Bill S7449A-2011

Enacts various legislation designed to make college more affordable for the citizens of the state

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

Details

Actions

  • Jun 4, 2012: referred to higher education
  • Jun 4, 2012: DELIVERED TO ASSEMBLY
  • Jun 4, 2012: PASSED SENATE
  • May 30, 2012: ORDERED TO THIRD READING CAL.970
  • May 25, 2012: PRINT NUMBER 7449A
  • May 25, 2012: AMEND (T) AND RECOMMIT TO RULES
  • May 18, 2012: REFERRED TO RULES

Votes

VOTE: COMMITTEE VOTE: - Rules - May 30, 2012
Ayes (21): Skelos, Alesi, Farley, Fuschillo, Hannon, Larkin, LaValle, Libous, Marcellino, Maziarz, Nozzolio, Saland, Seward, Sampson, Breslin, Dilan, Hassell-Thompson, Montgomery, Perkins, Smith, Stewart-Cousins
Ayes W/R (3): Duane, Krueger, Parker
Excused (1): Johnson

Memo

BILL NUMBER:S7449A

TITLE OF BILL:

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 education law, in relation to the creation of the New York state tuition savings program; to amend the state finance law, in relation to establishing 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)

PURPOSE OR GENERAL IDEA OF BILL:

This bill would create a new program, entitled the College Affordability Program, in order to establish tax credits, a linked deposit low-cost student loan program, and a student lending transparency program to assist families in New York State to better afford a college education.

SUMMARY OF SPECIFIC PROVISIONS:

Part A: The Stay in New York Tax Credit

This bill would amend section 606 of the Tax Law to establish the Stay in New York Tax Credit. In order to retain the graduates from New York colleges and universities, such credit would allow college graduates a credit equal to their college expenses over four years. This credit would be capped at $3,000 per year, and would apply to those graduates who live and work in New York, subsequent to graduation, and complete community service while they are attending college.

The Tuition Tax Credit

This bill would further amend section 606 of the Tax Law to improve New York's Tuition Tax Credit. In order to increase college affordability, the current tuition tax credit would be amended to:

o Double the amount of qualified college expenses that can be claimed from $10,000 to $20,000 over five years;

o Double the maximum amount of the credit allowed from $400 to $800 over five years; and

o Index the qualified expenses and credit to the rate of inflation of the Higher Education Price Index.

Part B: The Student Loan Linked Deposit Program

This bill would additionally add a new article 15-A to the State Finance Law to establish the Student Loan Linked Deposit Program. Modeled off of the highly successful linked deposit program for economic development, this new student loan program would provide low-cost student loans by means of authorizing the comptroller to place state deposits with participating lenders at a decreased interest rate, in order to offer students reduced rate student loans, at up to 3 points below market rates.

This Part would designate $100 million dollars for this program, with repaid loan amounts revolving back into available deposits and loans. Loans would be available for students of in state colleges, for qualified educational expenses (tuition, fees, books, supplies, room and board), in the maximum amount of $7,500 per academic year, and a maximum total amount of $30,000.

Part C: The Student Lending Transparency Program

This bill would also add a new Article 6 to the Financial Services Law, and a new Article 14-8 to the Education Law, to establish a Student Lending Transparency Program. Pursuant to this program, the Department of Financial Services would be required to compile data on student loans for the purpose of comparing loan rates and repayment plans. The superintendent would be required to take such data and create a list of private lenders who provide the best loan rates and repayment options on student loans, and place such list on an easily accessible website with links to the Higher Education Services Corporation's website as well as the websites of other colleges and universities. The list and the website maintained by the department would be updated monthly.

Pursuant to this Part, colleges and Universities would further be required to provide prospective and newly enrolled students with clearly outlined and easy to understand information pertaining to the total cost of attendance at their institution. Such information would include the total amount of debt, and the payments thereon, the student would incur.

Part D: The Pre-Paid Tuition Program

This bill would also add a new sections 355-d of the education law, and 99-u of the state finance law, and amend section 612 of the tax law, to establish a New York State Pre-pay tuition savings program. Such program would allow participants to prepay college tuition at

SUNY or CUNY institutions by paying one third of the annual total cost of their college education for a period of twelve years. Payments would be made through a fund administered by the Comptroller, in consultation with the Chancellor of the State University of New York and the Chancellor of the City University of New York.

JUSTIFICATION:

The cost of a college education is becoming more and more a financial burden unable to be borne by a college student during their college tenure. As a result parents or students are either forced to bear crushing financial circumstances or incur huge amounts of debt in order to obtain a college education.

Since the enactment of the tuition tax credit/deduction in SFY 2000-01, tuition and fees at public and private colleges throughout the State have increased by over 47 percent. However, the amount of tuition expenses that a taxpayer can claim as a credit or deduction has not.

Accordingly this bill seeks to address this problem, through a three part program. First, tax credits to make paying college tuition more affordable for those who are educated and stay in New York State, second lower cost student loans through a linked deposit student loan program, and third, increased transparency and information to allow consumer students to shop more wisely when purchasing a college education.

In the new age of global competitiveness, it is especially important for our state to provide the educational opportunities necessary for the people of New York to succeed. Higher education opens the doors of opportunity, and this bill will permit many more people to not only open the door, but also walk through it, without an unbearable cost or debt burden that will impair their future.

By its terms this bill seeks to ensure that rapidly escalating tuition costs don't place the dreams of an outstanding higher education out-of-reach for hardworking, middle class families across our State. It seeks to offer New York's young graduates an opportunity to better manage their finances when they leave college and begin their careers. By its terms, this bill will help lower the cost of a higher education for middle class families and students, encourage young New Yorkers to stay and begin their careers here at home in the Empire State, and reduce overall higher education expenditures by encouraging students to graduate more quickly and with less outstanding debt.

PRIOR LEGISLATIVE HISTORY: This is a new bill

FISCAL IMPLICATIONS:

Part A: The Stay in New York Tax Credit and the improved Tuition Tax Credit will save taxpayers $212 million by 2016.

Part B: The Linked Deposit Student Loan Program provides for a $100 million investment of state deposits.

Part C: None Noted

Part D: None noted, as participant contributions would cover the cost of the program.

EFFECTIVE DATE: This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as set forth in the last section of such Parts; with Part A taking effect immediately and applying to taxable years beginning on or after January 1, 2012, and provided, however, that section one of Part A shall apply to taxable years beginning on or after January 1, 2013; and with Part B taking effect on the 180th day after it shall have become a law, provided however that effective immediately, the addition, amendment and/or repeal of any rules or regulations necessary for implementation is authorized and directed to be made and completed on or before such effective date; with Part C taking effect on the 180th day after it shall have become a law; and with Part D taking effect one year after it shall have become a law, except that the Comptroller, in consultation with the Chancellor of the State University of New York and the Chancellor of the City University of New York, may immediately promulgate all rules and regulations necessary for the timely implementation of this act.


