Bill Text: NY S03998 | 2013-2014 | General Assembly | Introduced


Bill Title: Enacts various legislation designed to make college more affordable for the citizens of the state.

Spectrum: Moderate Partisan Bill (Republican 6-1)

Status: (Introduced - Dead) 2014-01-08 - REFERRED TO INVESTIGATIONS AND GOVERNMENT OPERATIONS [S03998 Detail]

Download: New_York-2013-S03998-Introduced.html
                           S T A T E   O F   N E W   Y O R K
       ________________________________________________________________________
                                         3998
                              2013-2014 Regular Sessions
                                   I N  S E N A T E
                                     March 4, 2013
                                      ___________
       Introduced  by  Sen. LAVALLE -- read twice and ordered printed, and when
         printed to be committed to the Committee on Investigations and Govern-
         ment Operations
       AN ACT to amend the tax law, in relation to providing a tax  credit  for
         allowable  college  expenses  (Part A); to amend the education law and
         the state finance law, in relation to the student loan linked  deposit
         act  (Part B); to amend the financial services law, in relation to the
         truth in student lending  clearinghouse  program;  and  to  amend  the
         financial  services  law  and  the  education  law, in relation to the
         student lending transparency program (Part C); and to amend the educa-
         tion law, in relation to the creation of the New  York  state  tuition
         savings program; to amend the state finance law, in relation to estab-
         lishing  the New York state pre-pay tuition fund; and to amend the tax
         law, in relation to reducing distributions from  the  New  York  state
         pre-pay tuition savings program from adjusted gross income (Part D)
         THE  PEOPLE OF THE STATE OF NEW YORK, REPRESENTED IN SENATE AND ASSEM-
       BLY, DO ENACT AS FOLLOWS:
    1    Section 1. This act enacts into law components of legislation relating
    2  to college affordability.  Each component is wholly contained  within  a
    3  Part  identified  as  Parts  A  through  D.  The effective date for each
    4  particular provision contained within such Part is set forth in the last
    5  section of such Part. Any provision in any section  contained  within  a
    6  Part, including the effective date of the Part, which makes reference to
    7  a  section  "of  this act", when used in connection with that particular
    8  component, shall be deemed  to  mean  and  refer  to  the  corresponding
    9  section of the Part in which it is found. Section three of this act sets
   10  forth the general effective date of this act.
   11                                   PART A
        EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                             [ ] is old law to be omitted.
                                                                  LBD09562-02-3
       S. 3998                             2
    1    Section  1.  Section  606  of  the  tax law is amended by adding a new
    2  subsection (u) to read as follows:
    3    (U)  STAY  IN  NEW  YORK  CREDIT. (1) GENERAL. (A) A RESIDENT TAXPAYER
    4  SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY  THIS  ARTICLE  FOR
    5  ALLOWABLE  COLLEGE  EXPENSES. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO
    6  TWENTY-FIVE PERCENT OF ALLOWABLE COLLEGE EXPENSES, CAPPED AT THREE THOU-
    7  SAND DOLLARS. THE CREDIT SHALL BE ALLOWED ONLY IN THE FIRST TAXABLE YEAR
    8  SUBSEQUENT TO THE TAXPAYER'S COMPLETION OF A COURSE OF STUDY LEADING  TO
    9  THE  GRANTING  OF  A  BACCALAUREATE DEGREE AND IN EACH OF THE NEXT THREE
   10  TAXABLE YEARS.
   11    (B) IN ORDER TO QUALIFY FOR THE CREDIT, THE ELIGIBLE TAXPAYER SHALL:
   12    (I) HAVE COMPLETED THE COURSE OF STUDY LEADING TO THE  GRANTING  OF  A
   13  BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION WITHIN FOUR
   14  YEARS  FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY. PROVIDED, HOWEVER,
   15  IF THE ELIGIBLE TAXPAYER WAS EMPLOYED IN EXCESS OF THREE  HUNDRED  HOURS
   16  PER  SEMESTER,  THE ELIGIBLE TAXPAYER SHALL HAVE COMPLETED THE COURSE OF
   17  STUDY LEADING TO THE GRANTING OF  A  BACCALAUREATE  DEGREE  WITHIN  FIVE
   18  YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY;
   19    (II) BE EMPLOYED FULL-TIME WITHIN THE STATE; AND
   20    (III) HAVE COMPLETED TWENTY HOURS OF COMMUNITY SERVICE PER SEMESTER OF
   21  ENROLLMENT IN AN INSTITUTION OF HIGHER EDUCATION. PROVIDED, HOWEVER, FOR
   22  THOSE  ELIGIBLE  TAXPAYERS  WHO  HAVE  BEEN GRANTED DEGREES WITHIN THREE
   23  YEARS OF THE EFFECTIVE DATE OF THIS  SUBSECTION,  SUCH  TAXPAYERS  SHALL
   24  COMPLETE  THE  COMMUNITY  SERVICE WITHIN THE FIRST TAXABLE YEAR IN WHICH
   25  THE CREDIT IS CLAIMED.
   26    (C) FOR ELIGIBLE TAXPAYERS WHO ENROLL IN A COURSE OF STUDY LEADING  TO
   27  THE GRANTING OF A POST BACCALAUREATE OR OTHER GRADUATE DEGREE IMMEDIATE-
   28  LY  FOLLOWING THE RECEIPT OF A BACCALAUREATE DEGREE, THE CREDIT SHALL BE
   29  ALLOWED  IN  THE  FIRST  TAXABLE  YEAR  SUBSEQUENT  TO  THE   TAXPAYER'S
   30  COMPLETION OF SUCH DEGREE OR WHEN SUCH TAXPAYER CEASES TO BE ENROLLED IN
   31  SUCH  COURSE  OF  STUDY  AND  IN  EACH  OF  THE NEXT THREE TAXABLE YEARS
   32  PROVIDED ALL OTHER QUALIFICATIONS OF THIS SUBSECTION ARE MET.
   33    (2) ALLOWABLE AND QUALIFIED COLLEGE EXPENSES. FOR THE PURPOSES OF THIS
   34  CREDIT:
   35    (A) THE TERM "ALLOWABLE COLLEGE EXPENSES" SHALL MEAN THE TOTAL  AMOUNT
   36  OF  QUALIFIED  COLLEGE  EXPENSES  INCURRED  BY  THE  TAXPAYER DURING THE
   37  TAXPAYER'S ENROLLMENT IN A COURSE OF STUDY LEADING TO THE GRANTING OF  A
   38  BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION.
   39    (B)  THE  TERM  "QUALIFIED  COLLEGE  EXPENSES"  SHALL MEAN THE TUITION
   40  REQUIRED FOR THE ENROLLMENT OR ATTENDANCE OF THE TAXPAYER AT AN INSTITU-
   41  TION OF HIGHER EDUCATION.   PROVIDED,  HOWEVER,  TUITION  PAYMENTS  MADE
   42  PURSUANT  TO  THE  RECEIPT OF ANY SCHOLARSHIPS OR FINANCIAL AID SHALL BE
   43  EXCLUDED FROM THE DEFINITION OF "QUALIFIED COLLEGE EXPENSES".
   44    (3) INSTITUTION OF HIGHER EDUCATION. FOR THE PURPOSES OF THIS  CREDIT,
   45  THE TERM "INSTITUTION OF HIGHER EDUCATION" SHALL MEAN ANY INSTITUTION OF
   46  HIGHER  EDUCATION  LOCATED  IN THE STATE, RECOGNIZED AND APPROVED BY THE
   47  REGENTS, OR ANY SUCCESSOR ORGANIZATION, OF THE UNIVERSITY OF  THE  STATE
   48  OF  NEW YORK OR ACCREDITED BY A NATIONALLY RECOGNIZED ACCREDITING AGENCY
   49  OR ASSOCIATION ACCEPTED AS SUCH BY THE REGENTS, OR ANY SUCCESSOR  ORGAN-
   50  IZATION,  OF  THE  UNIVERSITY OF THE STATE OF NEW YORK, WHICH PROVIDES A
   51  COURSE OF STUDY LEADING TO THE  GRANTING  OF  A  POST-SECONDARY  DEGREE,
   52  CERTIFICATE OR DIPLOMA.
   53    (4)  REFUNDABILITY.  THE CREDIT UNDER THIS SUBSECTION SHALL BE ALLOWED
   54  AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXABLE  YEAR  REDUCED
   55  BY  THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX
   56  AS SO REDUCED, THE TAXPAYER MAY RECEIVE, AND THE COMPTROLLER, SUBJECT TO
       S. 3998                             3
    1  A CERTIFICATE OF THE COMMISSIONER, SHALL PAY AS AN OVERPAYMENT,  WITHOUT
    2  INTEREST, THE AMOUNT OF SUCH EXCESS.
    3    S  2. Subparagraph (A) of paragraph 2 of subsection (t) of section 606
    4  of the tax law, as amended by section 1 of part N of chapter 85  of  the
    5  laws of 2002, is amended to read as follows:
    6    (A)  The  term  "allowable  college  tuition  expenses" shall mean the
    7  amount of qualified college tuition expenses of eligible  students  paid
    8  by  the  taxpayer  during  the  taxable year[,]. THE AMOUNT OF QUALIFIED
    9  COLLEGE TUITION EXPENSES SHALL BE limited [to] AS FOLLOWS:  FOR  TAXABLE
   10  YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND THIRTEEN, ten
   11  thousand  dollars  for each such student; FOR TAXABLE YEARS BEGINNING IN
   12  TWO THOUSAND THIRTEEN, TWELVE THOUSAND DOLLARS  FOR  EACH  STUDENT;  FOR
   13  TAXABLE  YEARS  BEGINNING  IN  TWO  THOUSAND FOURTEEN, FOURTEEN THOUSAND
   14  DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING  IN  TWO  THOUSAND
   15  FIFTEEN,  SIXTEEN  THOUSAND  DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS
   16  BEGINNING IN TWO THOUSAND SIXTEEN, EIGHTEEN THOUSAND  DOLLARS  FOR  EACH
   17  STUDENT;  AND  FOR  TAXABLE  YEARS BEGINNING AFTER TWO THOUSAND SIXTEEN,
   18  TWENTY THOUSAND DOLLARS PER STUDENT;
   19    S 3. Paragraph 4 of subsection (t) of section 606 of the tax  law,  as
   20  added  by  section  1  of  part DD of chapter 63 of the laws of 2000, is
   21  amended to read as follows:
   22    (4) Amount of credit. [If allowable college tuition expenses are  less
   23  than five thousand dollars, the amount of the credit provided under this
   24  subsection  shall be equal to the applicable percentage of the lesser of
   25  allowable college tuition expenses or two hundred dollars. If  allowable
   26  college  tuition  expenses are five thousand dollars or more, the amount
   27  of the credit provided under this  subsection  shall  be  equal  to  the
   28  applicable  percentage  of the allowable college tuition expenses multi-
   29  plied by four percent.]
