| Date of Action |
Assembly Actions -
Lowercase Senate Actions - UPPERCASE |
|---|---|
| Jan 08, 2014 |
referred to investigations and government operations |
| Mar 04, 2013 |
referred to investigations and government operations |
Find your Senator and share your views on important issues.
Senate Bill S3998
2013-2014 Legislative Session
Enacts various legislation designed to make college more affordable for the citizens of the state
download bill text pdfShare this bill
Sponsored By
(R) Senate District
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
Actions
co-Sponsors
(D) Senate District
(R, C, IP) Senate District
(R) Senate District
(R, C, IP) Senate District
(R, C, IP, RFM) Senate District
(R, C, IP) Senate District
2013-S3998 (ACTIVE) - Details
- Current Committee:
- Senate Investigations And Government Operations
- Law Section:
- Tax Law
- Laws Affected:
- Amd §§606 & 612, Tax L; amd §§680 & 655, add Art 14-B §§697 - 699, §355-d, Ed L; amd §98-a, add Art 15-A §§225 - 234-c, §99-u, St Fin L; amd §301, add Art 6 §§601 - 603, Fin Serv L
- Versions Introduced in 2011-2012 Legislative Session:
-
S7449
2013-S3998 (ACTIVE) - Sponsor Memo
BILL NUMBER:S3998
TITLE OF BILL: An act to amend the tax law, in relation to providing
a tax credit for allowable college expenses (Part A); to amend the
education law and the state finance law, in relation to the student
loan linked deposit act (Part B); to amend the financial services law,
in relation to the truth in student lending clearinghouse program; and
to amend the financial services law and the education law, in relation
to the student lending transparency program (Part C); and to amend the
education law, in relation to the creation of the New York state
tuition savings program; to amend the state finance law, in relation
to establishing the New York state pre-pay tuition fund; and to amend
the tax law, in relation to reducing distributions from the New York
state pre-pay tuition savings program from adjusted gross income (Part
D)
PURPOSE:
This bill would create a new program, entitled the College
Affordability Program, in order to establish tax credits, a linked
deposit low-cost student loan program, and a student lending
transparency program to assist families in New York State to better
afford a college education .
SUMMARY OF PROVISIONS:
Part A: The Stay in New York Tax Credit This bill would amend section 606 of the Tax Law to establish the Stay in New York Tax Credit. In order to retain the graduates from New York colleges and universities, such credit would allow college graduates a credit equal to their college expenses over four years. This credit would be capped at $3,000 per year, and would apply to those graduates who live and work in New York, subsequent to graduation, and complete community service while they are attending college. The Tuition Tax Credit This bill would further amend section 606 of the Tax Law to improve New York's Tuition Tax Credit. In order to increase college affordability, the current tuition tax credit would be amended to: Double the amount of qualified college expenses that can be claimed from $10,000 to $20,000 over five years; Double the maximum amount of the credit allowed from $400 to $800 over five years; and Index the qualified expenses and credit to the rate of inflation of the Higher Education Price Index. Part B: The Student Loan Linked Deposit Program This bill would additionally add a new article 15-A to the State Finance Law to establish the Student Loan Linked Deposit Program. Modeled off of the highly successful linked deposit program for economic development, this new student loan program would provide low-cost student loans by means of authorizing the comptroller to place state deposits with participating lenders at a decreased interest rate, in order to offer students reduced rate student loans, at up to 3 points below market rates. This Part would designate $100 million dollars for this program, with repaid loan amounts revolving back into available deposits and loans. Loans would be available for students of in state colleges, for qualified educational expenses (tuition, fees, books, supplies, room and board), in the maximum amount of $7,500 per academic year, and a maximum total amount of S30,000. Part C: The Student Lending Transparency Program This bill would also add a new Article 6 to the Financial Services Law, and a new Article 14-8 to the Education Law, to establish a Student Lending Transparency Program. Pursuant to this program, the Department of Financial Services would be required to compile data on student loans for the purpose of comparing loan rates and repayment plans. The superintendent would be required to take such data and create a list of private lenders who provide the best loan rates and repayment options on student loans, and place such list on an easily accessible website with links to the Higher Education Services Corporation's website as well as the websites of other colleges and universities. The list and the website maintained by the department would be updated monthly. Pursuant to this Part, colleges and Universities would further be required to provide prospective and newly enrolled students with clearly outlined and easy to understand information pertaining to the total cost of attendance at their institution. Such information would include the total amount of debt, and the payments thereon, the student would incur. Part D: The Pre-Paid Tuition Program This bill would also add a new sections 355-d of the education law, and 99-u of the state finance law, and amend section 612 of the tax law, to establish a New York State Pre-pay tuition savings program. Such program would allow participants to prepay college tuition at SUNY or CUNY institutions by paying one third of the annual total cost of their college education for a period of twelve years. Payments would be made through a fund administered by the Comptroller, in consultation with the Chancellor of the State University of New York and the Chancellor of the City University of New York. JUSTIFICATION: The cost of a college education is becoming more and more a financial burden unable to be borne by a college student during their college tenure. As a result parents or students are either forced to bear crushing financial circumstances or incur huge amounts of debt in order to obtain a college education. Since the enactment of the tuition tax credit/deduction in SFY 2000-01, tuition and fees at public and private colleges throughout the State have increased by over 47 percent. However, the amount of tuition expenses that a taxpayer can claim as a credit or deduction has not. Accordingly this bill seeks to address this problem, through a three part program. First, tax credits to make paying college tuition more affordable for those who are educated and stay in New York State, second lower cost student loans through a linked deposit student loan program, and third, increased transparency and information to allow consumer students to shop more wisely when purchasing a college education. In the new age of global competitiveness, it is especially important for our state to provide the educational opportunities necessary for the people of New York to succeed. Higher education opens the doors of opportunity, and this bill will permit many more people to not only open the door, but also walk through it, without an unbearable cost or debt burden that will impair their future. By its terms this bill seeks to ensure that rapidly escalating tuition costs don't place the dreams of an outstanding higher education out-of-reach for hardworking, middle class families across our State. It seeks to offer New York's young graduates an opportunity to better manage their finances when they leave college and begin their careers. By its terms, this bill will help lower the cost of a higher education for middle class families and students, encourage young New Yorkers to stay and begin their careers here at home in the Empire State, and reduce overall higher education expenditures by encouraging students to graduate more quickly and with less outstanding debt. LEGISLATIVE HISTORY: 2012 S.7449A FISCAL IMPLICATIONS: Part A: The Stay in New York Tax Credit and the improved Tuition Tax Credit will save taxpayers $212 million by 2016. Part B: The Linked Deposit Student Loan Program provides for a $100 million investment of state deposits. Part C: None Noted Part D: None noted, as participant contributions would cover the cost of the program. EFFECTIVE DATE: This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Parts.
2013-S3998 (ACTIVE) - Bill Text download pdf
S T A T E O F N E W Y O R K
________________________________________________________________________
3998
2013-2014 Regular Sessions
I N S E N A T E
March 4, 2013
___________
Introduced by Sen. LAVALLE -- 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 providing a tax credit for
allowable college expenses (Part A); to amend the education law and
the state finance law, in relation to the student loan linked deposit
act (Part B); to amend the financial services law, in relation to the
truth in student lending clearinghouse program; and to amend the
financial services law and the education law, in relation to the
student lending transparency program (Part C); and to amend the educa-
tion law, in relation to the creation of the New York state tuition
savings program; to amend the state finance law, in relation to estab-
lishing the New York state pre-pay tuition fund; and to amend the tax
law, in relation to reducing distributions from the New York state
pre-pay tuition savings program from adjusted gross income (Part D)
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. This act enacts into law components of legislation relating
to college affordability. Each component is wholly contained within a
Part identified as Parts A through D. The effective date for each
particular provision contained within such Part is set forth in the last
section of such Part. Any provision in any section contained within a
Part, including the effective date of the Part, which makes reference to
a section "of this act", when used in connection with that particular
component, shall be deemed to mean and refer to the corresponding
section of the Part in which it is found. Section three of this act sets
forth the general effective date of this act.
PART A
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD09562-02-3
S. 3998 2
Section 1. Section 606 of the tax law is amended by adding a new
subsection (u) to read as follows:
(U) STAY IN NEW YORK CREDIT. (1) GENERAL. (A) A RESIDENT TAXPAYER
SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR
ALLOWABLE COLLEGE EXPENSES. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO
TWENTY-FIVE PERCENT OF ALLOWABLE COLLEGE EXPENSES, CAPPED AT THREE THOU-
SAND DOLLARS. THE CREDIT SHALL BE ALLOWED ONLY IN THE FIRST TAXABLE YEAR
SUBSEQUENT TO THE TAXPAYER'S COMPLETION OF A COURSE OF STUDY LEADING TO
THE GRANTING OF A BACCALAUREATE DEGREE AND IN EACH OF THE NEXT THREE
TAXABLE YEARS.