Text

STATE OF NEW YORK ________________________________________________________________________ 7449--A IN SENATE May 18, 2012 ___________
Introduced by Sen. LAVALLE -- read twice and ordered printed, and when printed to be committed to the Committee on Rules -- committee discharged, bill amended, ordered reprinted as amended and recommitted to said committee 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: Section 1. This act enacts into law components of legislation relating to college affordability. Each component is wholly contained within a Part identified as Parts A through D. The effective date for each particular provision contained within such Part is set forth in the last section of such Part. Any provision in any section contained within a Part, including the effective date of the part, which makes reference to a section "of this act", when used in connection with that particular component, shall be deemed to mean and refer to the corresponding section of the Part in which it is found. Section three of this act sets forth the general effective date of this act. PART A Section 1. Section 606 of the tax law is amended by adding a new subsection (u) to read as follows:
(U) STAY IN NEW YORK CREDIT. (1) GENERAL. (A) A RESIDENT TAXPAYER SHALL BE ALLOWED A CREDIT AGAINST THE TAX IMPOSED BY THIS ARTICLE FOR ALLOWABLE COLLEGE EXPENSES. THE AMOUNT OF THE CREDIT SHALL BE EQUAL TO TWENTY-FIVE PERCENT OF ALLOWABLE COLLEGE EXPENSES, CAPPED AT THREE THOU- SAND DOLLARS. THE CREDIT SHALL BE ALLOWED ONLY IN THE FIRST TAXABLE YEAR SUBSEQUENT TO THE TAXPAYER'S COMPLETION OF A COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE AND IN EACH OF THE NEXT THREE TAXABLE YEARS. (B) IN ORDER TO QUALIFY FOR THE CREDIT, THE ELIGIBLE TAXPAYER SHALL: (I) HAVE COMPLETED THE COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION WITHIN FOUR YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY. PROVIDED, HOWEVER, IF THE ELIGIBLE TAXPAYER WAS EMPLOYED IN EXCESS OF THREE HUNDRED HOURS PER SEMESTER, THE ELIGIBLE TAXPAYER SHALL HAVE COMPLETED THE COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE WITHIN FIVE YEARS FROM THE COMMENCEMENT OF SUCH COURSE OF STUDY; (II) BE EMPLOYED FULL-TIME WITHIN THE STATE; AND (III) HAVE COMPLETED TWENTY HOURS OF COMMUNITY SERVICE PER SEMESTER OF ENROLLMENT IN AN INSTITUTION OF HIGHER EDUCATION. PROVIDED, HOWEVER, FOR THOSE ELIGIBLE TAXPAYERS WHO HAVE BEEN GRANTED DEGREES WITHIN THREE YEARS OF THE EFFECTIVE DATE OF THIS SUBSECTION, SUCH TAXPAYERS SHALL COMPLETE THE COMMUNITY SERVICE WITHIN THE FIRST TAXABLE YEAR IN WHICH THE CREDIT IS CLAIMED. (C) FOR ELIGIBLE TAXPAYERS WHO ENROLL IN A COURSE OF STUDY LEADING TO THE GRANTING OF A POST BACCALAUREATE OR OTHER GRADUATE DEGREE IMMEDIATE- LY FOLLOWING THE RECEIPT OF A BACCALAUREATE DEGREE, THE CREDIT SHALL BE ALLOWED IN THE FIRST TAXABLE YEAR SUBSEQUENT TO THE TAXPAYER'S COMPLETION OF SUCH DEGREE OR WHEN SUCH TAXPAYER CEASES TO BE ENROLLED IN SUCH COURSE OF STUDY AND IN EACH OF THE NEXT THREE TAXABLE YEARS PROVIDED ALL OTHER QUALIFICATIONS OF THIS SUBSECTION ARE MET. (2) ALLOWABLE AND QUALIFIED COLLEGE EXPENSES. FOR THE PURPOSES OF THIS CREDIT: (A) THE TERM "ALLOWABLE COLLEGE EXPENSES" SHALL MEAN THE TOTAL AMOUNT OF QUALIFIED COLLEGE EXPENSES INCURRED BY THE TAXPAYER DURING THE TAXPAYER'S ENROLLMENT IN A COURSE OF STUDY LEADING TO THE GRANTING OF A BACCALAUREATE DEGREE FROM AN INSTITUTION OF HIGHER EDUCATION. (B) THE TERM "QUALIFIED COLLEGE EXPENSES" SHALL MEAN THE TUITION REQUIRED FOR THE ENROLLMENT OR ATTENDANCE OF THE TAXPAYER AT AN INSTITU- TION OF HIGHER EDUCATION. PROVIDED, HOWEVER, TUITION PAYMENTS MADE PURSUANT TO THE RECEIPT OF ANY SCHOLARSHIPS OR FINANCIAL AID SHALL BE EXCLUDED FROM THE DEFINITION OF "QUALIFIED COLLEGE EXPENSES". (3) INSTITUTION OF HIGHER EDUCATION. FOR THE PURPOSES OF THIS CREDIT, THE TERM "INSTITUTION OF HIGHER EDUCATION" SHALL MEAN ANY INSTITUTION OF HIGHER EDUCATION LOCATED IN THE STATE, RECOGNIZED AND APPROVED BY THE REGENTS, OR ANY SUCCESSOR ORGANIZATION, OF THE UNIVERSITY OF THE STATE OF NEW YORK OR ACCREDITED BY A NATIONALLY RECOGNIZED ACCREDITING AGENCY OR ASSOCIATION ACCEPTED AS SUCH BY THE REGENTS, OR ANY SUCCESSOR ORGAN- IZATION, OF THE UNIVERSITY OF THE STATE OF NEW YORK, WHICH PROVIDES A COURSE OF STUDY LEADING TO THE GRANTING OF A POST-SECONDARY DEGREE, CERTIFICATE OR DIPLOMA. (4) REFUNDABILITY. THE CREDIT UNDER THIS SUBSECTION SHALL BE ALLOWED AGAINST THE TAXES IMPOSED BY THIS ARTICLE FOR THE TAXABLE YEAR REDUCED BY THE CREDITS PERMITTED BY THIS ARTICLE. IF THE CREDIT EXCEEDS THE TAX AS SO REDUCED, THE TAXPAYER MAY RECEIVE, AND THE COMPTROLLER, SUBJECT TO A CERTIFICATE OF THE COMMISSIONER, SHALL PAY AS AN OVERPAYMENT, WITHOUT INTEREST, THE AMOUNT OF SUCH EXCESS.
S 2. Subparagraph (A) of paragraph 2 of subsection (t) of section 606 of the tax law, as amended by section 1 of part N of chapter 85 of the laws of 2002, is amended to read as follows: (A) The term "allowable college tuition expenses" shall mean the amount of qualified college tuition expenses of eligible students paid by the taxpayer during the taxable year[,]. THE AMOUNT OF QUALIFIED COLLEGE TUITION EXPENSES SHALL BE limited [to] AS FOLLOWS: FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND TWELVE, ten thousand dollars for each such student; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE, TWELVE THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXA- BLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN, FOURTEEN THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN, SIXTEEN THOUSAND DOLLARS FOR EACH STUDENT; FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN, EIGHTEEN THOUSAND DOLLARS FOR EACH STUDENT; AND FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN, TWENTY THOUSAND DOLLARS PER STUDENT; S 3. Paragraph 4 of subsection (t) of section 606 of the tax law, as added by section 1 of part DD of chapter 63 of the laws of 2000, is amended to read as follows: (4) Amount of credit. [If allowable college tuition expenses are less than five thousand dollars, the amount of the credit provided under this subsection shall be equal to the applicable percentage of the lesser of allowable college tuition expenses or two hundred dollars. If allowable college tuition expenses are five thousand dollars or more, the amount of the credit provided under this subsection shall be equal to the applicable percentage of the allowable college tuition expenses multi- plied by four percent.] THE AMOUNT OF THE CREDIT SHALL BE DETERMINED IN ACCORDANCE WITH THE FOLLOWING SCHEDULES: (A) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND AND BEFORE TWO THOUSAND TWELVE: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN FIVE THOUSAND DOLLARS THE APPLICABLE PERCENTAGE OF THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR TWO HUNDRED DOLLARS FIVE THOUSAND DOLLARS OR MORE THE APPLICABLE PERCENTAGE OF ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (B) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND TWELVE: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN SIX THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR TWO HUNDRED FORTY DOLLARS SIX THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (C) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND THIRTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN SEVEN THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR TWO HUNDRED EIGHTY DOLLARS SEVEN THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (D) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FOURTEEN:
IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN EIGHT THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR THREE HUNDRED TWENTY DOLLARS EIGHT THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (E) FOR TAXABLE YEARS BEGINNING IN TWO THOUSAND FIFTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN NINE THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR THREE HUNDRED SIXTY DOLLARS NINE THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT (F) FOR TAXABLE YEARS BEGINNING AFTER TWO THOUSAND FIFTEEN: IF ALLOWABLE COLLEGE TUITION THE TAX CREDIT IS EQUAL TO: EXPENSES ARE: LESS THAN TEN THOUSAND DOLLARS THE LESSER OF ALLOWABLE COLLEGE TUITION EXPENSES OR FOUR HUNDRED DOLLARS TEN THOUSAND DOLLARS OR MORE THE ALLOWABLE COLLEGE TUITION EXPENSES MULTIPLIED BY FOUR PERCENT Such applicable percentage shall be twenty-five percent for taxable years beginning in two thousand one, fifty percent for taxable years beginning in two thousand two, seventy-five percent for taxable years beginning in two thousand three and one hundred percent for taxable years beginning after two thousand three. S 4. Subsection (t) of section 606 of the tax law is amended by adding a new paragraph 4-a to read as follows: (4-A) INFLATION ADJUSTMENT. (A) FOR TAXABLE YEARS BEGINNING IN OR AFTER TWO THOUSAND SIXTEEN, THE DOLLAR AMOUNTS IN SUBPARAGRAPH (A) OF PARAGRAPH TWO AND PARAGRAPH FOUR OF THIS SUBSECTION SHALL BE MULTIPLIED BY ONE PLUS THE INFLATION ADJUSTMENT. (B) THE INFLATION ADJUSTMENT FOR ANY TAXABLE YEAR SHALL BE THE PERCENTAGE, IF ANY, BY WHICH THE HIGHER EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL YEAR ENDING IN THE IMMEDIATELY PRECEDING TAXABLE YEAR EXCEEDS THE HIGHER EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL YEAR ENDING JUNE, TWO THOUSAND FIFTEEN. FOR THE PURPOSES OF THIS PARAGRAPH, THE HIGHER EDUCATION PRICE INDEX MEANS THE HIGHER EDUCATION PRICE INDEX PUBLISHED BY THE COMMONFUND INSTITUTE. (C) IF THE PRODUCT OF THE AMOUNTS IN SUBPARAGRAPHS (A) AND (B) OF THIS PARAGRAPH IS NOT A MULTIPLE OF FIVE DOLLARS, SUCH INCREASE SHALL BE ROUNDED TO THE NEXT MULTIPLE OF FIVE DOLLARS. S 5. This act shall take effect immediately and shall apply to taxable years beginning on or after January 1, 2012; provided, however, that section one of this act shall apply to taxable years beginning on or after January 1, 2013. PART B Section 1. Legislative findings and declaration of purpose. The legis- lature hereby finds that the costs of completing higher education for residents of the state of New York are increasing at a rate significant- ly faster than the rate of inflation. Paying out of pocket has become increasingly difficult for families and students seeking to improve
their educational and economic prospects. An affordable college educa- tion has become increasingly inaccessible to large numbers of middle class families in the state, for whom financial resources, including state grants and scholarships, are either limited or unavailable. Many families and students have no choice but to turn to the private lending market in order to finance their higher education. Compounding the problem is the fact that typical interest rates for student loans offered through the private lending market are relatively high when compared to interest rates for other purposes, such as a mort- gage or automobile. Additionally, the average student loan debt upon graduation is more than $26,000 per student in the state. Reducing the debt burden that students endure upon graduating college has become a critical public policy goal. As increasing the share of the state's population that undertakes and completes higher education is also a desirable public policy goal, and an individual's decision to complete a program of postsecondary educa- tion typically reaps economic and social rewards to the individual, the legislature hereby declares that it is in the best interest of the state to create a student loan linked deposit program whereby the state will subsidize private lenders to provide reduced-rate loans to students. S 2. Paragraph c of subdivision 1 of section 680 of the education law, as added by chapter 622 of the laws of 2008, is amended and a new para- graph d is added to read as follows: c. To enter into cooperative agreements, subject to the approval of the board of trustees and the director of the budget, with other enti- ties, including, but not limited to, other states, the federal govern- ment, and post-secondary institutions, to establish, administer, and operate federal student aid programs. Notwithstanding the provisions of paragraphs a and b of this subdivision, the corporation is authorized, pursuant to such cooperative agreements, to provide federal student aid services to students and families who are not residents of New York state[.]; AND D. TO ADMINISTER AND OPERATE A STUDENT LOAN LINKED DEPOSIT PROGRAM PURSUANT TO ARTICLE FIFTEEN-A OF THE STATE FINANCE LAW. S 3. Subdivision 2 of section 98-a of the state finance law, as added by chapter 705 of the laws of 1993, is amended to read as follows: 2. Notwithstanding any provision of law to the contrary, investment of bond proceeds and other funds not immediately required may be invested by the comptroller in linked deposits pursuant to article fifteen OR ARTICLE FIFTEEN-A of this chapter. If any moneys are invested by the comptroller in linked deposits pursuant to article fifteen OR ARTICLE FIFTEEN-A of this chapter, the comptroller shall compute the monthly earnings for all funds, other than the general fund, as if no such moneys had been invested in such linked deposits. S 4. The state finance law is amended by adding a new article 15-A to read as follows: ARTICLE 15-A STUDENT LOAN LINKED DEPOSIT ACT SECTION 225. SHORT TITLE. 226. DEFINITIONS. 227. ESTABLISHMENT AND PURPOSE; STUDENT LOAN LINKED DEPOSIT PROGRAM AUTHORIZATION. 228. RESPONSIBILITIES OF THE PRESIDENT, COMPTROLLER AND SUPER- INTENDENT. 229. RELEASE FROM LINKED DEPOSITS. 230. LINKED STUDENT LOANS.