   30    THE AMOUNT OF THE CREDIT SHALL BE DETERMINED IN  ACCORDANCE  WITH  THE
   31  FOLLOWING SCHEDULES:
   32    (A)  FOR  TAXABLE  YEARS  BEGINNING  AFTER TWO THOUSAND AND BEFORE TWO
   33  THOUSAND THIRTEEN:
   34  IF ALLOWABLE COLLEGE TUITION        THE TAX CREDIT IS EQUAL TO:
   35  EXPENSES ARE:
   36  LESS THAN FIVE THOUSAND DOLLARS     THE APPLICABLE PERCENTAGE OF THE
   37                                      LESSER OF ALLOWABLE COLLEGE TUITION
   38                                      EXPENSES OR TWO HUNDRED DOLLARS
   39  FIVE THOUSAND DOLLARS OR MORE       THE APPLICABLE PERCENTAGE OF
   40                                      ALLOWABLE COLLEGE TUITION EXPENSES
   41                                      MULTIPLIED BY FOUR PERCENT
   42    (B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN:
   43  IF ALLOWABLE COLLEGE TUITION        THE TAX CREDIT IS EQUAL TO:
   44  EXPENSES ARE:
   45  LESS THAN SIX THOUSAND DOLLARS      THE LESSER OF ALLOWABLE COLLEGE
   46                                      TUITION EXPENSES OR TWO HUNDRED
   47                                      FORTY DOLLARS
   48  SIX THOUSAND DOLLARS OR MORE        THE ALLOWABLE COLLEGE TUITION
   49                                      EXPENSES MULTIPLIED BY FOUR PERCENT
   50    (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN:
   51  IF ALLOWABLE COLLEGE TUITION        THE TAX CREDIT IS EQUAL TO:
   52  EXPENSES ARE:
   53  LESS THAN SEVEN THOUSAND DOLLARS    THE LESSER OF ALLOWABLE COLLEGE
   54                                      TUITION EXPENSES OR TWO HUNDRED
   55                                      EIGHTY DOLLARS
   56  SEVEN THOUSAND DOLLARS OR MORE      THE ALLOWABLE COLLEGE TUITION
       S. 3998                             4
    1                                      EXPENSES MULTIPLIED BY FOUR PERCENT
    2    (D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN:
    3  IF ALLOWABLE COLLEGE TUITION        THE TAX CREDIT IS EQUAL TO:
    4  EXPENSES ARE:
    5  LESS THAN EIGHT THOUSAND DOLLARS    THE LESSER OF ALLOWABLE COLLEGE
    6                                      TUITION EXPENSES OR THREE HUNDRED
    7                                      TWENTY DOLLARS
    8  EIGHT THOUSAND DOLLARS OR MORE      THE ALLOWABLE COLLEGE TUITION
    9                                      EXPENSES MULTIPLIED BY FOUR PERCENT
   10    (E) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND SIXTEEN:
   11  IF ALLOWABLE COLLEGE TUITION        THE TAX CREDIT IS EQUAL TO:
   12  EXPENSES ARE:
   13  LESS THAN NINE THOUSAND DOLLARS     THE LESSER OF ALLOWABLE COLLEGE
   14                                      TUITION EXPENSES OR THREE HUNDRED
   15                                      SIXTY DOLLARS
   16  NINE THOUSAND DOLLARS OR MORE       THE ALLOWABLE COLLEGE TUITION
   17                                      EXPENSES MULTIPLIED BY FOUR PERCENT
   18    (F) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND SIXTEEN:
   19  IF ALLOWABLE COLLEGE TUITION        THE TAX CREDIT IS EQUAL TO:
   20  EXPENSES ARE:
   21  LESS THAN TEN THOUSAND DOLLARS      THE LESSER OF ALLOWABLE COLLEGE
   22                                      TUITION EXPENSES OR FOUR HUNDRED
   23                                      DOLLARS
   24  TEN THOUSAND DOLLARS OR MORE        THE ALLOWABLE COLLEGE TUITION
   25                                      EXPENSES MULTIPLIED BY FOUR PERCENT
   26    Such  applicable  percentage  shall be twenty-five percent for taxable
   27  years beginning in two thousand one, fifty  percent  for  taxable  years
   28  beginning  in  two  thousand two, seventy-five percent for taxable years
   29  beginning in two thousand three and  one  hundred  percent  for  taxable
   30  years beginning after two thousand three.
   31    S 4. Subsection (t) of section 606 of the tax law is amended by adding
   32  a new paragraph 4-a to read as follows:
   33    (4-A)  INFLATION  ADJUSTMENT.  (A)  FOR  TAXABLE YEARS BEGINNING IN OR
   34  AFTER TWO THOUSAND SEVENTEEN, THE DOLLAR AMOUNTS IN SUBPARAGRAPH (A)  OF
   35  PARAGRAPH  TWO AND PARAGRAPH FOUR OF THIS SUBSECTION SHALL BE MULTIPLIED
   36  BY ONE PLUS THE INFLATION ADJUSTMENT.
   37    (B) THE INFLATION  ADJUSTMENT  FOR  ANY  TAXABLE  YEAR  SHALL  BE  THE
   38  PERCENTAGE,  IF  ANY,  BY WHICH THE HIGHER EDUCATION PRICE INDEX FOR THE
   39  ACADEMIC FISCAL YEAR ENDING IN THE IMMEDIATELY  PRECEDING  TAXABLE  YEAR
   40  EXCEEDS  THE  HIGHER  EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL YEAR
   41  ENDING JUNE, TWO THOUSAND FIFTEEN. FOR THE PURPOSES OF  THIS  PARAGRAPH,
   42  THE  HIGHER EDUCATION PRICE INDEX MEANS THE HIGHER EDUCATION PRICE INDEX
   43  PUBLISHED BY THE COMMONFUND INSTITUTE.
   44    (C) IF THE PRODUCT OF THE AMOUNTS IN SUBPARAGRAPHS (A) AND (B) OF THIS
   45  PARAGRAPH IS NOT A MULTIPLE OF FIVE  DOLLARS,  SUCH  INCREASE  SHALL  BE
   46  ROUNDED TO THE NEXT MULTIPLE OF FIVE DOLLARS.
   47    S 5. This act shall take effect immediately and shall apply to taxable
   48  years  beginning  on  or  after January 1, 2013; provided, however, that
   49  section one of this act shall apply to taxable  years  beginning  on  or
   50  after January 1, 2014.
   51                                   PART B
   52    Section 1. Legislative findings and declaration of purpose. The legis-
   53  lature  hereby  finds  that the costs of completing higher education for
   54  residents of the state of New York are increasing at a rate significant-
       S. 3998                             5
    1  ly faster than the rate of inflation. Paying out of  pocket  has  become
    2  increasingly  difficult  for  families  and  students seeking to improve
    3  their educational and economic prospects. An affordable  college  educa-
    4  tion  has  become  increasingly  inaccessible to large numbers of middle
    5  class families in the state, for  whom  financial  resources,  including
    6  state  grants  and scholarships, are either limited or unavailable. Many
    7  families and students have no choice but to turn to the private  lending
    8  market in order to finance their higher education.
    9    Compounding  the  problem  is the fact that typical interest rates for
   10  student loans offered through the private lending market are  relatively
   11  high when compared to interest rates for other purposes, such as a mort-
   12  gage  or  automobile.  Additionally,  the average student loan debt upon
   13  graduation is more than $26,000 per student in the state.  Reducing  the
   14  debt  burden  that  students endure upon graduating college has become a
   15  critical public policy goal.
   16    As increasing the share of the state's population that undertakes  and
   17  completes  higher  education is also a desirable public policy goal, and
   18  an individual's decision to complete a program of  postsecondary  educa-
   19  tion  typically reaps economic and social rewards to the individual, the
   20  legislature hereby declares that it is in the best interest of the state
   21  to create a student loan linked deposit program whereby the  state  will
   22  subsidize private lenders to provide reduced-rate loans to students.
   23    S 2. Paragraph c of subdivision 1 of section 680 of the education law,
   24  as  added by chapter 622 of the laws of 2008, is amended and a new para-
   25  graph d is added to read as follows:
   26    c. To enter into cooperative agreements, subject to  the  approval  of
   27  the  board  of trustees and the director of the budget, with other enti-
   28  ties, including, but not limited to, other states, the  federal  govern-
   29  ment,  and  post-secondary  institutions,  to establish, administer, and
   30  operate federal student aid programs. Notwithstanding the provisions  of
   31  paragraphs  a  and b of this subdivision, the corporation is authorized,
   32  pursuant to such cooperative agreements, to provide federal student  aid
   33  services  to  students  and  families  who are not residents of New York
   34  state[.]; AND
   35    D. TO ADMINISTER AND OPERATE A STUDENT  LOAN  LINKED  DEPOSIT  PROGRAM
   36  PURSUANT TO ARTICLE FIFTEEN-A OF THE STATE FINANCE LAW.
   37    S  3. Subdivision 2 of section 98-a of the state finance law, as added
   38  by chapter 705 of the laws of 1993, is amended to read as follows:
   39    2. Notwithstanding any provision of law to the contrary, investment of
   40  bond proceeds and other funds not immediately required may  be  invested
   41  by  the  comptroller  in  linked deposits pursuant to article fifteen OR
   42  ARTICLE FIFTEEN-A of this chapter. If any moneys  are  invested  by  the
   43  comptroller  in  linked  deposits pursuant to article fifteen OR ARTICLE
   44  FIFTEEN-A of this chapter, the comptroller  shall  compute  the  monthly
   45  earnings  for  all  funds,  other  than  the general fund, as if no such
   46  moneys had been invested in such linked deposits.
