Bill Text: NY S05298 | 2021-2022 | General Assembly | Introduced

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

Spectrum: Partisan Bill (Republican 1-0)

Status: (Introduced - Dead) 2022-01-05 - REFERRED TO HIGHER EDUCATION [S05298 Detail]

Download: New_York-2021-S05298-Introduced.html

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                STATE OF NEW YORK
        ________________________________________________________________________

                                          5298

                               2021-2022 Regular Sessions

                    IN SENATE

                                      March 1, 2021
                                       ___________

        Introduced  by  Sen.  AKSHAR -- read twice and ordered printed, and when
          printed to be committed to the Committee on Higher Education

        AN ACT to amend the education law and the tax law, in relation to estab-
          lishing student loan repayment accounts

          The People of the State of New York, represented in Senate and  Assem-
        bly, do enact as follows:

     1    Section 1. The education law is amended by adding a new section 682 to
     2  read as follows:
     3    §  682.  Student  loan  repayment  accounts.  1. An employer is hereby
     4  authorized to establish student  loan  repayment  accounts  which  shall
     5  permit  his  or  her  employees  to  deposit  a portion of their pre-tax
     6  income, up to five thousand dollars annually, into such accounts  solely
     7  for  undergraduate or graduate student loan repayments. Employers elect-
     8  ing to establish such accounts  may  contribute  matching  funds  to  an
     9  employee's  student  loan  repayment  account  and  shall  receive a tax
    10  deduction for such contributions. Such contribution may be up to a maxi-
    11  mum of one hundred percent of the employee's deposit, up to  five  thou-
    12  sand dollars annually, per employee account.
    13    2.  For  the  purposes  of this section, "student loan" shall mean the
    14  cumulative total of the  annual  student  loans  covering  the  cost  of
    15  attendance  at  an  undergraduate or graduate college or university, and
    16  any interest thereon.
    17    3. Employee student loan repayment accounts shall be  established  for
    18  the  deposit of funds to be used by the employee solely for repayment of
    19  student loans. Such accounts shall be managed by the comptroller and the
    20  higher education services corporation. All participating  employers  and
    21  employees  shall  provide  the  comptroller and the corporation with all
    22  necessary information in order  to  implement  the  provisions  of  this
    23  section.
    24    4.  Moneys in a student loan repayment account shall be available only
    25  for repayments of student loans as defined in this  section.  Any  with-

         EXPLANATION--Matter in italics (underscored) is new; matter in brackets
                              [ ] is old law to be omitted.
                                                                   LBD04083-01-1
        S. 5298                             2

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