231. INTEREST RATE FOR LINKED LOANS; NO LENDER'S FEES. 232. APPLICATION PROCEDURE. 233. REPAYMENT PERIODS FOR LINKED STUDENT LOANS. 234. LIABILITY; EARLY REPAYMENT AND WITHDRAWAL. 234-A. MONITORING AND REPORT. 234-B. PROMOTION OF PROGRAM. 234-C. RULES AND REGULATIONS. S 225. SHORT TITLE. THIS ARTICLE SHALL BE KNOWN AND MAY BE CITED AS THE "STUDENT LOAN LINKED DEPOSIT ACT". S 226. DEFINITIONS. WHEN USED IN THIS ARTICLE, UNLESS A DIFFERENT MEANING CLEARLY APPEARS FROM THE CONTEXT, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS: 1. "AUTHORIZED DEPOSITOR" MEANS THE COMPTROLLER WITH RESPECT TO LINKED DEPOSITS MADE BY THE COMPTROLLER. 2. "COMPTROLLER" MEANS THE COMPTROLLER OF THE STATE OF NEW YORK. 3. "DEPARTMENT" MEANS THE DEPARTMENT OF FINANCIAL SERVICES. 4. "ELIGIBLE RECIPIENT" MEANS AN INDIVIDUAL THAT HAS SUCCESSFULLY APPLIED FOR A LINKED STUDENT LOAN AND MET ALL REQUIREMENTS PRESCRIBED BY THE PRESIDENT AND A LENDING INSTITUTION FOR RECEIPT OF A LOAN. 5. "LENDER" MEANS: (A) ANY COMMERCIAL BANK WHICH IS OR SHALL BECOME AN APPROVED DEPOSITO- RY OF STATE FUNDS UNDER THE PROVISIONS OF SECTION ONE HUNDRED FIVE OF THIS CHAPTER AND WHICH AGREES TO PARTICIPATE IN THE PROGRAM; OR (B) ANY THRIFT WHICH AN AUTHORIZED DEPOSITOR DETERMINES IS ELIGIBLE TO ACCEPT LINKED DEPOSITS BASED UPON CRITERIA APPLIED BY THE AUTHORIZED DEPOSITOR IN MAKING DETERMINATIONS UNDER SECTION ONE HUNDRED FIVE OF THIS CHAPTER, AND WHICH AGREES TO PARTICIPATE IN THE PROGRAM, PROVIDED THAT ANY LINKED DEPOSIT IN SUCH THRIFT SHALL BE SECURED IN THE SAME MANNER AS MONEYS DEPOSITED PURSUANT TO SECTION ONE HUNDRED FIVE OF THIS CHAPTER AND SUCH THRIFTS SHALL PLEDGE ASSETS OR FURNISH OTHER SECURITY SATISFACTORY IN FORM AND AMOUNT TO THE AUTHORIZED DEPOSITOR FOR THE REPAYMENT OF MONEYS. 6. "LINKED DEPOSIT" MEANS A DEPOSIT PLACED WITH A LENDER BY THE COMP- TROLLER FOR A PERIOD OF FOUR YEARS AT THE LINKED DEPOSIT INTEREST RATE, PROVIDED THE LENDER AGREES TO: (A) LEND THE EQUIVALENT VALUE OF SUCH DEPOSIT TO AN ELIGIBLE RECIPIENT AT THE INTEREST RATE PROVIDED IN SECTION TWO HUNDRED THIRTY-ONE OF THIS ARTICLE; AND (B) PERMIT THE DEPOSIT TO BE COMPRISED OF A SERIES OF NINETY DAY DEPOSITS EACH BEARING AN INTEREST RATE EQUAL TO THE LINKED DEPOSIT INTEREST RATE FIXED AT THE TIME THE ORIGINAL DEPOSIT IS PLACED. THIS ARTICLE AND THE RELATED STATUTES THAT REFER TO THIS ARTICLE DO NOT GRANT THRIFTS ELIGIBILITY TO ACCEPT PUBLIC FUNDS OR PUBLIC MONEYS FROM PUBLIC ENTITIES FOR INVESTMENT PURPOSES. A LINKED DEPOSIT IS INTENDED TO ENABLE A LENDER TO MAKE A LINKED LOAN TO AN ELIGIBLE RECIPI- ENT AND SUCH DEPOSIT EARNS A YIELD LOWER THAN POSTED RATES IN ORDER TO ACCOMPLISH THE GOALS OF THIS ARTICLE. 7. "LINKED DEPOSIT INTEREST RATE" MEANS FOR A LINKED DEPOSIT MADE IN CONNECTION WITH A LINKED LOAN TO AN ELIGIBLE RECIPIENT A FIXED RATE OF INTEREST WHICH IS THREE HUNDRED BASIS POINTS BELOW THE LENDER'S POSTED FOUR YEAR CERTIFICATE OF DEPOSIT RATE OR, IF THE LENDER DOES NOT OFFER A FOUR YEAR CERTIFICATE OF DEPOSIT, IS THREE HUNDRED BASIS POINTS BELOW THE AVERAGE STATEWIDE RATE FOR FOUR YEAR CERTIFICATES OF DEPOSIT AS DETERMINED BY THE SUPERINTENDENT OF FINANCIAL SERVICES. IN THE EVENT THAT THE LENDER'S POSTED FOUR YEAR CERTIFICATE OF DEPOSIT RATE, OR THE AVERAGE STATEWIDE RATE FOR FOUR YEAR CERTIFICATES OF DEPOSIT ARE BELOW
THREE HUNDRED BASIS POINTS, THE LINKED DEPOSIT INTEREST RATE SHALL NOT BE LESS THAN ZERO. 8. "LINKED LOAN" MEANS A LOAN MADE TO AN ELIGIBLE RECIPIENT, IN AN AMOUNT EQUAL TO A LINKED DEPOSIT AND BEARING INTEREST FOR THE FIRST FOUR YEARS AT THE INTEREST RATE PROVIDED IN SECTION TWO HUNDRED THIRTY-ONE OF THIS ARTICLE. 9. "PRESIDENT" MEANS THE PRESIDENT OF THE HIGHER EDUCATION SERVICES CORPORATION. 10. "PROGRAM" MEANS THE STUDENT LOAN LINKED DEPOSIT PROGRAM. 11. "QUALIFIED EDUCATIONAL EXPENSES" MEANS THE ACTUAL OR EXPECTED COST OF A STUDENT'S HIGHER EDUCATION, WHICH SHALL INCLUDE THE FULL QUARTERLY, SEMESTERLY OR ANNUAL COST OF TUITION, FEES, BOOKS, SUPPLIES, ROOM AND BOARD. 12. "THRIFT" MEANS ANY SAVINGS BANK OR SAVINGS AND LOAN ASSOCIATION, FEDERAL SAVINGS BANK OR FEDERAL SAVINGS AND LOAN ASSOCIATION. S 227. ESTABLISHMENT AND PURPOSE; STUDENT LOAN LINKED DEPOSIT PROGRAM AUTHORIZATION. THE STUDENT LOAN LINKED DEPOSIT PROGRAM IS HEREBY CREATED. THE PURPOSE OF THE PROGRAM IS TO MAKE AVAILABLE TO RESIDENTS OF NEW YORK STATE REDUCED RATE LOANS THAT WILL ASSIST IN THE FINANCING OF AN IN-STATE COLLEGE EDUCATION. THE COMPTROLLER IS HEREBY AUTHORIZED TO USE ANY MONEYS OF THE STATE THE COMPTROLLER IS AUTHORIZED TO INVEST PURSUANT TO SECTION NINETY-EIGHT-A OF THIS CHAPTER AS LINKED DEPOSITS FOR THE PROGRAM. NOT MORE THAN ONE HUNDRED MILLION DOLLARS OF SUCH MONEYS SHALL BE ON DEPOSIT PURSUANT TO THE PROGRAM AT ANY GIVEN TIME. S 228. RESPONSIBILITIES OF THE PRESIDENT, COMPTROLLER AND SUPERINTEN- DENT. 1. THE PRESIDENT SHALL ADMINISTER THE PROGRAM PURSUANT TO SECTION TWO HUNDRED THIRTY-TWO OF THIS ARTICLE, INCLUDING ALL DECISIONS WITH RESPECT TO THE APPLICATION AND USE OF THE PROGRAM FOR ELIGIBLE RECIPI- ENTS; MARKET AND PROMOTE THE PROGRAM PURSUANT TO SECTION TWO HUNDRED THIRTY-FOUR-B OF THIS ARTICLE; AFTER CONSULTING WITH THE COMPTROLLER AND THE SUPERINTENDENT OF FINANCIAL SERVICES, ISSUE RULES AND REGULATIONS FOR THE OPERATION OF THE PROGRAM PURSUANT TO SECTION TWO HUNDRED THIR- TY-FOUR-C OF THIS ARTICLE. 2. THE COMPTROLLER'S RESPONSIBILITIES FOR THE PROGRAM SHALL BE LIMITED TO: PURSUANT TO SECTIONS TWO HUNDRED TWENTY-SEVEN AND TWO HUNDRED THIR- TY-TWO OF THIS ARTICLE, PLACING MONEYS ON DEPOSIT AT THE REQUEST OF THE PRESIDENT FOR THE PURPOSES OF THE PROGRAM AND ADMINISTERING SUCH DEPOS- ITS IN ACCORDANCE WITH SECTIONS NINETY-EIGHT-A AND ONE HUNDRED FIVE OF THIS CHAPTER AND WITH THE COMPTROLLER'S ESTABLISHED PROCEDURES; AND ENTERING INTO DEPOSIT AGREEMENTS WITH LENDERS PURSUANT TO SECTION TWO HUNDRED THIRTY-TWO OF THIS ARTICLE. 3. THE SUPERINTENDENT'S RESPONSIBILITIES FOR THE PROGRAM SHALL BE LIMITED TO MARKETING AND PROMOTING THE PROGRAM PURSUANT TO SECTION TWO HUNDRED THIRTY-FOUR-B OF THIS ARTICLE. S 229. RELEASE FROM LINKED DEPOSITS. THE AUTHORIZED DEPOSITOR MAY PERMIT FUNDS RELEASED FROM A LINKED DEPOSIT RELATING TO A LINKED LOAN TO BE MADE AVAILABLE FOR ADDITIONAL LINKED DEPOSITS UNDER THIS PROGRAM. S 230. LINKED STUDENT LOANS. LINKED STUDENT LOANS SHALL BE MADE BY LENDERS PURSUANT TO THE PROGRAM ONLY TO ELIGIBLE RECIPIENTS FOR QUALI- FIED EDUCATIONAL EXPENSES. A LINKED LOAN SHALL BE LIMITED TO A MAXIMUM AMOUNT OF SEVEN THOUSAND FIVE HUNDRED DOLLARS PER ACADEMIC YEAR. AN ELIGIBLE RECIPIENT MAY RECEIVE NO MORE THAN ONE LINKED LOAN PER ACADEMIC YEAR. DURING THE LIFE OF THE LINKED LOAN PROGRAM, THE TOTAL AMOUNT OF MONEY THAT AN ELIGIBLE RECIPIENT CAN BORROW FROM THE LINKED STUDENT LOAN PROGRAM SHALL BE THIRTY THOUSAND DOLLARS. THE CREDIT DECISION FOR MAKING A LINKED LOAN SHALL BE MADE SOLELY BY THE LENDER, PROVIDED HOWEVER THAT
