LBD16001-01-6
A. 11594 2
ACCOUNTS AND TO PROVIDE GUIDELINES FOR THE MAINTENANCE OF SUCH ACCOUNTS
TO:
1. PROVIDE A DIRECT FINANCIAL INCENTIVE FOR FAMILIES TO MAINTAIN NEW
YORK STATE RESIDENCY AND LONG-TERM INVESTMENT IN THE STATE;
2. MITIGATE THE HIGH COST OF LIVING IN NEW YORK STATE BY ESTABLISHING
A GROWTH-ORIENTED CAPITAL BASE;
3. INCENTIVIZE CONSISTENT PERSONAL SAVINGS AND PRIVATE INVESTMENT
THROUGH THE USE OF LOW-COST MARKET INSTRUMENTS; AND
4. FOSTER INDIVIDUAL OWNERSHIP AND FINANCIAL LITERACY BY PROVIDING
YOUNG NEW YORKERS WITH A PERSONAL STAKE IN THE ECONOMY AND PRACTICAL
EXPERIENCE MANAGING INVESTMENT ASSETS.
§ 510. DEFINITIONS. AS USED IN THIS ARTICLE, THE FOLLOWING TERMS SHALL
HAVE THE FOLLOWING MEANINGS:
1. "ACCOUNT" OR "NY SEED ACCOUNT" SHALL MEAN AN INDIVIDUAL SAVINGS
ACCOUNT ESTABLISHED IN ACCORDANCE WITH THE PROVISIONS OF THIS ARTICLE.
2. "ACCOUNT OWNER" SHALL MEAN A PARENT OR LEGAL GUARDIAN, WHO IS A
FULL-YEAR RESIDENT TAXPAYER IN THE STATE OF NEW YORK, OF A DESIGNATED
BENEFICIARY, WHO ESTABLISHED AN ACCOUNT UNDER THIS ARTICLE. UPON A
DESIGNATED BENEFICIARY REACHING THE AGE OF EIGHTEEN, SUCH DESIGNATED
BENEFICIARY SHALL AUTOMATICALLY BECOME THE ACCOUNT OWNER AND ASSUME ALL
RIGHTS, RESPONSIBILITIES, AND CONTROL OVER THE ACCOUNT.
3. "COMMISSIONER" SHALL MEAN THE COMMISSIONER OF THE DEPARTMENT OF
TAXATION AND FINANCE.
4. "COMPTROLLER" SHALL MEAN THE COMPTROLLER OF THE STATE OF NEW YORK.
5. "CONTRIBUTION" SHALL MEAN ANY CASH DEPOSIT OF PRIVATE FUNDS INTO AN
ACCOUNT FOR THE BENEFIT OF A DESIGNATED BENEFICIARY.
6. "CONTRIBUTION LIMIT" SHALL MEAN THE MAXIMUM AMOUNT OF PRIVATE FUNDS
THAT MAY BE DEPOSITED INTO AN ACCOUNT DURING A SINGLE TAXABLE YEAR,
WHICH SHALL NOT EXCEED FIVE THOUSAND DOLLARS FOR INDIVIDUAL OR HEAD OF
HOUSEHOLD AND TEN THOUSAND DOLLARS FOR MARRIED INDIVIDUALS WHO FILE
JOINT TAX RETURNS, PROVIDED THAT THE COMPTROLLER MAY ADJUST THIS LIMIT
FOR INFLATION IN INCREMENTS OF FIVE HUNDRED DOLLARS.
7. "CONTRIBUTOR" SHALL MEAN ANY PERSON OR LEGAL ENTITY WHO DEPOSITS
PRIVATE FUNDS INTO AN ACCOUNT.
8. "DEPENDENT" SHALL HAVE THE SAME MEANING AS DEFINED BY 26 U.S.C. §
152.
9. "DESIGNATED BENEFICIARY" SHALL MEAN ANY INDIVIDUAL UNDER THE AGE OF
EIGHTEEN FOR WHOM AN ACCOUNT IS ESTABLISHED UNDER THIS ARTICLE. SUCH
INDIVIDUAL MUST BE A DEPENDENT OF THE ACCOUNT OWNER.
10. "ELIGIBLE CHILD" SHALL MEAN AN INDIVIDUAL BORN IN THE STATE OF NEW
YORK FOR TAXABLE YEARS BEGINNING JANUARY FIRST, TWO THOUSAND TWENTY-SIX
AND BEFORE JANUARY FIRST, TWO THOUSAND TWENTY-NINE, WHO HAS BEEN ISSUED
A VALID SOCIAL SECURITY NUMBER.
11. "GUARDIAN" SHALL HAVE THE SAME MEANING AS DEFINED BY SECTION ONE
HUNDRED THREE OF THE SURROGATE'S COURT PROCEDURE ACT.
12. "NONQUALIFIED WITHDRAWAL" SHALL MEAN ANY WITHDRAWAL FROM AN
ACCOUNT BEFORE THE DESIGNATED BENEFICIARY REACHES THE AGE OF EIGHTEEN,
THE DESIGNATED BENEFICIARY HAS ATTAINED THE AGE OF EIGHTEEN BUT HAS
FAILED TO COMPLETE THE FINANCIAL LITERACY REQUIREMENTS AS PRESCRIBED BY
SUBDIVISION FIVE OF SECTION FIVE HUNDRED THIRTEEN OF THIS ARTICLE, OR
ANY INSTANCE WHERE THE DESIGNATED BENEFICIARY CEASES TO BE A RESIDENT OF
THE STATE OF NEW YORK PRIOR TO REACHING SUCH AGE, EXCEPT IN THE EVENT OF
THE BENEFICIARY'S DEATH OR PERMANENT DISABILITY.
(A) FOR QUALIFYING ACCOUNTS, A NONQUALIFIED WITHDRAWAL SHALL RESULT IN
THE IMMEDIATE FORFEITURE AND RECAPTURE OF THE SEED MONEY AND ANY ACCRUED
EARNINGS THEREON. SUCH RECAPTURED FUNDS SHALL BE RETURNED TO THE STATE.
A. 11594 3
PRIVATE CONTRIBUTIONS AND ANY EARNINGS ACCRUED ON SUCH PRIVATE CONTRIB-
UTIONS SHALL NOT BE SUBJECT TO STATE RECAPTURE.
