Bill Text: NY S00341 | 2019-2020 | General Assembly | Amended

Bill Title: Relates to establishing student loan repayment accounts; authorizes employers to establish student loan repayment accounts and provide matching funds up to $5000 a year; establishes tax deductions for participating employers.

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced) 2019-02-28 - PRINT NUMBER 341A [S00341 Detail]

Download: New_York-2019-S00341-Amended.html

                STATE OF NEW YORK
                               2019-2020 Regular Sessions
                    IN SENATE
                                     January 9, 2019
        Introduced  by  Sen.  AKSHAR -- 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 and the tax law, in relation to estab-
          lishing student loan repayment accounts
          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.  Student  loan  repayment  accounts.  1. An employer is hereby
     4  authorized to establish student  loan  repayment  accounts  which  shall
     5  permit  his  or  her  employees  to  deposit  a portion of their pre-tax
     6  income, up to five thousand dollars annually, into such accounts  solely
     7  for  undergraduate or graduate student loan repayments. Employers elect-
     8  ing to establish such accounts  may  contribute  matching  funds  to  an
     9  employee's  student  loan  repayment  account  and  shall  receive a tax
    10  deduction for such contributions. Such contribution may be up to a maxi-
    11  mum of one hundred percent of the employee's deposit, up to  five  thou-
    12  sand dollars annually, per employee account.
    13    2.  For  the  purposes  of this section, "student loan" shall mean the
    14  cumulative total of the  annual  student  loans  covering  the  cost  of
    15  attendance  at  an  undergraduate or graduate college or university, and
    16  any interest thereon.
    17    3. Employee student loan repayment accounts shall be  established  for
    18  the  deposit of funds to be used by the employee solely for repayment of
    19  student loans. Such accounts shall be managed by the comptroller and the
    20  higher education services corporation. All participating  employers  and
    21  employees  shall  provide  the  comptroller and the corporation with all
         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.

        S. 341--A                           2
     1  necessary information in order  to  implement  the  provisions  of  this
     2  section.
     3    4.  Moneys in a student loan repayment account shall be available only
     4  for repayments of student loans as defined in this  section.  Any  with-
     5  drawal  or  distribution  from  a  student  loan repayment account which
     6  violated the provisions of this subdivision shall be subject to a penal-
     7  ty of ten percent on any such withdrawal or distribution.
     8    5. The commissioner and the commissioner of taxation and finance shall
     9  jointly promulgate rules and  regulations  necessary  to  implement  the
    10  provisions of this section.
    11    §  2. Subdivision 9 of section 208 of the tax law is amended by adding
    12  a new paragraph (u) to read as follows:
    13    (u) A taxpayer establishing student loan repayment  accounts  pursuant
    14  to  section six hundred eighty-two of the education law shall be allowed
    15  a deduction from entire net income in  an  amount  equal  to  the  total
    16  amount  of matching contributions made to employees' student loan repay-
    17  ment accounts by a taxpayer during the taxable year.
    18    § 3. Subsection (c) of section 612 of the tax law is amended by adding
    19  a new paragraph 17 to read as follows:
    20    (17) The amount equal to the total amount  of  matching  contributions
    21  made  by  a  taxpayer during the taxable year to employees' student loan
    22  repayment accounts established pursuant to section six  hundred  eighty-
    23  two of the education law.
    24    § 4. Notwithstanding any provision of the tax law to the contrary, the
    25  aggregate  of tax expenditure and taxes forgone pursuant to sections two
    26  and three of this act shall not exceed $70,000,000. The commissioner  of
    27  taxation  and  finance  shall immediately suspend both deductions estab-
    28  lished pursuant to such sections upon reaching the  $70,000,000  thresh-
    29  old.
    30    §  5.  This  act  shall take effect on the sixtieth day after it shall
    31  have become a law and shall apply to  taxable  years  commencing  on  or
    32  after such effective date. Effective immediately the addition, amendment
    33  and/or repeal of any rule or regulation necessary for the implementation
    34  of  this  act  on  its  effective  date  are  authorized  to be made and
    35  completed on or before such date.