SUCH LENDER SHALL ENSURE THAT AN ELIGIBLE RECIPIENT COMPLIES WITH THE PROVISIONS OF THIS ARTICLE, INCLUDING ANY RULES OR REGULATIONS ISSUED BY THE PRESIDENT. NOTWITHSTANDING THE LENGTH OF THE TERM OF A LINKED LOAN, THE LINKED DEPOSIT RELATING TO THE LINKED LOAN SHALL BE FOR A PERIOD OF NOT MORE THAN FOUR YEARS. S 231. INTEREST RATE FOR LINKED LOANS; NO LENDER'S FEES. 1. LINKED LOANS MADE TO ELIGIBLE RECIPIENTS SHALL BEAR INTEREST AT A FIXED RATE EQUAL TO THREE PERCENTAGE POINTS BELOW THE FIXED INTEREST RATE THE LEND- ER WOULD HAVE CHARGED FOR THE LOAN IN THE ABSENCE OF A LINKED DEPOSIT BASED ON ITS USUAL CREDIT CONSIDERATIONS. LENDERS SHALL CERTIFY TO THE PRESIDENT THAT THE RATE TO BE CHARGED ON A LINKED LOAN IS THREE PERCENT- AGE POINTS BELOW THE INTEREST RATE THE LENDER WOULD HAVE CHARGED FOR THE LOAN IN THE ABSENCE OF A LINKED DEPOSIT. 2. LENDERS WHO MAKE LOANS PURSUANT TO THE PROGRAM SHALL NOT BE ENTI- TLED TO CHARGE ANY DISCOUNT, POINTS, ORIGINATION FEES, HANDLING FEES, SERVICE CHARGES, REFINANCING FEES OR PENALTIES OR ANY CHARGE OTHER THAN THOSE NORMALLY CHARGED AND IN SUCH AMOUNTS NORMALLY CHARGED BY THE LEND- ER FOR LOANS OF THE TYPE BEING MADE WITHOUT REGARD TO THE PROGRAM. S 232. APPLICATION PROCEDURE. 1. THE PRESIDENT, WITH THE ASSISTANCE OF THE SUPERINTENDENT OF THE DEPARTMENT, SHALL ESTABLISH PROCEDURES AND OTHER REQUIREMENTS FOR PARTICIPATION IN THE PROGRAM, AND SHALL PROVIDE A SIMPLIFIED APPLICATION FORM TO THE PARTICIPATING LENDERS FOR LINKED DEPOSITS. SUCH FORM SHALL REFLECT THE QUALIFYING INFORMATION REQUIRED BY THIS ARTICLE FOR ELIGIBLE LOAN RECIPIENTS. UPON COMPLETION OF ANY APPLICATION FOR A LINKED DEPOSIT, THE LENDER SHALL SEND THE APPLICATION, TOGETHER WITH THE INTEREST RATE CERTIFICATION REQUIRED PURSUANT TO SECTION TWO HUNDRED THIRTY-ONE OF THIS ARTICLE, TO THE PRESIDENT WHO SHALL EITHER APPROVE OR REJECT THE APPLICATION WITHIN TWENTY-EIGHT DAYS. THE PRESIDENT SHALL EVALUATE EACH APPLICATION BASED UPON THE FOLLOWING CRITERIA: (A) THE EXTENT TO WHICH SUCH LOAN WOULD REDUCE THE LONG-TERM COST OF FINANCING A STUDENT'S HIGHER EDUCATION; (B) THE LIKELIHOOD OF THE STUDENT SUCCESSFULLY COMPLETING HIS OR HER HIGHER EDUCATION AND REPAYING THE LOAN WITHIN A TIMELY MANNER; AND (C) SUCH OTHER CRITERIA AS THE PRESIDENT DEEMS RELEVANT. 2. IF THE DEPOSIT APPLICATION IS APPROVED BY THE PRESIDENT, HE OR SHE SHALL NOTIFY AN AUTHORIZED DEPOSITOR THAT A DETERMINATION HAS BEEN MADE THAT THE APPLICATION SATISFIES THE REQUIREMENTS OF THIS ARTICLE, AND THE PRESIDENT SHALL REQUEST THE AUTHORIZED DEPOSITOR TO DEPOSIT FUNDS WITH THE LENDER IN ACCORDANCE WITH SECTION NINETY-EIGHT-A OF THIS CHAPTER AND WITH THE AUTHORIZED DEPOSITOR'S ESTABLISHED PROCEDURES. SUCH DEPOSITS SHALL BE SECURED IN ACCORDANCE WITH THE PROVISIONS OF SECTION ONE HUNDRED FIVE OF THIS CHAPTER, AND LENDERS RECEIVING SUCH DEPOSITS SHALL SATISFY, IN THE SOLE JUDGMENT OF THE AUTHORIZED DEPOSITOR, ALL COLLAT- ERAL AND OTHER REQUIREMENTS GENERALLY APPLIED BY THE AUTHORIZED DEPOS- ITOR TO FUNDS INVESTED BY IT. THE NOTIFIED AUTHORIZED DEPOSITOR AND THE LENDER SHALL ENTER INTO A WRITTEN DEPOSIT AGREEMENT. IN NO EVENT SHALL ANY DEFECT IN ANY SUCH AGREEMENT BE ASSERTED AS A DEFENSE BY A BORROWER ON A LINKED LOAN MADE PURSUANT TO THE PROGRAM. S 233. REPAYMENT PERIODS FOR LINKED STUDENT LOANS. THE PRESIDENT SHALL REQUIRE THAT LINKED STUDENT LOANS ISSUED THROUGH THE PROGRAM OFFER FLEX- IBLE REPAYMENT OPTIONS, INCLUDING THE OPTION OF AN INCOME-BASED REPAY- MENT PLAN. SUCH REPAYMENT OPTIONS MAY, IF THE PRESIDENT DEEMS IT ADVIS- ABLE, BE CONSISTENT WITH THE REPAYMENT TERMS STIPULATED BY THE WILLIAM D. FORD FEDERAL DIRECT LOAN PROGRAM AUTHORIZED PURSUANT TO 20 USC CHAP- TER 28, SUBCHAPTER IV, PART C.
S 234. LIABILITY; EARLY REPAYMENT AND WITHDRAWAL. NOTHING CONTAINED IN THIS ARTICLE SHALL IMPOSE LIABILITY ON THE STATE OR ANY OF ITS DEPART- MENTS OR EMPLOYEES FOR PAYMENT OR DELAYS IN PAYMENT OF THE PRINCIPAL OR INTEREST OF A LINKED LOAN. ANY DELAY IN PAYMENTS OR ANY DEFAULT ON A LINKED LOAN SHALL IN NO WAY AFFECT THE LINKED DEPOSIT AGREEMENT BETWEEN THE LENDER AND THE AUTHORIZED DEPOSITOR. HOWEVER, IN THE EVENT THE INTEREST RATE OF THE LINKED LOAN SHALL BE INCREASED AS A CONSEQUENCE OF DEFAULT OR RENEGOTIATION, OR THE LOAN SHALL BE CHARGED OFF, THE LENDER SHALL GIVE THE AUTHORIZED DEPOSITOR PROMPT NOTICE OF SUCH EVENT, AND THE AUTHORIZED DEPOSITOR SHALL THEREAFTER WITHDRAW THE LINKED DEPOSIT UPON NOT LESS THAN SEVEN DAYS' PRIOR WRITTEN NOTICE TO THE LENDER. UPON EARLY REPAYMENT OF A LINKED LOAN, THE LENDER SHALL WITHIN THIRTY DAYS GIVE THE AUTHORIZED DEPOSITOR NOTICE OF SUCH EARLY REPAYMENT, AND THE AUTHORIZED DEPOSITOR SHALL THEREAFTER WITHDRAW THE LINKED DEPOSIT UPON NOT LESS THAN SEVEN DAYS' PRIOR WRITTEN NOTICE TO THE LENDER, AND THE INTEREST RATE PAYABLE ON THE LINKED DEPOSIT FROM THE DATE OF EARLY REPAYMENT OF THE LINKED LOAN TO THE DATE OF WITHDRAWAL OF THE LINKED DEPOSIT SHALL BE THE INTEREST RATE UPON WHICH THE LINKED DEPOSIT INTEREST RATE WAS CALCU- LATED WITHOUT REGARD TO THE APPLICABLE BASIS POINT REDUCTION. S 234-A. MONITORING AND REPORT. 1. THE PRESIDENT SHALL MONITOR THE ACTIVITIES OF PARTICIPATING LENDERS AND LOAN RECIPIENTS AND MAY REQUIRE PERIODIC REPORTS OR OTHER INFORMATION THE PRESIDENT DEEMS NECESSARY FROM PARTICIPATING LENDERS AND LOAN RECIPIENTS ON THE STATUS OF THE LINKED LOANS TO ENSURE COMPLIANCE WITH THE PROVISIONS AND THE INTENT OF THIS ARTICLE. 2. ON OR BEFORE DECEMBER FIRST, TWO THOUSAND FOURTEEN, AND ANNUALLY THEREAFTER THE PRESIDENT SHALL SUBMIT TO THE GOVERNOR, THE TEMPORARY PRESIDENT OF THE SENATE AND THE SPEAKER OF THE ASSEMBLY A REPORT REGARD- ING THE ACTIVITIES OF THE PROGRAM. SUCH REPORT SHALL CONTAIN A STATEMENT OF THE COST OF THE PROGRAM TO THE STATE, CONSIDERED AS A WHOLE, BECAUSE OF REDUCED RATES ON FUNDS INVESTED IN LINKED DEPOSITS. SUCH REPORT SHALL ALSO INCLUDE, BUT SHALL NOT BE LIMITED TO, THE NUMBER AND TYPE OF LINKED LOANS UNDER THE PROGRAM AND THE AMOUNT THEREOF; THE NUMBER AND TYPES OF LENDERS MAKING LINKED LOANS AND OF INDIVIDUALS RECEIVING LINKED LOANS; THE GEOGRAPHIC DISTRIBUTION OF SUCH LENDERS AND RECIPIENTS, INCLUDING THE STEPS TAKEN TO ENSURE GEOGRAPHIC DIVERSITY AMONG PARTICIPATING LEND- ERS, AS WELL AS ANY INFORMATION THE PRESIDENT DETERMINES USEFUL IN EVAL- UATING THE BENEFITS OF THE PROGRAM. S 234-B. PROMOTION OF PROGRAM. THE DEPARTMENT, WITH THE ASSISTANCE OF OTHER APPROPRIATE STATE AGENCIES, SHALL ACTIVELY MARKET AND PROMOTE AWARENESS OF THE PROGRAM IN ALL GEOGRAPHICAL AREAS OF THE STATE AMONG COMMERCIAL BANKS, THRIFTS AND OTHER APPROPRIATE BANKING ORGANIZATIONS. S 234-C. RULES AND REGULATIONS. THE PRESIDENT SHALL, IN CONSULTATION WITH THE COMPTROLLER AND THE SUPERINTENDENT OF FINANCIAL SERVICES, PROMULGATE RULES AND REGULATIONS NECESSARY AND REASONABLE FOR THE OPERA- TION OF THE PROGRAM. S 5. This act shall take effect on the one hundred eightieth day after it shall have become a law, provided however that effective immediately, the addition, amendment and/or repeal of any rules or regulations neces- sary for implementation of the foregoing sections of this act on its effective date is authorized and directed to be made and completed on or before such effective date. PART C