(B) FOR ANY ACCOUNT, A NONQUALIFIED WITHDRAWAL SHALL BE SUBJECT TO:
(I) THE RECAPTURE OF ANY STATE TAX DEDUCTIONS PREVIOUSLY CLAIMED,
PURSUANT TO THIS ARTICLE, AS ADMINISTERED BY THE COMMISSIONER. IF AN
ACCOUNT OWNER IS UNABLE TO PAY SUCH RECAPTURE IN FULL, THE COMPTROLLER,
IN COORDINATION WITH THE COMMISSIONER SHALL PROVIDE RULES FOR AN
INSTALLMENT PAYMENT AGREEMENT PLAN; AND
(II) AN ADMINISTRATIVE FEE, TO BE DETERMINED BY THE COMPTROLLER, TO
COVER THE COSTS OF ACCOUNT MAINTENANCE AND THE PROCESSING OF SUCH WITH-
DRAWAL.
13. "PROGRAM" SHALL MEAN THE SECURING EARLY EQUITY AND DEVELOPMENT
PROGRAM ESTABLISHED PURSUANT TO THIS ARTICLE.
14. "QUALIFYING ACCOUNT" SHALL MEAN AN ACCOUNT ESTABLISHED UNDER THIS
ARTICLE FOR AN ELIGIBLE CHILD WHERE THE ACCOUNT OWNER MUST HAVE HAD A
NEW YORK STATE ADJUSTED GROSS INCOME FOR THE PRECEDING TAXABLE YEAR NOT
EXCEEDING:
(A) SEVENTY-FIVE THOUSAND DOLLARS FOR AN ACCOUNT OWNER WHO FILED A NEW
YORK STATE RESIDENT INCOME TAX RETURN AS A SINGLE TAXPAYER, MARRIED
TAXPAYER FILING A SEPARATE RETURN, OR A HEAD OF HOUSEHOLD; OR
(B) ONE HUNDRED FIFTY THOUSAND DOLLARS FOR AN ACCOUNT OWNER WHO FILED
A NEW YORK STATE RESIDENT INCOME TAX RETURN AS A MARRIED TAXPAYER FILING
JOINTLY OR A QUALIFIED SURVIVING SPOUSE.
15. "QUALIFIED WITHDRAWAL" SHALL MEAN A WITHDRAWAL FROM AN ACCOUNT ON
OR AFTER THE DATE THE DESIGNATED BENEFICIARY REACHES THE AGE OF EIGH-
TEEN.
16. "ROLLOVER" SHALL MEAN A TRANSFER OF ASSETS UPON ATTAINING EIGHTEEN
YEARS OF AGE FROM A NY SEED ACCOUNT TO ANOTHER QUALIFIED TAX-ADVANTAGED
SAVINGS ACCOUNT, INCLUDING BUT NOT LIMITED TO:
(A) A TUITION SAVINGS ACCOUNT ESTABLISHED PURSUANT TO ARTICLE FOUR-
TEEN-A OF THE EDUCATION LAW;
(B) AN INDIVIDUAL RETIREMENT ACCOUNT AS DEFINED BY 26 U.S.C. § 408, TO
THE EXTENT PERMITTED UNDER FEDERAL LAW; OR
(C) A DEFERRED COMPENSATION PLAN MAINTAINED BY A PUBLIC OR PRIVATE
EMPLOYER, TO THE EXTENT PERMITTED UNDER FEDERAL LAW.
17. "SEED MONEY" OR "SEED DEPOSIT" SHALL MEAN A ONE-TIME STATE
CONTRIBUTION OF ONE THOUSAND DOLLARS DEPOSITED BY THE COMPTROLLER INTO A
QUALIFYING ACCOUNT; PROVIDED, HOWEVER, THAT NO SUCH DEPOSIT SHALL BE
MADE WITHOUT THE PRIOR APPROVAL OF THE DIRECTOR OF THE BUDGET.
§ 511. FUNCTIONS OF THE COMPTROLLER. 1. THE COMPTROLLER SHALL IMPLE-
MENT AND ADMINISTER THE PROGRAM UNDER THE TERMS AND CONDITIONS ESTAB-
LISHED BY THIS ARTICLE AND PURSUANT TO A MEMORANDUM OF UNDERSTANDING
RELATING TO ANY MATTERS NOT OTHERWISE EXPRESSLY PROVIDED FOR IN THIS
ARTICLE, PROVIDED, HOWEVER, THAT SUCH MEMORANDUM SHALL NOT CONFLICT WITH
ANY PROVISIONS OF THIS ARTICLE.
2. IN FURTHERANCE OF SUCH IMPLEMENTATION, THE MEMORANDUM OF UNDER-
STANDING SHALL ADDRESS THE AUTHORITY AND RESPONSIBILITY OF THE COMP-
TROLLER TO:
(A) DEVELOP, IMPLEMENT, AND ADMINISTER THE PROGRAM IN A MANNER
CONSISTENT WITH THE PROVISIONS OF THIS ARTICLE, INCLUDING THE ADOPTION
OF RULES AND REGULATIONS IN ACCORDANCE WITH THE STATE ADMINISTRATIVE
PROCEDURE ACT;
(B) SERVE AS CUSTODIAN AND TRUSTEE OF ALL FUNDS AND ACCOUNTS ESTAB-
LISHED PURSUANT TO THIS ARTICLE, AND TO HOLD, MANAGE, AND INVEST SUCH
FUNDS AT THE DIRECTION OF AND FOR THE EXCLUSIVE BENEFIT OF ACCOUNT
OWNERS AND DESIGNATED BENEFICIARIES, AND TO DISCHARGE SUCH DUTIES WITH
A. 11594 4
THE CARE, SKILL, AND DILIGENCE UNDER THE CIRCUMSTANCES THEN PREVAILING
THAT A PRUDENT PERSON ACTING IN A LIKE CAPACITY WOULD USE;
(C) INVEST AND REINVEST PROGRAM ASSETS IN ACCORDANCE WITH APPLICABLE
LAW AND A WRITTEN INVESTMENT POLICY ADOPTED BY THE COMPTROLLER, PROVIDED
THAT THE COMPTROLLER SHALL ESTABLISH A MENU OF STANDARDIZED INVESTMENT
OPTIONS AND SHALL PERMIT THE ACCOUNT OWNER TO DIRECT THE INVESTMENT OF
ALL FUNDS WITHIN THEIR INDIVIDUAL ACCOUNT AMONG SUCH OPTIONS. SUCH
OPTIONS SHALL INCLUDE, BUT NOT BE LIMITED TO, AGE-BASED TARGET DATE
FUNDS AND LOW-COST EQUITY AND FIXED-INCOME INDEX FUNDS, DESIGNED TO
PROMOTE LONG-TERM ASSET GROWTH FOR THE DESIGNATED BENEFICIARY;
(D) ENGAGE THE SERVICES OF CONSULTANTS, INVESTMENT MANAGERS, FINANCIAL