(B) IN ORDER TO QUALIFY FOR THE CREDIT, THE ELIGIBLE TAXPAYER SHALL:
(I) HAVE COMPLETED THE COURSE OF STUDY LEADING TO THE GRANTING OF A
BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION WITHIN FOUR
YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY. PROVIDED, HOWEVER,
IF THE ELIGIBLE TAXPAYER WAS EMPLOYED IN EXCESS OF THREE HUNDRED HOURS
PER SEMESTER, THE ELIGIBLE TAXPAYER SHALL HAVE COMPLETED THE COURSE OF
STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE WITHIN FIVE
YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY;
(II) BE EMPLOYED FULL-TIME WITHIN THE STATE; AND
(III) HAVE COMPLETED TWENTY HOURS OF COMMUNITY SERVICE PER SEMESTER OF
ENROLLMENT IN AN INSTITUTION OF HIGHER EDUCATION. PROVIDED, HOWEVER, FOR
THOSE ELIGIBLE TAXPAYERS WHO HAVE BEEN GRANTED DEGREES WITHIN THREE
YEARS OF THE EFFECTIVE DATE OF THIS SUBSECTION, SUCH TAXPAYERS SHALL
COMPLETE THE COMMUNITY SERVICE WITHIN THE FIRST TAXABLE YEAR IN WHICH
THE CREDIT IS CLAIMED.
(C) FOR ELIGIBLE TAXPAYERS WHO ENROLL IN A COURSE OF STUDY LEADING TO
THE GRANTING OF A POST BACCALAUREATE OR OTHER GRADUATE DEGREE IMMEDIATE-
LY FOLLOWING THE RECEIPT OF A BACCALAUREATE DEGREE, THE CREDIT SHALL BE
ALLOWED IN THE FIRST TAXABLE YEAR SUBSEQUENT TO THE TAXPAYER'S
COMPLETION OF SUCH DEGREE OR WHEN SUCH TAXPAYER CEASES TO BE ENROLLED IN
SUCH COURSE OF STUDY AND IN EACH OF THE NEXT THREE TAXABLE YEARS
PROVIDED ALL OTHER QUALIFICATIONS OF THIS SUBSECTION ARE MET.
(2) ALLOWABLE AND QUALIFIED COLLEGE EXPENSES. FOR THE PURPOSES OF THIS
CREDIT:
(A) THE TERM "ALLOWABLE COLLEGE EXPENSES" SHALL MEAN THE TOTAL AMOUNT
OF QUALIFIED COLLEGE EXPENSES INCURRED BY THE TAXPAYER DURING THE
TAXPAYER'S ENROLLMENT IN A COURSE OF STUDY LEADING TO THE GRANTING OF A
BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION.
(B) THE TERM "QUALIFIED COLLEGE EXPENSES" SHALL MEAN THE TUITION
REQUIRED FOR THE ENROLLMENT OR ATTENDANCE OF THE TAXPAYER AT AN INSTITU-
TION OF HIGHER EDUCATION. PROVIDED, HOWEVER, TUITION PAYMENTS MADE
PURSUANT TO THE RECEIPT OF ANY SCHOLARSHIPS OR FINANCIAL AID SHALL BE
EXCLUDED FROM THE DEFINITION OF "QUALIFIED COLLEGE EXPENSES".
(3) INSTITUTION OF HIGHER EDUCATION. FOR THE PURPOSES OF THIS CREDIT,
THE TERM "INSTITUTION OF HIGHER EDUCATION" SHALL MEAN ANY INSTITUTION OF
HIGHER EDUCATION LOCATED IN THE STATE, RECOGNIZED AND APPROVED BY THE
REGENTS, OR ANY SUCCESSOR ORGANIZATION, OF THE UNIVERSITY OF THE STATE
OF NEW YORK OR ACCREDITED BY A NATIONALLY RECOGNIZED ACCREDITING AGENCY
OR ASSOCIATION ACCEPTED AS SUCH BY THE REGENTS, OR ANY SUCCESSOR ORGAN-
IZATION, OF THE UNIVERSITY OF THE STATE OF NEW YORK, WHICH PROVIDES A
COURSE OF STUDY LEADING TO THE GRANTING OF A POST-SECONDARY DEGREE,
CERTIFICATE OR DIPLOMA.
(4) REFUNDABILITY. THE CREDIT UNDER THIS SUBSECTION SHALL BE ALLOWED
AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR REDUCED
BY THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX
AS SO REDUCED, THE TAXPAYER MAY RECEIVE, AND THE COMPTROLLER, SUBJECT TO
S. 3998 3
A CERTIFICATE OF THE COMMISSIONER, SHALL PAY AS AN OVERPAYMENT, WITHOUT
INTEREST, THE AMOUNT OF SUCH EXCESS.
S 2. Subparagraph (A) of paragraph 2 of subsection (t) of section 606
of the tax law, as amended by section 1 of part N of chapter 85 of the
laws of 2002, is amended to read as follows:
(A) The term "allowable college tuition expenses" shall mean the
amount of qualified college tuition expenses of eligible students paid
by the taxpayer during the taxable year[,]. THE AMOUNT OF QUALIFIED
COLLEGE TUITION EXPENSES SHALL BE limited [to] AS FOLLOWS: FOR TAXABLE
YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND THIRTEEN, ten
thousand dollars for each such student; FOR TAXABLE YEARS BEGINNING IN
TWO THOUSAND THIRTEEN, TWELVE THOUSAND DOLLARS FOR EACH STUDENT; FOR
TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN, FOURTEEN THOUSAND
DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND
FIFTEEN, SIXTEEN THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS
BEGINNING IN TWO THOUSAND SIXTEEN, EIGHTEEN THOUSAND DOLLARS FOR EACH
STUDENT; AND FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND SIXTEEN,
TWENTY THOUSAND DOLLARS PER STUDENT;
S 3. Paragraph 4 of subsection (t) of section 606 of the tax law, as
added by section 1 of part DD of chapter 63 of the laws of 2000, is
amended to read as follows:
(4) Amount of credit. [If allowable college tuition expenses are less
than five thousand dollars, the amount of the credit provided under this
subsection shall be equal to the applicable percentage of the lesser of
allowable college tuition expenses or two hundred dollars. If allowable
college tuition expenses are five thousand dollars or more, the amount
of the credit provided under this subsection shall be equal to the
applicable percentage of the allowable college tuition expenses multi-
plied by four percent.]
THE AMOUNT OF THE CREDIT SHALL BE DETERMINED IN ACCORDANCE WITH THE
FOLLOWING SCHEDULES:
(A) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO
THOUSAND THIRTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO:
EXPENSES ARE:
LESS THAN FIVE THOUSAND DOLLARS THE APPLICABLE PERCENTAGE OF THE
LESSER OF ALLOWABLE COLLEGE TUITION
EXPENSES OR TWO HUNDRED DOLLARS
FIVE THOUSAND DOLLARS OR MORE THE APPLICABLE PERCENTAGE OF
ALLOWABLE COLLEGE TUITION EXPENSES
MULTIPLIED BY FOUR PERCENT
(B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO:
EXPENSES ARE:
LESS THAN SIX THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE
TUITION EXPENSES OR TWO HUNDRED
FORTY DOLLARS
SIX THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION
EXPENSES MULTIPLIED BY FOUR PERCENT
(C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO:
EXPENSES ARE:
LESS THAN SEVEN THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE
TUITION EXPENSES OR TWO HUNDRED
EIGHTY DOLLARS
SEVEN THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION
S. 3998 4
EXPENSES MULTIPLIED BY FOUR PERCENT
(D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO:
EXPENSES ARE:
LESS THAN EIGHT THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE
TUITION EXPENSES OR THREE HUNDRED
TWENTY DOLLARS
EIGHT THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION
EXPENSES MULTIPLIED BY FOUR PERCENT
(E) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO:
EXPENSES ARE:
LESS THAN NINE THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE
TUITION EXPENSES OR THREE HUNDRED
SIXTY DOLLARS
NINE THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION
EXPENSES MULTIPLIED BY FOUR PERCENT
(F) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND SIXTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO:
EXPENSES ARE:
LESS THAN TEN THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE
TUITION EXPENSES OR FOUR HUNDRED
DOLLARS
TEN THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION
EXPENSES MULTIPLIED BY FOUR PERCENT
Such applicable percentage shall be twenty-five percent for taxable
years beginning in two thousand one, fifty percent for taxable years
beginning in two thousand two, seventy-five percent for taxable years
beginning in two thousand three and one hundred percent for taxable
years beginning after two thousand three.
S 4. Subsection (t) of section 606 of the tax law is amended by adding
a new paragraph 4-a to read as follows:
(4-A) INFLATION ADJUSTMENT. (A) FOR TAXABLE YEARS BEGINNING IN OR
AFTER TWO THOUSAND SEVENTEEN, THE DOLLAR AMOUNTS IN SUBPARAGRAPH (A) OF
PARAGRAPH TWO AND PARAGRAPH FOUR OF THIS SUBSECTION SHALL BE MULTIPLIED
BY ONE PLUS THE INFLATION ADJUSTMENT.
