S T A T E O F N E W Y O R K
________________________________________________________________________
7224--A
2017-2018 Regular Sessions
I N A S S E M B L Y
April 12, 2017
___________
Introduced by M. of A. CRESPO, SEPULVEDA, PICHARDO, RAMOS, DE LA ROSA,
ARROYO, RIVERA, DAVILA, DILAN, ENGLEBRIGHT, McDONALD -- read once and
referred to the Committee on Higher Education -- recommitted to the
Committee on Higher Education in accordance with Assembly Rule 3, sec.
2 -- committee discharged, bill amended, ordered reprinted as amended
and recommitted to said committee
AN ACT to amend the education law and the tax law, in relation to estab-
lishing the college debt freedom account pilot program
THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
BLY, DO ENACT AS FOLLOWS:
Section 1. The education law is amended by adding a new section 682 to
read as follows:
§ 682. COLLEGE DEBT FREEDOM ACCOUNT PILOT PROGRAM. 1. THERE IS HEREBY
ESTABLISHED THE COLLEGE DEBT FREEDOM ACCOUNT PILOT PROGRAM. SUCH PROGRAM
SHALL PERMIT EMPLOYEES OF ANY EMPLOYER JOINTLY CERTIFIED BY THE COMMIS-
SIONER AND THE COMMISSIONER OF TAXATION AND FINANCE PURSUANT TO THIS
SECTION TO DEPOSIT A PORTION OF THEIR PRE-TAX INCOME PURSUANT TO PARA-
GRAPH FORTY-FOUR OF SUBSECTION (C) OF SECTION SIX HUNDRED TWELVE OF THE
TAX LAW, INTO AN ACCOUNT SOLELY INTENDED FOR UNDERGRADUATE STUDENT LOAN
REPAYMENTS. CERTIFIED EMPLOYERS SHALL RECEIVE A TAX CREDIT BY CONTRIB-
UTING MATCHING FUNDS TO AN EMPLOYEE'S STUDENT LOAN REPAYMENT ACCOUNT
ESTABLISHED PURSUANT TO THIS SECTION. SUCH CONTRIBUTION SHALL BE MINI-
MALLY FIFTY PERCENT OF THE EMPLOYEE'S DEPOSIT AND A MAXIMUM ONE HUNDRED
PERCENT OF THE EMPLOYEE'S DEPOSIT, UP TO TWENTY-FIVE HUNDRED DOLLARS
ANNUALLY, PER EMPLOYEE ACCOUNT. THE ANNUAL MAXIMUM AGGREGATE AMOUNT TO
BE DEPOSITED PER ACCOUNT BY THE EMPLOYEE AND EMPLOYER SHALL BE FIVE
THOUSAND DOLLARS.
2. FOR THE PURPOSES OF THIS SECTION, "STUDENT LOAN" SHALL MEAN THE
CUMULATIVE TOTAL OF THE ANNUAL STUDENT LOANS COVERING THE COST OF
ATTENDANCE AT AN UNDERGRADUATE COLLEGE OR UNIVERSITY, AND ANY INTEREST
THEREON.
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD08136-09-8
A. 7224--A 2
3. ANY EMPLOYER WHICH IS A MIDDLE-SIZED BUSINESS IN THIS STATE, HAVING
BETWEEN TWENTY AND FIVE HUNDRED EMPLOYEES, MAY SUBMIT AN APPLICATION TO
THE COMMISSIONER FOR CERTIFICATION TO PARTICIPATE IN THE PROGRAM ESTAB-
LISHED PURSUANT TO THIS SECTION. THE COMMISSIONER AND THE COMMISSIONER
OF TAXATION AND FINANCE SHALL JOINTLY CONSIDER EACH APPLICATION FOR
CERTIFICATION SUBMITTED PURSUANT TO THIS SUBDIVISION. PROVIDED THAT NOT
MORE THAN FIFTY EMPLOYERS SHALL BE CERTIFIED TO PARTICIPATE IN THE
PROGRAM.
