S T A T E O F N E W Y O R K
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10627
I N A S S E M B L Y
March 13, 2026
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Introduced by M. of A. HYNDMAN -- read once and referred to the Commit-
tee on Higher Education
AN ACT to amend the education law, the state finance law, the civil
practice law and rules and the tax law, in relation to establishing
the New York state pre-paid tuition plan
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 355-f
to read as follows:
§ 355-F. NEW YORK STATE PRE-PAID TUITION PLAN. 1. DEFINITIONS. FOR
THE PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOW-
ING MEANINGS:
A. "ACCOUNT" OR "PRE-PAID TUITION ACCOUNT" SHALL MEAN AN INDIVIDUAL
PRE-PAID TUITION ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS
OF THIS SECTION.
B. "ACCOUNT OWNER" SHALL MEAN A PERSON WHO ENTERS INTO A PRE-PAID
TUITION AGREEMENT PURSUANT TO THE PROVISIONS OF THIS ARTICLE, INCLUDING
A PERSON WHO ENTERS INTO SUCH AN AGREEMENT AS A FIDUCIARY OR AGENT ON
BEHALF OF A TRUST, ESTATE, PARTNERSHIP, ASSOCIATION, COMPANY OR CORPO-
RATION. THE ACCOUNT OWNER MAY ALSO BE THE DESIGNATED BENEFICIARY OF THE
ACCOUNT.
C. "CITY UNIVERSITY" SHALL MEAN THE CITY UNIVERSITY OF NEW YORK.
D. "COMPTROLLER" SHALL MEAN THE STATE COMPTROLLER.
E. "DESIGNATED BENEFICIARY" SHALL MEAN, WITH RESPECT TO AN ACCOUNT OR
ACCOUNTS, THE INDIVIDUAL DESIGNATED AS THE INDIVIDUAL WHOSE TUITION
EXPENSES ARE EXPECTED TO BE PAID FROM THE ACCOUNT OR ACCOUNTS.
F. "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.
G. "FINANCIAL ORGANIZATION" SHALL MEAN AN ORGANIZATION AUTHORIZED TO
DO BUSINESS IN THE STATE AND (I) WHICH IS AN AUTHORIZED FIDUCIARY TO ACT
AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT OF CONGRESS ENTITLED
"EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974" AS SUCH PROVISIONS MAY
BE AMENDED FROM TIME TO TIME, OR AN INSURANCE COMPANY; AND (II) (A) IS
EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
[ ] is old law to be omitted.
LBD03784-03-6
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LICENSED OR CHARTERED BY THE DEPARTMENT OF FINANCIAL SERVICES, (B) IS
CHARTERED BY AN AGENCY OF THE FEDERAL GOVERNMENT, (C) IS SUBJECT TO THE
JURISDICTION AND REGULATION OF THE SECURITIES AND EXCHANGE COMMISSION OF
THE FEDERAL GOVERNMENT, OR (D) IS ANY OTHER ENTITY OTHERWISE AUTHORIZED
TO ACT IN THIS STATE AS A TRUSTEE PURSUANT TO THE PROVISIONS OF AN ACT
OF CONGRESS ENTITLED "EMPLOYEE RETIREMENT INCOME SECURITY ACT OF 1974"
AS SUCH PROVISIONS MAY BE AMENDED FROM TIME TO TIME.
H. "MEMBER OF FAMILY" SHALL MEAN A FAMILY MEMBER AS DEFINED IN SECTION
529 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED.
I. "NONQUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT,
BUT SHALL NOT MEAN:
(I) A QUALIFIED WITHDRAWAL; (II) A WITHDRAWAL MADE AS THE RESULT OF
THE DEATH OR DISABILITY OF THE DESIGNATED BENEFICIARY OF AN ACCOUNT; OR
(III) A WITHDRAWAL MADE ON THE ACCOUNT OF A SCHOLARSHIP.
J. "PLAN" SHALL MEAN THE NEW YORK STATE PRE-PAID TUITION PLAN ESTAB-
LISHED PURSUANT TO THIS SECTION.
K. "PLAN MANAGER" SHALL MEAN A FINANCIAL ORGANIZATION SELECTED BY THE
COMPTROLLER TO ACT AS A DEPOSITORY AND MANAGER OF THE PLAN.
