NEW YORK STATE ASSEMBLY MEMORANDUM IN SUPPORT OF LEGISLATION submitted in accordance with Assembly Rule III, Sec 1(f)
BILL NUMBER: A5788
SPONSOR: Giglio TITLE OF BILL:
An act to amend the education law, the tax law, the state finance law
and the civil practice law and rules, in relation to requiring the New
York state college choice tuition savings program to also apply to
elementary and secondary schools
PURPOSE OR GENERAL IDEA OF BILL:
To require the New York state college choice tuition savings program to
also apply to elementary and secondary schools.
SUMMARY OF PROVISIONS:
Sections 1 through 9 establish the "New York state (college choice)
tuition savings program", and amends the education law, the tax law, the
state finance law and the civil practice law and rules to include
elementary and secondary schools in the "New York (college choice)
tuition savings program".
Section 10 provides the effective date.
JUSTIFICATION:
Tuition costs continue to rise from elementary to collegiate level. New
York's expansion of federal 529 saving plans enable families to invest
in their child's future education, providing tax-free withdrawals and
deductible contributions to these accounts. With the passage of the 2017
Tax Cut and Jobs Act, the federal government expanded the use of the 529
saving account to include elementary and secondary school expenses. As
hardworking New Yorkers plan for their children to attend public and
private elementary secondary schools and colleges throughout the state,
the rising costs continue to strain their ability to afford these insti-
tutions. Expanding 529 saving plans to elementary and secondary educa-
tion would affirm New York State's commitment to families seeking a
choice in their child's future education.
PRIOR LEGISLATIVE HISTORY:
2022 A.6795- referred to Education
FISCAL IMPLICATIONS FOR STATE AND LOCAL GOVERNMENTS:
To be determined.
EFFECTIVE DATE:
This act shall take effect immediately and shall apply to taxable years
beginning on or after January 1, 2023.
STATE OF NEW YORK
________________________________________________________________________
5788
2025-2026 Regular Sessions
IN ASSEMBLY
February 20, 2025
___________
Introduced by M. of A. GIGLIO -- read once and referred to the Committee
on Education
AN ACT to amend the education law, the tax law, the state finance law
and the civil practice law and rules, in relation to requiring the New
York state college choice tuition savings program to also apply to
elementary and secondary schools
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 NEW YORK STATE
5 [COLLEGE CHOICE] TUITION SAVINGS PROGRAM
6 § 2. Section 695 of the education law, as added by chapter 546 of the
7 laws of 1997, is amended to read as follows:
8 § 695. Program established. There is hereby established the [college
9 choice] tuition savings program and such program shall be known and may
10 be cited as the "New York state [college choice] tuition savings
11 program".
12 § 3. Subdivision 2 of section 695-a of the education law, as added by
13 chapter 546 of the laws of 1997, is amended to read as follows:
14 2. Attract students to public and private elementary and secondary
15 schools, and colleges and universities within the state.
16 § 4. Subdivision 7 of section 695-b of the education law, as added by
17 chapter 546 of the laws of 1997, is amended to read as follows:
18 7. "Program" shall mean the New York state [college choice] tuition
19 savings program established pursuant to this article.
20 § 5. Paragraph c of subdivision 2 of section 695-d of the education
21 law, as added by chapter 546 of the laws of 1997, is amended to read as
22 follows:
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD01578-01-5
A. 5788 2
1 c. The ability of the investment instrument to track increasing costs
2 of [higher] education;
3 § 6. Paragraphs 32 and 33 of subsection (c) of section 612 of the tax
4 law, paragraph 32 as amended by chapter 81 of the laws of 2008 and para-
5 graph 33 as added by chapter 546 of the laws of 1997, are amended to
6 read as follows:
7 (32) Contributions made during the taxable year by an account owner to
8 one or more family tuition accounts established under the New York state
9 [college choice] tuition savings program provided for under article
10 fourteen-A of the education law, to the extent not deductible or eligi-
11 ble for credit for federal income tax purposes, provided, however, the
12 exclusion provided for in this paragraph shall not exceed five thousand
13 dollars for an individual or head of household, and for married couples
14 who file joint tax returns, shall not exceed ten thousand dollars;
15 provided, further, that such exclusion shall be available only to the
16 account owner and not to any other person.
17 (33) Distributions from a family tuition account established under the
18 New York state [college choice] tuition savings program provided for
19 under article fourteen-A of the education law, to the extent includible
20 in gross income for federal income tax purposes.
21 § 7. Paragraph 3 of subsection (d) of section 658 of the tax law, as
22 added by chapter 546 of the laws of 1997, is amended to read as follows:
23 (3) The commissioner may by regulation or instruction require the
24 filing of a report annually by the comptroller or program manager of the
25 New York state [college choice] tuition savings program, or their desig-
26 nee, setting forth the names and identification numbers of account
27 owners, designated beneficiaries and distributees of family tuition
28 accounts, the amounts contributed to such accounts, the amounts distrib-
29 uted from such accounts and the nature of such distributions as quali-
30 fied withdrawals or as withdrawals other than qualified withdrawals, and
31 any such other information as the commissioner may require regarding the
32 taxation under this article of amounts contributed to or withdrawn from
33 such accounts. The commissioner may require that any such report also be
34 made to the account owner, designated beneficiary or distributee of any
35 such account.
36 § 8. The section heading and subdivisions 1 and 2 of section 78 of the
37 state finance law, as added by chapter 546 of the laws of 1997, are
38 amended to read as follows:
39 New York state [college choice] tuition savings program trust fund.
40 1. There is hereby established in the sole custody of the state comp-
41 troller a special fund to be known as the New York state [college
42 choice] tuition savings program trust fund. All payments from such fund
43 shall be made in accordance with article fourteen-A of the education law
44 and the memorandum of understanding entered into pursuant thereto on the
45 audit of the state comptroller.
46 2. The fund shall be a trust fund and shall consist of a trust account
47 and an operating account. The trust account shall include amounts
48 received by the New York state [college choice] tuition savings program
49 pursuant to tuition savings agreements, administrative charges, fees,
50 and all other amounts received by the program from other sources, and
51 interest and investment income earned by the trust fund. The comptroller
52 shall, from time to time, make transfers from the trust account to the
53 operating account for the immediate payment of obligations under tuition
54 savings agreements, operating expenses and administrative costs of the
55 New York state [college choice] tuition savings program. Administrative
56 costs shall be paid out of the operating account according to the terms
A. 5788 3
1 and conditions established pursuant to the provisions of section six
2 hundred ninety-five-c of the education law.
3 § 9. The opening paragraph of subdivision (j) of section 5205 of the
4 civil practice law and rules, as added by chapter 546 of the laws of
5 1997, is amended to read as follows:
6 Exemption for New York state [college choice] tuition savings program
7 trust fund payment monies. Monies in an account created pursuant to
8 article fourteen-A of the education law are exempt from application to
9 the satisfaction of a money judgment as follows:
10 § 10. This act shall take effect immediately and shall apply to taxa-
11 ble years beginning on or after January 1, 2025.