INSTITUTIONS, AND OTHER PROFESSIONAL AND TECHNICAL ADVISORS ON A
CONTRACT BASIS FOR THE ADMINISTRATION AND MANAGEMENT OF THE PROGRAM;
(E) SEEK RULINGS AND OTHER GUIDANCE FROM THE UNITED STATES DEPARTMENT
OF THE TREASURY, THE INTERNAL REVENUE SERVICE, OR OTHER FEDERAL OR STATE
AGENCIES RELATING TO THE PROGRAM;
(F) MAKE ADMINISTRATIVE OR OPERATIONAL CHANGES TO THE PROGRAM AS
NECESSARY TO ENSURE COMPLIANCE WITH APPLICABLE STATE LAW AND TO OBTAIN
ANY FEDERAL INCOME TAX BENEFITS OR TREATMENT CONSISTENT WITH THE
PURPOSES OF THIS ARTICLE;
(G) CHARGE, IMPOSE, AND COLLECT REASONABLE ADMINISTRATIVE FEES AND
SERVICE CHARGES IN CONNECTION WITH ANY AGREEMENT, CONTRACT, OR TRANS-
ACTION RELATING TO THE PROGRAM;
(H) ESTABLISH PROCEDURES FOR THE CREATION, MAINTENANCE, ROLLOVER,
CONTRIBUTION TO, WITHDRAWAL FROM, AND DISTRIBUTION OF ACCOUNTS ESTAB-
LISHED PURSUANT TO THIS ARTICLE;
(I) ESTABLISH PROCEDURES TO ENSURE THAT THE ACCOUNT OWNER MAINTAINS
THE SOLE AUTHORITY TO SELECT AMONG THE INVESTMENT OPTIONS PROVIDED BY
THE PROGRAM FOR BOTH THE SEED MONEY AND ANY PRIVATE CONTRIBUTIONS, AND
TO PERIODICALLY REALLOCATE SUCH ASSETS AS PERMITTED BY THE COMPTROLLER
AND APPLICABLE TAX LAW. IN THE EVENT THAT AN ACCOUNT OWNER FAILS TO
DIRECT THE INVESTMENT OF FUNDS, THE COMPTROLLER SHALL AUTOMATICALLY
ALLOCATE SUCH FUNDS INTO THE AGE-BASED TARGET DATE FUND MOST APPROPRIATE
FOR THE AGE OF THE DESIGNATED BENEFICIARY;
(J) MAINTAIN RECORDS, ACCOUNTS, AND REPORTS RELATING TO THE PROGRAM,
AND PROVIDE PERIODIC REPORTS TO THE GOVERNOR AND LEGISLATURE AS REQUIRED
BY SECTION FIVE HUNDRED FIFTEEN OF THIS ARTICLE;
(K) DEVELOP MARKETING PLANS, OUTREACH STRATEGIES, AND PROMOTIONAL
MATERIALS TO INFORM ELIGIBLE PARTICIPANTS OF THE PROGRAM;
(L) ESTABLISH A FINANCIAL LITERACY CERTIFICATION PROGRAM, WHICH MAY BE
PROVIDED IN A DIGITAL FORMAT, THAT A DESIGNATED BENEFICIARY SHALL
COMPLETE UPON ATTAINING EIGHTEEN YEARS OF AGE AS A CONDITION OF EXERCIS-
ING FULL CONTROL OVER A QUALIFIED WITHDRAWAL; PROVIDED THAT SUCH PROGRAM
SHALL BE DESIGNED TO EDUCATE THE BENEFICIARY ON THE FUNDAMENTALS OF
INVESTING, COMPOUND INTEREST, AND RESPONSIBLE ASSET MANAGEMENT;
(M) ESTABLISH THE METHODS BY WHICH FUNDS HELD IN SUCH ACCOUNTS SHALL
BE DISBURSED, INCLUDING VERIFICATION OF ELIGIBILITY FOR SEED MONEY AND
THE CONFIRMATION OF APPROVAL BY THE DIRECTOR OF BUDGET PRIOR TO THE
DEPOSIT OF STATE FUNDS INTO A QUALIFYING ACCOUNT, PROVIDED, HOWEVER,
THAT EACH DESIGNATED BENEFICIARY SHALL BE ENTITLED TO ACCESS AND CONTROL
THE FULL BALANCE OF SUCH ACCOUNT UPON ATTAINING EIGHTEEN YEARS OF AGE,
SUBJECT ONLY TO REASONABLE ADMINISTRATIVE PROCEDURES AS MAY BE NECESSARY
TO VERIFY IDENTITY AND PREVENT FRAUD, AND FURTHER PROVIDED THAT ANY
RESTRICTIONS ON USE BEFORE SUCH AGE SHALL BE CONSISTENT WITH THE LONG-
TERM ASSET BUILDING PURPOSES OF THIS ARTICLE;
A. 11594 5
(N) ESTABLISH THE METHOD BY WHICH PROGRAM ASSETS SHALL BE ALLOCATED TO
PAY FOR ADMINISTRATIVE AND OPERATIONAL COSTS;
(O) COORDINATE WITH THE DEPARTMENT OF TAXATION AND FINANCE, AND ANY
OTHER RELEVANT STATE AGENCIES, INCLUDING FOR THE PURPOSES OF DATA SHAR-
ING, ELIGIBILITY VERIFICATION, AND PROGRAM ADMINISTRATION, IN ACCORDANCE
WITH APPLICABLE LAW;
(P) AUDIT AND OVERSEE ALL ASPECTS OF THE PROGRAM, INCLUDING ANY
CONTRACTORS, AGENTS, OR SERVICE PROVIDERS, TO ENSURE COMPLIANCE WITH
APPLICABLE LAW, RULES, CONTRACTUAL OBLIGATIONS, AND FIDUCIARY STANDARDS;
(Q) RECEIVE, USE, AND PROTECT DATA NECESSARY TO ADMINISTER THE
PROGRAM, INCLUDING TAX AND OTHER ELIGIBILITY-RELATED DATA, IN ACCORDANCE
WITH ALL APPLICABLE STATE PRIVACY AND CONFIDENTIALITY LAWS;
(R) PROVIDE FOR THE DISPOSITION OF ABANDONED OR UNCLAIMED ACCOUNTS IN
ACCORDANCE WITH THE ABANDONED PROPERTY LAW; PROVIDED THAT NO ACCOUNT
SHALL BE DEEMED ABANDONED PRIOR TO THE BENEFICIARY ATTAINING THE AGE OF
EIGHTEEN; AND
(S) DO ALL THINGS NECESSARY AND PROPER TO CARRY OUT THE PURPOSES OF
THIS ARTICLE, CONSISTENT WITH THE PROVISIONS OF THIS ARTICLE.