4. EMPLOYEE STUDENT LOAN REPAYMENT ACCOUNTS SHALL BE ESTABLISHED BY AN
EMPLOYEE FOR DEPOSIT OF FUNDS TO BE USED SOLELY FOR REPAYMENT OF STUDENT
LOANS. SUCH ACCOUNTS SHALL BE MANAGED BY THE HIGHER EDUCATION SERVICES
CORPORATION. ALL ENROLLEES AND CERTIFIED PARTICIPATING EMPLOYERS SHALL
PROVIDE THE CORPORATION WITH ALL NECESSARY INFORMATION IN ORDER TO
IMPLEMENT THE PROVISIONS OF THIS SECTION.
5. MONEYS IN A STUDENT LOAN REPAYMENT ACCOUNT SHALL BE AVAILABLE ONLY
FOR REPAYMENTS OF STUDENT LOANS. ANY WITHDRAWAL OR DISTRIBUTION FROM A
STUDENT LOAN REPAYMENT ACCOUNT WHICH VIOLATED THE PROVISIONS OF THIS
SUBDIVISION SHALL BE SUBJECT TO A PENALTY OF TEN PERCENT ON ANY SUCH
WITHDRAWAL OR DISTRIBUTION.
6. THE COMMISSIONER AND THE COMMISSIONER OF TAXATION AND FINANCE SHALL
JOINTLY PROMULGATE RULES AND REGULATIONS NECESSARY TO IMPLEMENT THE
PROVISIONS OF THIS SECTION.
§ 2. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 44 to read as follows:
(44) PAYMENT NOT IN EXCESS OF TWENTY-FIVE HUNDRED DOLLARS ACTUALLY
PAID BY AN ELIGIBLE BORROWER EMPLOYED BY AN EMPLOYER CERTIFIED PURSUANT
TO SECTION SIX HUNDRED EIGHTY-TWO OF THE EDUCATION LAW FOR STUDENT LOAN
REPAYMENT, TO THE EXTENT NOT DEDUCTIBLE IN DETERMINING FEDERAL ADJUSTED
GROSS INCOME AND NOT REIMBURSED. FOR THE PURPOSES OF THIS PARAGRAPH, THE
FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS:
(I) "STUDENT LOANS" SHALL MEAN ANY INDEBTEDNESS INCURRED BY THE
TAXPAYER FOR AN UNDERGRADUATE EDUCATION LOAN IN ACCORDANCE WITH SECTION
221 OF THE INTERNAL REVENUE CODE.
(II) "ELIGIBLE BORROWER" SHALL MEAN A TAXPAYER WHO HAS INCURRED
INDEBTEDNESS ON STUDENT LOANS AS DEFINED IN SUBPARAGRAPH (I) OF THIS
PARAGRAPH.
§ 3. Section 210-B of the tax law is amended by adding a new subdivi-
sion 53 to read as follows:
53. COLLEGE DEBT FREEDOM ACCOUNT PROGRAM TAX CREDIT. (A) GENERAL. AN
EMPLOYER CERTIFIED PURSUANT TO SECTION SIX HUNDRED EIGHTY-TWO OF THE
EDUCATION LAW, WHO CONTRIBUTES MATCHING FUNDS TOWARDS AN EMPLOYEE'S
UNDERGRADUATE STUDENT LOAN REPAYMENTS, SHALL BE ALLOWED A CREDIT, TO BE
COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE TAX IMPOSED BY
THIS ARTICLE, FOR CONTRIBUTIONS THE EMPLOYER DEPOSITS ANNUALLY, UP TO
TWENTY-FIVE HUNDRED DOLLARS PER EMPLOYEE PER YEAR.
(B) AMOUNT OF CREDIT. THE CREDIT AUTHORIZED BY THIS SUBDIVISION SHALL
BE EQUAL TO THE AMOUNT OF THE EMPLOYER'S CONTRIBUTION; PROVIDED THAT
SUCH CONTRIBUTION SHALL BE A MINIMUM OF FIFTY PERCENT AND A MAXIMUM OF
ONE HUNDRED PERCENT OF THE EMPLOYEE'S DEPOSIT TO A STUDENT LOAN REPAY-
MENT ACCOUNT SUBJECT TO THE LIMITS SET FORTH IN THIS SUBDIVISION.