(B) THE INFLATION ADJUSTMENT FOR ANY TAXABLE YEAR SHALL BE THE
PERCENTAGE, IF ANY, BY WHICH THE HIGHER EDUCATION PRICE INDEX FOR THE
ACADEMIC FISCAL YEAR ENDING IN THE IMMEDIATELY PRECEDING TAXABLE YEAR
EXCEEDS THE HIGHER EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL YEAR
ENDING JUNE, TWO THOUSAND FIFTEEN. FOR THE PURPOSES OF THIS PARAGRAPH,
THE HIGHER EDUCATION PRICE INDEX MEANS THE HIGHER EDUCATION PRICE INDEX
PUBLISHED BY THE COMMONFUND INSTITUTE.
(C) IF THE PRODUCT OF THE AMOUNTS IN SUBPARAGRAPHS (A) AND (B) OF THIS
PARAGRAPH IS NOT A MULTIPLE OF FIVE DOLLARS, SUCH INCREASE SHALL BE
ROUNDED TO THE NEXT MULTIPLE OF FIVE DOLLARS.
S 5. This act shall take effect immediately and shall apply to taxable
years beginning on or after January 1, 2013; provided, however, that
section one of this act shall apply to taxable years beginning on or
after January 1, 2014.
PART B
Section 1. Legislative findings and declaration of purpose. The legis-
lature hereby finds that the costs of completing higher education for
residents of the state of New York are increasing at a rate significant-
S. 3998 5
ly faster than the rate of inflation. Paying out of pocket has become
increasingly difficult for families and students seeking to improve
their educational and economic prospects. An affordable college educa-
tion has become increasingly inaccessible to large numbers of middle
class families in the state, for whom financial resources, including
state grants and scholarships, are either limited or unavailable. Many
families and students have no choice but to turn to the private lending
market in order to finance their higher education.
Compounding the problem is the fact that typical interest rates for
student loans offered through the private lending market are relatively
high when compared to interest rates for other purposes, such as a mort-
gage or automobile. Additionally, the average student loan debt upon
graduation is more than $26,000 per student in the state. Reducing the
debt burden that students endure upon graduating college has become a
critical public policy goal.
As increasing the share of the state's population that undertakes and
completes higher education is also a desirable public policy goal, and
an individual's decision to complete a program of postsecondary educa-
tion typically reaps economic and social rewards to the individual, the
legislature hereby declares that it is in the best interest of the state
to create a student loan linked deposit program whereby the state will
subsidize private lenders to provide reduced-rate loans to students.
S 2. Paragraph c of subdivision 1 of section 680 of the education law,
as added by chapter 622 of the laws of 2008, is amended and a new para-
graph d is added to read as follows:
c. To enter into cooperative agreements, subject to the approval of
the board of trustees and the director of the budget, with other enti-
ties, including, but not limited to, other states, the federal govern-
ment, and post-secondary institutions, to establish, administer, and
operate federal student aid programs. Notwithstanding the provisions of
paragraphs a and b of this subdivision, the corporation is authorized,
pursuant to such cooperative agreements, to provide federal student aid
services to students and families who are not residents of New York
state[.]; AND
D. TO ADMINISTER AND OPERATE A STUDENT LOAN LINKED DEPOSIT PROGRAM
PURSUANT TO ARTICLE FIFTEEN-A OF THE STATE FINANCE LAW.
S 3. Subdivision 2 of section 98-a of the state finance law, as added
by chapter 705 of the laws of 1993, is amended to read as follows:
2. Notwithstanding any provision of law to the contrary, investment of
bond proceeds and other funds not immediately required may be invested
by the comptroller in linked deposits pursuant to article fifteen OR
ARTICLE FIFTEEN-A of this chapter. If any moneys are invested by the
comptroller in linked deposits pursuant to article fifteen OR ARTICLE
FIFTEEN-A of this chapter, the comptroller shall compute the monthly
earnings for all funds, other than the general fund, as if no such
moneys had been invested in such linked deposits.
S 4. The state finance law is amended by adding a new article 15-A to
read as follows:
ARTICLE 15-A
STUDENT LOAN LINKED DEPOSIT ACT
SECTION 225. SHORT TITLE.
226. DEFINITIONS.
227. ESTABLISHMENT AND PURPOSE; STUDENT LOAN LINKED DEPOSIT
PROGRAM AUTHORIZATION.
228. RESPONSIBILITIES OF THE PRESIDENT, COMPTROLLER AND SUPER-
INTENDENT.
S. 3998 6
229. RELEASE FROM LINKED DEPOSITS.
230. LINKED STUDENT LOANS.
231. INTEREST RATE FOR LINKED LOANS; NO LENDER'S FEES.
232. APPLICATION PROCEDURE.
233. REPAYMENT PERIODS FOR LINKED STUDENT LOANS.
234. LIABILITY; EARLY REPAYMENT AND WITHDRAWAL.
234-A. MONITORING AND REPORT.
234-B. PROMOTION OF PROGRAM.
234-C. RULES AND REGULATIONS.
S 225. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
THE "STUDENT LOAN LINKED DEPOSIT ACT".
S 226. DEFINITIONS. WHEN USED IN THIS ARTICLE, UNLESS A DIFFERENT
MEANING CLEARLY APPEARS FROM THE CONTEXT, THE FOLLOWING TERMS SHALL HAVE
THE FOLLOWING MEANINGS:
1. "AUTHORIZED DEPOSITOR" MEANS THE COMPTROLLER WITH RESPECT TO LINKED
DEPOSITS MADE BY THE COMPTROLLER.
2. "COMPTROLLER" MEANS THE COMPTROLLER OF THE STATE OF NEW YORK.
3. "DEPARTMENT" MEANS THE DEPARTMENT OF FINANCIAL SERVICES.
4. "ELIGIBLE RECIPIENT" MEANS AN INDIVIDUAL THAT HAS SUCCESSFULLY
APPLIED FOR A LINKED STUDENT LOAN AND MET ALL REQUIREMENTS PRESCRIBED BY
THE PRESIDENT AND A LENDING INSTITUTION FOR RECEIPT OF A LOAN.
5. "LENDER" MEANS:
(A) ANY COMMERCIAL BANK WHICH IS OR SHALL BECOME AN APPROVED DEPOSITO-
RY OF STATE FUNDS UNDER THE PROVISIONS OF SECTION ONE HUNDRED FIVE OF
THIS CHAPTER AND WHICH AGREES TO PARTICIPATE IN THE PROGRAM; OR
(B) ANY THRIFT WHICH AN AUTHORIZED DEPOSITOR DETERMINES IS ELIGIBLE TO
ACCEPT LINKED DEPOSITS BASED UPON CRITERIA APPLIED BY THE AUTHORIZED
DEPOSITOR IN MAKING DETERMINATIONS UNDER SECTION ONE HUNDRED FIVE OF
THIS CHAPTER, AND WHICH AGREES TO PARTICIPATE IN THE PROGRAM, PROVIDED
THAT ANY LINKED DEPOSIT IN SUCH THRIFT SHALL BE SECURED IN THE SAME
MANNER AS MONEYS DEPOSITED PURSUANT TO SECTION ONE HUNDRED FIVE OF THIS
CHAPTER AND SUCH THRIFTS SHALL PLEDGE ASSETS OR FURNISH OTHER SECURITY
SATISFACTORY IN FORM AND AMOUNT TO THE AUTHORIZED DEPOSITOR FOR THE
REPAYMENT OF MONEYS.
6. "LINKED DEPOSIT" MEANS A DEPOSIT PLACED WITH A LENDER BY THE COMP-
TROLLER FOR A PERIOD OF FOUR YEARS AT THE LINKED DEPOSIT INTEREST RATE,
PROVIDED THE LENDER AGREES TO:
(A) LEND THE EQUIVALENT VALUE OF SUCH DEPOSIT TO AN ELIGIBLE RECIPIENT
AT THE INTEREST RATE PROVIDED IN SECTION TWO HUNDRED THIRTY-ONE OF THIS
ARTICLE; AND
(B) PERMIT THE DEPOSIT TO BE COMPRISED OF A SERIES OF NINETY DAY
DEPOSITS EACH BEARING AN INTEREST RATE EQUAL TO THE LINKED DEPOSIT
INTEREST RATE FIXED AT THE TIME THE ORIGINAL DEPOSIT IS PLACED.
THIS ARTICLE AND THE RELATED STATUTES THAT REFER TO THIS ARTICLE DO
NOT GRANT THRIFTS ELIGIBILITY TO ACCEPT PUBLIC FUNDS OR PUBLIC MONEYS
FROM PUBLIC ENTITIES FOR INVESTMENT PURPOSES. A LINKED DEPOSIT IS
INTENDED TO ENABLE A LENDER TO MAKE A LINKED LOAN TO AN ELIGIBLE RECIPI-
ENT AND SUCH DEPOSIT EARNS A YIELD LOWER THAN POSTED RATES IN ORDER TO
ACCOMPLISH THE GOALS OF THIS ARTICLE.