§ 512. POWERS OF THE COMPTROLLER. 1. THE COMPTROLLER MAY IMPLEMENT THE
PROGRAM THROUGH THE USE OF FINANCIAL ORGANIZATIONS AS ACCOUNT DEPOSITO-
RIES, CUSTODIANS, AND MANAGERS FOR ACCOUNTS ESTABLISHED ON BEHALF OF THE
ACCOUNT OWNER PURSUANT TO THIS ARTICLE. UNDER THE PROGRAM, AN ACCOUNT
SHALL BE ESTABLISHED FOR EACH CHILD IN A MANNER DETERMINED BY THE COMP-
TROLLER, WITH AN APPROVED ACCOUNT DEPOSITORY, AND SUCH ACCOUNTS MAY BE
MAINTAINED WITH ONE OR MORE APPROVED FINANCIAL ORGANIZATIONS.
2. THE COMPTROLLER MAY SOLICIT PROPOSALS FROM FINANCIAL ORGANIZATIONS
TO ACT AS DEPOSITORIES AND MANAGERS OF THE PROGRAM. FINANCIAL ORGANIZA-
TIONS SUBMITTING PROPOSALS SHALL DESCRIBE THE INVESTMENT INSTRUMENTS OR
OPTIONS TO BE OFFERED UNDER THE PROGRAM, WHICH SHALL BE DESIGNED TO
SUPPORT LONG-TERM ASSET GROWTH AND WEALTH ACCUMULATION. THE COMPTROLLER
SHALL SELECT AS PROGRAM DEPOSITORIES AND MANAGERS THE FINANCIAL ORGAN-
IZATION THAT DEMONSTRATES THE MOST ADVANTAGEOUS COMBINATION, BOTH TO
PROGRAM BENEFICIARIES AND THE STATE, OF THE FOLLOWING FACTORS:
(A) THE FINANCIAL STABILITY AND INTEGRITY OF THE FINANCIAL ORGANIZA-
TION;
(B) THE SAFETY, DIVERSIFICATION, AND LONG-TERM GROWTH POTENTIAL OF THE
INVESTMENT INSTRUMENTS BEING OFFERED, INCLUDING THE AVAILABILITY OF A
DIVERSE MENU OF OPTIONS FOR SELECTION BY THE ACCOUNT OWNER;
(C) THE ABILITY OF SUCH INVESTMENT INSTRUMENTS TO ACHIEVE LONG-TERM
ASSET GROWTH AND WEALTH ACCUMULATION, INCLUDING PRESERVATION OF PRINCI-
PAL AND COMPOUNDING RETURNS OVER TIME, CONSISTENT WITH THE PURPOSES OF
THIS ARTICLE;
(D) THE ABILITY OF THE FINANCIAL ORGANIZATION TO SATISFY RECORDKEEPING
AND REPORTING REQUIREMENTS;
(E) THE FINANCIAL ORGANIZATION'S PLAN FOR PROMOTING THE PROGRAM AND
THE INVESTMENT IT IS WILLING TO MAKE TO PROMOTE THE PROGRAM, SUPPORTING
SUSTAINED PARTICIPATION;
(F) THE FEES, IF ANY, PROPOSED TO BE CHARGED TO ACCOUNT OWNERS, WITH A
PREFERENCE FOR LOW-COST FEE STRUCTURES THAT MAXIMIZE THE LONG-TERM ACCU-
MULATION OF WEALTH FOR THE BENEFICIARY;
(G) THE MINIMUM INITIAL DEPOSIT AND MINIMUM CONTRIBUTIONS REQUIRED, IF
ANY;
(H) THE ABILITY TO ACCEPT ELECTRONIC CONTRIBUTIONS; AND
(I) ANY OTHER BENEFITS TO THE STATE OR ITS RESIDENTS INCLUDED IN THE
PROPOSAL, INCLUDING FEES PAYABLE TO THE STATE OR ADMINISTRATIVE SUPPORT.
A. 11594 6
3. THE COMPTROLLER MAY ENTER CONTRACTS WITH ONE OR MORE FINANCIAL
ORGANIZATIONS TO SERVE AS PROGRAM MANAGERS OR DEPOSITORIES. SUCH
CONTRACTS SHALL PROVIDE ONE OR MORE TYPES OF INVESTMENT INSTRUMENTS
SUFFICIENT TO ALLOW ACCOUNT OWNERS TO DIRECT THE INVESTMENT OF THEIR
INDIVIDUAL ACCOUNTS AMONG DIFFERENT RISK PROFILES.
4. THE COMPTROLLER MAY SELECT MORE THAN ONE FINANCIAL ORGANIZATION FOR
PARTICIPATION IN THE PROGRAM AND MAY ALLOCATE ACCOUNTS OR CONTRIBUTIONS
AMONG SUCH ORGANIZATIONS AS THE COMPTROLLER DEEMS APPROPRIATE AND IN THE
BEST INTERESTS OF ACCOUNT BENEFICIARIES.
