Authorizes the comptroller, in consultation with the NYS higher education services corporation, to develop and administer a scholarship and savings program to provide a pathway for eligible children to save for education expenses.
STATE OF NEW YORK
________________________________________________________________________
10445
IN SENATE
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:
1 Section 1. Legislative intent. It is the intent of the legislature to
2 support children and their future endeavors by expanding the accessibil-
3 ity of scholarships and grants available to them, and to provide a path-
4 way for children to begin saving for their future education costs.
5 § 2. Section 695-a of the education law, as added by chapter 546 of
6 the laws of 1997, is amended to read as follows:
7 § 695-a. Purposes. The purposes of the tuition savings program shall
8 be to authorize the establishment of family tuition accounts and to
9 provide guidelines for the maintenance of such accounts to:
10 1. Enable residents of this state and other states to benefit from the
11 tax incentive provided for qualified state tuition programs under the
12 Internal Revenue Code of 1986, as amended; [and]
13 2. Attract students to public and private colleges and universities
14 within the state[.]; and
15 3. Provide a pathway for eligible children to save for education
16 expenses through grant and scholarship programs, including scholarship
17 programs established pursuant to section six hundred ninety-five-h of
18 this article.
19 § 3. The education law is amended by adding a new section 695-h to
20 read as follows:
21 § 695-h. Scholarship and universal 529 programs; establishment of
22 scholarship programs. 1. The comptroller, in consultation with the
23 corporation, is hereby authorized to develop and administer a scholar-
24 ship and savings program pursuant to the provisions of this article,
25 including but not limited to a universal scholarship program, to provide
26 a pathway for eligible children to save for education expenses in furth-
27 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
1 2. The comptroller shall serve as the account holder for accounts
2 within a scholarship program created pursuant to this section to fund
3 scholarships for persons whose identity shall be determined by the
4 program.
5 3. Where an account, created pursuant to subdivision twelve of section
6 six hundred ninety-five-e of this article, already exists for the bene-
7 fit of an individual also eligible for any scholarship program created
8 pursuant to this section, the comptroller may, instead of opening a new
9 account under any scholarship program created pursuant to this section,
10 disburse scholarship monies to that established account, where such
11 option is elected by the parent or guardian of the account beneficiary.
12 4. All program limitations set forth in subdivision sixteen of section
13 six hundred ninety-five-e of this article and section six hundred nine-
14 ty-five-f of this article shall be applicable to any scholarship program
15 created pursuant to this section.
16 5. The definitions set forth in section six hundred ninety-five-b of
17 this article shall be applicable to any scholarship programs created
18 pursuant to this section, provided however, a withdrawal of monies from
19 any such scholarship program account to make a rollover to a Roth Indi-
20 vidual Retirement Account as provided for in section 529(c)(3)(E) of the
21 Internal Revenue Code of 1986, shall not be considered a qualified with-
22 drawal under any scholarship program created pursuant to this section.
23 6. Monies in any scholarship program account created pursuant to this
24 section shall not be used toward the calculation of New York state
25 financial aid under a financial aid program administered by the state.
26 7. Any scholarship program created pursuant to this section may
27 receive and use fees payable to the state as set forth in agreements
28 between the state and depositories and managers of the program and in
29 accordance with subdivision two of section six hundred ninety-five-c of
30 this article, any gifts or bequests of money provided for such purpose,
31 and any monies appropriated by the legislature for such purpose.
32 8. Any state agency or agency of a city with a population of one
33 million or more shall provide access to information requested by the
34 comptroller or the corporation, in accordance with applicable state and
35 federal law, for the administration and operation of a scholarship
36 program created pursuant to this section and in accordance with this
37 section.
38 9. The comptroller, in consultation with the corporation, shall
39 promulgate rules and regulations necessary to administer the provisions
40 of this section, including an application form and process, eligibility
41 criteria, and process for disbursement.
42 § 4. Subdivision 2 of section 695-c of the education law, as added by
43 chapter 546 of the laws of 1997, is amended to read as follows:
44 2. In furtherance of such implementation the memorandum of understand-
45 ing shall address the authority and responsibility of the comptroller
46 and the corporation to:
47 a. develop and implement the program in a manner consistent with the
48 provisions of this article through rules and regulations established in
49 accordance with the state administrative procedure act;
50 b. engage the services of consultants on a contract basis for render-
51 ing professional and technical assistance and advice;
52 c. seek rulings and other guidance from the United States Department
53 of the Treasury and the Internal Revenue Service relating to the
54 program;
55 d. make changes to the program required for the participants in the
56 program to obtain the federal income tax benefits or treatment provided
S. 10445 3
1 by section 529 of the Internal Revenue Code of 1986, as amended, or any
2 similar successor legislation;
3 e. charge, impose, and collect administrative fees and service charges
4 in connection with any agreement, contract or transaction relating to
5 the program;
6 f. develop marketing plans and promotion material;
7 g. establish the methods by which the funds held in such accounts be
8 [dispersed] disbursed;
9 h. establish the method by which funds shall be allocated to pay for
10 administrative costs; [and]
11 i. allocate funds available after payment of administrative costs to
12 support scholarship and grant programs, including any program estab-
13 lished pursuant to section six hundred ninety-five-h of this article;
14 and
15 j. do all things necessary and proper to carry out the purposes of
16 this article.
17 § 5. Subdivision 12 of section 695-e of the education law, as amended
18 by chapter 593 of the laws of 2003, is amended to read as follows:
19 12. a. [A] The state or a local government or organization described
20 in section 501(c)(3) of the Internal Revenue Code of 1986, as amended,
21 may open and become the account owner of [an account] one or more
22 accounts to fund scholarships or grants for persons whose identity is
23 known or will be determined upon disbursement.
24 b. In the case of any account opened pursuant to paragraph a of this
25 subdivision the requirement set forth in subdivision two of this section
26 that a designated beneficiary be designated when an account is opened
27 shall not apply and each individual who receives an interest in such
28 account as a scholarship or grant shall be treated as a designated bene-
29 ficiary with respect to such interest.
30 § 6. This act shall take effect immediately.