7. "LINKED DEPOSIT INTEREST RATE" MEANS FOR A LINKED DEPOSIT MADE IN
CONNECTION WITH A LINKED LOAN TO AN ELIGIBLE RECIPIENT A FIXED RATE OF
INTEREST WHICH IS THREE HUNDRED BASIS POINTS BELOW THE LENDER'S POSTED
FOUR YEAR CERTIFICATE OF DEPOSIT RATE OR, IF THE LENDER DOES NOT OFFER A
FOUR YEAR CERTIFICATE OF DEPOSIT, IS THREE HUNDRED BASIS POINTS BELOW
THE AVERAGE STATEWIDE RATE FOR FOUR YEAR CERTIFICATES OF DEPOSIT AS
DETERMINED BY THE SUPERINTENDENT OF FINANCIAL SERVICES. IN THE EVENT
S. 3998 7
THAT THE LENDER'S POSTED FOUR YEAR CERTIFICATE OF DEPOSIT RATE, OR THE
AVERAGE STATEWIDE RATE FOR FOUR YEAR CERTIFICATES OF DEPOSIT ARE BELOW
THREE HUNDRED BASIS POINTS, THE LINKED DEPOSIT INTEREST RATE SHALL NOT
BE LESS THAN ZERO.
8. "LINKED LOAN" MEANS A LOAN MADE TO AN ELIGIBLE RECIPIENT, IN AN
AMOUNT EQUAL TO A LINKED DEPOSIT AND BEARING INTEREST FOR THE FIRST FOUR
YEARS AT THE INTEREST RATE PROVIDED IN SECTION TWO HUNDRED THIRTY-ONE OF
THIS ARTICLE.
9. "PRESIDENT" MEANS THE PRESIDENT OF THE HIGHER EDUCATION SERVICES
CORPORATION.
10. "PROGRAM" MEANS THE STUDENT LOAN LINKED DEPOSIT PROGRAM.
11. "QUALIFIED EDUCATIONAL EXPENSES" MEANS THE ACTUAL OR EXPECTED COST
OF A STUDENT'S HIGHER EDUCATION, WHICH SHALL INCLUDE THE FULL QUARTERLY,
SEMESTERLY OR ANNUAL COST OF TUITION, FEES, BOOKS, SUPPLIES, ROOM AND
BOARD.
12. "THRIFT" MEANS ANY SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION,
FEDERAL SAVINGS BANK OR FEDERAL SAVINGS AND LOAN ASSOCIATION.
S 227. ESTABLISHMENT AND PURPOSE; STUDENT LOAN LINKED DEPOSIT PROGRAM
AUTHORIZATION. THE STUDENT LOAN LINKED DEPOSIT PROGRAM IS HEREBY
CREATED. THE PURPOSE OF THE PROGRAM IS TO MAKE AVAILABLE TO RESIDENTS
OF NEW YORK STATE REDUCED RATE LOANS THAT WILL ASSIST IN THE FINANCING
OF AN IN-STATE COLLEGE EDUCATION. THE COMPTROLLER IS HEREBY AUTHORIZED
TO USE ANY MONEYS OF THE STATE THE COMPTROLLER IS AUTHORIZED TO INVEST
PURSUANT TO SECTION NINETY-EIGHT-A OF THIS CHAPTER AS LINKED DEPOSITS
FOR THE PROGRAM. NOT MORE THAN ONE HUNDRED MILLION DOLLARS OF SUCH
MONEYS SHALL BE ON DEPOSIT PURSUANT TO THE PROGRAM AT ANY GIVEN TIME.
S 228. RESPONSIBILITIES OF THE PRESIDENT, COMPTROLLER AND SUPERINTEN-
DENT. 1. THE PRESIDENT SHALL ADMINISTER THE PROGRAM PURSUANT TO SECTION
TWO HUNDRED THIRTY-TWO OF THIS ARTICLE, INCLUDING ALL DECISIONS WITH
RESPECT TO THE APPLICATION AND USE OF THE PROGRAM FOR ELIGIBLE RECIPI-
ENTS; MARKET AND PROMOTE THE PROGRAM PURSUANT TO SECTION TWO HUNDRED
THIRTY-FOUR-B OF THIS ARTICLE; AFTER CONSULTING WITH THE COMPTROLLER AND
THE SUPERINTENDENT OF FINANCIAL SERVICES, ISSUE RULES AND REGULATIONS
FOR THE OPERATION OF THE PROGRAM PURSUANT TO SECTION TWO HUNDRED THIR-
TY-FOUR-C OF THIS ARTICLE.
2. THE COMPTROLLER'S RESPONSIBILITIES FOR THE PROGRAM SHALL BE LIMITED
TO: PURSUANT TO SECTIONS TWO HUNDRED TWENTY-SEVEN AND TWO HUNDRED THIR-
TY-TWO OF THIS ARTICLE, PLACING MONEYS ON DEPOSIT AT THE REQUEST OF THE
PRESIDENT FOR THE PURPOSES OF THE PROGRAM AND ADMINISTERING SUCH DEPOS-
ITS IN ACCORDANCE WITH SECTIONS NINETY-EIGHT-A AND ONE HUNDRED FIVE OF
THIS CHAPTER AND WITH THE COMPTROLLER'S ESTABLISHED PROCEDURES; AND
ENTERING INTO DEPOSIT AGREEMENTS WITH LENDERS PURSUANT TO SECTION TWO
HUNDRED THIRTY-TWO OF THIS ARTICLE.
3. THE SUPERINTENDENT'S RESPONSIBILITIES FOR THE PROGRAM SHALL BE
LIMITED TO MARKETING AND PROMOTING THE PROGRAM PURSUANT TO SECTION TWO
HUNDRED THIRTY-FOUR-B OF THIS ARTICLE.
S 229. RELEASE FROM LINKED DEPOSITS. THE AUTHORIZED DEPOSITOR MAY
PERMIT FUNDS RELEASED FROM A LINKED DEPOSIT RELATING TO A LINKED LOAN TO
BE MADE AVAILABLE FOR ADDITIONAL LINKED DEPOSITS UNDER THIS PROGRAM.
S 230. LINKED STUDENT LOANS. LINKED STUDENT LOANS SHALL BE MADE BY
LENDERS PURSUANT TO THE PROGRAM ONLY TO ELIGIBLE RECIPIENTS FOR QUALI-
FIED EDUCATIONAL EXPENSES. A LINKED LOAN SHALL BE LIMITED TO A MAXIMUM
AMOUNT OF SEVEN THOUSAND FIVE HUNDRED DOLLARS PER ACADEMIC YEAR. AN
ELIGIBLE RECIPIENT MAY RECEIVE NO MORE THAN ONE LINKED LOAN PER ACADEMIC
YEAR. DURING THE LIFE OF THE LINKED LOAN PROGRAM, THE TOTAL AMOUNT OF
MONEY THAT AN ELIGIBLE RECIPIENT CAN BORROW FROM THE LINKED STUDENT LOAN
S. 3998 8
PROGRAM SHALL BE THIRTY THOUSAND DOLLARS. THE CREDIT DECISION FOR MAKING
A LINKED LOAN SHALL BE MADE SOLELY BY THE LENDER, PROVIDED HOWEVER THAT
SUCH LENDER SHALL ENSURE THAT AN ELIGIBLE RECIPIENT COMPLIES WITH THE
PROVISIONS OF THIS ARTICLE, INCLUDING ANY RULES OR REGULATIONS ISSUED BY
THE PRESIDENT. NOTWITHSTANDING THE LENGTH OF THE TERM OF A LINKED LOAN,
THE LINKED DEPOSIT RELATING TO THE LINKED LOAN SHALL BE FOR A PERIOD OF
NOT MORE THAN FOUR YEARS.
S 231. INTEREST RATE FOR LINKED LOANS; NO LENDER'S FEES. 1. LINKED
LOANS MADE TO ELIGIBLE RECIPIENTS SHALL BEAR INTEREST AT A FIXED RATE
EQUAL TO THREE PERCENTAGE POINTS BELOW THE FIXED INTEREST RATE THE LEND-
ER WOULD HAVE CHARGED FOR THE LOAN IN THE ABSENCE OF A LINKED DEPOSIT
BASED ON ITS USUAL CREDIT CONSIDERATIONS. LENDERS SHALL CERTIFY TO THE
PRESIDENT THAT THE RATE TO BE CHARGED ON A LINKED LOAN IS THREE PERCENT-
AGE POINTS BELOW THE INTEREST RATE THE LENDER WOULD HAVE CHARGED FOR THE
LOAN IN THE ABSENCE OF A LINKED DEPOSIT.
2. LENDERS WHO MAKE LOANS PURSUANT TO THE PROGRAM SHALL NOT BE ENTI-
TLED TO CHARGE ANY DISCOUNT, POINTS, ORIGINATION FEES, HANDLING FEES,
SERVICE CHARGES, REFINANCING FEES OR PENALTIES OR ANY CHARGE OTHER THAN
THOSE NORMALLY CHARGED AND IN SUCH AMOUNTS NORMALLY CHARGED BY THE LEND-
ER FOR LOANS OF THE TYPE BEING MADE WITHOUT REGARD TO THE PROGRAM.
