NY State Senate Bill 2023-S5109

Current Bill Status - In Senate Committee Higher Education Committee

Introduced
- In Committee Assembly
- In Committee Senate
- On Floor Calendar Assembly
- On Floor Calendar Senate
- Passed Assembly
- Passed Senate
Delivered to Governor
Signed By Governor

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Actions

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	Assembly Actions - Lowercase Senate Actions - UPPERCASE
Jan 03, 2024	referred to higher education
Feb 23, 2023	referred to higher education

co-Sponsors

2023-S5109 (ACTIVE) - Details

Current Committee:: Senate Higher Education
Law Section:: Education Law
Laws Affected:: Add §682, Ed L; amd §§208 & 612, Tax L
Versions Introduced in Other Legislative Sessions:: 2017-2018: S6240
2019-2020: S341
2021-2022: S5298

2023-S5109 (ACTIVE) - Summary

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.

2023-S5109 (ACTIVE) - Sponsor Memo

                                 
BILL NUMBER: S5109

SPONSOR: OBERACKER
 
TITLE OF BILL:

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

 
PURPOSE:

This bill would allow employers to establish tax-deductible student loan
repayment accounts.

 
SUMMARY OF PROVISIONS:

Section 1 of the bill amends the education law to authorize employers to
create student loan repayment accounts. Employees will be al lowed to
deposit up to $5,000 of their pre-taxable income annually.  Employers
may contribute matching funds to an employee's student loan repayment
account up to a maximum 100% of the employee's contribution. The student
loan accounts shall be managed by the comptroller and the higher educa-
tion services corporation.

Section 2 adds a new paragraph that establishes student loan repayment
accounts, which allow a deduction from entire net income in an amount
equal to the total amount of matching contributions made to employees'
student loan repayment accounts by a taxpayer during the taxable year.

Section 3 establishes adds a new paragraph that states the amount equal
to the total of matching contributions made by a taxpayer during the
taxable year to employees' student loan repayment accounts be estab-
lished pursuant to section six hundred eighty-two of the education law.

Section 4 states that the aggregate of tax expenditure and taxes forgone
shall not exceed $70,000,000.

Section 5 lists the effective date.

 
JUSTIFICATION:

New Yorkers of all ages are currently facing heavy financial burdens due
to high amounts of student loan debt. Many families are struggling with
this burdensome debt while trying to provide for their families,
attempting to establish careers, and buy homes within the state.

In 2015, 17.9% of college graduates in New York State had accumulated
approximately $32,000 in student loan debt (The Federal Reserve Bank of
New York). Studies have shown that people younger than 40 years old
continue to have approximately 65% of outstanding higher education debt.

According to a 2016 study by the Society of Human Resource Management,
only 4% of companies are currently offering student loan repayment
assistance. This bill aims to raise that percentage and to create a
better environment for both employees and employers.

Student loan repayment accounts would help businesses and employers in
New York to attract and retain highly qualified employees. By providing
opportunities for our citizens to be successful contributors to our

economy, we are paving the way for a better business climate as well as
a stronger workforce in the State of New York.

 
LEGISLATIVE HISTORY:

2021-2022 S5298

2019-2020 S341A

2017-2018 S6240

 
FISCAL IMPLICATIONS:

The program shall not exceed $70 million annually.

 
EFFECTIVE DATE:
Sixty days after becoming law.

2023-S5109 (ACTIVE) - Bill Text download pdf

                             
                     S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   5109
 
                        2023-2024 Regular Sessions
 
                             I N  S E N A T E
 
                             February 23, 2023
                                ___________
 
 Introduced by Sen. OBERACKER -- 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:
 
