NY State Senate Bill 2021-S9335

Senate Bill S9335

Signed By Governor

2021-2022 Legislative Session

Relates to the residency requirement for designated beneficiaries of the ABLE program

download bill text pdf

Archive: Last Bill Status Via A7652 - Signed by Governor

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

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Actions

View Actions

	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jul 26, 2022	signed chap.478 delivered to governor
May 24, 2022	returned to assembly passed senate 3rd reading cal.1477 substituted for s9335
May 24, 2022	substituted by a7652
May 23, 2022	ordered to third reading cal.1477 committee discharged and committed to rules
May 17, 2022	referred to disabilities

Votes

- May 24, 2022 - Floor Vote
  A7652
  
  61
  
  Aye
  
  0
  
  Nay
  
  0
  
  Absent
  
  2
  
  Excused
  
  0
  
  Abstained
  - - Floor Vote: May 24, 2022
      
      aye (61)
      
      Addabbo Jr.
      
      Akshar
      
      Bailey
      
      Biaggi
      
      Borrello
      
      Boyle
      
      Breslin
      
      Brisport
      
      Brouk
      
      Cleare
      
      Comrie
      
      Cooney
      
      Felder
      
      Gallivan
      
      Gaughran
      
      Gianaris
      
      Gounardes
      
      Griffo
      
      Harckham
      
      Helming
      
      Hinchey
      
      Hoylman-Sigal
      
      Jackson
      
      Jordan
      
      Kaminsky
      
      Kaplan
      
      Kavanagh
      
      Kennedy
      
      Krueger
      
      Lanza
      
      Liu
      
      Mannion
      
      Martucci
      
      Mattera
      
      May
      
      Mayer
      
      Myrie
      
      O'Mara
      
      Oberacker
      
      Ortt
      
      Palumbo
      
      Parker
      
      Persaud
      
      Ramos
      
      Rath III
      
      Reichlin-Melnick
      
      Ritchie
      
      Rivera
      
      Ryan
      
      Salazar
      
      Savino
      
      Sepúlveda
      
      Serino
      
      Serrano
      
      Skoufis
      
      Stavisky
      
      Stec
      
      Stewart-Cousins
      
      Tedisco
      
      Thomas
      
      Weik
      
      excused (2)
      
      Brooks
      
      Sanders Jr.
  May 23, 2022 - Rules Committee Vote
  S9335
  
  20
  
  Aye
  
  0
  
  Nay
  
  1
  
  Aye with Reservations
  
  0
  
  Absent
  
  0
  
  Excused
  
  0
  
  Abstained
  - - Rules Committee Vote: May 23, 2022
      
      aye (20)
      
      Addabbo Jr.
      
      Bailey
      
      Biaggi
      
      Boyle
      
      Breslin
      
      Comrie
      
      Gallivan
      
      Gianaris
      
      Griffo
      
      Kennedy
      
      Krueger
      
      Liu
      
      Mayer
      
      O'Mara
      
      Ortt
      
      Parker
      
      Ritchie
      
      Savino
      
      Sepúlveda
      
      Stewart-Cousins
      
      aye wr (1)
      
      Lanza

2021-S9335 (ACTIVE) - Details

See Assembly Version of this Bill:: A7652
Law Section:: Mental Hygiene Law
Laws Affected:: Amd §84.03, Ment Hyg L

2021-S9335 (ACTIVE) - Summary

Relates to the residency requirement for designated beneficiaries of the ABLE program and the definition of designated beneficiary.

2021-S9335 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S9335

SPONSOR: BROUK
 
TITLE OF BILL:

An act to amend the mental hygiene law, in relation to the residency
requirement for designated beneficiaries of the ABLE program

 
PURPOSE:

The purpose of this legislation is to eliminate the New York State resi-
dency requirement for designated beneficiaries in the New York ABLE
program

 
SUMMARY OF PROVISIONS:

Section 1 of this proposal amends section 84.03(4) of the mental hygiene
law.

Section 2 of this proposal provides for an immediate effective date.

PRIOR LEGISLATIVE HISTORY:

New bill.