S 232. APPLICATION PROCEDURE. 1. THE PRESIDENT, WITH THE ASSISTANCE OF
THE SUPERINTENDENT OF THE DEPARTMENT, SHALL ESTABLISH PROCEDURES AND
OTHER REQUIREMENTS FOR PARTICIPATION IN THE PROGRAM, AND SHALL PROVIDE A
SIMPLIFIED APPLICATION FORM TO THE PARTICIPATING LENDERS FOR LINKED
DEPOSITS. SUCH FORM SHALL REFLECT THE QUALIFYING INFORMATION REQUIRED
BY THIS ARTICLE FOR ELIGIBLE LOAN RECIPIENTS. UPON COMPLETION OF ANY
APPLICATION FOR A LINKED DEPOSIT, THE LENDER SHALL SEND THE APPLICATION,
TOGETHER WITH THE INTEREST RATE CERTIFICATION REQUIRED PURSUANT TO
SECTION TWO HUNDRED THIRTY-ONE OF THIS ARTICLE, TO THE PRESIDENT WHO
SHALL EITHER APPROVE OR REJECT THE APPLICATION WITHIN TWENTY-EIGHT DAYS.
THE PRESIDENT SHALL EVALUATE EACH APPLICATION BASED UPON THE FOLLOWING
CRITERIA:
(A) THE EXTENT TO WHICH SUCH LOAN WOULD REDUCE THE LONG-TERM COST OF
FINANCING A STUDENT'S HIGHER EDUCATION;
(B) THE LIKELIHOOD OF THE STUDENT SUCCESSFULLY COMPLETING HIS OR HER
HIGHER EDUCATION AND REPAYING THE LOAN WITHIN A TIMELY MANNER; AND
(C) SUCH OTHER CRITERIA AS THE PRESIDENT DEEMS RELEVANT.
2. IF THE DEPOSIT APPLICATION IS APPROVED BY THE PRESIDENT, HE OR SHE
SHALL NOTIFY AN AUTHORIZED DEPOSITOR THAT A DETERMINATION HAS BEEN MADE
THAT THE APPLICATION SATISFIES THE REQUIREMENTS OF THIS ARTICLE, AND THE
PRESIDENT SHALL REQUEST THE AUTHORIZED DEPOSITOR TO DEPOSIT FUNDS WITH
THE LENDER IN ACCORDANCE WITH SECTION NINETY-EIGHT-A OF THIS CHAPTER AND
WITH THE AUTHORIZED DEPOSITOR'S ESTABLISHED PROCEDURES. SUCH DEPOSITS
SHALL BE SECURED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE
HUNDRED FIVE OF THIS CHAPTER, AND LENDERS RECEIVING SUCH DEPOSITS SHALL
SATISFY, IN THE SOLE JUDGMENT OF THE AUTHORIZED DEPOSITOR, ALL COLLAT-
ERAL AND OTHER REQUIREMENTS GENERALLY APPLIED BY THE AUTHORIZED DEPOS-
ITOR TO FUNDS INVESTED BY IT. THE NOTIFIED AUTHORIZED DEPOSITOR AND THE
LENDER SHALL ENTER INTO A WRITTEN DEPOSIT AGREEMENT. IN NO EVENT SHALL
ANY DEFECT IN ANY SUCH AGREEMENT BE ASSERTED AS A DEFENSE BY A BORROWER
ON A LINKED LOAN MADE PURSUANT TO THE PROGRAM.
S 233. REPAYMENT PERIODS FOR LINKED STUDENT LOANS. THE PRESIDENT SHALL
REQUIRE THAT LINKED STUDENT LOANS ISSUED THROUGH THE PROGRAM OFFER FLEX-
IBLE REPAYMENT OPTIONS, INCLUDING THE OPTION OF AN INCOME-BASED REPAY-
MENT PLAN. SUCH REPAYMENT OPTIONS MAY, IF THE PRESIDENT DEEMS IT ADVIS-
ABLE, BE CONSISTENT WITH THE REPAYMENT TERMS STIPULATED BY THE WILLIAM
S. 3998 9
D. FORD FEDERAL DIRECT LOAN PROGRAM AUTHORIZED PURSUANT TO 20 USC CHAP-
TER 28, SUBCHAPTER IV, PART C.
S 234. LIABILITY; EARLY REPAYMENT AND WITHDRAWAL. NOTHING CONTAINED IN
THIS ARTICLE SHALL IMPOSE LIABILITY ON THE STATE OR ANY OF ITS DEPART-
MENTS OR EMPLOYEES FOR PAYMENT OR DELAYS IN PAYMENT OF THE PRINCIPAL OR
INTEREST OF A LINKED LOAN. ANY DELAY IN PAYMENTS OR ANY DEFAULT ON A
LINKED LOAN SHALL IN NO WAY AFFECT THE LINKED DEPOSIT AGREEMENT BETWEEN
THE LENDER AND THE AUTHORIZED DEPOSITOR. HOWEVER, IN THE EVENT THE
INTEREST RATE OF THE LINKED LOAN SHALL BE INCREASED AS A CONSEQUENCE OF
DEFAULT OR RENEGOTIATION, OR THE LOAN SHALL BE CHARGED OFF, THE LENDER
SHALL GIVE THE AUTHORIZED DEPOSITOR PROMPT NOTICE OF SUCH EVENT, AND THE
AUTHORIZED DEPOSITOR SHALL THEREAFTER WITHDRAW THE LINKED DEPOSIT UPON
NOT LESS THAN SEVEN DAYS' PRIOR WRITTEN NOTICE TO THE LENDER. UPON EARLY
REPAYMENT OF A LINKED LOAN, THE LENDER SHALL WITHIN THIRTY DAYS GIVE THE
AUTHORIZED DEPOSITOR NOTICE OF SUCH EARLY REPAYMENT, AND THE AUTHORIZED
DEPOSITOR SHALL THEREAFTER WITHDRAW THE LINKED DEPOSIT UPON NOT LESS
THAN SEVEN DAYS' PRIOR WRITTEN NOTICE TO THE LENDER, AND THE INTEREST
RATE PAYABLE ON THE LINKED DEPOSIT FROM THE DATE OF EARLY REPAYMENT OF
THE LINKED LOAN TO THE DATE OF WITHDRAWAL OF THE LINKED DEPOSIT SHALL BE
THE INTEREST RATE UPON WHICH THE LINKED DEPOSIT INTEREST RATE WAS CALCU-
LATED WITHOUT REGARD TO THE APPLICABLE BASIS POINT REDUCTION.
S 234-A. MONITORING AND REPORT. 1. THE PRESIDENT SHALL MONITOR THE
ACTIVITIES OF PARTICIPATING LENDERS AND LOAN RECIPIENTS AND MAY REQUIRE
PERIODIC REPORTS OR OTHER INFORMATION THE PRESIDENT DEEMS NECESSARY FROM
PARTICIPATING LENDERS AND LOAN RECIPIENTS ON THE STATUS OF THE LINKED
LOANS TO ENSURE COMPLIANCE WITH THE PROVISIONS AND THE INTENT OF THIS
ARTICLE.
2. ON OR BEFORE DECEMBER FIRST, TWO THOUSAND FIFTEEN, AND ANNUALLY
THEREAFTER THE PRESIDENT SHALL SUBMIT TO THE GOVERNOR, THE TEMPORARY
PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY A REPORT REGARD-
ING THE ACTIVITIES OF THE PROGRAM. SUCH REPORT SHALL CONTAIN A STATEMENT
OF THE COST OF THE PROGRAM TO THE STATE, CONSIDERED AS A WHOLE, BECAUSE
OF REDUCED RATES ON FUNDS INVESTED IN LINKED DEPOSITS. SUCH REPORT SHALL
ALSO INCLUDE, BUT SHALL NOT BE LIMITED TO, THE NUMBER AND TYPE OF LINKED
LOANS UNDER THE PROGRAM AND THE AMOUNT THEREOF; THE NUMBER AND TYPES OF
LENDERS MAKING LINKED LOANS AND OF INDIVIDUALS RECEIVING LINKED LOANS;
THE GEOGRAPHIC DISTRIBUTION OF SUCH LENDERS AND RECIPIENTS, INCLUDING
THE STEPS TAKEN TO ENSURE GEOGRAPHIC DIVERSITY AMONG PARTICIPATING LEND-
ERS, AS WELL AS ANY INFORMATION THE PRESIDENT DETERMINES USEFUL IN EVAL-
UATING THE BENEFITS OF THE PROGRAM.
S 234-B. PROMOTION OF PROGRAM. THE DEPARTMENT, WITH THE ASSISTANCE OF
OTHER APPROPRIATE STATE AGENCIES, SHALL ACTIVELY MARKET AND PROMOTE
AWARENESS OF THE PROGRAM IN ALL GEOGRAPHICAL AREAS OF THE STATE AMONG
COMMERCIAL BANKS, THRIFTS AND OTHER APPROPRIATE BANKING ORGANIZATIONS.
S 234-C. RULES AND REGULATIONS. THE PRESIDENT SHALL, IN CONSULTATION
WITH THE COMPTROLLER AND THE SUPERINTENDENT OF FINANCIAL SERVICES,
PROMULGATE RULES AND REGULATIONS NECESSARY AND REASONABLE FOR THE OPERA-
TION OF THE PROGRAM.
S 5. This act shall take effect on the one hundred eightieth day after
it shall have become a law, provided however that effective immediately,
the addition, amendment and/or repeal of any rules or regulations neces-
sary for implementation of the foregoing sections of this act on its
effective date is authorized and directed to be made and completed on or
before such effective date.