Section 1. Paragraphs 6 and 7 of subsection (c) of section 301 of the financial services law, as added by section 1 of part A of chapter 62 of the laws of 2011, are amended and a new paragraph 8 is added to read as follows: (6) providing technical assistance to local governments and not-for- profits in the development of consumer protection measures with respect to financial products and services; [and] (7) continuing and expanding the detection, investigation and prevention of insurance fraud[.]; AND (8) ESTABLISHING AND ADMINISTERING THE "STUDENT LENDING TRANSPARENCY PROGRAM" PURSUANT TO ARTICLE SIX OF THIS CHAPTER. S 2. The financial services law is amended by adding a new article 6 to read as follows: ARTICLE 6 STUDENT LENDING TRANSPARENCY PROGRAM SECTION 601. DEFINITIONS. 602. STUDENT LENDING TRANSPARENCY PROGRAM. 603. RULES AND REGULATIONS. S 601. DEFINITIONS. THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEAN- INGS WHEN USED IN THIS ARTICLE: A. "PRIVATE STUDENT LOANS" SHALL MEAN A PRIVATE LOAN ISSUED BY A PRIVATE LENDING INSTITUTION FOR THE PURPOSES OF PAYING FOR OR FINANCING HIGHER EDUCATION EXPENSES. B. "PRIVATE LENDING INSTITUTIONS" OR "PRIVATE LENDERS" SHALL MEAN ANY PRIVATE ENTITY THAT ITSELF OR THROUGH AN AFFILIATE MAKES AVAILABLE STUDENT LOANS TO PAY FOR OR FINANCE HIGHER EDUCATION EXPENSES. C. "STUDENT BORROWER" SHALL MEAN ANY INDIVIDUAL WHO BORROWS MONEY FROM A PRIVATE LENDING INSTITUTION TO FINANCE HIGHER EDUCATION EXPENSES. D. "HIGHER EDUCATION EXPENSES" SHALL INCLUDE THE FOLLOWING: (I) TUITION AND FEES; (II) BOOKS AND SUPPLIES; AND (III) ROOM AND BOARD. S 602. STUDENT LENDING TRANSPARENCY PROGRAM. 1. THE SUPERINTENDENT SHALL ESTABLISH A PROGRAM TO COMPILE DATA RELATED TO PRIVATE STUDENT LOANS FOR THE PURPOSE OF COMPARING PRIVATE LENDING INSTITUTION'S STUDENT LOAN INTEREST RATES AND REPAYMENT PLANS, INCLUDING POLICIES RELATING TO DEFERMENT AND FORBEARANCE, DEFAULT POLICIES AND PENALTIES, AND ANY OTHER INFORMATION THAT THE SUPERINTENDENT DEEMS RELEVANT FOR THE PURPOSE OF CREATING A LIST OF PRIVATE LENDERS WHO PROVIDE THE LOWEST RATES AND BEST REPAYMENT OPTIONS ON STUDENT LOANS. SUCH LIST SHALL BE CREATED AND MAIN- TAINED BY THE SUPERINTENDENT OR HIS DESIGNEE AND SHALL BE PLACED ON AN EASILY ACCESSIBLE WEBSITE THAT SHALL BE MADE AVAILABLE TO BE LINKED TO THE WEBSITE OF THE HIGHER EDUCATION SERVICES CORPORATION PURSUANT TO SUBDIVISION THIRTEEN OF SECTION SIX HUNDRED FIFTY-FIVE OF THE EDUCATION LAW AND TO COLLEGES AND UNIVERSITIES WEBSITES PURSUANT TO ARTICLE 14-B OF THE EDUCATION LAW. 2. SUCH WEBSITE SHALL BE UPDATED ON A MONTHLY BASIS TO ENSURE THAT THE STUDENT LOAN INFORMATION IS CURRENT AND ACCURATE. THE SUPERINTENDENT OR HIS OR HER DESIGNEE SHALL COMPILE A LIST OF THE TOP TEN BEST PRIVATE LENDING INSTITUTIONS BASED UPON RATES AND POLICIES THAT ARE MOST FAVORA- BLE TO THE STUDENT BORROWER. THE SUPERINTENDENT MAY ALSO CONSIDER THE PRIVATE LENDING INSTITUTIONS POLICIES FOR ALLOWING A STUDENT BORROWER TO BORROW MORE THAN TEN PERCENT OVER SUCH STUDENT BORROWER'S TOTAL COST OF HIGHER EDUCATION EXPENSES WHEN DETERMINING IF A PRIVATE LENDING INSTITU- TION SHOULD BE PLACED ON SUCH LIST. INFORMATION PERTAINING TO LENDING INSTITUTIONS THAT DO NOT MAKE THE TOP TEN LIST SHALL ALSO BE POSTED ON
SUCH WEBSITE AND THOSE LENDING INSTITUTIONS THAT PROVIDE THE WORST RATES AND STRICTEST REPAYMENT OPTIONS SHALL BE CLEARLY INDICATED. S 603. RULES AND REGULATIONS. THE SUPERINTENDENT SHALL PROMULGATE ALL RULES AND REGULATIONS NECESSARY FOR THE IMPLEMENTATION OF THIS ARTICLE. S 3. Section 655 of the education law is amended by adding a new subdivision 13 to read as follows: 13. TO CREATE A LINK ON THE CORPORATION'S WEBSITE TO THE DEPARTMENT OF FINANCIAL SERVICES WEBSITE PURSUANT TO SUBDIVISION ONE OF SECTION SIX HUNDRED TWO OF THE FINANCIAL SERVICES LAW. S 4. The education law is amended by adding a new article 14-B to read as follows: ARTICLE 14-B STUDENT LENDING TRANSPARENCY PROGRAM SECTION 697. CREATION OF PROGRAM. 698. ACCESS TO INFORMATION. 699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES. S 697. CREATION OF PROGRAM. THE STUDENT LENDING TRANSPARENCY PROGRAM IS HEREBY ESTABLISHED TO ENSURE THAT NEW YORK STATE COLLEGES PROVIDE THE MOST ACCURATE AND TRANSPARENT INFORMATION WITH REGARD TO STUDENT LOANS. S 698. ACCESS TO INFORMATION. NOTWITHSTANDING ANY OTHER LAW, RULE OR REGULATION TO THE CONTRARY, NEW YORK STATE COLLEGES AS DEFINED IN SECTION SIX HUNDRED ONE OF ARTICLE THIRTEEN OF THE EDUCATION LAW, SHALL BE REQUIRED THROUGH THEIR FINANCIAL AID OFFICES TO PROVIDE TO PROSPEC- TIVE OR NEWLY ACCEPTED STUDENTS AND PARENTS CLEARLY OUTLINED AND EASY TO UNDERSTAND INFORMATION PERTAINING TO THE TOTAL COST OF ATTENDANCE AT THEIR INSTITUTION, THE APPROXIMATE OR ACTUAL TOTAL AMOUNT OF FINANCIAL AID THEY WOULD RECEIVE FROM SUCH INSTITUTION AND THE APPROXIMATE OR ACTUAL TOTAL AMOUNT OF STUDENT LOAN DEBT THEY WOULD ACCUMULATE OVER THE COURSE OF FOUR YEARS IF THEY ATTENDED SUCH COLLEGE. THE INFORMATION PROVIDED MUST ALSO INCLUDE STUDENT LOAN RATES, INFORMATION ON REPAYMENT PLANS AND DEFAULT RATES AND THE ACTUAL COST OF THE AVERAGE MONTHLY PAYMENT THAT WOULD BE REQUIRED UPON GRADUATION WHEN SUCH LOANS WOULD BECOME DUE. S 699. LINKS TO DEPARTMENT OF FINANCIAL SERVICES. NEW YORK STATE COLLEGES THAT MAINTAIN AN OFFICIAL COLLEGE WEBSITE SHALL ALSO BE REQUIRED TO ADD A LINK ON EACH OF THEIR WEBSITES TO THE DEPARTMENT OF FINANCIAL SERVICES WEBSITE ON STUDENT LENDING TRANSPARENCY CREATED PURSUANT TO ARTICLE SIX OF THE FINANCIAL SERVICES LAW. S 5. This act shall take effect on the one hundred eightieth day after it shall have become a law. PART D Section 1. The education law is amended by adding a new section 355-d to read as follows: S 355-D. NEW YORK STATE PRE-PAY TUITION SAVINGS PROGRAM. 1. FOR PURPOSES OF THIS SECTION, THE FOLLOWING TERMS SHALL HAVE THE FOLLOWING MEANINGS: A. "PARTICIPANT" SHALL MEAN A NEW YORK STATE RESIDENT WHO ENROLLS AN ELIGIBLE CHILD AND MAKES PAYMENTS ON BEHALF OF SUCH ELIGIBLE CHILD, AND SHALL INCLUDE BUT NOT BE LIMITED TO SUCH ELIGIBLE CHILD'S PARENT OR GUARDIAN. B. "ELIGIBLE CHILD" SHALL MEAN A CHILD FIVE YEARS OF AGE OR OLDER, WHO IS ENROLLED IN THE NEW YORK STATE PRE-PAY TUITION PROGRAM BY A PARTIC- IPANT.
