NY State Senate Bill S7783

senate Bill S7783

2017-2018 Legislative Session

Relates to expanding the New York state college choice tuition savings program to include costs of elementary and secondary education

download bill text pdf

Current Bill Status - Passed Senate

Introduced
In Committee
On Floor Calendar
- Passed Senate
- Passed Assembly
Delivered to Governor
Signed/Vetoed by Governor

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Actions

view actions (8)

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
May 07, 2018	referred to education delivered to assembly passed senate ordered to third reading cal.1034 committee discharged and committed to rules
Apr 11, 2018	print number 7783a
Apr 11, 2018	amend (t) and recommit to higher education
Feb 23, 2018	referred to higher education

Votes

Bill Amendments

Original

A (Active)

Original

A (Active)

Co-Sponsors

S7783 (ACTIVE) - Details

Current Committee:: Assembly Education
Law Section:: Education Law
Laws Affected:: Amd Art 14-A Art Head, §§695, 695-b & 695-e, Ed L; amd §612, Tax L

S7783 (ACTIVE) - Summary

Expands and renames the New York state college choice tuition savings program to include costs of nonpublic elementary and secondary education.

S7783 (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S7783

SPONSOR: GOLDEN
 
TITLE OF BILL:

An act to amend the education law and the tax law, in relation to
expanding the New York state college choice tuition savings program to
include costs of elementary and secondary education

 
PURPOSE OR GENERAL IDEA OF BILL:

To conform New York law to the current Federal law regarding Internal
Revenue Code section 529 savings plans.

 
SUMMARY OF PROVISIONS:

Section 1 of this bill changes the title of Article 14-A of the Educa-
tion Law from New York State College Choice Tuition Savings Program to
New York State Education Choice Tuition Savings Program.

Section 2 of this bill amends Education Law section 695 to establish the

education choice tuition savings program and cite the program as the
"New York state education choice tuition savings program."

Section 3 of this bill amends Education Law section 695-b(5) to add any
elementary or secondary school for which tuition expenses are included
within the definition of the term of qualified higher education expenses
in section 529(e)(3) of the Internal Revenue Code of 1986, as amended,
as an "eligible educational institution."

Section 4 of this bill amends Education Law section 695-e(10) to add
nonpublic elementary and secondary tuition costs to be protected by the
rules or regulations as set forth by the comptroller to prevent more
contributions than necessary to provide for the qualified higher educa-
tion costs of the beneficiary, as required to maintain the program as a
'qualified tuition program" under section 529 of the Internal Revenue
code of 1986, as amended.

Section 5 of this bill amends Education Law section 695-e by adding a
new subdivision 17 to state that this article shall not be construed as
a guarantee by the State or any elementary or secondary school that a
beneficiary will be admitted to any elementary or secondary school, or,
upon admission to an elementary or secondary school will be permitted to
continue to attend such elementary or secondary school.

Section 6 of this bill amends Tax Law sections 612(c)(32) and (33) to
cite the program as the New York state education choice tuition savings
program.

Section 7 of the bill provides that this act shall take effect imme-
diately and shall apply to contributions and distributions made on and
after January 1, 2018.

 
JUSTIFICATION:

The Tax Cuts and Jobs Act that was enacted on December 22, 2017 expanded
the use of Internal Revenue Code 529 plans to include tuition expenses
for attendance at an elementary or secondary school.  Unfortunately,
before New Yorkers who participate in the State's 529 plan can take
advantage of the Federal changes, New York state law needs to be amended
to include elementary or secondary school expenses as eligible expenses
under the 529 program.

This bill would allow for New York families to take full advantage of
the 529 Plan. Any distribution from the 529 plan that were made on and
after January 1, 2018 to pay the tuition expenses to attend an elementa-
ry or secondary school would receive the same tax benefits as distrib-
utions to attend an institution of higher education. New Yorkers should
be provided with the benefits that have been granted by the Federal
government. This bill accomplishes that goal.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to contributions
and distributions made on and after January 1, 2018.

