S T A T E   O F   N E W   Y O R K
 ________________________________________________________________________
 
                                   1125
 
                        2025-2026 Regular Sessions
 
                             I N  S E N A T E
 
                              January 8, 2025
                                ___________
 
 Introduced  by Sens. OBERACKER, BORRELLO, GALLIVAN, RHOADS -- 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  THEIR EMPLOYEES TO DEPOSIT A PORTION OF THEIR PRE-TAX INCOME, UP
 TO FIVE THOUSAND DOLLARS ANNUALLY, INTO SUCH ACCOUNTS SOLELY FOR  UNDER-
 GRADUATE  OR  GRADUATE  STUDENT  LOAN  REPAYMENTS. EMPLOYERS ELECTING 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  MAXIMUM  OF  ONE
 HUNDRED  PERCENT  OF THE EMPLOYEE'S DEPOSIT, UP TO FIVE THOUSAND 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.
 
  EXPLANATION--Matter in ITALICS (underscored) is new; matter in brackets
                       [ ] is old law to be omitted.
                                                            LBD03495-01-5
 S. 1125                             2
              

 
   4. MONEYS IN A STUDENT LOAN REPAYMENT ACCOUNT SHALL BE AVAILABLE  ONLY
 FOR  REPAYMENTS  OF  STUDENT LOANS AS DEFINED IN THIS SECTION. ANY WITH-
 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.