§ 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
of the tax law is amended by adding a new clause (xliv) to read as
follows:
(XLIV) COLLEGE DEBT AMOUNT OF CREDIT
FREEDOM ACCOUNT UNDER SUBDIVISION FIFTY-THREE
PROGRAM TAX CREDIT UNDER OF SECTION TWO HUNDRED TEN-B
A. 7224--A 3
SUBSECTION (CCC)
§ 5. Section 606 of the tax law is amended by adding a new subsection
(ccc) to read as follows:
(CCC) COLLEGE DEBT FREEDOM ACCOUNT PROGRAM TAX CREDIT. (A) GENERAL. AN
EMPLOYER, CERTIFIED PURSUANT TO SECTION SIX HUNDRED EIGHTY-TWO OF THE
EDUCATION LAW, WHO CONTRIBUTES MATCHING FUNDS TOWARDS AN EMPLOYEE'S
UNDERGRADUATE STUDENT LOAN REPAYMENTS, SHALL BE ALLOWED A CREDIT, TO BE
COMPUTED AS PROVIDED IN THIS SUBSECTION, AGAINST THE TAX IMPOSED BY THIS
ARTICLE, FOR CONTRIBUTIONS THE EMPLOYER DEPOSITS ANNUALLY, UP TO TWEN-
TY-FIVE HUNDRED DOLLARS PER EMPLOYEE PER YEAR.
(B) AMOUNT OF CREDIT. THE CREDIT AUTHORIZED BY THIS SUBSECTION SHALL
BE EQUAL TO THE AMOUNT OF THE EMPLOYER CONTRIBUTION; PROVIDED THAT SUCH
CONTRIBUTION SHALL BE A MINIMUM OF FIFTY PERCENT AND A MAXIMUM OF ONE
HUNDRED PERCENT OF THE EMPLOYEE'S DEPOSIT TO A STUDENT LOAN REPAYMENT
ACCOUNT SUBJECT TO THE LIMITS SET FORTH IN THIS SUBSECTION.
§ 6. Section 1511 of the tax law is amended by adding a new subdivi-
sion (dd) to read as follows:
(DD) COLLEGE DEBT FREEDOM ACCOUNT PROGRAM TAX CREDIT. (1) GENERAL. AN
EMPLOYER, CERTIFIED PURSUANT TO SECTION SIX HUNDRED EIGHTY-TWO OF THE
EDUCATION LAW, WHO CONTRIBUTES MATCHING FUNDS TOWARDS AN EMPLOYEE'S
UNDERGRADUATE STUDENT LOAN REPAYMENTS, SHALL BE ALLOWED A CREDIT, TO BE
COMPUTED AS PROVIDED IN THIS SUBDIVISION, AGAINST THE TAX IMPOSED BY
THIS ARTICLE, FOR CONTRIBUTIONS THE EMPLOYER DEPOSITS ANNUALLY, UP TO
TWENTY-FIVE HUNDRED DOLLARS PER EMPLOYEE PER YEAR.
(2) AMOUNT OF CREDIT. THE CREDIT AUTHORIZED BY THIS SUBDIVISION SHALL
BE EQUAL TO THE AMOUNT OF THE EMPLOYER'S CONTRIBUTION; PROVIDED THAT
SUCH CONTRIBUTION SHALL BE A MINIMUM OF FIFTY PERCENT AND A MAXIMUM OF
ONE HUNDRED PERCENT OF THE EMPLOYEE'S DEPOSIT TO A STUDENT LOAN REPAY-
MENT ACCOUNT SUBJECT TO THE LIMITS SET FORTH IN THIS SUBDIVISION.
§ 7. Notwithstanding any provision of the tax law to the contrary, the
aggregate of tax expenditure and taxes forgone pursuant to sections two,
three, four, five and six of this act shall not exceed $70,000,000. The
commissioner of taxation and finance shall immediately suspend all
deductions and credits established pursuant to such sections upon reach-
ing the $70,000,000 threshold.
§ 8. This act shall take effect on the sixtieth day after it shall
have become a law and shall apply to taxable years commencing on or
after January 1, 2019.