5. ANY MANAGEMENT CONTRACT ENTERED PURSUANT TO THIS SECTION SHALL
INCLUDE, AT A MINIMUM, TERMS REQUIRING THE FINANCIAL ORGANIZATION TO:
(A) TAKE ANY ACTION NECESSARY TO ENSURE THAT THE PROGRAM COMPLIES WITH
APPLICABLE STATE AND FEDERAL LAW;
(B) KEEP ADEQUATE RECORDS OF EACH ACCOUNT, MAINTAIN EACH ACCOUNT SEPA-
RATELY, AND PROVIDE THE COMPTROLLER WITH SUCH INFORMATION AS IS NECES-
SARY TO ADMINISTER THE PROGRAM AND PREPARE REQUIRED REPORTS;
(C) MAINTAIN DISTINCT RECORDS FOR EACH ACCOUNT THAT CLEARLY DIFFEREN-
TIATE BETWEEN STATE-FUNDED SEED MONEY, INCLUDING ANY ACCRUED EARNINGS
THEREON, AND PRIVATE CONTRIBUTIONS;
(D) COMPILE AND PROVIDE AGGREGATE DATA AND REPORTS AS REQUIRED BY THE
COMPTROLLER;
(E) PROVIDE THE COMPTROLLER WITH SUCH INFORMATION AS IS NECESSARY TO
DETERMINE COMPLIANCE WITH THIS ARTICLE AND ANY APPLICABLE CONTRACT
PROVISIONS;
(F) PROVIDE THE COMPTROLLER OR THE COMPTROLLER'S DESIGNEE WITH ACCESS
TO THE BOOKS AND RECORDS OF THE PROGRAM MANAGER AS NECESSARY TO ENSURE
COMPLIANCE WITH THE CONTRACT;
(G) HOLD ALL ACCOUNTS IN TRUST FOR THE EXCLUSIVE BENEFIT OF THE
ACCOUNT OWNERS;
(H) BE SUBJECTED TO AN ANNUAL INDEPENDENT AUDIT BY A CERTIFIED PUBLIC
ACCOUNTANT, THE RESULTS OF WHICH SHALL BE PROVIDED TO THE COMPTROLLER;
(I) PROVIDE COPIES OF ALL NON-CONFIDENTIAL REGULATORY FILINGS AND
REPORTS AND MAKE AVAILABLE FOR REVIEW THE RESULTS OF ANY REGULATORY
EXAMINATIONS, TO THE EXTENT PERMITTED BY LAW; AND
(J) ENSURE THAT ALL MARKETING, OUTREACH, AND PROGRAM MATERIALS COMPLY
WITH APPLICABLE LAW AND ACCURATELY REFLECT THE LONG-TERM, WEALTH-BUILD-
ING PURPOSE OF THE PROGRAM ADOPTED PURSUANT TO THIS ARTICLE.
6. THE COMPTROLLER MAY REQUIRE, AT ANY TIME, AN AUDIT OR EXAMINATION
OF THE OPERATIONS AND FINANCIAL CONDITION OF ANY PROGRAM MANAGER OR
DEPOSITORY IF THE COMPTROLLER HAS REASON TO BE CONCERNED ABOUT THE
FINANCIAL POSITION, RECORDKEEPING PRACTICES, OR ADMINISTRATION OF
ACCOUNTS.
7. DURING THE TERM OF ANY CONTRACT, THE COMPTROLLER SHALL CONDUCT
PERIODIC EXAMINATIONS OF EACH PROGRAM MANAGER AND ITS HANDLING OF
ACCOUNTS, WHICH SHALL OCCUR AT LEAST BIENNIALLY UNLESS SUCH ENTITY IS
OTHERWISE SUBJECT TO SUBSTANTIALLY SIMILAR OVERSIGHT BY A STATE OR
FEDERAL REGULATORY AUTHORITY.
8. (A) IF THE SELECTION OF A FINANCIAL ORGANIZATION AS A PROGRAM
MANAGER OR DEPOSITORY IS NOT RENEWED, THEN, FOLLOWING THE EXPIRATION OF
ITS TERM:
(I) NO NEW ACCOUNTS SHALL BE ESTABLISHED WITH SUCH ORGANIZATION;
(II) ADDITIONAL CONTRIBUTIONS MAY BE MADE TO EXISTING ACCOUNTS AS
PERMITTED BY THE COMPTROLLER;
(III) SUCH ACCOUNTS SHALL REMAIN SUBJECT TO ALL APPLICABLE OVERSIGHT
AND REPORTING REQUIREMENTS ESTABLISHED BY THE COMPTROLLER; AND
A. 11594 7
(IV) THE COMPTROLLER SHALL TAKE SUCH ACTIONS AS NECESSARY TO PROTECT
ACCOUNT BENEFICIARIES.
(B) IF THE COMPTROLLER TERMINATES A FINANCIAL ORGANIZATION AS A
PROGRAM MANAGER OR DEPOSITORY, THE COMPTROLLER MAY TAKE CUSTODY OF
ACCOUNTS HELD BY SUCH ORGANIZATION AND SHALL TAKE REASONABLE STEPS TO
TRANSFER SUCH ACCOUNTS TO ANOTHER APPROVED FINANCIAL ORGANIZATION OR
INVESTMENT OPTION WITH SUBSTANTIALLY SIMILAR CHARACTERISTICS, TO THE
EXTENT PRACTICABLE.
9. THE COMPTROLLER MAY ENTER SUCH CONTRACTS AS THEY DEEM NECESSARY AND
PROPER TO IMPLEMENT AND ADMINISTER THE PROGRAM, PROVIDED THAT SUCH
ACTIONS ARE CONSISTENT WITH THE PROVISIONS OF THIS ARTICLE.
§ 513. PROGRAM REQUIREMENTS; NY SEED ACCOUNT. 1. NY SEED ACCOUNTS
ESTABLISHED PURSUANT TO THE PROVISIONS OF THIS ARTICLE SHALL BE GOVERNED
BY THE PROVISIONS OF THIS SECTION.
2. A NY SEED ACCOUNT MAY BE OPENED BY AN ACCOUNT OWNER FOR A DESIG-
NATED BENEFICIARY THROUGH AN ELECTION MADE ON THE STATE RESIDENT INCOME
TAX RETURN.
(A) THE DEPARTMENT OF TAXATION AND FINANCE, IN COORDINATION WITH THE
COMPTROLLER, SHALL PROVIDE A SIMPLIFIED OPT-IN MECHANISM ON THE NEW YORK
STATE RESIDENT INCOME TAX RETURN FOR A RESIDENT TAXPAYER TO ESTABLISH AN
ACCOUNT FOR A DESIGNATED BENEFICIARY.
(B) THE DEPARTMENT OF TAXATION AND FINANCE SHALL INCLUDE IN THE
INSTRUCTIONS FOR THE NEW YORK STATE RESIDENT INCOME TAX RETURN A
CONCISE, PLAIN-LANGUAGE DESCRIPTION OF THE PROGRAM, INCLUDING AN OPT-OUT
MECHANISM FOR RECEIVING THE STATE-FUNDED SEED DEPOSIT. SUCH DESCRIPTION
SHALL INCLUDE THE PROGRAM'S PURPOSES, THE CRITERIA FOR STATE-FUNDED SEED
DEPOSITS, RESIDENCY REQUIREMENTS, AND THE POTENTIAL TAX CONSEQUENCES OF
PARTICIPATION.
