Bill Text: NY A06972 | 2019-2020 | General Assembly | Introduced


Bill Title: Establishes the small business child and dependent care savings program and provides the basic framework therefor.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2020-01-08 - referred to small business [A06972 Detail]

Download: New_York-2019-A06972-Introduced.html


                STATE OF NEW YORK
        ________________________________________________________________________
                                          6972
                               2019-2020 Regular Sessions
                   IN ASSEMBLY
                                     March 29, 2019
                                       ___________
        Introduced  by M. of A. BARCLAY -- read once and referred to the Commit-
          tee on Small Business
        AN ACT to amend the state finance law and the tax law,  in  relation  to
          the  establishment  of  the  small  business  child and dependent care
          savings program
          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:
     1    Section 1. The state finance law is amended by adding a new article 17
     2  to read as follows:
     3                                 ARTICLE 17
     4   NEW YORK STATE SMALL BUSINESS CHILD AND DEPENDENT CARE SAVINGS PROGRAM
     5  Section 255. Short title.
     6          256. Definitions.
     7          257. Program established.
     8          258. Program administration.
     9          259. Program implementation and enrollment.
    10          260. Payments.
    11          261. Duty and liability of the state.
    12          262. Duty and liability of participating employers.
    13          263. Delayed implementation.
    14    §  255.  Short  title. This act shall be known and may be cited as the
    15  "New York small business child and dependent care savings program act".
    16    § 256. Definitions. The following terms shall have the following mean-
    17  ings:
    18    1. "Commissioner" shall mean the commissioner of labor.
    19    2. "Comptroller" shall mean the comptroller of the state.
    20    3. "Employee" shall mean any individual who is eighteen years  of  age
    21  or  older,  who is employed by an employer, and who earned wages working
    22  for an employer in New York state during a calendar year.
    23    4. "Employer" shall mean a person or entity  engaged  in  a  business,
    24  industry,  profession,  trade,  or  other  enterprise in New York state,
    25  whether for profit or not for profit, that (a) has at all  times  during
    26  the  previous  calendar year employed at least one but not more than one
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD10983-01-9

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     1  hundred employees in the state, (b) has been in business  at  least  two
     2  years, and (c) has not offered a child and dependent care savings plan.
     3    5. "Enrollee" shall mean any employee who is enrolled in the program.
     4    6.  "Fund"  shall mean the New York small business child and dependent
     5  care savings program fund.
     6    7. "Participating employer" shall mean a small business that  provides
     7  a  payroll  child and dependent care savings arrangement as provided for
     8  by this article for its employees who are enrollees in the program.
     9    8. "Payroll deposit child  and  dependent  care  savings  arrangement"
    10  shall  mean  an  arrangement  by  which  a participating employer allows
    11  enrollees to remit payroll deduction contributions to the program.
    12    9. "Program" shall mean the New York state small  business  child  and
    13  dependent care savings program.
    14    10.  "Small business" shall mean a person or entity engaged in a busi-
    15  ness, industry, profession, trade,  or  other  enterprise  in  New  York
    16  state,  whether for profit or not for profit, that employed at least one
    17  but no more than one hundred employees at any  one  time  in  the  state
    18  throughout the previous calendar year, and that notifies the comptroller
    19  that it is interested in being a participating employer.
    20    11.  "Wages"  means  any  compensation  received by an enrollee from a
    21  participating employer during the calendar year.
    22    12. "Internal revenue code" shall mean the internal  revenue  code  of
    23  nineteen  hundred  eighty-six,  or  any successor law, in effect for the
    24  calendar year.
    25    13. "Administrators" shall mean the  commissioner  of  labor  together
    26  with the comptroller.
    27    §  257.  Program established. A state child and dependent care savings
    28  program in the form of payroll deduction, known as the  New  York  state
    29  small  business  child and dependent care program, is hereby established
    30  for the purpose of promoting greater child and  dependent  care  savings
    31  for  private-sector  employees of small businesses in a convenient, low-
    32  cost, and portable manner.
    33    § 258. Program administration. The administration of the program shall
    34  be overseen by both the comptroller and the commissioner.  The  adminis-
    35  trators  are  authorized  and  directed to establish a flexible benefits
    36  program consistent with sections one hundred twenty-five and one hundred
    37  twenty-nine of the internal revenue code and regulations adopted  pursu-
    38  ant  thereto.  The  administrative  duties  and  responsibilities are as
    39  follows:
    40    1. Cause the program to be designed, established  and  operated  in  a
    41  manner that:
    42    (a) maximizes participation and savings;
    43    (b) maximizes simplicity, including ease of administration for partic-
    44  ipating employers and enrollees;
    45    2. Determine the number and duties of staff members needed to adminis-
    46  ter the program and assemble such staff, including, as needed, employing
    47  staff and appointing a program administrator.
    48    3. Evaluate and establish the process by which an enrollee is eligible
    49  to contribute a portion of his or her wages to the program for automatic
    50  deposit  and  the process by which the participating employer provides a
    51  payroll deposit child and dependent care savings arrangement to  forward
    52  those  contributions  and related information to the program, including,
    53  but not limited to, contracting with  financial  service  companies  and
    54  third-party  administrators  with  the capability to receive and process
    55  employee information and contributions for  payroll  deposit  child  and
    56  dependent care savings arrangements or similar arrangements.