L. "QUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT TO
PAY THE QUALIFIED TUITION EXPENSES OF THE DESIGNATED BENEFICIARY.
M. "STATE UNIVERSITY" SHALL MEAN THE STATE UNIVERSITY OF NEW YORK.
N. "TUITION" SHALL MEAN ANY MANDATORY CHARGES IMPOSED BY AN ELIGIBLE
EDUCATIONAL INSTITUTION FOR ATTENDANCE FOR AN ACADEMIC YEAR AS A CONDI-
TION OF ENROLLMENT. SUCH TERM SHALL NOT INCLUDE LABORATORY FEES, ROOM
AND BOARD, OR OTHER SIMILAR FEES AND CHARGES.
O. "TUITION SAVINGS AGREEMENT" SHALL MEAN AN AGREEMENT BETWEEN THE
COMPTROLLER OR A FINANCIAL ORGANIZATION AND AN ACCOUNT OWNER.
2. POWERS AND DUTIES OF THE COMPTROLLER. THE COMPTROLLER SHALL ADMIN-
ISTER THE PLAN AND SHALL DEVELOP AND IMPLEMENT PROGRAMS FOR THE PRE-PAY-
MENT OF UNDERGRADUATE TUITION, AT A FIXED, GUARANTEED LEVEL FOR APPLICA-
TION AT ANY TWO-YEAR OR FOUR-YEAR ELIGIBLE EDUCATIONAL INSTITUTION AS
DEFINED IN SECTION 529 OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED,
OR OTHER APPLICABLE FEDERAL LAW. IN ADDITION, THE COMPTROLLER SHALL HAVE
THE POWER AND DUTY TO:
A. DEVELOP AND IMPLEMENT THE PLAN IN A MANNER CONSISTENT WITH THE
PROVISIONS OF THIS SECTION THROUGH RULES AND REGULATIONS ESTABLISHED IN
ACCORDANCE WITH THE STATE ADMINISTRATIVE PROCEDURE ACT;
B. MAKE ARRANGEMENTS WITH THE STATE UNIVERSITY, CITY UNIVERSITY AND
ANY ELIGIBLE EDUCATIONAL INSTITUTION LOCATED WITHIN THE STATE WHICH
CHOOSES TO PARTICIPATE, TO FULFILL OBLIGATIONS UNDER PRE-PAID TUITION
CONTRACTS FOR TWO-YEAR OR FOUR-YEAR DEGREE PROGRAMS, INCLUDING, BUT NOT
LIMITED TO, PAYMENT FROM THE PLAN OF THE THEN ACTUAL IN-STATE UNDERGRAD-
UATE TUITION COST ON BEHALF OF A QUALIFIED BENEFICIARY OF A PRE-PAID
TUITION CONTRACT TO THE INSTITUTION IN WHICH SUCH BENEFICIARY IS ADMIT-
TED AND ENROLLED, AND APPLICATION OF SUCH BENEFITS TOWARDS GRADUATE-LEV-
EL TUITION AND TOWARDS TUITION COSTS AT SUCH ELIGIBLE EDUCATIONAL INSTI-
TUTIONS, AS THAT TERM IS DEFINED IN 26 U.S.C. § 529 OR ANY OTHER
APPLICABLE SECTION OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, AS
DETERMINED BY THE COMPTROLLER IN THEIR SOLE DISCRETION. SUCH ARRANGE-
MENTS MUST INCLUDE PLANS THAT ALLOW AN ACCOUNT OWNER TO ENTER INTO
CONTRACTS IN WHICH SUCH OWNER CAN PURCHASE TUITION IN INSTALLMENTS EQUAL
TO THE COST OF SEMESTERS AS A FULL TIME STUDENT, BUT CAN ALSO INCLUDE
PLANS THAT WOULD ALLOW FOR THE PRE-PAYMENT OF TUITION FOR TUITION CREDIT
HOURS;
C. ENGAGE THE SERVICES OF CONSULTANTS ON A CONTRACT BASIS FOR RENDER-
ING PROFESSIONAL AND TECHNICAL ASSISTANCE AND ADVICE;
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D. SEEK RULINGS AND OTHER GUIDANCE FROM THE UNITED STATES DEPARTMENT
OF TREASURY AND THE INTERNAL REVENUE SERVICE RELATING TO THE PROGRAM;
E. MAKE CHANGES TO THE PLAN REQUIRED FOR THE PARTICIPANTS TO OBTAIN
THE FEDERAL INCOME TAX BENEFITS OR TREATMENT PROVIDED BY SECTION 529 OF
THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, OR ANY SIMILAR SUCCESSOR
LEGISLATION;
F. CHARGE, IMPOSE AND COLLECT ADMINISTRATIVE FEES AND SERVICE CHARGES
IN CONNECTION WITH ANY AGREEMENT, CONTRACT OR TRANSACTION RELATING TO
THE PLAN;
G. DEVELOP MARKETING PLANS AND PROMOTION MATERIAL;
H. ESTABLISH THE METHODS BY WHICH THE FUNDS HELD IN SUCH ACCOUNTS BE
DISBURSED;
I. ESTABLISH THE METHOD BY WHICH FUNDS SHALL BE ALLOCATED TO PAY FOR
ADMINISTRATIVE COSTS; AND
J. DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT THE PURPOSES OF
THIS SECTION.