PART C
S. 3998 10
Section 1. Paragraphs 6 and 7 of subsection (c) of section 301 of the
financial services law are amended and a new paragraph 8 is added to
read as follows:
(6) providing technical assistance to local governments and not-for-
profits in the development of consumer protection measures with respect
to financial products and services; [and]
(7) continuing and expanding the detection, investigation and
prevention of insurance fraud[.]; AND
(8) ESTABLISHING AND ADMINISTERING THE "STUDENT LENDING TRANSPARENCY
PROGRAM" PURSUANT TO ARTICLE SIX OF THIS CHAPTER.
S 2. The financial services law is amended by adding a new article 6
to read as follows:
ARTICLE 6
STUDENT LENDING TRANSPARENCY PROGRAM
SECTION 601. DEFINITIONS.
602. STUDENT LENDING TRANSPARENCY PROGRAM.
603. RULES AND REGULATIONS.
S 601. DEFINITIONS. THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEAN-
INGS WHEN USED IN THIS ARTICLE:
A. "PRIVATE STUDENT LOANS" SHALL MEAN A PRIVATE LOAN ISSUED BY A
PRIVATE LENDING INSTITUTION FOR THE PURPOSES OF PAYING FOR OR FINANCING
HIGHER EDUCATION EXPENSES.
B. "PRIVATE LENDING INSTITUTIONS" OR "PRIVATE LENDERS" SHALL MEAN ANY
PRIVATE ENTITY THAT ITSELF OR THROUGH AN AFFILIATE MAKES AVAILABLE
STUDENT LOANS TO PAY FOR OR FINANCE HIGHER EDUCATION EXPENSES.
C. "STUDENT BORROWER" SHALL MEAN ANY INDIVIDUAL WHO BORROWS MONEY FROM
A PRIVATE LENDING INSTITUTION TO FINANCE HIGHER EDUCATION EXPENSES.
D. "HIGHER EDUCATION EXPENSES" SHALL INCLUDE THE FOLLOWING:
(I) TUITION AND FEES;
(II) BOOKS AND SUPPLIES; AND
(III) ROOM AND BOARD.
S 602. STUDENT LENDING TRANSPARENCY PROGRAM. 1. THE SUPERINTENDENT
SHALL ESTABLISH A PROGRAM TO COMPILE DATA RELATED TO PRIVATE STUDENT
LOANS FOR THE PURPOSE OF COMPARING PRIVATE LENDING INSTITUTIONS' STUDENT
LOAN INTEREST RATES AND REPAYMENT PLANS, INCLUDING POLICIES RELATING TO
DEFERMENT AND FORBEARANCE, DEFAULT POLICIES AND PENALTIES, AND ANY OTHER
INFORMATION THAT THE SUPERINTENDENT DEEMS RELEVANT FOR THE PURPOSE OF
CREATING A LIST OF PRIVATE LENDERS WHO PROVIDE THE LOWEST RATES AND BEST
REPAYMENT OPTIONS ON STUDENT LOANS. SUCH LIST SHALL BE CREATED AND MAIN-
TAINED BY THE SUPERINTENDENT OR HIS DESIGNEE AND SHALL BE PLACED ON AN
EASILY ACCESSIBLE WEBSITE THAT SHALL BE MADE AVAILABLE TO BE LINKED TO
THE WEBSITE OF THE HIGHER EDUCATION SERVICES CORPORATION PURSUANT TO
SUBDIVISION THIRTEEN OF SECTION SIX HUNDRED FIFTY-FIVE OF THE EDUCATION
LAW AND TO COLLEGES AND UNIVERSITIES WEBSITES PURSUANT TO ARTICLE FOUR-
TEEN-B OF THE EDUCATION LAW.
2. SUCH WEBSITE SHALL BE UPDATED ON A MONTHLY BASIS TO ENSURE THAT THE
STUDENT LOAN INFORMATION IS CURRENT AND ACCURATE. THE SUPERINTENDENT OR
HIS OR HER DESIGNEE SHALL COMPILE A LIST OF THE TOP TEN BEST PRIVATE
LENDING INSTITUTIONS BASED UPON RATES AND POLICIES THAT ARE MOST FAVORA-
BLE TO THE STUDENT BORROWER. THE SUPERINTENDENT MAY ALSO CONSIDER THE
PRIVATE LENDING INSTITUTIONS POLICIES FOR ALLOWING A STUDENT BORROWER TO
BORROW MORE THAN TEN PERCENT OVER SUCH STUDENT BORROWER'S TOTAL COST OF
HIGHER EDUCATION EXPENSES WHEN DETERMINING IF A PRIVATE LENDING INSTITU-
TION SHOULD BE PLACED ON SUCH LIST. INFORMATION PERTAINING TO LENDING
INSTITUTIONS THAT DO NOT MAKE THE TOP TEN LIST SHALL ALSO BE POSTED ON
S. 3998 11
SUCH WEBSITE AND THOSE LENDING INSTITUTIONS THAT PROVIDE THE WORST RATES
AND STRICTEST REPAYMENT OPTIONS SHALL BE CLEARLY INDICATED.
S 603. RULES AND REGULATIONS. THE SUPERINTENDENT SHALL PROMULGATE ALL
RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE.
S 3. Section 655 of the education law is amended by adding a new
subdivision 13 to read as follows:
13. TO CREATE A LINK ON THE CORPORATION'S WEBSITE TO THE DEPARTMENT OF
FINANCIAL SERVICES WEBSITE PURSUANT TO SUBDIVISION ONE OF SECTION SIX
HUNDRED TWO OF THE FINANCIAL SERVICES LAW.
S 4. The education law is amended by adding a new article 14-B to read
as follows:
ARTICLE 14-B
STUDENT LENDING TRANSPARENCY PROGRAM
SECTION 697. CREATION OF PROGRAM.
698. ACCESS TO INFORMATION.
699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES.
S 697. CREATION OF PROGRAM. THE STUDENT LENDING TRANSPARENCY PROGRAM
IS HEREBY ESTABLISHED TO ENSURE THAT NEW YORK STATE COLLEGES PROVIDE THE
MOST ACCURATE AND TRANSPARENT INFORMATION WITH REGARD TO STUDENT LOANS.
S 698. ACCESS TO INFORMATION. NOTWITHSTANDING ANY OTHER LAW, RULE OR
REGULATION TO THE CONTRARY, NEW YORK STATE COLLEGES AS DEFINED IN
SECTION SIX HUNDRED ONE OF THIS TITLE, SHALL BE REQUIRED THROUGH THEIR
FINANCIAL AID OFFICES TO PROVIDE TO PROSPECTIVE OR NEWLY ACCEPTED
STUDENTS AND PARENTS CLEARLY OUTLINED AND EASY TO UNDERSTAND INFORMATION
PERTAINING TO THE TOTAL COST OF ATTENDANCE AT THEIR INSTITUTION, THE
APPROXIMATE OR ACTUAL TOTAL AMOUNT OF FINANCIAL AID THEY WOULD RECEIVE
FROM SUCH INSTITUTION AND THE APPROXIMATE OR ACTUAL TOTAL AMOUNT OF
STUDENT LOAN DEBT THEY WOULD ACCUMULATE OVER THE COURSE OF FOUR YEARS IF
THEY ATTENDED SUCH COLLEGE. THE INFORMATION PROVIDED MUST ALSO INCLUDE
STUDENT LOAN RATES, INFORMATION ON REPAYMENT PLANS AND DEFAULT RATES AND
THE ACTUAL COST OF THE AVERAGE MONTHLY PAYMENT THAT WOULD BE REQUIRED
UPON GRADUATION WHEN SUCH LOANS WOULD BECOME DUE.
S 699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES. NEW YORK STATE
COLLEGES THAT MAINTAIN AN OFFICIAL COLLEGE WEBSITE SHALL ALSO BE
REQUIRED TO ADD A LINK ON EACH OF THEIR WEBSITES TO THE DEPARTMENT OF
FINANCIAL SERVICES WEBSITE ON STUDENT LENDING TRANSPARENCY CREATED
PURSUANT TO ARTICLE SIX OF THE FINANCIAL SERVICES LAW.
S 5. This act shall take effect on the one hundred eightieth day after
it shall have become a law.
PART D
Section 1. The education law is amended by adding a new section 355-d
to read as follows:
S 355-D. NEW YORK STATE PRE-PAY TUITION SAVINGS PROGRAM. 1. FOR
PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
MEANINGS:
A. "PARTICIPANT" SHALL MEAN A NEW YORK STATE RESIDENT WHO ENROLLS AN
ELIGIBLE CHILD AND MAKES PAYMENTS ON BEHALF OF SUCH ELIGIBLE CHILD, AND
SHALL INCLUDE BUT NOT BE LIMITED TO SUCH ELIGIBLE CHILD'S PARENT OR
GUARDIAN.
B. "ELIGIBLE CHILD" SHALL MEAN A CHILD FIVE YEARS OF AGE OR OLDER, WHO
IS ENROLLED IN THE NEW YORK STATE PRE-PAY TUITION PROGRAM BY A PARTIC-
IPANT.
C. "THE FUND" SHALL MEAN THE NEW YORK STATE PRE-PAY TUITION FUND
ESTABLISHED BY SECTION NINETY-NINE-U OF THE STATE FINANCE LAW.