   Section 1. The education law is amended by adding a new section 682 to
 read as follows:
   § 682. STUDENT LOAN REPAYMENT  ACCOUNTS.  1.  AN  EMPLOYER  IS  HEREBY
 AUTHORIZED  TO  ESTABLISH  STUDENT  LOAN  REPAYMENT ACCOUNTS WHICH SHALL
 PERMIT HIS OR HER EMPLOYEES  TO  DEPOSIT  A  PORTION  OF  THEIR  PRE-TAX
 INCOME,  UP TO FIVE THOUSAND DOLLARS ANNUALLY, INTO SUCH ACCOUNTS SOLELY
 FOR UNDERGRADUATE OR GRADUATE STUDENT LOAN REPAYMENTS. EMPLOYERS  ELECT-
 ING  TO  ESTABLISH  SUCH  ACCOUNTS  MAY  CONTRIBUTE MATCHING FUNDS TO AN
 EMPLOYEE'S STUDENT LOAN  REPAYMENT  ACCOUNT  AND  SHALL  RECEIVE  A  TAX
 DEDUCTION FOR SUCH CONTRIBUTIONS. SUCH CONTRIBUTION MAY BE UP TO A MAXI-
 MUM  OF  ONE HUNDRED PERCENT OF THE EMPLOYEE'S DEPOSIT, UP TO FIVE THOU-
 SAND DOLLARS ANNUALLY, PER EMPLOYEE ACCOUNT.
   2. FOR THE PURPOSES OF THIS SECTION, "STUDENT  LOAN"  SHALL  MEAN  THE
 CUMULATIVE  TOTAL  OF  THE  ANNUAL  STUDENT  LOANS  COVERING THE COST OF
 ATTENDANCE AT AN UNDERGRADUATE OR GRADUATE COLLEGE  OR  UNIVERSITY,  AND
 ANY INTEREST THEREON.
   3.  EMPLOYEE  STUDENT LOAN REPAYMENT ACCOUNTS SHALL BE ESTABLISHED FOR
 THE DEPOSIT OF FUNDS TO BE USED BY THE EMPLOYEE SOLELY FOR REPAYMENT  OF
 STUDENT LOANS. SUCH ACCOUNTS SHALL BE MANAGED BY THE COMPTROLLER AND THE
 HIGHER  EDUCATION  SERVICES CORPORATION. ALL PARTICIPATING EMPLOYERS AND
 EMPLOYEES SHALL PROVIDE THE COMPTROLLER AND  THE  CORPORATION  WITH  ALL
 NECESSARY  INFORMATION  IN  ORDER  TO  IMPLEMENT  THE PROVISIONS OF THIS
 SECTION.
   4. MONEYS IN A STUDENT LOAN REPAYMENT ACCOUNT SHALL BE AVAILABLE  ONLY
 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.
                                                            LBD09163-01-3

 S. 5109                             2
 
 DRAWAL OR DISTRIBUTION FROM  A  STUDENT  LOAN  REPAYMENT  ACCOUNT  WHICH
 VIOLATED THE PROVISIONS OF THIS SUBDIVISION SHALL BE SUBJECT TO A PENAL-
 TY OF TEN PERCENT ON ANY SUCH WITHDRAWAL OR DISTRIBUTION.
   5. THE COMMISSIONER AND THE COMMISSIONER OF TAXATION AND FINANCE SHALL
 JOINTLY  PROMULGATE  RULES  AND  REGULATIONS  NECESSARY TO IMPLEMENT THE
 PROVISIONS OF THIS SECTION.
   § 2. Subdivision 9 of section 208 of the tax law is amended by  adding
 a new paragraph (u) to read as follows:
   (U)  A  TAXPAYER ESTABLISHING STUDENT LOAN REPAYMENT ACCOUNTS PURSUANT
 TO SECTION SIX HUNDRED EIGHTY-TWO OF THE EDUCATION LAW SHALL BE  ALLOWED
 A  DEDUCTION  FROM  ENTIRE  NET  INCOME  IN AN AMOUNT EQUAL TO THE TOTAL
 AMOUNT OF MATCHING CONTRIBUTIONS MADE TO EMPLOYEES' STUDENT LOAN  REPAY-
 MENT ACCOUNTS BY A TAXPAYER DURING THE TAXABLE YEAR.
   § 3. Subsection (c) of section 612 of the tax law is amended by adding
 a new paragraph 17 to read as follows:
   (17)  THE  AMOUNT  EQUAL TO THE TOTAL AMOUNT OF MATCHING CONTRIBUTIONS
 MADE BY A TAXPAYER DURING THE TAXABLE YEAR TO  EMPLOYEES'  STUDENT  LOAN
 REPAYMENT  ACCOUNTS  ESTABLISHED PURSUANT TO SECTION SIX HUNDRED EIGHTY-
 TWO OF THE EDUCATION LAW.
   § 4. Notwithstanding any provision of the tax law to the contrary, the
 aggregate of tax expenditure and taxes forgone pursuant to sections  two
 and  three of this act shall not exceed $70,000,000. The commissioner of
 taxation and finance shall immediately suspend  both  deductions  estab-
 lished  pursuant  to such sections upon reaching the $70,000,000 thresh-
 old.
   § 5. This act shall take effect on the sixtieth  day  after  it  shall
 have  become  a  law  and  shall apply to taxable years commencing on or
 after such effective date. Effective immediately the addition, amendment
 and/or repeal of any rule or regulation necessary for the implementation
 of this act on  its  effective  date  are  authorized  to  be  made  and
 completed on or before such date.

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Senate Bill S5109

Sponsored By

Current Bill Status - In Senate Committee Higher Education Committee

co-Sponsors

2023-S5109 (ACTIVE) - Details

2023-S5109 (ACTIVE) - Summary

2023-S5109 (ACTIVE) - Sponsor Memo

2023-S5109 (ACTIVE) - Bill Text download pdf

Comments

Senate Bill S5109

Share this bill

Sponsored By

Peter Oberacker

Current Bill Status - In Senate Committee Higher Education Committee

co-Sponsors

George M. Borrello

Patrick M. Gallivan

Steven D. Rhoads

2023-S5109 (ACTIVE) - Details

2023-S5109 (ACTIVE) - Summary

2023-S5109 (ACTIVE) - Sponsor Memo

2023-S5109 (ACTIVE) - Bill Text download pdf

Comments