   47    S 4. The state finance law is amended by adding a new article 15-A  to
   48  read as follows:
   49                                ARTICLE 15-A
   50                       STUDENT LOAN LINKED DEPOSIT ACT
   51  SECTION 225.   SHORT TITLE.
   52          226.   DEFINITIONS.
   53          227.   ESTABLISHMENT  AND  PURPOSE;  STUDENT LOAN LINKED DEPOSIT
   54                   PROGRAM AUTHORIZATION.
   55          228.   RESPONSIBILITIES OF THE PRESIDENT, COMPTROLLER AND SUPER-
   56                   INTENDENT.
       S. 3998                             6
    1          229.   RELEASE FROM LINKED DEPOSITS.
    2          230.   LINKED STUDENT LOANS.
    3          231.   INTEREST RATE FOR LINKED LOANS; NO LENDER'S FEES.
    4          232.   APPLICATION PROCEDURE.
    5          233.   REPAYMENT PERIODS FOR LINKED STUDENT LOANS.
    6          234.   LIABILITY; EARLY REPAYMENT AND WITHDRAWAL.
    7          234-A. MONITORING AND REPORT.
    8          234-B. PROMOTION OF PROGRAM.
    9          234-C. RULES AND REGULATIONS.
   10    S  225.  SHORT  TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS
   11  THE "STUDENT LOAN LINKED DEPOSIT ACT".
   12    S 226. DEFINITIONS. WHEN USED IN  THIS  ARTICLE,  UNLESS  A  DIFFERENT
   13  MEANING CLEARLY APPEARS FROM THE CONTEXT, THE FOLLOWING TERMS SHALL HAVE
   14  THE FOLLOWING MEANINGS:
   15    1. "AUTHORIZED DEPOSITOR" MEANS THE COMPTROLLER WITH RESPECT TO LINKED
   16  DEPOSITS MADE BY THE COMPTROLLER.
   17    2. "COMPTROLLER" MEANS THE COMPTROLLER OF THE STATE OF NEW YORK.
   18    3. "DEPARTMENT" MEANS THE DEPARTMENT OF FINANCIAL SERVICES.
   19    4.  "ELIGIBLE  RECIPIENT"  MEANS  AN  INDIVIDUAL THAT HAS SUCCESSFULLY
   20  APPLIED FOR A LINKED STUDENT LOAN AND MET ALL REQUIREMENTS PRESCRIBED BY
   21  THE PRESIDENT AND A LENDING INSTITUTION FOR RECEIPT OF A LOAN.
   22    5. "LENDER" MEANS:
   23    (A) ANY COMMERCIAL BANK WHICH IS OR SHALL BECOME AN APPROVED DEPOSITO-
   24  RY OF STATE FUNDS UNDER THE PROVISIONS OF SECTION ONE  HUNDRED  FIVE  OF
   25  THIS CHAPTER AND WHICH AGREES TO PARTICIPATE IN THE PROGRAM; OR
   26    (B) ANY THRIFT WHICH AN AUTHORIZED DEPOSITOR DETERMINES IS ELIGIBLE TO
   27  ACCEPT  LINKED  DEPOSITS  BASED  UPON CRITERIA APPLIED BY THE AUTHORIZED
   28  DEPOSITOR IN MAKING DETERMINATIONS UNDER SECTION  ONE  HUNDRED  FIVE  OF
   29  THIS  CHAPTER,  AND WHICH AGREES TO PARTICIPATE IN THE PROGRAM, PROVIDED
   30  THAT ANY LINKED DEPOSIT IN SUCH THRIFT SHALL  BE  SECURED  IN  THE  SAME
   31  MANNER  AS MONEYS DEPOSITED PURSUANT TO SECTION ONE HUNDRED FIVE OF THIS
   32  CHAPTER AND SUCH THRIFTS SHALL PLEDGE ASSETS OR FURNISH  OTHER  SECURITY
   33  SATISFACTORY  IN  FORM  AND  AMOUNT  TO THE AUTHORIZED DEPOSITOR FOR THE
   34  REPAYMENT OF MONEYS.
   35    6. "LINKED DEPOSIT" MEANS A DEPOSIT PLACED WITH A LENDER BY THE  COMP-
   36  TROLLER  FOR A PERIOD OF FOUR YEARS AT THE LINKED DEPOSIT INTEREST RATE,
   37  PROVIDED THE LENDER AGREES TO:
   38    (A) LEND THE EQUIVALENT VALUE OF SUCH DEPOSIT TO AN ELIGIBLE RECIPIENT
   39  AT THE INTEREST RATE PROVIDED IN SECTION TWO HUNDRED THIRTY-ONE OF  THIS
   40  ARTICLE; AND
   41    (B)  PERMIT  THE  DEPOSIT  TO  BE  COMPRISED OF A SERIES OF NINETY DAY
   42  DEPOSITS EACH BEARING AN INTEREST  RATE  EQUAL  TO  THE  LINKED  DEPOSIT
   43  INTEREST RATE FIXED AT THE TIME THE ORIGINAL DEPOSIT IS PLACED.
   44    THIS  ARTICLE  AND  THE RELATED STATUTES THAT REFER TO THIS ARTICLE DO
   45  NOT GRANT THRIFTS ELIGIBILITY TO ACCEPT PUBLIC FUNDS  OR  PUBLIC  MONEYS
   46  FROM  PUBLIC  ENTITIES  FOR  INVESTMENT  PURPOSES.  A  LINKED DEPOSIT IS
   47  INTENDED TO ENABLE A LENDER TO MAKE A LINKED LOAN TO AN ELIGIBLE RECIPI-
   48  ENT AND SUCH DEPOSIT EARNS A YIELD LOWER THAN POSTED RATES IN  ORDER  TO
   49  ACCOMPLISH THE GOALS OF THIS ARTICLE.
   50    7.  "LINKED  DEPOSIT INTEREST RATE" MEANS FOR A LINKED DEPOSIT MADE IN
   51  CONNECTION WITH A LINKED LOAN TO AN ELIGIBLE RECIPIENT A FIXED  RATE  OF
   52  INTEREST  WHICH  IS THREE HUNDRED BASIS POINTS BELOW THE LENDER'S POSTED
   53  FOUR YEAR CERTIFICATE OF DEPOSIT RATE OR, IF THE LENDER DOES NOT OFFER A
   54  FOUR YEAR CERTIFICATE OF DEPOSIT, IS THREE HUNDRED  BASIS  POINTS  BELOW
   55  THE  AVERAGE  STATEWIDE  RATE  FOR  FOUR YEAR CERTIFICATES OF DEPOSIT AS
   56  DETERMINED BY THE SUPERINTENDENT OF FINANCIAL SERVICES.   IN  THE  EVENT
       S. 3998                             7
    1  THAT  THE  LENDER'S POSTED FOUR YEAR CERTIFICATE OF DEPOSIT RATE, OR THE
    2  AVERAGE STATEWIDE RATE FOR FOUR YEAR CERTIFICATES OF DEPOSIT  ARE  BELOW
    3  THREE  HUNDRED  BASIS POINTS, THE LINKED DEPOSIT INTEREST RATE SHALL NOT
    4  BE LESS THAN ZERO.
    5    8.  "LINKED  LOAN"  MEANS  A LOAN MADE TO AN ELIGIBLE RECIPIENT, IN AN
    6  AMOUNT EQUAL TO A LINKED DEPOSIT AND BEARING INTEREST FOR THE FIRST FOUR
    7  YEARS AT THE INTEREST RATE PROVIDED IN SECTION TWO HUNDRED THIRTY-ONE OF
    8  THIS ARTICLE.
    9    9. "PRESIDENT" MEANS THE PRESIDENT OF THE  HIGHER  EDUCATION  SERVICES
   10  CORPORATION.
   11    10. "PROGRAM" MEANS THE STUDENT LOAN LINKED DEPOSIT PROGRAM.
