BILL NUMBER: S9700
SPONSOR: STAVISKY
 
TITLE OF BILL:
An act to amend the education law, in relation to the New York state
college choice tuition savings program
 
PURPOSE:
The purpose of this legislation is to allow the New York State college
choice tuition savings program (NY 529) to support scholarships and
grant programs.
 
SUMMARY OF PROVISIONS:
Section 1 of this proposal amends section 695-c of the Education law to
allow the Comptroller and the Higher Education Services Corporation to
jointly determine when the 529 program has funds available, after the
payment of administrative costs, to support scholarships and grant
programs.
Section 2 of this proposal amends section 695-e of the Education Law to
authorize a State to open a 529 account, or accounts, to fund grants and
scholarships
Section 3 of this proposal provides for an immediate effective date.
 
JUSTIFICATION:
New York's 529 College Savings Program (NY 529 Program or Program),
which is jointly administered by the Comptroller and the New York State
Higher Education Services Corporation (HESC), allows program partic-
ipants to save money for their selected beneficiary's higher education
expenses. The Program enables residents of New York and other states to
benefit from the tax incentive provided for qualified state tuition
programs under the Internal Revenue Code of 1986.
While State statute authorizes municipalities and 501(c)(3) organiza-
tions to open scholarship accounts in the NY 529 Program, this authori-
zation does not include state entities such as the NY 529 Program. The
Comptroller and HESC currently partner with several organizations that
have opened child development scholarship accounts in the NY 529
Program. The accounts are typically opened when the children begin
kindergarten and become available to them upon graduation from high
school so they may pursue higher education or eligible apprenticeships.
One sponsor, New York City Kids RISE, Inc., offers automatic enrollment
in a scholarship account established in the NY 529 Program to each child
who enters kindergarten in the New York City public school system and
participating charter schools. Launched in 2017, this Save for College
Program currently enrolls over 200,000 students in scholarship accounts
with total assets of approximately $32 million invested for their higher
education expenses.
While the NY 529 Program has facilitated this initiative, current statu-
tory language constrains the State from opening or contributing funds to
such child development initiatives through grant funding. This bill
would authorize the State to open 529 accounts to support grant or scho-
larship programs.
 
PRIOR LEGISLATIVE HISTORY:
New bill.
 
FISCAL IMPLICATIONS FOR STATE:
None.
 
EFFECTIVE DATE:
This act shall take effect immediately.

Statutes affected:
S9700: 695-c education law, 695-c(2) education law, 695-e education law, 695-e(12) education law