3. PLAN REQUIREMENTS. EVERY PRE-PAID TUITION ACCOUNT SHALL COMPLY WITH
THE PROVISIONS OF THIS SECTION.
A. A PRE-PAID TUITION ACCOUNT MAY BE OPENED BY ANY PERSON WHO DESIRES
TO ENTER INTO A CONTRACT FOR PRE-PAYMENT OF TUITION EXPENSES AT AN
INSTITUTION OF THE STATE UNIVERSITY, THE CITY UNIVERSITY OR ANY PARTIC-
IPATING ELIGIBLE EDUCATIONAL INSTITUTION. AN ACCOUNT OWNER MAY DESIGNATE
ANOTHER PERSON AS SUCCESSOR OWNER OF THE ACCOUNT IN THE EVENT OF THE
DEATH OF THE ORIGINAL ACCOUNT OWNER. SUCH PERSON WHO OPENS AN ACCOUNT OR
ANY SUCCESSOR OWNER SHALL BE CONSIDERED THE ACCOUNT OWNER.
B. AN APPLICATION FOR SUCH ACCOUNT SHALL BE IN THE FORM PRESCRIBED BY
THE COMPTROLLER AND CONTAIN THE FOLLOWING:
(I) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OR EMPLOYER IDENTIFI-
CATION NUMBER OF THE ACCOUNT OWNER;
(II) THE DESIGNATION OF A DESIGNATED BENEFICIARY;
(III) THE NAME, ADDRESS AND SOCIAL SECURITY NUMBER OF THE DESIGNATED
BENEFICIARY; AND
(IV) SUCH OTHER INFORMATION AS THE COMPTROLLER MAY REQUIRE.
C. THE COMPTROLLER MAY ESTABLISH A NOMINAL FEE FOR SUCH APPLICATION.
D. ANY PERSON, INCLUDING THE ACCOUNT OWNER, MAY MAKE CONTRIBUTIONS TO
AN ACCOUNT AFTER THE ACCOUNT IS OPENED.
E. CONTRIBUTIONS TO ACCOUNTS MAY BE MADE ONLY IN CASH.
F. FOUR YEARS MUST ELAPSE BETWEEN THE ESTABLISHMENT OF A PRE-PAID
TUITION ACCOUNT AND THE TIME THE FIRST QUALIFIED WITHDRAWAL IS MADE FOR
THE PAYMENT OF TUITION EXPENSES.
G. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE BALANCE FROM AN
ACCOUNT ON SIXTY DAYS NOTICE OR SUCH SHORTER PERIOD AS MAY BE AUTHORIZED
UNDER RULES GOVERNING THE PLAN. SUCH RULES SHALL INCLUDE PROVISIONS THAT
WILL GENERALLY ENABLE THE DETERMINATION AS TO WHETHER A WITHDRAWAL IS A
NONQUALIFIED WITHDRAWAL OR A QUALIFIED WITHDRAWAL.