   12    11. "QUALIFIED EDUCATIONAL EXPENSES" MEANS THE ACTUAL OR EXPECTED COST
   13  OF A STUDENT'S HIGHER EDUCATION, WHICH SHALL INCLUDE THE FULL QUARTERLY,
   14  SEMESTERLY  OR  ANNUAL  COST OF TUITION, FEES, BOOKS, SUPPLIES, ROOM AND
   15  BOARD.
   16    12. "THRIFT" MEANS ANY SAVINGS BANK OR SAVINGS AND  LOAN  ASSOCIATION,
   17  FEDERAL SAVINGS BANK OR FEDERAL SAVINGS AND LOAN ASSOCIATION.
   18    S  227. ESTABLISHMENT AND PURPOSE; STUDENT LOAN LINKED DEPOSIT PROGRAM
   19  AUTHORIZATION.  THE  STUDENT  LOAN  LINKED  DEPOSIT  PROGRAM  IS  HEREBY
   20  CREATED.    THE PURPOSE OF THE PROGRAM IS TO MAKE AVAILABLE TO RESIDENTS
   21  OF NEW YORK STATE REDUCED RATE LOANS THAT WILL ASSIST IN  THE  FINANCING
   22  OF  AN  IN-STATE COLLEGE EDUCATION. THE COMPTROLLER IS HEREBY AUTHORIZED
   23  TO USE ANY MONEYS OF THE STATE THE COMPTROLLER IS AUTHORIZED  TO  INVEST
   24  PURSUANT  TO  SECTION  NINETY-EIGHT-A OF THIS CHAPTER AS LINKED DEPOSITS
   25  FOR THE PROGRAM.   NOT MORE THAN ONE HUNDRED  MILLION  DOLLARS  OF  SUCH
   26  MONEYS SHALL BE ON DEPOSIT PURSUANT TO THE PROGRAM AT ANY GIVEN TIME.
   27    S  228. RESPONSIBILITIES OF THE PRESIDENT, COMPTROLLER AND SUPERINTEN-
   28  DENT. 1. THE PRESIDENT SHALL ADMINISTER THE PROGRAM PURSUANT TO  SECTION
   29  TWO  HUNDRED  THIRTY-TWO  OF  THIS ARTICLE, INCLUDING ALL DECISIONS WITH
   30  RESPECT TO THE APPLICATION AND USE OF THE PROGRAM FOR  ELIGIBLE  RECIPI-
   31  ENTS;  MARKET  AND  PROMOTE  THE PROGRAM PURSUANT TO SECTION TWO HUNDRED
   32  THIRTY-FOUR-B OF THIS ARTICLE; AFTER CONSULTING WITH THE COMPTROLLER AND
   33  THE SUPERINTENDENT OF FINANCIAL SERVICES, ISSUE  RULES  AND  REGULATIONS
   34  FOR  THE  OPERATION OF THE PROGRAM PURSUANT TO SECTION TWO HUNDRED THIR-
   35  TY-FOUR-C OF THIS ARTICLE.
   36    2. THE COMPTROLLER'S RESPONSIBILITIES FOR THE PROGRAM SHALL BE LIMITED
   37  TO:  PURSUANT TO SECTIONS TWO HUNDRED TWENTY-SEVEN AND TWO HUNDRED THIR-
   38  TY-TWO OF THIS ARTICLE, PLACING MONEYS ON DEPOSIT AT THE REQUEST OF  THE
   39  PRESIDENT  FOR THE PURPOSES OF THE PROGRAM AND ADMINISTERING SUCH DEPOS-
   40  ITS IN ACCORDANCE WITH SECTIONS NINETY-EIGHT-A AND ONE HUNDRED  FIVE  OF
   41  THIS  CHAPTER  AND  WITH  THE  COMPTROLLER'S ESTABLISHED PROCEDURES; AND
   42  ENTERING INTO DEPOSIT AGREEMENTS WITH LENDERS PURSUANT  TO  SECTION  TWO
   43  HUNDRED THIRTY-TWO OF THIS ARTICLE.
   44    3.  THE  SUPERINTENDENT'S  RESPONSIBILITIES  FOR  THE PROGRAM SHALL BE
   45  LIMITED TO MARKETING AND PROMOTING THE PROGRAM PURSUANT TO  SECTION  TWO
   46  HUNDRED THIRTY-FOUR-B OF THIS ARTICLE.
   47    S  229.  RELEASE  FROM  LINKED  DEPOSITS. THE AUTHORIZED DEPOSITOR MAY
   48  PERMIT FUNDS RELEASED FROM A LINKED DEPOSIT RELATING TO A LINKED LOAN TO
   49  BE MADE AVAILABLE FOR ADDITIONAL LINKED DEPOSITS UNDER THIS PROGRAM.
   50    S 230. LINKED STUDENT LOANS. LINKED STUDENT LOANS  SHALL  BE  MADE  BY
   51  LENDERS  PURSUANT  TO THE PROGRAM ONLY TO ELIGIBLE RECIPIENTS FOR QUALI-
   52  FIED EDUCATIONAL EXPENSES. A LINKED LOAN SHALL BE LIMITED TO  A  MAXIMUM
   53  AMOUNT  OF  SEVEN  THOUSAND  FIVE  HUNDRED DOLLARS PER ACADEMIC YEAR. AN
   54  ELIGIBLE RECIPIENT MAY RECEIVE NO MORE THAN ONE LINKED LOAN PER ACADEMIC
   55  YEAR. DURING THE LIFE OF THE LINKED LOAN PROGRAM, THE  TOTAL  AMOUNT  OF
   56  MONEY THAT AN ELIGIBLE RECIPIENT CAN BORROW FROM THE LINKED STUDENT LOAN
       S. 3998                             8
    1  PROGRAM SHALL BE THIRTY THOUSAND DOLLARS. THE CREDIT DECISION FOR MAKING
    2  A  LINKED LOAN SHALL BE MADE SOLELY BY THE LENDER, PROVIDED HOWEVER THAT
    3  SUCH LENDER SHALL ENSURE THAT AN ELIGIBLE RECIPIENT  COMPLIES  WITH  THE
    4  PROVISIONS OF THIS ARTICLE, INCLUDING ANY RULES OR REGULATIONS ISSUED BY
    5  THE  PRESIDENT. NOTWITHSTANDING THE LENGTH OF THE TERM OF A LINKED LOAN,
    6  THE LINKED DEPOSIT RELATING TO THE LINKED LOAN SHALL BE FOR A PERIOD  OF
    7  NOT MORE THAN FOUR YEARS.
    8    S  231.  INTEREST  RATE  FOR LINKED LOANS; NO LENDER'S FEES. 1. LINKED
    9  LOANS MADE TO ELIGIBLE RECIPIENTS SHALL BEAR INTEREST AT  A  FIXED  RATE
   10  EQUAL TO THREE PERCENTAGE POINTS BELOW THE FIXED INTEREST RATE THE LEND-
   11  ER  WOULD  HAVE  CHARGED FOR THE LOAN IN THE ABSENCE OF A LINKED DEPOSIT
   12  BASED ON ITS USUAL CREDIT CONSIDERATIONS. LENDERS SHALL CERTIFY  TO  THE
   13  PRESIDENT THAT THE RATE TO BE CHARGED ON A LINKED LOAN IS THREE PERCENT-
   14  AGE POINTS BELOW THE INTEREST RATE THE LENDER WOULD HAVE CHARGED FOR THE
   15  LOAN IN THE ABSENCE OF A LINKED DEPOSIT.
   16    2.  LENDERS  WHO MAKE LOANS PURSUANT TO THE PROGRAM SHALL NOT BE ENTI-
   17  TLED TO CHARGE ANY DISCOUNT, POINTS, ORIGINATION  FEES,  HANDLING  FEES,
   18  SERVICE  CHARGES, REFINANCING FEES OR PENALTIES OR ANY CHARGE OTHER THAN
   19  THOSE NORMALLY CHARGED AND IN SUCH AMOUNTS NORMALLY CHARGED BY THE LEND-
   20  ER FOR LOANS OF THE TYPE BEING MADE WITHOUT REGARD TO THE PROGRAM.
   21    S 232. APPLICATION PROCEDURE. 1. THE PRESIDENT, WITH THE ASSISTANCE OF
   22  THE SUPERINTENDENT OF THE DEPARTMENT,  SHALL  ESTABLISH  PROCEDURES  AND
   23  OTHER REQUIREMENTS FOR PARTICIPATION IN THE PROGRAM, AND SHALL PROVIDE A
   24  SIMPLIFIED  APPLICATION  FORM  TO  THE  PARTICIPATING LENDERS FOR LINKED
   25  DEPOSITS.  SUCH FORM SHALL REFLECT THE QUALIFYING  INFORMATION  REQUIRED
   26  BY  THIS  ARTICLE  FOR ELIGIBLE LOAN RECIPIENTS.  UPON COMPLETION OF ANY
   27  APPLICATION FOR A LINKED DEPOSIT, THE LENDER SHALL SEND THE APPLICATION,
   28  TOGETHER WITH THE  INTEREST  RATE  CERTIFICATION  REQUIRED  PURSUANT  TO
   29  SECTION  TWO  HUNDRED  THIRTY-ONE  OF THIS ARTICLE, TO THE PRESIDENT WHO
   30  SHALL EITHER APPROVE OR REJECT THE APPLICATION WITHIN TWENTY-EIGHT DAYS.
   31  THE PRESIDENT SHALL EVALUATE EACH APPLICATION BASED UPON  THE  FOLLOWING
   32  CRITERIA:
   33    (A)  THE  EXTENT TO WHICH SUCH LOAN WOULD REDUCE THE LONG-TERM COST OF
   34  FINANCING A STUDENT'S HIGHER EDUCATION;
   35    (B) THE LIKELIHOOD OF THE STUDENT SUCCESSFULLY COMPLETING HIS  OR  HER
   36  HIGHER EDUCATION AND REPAYING THE LOAN WITHIN A TIMELY MANNER; AND
   37    (C) SUCH OTHER CRITERIA AS THE PRESIDENT DEEMS RELEVANT.
