR REQUESTED TO BE PAID TO THE
STUDENT LOAN LENDER. THERE SHALL BE A LIMIT OF TWENTY-FIVE STATE  ISSUED
REBATES  PER  STUDENT, PER LIFETIME, WITH NO LIMITATIONS ON SELF-CONTRI-
BUTED PARTICIPATION. IN THE EVENT THE  GOVERNOR  NULLIFIES  THE  STATE'S
CONTRIBUTION,  THE INDIVIDUAL SHALL RETAIN THE RIGHT TO FILE FOR A STATE
CONTRIBUTION FOR AN ADDITIONAL YEAR.
  4. NOTWITHSTANDING ANY OTHER PROVISION OF LAW, ALL  REVENUES  PURSUANT
TO  THIS  SECTION  SHALL BE PAID DIRECTLY BY THE STATE TO THE LENDER FOR
CREDIT TOWARDS THE PRINCIPAL OF THE LOAN, AND ONLY FOR THAT PURPOSE. THE
COST TO ELECT THIS OPTION SHALL BE ONE DOLLAR FOR INDIVIDUALS  FILING  A
NON-ELECTRONIC  STATE  TAX RETURN AND THERE SHALL BE NO FEE FOR AN INDI-
VIDUAL WHO FILES A STATE TAX RETURN ELECTRONICALLY.
  S 2. This act shall take effect immediately.

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