S T A T E   O F   N E W   Y O R K
________________________________________________________________________

                                  10354

                          I N  A S S E M B L Y

                              May 24, 2012
                               ___________

Introduced  by  M. of A. KOLB -- read once and referred to the Committee
  on Ways and Means

AN ACT to amend the tax law, in relation to a  tuition  tax  credit  and
  increasing the amount of an allowable deduction (Part A); and to amend
  the  tax law, in relation to reducing income by the amount of interest
  paid for student loans (Part B)

  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  Retain-NY.  Each component is wholly contained within a Part identi-
fied as Parts A through  B.  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, includ-
ing  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.  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
OR AFTER TWO THOUSAND TWELVE, THIRTEEN THOUSAND  EIGHT  HUNDRED  DOLLARS
FOR EACH SUCH STUDENT;

 EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                      [ ] is old law to be omitted.
                                                           LBD15925-01-2

              

A. 10354                            2

  S  2.  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
EXPENSES ARE:                        THE TAX CREDIT IS EQUAL TO:
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 OR AFTER TWO THOUSAND TWELVE:
IF ALLOWABLE COLLEGE TUITION
EXPENSES ARE:                        THE TAX CREDIT IS EQUAL TO:
LESS THAN SIX THOUSAND NINE          THE LESSER OF ALLOWABLE COLLEGE
HUNDRED DOLLARS                      TUITION EXPENSES OR TWO HUNDRED
                                     SEVENTY-FIVE DOLLARS
SIX THOUSAND NINE HUNDRED            THE ALLOWABLE COLLEGE TUITION
DOLLARS OR MORE                      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 3. 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 THIRTEEN, 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 TAX YEAR SHALL BE THE PERCENTAGE,
IF ANY, BY WHICH THE HIGHER  EDUCATION  PRICE  INDEX  FOR  THE  ACADEMIC
FISCAL  YEAR  ENDING  IN  THE IMMEDIATELY PRECEDING TAX YEAR EXCEEDS THE
HIGHER EDUCATION PRICE INDEX FOR THE ACADEMIC FISCAL  YEAR  ENDING  JUNE
TWO  THOUSAND  TWELVE.  FOR  THE  PURPOSES OF THIS PARAGRAPH, THE HIGHER
EDUCATION PRICE INDEX MEANS THE HIGHER EDUCATION PRICE  INDEX  PUBLISHED
BY THE COMMON FUND INSTITUTE.
  (C) IF THE PRODUCT OF THE AMOUNTS IN SUBPARAGRAPH (A) AND SUBPARAGRAPH
(B)  OF  THIS PARAGRAPH IS NOT A MULTIPLE OF FIVE DOLLARS, SUCH INCREASE
SHALL BE ROUNDED TO THE NEXT MULTIPLE OF FIVE DOLLARS.
  S 4. This act shall take effect immediately.

A. 10354                            3

                                 PART B

  Section  1. Subsection (c) of section 612 of the tax law is amended by
adding a new paragraph 39 to read as follows:
  (39) FOR TAX YEARS  COMMENCING  AFTER  DECEMBER  FIRST,  TWO  THOUSAND
TWELVE,  FOR TAXPAYERS, ALL INTEREST PAID ON STUDENT LOANS. FOR PURPOSES
OF THIS PARAGRAPH "STUDENT LOAN" MEANS A LOAN TO A STUDENT FROM A LENDER
TO HELP PAY FOR THE COST OF POST-SECONDARY EDUCATION AT A POST-SECONDARY
SCHOOL. FOR PURPOSES OF THIS PARAGRAPH "LENDER" MEANS  A  BANK,  SAVINGS
AND  LOAN  ASSOCIATION,  CREDIT  UNION, PENSION FUND, INSURANCE COMPANY,
SCHOOL, OR STATE LENDING AGENCY.
  S 2. This act shall take effect immediately.
  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 B of this act shall  be
as specifically set forth in the last section of such Parts.