Senate Bill S10445

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   10445
 
                             I N  S E N A T E
 
                               May 15, 2026
                                ___________
 
 Introduced  by Sen. GIANARIS -- (at request of the State Comptroller) --
   read twice and ordered printed, and when printed to  be  committed  to
   the Committee on Higher Education
 
 AN  ACT to amend the education law, in relation to establishing scholar-
   ship programs within the New York 529 program
 
   THE PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND  ASSEM-
 BLY, DO ENACT AS FOLLOWS:
 
   Section  1. Legislative intent. It is the intent of the legislature to
 support children and their future endeavors by expanding the accessibil-
 ity of scholarships and grants available to them, and to provide a path-
 way for children to begin saving for their future education costs.
   § 2. Section 695-a of the education law, as added by  chapter  546  of
 the laws of 1997, is amended to read as follows:
   §  695-a.  Purposes. The purposes of the tuition savings program shall
 be to authorize the establishment of  family  tuition  accounts  and  to
 provide guidelines for the maintenance of such accounts to:
   1. Enable residents of this state and other states to benefit from the
 tax  incentive  provided  for qualified state tuition programs under the
 Internal Revenue Code of 1986, as amended; [and]
   2. Attract students to public and private  colleges  and  universities
 within the state[.]; AND
   3.  PROVIDE  A  PATHWAY  FOR  ELIGIBLE  CHILDREN TO SAVE FOR EDUCATION
 EXPENSES THROUGH GRANT AND SCHOLARSHIP PROGRAMS,  INCLUDING  SCHOLARSHIP
 PROGRAMS  ESTABLISHED  PURSUANT  TO SECTION SIX HUNDRED NINETY-FIVE-H OF
 THIS ARTICLE.
   § 3. The education law is amended by adding a  new  section  695-h  to
 read as follows:
   §  695-H.  SCHOLARSHIP  AND  UNIVERSAL  529 PROGRAMS; ESTABLISHMENT OF
 SCHOLARSHIP PROGRAMS. 1.  THE  COMPTROLLER,  IN  CONSULTATION  WITH  THE
 CORPORATION,  IS  HEREBY AUTHORIZED TO DEVELOP AND ADMINISTER A SCHOLAR-
 SHIP AND SAVINGS PROGRAM PURSUANT TO THE  PROVISIONS  OF  THIS  ARTICLE,
 INCLUDING BUT NOT LIMITED TO A UNIVERSAL SCHOLARSHIP PROGRAM, TO PROVIDE
 A PATHWAY FOR ELIGIBLE CHILDREN TO SAVE FOR EDUCATION EXPENSES IN FURTH-
 ERANCE OF THE PURPOSES OF THIS ARTICLE.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
              