S. 3998 12
D. "TOTAL COST OF EDUCATION" SHALL MEAN THE AVERAGE SYSTEM-WIDE YEARLY
TOTAL COST OF A FOUR YEAR EDUCATION AT THE STATE UNIVERSITY OF NEW YORK
INCLUDING TUITION, ROOM AND BOARD AND ALL APPLICABLE FEES. DURING EACH
YEAR OF PARTICIPATION, THE TOTAL COST OF EDUCATION SHALL BE CALCULATED
BASED UPON THE CURRENT YEAR'S COST UNTIL THE FINAL PAYMENT IS MADE.
2. THE NEW YORK STATE PRE-PAY TUITION SAVINGS PROGRAM IS HEREBY ESTAB-
LISHED AND SHALL BE CONTROLLED AND ADMINISTERED BY THE NEW YORK STATE
COMPTROLLER OR HIS OR HER DESIGNEE IN CONSULTATION WITH THE CHANCELLOR
OF THE STATE UNIVERSITY OF NEW YORK (SUNY) OR HIS OR HER DESIGNEE AND
THE CHANCELLOR OF THE CITY UNIVERSITY OF NEW YORK (CUNY) OR HIS OR HER
DESIGNEE.
3. A. A PARTICIPANT MAY ENROLL AN ELIGIBLE CHILD BEGINNING AT FIVE
YEARS OF AGE AND PAY ONE-THIRD OF THE TOTAL COST OF EDUCATION EACH YEAR
FOR THE DURATION OF TWELVE CONSECUTIVE YEARS.
B. A PARTICIPANT MAY ENROLL AN ELIGIBLE CHILD BEGINNING AT SIX YEARS
OF AGE AND PAY ONE-THIRD OF THE TOTAL COST OF EDUCATION EACH YEAR FOR
THE DURATION OF TWELVE YEARS.
C. IF A PARTICIPANT ENROLLS AN ELIGIBLE CHILD AT AGE SEVEN OR THERE-
AFTER, YEARLY PAYMENTS SHALL BE DETERMINED BY THE SUNY CHANCELLOR OR HIS
OR HER DESIGNEE AND APPROVED BY THE STATE COMPTROLLER OR HIS OR HER
DESIGNEE BASED UPON A FORMULA THAT CONSIDERS THE CHILD'S AGE AT THE TIME
OF ENROLLMENT AND EVENLY DIVIDES THE YEARLY AVERAGE TOTAL COST OF A FOUR
YEAR SUNY EDUCATION BUT ENSURES THAT THE LAST PAYMENT WILL BE RECEIVED
WITHIN THE CALENDAR YEAR WHEN THE ELIGIBLE CHILD GRADUATES OR IS SCHED-
ULED TO GRADUATE HIGH SCHOOL.
D. (1) UPON ENROLLMENT OF AN ELIGIBLE CHILD INTO THE PROGRAM, THE
PARTICIPANT SHALL RECEIVE A BILL FROM THE STATE COMPTROLLER OR HIS OR
HER DESIGNEE CLEARLY STATING THE TOTAL COST OF EDUCATION FOR THAT YEAR,
AND THE MONTHLY PAYMENT AMOUNT DUE TO BE DEPOSITED IN THE FUND, PROVIDED
HOWEVER, THAT AT ANY TIME WITHIN SUCH YEAR, THE TOTAL COST OF EDUCATION
FOR THAT YEAR MAY BE PAID IN FULL WITHOUT PENALTY.
(2) PROVIDED FURTHER HOWEVER, THAT A PAYMENT PLAN OTHER THAN MONTHLY
BILLING MAY BE ESTABLISHED BASED ON RULES AND REGULATIONS PROMULGATED
PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
E. (1) PAYMENTS DEPOSITED INTO THE FUND SHALL NOT BE ELIGIBLE FOR
WITHDRAWAL AT ANY TIME BEFORE THE ELIGIBLE CHILD FOR WHOM THE PARTIC-
IPANT IS PAYING, REACHES THE AGE OF HIGH SCHOOL GRADUATION OR THE AGE
WHEN SUCH CHILD SHOULD HAVE GRADUATED.
(2) UPON THE ELIGIBLE CHILD REACHING THE AGE OF HIGH SCHOOL GRADU-
ATION, THE PARTICIPANT MAY CHOOSE TO WITHDRAW THE TOTAL BALANCE THAT
SUCH PARTICIPANT PAID INTO THE FUND AND NO LONGER PARTICIPATE IN THE
PROGRAM.
F. (1) UPON SUBMISSION OF THE LAST PAYMENT, THE ACTUAL COST OF WHAT A
TWO YEAR PROGRAM AT SUNY, A TWO YEAR PROGRAM AT CUNY AND A FOUR YEAR
PROGRAM AT CUNY WOULD HAVE COST IN EACH YEAR THAT A PARTICIPANT
COMPLETED PAYMENTS FOR THE FIRST YEAR, THE SECOND YEAR, THE THIRD YEAR
AND THE FOURTH YEAR OF THE TOTAL COST OF EDUCATION, SHALL BE CALCULATED.
(2) THE ACTUAL COST SHALL BE CALCULATED IN THE SAME MANNER AS THE
TOTAL COST OF EDUCATION BY THE COMPTROLLER OR HIS OR HER DESIGNEE IN
CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIGNEE AND THE
CUNY CHANCELLOR OR HIS OR HER DESIGNEE.
G. ONCE AN ELIGIBLE CHILD HAS GRADUATED HIGH SCHOOL OR HAS REACHED THE
AGE OF SUCH CHILD'S SCHEDULED HIGH SCHOOL GRADUATION, AND IT HAS BEEN
DETERMINED THAT ALL REQUIRED PAYMENTS HAVE BEEN DEPOSITED INTO THE FUND,
THE PARTICIPANTS HAVE THE FOLLOWING OPTIONS:
S. 3998 13
(1) SUNY. (I) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, IS
ACCEPTED TO, AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM AT SUNY, THEN
SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND FOR
THE DURATION OF FOUR CONSECUTIVE YEARS IN SUCH SUNY PROGRAM AND THE
COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE
AND PROVIDE ANY REFUNDS DUE TO THE PARTICIPANT, BASED UPON RULES AND
REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
(II) (A) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED
TO, AND ENROLLS IN A TWO YEAR PROGRAM AT SUNY, THEN SUCH ELIGIBLE
CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMP-
TROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND
SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR THE DIFFERENCE BETWEEN THE
COST OF A TWO YEAR PROGRAM AND THE FOUR YEAR PROGRAM FOR WHICH THEY
PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT, CALCU-
LATED UPON SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT AND BASED UPON
RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS
SECTION.
(B) AT THAT TIME, SUCH PARTICIPANT SHALL HAVE THE OPTION TO WITHDRAW
THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND,
OR MAY CHOOSE TO KEEP THE REMAINDER IN THE FUND TO BE APPLIED TO A FOUR
YEAR PROGRAM IN THE EVENT THAT THE ELIGIBLE CHILD TRANSFERS TO A FOUR
YEAR PROGRAM.
(C) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT CUNY,
THE PARTICIPANT SHALL RECEIVE A REFUND FOR THE DIFFERENCE BETWEEN THE
ACTUAL COST OF EDUCATION AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH
THEY PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT,
CALCULATED AT THE TIME OF THE SUBMISSION OF THE PARTICIPANT'S LAST
PAYMENT.
(III) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT A NEW
YORK STATE PRIVATE SCHOOL, THE PARTICIPANT MAY CHOOSE TO HAVE THE
REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND,
APPLIED TO THE COST OF EDUCATION AT SUCH PRIVATE SCHOOL.
(IV) IF SUCH ELIGIBLE CHILD TRANSFERS TO AN OUT-OF-STATE COLLEGE, THE
PARTICIPANT SHALL RECEIVE THE REMAINDER OF THE BALANCE THAT SUCH PARTIC-
IPANT PAID INTO THE FUND.
(2) CUNY. (I) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS
ACCEPTED TO AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM AT CUNY, THEN SUCH
ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE
COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH
COLLEGE, AND SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR THE DIFFER-
ENCE BETWEEN THE ACTUAL COST OF EDUCATION FOR A FOUR YEAR PROGRAM AT
CUNY AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY ADDI-
TIONAL REFUNDS DUE TO THE PARTICIPANT, CALCULATED AT THE TIME OF THE
SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT BASED UPON RULES AND REGU-
LATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
(II) (A) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED
TO AND ENROLLS IN A TWO YEAR PROGRAM AT CUNY, THEN SUCH ELIGIBLE CHILD'S
FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMPTROLLER OR HIS
OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND SHALL PROVIDE
A REFUND TO THE PARTICIPANT FOR THE DIFFERENCE BETWEEN THE COST OF A TWO
YEAR PROGRAM AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING
ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT, CALCULATED UPON
SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT AND BASED UPON RULES AND
REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
(B) AT THAT TIME, SUCH PARTICIPANT SHALL HAVE THE OPTION TO WITHDRAW
THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND,
S. 3998 14
OR MAY CHOOSE TO KEEP THE REMAINDER IN THE FUND TO BE APPLIED TO A FOUR
YEAR PROGRAM IN THE EVENT THAT THE ELIGIBLE CHILD TRANSFERS TO A FOUR
YEAR PROGRAM.
