Bill Text: NY S07783 | 2017-2018 | General Assembly | Amended

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Bill Title: Expands and renames the New York state college choice tuition savings program to include costs of nonpublic elementary and secondary education.

Spectrum: Partisan Bill (Republican 3-0)

Status: (Engrossed - Dead) 2018-05-07 - referred to education [S07783 Detail]

Download: New_York-2017-S07783-Amended.html

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                STATE OF NEW YORK
        ________________________________________________________________________
                                         7783--A
                    IN SENATE
                                    February 23, 2018
                                       ___________
        Introduced  by  Sens.  GOLDEN, O'MARA -- read twice and ordered printed,
          and when printed to be committed to the Committee on Higher  Education
          --  committee  discharged,  bill amended, ordered reprinted as amended
          and recommitted to said committee
        AN ACT to amend the education law, the tax law, the state  finance  law,
          the  mental  hygiene  law  and  the  civil  practice law and rules, in
          relation to expanding  the  New  York  state  college  choice  tuition
          savings program to include costs of elementary and secondary education
          The  People of the State of New York, represented in Senate and Assem-
        bly, do enact as follows:
     1    Section 1. The article heading of article 14-A of the  education  law,
     2  as  added  by  chapter  546  of  the laws of 1997, is amended to read as
     3  follows:
     4                                ARTICLE 14-A
     5                               NEW YORK STATE
     6             [COLLEGE] EDUCATION CHOICE TUITION SAVINGS PROGRAM
     7    § 2. Section 695 of the education law, as added by chapter 546 of  the
     8  laws of 1997, is amended to read as follows:
     9    §  695. Program established. There is hereby established the [college]
    10  education choice tuition savings program and such program shall be known
    11  and may be cited as the  "New  York  state  [college]  education  choice
    12  tuition savings program".
    13    §  3.  Subdivision 5 of section 695-b of the education law, as amended
    14  by chapter 535 of the laws of 2000, is amended to read as follows:
    15    5. "Eligible educational institution" shall mean  any  institution  of
    16  higher  education  defined  as  an  eligible  educational institution in
    17  section 529(e)(5) of the Internal Revenue Code of 1986, as amended,  and
    18  any  elementary  or  secondary  school  for  which  tuition expenses are
    19  included within the definition of the term  qualified  higher  education
    20  expenses  in  section 529(e)(3) of the Internal Revenue Code of 1986, as
    21  amended.
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD14736-03-8
        S. 7783--A                          2
     1    § 4. Subdivision 10 of section 695-e of the education law, as  amended
     2  by chapter 593 of the laws of 2003, is amended to read as follows:
     3    10.  The  comptroller shall promulgate rules or regulations to prevent
     4  contributions on behalf of a designated  beneficiary  in  excess  of  an
     5  amount  that  would cause the aggregate account balance for all accounts
     6  for a designated beneficiary to exceed a  maximum  account  balance,  as
     7  established  from time to time by the comptroller and the corporation on
     8  the basis of nonpublic elementary and secondary tuition  costs  and  the
     9  higher education costs in the state, with adequate safeguards to prevent
    10  more  contributions  than  necessary to provide for the qualified higher
    11  education costs of the beneficiary, as required to maintain the  program
    12  as  a  "qualified  tuition  program"  under  section 529 of the Internal
    13  Revenue Code of 1986, as amended.
    14    § 5. Section 695-e of the education law is amended  by  adding  a  new
    15  subdivision 17 to read as follows:
    16    17.  Nothing  in  this  article  or  in  any tuition savings agreement
    17  entered into pursuant to this article shall be construed as a  guarantee
    18  by  the  state  or any elementary or secondary school that a beneficiary
    19  will be admitted to any elementary or secondary school, or, upon  admis-
    20  sion  to an elementary or secondary school will be permitted to continue
    21  to attend such elementary or secondary school.
    22    § 6. Paragraphs 32 and 33 of subsection (c) of section 612 of the  tax
    23  law,  paragraph  32  as amended by chapter 81 of the laws of 2008, para-
    24  graph 33 as added by chapter 546 of the laws of  1997,  are  amended  to
    25  read as follows:
    26    (32) Contributions made during the taxable year by an account owner to
    27  one or more family tuition accounts established under the New York state
    28  [college]  education  choice  tuition savings program provided for under
    29  article fourteen-A of the education law, to the extent not deductible or
    30  eligible for credit for federal income tax purposes, provided,  however,
    31  the exclusion provided for in this paragraph shall not exceed five thou-
    32  sand  dollars  for  an  individual or head of household, and for married
    33  couples who file joint  tax  returns,  shall  not  exceed  ten  thousand
    34  dollars;  provided, further, that such exclusion shall be available only
    35  to the account owner and not to any other person.
    36    (33) Distributions from a family tuition account established under the