        A. 6972                             3
     1    4. Design and establish the process for enrollment including the proc-
     2  ess  by  which  an  employee  can opt not to participate in the program,
     3  select a contribution amount or terminate participation in the program.
     4    5.  Evaluate  and  establish  the  processes  by which an employee may
     5  voluntarily enroll in and make contributions to the program.
     6    6. Set minimum and maximum  contribution  levels  in  accordance  with
     7  limits.
     8    7. Facilitate education and outreach to employers and employees.
     9    8.  Carry  out  the duties and obligations of the program in an effec-
    10  tive, efficient, and low-cost manner.
    11    9. Exercise any and all other  powers  reasonably  necessary  for  the
    12  effectuation  of  the purposes, objectives, and provisions of this arti-
    13  cle.
    14    10. Determine  withdrawal  provisions,  such  as  economic  hardships,
    15  portability and leakage.
    16    §  259.  Program  implementation  and  enrollment. Except as otherwise
    17  provided in this article, the program shall be implemented, and  enroll-
    18  ment  of employees shall begin, within twelve months after the effective
    19  date of this article. The provisions of this section shall be  in  force
    20  at  such time as the program administrators open the program for enroll-
    21  ment.
    22    1. Each participating employer shall establish a payroll deposit child
    23  and dependent care savings arrangement to allow each employee to partic-
    24  ipate in the program after the program administrators open  the  program
    25  for enrollment.
    26    2.  Enrollees shall have the ability to select a contribution level to
    27  the fund. This level may be expressed as a percentage of wages or  as  a
    28  dollar  amount.  Enrollees  may  change  their contribution level at any
    29  time, subject to rules promulgated by the program administrators.
    30    3. Following initial implementation of the program  pursuant  to  this
    31  section,  at least once every year, participating employers shall desig-
    32  nate an open enrollment period during  which  employees  who  previously
    33  opted out of the program may enroll in the program.
    34    4.  An employee who opts out of the program and who subsequently wants
    35  to participate through  the  participating  employer's  payroll  deposit
    36  child  and dependent care savings arrangement may only enroll during the
    37  participating employer's designated open enrollment period or if permit-
    38  ted by the participating employer at an earlier time.
    39    5. Employers shall retain the option, at all times, to set up any type
    40  of employer-sponsored child and dependent care savings plan  instead  of
    41  having  a  payroll  deposit child and dependent care savings arrangement
    42  such that employees are allowed to participate in the program.
    43    6. An enrollee may terminate his or her participation in  the  program
    44  at any time in a manner prescribed by the program administrators.
    45    7.  To  the extent permitted by section one hundred twenty-five of the
    46  internal revenue code and  regulations  adopted  pursuant  thereto,  and
    47  salary  deferred  by  an  employee  as  defined  in subdivision three of
    48  section two hundred fifty-six of this article under a flexible  benefits
    49  program established pursuant to this article shall be considered part of
    50  annual compensation for the purpose of computing retirement benefits.
    51    §  260. Payments. Employee contributions deducted by the participating
    52  employer through payroll deduction shall be paid  by  the  participating
    53  employer to the fund using one or more payroll deposit child and depend-
    54  ent  care  savings  arrangements  established by the administrator under
    55  this article, either:

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     1    1. on or before the last day of the month following the month in which
     2  the compensation otherwise would have been payable to  the  employee  in
     3  cash; or
     4    2.  before  such  later  deadline  prescribed by the administrator for
     5  making such payments, but not later than the due date for the deposit of
     6  tax required to be deducted  and  withheld  relating  to  collection  of
     7  income  tax  at source on wages or for the deposit of tax required to be
     8  paid under the unemployment insurance system for the payroll  period  to
     9  which such payments relate.
    10    §  261.  Duty  and  liability of the state. 1. The state shall have no
    11  duty or liability to any party for the payment of any child and  depend-
    12  ent care savings benefits accrued by any enrollee under the program. Any
    13  financial liability for the payment of child and dependent savings bene-
    14  fits in excess of funds available under the program shall be borne sole-
    15  ly  by  the  entities  with  whom the program administrators contract to
    16  provide insurance to protect the value of the program.
    17    § 262. Duty and liability of participating employers. 1.   Participat-
    18  ing  employers  shall  not  have  any  liability  for the decision of an
    19  employee to participate in or opt out of the program.
    20    2. A participating employer shall not be a fiduciary,  nor  considered
    21  to  be, a fiduciary over the program. A participating employer shall not
    22  bear responsibility for the administration of the program.    A  partic-
    23  ipating  employer  shall  not  be liable for program design and benefits
    24  paid to program participants.
    25    § 263. Delayed implementation. If the program  administrators  do  not
    26  obtain adequate funds to implement the program within the time frame set
    27  forth under this article or such funds are subject to appropriation, the
    28  program administrators may delay the implementation of the program.
    29    § 2. The state finance law is amended by adding a new section 99-ff to
    30  read as follows:
    31    §  99-ff.  New  York  state  small  business  child and dependent care
    32  program fund. 1. There is hereby established within the joint custody of
    33  the commissioner of taxation and finance and the  state  comptroller,  a
    34  new  fund  to  be  known  as the New York state small business child and
    35  dependent care program fund.
    36    2. The fund  shall  include  the  child  and  dependent  care  savings
    37  accounts  of  enrollees,  which  shall  be  accounted  for as individual
    38  accounts.
    39    3. Moneys in the fund shall consist of moneys received from  enrollees
    40  and participating employers pursuant to automatic payroll deductions and
    41  contributions  to  savings  made under the New York state small business
    42  child and dependent care program.
    43    4. The fund shall be operated in a manner determined by  the  adminis-
    44  trators  of  the  New York state small business child and dependent care
    45  savings program.
    46    5. The amounts deposited in the fund shall not constitute property  of
    47  the state and the fund shall not be construed to be a department, insti-
    48  tution, or agency of the state. Amounts on deposit in the fund shall not
    49  be  commingled  with state funds and the state shall have no claim to or
    50  against, or interest in, such funds.
    51    § 3. Subsection (c) of section 612 of the tax law is amended by adding
    52  a new paragraph 44 to read as follows:
    53    (44) Any payroll deduction for  child  and  dependent  care  services,
    54  pursuant to article seventeen of the state finance law.
    55    § 4. This act shall take effect immediately.
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