   38    2.  IF THE DEPOSIT APPLICATION IS APPROVED BY THE PRESIDENT, HE OR SHE
   39  SHALL NOTIFY AN AUTHORIZED DEPOSITOR THAT A DETERMINATION HAS BEEN  MADE
   40  THAT THE APPLICATION SATISFIES THE REQUIREMENTS OF THIS ARTICLE, AND THE
   41  PRESIDENT  SHALL  REQUEST THE AUTHORIZED DEPOSITOR TO DEPOSIT FUNDS WITH
   42  THE LENDER IN ACCORDANCE WITH SECTION NINETY-EIGHT-A OF THIS CHAPTER AND
   43  WITH THE AUTHORIZED DEPOSITOR'S ESTABLISHED  PROCEDURES.  SUCH  DEPOSITS
   44  SHALL  BE  SECURED  IN  ACCORDANCE  WITH  THE  PROVISIONS OF SECTION ONE
   45  HUNDRED FIVE OF THIS CHAPTER, AND LENDERS RECEIVING SUCH DEPOSITS  SHALL
   46  SATISFY,  IN  THE SOLE JUDGMENT OF THE AUTHORIZED DEPOSITOR, ALL COLLAT-
   47  ERAL AND OTHER REQUIREMENTS GENERALLY APPLIED BY THE  AUTHORIZED  DEPOS-
   48  ITOR TO FUNDS INVESTED BY IT.  THE NOTIFIED AUTHORIZED DEPOSITOR AND THE
   49  LENDER  SHALL  ENTER INTO A WRITTEN DEPOSIT AGREEMENT. IN NO EVENT SHALL
   50  ANY DEFECT IN ANY SUCH AGREEMENT BE ASSERTED AS A DEFENSE BY A  BORROWER
   51  ON A LINKED LOAN MADE PURSUANT TO THE PROGRAM.
   52    S 233. REPAYMENT PERIODS FOR LINKED STUDENT LOANS. THE PRESIDENT SHALL
   53  REQUIRE THAT LINKED STUDENT LOANS ISSUED THROUGH THE PROGRAM OFFER FLEX-
   54  IBLE  REPAYMENT  OPTIONS, INCLUDING THE OPTION OF AN INCOME-BASED REPAY-
   55  MENT PLAN.  SUCH REPAYMENT OPTIONS MAY, IF THE PRESIDENT DEEMS IT ADVIS-
   56  ABLE, BE CONSISTENT WITH THE REPAYMENT TERMS STIPULATED BY  THE  WILLIAM
       S. 3998                             9
    1  D.  FORD FEDERAL DIRECT LOAN PROGRAM AUTHORIZED PURSUANT TO 20 USC CHAP-
    2  TER 28, SUBCHAPTER IV, PART C.
    3    S 234. LIABILITY; EARLY REPAYMENT AND WITHDRAWAL. NOTHING CONTAINED IN
    4  THIS  ARTICLE  SHALL IMPOSE LIABILITY ON THE STATE OR ANY OF ITS DEPART-
    5  MENTS OR EMPLOYEES FOR PAYMENT OR DELAYS IN PAYMENT OF THE PRINCIPAL  OR
    6  INTEREST  OF  A  LINKED  LOAN. ANY DELAY IN PAYMENTS OR ANY DEFAULT ON A
    7  LINKED LOAN SHALL IN NO WAY AFFECT THE LINKED DEPOSIT AGREEMENT  BETWEEN
    8  THE  LENDER  AND  THE  AUTHORIZED  DEPOSITOR.  HOWEVER, IN THE EVENT THE
    9  INTEREST RATE OF THE LINKED LOAN SHALL BE INCREASED AS A CONSEQUENCE  OF
   10  DEFAULT  OR  RENEGOTIATION, OR THE LOAN SHALL BE CHARGED OFF, THE LENDER
   11  SHALL GIVE THE AUTHORIZED DEPOSITOR PROMPT NOTICE OF SUCH EVENT, AND THE
   12  AUTHORIZED DEPOSITOR SHALL THEREAFTER WITHDRAW THE LINKED  DEPOSIT  UPON
   13  NOT LESS THAN SEVEN DAYS' PRIOR WRITTEN NOTICE TO THE LENDER. UPON EARLY
   14  REPAYMENT OF A LINKED LOAN, THE LENDER SHALL WITHIN THIRTY DAYS GIVE THE
   15  AUTHORIZED  DEPOSITOR NOTICE OF SUCH EARLY REPAYMENT, AND THE AUTHORIZED
   16  DEPOSITOR SHALL THEREAFTER WITHDRAW THE LINKED  DEPOSIT  UPON  NOT  LESS
   17  THAN  SEVEN  DAYS'  PRIOR WRITTEN NOTICE TO THE LENDER, AND THE INTEREST
   18  RATE PAYABLE ON THE LINKED DEPOSIT FROM THE DATE OF EARLY  REPAYMENT  OF
   19  THE LINKED LOAN TO THE DATE OF WITHDRAWAL OF THE LINKED DEPOSIT SHALL BE
   20  THE INTEREST RATE UPON WHICH THE LINKED DEPOSIT INTEREST RATE WAS CALCU-
   21  LATED WITHOUT REGARD TO THE APPLICABLE BASIS POINT REDUCTION.
   22    S  234-A.  MONITORING  AND  REPORT. 1. THE PRESIDENT SHALL MONITOR THE
   23  ACTIVITIES OF PARTICIPATING LENDERS AND LOAN RECIPIENTS AND MAY  REQUIRE
   24  PERIODIC REPORTS OR OTHER INFORMATION THE PRESIDENT DEEMS NECESSARY FROM
   25  PARTICIPATING  LENDERS  AND  LOAN RECIPIENTS ON THE STATUS OF THE LINKED
   26  LOANS TO ENSURE COMPLIANCE WITH THE PROVISIONS AND THE  INTENT  OF  THIS
   27  ARTICLE.
   28    2.  ON  OR  BEFORE  DECEMBER FIRST, TWO THOUSAND FIFTEEN, AND ANNUALLY
   29  THEREAFTER THE PRESIDENT SHALL SUBMIT TO  THE  GOVERNOR,  THE  TEMPORARY
   30  PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY A REPORT REGARD-
   31  ING THE ACTIVITIES OF THE PROGRAM. SUCH REPORT SHALL CONTAIN A STATEMENT
   32  OF  THE COST OF THE PROGRAM TO THE STATE, CONSIDERED AS A WHOLE, BECAUSE
   33  OF REDUCED RATES ON FUNDS INVESTED IN LINKED DEPOSITS. SUCH REPORT SHALL
   34  ALSO INCLUDE, BUT SHALL NOT BE LIMITED TO, THE NUMBER AND TYPE OF LINKED
   35  LOANS UNDER THE PROGRAM AND THE AMOUNT THEREOF; THE NUMBER AND TYPES  OF
   36  LENDERS  MAKING  LINKED LOANS AND OF INDIVIDUALS RECEIVING LINKED LOANS;
   37  THE GEOGRAPHIC DISTRIBUTION OF SUCH LENDERS  AND  RECIPIENTS,  INCLUDING
   38  THE STEPS TAKEN TO ENSURE GEOGRAPHIC DIVERSITY AMONG PARTICIPATING LEND-
   39  ERS, AS WELL AS ANY INFORMATION THE PRESIDENT DETERMINES USEFUL IN EVAL-
   40  UATING THE BENEFITS OF THE PROGRAM.
   41    S  234-B. PROMOTION OF PROGRAM. THE DEPARTMENT, WITH THE ASSISTANCE OF
   42  OTHER APPROPRIATE STATE AGENCIES,  SHALL  ACTIVELY  MARKET  AND  PROMOTE
   43  AWARENESS  OF  THE  PROGRAM IN ALL GEOGRAPHICAL AREAS OF THE STATE AMONG
   44  COMMERCIAL BANKS, THRIFTS AND OTHER APPROPRIATE BANKING ORGANIZATIONS.
   45    S 234-C. RULES AND REGULATIONS. THE PRESIDENT SHALL,  IN  CONSULTATION
   46  WITH  THE  COMPTROLLER  AND  THE  SUPERINTENDENT  OF FINANCIAL SERVICES,
   47  PROMULGATE RULES AND REGULATIONS NECESSARY AND REASONABLE FOR THE OPERA-
   48  TION OF THE PROGRAM.
   49    S 5. This act shall take effect on the one hundred eightieth day after
   50  it shall have become a law, provided however that effective immediately,
   51  the addition, amendment and/or repeal of any rules or regulations neces-
   52  sary for implementation of the foregoing sections of  this  act  on  its
   53  effective date is authorized and directed to be made and completed on or
   54  before such effective date.
   55                                   PART C
       S. 3998                            10
    1    Section  1. Paragraphs 6 and 7 of subsection (c) of section 301 of the
    2  financial services law are amended and a new paragraph  8  is  added  to
    3  read as follows:
    4    (6)  providing  technical assistance to local governments and not-for-
    5  profits in the development of consumer protection measures with  respect
    6  to financial products and services; [and]
    7    (7)   continuing   and  expanding  the  detection,  investigation  and
    8  prevention of insurance fraud[.]; AND
    9    (8) ESTABLISHING AND ADMINISTERING THE "STUDENT  LENDING  TRANSPARENCY
   10  PROGRAM" PURSUANT TO ARTICLE SIX OF THIS CHAPTER.
   11    S  2.  The financial services law is amended by adding a new article 6
   12  to read as follows:
   13                                  ARTICLE 6
   14                    STUDENT LENDING TRANSPARENCY PROGRAM
   15  SECTION 601. DEFINITIONS.
   16          602. STUDENT LENDING TRANSPARENCY PROGRAM.
   17          603. RULES AND REGULATIONS.
   18    S 601. DEFINITIONS. THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEAN-
   19  INGS WHEN USED IN THIS ARTICLE:
   20    A. "PRIVATE STUDENT LOANS" SHALL MEAN  A  PRIVATE  LOAN  ISSUED  BY  A
   21  PRIVATE  LENDING INSTITUTION FOR THE PURPOSES OF PAYING FOR OR FINANCING
   22  HIGHER EDUCATION EXPENSES.
   23    B. "PRIVATE LENDING INSTITUTIONS" OR "PRIVATE LENDERS" SHALL MEAN  ANY
   24  PRIVATE  ENTITY  THAT  ITSELF  OR  THROUGH  AN AFFILIATE MAKES AVAILABLE
   25  STUDENT LOANS TO PAY FOR OR FINANCE HIGHER EDUCATION EXPENSES.
   26    C. "STUDENT BORROWER" SHALL MEAN ANY INDIVIDUAL WHO BORROWS MONEY FROM
   27  A PRIVATE LENDING INSTITUTION TO FINANCE HIGHER EDUCATION EXPENSES.
   28    D. "HIGHER EDUCATION EXPENSES" SHALL INCLUDE THE FOLLOWING:
   29    (I) TUITION AND FEES;
   30    (II) BOOKS AND SUPPLIES; AND
   31    (III) ROOM AND BOARD.