S7783 (ACTIVE) - Bill Text download pdf


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

                                  7783

                            I N  S E N A T E

                            February 23, 2018
                               ___________

Introduced  by  Sens.  GOLDEN, O'MARA -- read twice and ordered printed,
  and when printed to be committed to the Committee on Higher Education

AN ACT to amend the education law  and  the  tax  law,  in  relation  to
  expanding the New York state college choice tuition savings program to
  include costs of elementary and secondary education

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

  Section 1. The article heading of article 14-A of the  education  law,
as  added  by  chapter  546  of  the laws of 1997, is amended to read as
follows:

                              ARTICLE 14-A
                             NEW YORK STATE
           [COLLEGE] EDUCATION CHOICE TUITION SAVINGS PROGRAM

  § 2. Section 695 of the education law, as added by chapter 546 of  the
laws of 1997, is amended to read as follows:
  §  695. Program established. There is hereby established the [college]
EDUCATION choice tuition savings program and such program shall be known
and may be cited as the  "New  York  state  [college]  EDUCATION  choice
tuition savings program".
  §  3.  Subdivision 5 of section 695-b of the education law, as amended
by chapter 535 of the laws of 2000, is amended to read as follows:
  5. "Eligible educational institution" shall mean  any  institution  of
higher  education  defined  as  an  eligible  educational institution in
section 529(e)(5) of the Internal Revenue Code of 1986, as amended,  AND
ANY  ELEMENTARY  OR  SECONDARY  SCHOOL  FOR  WHICH  TUITION EXPENSES ARE
INCLUDED WITHIN THE DEFINITION OF THE TERM  QUALIFIED  HIGHER  EDUCATION
EXPENSES  IN  SECTION 529(E)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.
  § 4. Subdivision 10 of section 695-e of the education law, as  amended
by chapter 593 of the laws of 2003, is amended to read as follows:
  10.  The  comptroller shall promulgate rules or regulations to prevent
contributions on behalf of a designated  beneficiary  in  excess  of  an

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets

                      [ ] is old law to be omitted.
                                                           LBD14736-02-8

S. 7783                             2

amount  that  would cause the aggregate account balance for all accounts
for a designated beneficiary to exceed a  maximum  account  balance,  as
established  from time to time by the comptroller and the corporation on
the  basis  of  NONPUBLIC ELEMENTARY AND SECONDARY TUITION COSTS AND THE
higher education costs in the state, with adequate safeguards to prevent
more contributions than necessary to provide for  the  qualified  higher
education  costs of the beneficiary, as required to maintain the program
as a "qualified tuition program"  under  section  529  of  the  Internal
Revenue Code of 1986, as amended.
  §  5.  Section  695-e  of the education law is amended by adding a new
subdivision 17 to read as follows:
  17. NOTHING IN THIS  ARTICLE  OR  IN  ANY  TUITION  SAVINGS  AGREEMENT
ENTERED  INTO PURSUANT TO THIS ARTICLE SHALL BE CONSTRUED AS A GUARANTEE
BY THE STATE OR ANY ELEMENTARY OR SECONDARY SCHOOL  THAT  A  BENEFICIARY
WILL  BE ADMITTED TO ANY ELEMENTARY OR SECONDARY SCHOOL, OR, UPON ADMIS-
SION TO AN ELEMENTARY OR SECONDARY SCHOOL WILL BE PERMITTED TO  CONTINUE
TO ATTEND SUCH ELEMENTARY OR SECONDARY SCHOOL.
  §  6. Paragraphs 32 and 33 of subsection (c) of section 612 of the tax
law, paragraph 32 as amended by chapter 81 of the laws  of  2008,  para-
graph  33  as  added  by chapter 546 of the laws of 1997, are amended to
read as follows:
  (32) Contributions made during the taxable year by an account owner to
one or more family tuition accounts established under the New York state
[college] EDUCATION choice tuition savings program  provided  for  under
article fourteen-A of the education law, to the extent not deductible or
eligible  for credit for federal income tax purposes, provided, however,
the exclusion provided for in this paragraph shall not exceed five thou-
sand dollars for an individual or head of  household,  and  for  married
couples  who  file  joint  tax  returns,  shall  not exceed ten thousand
dollars; provided, further, that such exclusion shall be available  only
to the account owner and not to any other person.
  (33) Distributions from a family tuition account established under the
New  York  state  [college]  EDUCATION  choice  tuition  savings program
provided for under article fourteen-A  of  the  education  law,  to  the
extent includible in gross income for federal income tax purposes.
  §  7.  This  act  shall  take  effect  immediately  and shall apply to
contributions and distributions made on and after January 1, 2018.

Co-Sponsors

S7783A (ACTIVE) - Details

Current Committee:: Assembly Education
Law Section:: Education Law
Laws Affected:: Amd Art 14-A Art Head, §§695, 695-b & 695-e, Ed L; amd §612, Tax L

S7783A (ACTIVE) - Summary

Expands and renames the New York state college choice tuition savings program to include costs of nonpublic elementary and secondary education.

