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SECTION 171-D
Certain overpayments credited against defaulted governmental education loans
Tax (TAX) CHAPTER 60, ARTICLE 8
§ 171-d. Certain overpayments credited against defaulted governmental
education loans. (1) The commissioner, on behalf of the tax commission,
shall enter into a written agreement with the president of the New York
state higher education services corporation, on behalf of such
corporation, which shall set forth the procedures for crediting any
overpayment by an individual, estate or trust of income tax imposed by
article twenty-two of this chapter, city personal income tax on
residents imposed pursuant to the authority of article thirty of this
chapter, city income tax surcharge on residents imposed pursuant to the
authority of article thirty-A of this chapter, city earnings tax on
nonresidents imposed pursuant to the authority of former article two-E
of the general city law and city earnings tax on nonresidents imposed
pursuant to the authority of article thirty-B of this chapter and the
interest on such overpayments against the amount of any default in
repayment of any governmental education loan owed by such individual,
estate or trust of which the commissioner has been notified by the
president of the New York state higher education services corporation
pursuant to the provisions of such agreement. For purposes of this
section, "governmental education loan" shall mean any education loan
debt, including judgments, owed to the federal or New York state
government that is being collected by the New York state higher
education services corporation.

(2) Such agreement shall apply only to the amount of a default in
repayment of any governmental education loan debt, including judgments,
being collected by the New York state higher education services
corporation. Such agreement shall require the New York state higher
education services corporation to satisfy the requirements of
subdivision three of section one hundred seventy-one-f of this article.

(3) Such agreement shall include:

(a) the procedure under which the New York state higher education
services corporation shall notify the commissioner of a default in
repayment of a governmental education loan, such procedure to specify
when the commissioner shall be notified and the content of such
notification;

(b) the minimum amount outstanding on a default in repayment of a
governmental education loan against which the commissioner shall,
pursuant to this section, credit an overpayment;

(c) the procedure for reimbursement of the commissioner by the New
York state higher education services corporation for the full cost of
carrying out the procedures authorized by this section;

(d) such other matters as the parties to such agreement shall deem
necessary to carry out the provisions of this section; and

(e) the procedure for reimbursement of the comptroller by the New York
state higher education services corporation for overpayment and interest
thereon which has been credited against the amount of default in
repayment of a governmental education loan owed by a taxpayer filing a
joint return, but which has been refunded by the comptroller, pursuant
to paragraph six of subsection (b) of section six hundred fifty-one of
this chapter, to a spouse not liable for the amount of default in
repayment of a governmental education loan owed by such taxpayer.

(4) (i) In calculating the amount of an overpayment and interest
thereon which shall be credited against the amount of a default in
repayment of a governmental education loan owed by a taxpayer, the
commissioner shall first credit the overpayment and interest thereon
against any:

(A) liability of such taxpayer in respect of any tax imposed by this
chapter;

(B) liability of such taxpayer for any tax imposed pursuant to the
authority of this chapter or any other law if such tax is administered
by the tax commission;

(C) estimated tax for the succeeding taxable year if such taxpayer
claims such overpayment or a portion thereof as a credit against
estimated tax for such succeeding taxable year pursuant to subsection
(e) of section six hundred eighty-six of this chapter or subdivision (e)
of section 11-1786 of the administrative code of the city of New York
for any tax imposed pursuant to the authority of this chapter or any
other law if such tax is administered by the tax commission; and

(D) past-due support owed by the taxpayer pursuant to section one
hundred seventy-one-c of this article.

(E) the amount of a default in repayment of a state university loan or
city university loan pursuant to section one hundred seventy-one-e of
this article.

(F) the amount of a past-due legally enforceable debt owed to a state
agency pursuant to section one hundred seventy-one-f of this article.

(G) the amount of a city of New York tax warrant judgment debt owed to
the city of New York pursuant to section one hundred seventy-one-l of
this article.

(ii) Only the balance remaining, after such overpayment and the
interest thereon has been credited as described in paragraph (i) of this
subdivision, shall be certified as an overpayment plus any interest to
be credited against the amount of a default in repayment of a
governmental education loan, with the remainder to be refunded to the
taxpayer.

(5) The tax commission shall certify to the comptroller the total
amount of the overpayment and the interest on such overpayment, the
amount of such overpayment and the interest on such amount to be
credited against the amount of the default in repayment of a
governmental education loan and the balance of such overpayment and
interest to be refunded to the taxpayer.

(6) The commissioner shall notify the taxpayer making the overpayment,
in writing, of the amount of such overpayment and the interest thereon
certified to the comptroller as the amount to be credited against the
amount of a default in repayment of a governmental education loan. Such
notice shall include notification to any other person who may have filed
a joint return with the taxpayer of the steps such other person may take
in order to secure his or her proper share of the refund.

(7) From the time the state tax commission is notified by the New York
state higher education services corporation of an individual's, estate's
or trust's default in repayment of a governmental education loan under
the agreement provided for in this section, the state tax commission and
the department shall be relieved from all liability to such individual,
estate or trust, their assigns, successors, heirs or representatives for
the amount of an overpayment and interest on such amount certified to
the comptroller to be credited against the amount of default in
repayment of a governmental education loan and such individual, estate
or trust shall have no right to commence a court action or proceeding or
to any other legal recourse against the state tax commission or the
department to recover such overpayment or such interest certified to the
comptroller to be credited against the amount of default in repayment of
a governmental education loan. Provided, however, nothing herein shall
be construed to prohibit such individual, estate or trust from
proceeding against the New York state higher education services
corporation to recover that part of such overpayment or interest thereon
so certified to the comptroller to be credited against the amount of a
default in repayment of a governmental education loan which is greater
than the amount of such default owed by such individual, estate or trust
on the date of such certification.

(8) The tax commission shall promulgate such rules and regulations as
it deems necessary to carry out the provisions of this section.