H. AN ACCOUNT OWNER MAY CHANGE THE DESIGNATED BENEFICIARY OF AN
ACCOUNT TO AN INDIVIDUAL WHO IS A MEMBER OF THE FAMILY OF THE PRIOR
DESIGNATED BENEFICIARY IN ACCORDANCE WITH PROCEDURES ESTABLISHED BY THE
COMPTROLLER.
I. AN ACCOUNT OWNER MAY TRANSFER ALL OR A PORTION OF AN ACCOUNT TO
ANOTHER FAMILY TUITION ACCOUNT, THE SUBSEQUENT DESIGNATED BENEFICIARY OF
WHICH IS A MEMBER OF THE FAMILY AS DEFINED IN SECTION 529 OF THE INTER-
NAL REVENUE CODE OF 1986, AS AMENDED.
J. THE PLAN SHALL PROVIDE SEPARATE ACCOUNTING FOR EACH DESIGNATED
BENEFICIARY.
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K. NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF ANY ACCOUNT SHALL BE
PERMITTED TO DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR
THE EARNINGS THEREON.
L. NEITHER AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY SHALL USE AN
INTEREST IN AN ACCOUNT AS SECURITY FOR A LOAN. ANY PLEDGE OF AN INTEREST
IN AN ACCOUNT SHALL BE OF NO FORCE AND EFFECT.
M. (I) IF THERE IS ANY DISTRIBUTION FROM AN ACCOUNT TO ANY INDIVIDUAL
OR FOR THE BENEFIT OF ANY INDIVIDUAL DURING A CALENDAR YEAR, SUCH
DISTRIBUTION SHALL BE REPORTED TO THE INTERNAL REVENUE SERVICE AND THE
ACCOUNT OWNER, THE DESIGNATED BENEFICIARY OR THE DISTRIBUTEE TO THE
EXTENT REQUIRED BY FEDERAL LAW OR REGULATION.
(II) STATEMENTS SHALL BE PROVIDED TO EACH ACCOUNT OWNER AT LEAST ONCE
EACH YEAR WITHIN SIXTY DAYS AFTER THE END OF THE TWELVE MONTH PERIOD TO
WHICH THEY RELATE. THE STATEMENT SHALL IDENTIFY THE CONTRIBUTIONS MADE
DURING A PRECEDING TWELVE MONTH PERIOD, THE TOTAL CONTRIBUTIONS MADE TO
THE ACCOUNT THROUGH THE END OF THE PERIOD, THE VALUE OF THE ACCOUNT AT
THE END OF SUCH PERIOD, DISTRIBUTIONS MADE DURING SUCH PERIOD AND ANY
OTHER INFORMATION THAT THE COMPTROLLER SHALL REQUIRE TO BE REPORTED TO
THE ACCOUNT OWNER.
(III) STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE
PREPARED AND FILED TO THE EXTENT REQUIRED BY FEDERAL AND STATE TAX LAW.
N. (I) A LOCAL GOVERNMENT OR ORGANIZATION DESCRIBED IN SECTION
501(C)(3) OF THE INTERNAL REVENUE CODE OF 1986, AS AMENDED, MAY OPEN AND
BECOME THE ACCOUNT OWNER OF AN ACCOUNT TO FUND SCHOLARSHIPS FOR PERSONS
WHOSE IDENTITY WILL BE DETERMINED UPON DISBURSEMENT.
(II) IN THE CASE OF ANY ACCOUNT OPENED PURSUANT TO PARAGRAPH A OF THIS
SUBDIVISION THE REQUIREMENT SET FORTH IN THIS SUBDIVISION THAT A DESIG-
NATED BENEFICIARY BE DESIGNATED WHEN AN ACCOUNT IS OPENED SHALL NOT
APPLY AND EACH INDIVIDUAL WHO RECEIVES AN INTEREST IN SUCH ACCOUNT AS A
SCHOLARSHIP SHALL BE TREATED AS A DESIGNATED BENEFICIARY WITH RESPECT TO
SUCH INTEREST.
O. AN ANNUAL FEE MAY BE IMPOSED UPON THE ACCOUNT OWNER FOR THE MAINTE-
NANCE OF THE ACCOUNT.
