N.Y. Tax Law § 171-D — Certain overpayments credited against defaulted governmental education loans

§ 171-d. Certain overpayments credited against defaulted governmental\neducation loans. (1) The commissioner, on behalf of the tax commission,\nshall enter into a written agreement with the president of the New York\nstate higher education services corporation, on behalf of such\ncorporation, which shall set forth the procedures for crediting any\noverpayment by an individual, estate or trust of income tax imposed by\narticle twenty-two of this chapter, city personal income tax on\nresidents imposed pursuant to the authority of article thirty of this\nchapter, city income tax surcharge on residents imposed pursuant to the\nauthority of article thirty-A of this chapter, city earnings tax on\nnonresidents imposed pursuant to the authority of former article two-E\nof the general city law and city earnings tax on nonresidents imposed\npursuant to the authority of article thirty-B of this chapter and the\ninterest on such overpayments against the amount of any default in\nrepayment of any governmental education loan owed by such individual,\nestate or trust of which the commissioner has been notified by the\npresident of the New York state higher education services corporation\npursuant to the provisions of such agreement. For purposes of this\nsection, "governmental education loan" shall mean any education loan\ndebt, including judgments, owed to the federal or New York state\ngovernment that is being collected by the New York state higher\neducation services corporation.\n (2) Such agreement shall apply only to the amount of a default in\nrepayment of any governmental education loan debt, including judgments,\nbeing collected by the New York state higher education services\ncorporation. Such agreement shall require the New York state higher\neducation services corporation to satisfy the requirements of\nsubdivision three of section one hundred seventy-one-f of this article.\n (3) Such agreement shall include:\n (a) the procedure under which the New York state higher education\nservices corporation shall notify the commissioner of a default in\nrepayment of a governmental education loan, such procedure to specify\nwhen the commissioner shall be notified and the content of such\nnotification;\n (b) the minimum amount outstanding on a default in repayment of a\ngovernmental education loan against which the commissioner shall,\npursuant to this section, credit an overpayment;\n (c) the procedure for reimbursement of the commissioner by the New\nYork state higher education services corporation for the full cost of\ncarrying out the procedures authorized by this section;\n (d) such other matters as the parties to such agreement shall deem\nnecessary to carry out the provisions of this section; and\n (e) the procedure for reimbursement of the comptroller by the New York\nstate higher education services corporation for overpayment and interest\nthereon which has been credited against the amount of default in\nrepayment of a governmental education loan owed by a taxpayer filing a\njoint return, but which has been refunded by the comptroller, pursuant\nto paragraph six of subsection (b) of section six hundred fifty-one of\nthis chapter, to a spouse not liable for the amount of default in\nrepayment of a governmental education loan owed by such taxpayer.\n (4) (i) In calculating the amount of an overpayment and interest\nthereon which shall be credited against the amount of a default in\nrepayment of a governmental education loan owed by a taxpayer, the\ncommissioner shall first credit the overpayment and interest thereon\nagainst any:\n (A) liability of such taxpayer in respect of any tax imposed by this\nchapter;\n (B) liability of such taxpayer for any tax imposed pursuant to the\nauthority of this chapter or any other law if such tax is administered\nby the tax commission;\n (C) estimated tax for the succeeding taxable year if such taxpayer\nclaims such overpayment or a portion thereof as a credit against\nestimated tax for such succeeding taxable year pursuant to subsection\n(e) of section six hundred eighty-six of this chapter or subdivision (e)\nof section 11-1786 of the administrative code of the city of New York\nfor any tax imposed pursuant to the authority of this chapter or any\nother law if such tax is administered by the tax commission; and\n (D) past-due support owed by the taxpayer pursuant to section one\nhundred seventy-one-c of this article.\n (E) the amount of a default in repayment of a state university loan or\ncity university loan pursuant to section one hundred seventy-one-e of\nthis article.\n (F) the amount of a past-due legally enforceable debt owed to a state\nagency pursuant to section one hundred seventy-one-f of this article.\n (G) the amount of a city of New York tax warrant judgment debt owed to\nthe city of New York pursuant to section one hundred seventy-one-l of\nthis article.\n (ii) Only the balance remaining, after such overpayment and the\ninterest thereon has been credited as described in paragraph (i) of this\nsubdivision, shall be certified as an overpayment plus any interest to\nbe credited against the amount of a default in repayment of a\ngovernmental education loan, with the remainder to be refunded to the\ntaxpayer.\n (5) The tax commission shall certify to the comptroller the total\namount of the overpayment and the interest on such overpayment, the\namount of such overpayment and the interest on such amount to be\ncredited against the amount of the default in repayment of a\ngovernmental education loan and the balance of such overpayment and\ninterest to be refunded to the taxpayer.\n (6) The commissioner shall notify the taxpayer making the overpayment,\nin writing, of the amount of such overpayment and the interest thereon\ncertified to the comptroller as the amount to be credited against the\namount of a default in repayment of a governmental education loan. Such\nnotice shall include notification to any other person who may have filed\na joint return with the taxpayer of the steps such other person may take\nin order to secure his or her proper share of the refund.\n (7) From the time the state tax commission is notified by the New York\nstate higher education services corporation of an individual's, estate's\nor trust's default in repayment of a governmental education loan under\nthe agreement provided for in this section, the state tax commission and\nthe department shall be relieved from all liability to such individual,\nestate or trust, their assigns, successors, heirs or representatives for\nthe amount of an overpayment and interest on such amount certified to\nthe comptroller to be credited against the amount of default in\nrepayment of a governmental education loan and such individual, estate\nor trust shall have no right to commence a court action or proceeding or\nto any other legal recourse against the state tax commission or the\ndepartment to recover such overpayment or such interest certified to the\ncomptroller to be credited against the amount of default in repayment of\na governmental education loan. Provided, however, nothing herein shall\nbe construed to prohibit such individual, estate or trust from\nproceeding against the New York state higher education services\ncorporation to recover that part of such overpayment or interest thereon\nso certified to the comptroller to be credited against the amount of a\ndefault in repayment of a governmental education loan which is greater\nthan the amount of such default owed by such individual, estate or trust\non the date of such certification.\n (8) The tax commission shall promulgate such rules and regulations as\nit deems necessary to carry out the provisions of this section.\n