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.