P. THE PLAN SHALL DISCLOSE THE FOLLOWING INFORMATION IN WRITING TO
EACH ACCOUNT OWNER AND PROSPECTIVE ACCOUNT OWNER OF A PRE-PAID TUITION
ACCOUNT:
(I) THE TERMS AND CONDITIONS FOR PURCHASING A PRE-PAID TUITION
ACCOUNT;
(II) ANY RESTRICTIONS ON THE SUBSTITUTION OF BENEFICIARIES;
(III) THE PERSON OR ENTITY ENTITLED TO TERMINATE THE TUITION PRE-PAY-
MENT AGREEMENT;
(IV) THE PERIOD OF TIME DURING WHICH A BENEFICIARY MAY RECEIVE BENE-
FITS UNDER THE TUITION PRE-PAYMENT AGREEMENT;
(V) THE TERMS AND CONDITIONS UNDER WHICH MONEY MAY BE WHOLLY OR
PARTIALLY WITHDRAWN FROM THE PLAN, INCLUDING, BUT NOT LIMITED TO, ANY
REASONABLE CHARGES AND FEES THAT MAY BE IMPOSED FOR WITHDRAWAL;
(VI) THE PROBABLE TAX CONSEQUENCES ASSOCIATED WITH CONTRIBUTIONS TO
AND DISTRIBUTIONS FROM ACCOUNTS; AND
(VII) ALL OTHER RIGHTS AND OBLIGATIONS PURSUANT TO PRE-PAID TUITION
AGREEMENTS, AND ANY OTHER TERMS, CONDITIONS AND PROVISIONS DEEMED NECES-
SARY AND APPROPRIATE BY THE COMPTROLLER PURSUANT TO THIS SUBDIVISION.
Q. PRE-PAID TUITION SAVINGS AGREEMENTS SHALL BE SUBJECT TO SECTION
FOURTEEN-C OF THE BANKING LAW AND THE "TRUTH-IN-SAVINGS" REGULATIONS
PROMULGATED THEREUNDER.
R. NOTHING IN THIS ARTICLE OR IN ANY PRE-PAID TUITION SAVINGS AGREE-
MENT ENTERED INTO PURSUANT TO THIS ARTICLE SHALL BE CONSTRUED AS A GUAR-
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ANTEE BY THE STATE OR ANY COLLEGE THAT A BENEFICIARY WILL BE ADMITTED TO
A COLLEGE OR UNIVERSITY, OR, UPON ADMISSION TO A COLLEGE WILL BE PERMIT-
TED TO CONTINUE TO ATTEND OR WILL RECEIVE A DEGREE FROM A COLLEGE OR
UNIVERSITY.
4. STATE GUARANTEE. A. NOTHING IN THIS SECTION SHALL ESTABLISH OR BE
DEEMED TO ESTABLISH ANY OBLIGATION OF THE STATE, THE COMPTROLLER OR ANY
AGENCY OR INSTRUMENTALITY OF THE STATE TO GUARANTEE ANY BENEFITS TO ANY
ACCOUNT OWNER OR DESIGNATED BENEFICIARY.
B. NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION ONE OF THIS SECTION,
IN ORDER TO ENSURE THAT THE PLAN IS ABLE TO MEET ITS OBLIGATIONS, THE
GOVERNOR SHALL INCLUDE IN THE BUDGET SUBMITTED PURSUANT TO SECTION TWEN-
TY-TWO OF THE STATE FINANCE LAW, AN APPROPRIATION SUFFICIENT FOR THE
PURPOSE OF ENSURING THAT THE PLAN CAN MEET ITS OBLIGATIONS. ANY SUMS
APPROPRIATED FOR SUCH PURPOSE SHALL BE TRANSFERRED TO THE PLAN. ALL
AMOUNTS PAID INTO THE PLAN PURSUANT TO THIS SUBDIVISION SHALL CONSTITUTE
AND BE ACCOUNTED FOR AS ADVANCES BY THE STATE TO THE PLAN AND, SUBJECT
TO THE RIGHTS OF THE PLAN'S CONTRACT HOLDERS, SHALL BE REPAID TO THE
STATE WITHOUT INTEREST FROM AVAILABLE OPERATING REVENUE OF THE PLAN IN
EXCESS OF AMOUNTS REQUIRED FOR THE PAYMENT OF THE OBLIGATIONS OF THE
PLAN. AS USED IN THIS SECTION, "OBLIGATIONS OF THE PLAN" MEANS AMOUNTS
REQUIRED FOR THE PAYMENT OF CONTRACT BENEFITS OR OTHER OBLIGATIONS OF
THE PLAN, THE MAINTENANCE OF THE PLAN, AND OPERATING EXPENSES FOR THE
CURRENT FISCAL YEAR.
