STATE OF NEW YORK
________________________________________________________________________
5136--A
2017-2018 Regular Sessions
IN SENATE
March 9, 2017
___________
Introduced by Sens. KLEIN, GALLIVAN, HELMING, MARCHIONE, VALESKY -- read
twice and ordered printed, and when printed to be committed to the
Committee on Higher Education -- recommitted to the Committee on
Finance in accordance with Senate Rule 6, sec. 8 -- committee
discharged, bill amended, ordered reprinted as amended and recommitted
to said committee
AN ACT to amend the education law and the tax law, in relation to estab-
lishing the college debt freedom account pilot program
The People of the State of New York, represented in Senate and Assem-bly, do enact as follows:
1 Section 1. The education law is amended by adding a new section 682 to
2 read as follows:
3 § 682. College debt freedom account pilot program. 1. There is hereby
4 established the college debt freedom account pilot program. Such program
5 shall permit employees of any employer jointly certified by the commis-
6 sioner and the commissioner of taxation and finance pursuant to this
7 section to deposit a portion of their pre-tax income pursuant to para-
8 graph forty-four of subsection (c) of section six hundred twelve of the
9 tax law, into an account solely intended for undergraduate student loan
10 repayments. Certified employers shall receive a tax credit by contrib-
11 uting matching funds to an employee's student loan repayment account
12 established pursuant to this section. Such contribution shall be mini-
13 mally fifty percent of the employee's deposit and a maximum one hundred
14 percent of the employee's deposit, up to twenty-five hundred dollars
15 annually, per employee account. The annual maximum aggregate amount to
16 be deposited per account by the employee and employer shall be five
17 thousand dollars.
18 2. For the purposes of this section, "student loan" shall mean the
19 cumulative total of the annual student loans covering the cost of
20 attendance at an undergraduate college or university, and any interest
21 thereon.
EXPLANATION--Matter in italics (underscored) is new; matter in brackets
[] is old law to be omitted.
LBD08136-08-8
S. 5136--A 2
1 3. Any employer which is a middle-sized business in this state, having
2 between twenty and five hundred employees, may submit an application to
3 the commissioner for certification to participate in the program estab-
4 lished pursuant to this section. The commissioner and the commissioner
5 of taxation and finance shall jointly consider each application for
6 certification submitted pursuant to this subdivision. Provided that not
7 more than fifty employers shall be certified to participate in the
8 program.
9 4. Employee student loan repayment accounts shall be established by an
10 employee for deposit of funds to be used solely for repayment of student
11 loans. Such accounts shall be managed by the higher education services
12 corporation. All enrollees and certified participating employers shall
13 provide the corporation with all necessary information in order to
14 implement the provisions of this section.
15 5. Moneys in a student loan repayment account shall be available only
16 for repayments of student loans. Any withdrawal or distribution from a
17 student loan repayment account which violated the provisions of this
18 subdivision shall be subject to a penalty of ten percent on any such
19 withdrawal or distribution.
20 6. The commissioner and the commissioner of taxation and finance shall
21 jointly promulgate rules and regulations necessary to implement the
22 provisions of this section.
23 § 2. Subsection (c) of section 612 of the tax law is amended by adding
24 a new paragraph 44 to read as follows:
25 (44) Payment not in excess of twenty-five hundred dollars actually
26 paid by an eligible borrower employed by an employer certified pursuant
27 to section six hundred eighty-two of the education law for student loan
28 repayment, to the extent not deductible in determining federal adjusted
29 gross income and not reimbursed. For the purposes of this paragraph, the
30 following terms shall have the following meanings:
31 (i) "Student loans" shall mean any indebtedness incurred by the
32 taxpayer for an undergraduate education loan in accordance with section
33 221 of the internal revenue code.
34 (ii) "Eligible borrower" shall mean a taxpayer who has incurred
35 indebtedness on student loans as defined in subparagraph (i) of this
36 paragraph.
37 § 3. Section 210-B of the tax law is amended by adding a new subdivi-
38 sion 53 to read as follows:
39 53. College debt freedom account program tax credit. (a) General. An
40 employer certified pursuant to section six hundred eighty-two of the
41 education law, who contributes matching funds towards an employee's
42 undergraduate student loan repayments, shall be allowed a credit, to be
43 computed as provided in this subdivision, against the tax imposed by
44 this article, for contributions the employer deposits annually, up to
45 twenty-five hundred dollars per employee per year.
46 (b) Amount of credit. The credit authorized by this subdivision shall
47 be equal to the amount of the employer's contribution; provided that
48 such contribution shall be a minimum of fifty percent and a maximum of
49 one hundred percent of the employee's deposit to a student loan repay-
50 ment account subject to the limits set forth in this subdivision.
51 § 4. Subparagraph (B) of paragraph 1 of subsection (i) of section 606
52 of the tax law is amended by adding a new clause (xliv) to read as
53 follows:
54 (xliv) College debtAmount of credit
55 freedom accountunder subdivision fifty-three
56 program tax credit underof section two hundred ten-B
S. 5136--A 3
1 subsection (ccc)
2 § 5. Section 606 of the tax law is amended by adding a new subsection
3 (ccc) to read as follows:
4 (ccc) College debt freedom account program tax credit. (a) General. An
5 employer, certified pursuant to section six hundred eighty-two of the
6 education law, who contributes matching funds towards an employee's
7 undergraduate student loan repayments, shall be allowed a credit, to be
8 computed as provided in this subsection, against the tax imposed by this
9 article, for contributions the employer deposits annually, up to twen-
10 ty-five hundred dollars per employee per year.
11 (b) Amount of credit. The credit authorized by this subsection shall
12 be equal to the amount of the employer contribution; provided that such
13 contribution shall be a minimum of fifty percent and a maximum of one
14 hundred percent of the employee's deposit to a student loan repayment
15 account subject to the limits set forth in this subsection.
16 § 6. Section 1511 of the tax law is amended by adding a new subdivi-
17 sion (dd) to read as follows:
18 (dd) College debt freedom account program tax credit. (1) General. An
19 employer, certified pursuant to section six hundred eighty-two of the
20 education law, who contributes matching funds towards an employee's
21 undergraduate student loan repayments, shall be allowed a credit, to be
22 computed as provided in this subdivision, against the tax imposed by
23 this article, for contributions the employer deposits annually, up to
24 twenty-five hundred dollars per employee per year.
25 (2) Amount of credit. The credit authorized by this subdivision shall
26 be equal to the amount of the employer's contribution; provided that
27 such contribution shall be a minimum of fifty percent and a maximum of
28 one hundred percent of the employee's deposit to a student loan repay-
29 ment account subject to the limits set forth in this subdivision.
30 § 7. Notwithstanding any provision of the tax law to the contrary, the
31 aggregate of tax expenditure and taxes forgone pursuant to sections two,
32 three, four, five and six of this act shall not exceed $70,000,000. The
33 commissioner of taxation and finance shall immediately suspend all
34 deductions and credits established pursuant to such sections upon reach-
35 ing the $70,000,000 threshold.
36 § 8. This act shall take effect on the sixtieth day after it shall
37 have become a law and shall apply to taxable years commencing on or
38 after January 1, 2019.