S7783A (ACTIVE) - Sponsor Memo

 
BILL NUMBER: S7783A

SPONSOR: GOLDEN
 
TITLE OF BILL:  An act to amend the education law, the tax law, the
state finance law, the mental hygiene law and the civil practice law and
rules, in relation to expanding the New York state college choice
tuition savings program to include costs of elementary and secondary
education

 
PURPOSE OR GENERAL IDEA OF BILL:

To conform New York law to the current Federal law regarding Internal
Revenue Code section 529 savings plans.

 
SUMMARY OF PROVISIONS:

Section 1 of this bill changes the title of Article 14-A of the Educa-
tion Law from New York State College Choice Tuition Savings Program to
New York State Education Choice Tuition Savings Program.

Section 2 of this bill amends Education Law section 695 to establish the

education choice tuition savings program and cite the program as the
"New York state education choice tuition savings program."

Section 3 of this bill amends Education Law section 695-b(5) to add any
elementary or secondary school for which tuition expenses are included
within the definition of the term of qualified higher education expenses
in section 529(e)(3) of the Internal Revenue Code of 1986, as amended,
as an "eligible educational institution."

Section 4 of this bill amends Education Law section 695-e(10) to add
nonpublic elementary and secondary tuition costs to be protected by the
rules or regulations as set forth by the comptroller to prevent more
contributions than necessary to provide for the qualified higher educa-
tion costs of the beneficiary, as required to maintain the program as a
'qualified tuition program" under section 529 of the Internal Revenue
code of 1986, as amended.

Section 5 of this bill amends Education Law section 695-e by adding a
new subdivision 17 to state that this article shall not be construed as
a guarantee by the State or any elementary or secondary school that a
beneficiary will be admitted to any elementary or secondary school, or,
upon admission to an elementary or secondary school will be permitted to
continue to attend such elementary or secondary school.

Sections 6 through 11 of this bill amend Tax Law section 612(c)(32) and
(33), State Finance Law section 78, Tax Law section 612(b)(34)(A), Tax
Law section 546(d)(3), Mental Hygiene Law section 84.05(3-a), and CPLR
section 5205(j), respectively, to cite the program as the New York state
education choice tuition savings program.

Section 12 of this bill provides that this act shall take effect imme-
diately and shall apply to contributions and distributions made on and
after January 1, 2018.

 
JUSTIFICATION:

The Tax Cuts and Jobs Act that was enacted on December 22, 2017 expanded
the use of Internal Revenue Code 529 plans to include tuition expenses
for attendance at an elementary or secondary school.  Unfortunately,
before New Yorkers who participate in the State's 529 plan can take
advantage of the Federal changes, New York state law needs to be amended
to include elementary or secondary school expenses as eligible expenses
under the 529 program.

This bill would allow for New York families to take full advantage of
the 529 Plan. Any distribution from the 529 plan that were made on and
after January 1, 2018 to pay the tuition expenses to attend an elementa-
ry or secondary school would receive the same tax benefits as distrib-
utions to attend an institution of higher education. New Yorkers should
be provided with the benefits that have been granted by the Federal
government. This bill accomplishes that goal.

 
PRIOR LEGISLATIVE HISTORY:

New bill.

 
FISCAL IMPLICATIONS:

To be determined.

 
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to contributions
and distributions made on and after January 1, 2018.

S7783A (ACTIVE) - Bill Text download pdf


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

                                 7783--A

                            I N  S E N A T E

                            February 23, 2018
                               ___________

Introduced  by  Sens.  GOLDEN, O'MARA -- read twice and ordered printed,
  and when printed to be committed to the Committee on Higher  Education
  --  committee  discharged,  bill amended, ordered reprinted as amended
  and recommitted to said committee

AN ACT to amend the education law, the tax law, the state  finance  law,
  the  mental  hygiene  law  and  the  civil  practice law and rules, in
  relation to expanding  the  New  York  state  college  choice  tuition
  savings program to include costs of elementary and secondary education

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

  Section 1. The article heading of article 14-A of the  education  law,
as  added  by  chapter  546  of  the laws of 1997, is amended to read as
follows:

                              ARTICLE 14-A
                             NEW YORK STATE
           [COLLEGE] EDUCATION CHOICE TUITION SAVINGS PROGRAM

  § 2. Section 695 of the education law, as added by chapter 546 of  the
laws of 1997, is amended to read as follows:
  §  695. Program established. There is hereby established the [college]
EDUCATION choice tuition savings program and such program shall be known
and may be cited as the  "New  York  state  [college]  EDUCATION  choice
tuition savings program".
  §  3.  Subdivision 5 of section 695-b of the education law, as amended
by chapter 535 of the laws of 2000, is amended to read as follows:
  5. "Eligible educational institution" shall mean  any  institution  of
higher  education  defined  as  an  eligible  educational institution in
section 529(e)(5) of the Internal Revenue Code of 1986, as amended,  AND
ANY  ELEMENTARY  OR  SECONDARY  SCHOOL  FOR  WHICH  TUITION EXPENSES ARE
INCLUDED WITHIN THE DEFINITION OF THE TERM  QUALIFIED  HIGHER  EDUCATION
EXPENSES  IN  SECTION 529(E)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS
AMENDED.