 
JUSTIFICATION:

In December 2014, the Stephen Beck, Jr. Achieving a Better Life Experi-
ence ("ABLE") Act was signed into law at the federal level as section
529A of the Internal Revenue Code. Similar to 529 College Savings
Programs, this Act authorized states to establish qualified ABLE
programs meeting requirements of the federal Act. However, the ABLE Act
differed from the 529 College Savings Program in several ways. The ABLE
Act defined the designated beneficiary as the owner of the ABLE account,
allowed for only one account per designated beneficiary, and required
that a designated beneficiary establish an ABLE account in the state in
which he or she resided or, if such state did not administer its own
ABLE program, in a state which contracted with the designated benefici-
ary's state of residence to so administer a program. This ABLE residency
requirement was eliminated by the federal Protecting Americans from Tax
Hikes ("PATH") Act enacted in December 2015.

In June 2015, the New York State Legislature passed a bill to establish
the NY ABLE Program which was signed into law in December 2015. The New
York legislation contained requirements set forth in the federal ABLE
Act, including the state residency requirement.  Given the near simul-
taneous timing of the enactment of the NY ABLE Program and the federal
enactment of the PATH Act, the residency requirement remained in State
legislation, although no longer required at the federal level.

This bill seeks to eliminate the unnecessary state ABLE residency
requirement in New York statute, thereby bringing State law into
conformance with the federal ABLE Act. Currently, New York is one of
only 17 states nationwide, out of a total of 43 states that maintain
ABLE programs, which restricts its ABLE program to state residents only.
This amendment will allow out-of-state residents who are eligible for
ABLE Accounts to choose the NY ABLE program from among other state ABLE
programs, if its program benefits are more desirable than those of other
state programs.
While the NY ABLE Program is currently available only to New York State
residents, several other states offer national ABLE programs that market
heavily in New York State. New Yorkers are not required to use the NY
ABLE program, and since there is no tax deduction for contributions in
New York State, potential account owners lack the same compelling reason
to use New York's in-state ABLE Program as individuals have to use NY's
529 College Savings Program, which does offer generous tax advantages to
New York taxpayers.

The limitation of one ABLE account per beneficiary results in additional
competition among states that offer their ABLE programs to eligible
account owners regardless of residency. Indeed, the NY ABLE Program is
aware that many eligible New York residents choose to invest and save in
out-of-state ABLE programs for various reasons, among which are more
competitive costs. As assets under management in ABLE programs grow, the
costs of administering such programs on an account-by-account basis
decrease due to economies of scale, such as New York has experienced in
its 529 College Savings Program. Such savings may then be passed onto
program account owners, making programs with lower costs more appealing.

In addition, if an account owner in the NY ABLE Program relocates to
another state, he or she must close his or her NY ABLE account, open an
account in another state ABLE program, and transfer assets from the NY
Program to the other state program. This inconvenience would be elimi-
nated by the change sought.

This amendment would align the NY ABLE statute with federal requirements
by eliminating an outdated residency requirement, thereby placing the NY
ABLE Program in a stronger competitive position.

 
FISCAL IMPLICATIONS FOR STATE:

This change would be revenue-neutral to the State of New York, since NY
ABLE contributions are not tax deductible.

 
EFFECTIVE DATE:
This act shall take effect immediately.

2021-S9335 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   9335
 
                             I N  S E N A T E
 
                               May 17, 2022
                                ___________
 
 Introduced  by  Sen.  BROUK  -- (at request of the State Comptroller) --
   read twice and ordered printed, and when printed to  be  committed  to
   the Committee on Disabilities
 
 AN  ACT  to  amend  the mental hygiene law, in relation to the residency
   requirement for designated beneficiaries of the ABLE program
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1.  Subdivision 4 of section 84.03 of the mental hygiene law,
 as added by chapter 576 of the laws of  2015,  is  amended  to  read  as
 follows:
   4.  "Designated beneficiary" shall mean, with respect to an account or
 accounts, any individual who is  an  "eligible  individual"  as  defined
 under  paragraph  (1)  of subsection (e) of section 529A of the Internal
 Revenue Code of 1986, as amended, or any regulations promulgated  there-
 under  and  whose  qualified  expenses  are expected to be paid from the
 account or accounts. [A designated beneficiary shall be  a  resident  of
 New York state or a resident of a state that: (a) does not have a quali-
 fied ABLE program recognized under section 529-A of the Internal Revenue
 Code  of  1986, as amended; and (b) has entered into a contract with New
 York state to provide residents of the contracting state with access  to
 New York state's ABLE program.]
   § 2. This act shall take effect immediately.
 
 
 
 
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD10545-01-1

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