§ 2. The state finance law is amended by adding a new section 78-c to
read as follows:
§ 78-C. NEW YORK STATE PRE-PAID TUITION PLAN 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 PRE-PAID TUITION PLAN FUND. ALL
PAYMENTS FROM SUCH FUND SHALL BE MADE IN ACCORDANCE WITH SECTION THREE
HUNDRED FIFTY-FIVE-F OF THE EDUCATION LAW.
2. (A) THE COMPTROLLER SHALL INVEST THE ASSETS OF THE FUND IN INVEST-
MENTS AUTHORIZED BY ARTICLE FOUR-A OF THE RETIREMENT AND SOCIAL SECURITY
LAW, PROVIDED HOWEVER, THAT:
(I) THE PROVISIONS OF PARAGRAPH (A) OF SUBDIVISION TWO OF SECTION ONE
HUNDRED SEVENTY-SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW SHALL
NOT APPLY EXCEPT FOR SUBPARAGRAPH (II) OF SUCH PARAGRAPH; AND (II)
NOTWITHSTANDING THE PROVISIONS OF SUBDIVISION SEVEN OF SECTION ONE
HUNDRED SEVENTY-SEVEN OF THE RETIREMENT AND SOCIAL SECURITY LAW OR ANY
OTHER LAW TO THE CONTRARY, THE ASSETS OF THE FUND MAY BE INVESTED IN ANY
FUNDING AGREEMENT ISSUED IN ACCORDANCE WITH SECTION THREE THOUSAND TWO
HUNDRED TWENTY-TWO OF THE INSURANCE LAW BY A DOMESTIC LIFE INSURANCE
COMPANY OR A FOREIGN LIFE INSURANCE COMPANY DOING BUSINESS IN THIS
STATE, SUBJECT TO THE FOLLOWING:
(1) SUCH A FUNDING AGREEMENT MAY PROVIDE FOR A GUARANTEED MINIMUM RATE
OF RETURN;
(2) SUCH A FUNDING AGREEMENT MAY BE ALLOCATED AS EITHER A SEPARATE
ACCOUNT OR A GENERAL ACCOUNT OF THE ISSUER, AS THE COMPTROLLER MAY
DECIDE;
(3) TOTAL INVESTMENTS OF THE FUND PURSUANT TO THIS PARAGRAPH IN ANY
FUNDING AGREEMENTS ISSUED BY A SINGLE LIFE INSURANCE COMPANY WHICH ARE
ALLOCATED AS A GENERAL ACCOUNT OF THE ISSUER SHALL NOT, IN THE AGGRE-
GATE, EXCEED THREE HUNDRED FIFTY MILLION DOLLARS; AND
(4) NO ASSETS OF THE FUND SHALL BE INVESTED IN ANY SUCH FUNDING AGREE-
MENT UNLESS, AT THE TIME OF SUCH INVESTMENT, THE GENERAL OBLIGATIONS OR
FINANCIAL STRENGTH OF THE ISSUER HAVE RECEIVED EITHER THE HIGHEST OR
SECOND HIGHEST RATING BY TWO NATIONALLY RECOGNIZED RATING SERVICES OR BY
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ONE NATIONALLY RECOGNIZED RATING SERVICE IN THE EVENT THAT ONLY ONE SUCH
SERVICE RATES SUCH OBLIGATIONS.
(B) FUND ASSETS SHALL BE KEPT SEPARATE AND SHALL NOT BE COMMINGLED
WITH OTHER ASSETS. THE COMPTROLLER MAY ENTER INTO CONTRACTS TO PROVIDE
FOR INVESTMENT ADVICE AND MANAGEMENT, CUSTODIAL SERVICES AND OTHER
PROFESSIONAL SERVICES FOR THE ADMINISTRATION AND INVESTMENT OF THE PLAN.