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

                                                           LBD14736-03-8

S. 7783--A                          2

  § 4. Subdivision 10 of section 695-e of the education law, as  amended
by chapter 593 of the laws of 2003, is amended to read as follows:
  10.  The  comptroller shall promulgate rules or regulations to prevent
contributions on behalf of a designated  beneficiary  in  excess  of  an
amount  that  would cause the aggregate account balance for all accounts
for a designated beneficiary to exceed a  maximum  account  balance,  as
established  from time to time by the comptroller and the corporation on
the basis of NONPUBLIC ELEMENTARY AND SECONDARY TUITION  COSTS  AND  THE
higher education costs in the state, with adequate safeguards to prevent
more  contributions  than  necessary to provide for the qualified higher
education costs of the beneficiary, as required to maintain the  program
as  a  "qualified  tuition  program"  under  section 529 of the Internal
Revenue Code of 1986, as amended.
  § 5. Section 695-e of the education law is amended  by  adding  a  new
subdivision 17 to read as follows:
  17.  NOTHING  IN  THIS  ARTICLE  OR  IN  ANY TUITION SAVINGS AGREEMENT
ENTERED INTO PURSUANT TO THIS ARTICLE SHALL BE CONSTRUED AS A  GUARANTEE
BY  THE  STATE  OR ANY ELEMENTARY OR SECONDARY SCHOOL THAT A BENEFICIARY
WILL BE ADMITTED TO ANY ELEMENTARY OR SECONDARY SCHOOL, OR, UPON  ADMIS-
SION  TO AN ELEMENTARY OR SECONDARY SCHOOL WILL BE PERMITTED TO CONTINUE
TO ATTEND SUCH ELEMENTARY OR SECONDARY SCHOOL.
  § 6. Paragraphs 32 and 33 of subsection (c) of section 612 of the  tax
law,  paragraph  32  as amended by chapter 81 of the laws of 2008, para-
graph 33 as added by chapter 546 of the laws of  1997,  are  amended  to
read as follows:
  (32) Contributions made during the taxable year by an account owner to
one or more family tuition accounts established under the New York state
[college]  EDUCATION  choice  tuition savings program provided for under
article fourteen-A of the education law, to the extent not deductible or
eligible for credit for federal income tax purposes, provided,  however,
the exclusion provided for in this paragraph shall not exceed five thou-
sand  dollars  for  an  individual or head of household, and for married
couples who file joint  tax  returns,  shall  not  exceed  ten  thousand
dollars;  provided, further, that such exclusion shall be available only
to the account owner and not to any other person.
  (33) Distributions from a family tuition account established under the
New York  state  [college]  EDUCATION  choice  tuition  savings  program
provided  for  under  article  fourteen-A  of  the education law, to the
extent includible in gross income for federal income tax purposes.
  § 7.  The section heading and subdivisions 1 and 2 of  section  78  of
the  state finance law, as added by chapter 546 of the laws of 1997, are
amended to read as follows:
  New York state [college]  EDUCATION  choice  tuition  savings  program
trust  fund.   1. There is hereby established in the sole custody of the
state comptroller a special fund to be  known  as  the  New  York  state
[college]  EDUCATION  choice  tuition  savings  program  trust fund. All
payments from such fund shall be made in accordance with  article  four-
teen-A  of the education law and the memorandum of understanding entered
into pursuant thereto on the audit of the state comptroller.
  2. The fund shall be a trust fund and shall consist of a trust account
and an operating  account.  The  trust  account  shall  include  amounts
received  by  the  New  York  state  [college]  EDUCATION choice tuition
savings program pursuant to tuition savings  agreements,  administrative
charges,  fees, and all other amounts received by the program from other
sources, and interest and investment income earned by  the  trust  fund.
The  comptroller shall, from time to time, make transfers from the trust