   32    S 602. STUDENT LENDING TRANSPARENCY  PROGRAM.  1.  THE  SUPERINTENDENT
   33  SHALL  ESTABLISH  A  PROGRAM  TO COMPILE DATA RELATED TO PRIVATE STUDENT
   34  LOANS FOR THE PURPOSE OF COMPARING PRIVATE LENDING INSTITUTIONS' STUDENT
   35  LOAN INTEREST RATES AND REPAYMENT PLANS, INCLUDING POLICIES RELATING  TO
   36  DEFERMENT AND FORBEARANCE, DEFAULT POLICIES AND PENALTIES, AND ANY OTHER
   37  INFORMATION  THAT  THE  SUPERINTENDENT DEEMS RELEVANT FOR THE PURPOSE OF
   38  CREATING A LIST OF PRIVATE LENDERS WHO PROVIDE THE LOWEST RATES AND BEST
   39  REPAYMENT OPTIONS ON STUDENT LOANS. SUCH LIST SHALL BE CREATED AND MAIN-
   40  TAINED BY THE SUPERINTENDENT OR HIS DESIGNEE AND SHALL BE PLACED  ON  AN
   41  EASILY  ACCESSIBLE  WEBSITE THAT SHALL BE MADE AVAILABLE TO BE LINKED TO
   42  THE WEBSITE OF THE HIGHER EDUCATION  SERVICES  CORPORATION  PURSUANT  TO
   43  SUBDIVISION  THIRTEEN OF SECTION SIX HUNDRED FIFTY-FIVE OF THE EDUCATION
   44  LAW AND TO COLLEGES AND UNIVERSITIES WEBSITES PURSUANT TO ARTICLE  FOUR-
   45  TEEN-B OF THE EDUCATION LAW.
   46    2. SUCH WEBSITE SHALL BE UPDATED ON A MONTHLY BASIS TO ENSURE THAT THE
   47  STUDENT  LOAN INFORMATION IS CURRENT AND ACCURATE. THE SUPERINTENDENT OR
   48  HIS OR HER DESIGNEE SHALL COMPILE A LIST OF THE  TOP  TEN  BEST  PRIVATE
   49  LENDING INSTITUTIONS BASED UPON RATES AND POLICIES THAT ARE MOST FAVORA-
   50  BLE  TO  THE  STUDENT BORROWER. THE SUPERINTENDENT MAY ALSO CONSIDER THE
   51  PRIVATE LENDING INSTITUTIONS POLICIES FOR ALLOWING A STUDENT BORROWER TO
   52  BORROW MORE THAN TEN PERCENT OVER SUCH STUDENT BORROWER'S TOTAL COST  OF
   53  HIGHER EDUCATION EXPENSES WHEN DETERMINING IF A PRIVATE LENDING INSTITU-
   54  TION  SHOULD  BE  PLACED ON SUCH LIST. INFORMATION PERTAINING TO LENDING
   55  INSTITUTIONS THAT DO NOT MAKE THE TOP TEN LIST SHALL ALSO BE  POSTED  ON
       S. 3998                            11
    1  SUCH WEBSITE AND THOSE LENDING INSTITUTIONS THAT PROVIDE THE WORST RATES
    2  AND STRICTEST REPAYMENT OPTIONS SHALL BE CLEARLY INDICATED.
    3    S  603. RULES AND REGULATIONS. THE SUPERINTENDENT SHALL PROMULGATE ALL
    4  RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE.
    5    S 3. Section 655 of the education law  is  amended  by  adding  a  new
    6  subdivision 13 to read as follows:
    7    13. TO CREATE A LINK ON THE CORPORATION'S WEBSITE TO THE DEPARTMENT OF
    8  FINANCIAL  SERVICES  WEBSITE  PURSUANT TO SUBDIVISION ONE OF SECTION SIX
    9  HUNDRED TWO OF THE FINANCIAL SERVICES LAW.
   10    S 4. The education law is amended by adding a new article 14-B to read
   11  as follows:
   12                                ARTICLE 14-B
   13                    STUDENT LENDING TRANSPARENCY PROGRAM
   14  SECTION 697. CREATION OF PROGRAM.
   15          698. ACCESS TO INFORMATION.
   16          699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES.
   17    S 697. CREATION OF PROGRAM. THE STUDENT LENDING  TRANSPARENCY  PROGRAM
   18  IS HEREBY ESTABLISHED TO ENSURE THAT NEW YORK STATE COLLEGES PROVIDE THE
   19  MOST ACCURATE AND TRANSPARENT INFORMATION WITH REGARD TO STUDENT LOANS.
   20    S  698.  ACCESS TO INFORMATION. NOTWITHSTANDING ANY OTHER LAW, RULE OR
   21  REGULATION TO THE CONTRARY,  NEW  YORK  STATE  COLLEGES  AS  DEFINED  IN
   22  SECTION  SIX  HUNDRED ONE OF THIS TITLE, SHALL BE REQUIRED THROUGH THEIR
   23  FINANCIAL AID OFFICES  TO  PROVIDE  TO  PROSPECTIVE  OR  NEWLY  ACCEPTED
   24  STUDENTS AND PARENTS CLEARLY OUTLINED AND EASY TO UNDERSTAND INFORMATION
   25  PERTAINING  TO  THE  TOTAL  COST OF ATTENDANCE AT THEIR INSTITUTION, THE
   26  APPROXIMATE OR ACTUAL TOTAL AMOUNT OF FINANCIAL AID THEY  WOULD  RECEIVE
   27  FROM  SUCH  INSTITUTION  AND  THE  APPROXIMATE OR ACTUAL TOTAL AMOUNT OF
   28  STUDENT LOAN DEBT THEY WOULD ACCUMULATE OVER THE COURSE OF FOUR YEARS IF
   29  THEY ATTENDED SUCH COLLEGE. THE INFORMATION PROVIDED MUST  ALSO  INCLUDE
   30  STUDENT LOAN RATES, INFORMATION ON REPAYMENT PLANS AND DEFAULT RATES AND
   31  THE  ACTUAL  COST  OF THE AVERAGE MONTHLY PAYMENT THAT WOULD BE REQUIRED
   32  UPON GRADUATION WHEN SUCH LOANS WOULD BECOME DUE.
   33    S 699. LINKS TO DEPARTMENT  OF  FINANCIAL  SERVICES.  NEW  YORK  STATE
   34  COLLEGES  THAT  MAINTAIN  AN  OFFICIAL  COLLEGE  WEBSITE  SHALL  ALSO BE
   35  REQUIRED TO ADD A LINK ON EACH OF THEIR WEBSITES TO  THE  DEPARTMENT  OF
   36  FINANCIAL  SERVICES  WEBSITE  ON  STUDENT  LENDING  TRANSPARENCY CREATED
   37  PURSUANT TO ARTICLE SIX OF THE FINANCIAL SERVICES LAW.
   38    S 5. This act shall take effect on the one hundred eightieth day after
   39  it shall have become a law.
   40                                   PART D
   41    Section 1.  The education law is amended by adding a new section 355-d
   42  to read as follows:
   43    S 355-D. NEW YORK STATE PRE-PAY  TUITION  SAVINGS  PROGRAM.    1.  FOR
   44  PURPOSES  OF  THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING
   45  MEANINGS:
   46    A. "PARTICIPANT" SHALL MEAN A NEW YORK STATE RESIDENT WHO  ENROLLS  AN
   47  ELIGIBLE  CHILD AND MAKES PAYMENTS ON BEHALF OF SUCH ELIGIBLE CHILD, AND
   48  SHALL INCLUDE BUT NOT BE LIMITED TO  SUCH  ELIGIBLE  CHILD'S  PARENT  OR
   49  GUARDIAN.
   50    B. "ELIGIBLE CHILD" SHALL MEAN A CHILD FIVE YEARS OF AGE OR OLDER, WHO
   51  IS  ENROLLED  IN THE NEW YORK STATE PRE-PAY TUITION PROGRAM BY A PARTIC-
   52  IPANT.
   53    C. "THE FUND" SHALL MEAN THE  NEW  YORK  STATE  PRE-PAY  TUITION  FUND
   54  ESTABLISHED BY SECTION NINETY-NINE-U OF THE STATE FINANCE LAW.
       S. 3998                            12
    1    D. "TOTAL COST OF EDUCATION" SHALL MEAN THE AVERAGE SYSTEM-WIDE YEARLY
    2  TOTAL  COST OF A FOUR YEAR EDUCATION AT THE STATE UNIVERSITY OF NEW YORK
    3  INCLUDING TUITION, ROOM AND BOARD AND ALL APPLICABLE FEES.  DURING  EACH
    4  YEAR  OF  PARTICIPATION, THE TOTAL COST OF EDUCATION SHALL BE CALCULATED
    5  BASED UPON THE CURRENT YEAR'S COST UNTIL THE FINAL PAYMENT IS MADE.
    6    2. THE NEW YORK STATE PRE-PAY TUITION SAVINGS PROGRAM IS HEREBY ESTAB-
    7  LISHED  AND  SHALL  BE CONTROLLED AND ADMINISTERED BY THE NEW YORK STATE
    8  COMPTROLLER OR HIS OR HER DESIGNEE IN CONSULTATION WITH  THE  CHANCELLOR
    9  OF  THE  STATE  UNIVERSITY OF NEW YORK (SUNY) OR HIS OR HER DESIGNEE AND
   10  THE CHANCELLOR OF THE CITY UNIVERSITY OF NEW YORK (CUNY) OR HIS  OR  HER
   11  DESIGNEE.
   12    3.  A.    A PARTICIPANT MAY ENROLL AN ELIGIBLE CHILD BEGINNING AT FIVE
   13  YEARS OF AGE AND PAY ONE-THIRD OF THE TOTAL COST OF EDUCATION EACH  YEAR
   14  FOR THE DURATION OF TWELVE CONSECUTIVE YEARS.
   15    B.  A  PARTICIPANT MAY ENROLL AN ELIGIBLE CHILD BEGINNING AT SIX YEARS
   16  OF AGE AND PAY ONE-THIRD OF THE TOTAL COST OF EDUCATION  EACH  YEAR  FOR
   17  THE DURATION OF TWELVE YEARS.
   18    C.  IF  A PARTICIPANT ENROLLS AN ELIGIBLE CHILD AT AGE SEVEN OR THERE-
   19  AFTER, YEARLY PAYMENTS SHALL BE DETERMINED BY THE SUNY CHANCELLOR OR HIS
   20  OR HER DESIGNEE AND APPROVED BY THE STATE  COMPTROLLER  OR  HIS  OR  HER
   21  DESIGNEE BASED UPON A FORMULA THAT CONSIDERS THE CHILD'S AGE AT THE TIME
   22  OF ENROLLMENT AND EVENLY DIVIDES THE YEARLY AVERAGE TOTAL COST OF A FOUR
   23  YEAR  SUNY  EDUCATION BUT ENSURES THAT THE LAST PAYMENT WILL BE RECEIVED
   24  WITHIN THE CALENDAR YEAR WHEN THE ELIGIBLE CHILD GRADUATES OR IS  SCHED-
   25  ULED TO GRADUATE HIGH SCHOOL.
   26    D.  (1)  UPON  ENROLLMENT  OF  AN ELIGIBLE CHILD INTO THE PROGRAM, THE
   27  PARTICIPANT SHALL RECEIVE A BILL FROM THE STATE COMPTROLLER  OR  HIS  OR
   28  HER  DESIGNEE CLEARLY STATING THE TOTAL COST OF EDUCATION FOR THAT YEAR,
   29  AND THE MONTHLY PAYMENT AMOUNT DUE TO BE DEPOSITED IN THE FUND, PROVIDED
   30  HOWEVER, THAT AT ANY TIME WITHIN SUCH YEAR, THE TOTAL COST OF  EDUCATION
   31  FOR THAT YEAR MAY BE PAID IN FULL WITHOUT PENALTY.
   32    (2)  PROVIDED  FURTHER HOWEVER, THAT A PAYMENT PLAN OTHER THAN MONTHLY
   33  BILLING MAY BE ESTABLISHED BASED ON RULES  AND  REGULATIONS  PROMULGATED
   34  PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
   35    E.  (1)  PAYMENTS  DEPOSITED  INTO  THE FUND SHALL NOT BE ELIGIBLE FOR
   36  WITHDRAWAL AT ANY TIME BEFORE THE ELIGIBLE CHILD FOR  WHOM  THE  PARTIC-
   37  IPANT  IS  PAYING,  REACHES THE AGE OF HIGH SCHOOL GRADUATION OR THE AGE
   38  WHEN SUCH CHILD SHOULD HAVE GRADUATED.
   39    (2) UPON THE ELIGIBLE CHILD REACHING THE AGE  OF  HIGH  SCHOOL  GRADU-
   40  ATION,  THE  PARTICIPANT  MAY  CHOOSE TO WITHDRAW THE TOTAL BALANCE THAT
   41  SUCH PARTICIPANT PAID INTO THE FUND AND NO  LONGER  PARTICIPATE  IN  THE
   42  PROGRAM.
   43    F.  (1) UPON SUBMISSION OF THE LAST PAYMENT, THE ACTUAL COST OF WHAT A
   44  TWO YEAR PROGRAM AT SUNY, A TWO YEAR PROGRAM AT CUNY  AND  A  FOUR  YEAR
   45  PROGRAM  AT  CUNY  WOULD  HAVE  COST  IN  EACH  YEAR  THAT A PARTICIPANT
   46  COMPLETED PAYMENTS FOR THE FIRST YEAR, THE SECOND YEAR, THE  THIRD  YEAR
   47  AND THE FOURTH YEAR OF THE TOTAL COST OF EDUCATION, SHALL BE CALCULATED.
   48    (2)  THE  ACTUAL  COST  SHALL  BE CALCULATED IN THE SAME MANNER AS THE
   49  TOTAL COST OF EDUCATION BY THE COMPTROLLER OR HIS  OR  HER  DESIGNEE  IN
   50  CONSULTATION  WITH  THE  SUNY  CHANCELLOR OR HIS OR HER DESIGNEE AND THE
   51  CUNY CHANCELLOR OR HIS OR HER DESIGNEE.
   52    G. ONCE AN ELIGIBLE CHILD HAS GRADUATED HIGH SCHOOL OR HAS REACHED THE
   53  AGE OF SUCH CHILD'S SCHEDULED HIGH SCHOOL GRADUATION, AND  IT  HAS  BEEN
   54  DETERMINED THAT ALL REQUIRED PAYMENTS HAVE BEEN DEPOSITED INTO THE FUND,
   55  THE PARTICIPANTS HAVE THE FOLLOWING OPTIONS:
       S. 3998                            13
    1    (1)  SUNY.  (I)  IF  A  PARTICIPANT'S  ELIGIBLE  CHILD  APPLIES TO, IS
    2  ACCEPTED TO, AND ENROLLS IN A FOUR YEAR DEGREE  PROGRAM  AT  SUNY,  THEN
    3  SUCH  ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND FOR
    4  THE DURATION OF FOUR CONSECUTIVE YEARS IN  SUCH  SUNY  PROGRAM  AND  THE
    5  COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE
    6  AND  PROVIDE  ANY  REFUNDS  DUE TO THE PARTICIPANT, BASED UPON RULES AND
    7  REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
    8    (II) (A) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO,  GETS  ACCEPTED