C. "THE FUND" SHALL MEAN THE NEW YORK STATE PRE-PAY TUITION FUND ESTABLISHED BY SECTION NINETY-NINE-U OF THE STATE FINANCE LAW. D. "TOTAL COST OF EDUCATION" SHALL MEAN THE AVERAGE SYSTEM-WIDE YEARLY TOTAL COST OF A FOUR YEAR EDUCATION AT THE STATE UNIVERSITY OF NEW YORK INCLUDING TUITION, ROOM AND BOARD AND ALL APPLICABLE FEES. DURING EACH YEAR OF PARTICIPATION, THE TOTAL COST OF EDUCATION SHALL BE CALCULATED BASED UPON THE CURRENT YEAR'S COST UNTIL THE FINAL PAYMENT IS MADE. 2. THE NEW YORK STATE PRE-PAY TUITION SAVINGS PROGRAM IS HEREBY ESTAB- LISHED AND SHALL BE CONTROLLED AND ADMINISTERED BY THE NEW YORK STATE COMPTROLLER OR HIS OR HER DESIGNEE IN CONSULTATION WITH THE CHANCELLOR OF THE STATE UNIVERSITY OF NEW YORK (SUNY) OR HIS OR HER DESIGNEE AND THE CHANCELLOR OF THE CITY UNIVERSITY OF NEW YORK (CUNY) OR HIS OR HER DESIGNEE. 3. A. A PARTICIPANT MAY ENROLL AN ELIGIBLE CHILD BEGINNING AT FIVE YEARS OF AGE AND PAY ONE-THIRD OF THE COST OF THE TOTAL COST OF EDUCA- TION EACH YEAR FOR THE DURATION OF TWELVE CONSECUTIVE YEARS. B. A PARTICIPANT MAY ENROLL AN ELIGIBLE CHILD BEGINNING AT SIX YEARS OF AGE AND PAY ONE-THIRD OF THE TOTAL COST OF EDUCATION EACH YEAR FOR THE DURATION OF TWELVE YEARS. C. IF A PARTICIPANT ENROLLS AN ELIGIBLE CHILD AT AGE SEVEN OR THERE- AFTER, YEARLY PAYMENTS SHALL BE DETERMINED BY THE SUNY CHANCELLOR OR HIS OR HER DESIGNEE AND APPROVED BY THE STATE COMPTROLLER OR HIS OR HER DESIGNEE BASED UPON A FORMULA THAT CONSIDERS THE CHILD'S AGE AT THE TIME OF ENROLLMENT AND EVENLY DIVIDES THE YEARLY AVERAGE TOTAL COST OF A FOUR YEAR SUNY EDUCATION BUT ENSURES THAT THE LAST PAYMENT WILL BE RECEIVED WITHIN THE CALENDAR YEAR WHEN THE ELIGIBLE CHILD GRADUATES OR IS SCHED- ULED TO GRADUATE HIGH SCHOOL. D. (1) UPON ENROLLMENT OF AN ELIGIBLE CHILD INTO THE PROGRAM, THE PARTICIPANT SHALL RECEIVE A BILL FROM THE STATE COMPTROLLER OR HIS OR HER DESIGNEE CLEARLY STATING THE TOTAL COST OF EDUCATION FOR THAT YEAR, AND THE MONTHLY PAYMENT AMOUNT DUE TO BE DEPOSITED IN THE FUND, PROVIDED HOWEVER, THAT AT ANY TIME WITHIN SUCH YEAR, THE TOTAL COST OF EDUCATION FOR THAT YEAR MAY BE PAID IN FULL WITHOUT PENALTY. (2) PROVIDED FURTHER HOWEVER, THAT A PAYMENT PLAN OTHER THAN MONTHLY BILLING MAY BE ESTABLISHED BASED ON RULES AND REGULATIONS PROMULGATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. E. (1) PAYMENTS DEPOSITED INTO THE FUND SHALL NOT BE ELIGIBLE FOR WITHDRAWAL AT ANY TIME BEFORE THE ELIGIBLE CHILD FOR WHOM THE PARTIC- IPANT IS PAYING, REACHES THE AGE OF HIGH SCHOOL GRADUATION OR THE AGE WHEN SUCH CHILD SHOULD HAVE GRADUATED. (2) UPON THE ELIGIBLE CHILD REACHING THE AGE OF HIGH SCHOOL GRADU- ATION, THE PARTICIPANT MAY CHOOSE TO WITHDRAW THE TOTAL BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND AND NO LONGER PARTICIPATE IN THE PROGRAM. F. (1) UPON SUBMISSION OF THE LAST PAYMENT, THE ACTUAL COST OF WHAT A TWO YEAR PROGRAM AT SUNY, A TWO YEAR PROGRAM AT CUNY AND A FOUR YEAR PROGRAM AT CUNY WOULD HAVE COST IN EACH YEAR THAT A PARTICIPANT COMPLETED PAYMENTS FOR THE FIRST YEAR, THE SECOND YEAR, THE THIRD YEAR AND THE FOURTH YEAR OF THE TOTAL COST OF EDUCATION, SHALL BE CALCULATED. (2) THE ACTUAL COST SHALL BE CALCULATED IN THE SAME MANNER AS THE TOTAL COST OF EDUCATION BY THE COMPTROLLER OR HIS OR HER DESIGNEE IN CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIGNEE AND THE CUNY CHANCELLOR OR HIS OR HER DESIGNEE. G. ONCE AN ELIGIBLE CHILD HAS GRADUATED HIGH SCHOOL OR HAS REACHED THE AGE OF SUCH CHILD'S SCHEDULED HIGH SCHOOL GRADUATION, AND IT HAS BEEN
DETERMINED THAT ALL REQUIRED PAYMENTS HAVE BEEN DEPOSITED INTO THE FUND, THE PARTICIPANTS HAVE THE FOLLOWING OPTIONS: (1) SUNY. (I) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, IS ACCEPTED TO, AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM AT SUNY, THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND FOR THE DURATION OF FOUR CONSECUTIVE YEARS IN SUCH SUNY PROGRAM AND THE COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND PROVIDE ANY REFUNDS DUE TO THE PARTICIPANT, BASED UPON RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. (II) (A) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED TO, AND ENROLLS IN A TWO YEAR PROGRAM AT SUNY, THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMP- TROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR THE DIFFERENCE BETWEEN THE COST OF A TWO YEAR PROGRAM AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT, CALCU- LATED UPON SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT AND BASED UPON RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. (B) AT THAT TIME, SUCH PARTICIPANT SHALL HAVE THE OPTION TO WITHDRAW THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND, OR MAY CHOOSE TO KEEP THE REMAINDER IN THE FUND TO BE APPLIED TO A FOUR YEAR PROGRAM IN THE EVENT THAT THE ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM. (C) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT CUNY, THE PARTICIPANT SHALL RECEIVE A REFUND FOR THE DIFFERENCE BETWEEN THE ACTUAL COST OF EDUCATION AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT, CALCULATED AT THE TIME OF THE SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT. (III) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT A NEW YORK STATE PRIVATE SCHOOL, THE PARTICIPANT MAY CHOOSE TO HAVE THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND, APPLIED TO THE COST OF EDUCATION AT SUCH PRIVATE SCHOOL. (IV) IF SUCH ELIGIBLE CHILD TRANSFERS TO AN OUT-OF-STATE COLLEGE, THE PARTICIPANT SHALL RECEIVE THE REMAINDER OF THE BALANCE THAT SUCH PARTIC- IPANT PAID INTO THE FUND. (2) CUNY. (I) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM AT CUNY, THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE, AND SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR THE DIFFER- ENCE BETWEEN THE ACTUAL COST OF EDUCATION FOR A FOUR YEAR PROGRAM AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY ADDI- TIONAL REFUNDS DUE TO THE PARTICIPANT, CALCULATED AT THE TIME OF THE SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT BASED UPON RULES AND REGU- LATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. (II) (A) IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN A TWO YEAR PROGRAM AT CUNY, THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE AND SHALL PROVIDE A REFUND TO THE PARTICIPANT FOR THE DIFFERENCE BETWEEN THE COST OF A TWO YEAR PROGRAM AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT, CALCULATED UPON SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT AND BASED UPON RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