(C) AN ELECTION MADE PURSUANT TO THIS SUBDIVISION SHALL CONSTITUTE THE
APPLICATION FOR THE ACCOUNT. THE DEPARTMENT OF TAXATION AND FINANCE
SHALL SHARE WITH THE COMPTROLLER ONLY SUCH INFORMATION AS IS NECESSARY
TO VERIFY IDENTITY, RESIDENCY, AND ELIGIBILITY FOR THE STATE-FUNDED SEED
DEPOSIT.
(D) THE COMPTROLLER SHALL PRESCRIBE AN ALTERNATIVE APPLICATION PROCESS
FOR INDIVIDUALS WHO ARE NOT REQUIRED TO FILE A NEW YORK STATE RESIDENT
INCOME TAX RETURN.
3. ONLY THOSE ACCOUNTS ESTABLISHED FOR AN ELIGIBLE CHILD SHALL BE
ENTITLED TO RECEIVE THE STATE-FUNDED SEED DEPOSIT. SUCH DEPOSIT SHALL BE
MADE BY THE COMPTROLLER UPON VERIFICATION OF THE BENEFICIARY'S ELIGIBIL-
ITY, AND UPON THE APPROVAL OF THE DIRECTOR OF BUDGET.
4. ANY CONTRIBUTOR MAY MAKE CONTRIBUTIONS TO A NY SEED ACCOUNT AFTER
SUCH ACCOUNT HAS BEEN ESTABLISHED.
(A) THE TOTAL CONTRIBUTIONS MADE TO AN ACCOUNT IN ANY SINGLE TAXABLE
YEAR SHALL NOT EXCEED THE CONTRIBUTION LIMIT. THE COMPTROLLER SHALL
ESTABLISH SAFEGUARDS TO PREVENT CONTRIBUTIONS IN EXCESS OF SUCH LIMIT.
(B) ONLY CONTRIBUTIONS MADE BY AN ACCOUNT OWNER SHALL BE ELIGIBLE FOR
A STATE INCOME TAX DEDUCTION PROVIDED UNDER PARAGRAPH FORTY-EIGHT OF
SUBSECTION (C) OF SECTION SIX HUNDRED TWELVE OF THE TAX LAW. CONTRIB-
UTIONS MADE BY THIRD PARTIES WHO ARE NOT ACCOUNT OWNERS SHALL NOT ENTI-
TLE SUCH THIRD PARTIES TO A TAX DEDUCTION UNLESS OTHERWISE PROVIDED BY
LAW.
(C) ALL CONTRIBUTIONS, INCLUDING THE STATE-FUNDED SEED DEPOSIT AND
PRIVATE CONTRIBUTIONS, SHALL BE HELD IN A SINGLE ACCOUNT BUT SHALL BE
ACCOUNTED FOR SEPARATELY BY THE COMPTROLLER TO ENSURE ACCURATE TRACKING
OF STATE VERSUS PRIVATE FUNDS.
A. 11594 8
5. (A) UPON A DESIGNATED BENEFICIARY REACHING THE AGE OF EIGHTEEN,
SUCH BENEFICIARY SHALL AUTOMATICALLY ASSUME ALL RIGHTS, RESPONSIBIL-
ITIES, AND CONTROL OVER THE ACCOUNT, PROVIDED THAT SUCH BENEFICIARY IS A
RESIDENT OF THE STATE AND HAS COMPLETED THE FINANCIAL LITERACY CERTIF-
ICATION PROGRAM, PURSUANT TO PARAGRAPH (L) OF SUBDIVISION TWO OF SECTION
FIVE HUNDRED ELEVEN OF THIS ARTICLE, OR HAS SATISFIED THE GENERAL SCHOOL
REQUIREMENTS RELATED TO FINANCIAL LITERACY AS SET FORTH IN SECTION 100.2
OF THE REGULATIONS OF THE COMMISSIONER OF EDUCATION.
(B) NO WITHDRAWAL OF FUNDS FROM A NY SEED ACCOUNT SHALL BE AUTHORIZED
FOR A DESIGNATED BENEFICIARY WHO HAS ATTAINED THE AGE OF EIGHTEEN YEARS
UNLESS SUCH BENEFICIARY HAS COMPLETED THE FINANCIAL LITERACY REQUIRE-
MENTS.
(I) IN THE EVENT THAT A WITHDRAWAL IS MADE WITHOUT COMPLETING THE
FINANCIAL LITERACY REQUIREMENTS, THE COMPTROLLER SHALL IMPOSE AN ADMIN-
ISTRATIVE PENALTY EQUAL TO TEN PERCENT OF THE TOTAL AMOUNT OF SUCH WITH-
DRAWAL. SUCH PENALTY SHALL BE WITHHELD FROM THE DISTRIBUTION AND
RETURNED TO THE NY SEED FUND ESTABLISHED PURSUANT TO SECTION NINETY-
NINE-UU OF THE STATE FINANCE LAW.
(II) ANY WITHDRAWAL MADE IN VIOLATION OF THIS SECTION SHALL BE DEEMED
A NON-QUALIFIED WITHDRAWAL.
6. AN ACCOUNT OWNER MAY WITHDRAW ALL OR PART OF THE BALANCE FROM AN
ACCOUNT.
(A) THE COMPTROLLER SHALL ESTABLISH RULES TO DETERMINE WHETHER SUCH
WITHDRAWAL IS A NONQUALIFIED WITHDRAWAL.
(B) ANY INSTANCE WHERE THE DESIGNATED BENEFICIARY CEASES TO BE A RESI-
DENT OF THE STATE PRIOR TO REACHING THE AGE OF EIGHTEEN SHALL RESULT IN
THE RECAPTURE OF THE SEED MONEY AND ANY ACCRUED EARNINGS THEREON BY THE
STATE, EXCEPT IN THE CASE OF THE DESIGNATED BENEFICIARY'S DEATH OR
PERMANENT DISABILITY.
7. NO ACCOUNT OWNER OR DESIGNATED BENEFICIARY SHALL BE PERMITTED TO
DIRECT THE INVESTMENT OF ANY CONTRIBUTIONS TO AN ACCOUNT OR THE EARNINGS
THEREON MORE THAN TWO TIMES IN ANY CALENDAR YEAR.