    9  TO,  AND  ENROLLS  IN  A  TWO  YEAR  PROGRAM AT SUNY, THEN SUCH ELIGIBLE
   10  CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET  TO  ATTEND  AND  THE  COMP-
   11  TROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND
   12  SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR THE DIFFERENCE BETWEEN THE
   13  COST  OF  A  TWO  YEAR  PROGRAM AND THE FOUR YEAR PROGRAM FOR WHICH THEY
   14  PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO  THE  PARTICIPANT,  CALCU-
   15  LATED  UPON  SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT AND BASED UPON
   16  RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR  OF  THIS
   17  SECTION.
   18    (B)  AT  THAT TIME, SUCH PARTICIPANT SHALL HAVE THE OPTION TO WITHDRAW
   19  THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO  THE  FUND,
   20  OR  MAY CHOOSE TO KEEP THE REMAINDER IN THE FUND TO BE APPLIED TO A FOUR
   21  YEAR PROGRAM IN THE EVENT THAT THE ELIGIBLE CHILD TRANSFERS  TO  A  FOUR
   22  YEAR PROGRAM.
   23    (C)  IF  SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT CUNY,
   24  THE PARTICIPANT SHALL RECEIVE A REFUND FOR THE  DIFFERENCE  BETWEEN  THE
   25  ACTUAL  COST  OF  EDUCATION  AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH
   26  THEY PAID, INCLUDING ANY ADDITIONAL  REFUNDS  DUE  TO  THE  PARTICIPANT,
   27  CALCULATED  AT  THE  TIME  OF  THE  SUBMISSION OF THE PARTICIPANT'S LAST
   28  PAYMENT.
   29    (III) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT A NEW
   30  YORK STATE PRIVATE SCHOOL,  THE  PARTICIPANT  MAY  CHOOSE  TO  HAVE  THE
   31  REMAINDER  OF  THE  BALANCE  THAT  SUCH  PARTICIPANT PAID INTO THE FUND,
   32  APPLIED TO THE COST OF EDUCATION AT SUCH PRIVATE SCHOOL.
   33    (IV) IF SUCH ELIGIBLE CHILD TRANSFERS TO AN OUT-OF-STATE COLLEGE,  THE
   34  PARTICIPANT SHALL RECEIVE THE REMAINDER OF THE BALANCE THAT SUCH PARTIC-
   35  IPANT PAID INTO THE FUND.
   36    (2)  CUNY.  (I)  IF  A  PARTICIPANT'S  ELIGIBLE CHILD APPLIES TO, GETS
   37  ACCEPTED TO AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM AT CUNY, THEN SUCH
   38  ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND  AND  THE
   39  COMPTROLLER  OR  HIS  OR  HER  DESIGNEE  SHALL  SUBMIT  PAYMENTS TO SUCH
   40  COLLEGE, AND SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR  THE  DIFFER-
   41  ENCE  BETWEEN  THE  ACTUAL  COST OF EDUCATION FOR A FOUR YEAR PROGRAM AT
   42  CUNY AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY  ADDI-
   43  TIONAL  REFUNDS  DUE  TO  THE PARTICIPANT, CALCULATED AT THE TIME OF THE
   44  SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT BASED UPON RULES AND  REGU-
   45  LATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
   46    (II)  (A)  IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED
   47  TO AND ENROLLS IN A TWO YEAR PROGRAM AT CUNY, THEN SUCH ELIGIBLE CHILD'S
   48  FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMPTROLLER OR HIS
   49  OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND SHALL  PROVIDE
   50  A REFUND TO THE PARTICIPANT FOR THE DIFFERENCE BETWEEN THE COST OF A TWO
   51  YEAR  PROGRAM  AND  THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING
   52  ANY  ADDITIONAL  REFUNDS  DUE  TO  THE  PARTICIPANT,   CALCULATED   UPON
   53  SUBMISSION  OF  THE  PARTICIPANT'S LAST PAYMENT AND BASED UPON RULES AND
   54  REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
   55    (B) AT THAT TIME, SUCH PARTICIPANT SHALL HAVE THE OPTION  TO  WITHDRAW
   56  THE  REMAINDER  OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND,
       S. 3998                            14
    1  OR MAY CHOOSE TO KEEP THE REMAINDER IN THE FUND TO BE APPLIED TO A  FOUR
    2  YEAR  PROGRAM  IN  THE EVENT THAT THE ELIGIBLE CHILD TRANSFERS TO A FOUR
    3  YEAR PROGRAM.
    4    (C)  IF  SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT CUNY,
    5  THE PARTICIPANT SHALL RECEIVE A REFUND FOR THE  DIFFERENCE  BETWEEN  THE
    6  ACTUAL  COST  OF  EDUCATION  AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH
    7  THEY PAID, INCLUDING ANY ADDITIONAL  REFUNDS  DUE  TO  THE  PARTICIPANT,
    8  CALCULATED  AT  THE  TIME  OF  THE  SUBMISSION OF THE PARTICIPANT'S LAST
    9  PAYMENT.
   10    (D) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM  AT  SUNY,
   11  THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND
   12  AND THE COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH
   13  COLLEGE,  AND  PROVIDE  ANY  REFUNDS  DUE TO THE PARTICIPANT, BASED UPON
   14  RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR  OF  THIS
   15  SECTION.
   16    (III)  IF  AN  ELIGIBLE  STUDENT TRANSFERS TO A NEW YORK STATE PRIVATE
   17  SCHOOL, THE PARTICIPANT MAY CHOOSE TO HAVE THE REMAINDER OF THE  BALANCE
   18  THAT  SUCH PARTICIPANT PAID INTO THE FUND, APPLIED TO THE COST OF EDUCA-
   19  TION AT SUCH PRIVATE SCHOOL.
   20    (IV) IF SUCH ELIGIBLE CHILD TRANSFERS TO AN OUT-OF-STATE COLLEGE,  THE
   21  PARTICIPANT SHALL RECEIVE THE REMAINDER OF THE BALANCE THAT SUCH PARTIC-
   22  IPANT PAID INTO THE FUND.
   23    (3)  NEW  YORK STATE PRIVATE SCHOOL. IF A PARTICIPANT'S ELIGIBLE CHILD
   24  APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN A FOUR YEAR  DEGREE  PROGRAM
   25  OR  A  TWO  YEAR  DEGREE  PROGRAM  AT A NEW YORK STATE PRIVATE SCHOOL, A
   26  PARTICIPANT MAY CHOOSE TO HAVE THE BALANCE THAT  SUCH  PARTICIPANT  PAID
   27  INTO THE FUND APPLIED TO THE COST OF EDUCATION AT SUCH PRIVATE SCHOOL OR
   28  SUCH PARTICIPANT MAY CHOOSE TO WITHDRAW THE TOTAL CONTRIBUTION THAT SUCH
   29  PARTICIPANT  PAID INTO THE FUND BASED UPON RULES AND REGULATIONS PROMUL-
   30  GATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
   31    (4) OUT-OF-STATE SCHOOL  OR  NON-ACCEPTANCE  INTO  A  NEW  YORK  STATE
   32  COLLEGE, OR IF AN ELIGIBLE CHILD DOES NOT APPLY TO COLLEGE. IF A PARTIC-
   33  IPANT'S  ELIGIBLE  CHILD  APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN AN
   34  OUT-OF-STATE SCHOOL OR IF A PARTICIPANT'S ELIGIBLE CHILD  DOES  NOT  GET
   35  ACCEPTED  INTO  A  NEW  YORK  STATE  COLLEGE,  OR  CHOOSES NOT TO ATTEND
   36  COLLEGE, THEN SUCH PARTICIPANT SHALL  WITHDRAW  THE  TOTAL  CONTRIBUTION
   37  THAT  SUCH  PARTICIPANT  PAID  INTO  THE FUND BASED UPON RULES AND REGU-
   38  LATIONS PROMULGATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
   39    (5) NON-PAYMENT.  (I)  IF  A  PARTICIPANT  CANNOT  MAKE  THE  REQUIRED
   40  PAYMENTS  AT  ANY  TIME AFTER ENROLLMENT OF AN ELIGIBLE CHILD, THEN SUCH
   41  PARTICIPANT MAY WITHDRAW THE BALANCE THAT SUCH PARTICIPANT HAS PAID INTO
   42  THE FUND AT SUCH TIME THAT THE ELIGIBLE CHILD GRADUATES HIGH  SCHOOL  OR
   43  REACHES THE AGE OF SCHEDULED GRADUATION.
   44    (II)  IF  SUCH  PARTICIPANT CANNOT MAKE PAYMENT BUT WISHES TO CONTINUE
   45  PAYING INTO THE PROGRAM, SUCH PARTICIPANT MAY RESUME PAYMENTS CALCULATED
   46  UNDER A NEW SCHEDULE BASED UPON THE ELIGIBLE CHILD'S CURRENT AGE AND THE
   47  CURRENT TOTAL COST OF EDUCATION.
   48    (6) DEATH OF ELIGIBLE CHILD. IN THE EVENT OF THE DEATH OF AN  ENROLLED
   49  ELIGIBLE CHILD, THE PARTICIPANT MAY WITHDRAW THE TOTAL BALANCE THAT SUCH
   50  PARTICIPANT PAID INTO THE FUND OR MAY ELECT TO HAVE A SCHOLARSHIP IN THE
   51  AMOUNT  OF  SUCH TOTAL BALANCE AWARDED TO ANOTHER STUDENT IN THE NAME OF
   52  SUCH DECEASED ELIGIBLE CHILD, UPON SUBMISSION OF A DEATH CERTIFICATE AND
   53  BASED UPON RULES AND REGULATIONS  PROMULGATED  PURSUANT  TO  SUBDIVISION
   54  FOUR OF THIS SECTION.
   55    4.  THE  COMPTROLLER  OR HIS OR HER DESIGNEE, IN CONSULTATION WITH THE
   56  SUNY CHANCELLOR OR HIS OR HER DESIGNEE AND THE CUNY CHANCELLOR OR HIS OR
       S. 3998                            15
    1  HER DESIGNEE, SHALL PROMULGATE ALL NECESSARY RULES AND  REGULATIONS  FOR
    2  THE  SUCCESSFUL  IMPLEMENTATION  OF THIS SECTION.   SUCH RULES AND REGU-
    3  LATIONS SHALL INCLUDE PROVISIONS TO ADDRESS AN ELIGIBLE  CHILD'S  ELIGI-
    4  BILITY  FOR TUITION ASSISTANCE PROGRAM AWARDS OR ANY OTHER SCHOLARSHIPS,
    5  GRANTS OR AWARDS, TO ENSURE THAT THE VALUE OF SUCH AWARDS IS REFUNDED TO
    6  THAT PARTICIPANT OR ELIGIBLE CHILD.
    7    S 2. The state finance law is amended by adding a new section 99-u  to
    8  read as follows:
    9    S  99-U.  NEW  YORK  STATE  PRE-PAY TUITION FUND.   1. THERE IS HEREBY
   10  ESTABLISHED WITHIN THE CUSTODY OF THE STATE COMPTROLLER, OR HIS  OR  HER
   11  DESIGNEE,  IN CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIG-
   12  NEE AND THE CUNY CHANCELLOR OR HIS OR HER DESIGNEE, A  NEW  FUND  TO  BE
   13  KNOWN AS THE NEW YORK STATE PRE-PAY TUITION FUND.
   14    2.  ALL MONIES RECEIVED PURSUANT TO THE NEW YORK STATE PRE-PAY TUITION
   15  PROGRAM SHALL BE DEPOSITED INTO THIS FUND AND SHALL BE MANAGED  PURSUANT
   16  TO SECTION THREE HUNDRED FIFTY-FIVE-D OF THE EDUCATION LAW.
   17    3.  ALL  NECESSARY  RULES  AND REGULATIONS FOR THE SUCCESSFUL ADMINIS-
   18  TRATION, INVESTMENT AND MANAGEMENT OF SUCH FUND SHALL BE PROMULGATED  BY
   19  THE  STATE  COMPTROLLER  OR HIS OR HER DESIGNEE IN CONSULTATION WITH THE
   20  SUNY CHANCELLOR OR HIS OR HER DESIGNEE OR THE CUNY CHANCELLOR OR HIS  OR
   21  HER DESIGNEE.
   22    S 3.  Paragraph 33 of subsection (c) of section 612 of the tax law, as
   23  added by chapter 546 of the laws of 1997, is amended to read as follows:
   24    (33) Distributions from a family tuition account established under the
   25  New York state college choice tuition savings program provided for under
   26  article  fourteen-A  of  the education law OR DISTRIBUTIONS FROM THE NEW
   27  YORK STATE PRE-PAY TUITION SAVINGS PROGRAM PROVIDED  FOR  UNDER  SECTION
   28  THREE  HUNDRED FIFTY-FIVE-D OF THE EDUCATION LAW, to the extent includi-
   29  ble in gross income for federal income tax purposes.
   30    S 4. Nothing in this act shall be construed  to  guarantee  acceptance
   31  into any New York state college.
   32    S  5. This act shall take effect one year after it shall have become a
   33  law; provided however that effective  immediately  the  New  York  state
   34  comptroller  or his or her designee, in consultation with the chancellor
   35  of the state university of New York or his or her designee and the chan-
   36  cellor of the city university of New York or his or her designee,  shall
   37  promulgate  all necessary rules and regulations for the timely implemen-
   38  tation of this act on or before such effective date.
   39    S 2. Severability. If any clause, sentence, paragraph, section or part
   40  of this act shall be adjudged by any court of competent jurisdiction  to
   41  be  invalid  and  after  exhaustion  of all further judicial review, the
   42  judgment shall not affect, impair, or invalidate the remainder  thereof,
   43  but  shall  be  confined in its operation to the clause, sentence, para-
   44  graph, section or part of this act directly involved in the  controversy
   45  in which the judgment shall have been rendered.
   46    S  3.  This  act shall take effect immediately provided, however, that
   47  the applicable effective date of Parts A through D of this act shall  be
   48  as specifically set forth in the last section of such Parts.
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