(C) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT CUNY,
THE PARTICIPANT SHALL RECEIVE A REFUND FOR THE DIFFERENCE BETWEEN THE
ACTUAL COST OF EDUCATION AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH
THEY PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT,
CALCULATED AT THE TIME OF THE SUBMISSION OF THE PARTICIPANT'S LAST
PAYMENT.
(D) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT SUNY,
THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND
AND THE COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH
COLLEGE, AND PROVIDE ANY REFUNDS DUE TO THE PARTICIPANT, BASED UPON
RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS
SECTION.
(III) IF AN ELIGIBLE STUDENT TRANSFERS TO A NEW YORK STATE PRIVATE
SCHOOL, THE PARTICIPANT MAY CHOOSE TO HAVE THE REMAINDER OF THE BALANCE
THAT SUCH PARTICIPANT PAID INTO THE FUND, APPLIED TO THE COST OF EDUCA-
TION AT SUCH PRIVATE SCHOOL.
(IV) IF SUCH ELIGIBLE CHILD TRANSFERS TO AN OUT-OF-STATE COLLEGE, THE
PARTICIPANT SHALL RECEIVE THE REMAINDER OF THE BALANCE THAT SUCH PARTIC-
IPANT PAID INTO THE FUND.
(3) NEW YORK STATE PRIVATE SCHOOL. IF A PARTICIPANT'S ELIGIBLE CHILD
APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM
OR A TWO YEAR DEGREE PROGRAM AT A NEW YORK STATE PRIVATE SCHOOL, A
PARTICIPANT MAY CHOOSE TO HAVE THE BALANCE THAT SUCH PARTICIPANT PAID
INTO THE FUND APPLIED TO THE COST OF EDUCATION AT SUCH PRIVATE SCHOOL OR
SUCH PARTICIPANT MAY CHOOSE TO WITHDRAW THE TOTAL CONTRIBUTION THAT SUCH
PARTICIPANT PAID INTO THE FUND BASED UPON RULES AND REGULATIONS PROMUL-
GATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
(4) OUT-OF-STATE SCHOOL OR NON-ACCEPTANCE INTO A NEW YORK STATE
COLLEGE, OR IF AN ELIGIBLE CHILD DOES NOT APPLY TO COLLEGE. IF A PARTIC-
IPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN AN
OUT-OF-STATE SCHOOL OR IF A PARTICIPANT'S ELIGIBLE CHILD DOES NOT GET
ACCEPTED INTO A NEW YORK STATE COLLEGE, OR CHOOSES NOT TO ATTEND
COLLEGE, THEN SUCH PARTICIPANT SHALL WITHDRAW THE TOTAL CONTRIBUTION
THAT SUCH PARTICIPANT PAID INTO THE FUND BASED UPON RULES AND REGU-
LATIONS PROMULGATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
(5) NON-PAYMENT. (I) IF A PARTICIPANT CANNOT MAKE THE REQUIRED
PAYMENTS AT ANY TIME AFTER ENROLLMENT OF AN ELIGIBLE CHILD, THEN SUCH
PARTICIPANT MAY WITHDRAW THE BALANCE THAT SUCH PARTICIPANT HAS PAID INTO
THE FUND AT SUCH TIME THAT THE ELIGIBLE CHILD GRADUATES HIGH SCHOOL OR
REACHES THE AGE OF SCHEDULED GRADUATION.
(II) IF SUCH PARTICIPANT CANNOT MAKE PAYMENT BUT WISHES TO CONTINUE
PAYING INTO THE PROGRAM, SUCH PARTICIPANT MAY RESUME PAYMENTS CALCULATED
UNDER A NEW SCHEDULE BASED UPON THE ELIGIBLE CHILD'S CURRENT AGE AND THE
CURRENT TOTAL COST OF EDUCATION.
(6) DEATH OF ELIGIBLE CHILD. IN THE EVENT OF THE DEATH OF AN ENROLLED
ELIGIBLE CHILD, THE PARTICIPANT MAY WITHDRAW THE TOTAL BALANCE THAT SUCH
PARTICIPANT PAID INTO THE FUND OR MAY ELECT TO HAVE A SCHOLARSHIP IN THE
AMOUNT OF SUCH TOTAL BALANCE AWARDED TO ANOTHER STUDENT IN THE NAME OF
SUCH DECEASED ELIGIBLE CHILD, UPON SUBMISSION OF A DEATH CERTIFICATE AND
BASED UPON RULES AND REGULATIONS PROMULGATED PURSUANT TO SUBDIVISION
FOUR OF THIS SECTION.
4. THE COMPTROLLER OR HIS OR HER DESIGNEE, IN CONSULTATION WITH THE
SUNY CHANCELLOR OR HIS OR HER DESIGNEE AND THE CUNY CHANCELLOR OR HIS OR
S. 3998 15
HER DESIGNEE, SHALL PROMULGATE ALL NECESSARY RULES AND REGULATIONS FOR
THE SUCCESSFUL IMPLEMENTATION OF THIS SECTION. SUCH RULES AND REGU-
LATIONS SHALL INCLUDE PROVISIONS TO ADDRESS AN ELIGIBLE CHILD'S ELIGI-
BILITY FOR TUITION ASSISTANCE PROGRAM AWARDS OR ANY OTHER SCHOLARSHIPS,
GRANTS OR AWARDS, TO ENSURE THAT THE VALUE OF SUCH AWARDS IS REFUNDED TO
THAT PARTICIPANT OR ELIGIBLE CHILD.
S 2. The state finance law is amended by adding a new section 99-u to
read as follows:
S 99-U. NEW YORK STATE PRE-PAY TUITION FUND. 1. THERE IS HEREBY
ESTABLISHED WITHIN THE CUSTODY OF THE STATE COMPTROLLER, OR HIS OR HER
DESIGNEE, IN CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIG-
NEE AND THE CUNY CHANCELLOR OR HIS OR HER DESIGNEE, A NEW FUND TO BE
KNOWN AS THE NEW YORK STATE PRE-PAY TUITION FUND.
2. ALL MONIES RECEIVED PURSUANT TO THE NEW YORK STATE PRE-PAY TUITION
PROGRAM SHALL BE DEPOSITED INTO THIS FUND AND SHALL BE MANAGED PURSUANT
TO SECTION THREE HUNDRED FIFTY-FIVE-D OF THE EDUCATION LAW.
3. ALL NECESSARY RULES AND REGULATIONS FOR THE SUCCESSFUL ADMINIS-
TRATION, INVESTMENT AND MANAGEMENT OF SUCH FUND SHALL BE PROMULGATED BY
THE STATE COMPTROLLER OR HIS OR HER DESIGNEE IN CONSULTATION WITH THE
SUNY CHANCELLOR OR HIS OR HER DESIGNEE OR THE CUNY CHANCELLOR OR HIS OR
HER DESIGNEE.
S 3. Paragraph 33 of subsection (c) of section 612 of the tax law, as
added by chapter 546 of the laws of 1997, is amended to read as follows:
(33) Distributions from a family tuition account established under the
New York state college choice tuition savings program provided for under
article fourteen-A of the education law OR DISTRIBUTIONS FROM THE NEW
YORK STATE PRE-PAY TUITION SAVINGS PROGRAM PROVIDED FOR UNDER SECTION
THREE HUNDRED FIFTY-FIVE-D OF THE EDUCATION LAW, to the extent includi-
ble in gross income for federal income tax purposes.
S 4. Nothing in this act shall be construed to guarantee acceptance
into any New York state college.
S 5. This act shall take effect one year after it shall have become a
law; provided however that effective immediately the New York state
comptroller or his or her designee, in consultation with the chancellor
of the state university of New York or his or her designee and the chan-
cellor of the city university of New York or his or her designee, shall
promulgate all necessary rules and regulations for the timely implemen-
tation of this act on or before such effective date.
S 2. Severability. If any clause, sentence, paragraph, section or part
of this act shall be adjudged by any court of competent jurisdiction to
be invalid and after exhaustion of all further judicial review, the
judgment shall not affect, impair, or invalidate the remainder thereof,
but shall be confined in its operation to the clause, sentence, para-
graph, section or part of this act directly involved in the controversy
in which the judgment shall have been rendered.
S 3. This act shall take effect immediately provided, however, that
the applicable effective date of Parts A through D of this act shall be
as specifically set forth in the last section of such Parts.
Comments
Open Legislation is a forum for New York State legislation. All comments are subject to review and community moderation is encouraged.
Comments deemed off-topic, commercial, campaign-related, self-promotional; or that contain profanity, hate or toxic speech; or that link to sites outside of the nysenate.gov domain are not permitted, and will not be published. Attempts to intimidate and silence contributors or deliberately deceive the public, including excessive or extraneous posting/posts, or coordinated activity, are prohibited and may result in the temporary or permanent banning of the user. Comment moderation is generally performed Monday through Friday. By contributing or voting you agree to the Terms of Participation and verify you are over 13.
Create an account. An account allows you to sign petitions with a single click, officially support or oppose key legislation, and follow issues, committees, and bills that matter to you. When you create an account, you agree to this platform's terms of participation.