(B) AT THAT TIME, SUCH PARTICIPANT SHALL HAVE THE OPTION TO WITHDRAW THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND, OR MAY CHOOSE TO KEEP THE REMAINDER IN THE FUND TO BE APPLIED TO A FOUR YEAR PROGRAM IN THE EVENT THAT THE ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM. (C) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT CUNY, THE PARTICIPANT SHALL RECEIVE A REFUND FOR THE DIFFERENCE BETWEEN THE ACTUAL COST OF EDUCATION AT CUNY AND THE FOUR YEAR PROGRAM FOR WHICH THEY PAID, INCLUDING ANY ADDITIONAL REFUNDS DUE TO THE PARTICIPANT, CALCULATED AT THE TIME OF THE SUBMISSION OF THE PARTICIPANT'S LAST PAYMENT. (D) IF SUCH ELIGIBLE CHILD TRANSFERS TO A FOUR YEAR PROGRAM AT SUNY, THEN SUCH ELIGIBLE CHILD'S FINANCIAL OBLIGATIONS HAVE BEEN MET TO ATTEND AND THE COMPTROLLER OR HIS OR HER DESIGNEE SHALL SUBMIT PAYMENTS TO SUCH COLLEGE, AND PROVIDE ANY REFUNDS DUE TO THE PARTICIPANT, BASED UPON RULES AND REGULATIONS ESTABLISHED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. (III) IF AN ELIGIBLE STUDENT TRANSFERS TO A NEW YORK STATE PRIVATE SCHOOL, THE PARTICIPANT MAY CHOOSE TO HAVE THE REMAINDER OF THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND, APPLIED TO THE COST OF EDUCA- TION AT SUCH PRIVATE SCHOOL. (IV) IF SUCH ELIGIBLE CHILD TRANSFERS TO AN OUT-OF-STATE COLLEGE, THE PARTICIPANT SHALL RECEIVE THE REMAINDER OF THE BALANCE THAT SUCH PARTIC- IPANT PAID INTO THE FUND. (3) NEW YORK STATE PRIVATE SCHOOL. IF A PARTICIPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN A FOUR YEAR DEGREE PROGRAM OR A TWO YEAR DEGREE PROGRAM AT A NEW YORK STATE PRIVATE SCHOOL, A PARTICIPANT MAY CHOOSE TO HAVE THE BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND APPLIED TO THE COST OF EDUCATION AT SUCH PRIVATE SCHOOL OR SUCH PARTICIPANT MAY CHOOSE TO WITHDRAW THE TOTAL CONTRIBUTION THAT SUCH PARTICIPANT PAID INTO THE FUND BASED UPON RULES AND REGULATIONS PROMUL- GATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. (4) OUT-OF-STATE SCHOOL OR NON-ACCEPTANCE INTO A NEW YORK STATE COLLEGE, OR IF AN ELIGIBLE CHILD DOES NOT APPLY TO COLLEGE. IF A PARTIC- IPANT'S ELIGIBLE CHILD APPLIES TO, GETS ACCEPTED TO AND ENROLLS IN AN OUT-OF-STATE SCHOOL OR IF A PARTICIPANT'S ELIGIBLE CHILD DOES NOT GET ACCEPTED INTO A NEW YORK STATE COLLEGE, OR CHOOSES NOT TO ATTEND COLLEGE, THEN SUCH PARTICIPANT SHALL WITHDRAW THE TOTAL CONTRIBUTION THAT SUCH PARTICIPANT PAID INTO THE FUND BASED UPON RULES AND REGU- LATIONS PROMULGATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION. (5) NON-PAYMENT. (I) IF A PARTICIPANT CANNOT MAKE THE REQUIRED PAYMENTS AT ANY TIME AFTER ENROLLMENT OF AN ELIGIBLE CHILD, THEN SUCH PARTICIPANT MAY WITHDRAW THE BALANCE THAT SUCH PARTICIPANT HAS PAID INTO THE FUND AT SUCH TIME THAT THE ELIGIBLE CHILD GRADUATES HIGH SCHOOL OR REACHES THE AGE OF SCHEDULED GRADUATION. (II) IF SUCH PARTICIPANT CANNOT MAKE PAYMENT BUT WISHES TO CONTINUE PAYING INTO THE PROGRAM, SUCH PARTICIPANT MAY RESUME PAYMENTS CALCULATED UNDER A NEW SCHEDULE BASED UPON THE ELIGIBLE CHILD'S CURRENT AGE AND THE CURRENT TOTAL COST OF EDUCATION. (6) DEATH OF ELIGIBLE CHILD. IN THE EVENT OF THE DEATH OF AN ENROLLED ELIGIBLE CHILD, THE PARTICIPANT MAY WITHDRAW THE TOTAL BALANCE THAT SUCH PARTICIPANT PAID INTO THE FUND OR MAY ELECT TO HAVE A SCHOLARSHIP IN THE AMOUNT OF SUCH TOTAL BALANCE AWARDED TO ANOTHER STUDENT IN THE NAME OF SUCH DECEASED ELIGIBLE CHILD, UPON SUBMISSION OF A DEATH CERTIFICATE AND BASED UPON RULES AND REGULATIONS PROMULGATED PURSUANT TO SUBDIVISION FOUR OF THIS SECTION.
4. THE COMPTROLLER OR HIS OR HER DESIGNEE, IN CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIGNEE AND THE CUNY CHANCELLOR OR HIS OR HER DESIGNEE, SHALL PROMULGATE ALL NECESSARY RULES AND REGULATIONS FOR THE SUCCESSFUL IMPLEMENTATION OF THIS SECTION. SUCH RULES AND REGU- LATIONS SHALL INCLUDE PROVISIONS TO ADDRESS AN ELIGIBLE CHILD'S ELIGI- BILITY FOR TUITION ASSISTANCE PROGRAM AWARDS OR ANY OTHER SCHOLARSHIPS, GRANTS OR AWARDS, TO ENSURE THAT THE VALUE OF SUCH AWARDS ARE REFUNDED TO THAT PARTICIPANT OR ELIGIBLE CHILD. S 2. The state finance law is amended by adding a new section 99-u to read as follows: S 99-U. NEW YORK STATE PRE-PAY TUITION FUND. 1. THERE IS HEREBY ESTABLISHED WITHIN THE CUSTODY OF THE STATE COMPTROLLER, OR HIS OR HER DESIGNEE, IN CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIG- NEE AND THE CUNY CHANCELLOR OR HIS OR HER DESIGNEE, A NEW FUND TO BE KNOWN A THE NEW YORK STATE PRE-PAY TUITION FUND. 2. ALL MONIES RECEIVED PURSUANT TO THE NEW YORK STATE PRE-PAY TUITION PROGRAM SHALL BE DEPOSITED INTO THIS FUND AND SHALL BE MANAGED PURSUANT TO SECTION THREE HUNDRED FIFTY-FIVE-D OF THE EDUCATION LAW. 3. ALL NECESSARY RULES AND REGULATIONS FOR THE SUCCESSFUL ADMINIS- TRATION, INVESTMENT AND MANAGEMENT OF SUCH FUND SHALL BE PROMULGATED BY THE STATE COMPTROLLER OR HIS OR HER DESIGNEE IN CONSULTATION WITH THE SUNY CHANCELLOR OR HIS OR HER DESIGNEE OR THE CUNY CHANCELLOR OR HIS OR HER DESIGNEE. S 3. Paragraph 33 of subsection (c) of section 612 of the tax law, as added by chapter 546 of the laws of 1997, is amended to read as follows: (33) Distributions from a family tuition account established under the New York state college choice tuition savings program provided for under article fourteen-A of the education law OR DISTRIBUTIONS FROM THE NEW YORK STATE PRE-PAY TUITION SAVINGS PROGRAM PROVIDED FOR UNDER SECTION THREE HUNDRED FIFTY-FIVE-D OF THE EDUCATION LAW, to the extent includi- ble in gross income for federal income tax purposes. S 4. Nothing in this act shall be construed to guarantee acceptance into any New York state college. S 5. This act shall take effect one year after it shall have become a law; provided however that effective immediately the New York state comptroller or his or her designee, in consultation with the chancellor of the state university of New York or his or her designee and the chan- cellor of the city university of New York or his or her designee, shall promulgate all necessary rules and regulations for the timely implemen- tation of this act on or before such effective date. S 2. Severability. If any clause, sentence, paragraph, section or part of this act shall be adjudged by any court of competent jurisdiction to be invalid and after exhaustion of all further judicial review, the judgment shall not affect, impair, or invalidate the remainder thereof, but shall be confined in its operation to the clause, sentence, para- graph, section or part of this act directly involved in the controversy in which the judgment shall have been rendered. S 3. This act shall take effect immediately provided, however, that the applicable effective date of Parts A through D of this act shall be as specifically set forth in the last section of such Parts.

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