ADMINISTRATIVE FEES, COSTS AND EXPENSES, INCLUDING INVESTMENT FEES AND
EXPENSES, SHALL BE PAID FROM THE ASSETS OF THE FUND.
3. THE COMPTROLLER SHALL PROVIDE FOR THE ADMINISTRATION OF THE TRUST
FUND, INCLUDING MAINTAINING PARTICIPANT RECORDS AND ACCOUNTS, AND
PROVIDING ANNUAL AUDITED REPORTS. THE COMPTROLLER MAY ENTER INTO
CONTRACTS TO PROVIDE ADMINISTRATIVE SERVICES AND REPORTING.
§ 3. Section 5205 of the civil practice law and rules is amended by
adding a new subdivision (q) to read as follows:
(Q) EXEMPTION FOR NEW YORK STATE PRE-PAID TUITION PLAN MONIES. MONIES
IN AN ACCOUNT CREATED PURSUANT TO SECTION THREE HUNDRED FIFTY-FIVE-F OF
THE EDUCATION LAW ARE EXEMPT FROM APPLICATION TO THE SATISFACTION OF A
MONEY JUDGMENT AS FOLLOWS:
1. ONE HUNDRED PERCENT OF MONIES IN AN ACCOUNT IN CONNECTION WITH A
PRE-PAID TUITION PLAN ESTABLISHED PURSUANT TO SUCH ARTICLE IS EXEMPT;
AND
2. ONE HUNDRED PERCENT OF MONIES IN AN ACCOUNT IS EXEMPT WHERE THE
JUDGMENT DEBTOR IS THE ACCOUNT OWNER OR DESIGNATED BENEFICIARY OF SUCH
ACCOUNT.
FOR THE PURPOSES OF THIS SUBDIVISION, THE TERMS "ACCOUNT OWNER" AND
"DESIGNATED BENEFICIARY" SHALL HAVE THE MEANINGS ASCRIBED TO THEM IN
ARTICLE FOURTEEN-A OF THE EDUCATION LAW.
§ 4. Paragraph 34 of subsection (b) of section 612 of the tax law, as
amended by chapter 535 of the laws of 2000, subparagraph (B) as amended
by chapter 593 of the laws of 2003, is amended to read as follows:
(34) (A) Excess distributions received during the taxable year by a
distributee of 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 OF A PRE-PAID TUITION ACCOUNT ESTAB-
LISHED PURSUANT TO SECTION THREE HUNDRED FIFTY-FIVE-F 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.
(B) (i) The term "excess distributions" means distributions which are
not
(I) qualified withdrawals within the meaning of subdivision nine of
section six hundred ninety-five-b OR PARAGRAPH L OF SUBDIVISION ONE OF
SECTION THREE HUNDRED FIFTY-FIVE-F of the education law;
(II) withdrawals made as a result of the death or disability of the
designated beneficiary within the meaning of subdivision ten of section
six hundred ninety-five-b OR PARAGRAPH I OF SUBDIVISION ONE OF SECTION
THREE HUNDRED FIFTY-FIVE-F of such law; or
(III) transfers described in paragraph b of subdivision six of section
six hundred ninety-five-e of such law.
(ii) Excess distributions shall be deemed attributable to deductible
contributions to the extent the amount of any such excess distribution,
when added to all previous excess distributions from the account,
exceeds the aggregate of all nondeductible contributions to the account.
§ 5. 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 and para-
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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 choice tuition savings program provided for under article four-
teen-A, OR TO A PRE-PAID TUITION ACCOUNT PURSUANT TO SECTION THREE
HUNDRED FIFTY-FIVE-F of the education law, to the extent not deductible
or eligible for credit for federal income tax purposes, provided, howev-
er, the exclusion provided for in this paragraph shall not exceed [five]
TEN thousand dollars for an individual or head of household, and for
married couples who file joint tax returns, shall not exceed [ten] TWEN-
TY 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 choice tuition savings program provided for under
article fourteen-A, OR FROM A PRE-PAID TUITION ACCOUNT PURSUANT TO
SECTION THREE HUNDRED FIFTY-FIVE-F of the education law, to the extent
includible in gross income for federal income tax purposes.
§ 6. This act shall take effect immediately and shall apply to taxable
years commencing after the thirty-first of December next succeeding the
date on which it shall have become a law.