    37  New York  state  [college]  education  choice  tuition  savings  program
    38  provided  for  under  article  fourteen-A  of  the education law, to the
    39  extent includible in gross income for federal income tax purposes.
    40    § 7.  The section heading and subdivisions 1 and 2 of  section  78  of
    41  the  state finance law, as added by chapter 546 of the laws of 1997, are
    42  amended to read as follows:
    43    New York state [college]  education  choice  tuition  savings  program
    44  trust  fund.   1. There is hereby established in the sole custody of the
    45  state comptroller a special fund to be  known  as  the  New  York  state
    46  [college]  education  choice  tuition  savings  program  trust fund. All
    47  payments from such fund shall be made in accordance with  article  four-
    48  teen-A  of the education law and the memorandum of understanding entered
    49  into pursuant thereto on the audit of the state comptroller.
    50    2. The fund shall be a trust fund and shall consist of a trust account
    51  and an operating  account.  The  trust  account  shall  include  amounts
    52  received  by  the  New  York  state  [college]  education choice tuition
    53  savings program pursuant to tuition savings  agreements,  administrative
    54  charges,  fees, and all other amounts received by the program from other
    55  sources, and interest and investment income earned by  the  trust  fund.
    56  The  comptroller shall, from time to time, make transfers from the trust
        S. 7783--A                          3
     1  account to the operating account for  the  immediate  payment  of  obli-
     2  gations  under tuition savings agreements, operating expenses and admin-
     3  istrative costs of the New York state [college] education choice tuition
     4  savings program. Administrative costs shall be paid out of the operating
     5  account  according  to  the terms and conditions established pursuant to
     6  the provisions of section six hundred  ninety-five-c  of  the  education
     7  law.
     8    § 8. Subparagraph (A) of paragraph 34 of subsection (b) of section 612
     9  of  the  tax  law,  as  amended  by  chapter 535 of the laws of 2000, is
    10  amended to read as follows:
    11    (A) Excess distributions received during the taxable year by a distri-
    12  butee of a family tuition account established under the New  York  state
    13  [college]  education  choice  tuition savings program provided for under
    14  article fourteen-A of the education  law,  to  the  extent  such  excess
    15  distributions  are deemed attributable to deductible contributions under
    16  paragraph thirty-two of subsection (c) of this section.
    17    § 9. Paragraph 3 of subsection (d) of section 658 of the tax  law,  as
    18  added by chapter 546 of the laws of 1997, is amended to read as follows:
    19    (3)  The  commissioner  may  by  regulation or instruction require the
    20  filing of a report annually by the comptroller or program manager of the
    21  New York state [college] education choice tuition  savings  program,  or
    22  their  designee,  setting  forth the names and identification numbers of
    23  account owners, designated  beneficiaries  and  distributees  of  family
    24  tuition  accounts, the amounts contributed to such accounts, the amounts
    25  distributed from such accounts and the nature of such  distributions  as
    26  qualified  withdrawals  or  as  withdrawals  other  than qualified with-
    27  drawals, and any such other information as the commissioner may  require
    28  regarding  the  taxation under this article of amounts contributed to or
    29  withdrawn from such accounts. The commissioner may require that any such
    30  report also be made to the  account  owner,  designated  beneficiary  or
    31  distributee of any such account.
    32    §  10.  Subdivision 3-a of section 84.05 of the mental hygiene law, as
    33  added by chapter 149 of the laws of 2016, is amended to read as follows:
    34    3-a. Notwithstanding the  provisions  of  subdivision  three  of  this
    35  section,  the  comptroller  may,  in his or her discretion, enter into a
    36  contract with  the  existing  third  party  administrator  of  the  [NYS
    37  college] New York state education choice tuition savings program for the
    38  purpose of administering the NY ABLE savings account program and provid-
    39  ing  account  depositories and managers. The term of such contract shall
    40  expire on the same date as the contract for the  administration  of  the
    41  [NYS  college]  New  York state education choice tuition savings program
    42  expires. Following such expiration, the comptroller may, in his  or  her
    43  discretion,  solicit  proposals  for the purpose of administering the NY
    44  ABLE savings account program and solicit proposals for  the  purpose  of
    45  administering  the [NYS college] New York state education choice tuition
    46  savings program jointly or separately.
    47    § 11. The opening paragraph of subdivision (j) of section 5205 of  the
    48  civil  practice  law  and  rules, as added by chapter 546 of the laws of
    49  1997, is amended to read as follows:
    50    Exemption for  New  York  state  [college]  education  choice  tuition
    51  savings  program trust fund payment monies. Monies in an account created
    52  pursuant to article fourteen-A of the  education  law  are  exempt  from
    53  application to the satisfaction of a money judgment as follows:
    54    §  12.    This  act  shall  take effect immediately and shall apply to
    55  contributions and distributions made on and after January 1, 2018.