                                                            LBD14950-01-6
 S. 10445                            2
 
   2.  THE  COMPTROLLER  SHALL  SERVE  AS THE ACCOUNT HOLDER FOR ACCOUNTS
 WITHIN A SCHOLARSHIP PROGRAM CREATED PURSUANT TO THIS  SECTION  TO  FUND
 SCHOLARSHIPS  FOR  PERSONS  WHOSE  IDENTITY  SHALL  BE DETERMINED BY THE
 PROGRAM.
   3. WHERE AN ACCOUNT, CREATED PURSUANT TO SUBDIVISION TWELVE OF SECTION
 SIX  HUNDRED NINETY-FIVE-E OF THIS ARTICLE, ALREADY EXISTS FOR THE BENE-
 FIT OF AN INDIVIDUAL ALSO ELIGIBLE FOR ANY SCHOLARSHIP  PROGRAM  CREATED
 PURSUANT  TO THIS SECTION, THE COMPTROLLER MAY, INSTEAD OF OPENING A NEW
 ACCOUNT UNDER ANY SCHOLARSHIP PROGRAM CREATED PURSUANT TO THIS  SECTION,
 DISBURSE  SCHOLARSHIP  MONIES  TO  THAT  ESTABLISHED ACCOUNT, WHERE SUCH
 OPTION IS ELECTED BY THE PARENT OR GUARDIAN OF THE ACCOUNT BENEFICIARY.
   4. ALL PROGRAM LIMITATIONS SET FORTH IN SUBDIVISION SIXTEEN OF SECTION
 SIX HUNDRED NINETY-FIVE-E OF THIS ARTICLE AND SECTION SIX HUNDRED  NINE-
 TY-FIVE-F OF THIS ARTICLE SHALL BE APPLICABLE TO ANY SCHOLARSHIP PROGRAM
 CREATED PURSUANT TO THIS SECTION.
   5.  THE  DEFINITIONS SET FORTH IN SECTION SIX HUNDRED NINETY-FIVE-B OF
 THIS ARTICLE SHALL BE APPLICABLE TO  ANY  SCHOLARSHIP  PROGRAMS  CREATED
 PURSUANT  TO THIS SECTION, PROVIDED HOWEVER, A WITHDRAWAL OF MONIES FROM
 ANY SUCH SCHOLARSHIP PROGRAM ACCOUNT TO MAKE A ROLLOVER TO A ROTH  INDI-
 VIDUAL RETIREMENT ACCOUNT AS PROVIDED FOR IN SECTION 529(C)(3)(E) OF THE
 INTERNAL REVENUE CODE OF 1986, SHALL NOT BE CONSIDERED A QUALIFIED WITH-
 DRAWAL UNDER ANY SCHOLARSHIP PROGRAM CREATED PURSUANT TO THIS SECTION.
   6.  MONIES IN ANY SCHOLARSHIP PROGRAM ACCOUNT CREATED PURSUANT TO THIS
 SECTION SHALL NOT BE USED TOWARD  THE  CALCULATION  OF  NEW  YORK  STATE
 FINANCIAL AID UNDER A FINANCIAL AID PROGRAM ADMINISTERED BY THE STATE.
   7.  ANY  SCHOLARSHIP  PROGRAM  CREATED  PURSUANT  TO  THIS SECTION MAY
 RECEIVE AND USE FEES PAYABLE TO THE STATE AS  SET  FORTH  IN  AGREEMENTS
 BETWEEN  THE  STATE  AND DEPOSITORIES AND MANAGERS OF THE PROGRAM AND IN
 ACCORDANCE WITH SUBDIVISION TWO OF SECTION SIX HUNDRED NINETY-FIVE-C  OF
 THIS  ARTICLE, ANY GIFTS OR BEQUESTS OF MONEY PROVIDED FOR SUCH PURPOSE,
 AND ANY MONIES APPROPRIATED BY THE LEGISLATURE FOR SUCH PURPOSE.
   8. ANY STATE AGENCY OR AGENCY OF A  CITY  WITH  A  POPULATION  OF  ONE
 MILLION  OR  MORE  SHALL  PROVIDE ACCESS TO INFORMATION REQUESTED BY THE
 COMPTROLLER OR THE CORPORATION, IN ACCORDANCE WITH APPLICABLE STATE  AND
 FEDERAL  LAW,  FOR  THE  ADMINISTRATION  AND  OPERATION OF A SCHOLARSHIP
 PROGRAM CREATED PURSUANT TO THIS SECTION AND  IN  ACCORDANCE  WITH  THIS
 SECTION.
   9.  THE  COMPTROLLER,  IN  CONSULTATION  WITH  THE  CORPORATION, SHALL
 PROMULGATE RULES AND REGULATIONS NECESSARY TO ADMINISTER THE  PROVISIONS
 OF  THIS SECTION, INCLUDING AN APPLICATION FORM AND PROCESS, ELIGIBILITY
 CRITERIA, AND PROCESS FOR DISBURSEMENT.
   § 4. Subdivision 2 of section 695-c of the education law, as added  by
 chapter 546 of the laws of 1997, is amended to read as follows:
   2. In furtherance of such implementation the memorandum of understand-
 ing  shall  address  the authority and responsibility of the comptroller
 and the corporation to:
   a. develop and implement the program in a manner consistent  with  the
 provisions  of this article through rules and regulations established in
 accordance with the state administrative procedure act;
   b. engage the services of consultants on a contract basis for  render-
 ing professional and technical assistance and advice;
   c.  seek  rulings and other guidance from the United States Department
 of THE Treasury  and  the  Internal  Revenue  Service  relating  to  the
 program;
   d.  make  changes  to the program required for the participants in the
 program to obtain the federal income tax benefits or treatment  provided
 S. 10445                            3
 
 by  section 529 of the Internal Revenue Code of 1986, as amended, or any
 similar successor legislation;
   e. charge, impose, and collect administrative fees and service charges
 in  connection  with  any agreement, contract or transaction relating to
 the program;
   f. develop marketing plans and promotion material;
   g. establish the methods by which the funds held in such  accounts  be
 [dispersed] DISBURSED;
   h.  establish  the method by which funds shall be allocated to pay for
 administrative costs; [and]
   i. ALLOCATE FUNDS AVAILABLE AFTER PAYMENT OF ADMINISTRATIVE  COSTS  TO
 SUPPORT  SCHOLARSHIP  AND  GRANT  PROGRAMS, INCLUDING ANY PROGRAM ESTAB-
 LISHED PURSUANT TO SECTION SIX HUNDRED NINETY-FIVE-H  OF  THIS  ARTICLE;
 AND
   J.  do  all  things  necessary and proper to carry out the purposes of
 this article.
   § 5. Subdivision 12 of section 695-e of the education law, as  amended
 by chapter 593 of the laws of 2003, is amended to read as follows:
   12.  a.  [A] THE STATE OR 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] ONE OR MORE
 ACCOUNTS to fund scholarships OR GRANTS for persons  whose  identity  IS
 KNOWN OR will be determined upon disbursement.
   b.  In  the case of any account opened pursuant to paragraph a of this
 subdivision the requirement set forth in subdivision two of this section
 that a designated beneficiary be designated when an  account  is  opened
 shall  not  apply  and  each individual who receives an interest in such
 account as a scholarship OR GRANT shall be treated as a designated bene-
 ficiary with respect to such interest.
   § 6. This act shall take effect immediately.