S. 7783--A                          3

account to the operating account for  the  immediate  payment  of  obli-
gations  under tuition savings agreements, operating expenses and admin-
istrative costs of the New York state [college] EDUCATION choice tuition
savings program. Administrative costs shall be paid out of the operating
account  according  to  the terms and conditions established pursuant to
the provisions of section six hundred  ninety-five-c  of  the  education
law.
  § 8. Subparagraph (A) of paragraph 34 of subsection (b) of section 612
of  the  tax  law,  as  amended  by  chapter 535 of the laws of 2000, is
amended to read as follows:
  (A) Excess distributions received during the taxable year by a distri-
butee of a family tuition account established under the New  York  state
[college]  EDUCATION  choice  tuition savings program provided for under
article fourteen-A of the education  law,  to  the  extent  such  excess
distributions  are deemed attributable to deductible contributions under
paragraph thirty-two of subsection (c) of this section.
  § 9. Paragraph 3 of subsection (d) of section 658 of the tax  law,  as
added by chapter 546 of the laws of 1997, is amended to read as follows:
  (3)  The  commissioner  may  by  regulation or instruction require the
filing of a report annually by the comptroller or program manager of the
New York state [college] EDUCATION choice tuition  savings  program,  or
their  designee,  setting  forth the names and identification numbers of
account owners, designated  beneficiaries  and  distributees  of  family
tuition  accounts, the amounts contributed to such accounts, the amounts
distributed from such accounts and the nature of such  distributions  as
qualified  withdrawals  or  as  withdrawals  other  than qualified with-
drawals, and any such other information as the commissioner may  require
regarding  the  taxation under this article of amounts contributed to or
withdrawn from such accounts. The commissioner may require that any such
report also be made to the  account  owner,  designated  beneficiary  or
distributee of any such account.
  §  10.  Subdivision 3-a of section 84.05 of the mental hygiene law, as
added by chapter 149 of the laws of 2016, is amended to read as follows:
  3-a. Notwithstanding the  provisions  of  subdivision  three  of  this
section,  the  comptroller  may,  in his or her discretion, enter into a
contract with  the  existing  third  party  administrator  of  the  [NYS
college] NEW YORK STATE EDUCATION choice tuition savings program for the
purpose of administering the NY ABLE savings account program and provid-
ing  account  depositories and managers. The term of such contract shall
expire on the same date as the contract for the  administration  of  the
[NYS  college]  NEW  YORK STATE EDUCATION choice tuition savings program
expires. Following such expiration, the comptroller may, in his  or  her
discretion,  solicit  proposals  for the purpose of administering the NY
ABLE savings account program and solicit proposals for  the  purpose  of
administering  the [NYS college] NEW YORK STATE EDUCATION choice tuition
savings program jointly or separately.
  § 11. The opening paragraph of subdivision (j) of section 5205 of  the
civil  practice  law  and  rules, as added by chapter 546 of the laws of
1997, is amended to read as follows:
  Exemption for  New  York  state  [college]  EDUCATION  choice  tuition
savings  program trust fund payment monies. Monies in an account created
pursuant to article fourteen-A of the  education  law  are  exempt  from
application to the satisfaction of a money judgment as follows:
  §  12.    This  act  shall  take effect immediately and shall apply to
contributions and distributions made on and after January 1, 2018.

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The New York State Senate

senate Bill S7783

Sponsored By

Current Bill Status - Passed Senate

Your Voice

Actions

Votes

May 7, 2018 - floor Vote

Floor Vote: May 7, 2018

May 7, 2018 - Rules committee Vote

Committee Vote: May 7, 2018

Bill Amendments

Co-Sponsors

S7783 (ACTIVE) - Details

S7783 (ACTIVE) - Summary

S7783 (ACTIVE) - Sponsor Memo

S7783 (ACTIVE) - Bill Text download pdf

Co-Sponsors

S7783A (ACTIVE) - Details

S7783A (ACTIVE) - Summary

S7783A (ACTIVE) - Sponsor Memo

S7783A (ACTIVE) - Bill Text download pdf

Comments

senate Bill S7783

Share this bill

Sponsored By

Martin J. Golden

Current Bill Status - Passed Senate

Your Voice

Actions

Votes

May 7, 2018 - floor Vote

Floor Vote: May 7, 2018

May 7, 2018 - Rules committee Vote

Committee Vote: May 7, 2018

Bill Amendments

Co-Sponsors

Thomas F. O'Mara

S7783 (ACTIVE) - Details

S7783 (ACTIVE) - Summary

S7783 (ACTIVE) - Sponsor Memo

S7783 (ACTIVE) - Bill Text download pdf

Co-Sponsors

Thomas F. O'Mara

Rich Funke

S7783A (ACTIVE) - Details

S7783A (ACTIVE) - Summary

S7783A (ACTIVE) - Sponsor Memo

S7783A (ACTIVE) - Bill Text download pdf

Comments