8. NEITHER AN ACCOUNT OWNER NOR A DESIGNATED BENEFICIARY MAY 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.
9. (A) 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.
(B) 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.
(C) STATEMENTS AND INFORMATION RELATING TO ACCOUNTS SHALL BE PREPARED
AND FILED TO THE EXTENT REQUIRED BY THE INTERNAL REVENUE CODE AND THE
STATE TAX LAW.
10. (A) NOTWITHSTANDING THE DEFINITION OF ACCOUNT OWNER IN SUBDIVISION
TWO OF SECTION FIVE HUNDRED TEN OF THIS ARTICLE, A LOCAL GOVERNMENT OR
AN ORGANIZATION DESCRIBED IN 501 (C) (3) OF THE INTERNAL REVENUE CODE
MAY OPEN AND BECOME THE ACCOUNT OWNER OF ONE OR MORE ACCOUNTS TO FUND
A. 11594 9
SCHOLARSHIPS FOR ONE OR MORE DESIGNATED BENEFICIARIES WHOSE IDENTITIES
MAY BE DETERMINED UPON DISBURSEMENT.
(B) FOR ACCOUNTS OPENED UNDER THIS SUBDIVISION, THE REQUIREMENT TO
DESIGNATE A BENEFICIARY AT THE TIME OF OPENING SHALL BE WAIVED. THE
INSTITUTION MAY HOLD FUNDS IN A SINGLE ACCOUNT FOR THE BENEFIT OF MULTI-
PLE INDIVIDUALS, PROVIDED THAT THE COMPTROLLER'S ACCOUNTING RULES ALLOW
FOR THE EVENTUAL ALLOCATION OF SUCH FUNDS TO SPECIFIC DESIGNATED BENEFI-
CIARIES.
(C) EACH INDIVIDUAL WHO RECEIVES AN INTEREST IN AN ACCOUNT PURSUANT TO
THIS SUBDIVISION AS A SCHOLARSHIP SHALL BE TREATED AS A DESIGNATED BENE-
FICIARY WITH RESPECT TO SUCH INTEREST UPON DISBURSEMENT.
11. A NOMINAL ANNUAL FEE MAY BE IMPOSED UPON THE ACCOUNT OWNER FOR THE
MAINTENANCE OF AN ACCOUNT.
(A) THE AMOUNT OF SUCH FEE SHALL BE DETERMINED BY THE COMPTROLLER AND
SHALL NOT EXCEED THE ACTUAL ADMINISTRATIVE COSTS ASSOCIATED WITH THE
OVERSIGHT AND MANAGEMENT OF THE PROGRAM.
(B) THE COMPTROLLER SHALL HAVE THE AUTHORITY TO WAIVE OR REDUCE SUCH
FEE FOR ACCOUNTS WITH BALANCES BELOW A SPECIFIED THRESHOLD OR BASED UPON
THE FINANCIAL HARDSHIP OF THE ACCOUNT OWNER.
12. THE COMPTROLLER SHALL PROVIDE EACH ACCOUNT OWNER WITH A WRITTEN
DISCLOSURE STATEMENT WITHIN THIRTY DAYS OF ACCOUNT ESTABLISHMENT. SUCH
STATEMENT SHALL CLEARLY DEFINE THE TERMS AND CONDITIONS OF THE ACCOUNT,
INCLUDING BUT NOT LIMITED TO WITHDRAWAL RESTRICTIONS, CONTRIBUTION
LIMITS, POTENTIAL TAX CONSEQUENCES, AND ANY APPLICABLE FEES.
13. NY SEED ACCOUNTS SHALL BE SUBJECT TO SECTION FOURTEEN-C OF THE
BANKING LAW AND THE "TRUTH-IN-SAVINGS" REGULATIONS PROMULGATED THERE-
UNDER.
14. NOTHING IN THIS ARTICLE OR IN ANY ELECTION MADE PURSUANT TO THIS
ARTICLE SHALL BE CONSTRUED AS A GUARANTEE BY NEW YORK STATE OF THE
RETURN OF PRINCIPAL, RATE OF INTEREST, OR ANY SPECIFIC INVESTMENT RETURN
ON AN ACCOUNT.
§ 514. PROGRAM LIMITATIONS; NY SEED ACCOUNT. 1. NOTHING IN THIS ARTI-
CLE SHALL BE CONSTRUED TO:
(A) GIVE ANY DESIGNATED BENEFICIARY ANY RIGHTS OR LEGAL INTEREST WITH
RESPECT TO AN ACCOUNT UNLESS AND UNTIL SUCH BENEFICIARY ASSUMES OWNER-
SHIP OF THE ACCOUNT PURSUANT TO SUBDIVISION FIVE OF SECTION FIVE HUNDRED
THIRTEEN OF THIS ARTICLE;
(B) CREATE STATE RESIDENCY FOR AN INDIVIDUAL MERELY BECAUSE SUCH INDI-
VIDUAL IS A DESIGNATED BENEFICIARY;
(C) GUARANTEE THAT AMOUNTS SAVED OR INVESTED PURSUANT TO THE PROGRAM
WILL BE SUFFICIENT TO MEET ANY SPECIFIC FINANCIAL NEED OR LIFE EXPENSE
OF A DESIGNATED BENEFICIARY; OR
(D) IMPLY STATE ENDORSEMENT OR OVERSIGHT OF ANY PURCHASE, INVESTMENT,
OR EXPENDITURE MADE BY AN ACCOUNT OWNER USING FUNDS WITHDRAWN FROM AN
ACCOUNT.
2. (A) NOTHING IN THIS ARTICLE SHALL CREATE OR BE CONSTRUED TO CREATE
ANY OBLIGATION OF THE COMPTROLLER, THE STATE, OR ANY AGENCY OR INSTRU-
MENTALITY OF THE STATE TO GUARANTEE FOR THE BENEFIT OF ANY ACCOUNT OWNER
OR DESIGNATED BENEFICIARY WITH RESPECT TO:
(I) THE RATE OF INTEREST OR OTHER RETURN ON ANY ACCOUNT;
(II) THE PAYMENT OF INTEREST OR OTHER RETURN ON ANY ACCOUNT; AND
(III) THE PRESERVATION OF THE PRINCIPAL DEPOSITED IN ANY ACCOUNT.
(B) THE COMPTROLLER SHALL ENSURE THAT EVERY DISCLOSURE STATEMENT,
APPLICATION, OR SIMILAR DOCUMENT IN CONNECTION WITH THE PROGRAM CLEARLY
INDICATES THAT THE ACCOUNT IS NOT INSURED BY THE STATE AND THAT NEITHER
THE PRINCIPAL NOR THE INVESTMENT RETURN IS GUARANTEED BY THE STATE.
A. 11594 10
§ 515. REPORTING REQUIREMENTS. THE COMPTROLLER SHALL, IN COORDINATION
WITH THE COMMISSIONER OF TAXATION AND FINANCE, SUBMIT AN ANNUAL REPORT
TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE, THE MINORITY
LEADER OF THE SENATE, THE SPEAKER OF THE ASSEMBLY, AND THE MINORITY
LEADER OF THE ASSEMBLY ON OR BEFORE SEPTEMBER FIRST OF EACH YEAR. SUCH
REPORT SHALL INCLUDE, BUT NOT BE LIMITED TO:
1. THE TOTAL NUMBER OF NY SEED ACCOUNTS ESTABLISHED, CATEGORIZED BY
COUNTY OF RESIDENCE AND INCOME BRACKET OF ACCOUNT OWNERS, AND, TO THE
EXTENT PRACTICABLE, DEMOGRAPHIC DATA OF BENEFICIARIES;
2. THE TOTAL AMOUNT OF SEED MONEY DEPOSITED BY THE STATE AND THE TOTAL
VOLUME OF PRIVATE CONTRIBUTIONS MADE TO SUCH ACCOUNTS;
3. THE AGGREGATE RATE OF RETURN FOR EACH INVESTMENT OPTION OFFERED
UNDER THE PROGRAM;
4. AN ESTIMATE OF THE TOTAL STATE TAX DEDUCTIONS CLAIMED BY ACCOUNT
OWNERS, AS PROVIDED BY THE COMMISSIONER;
5. A SUMMARY OF PROGRAM UTILIZATION IN HIGH-OUTMIGRATION REGIONS AND
AN ASSESSMENT OF THE PROGRAM'S IMPACT ON FAMILY RETENTION AND LONG-TERM
FINANCIAL PLANNING RELATIVE TO STATEWIDE TRENDS;
6. A BREAKDOWN OF ADMINISTRATIVE FEES CHARGED AND THE OPERATIONAL
COSTS OF THE PILOT PROGRAM;
7. IN THE THIRD YEAR OF THE PROGRAM, A COMPREHENSIVE EVALUATION AND
FORMAL RECOMMENDATION AS TO WHETHER THE STATE-FUNDED SEED MONEY CONTRIB-
UTION SHOULD BE CONTINUED, MODIFIED, OR TERMINATED, BASED ON THE
PROGRAM'S DEMONSTRATED IMPACT ON HUMAN CAPITAL AND STATE FISCAL HEALTH;
AND
8. ANY OTHER INFORMATION OR DATA THE COMPTROLLER DEEMS NECESSARY.
§ 4. Subsection (c) of section 612 of the tax law is amended by adding
a new paragraph 48 to read as follows:
(48) CONTRIBUTIONS MADE DURING THE TAXABLE YEAR BY AN ACCOUNT OWNER TO
ONE OR MORE NY SEED ACCOUNTS ESTABLISHED UNDER THE NEW YORK STATE SECUR-
ING EARLY EQUITY AND DEVELOPMENT PROGRAM PROVIDED FOR UNDER ARTICLE
TWENTY-NINE OF THE ECONOMIC DEVELOPMENT LAW, TO THE EXTENT NOT DEDUCT-
IBLE OR ELIGIBLE FOR CREDIT FOR FEDERAL INCOME TAX PURPOSES; PROVIDED,
HOWEVER, THE DEDUCTION PROVIDED FOR IN THIS PARAGRAPH SHALL NOT EXCEED
AN AGGREGATE OF FIVE THOUSAND DOLLARS FOR AN INDIVIDUAL FILING AS SINGLE
OR HEAD OF HOUSEHOLD, AND AN AGGREGATE OF TEN THOUSAND DOLLARS FOR
TAXPAYERS WHO ARE MARRIED FILING JOINTLY; PROVIDED, FURTHER THAT SUCH
DEDUCTION SHALL BE AVAILABLE ONLY TO THE ACCOUNT OWNER AND NOT TO ANY
OTHER PERSON.
§ 5. The state finance law is amended by adding a new section 99-uu to
read as follows:
§ 99-UU. NEW YORK SEED ACCOUNT FUND. 1. THERE IS HEREBY ESTABLISHED
IN THE JOINT CUSTODY OF THE COMPTROLLER AND THE COMMISSIONER OF TAXATION
AND FINANCE, A SPECIAL FUND TO BE KNOWN AS THE "NEW YORK SEED ACCOUNT
FUND".
2. SUCH FUND SHALL CONSIST OF ALL MONEYS APPROPRIATED FOR THE PURPOSE
OF THE FUND, ALL MONEYS REQUIRED BY THIS SECTION OR ANY OTHER LAW TO BE
PAID INTO OR CREDITED TO THE FUND, AND ALL OTHER MONEYS THAT MAY BE
RECEIVED BY THE FUND FROM ANY OTHER SOURCE.
3. THE COMPTROLLER SHALL ESTABLISH TWO DISTINCT SUB-ACCOUNTS WITHIN
THE FUND:
(A) THE SEED DEPOSIT SUB-ACCOUNT. SUCH SUB-ACCOUNT SHALL HOLD ALL
STATE-FUNDED SEED DEPOSITS AND ANY INTEREST OR EARNINGS ACCRUED THEREON;
AND
A. 11594 11
(B) THE PRIVATE CONTRIBUTION SUB-ACCOUNT. SUCH SUB-ACCOUNT SHALL HOLD
ALL PRIVATE CONTRIBUTIONS MADE BY ACCOUNT OWNERS OR CONTRIBUTORS AND ANY
INTEREST OR EARNINGS ACCRUED THEREON.
§ 6. This act shall take effect on the one hundred eightieth day after
it shall have become a law and shall apply to taxable years commencing
on or after January 1, 2026. Effective immediately, the addition, amend-
ment and/or repeal of any rule or regulation necessary for the implemen-
tation of this act on its effective date are authorized to be made and
completed on or before such effective date.