ESC-28-14-00022-P New York State Young Farmers Loan Forgiveness Incentive Program

7/16/14 N.Y. St. Reg. ESC-28-14-00022-P

NEW YORK STATE REGISTER

VOLUME XXXVI, ISSUE 28

July 16, 2014

RULE MAKING ACTIVITIES

HIGHER EDUCATION SERVICES CORPORATION

PROPOSED RULE MAKING

NO HEARING(S) SCHEDULED

 

I.D No. ESC-28-14-00022-P

New York State Young Farmers Loan Forgiveness Incentive Program

PURSUANT TO THE PROVISIONS OF THE State Administrative Procedure Act, NOTICE is hereby given of the following proposed rule:

Proposed Action:

Addition of section 2201.14 to Title 8 NYCRR.

Statutory authority:

Education Law, sections 653, 655 and 679-f

Subject:

New York State Young Farmers Loan Forgiveness Incentive Program.

Purpose:

To implement the New York State Young Farmers Loan Forgiveness Incentive Program.

Text of proposed rule:

New section 2201.14 is added to Title 8 of the New York Code, Rules and Regulations to read as follows:

Section 2201.14 New York State Young Farmers Loan Forgiveness Incentive Program.

(a) Definitions. The following definitions apply to this section:

(1) “Approved New York state college or university” shall mean a college or university located within New York State that is accredited by an agency recognized by the United States secretary of education, or by a successor federal agency.

(2) “Award” shall mean a New York State Young Farmers Loan Forgiveness Incentive Program award pursuant to section 679-f of the New York State Education Law.

(3) “Corporation” shall mean the New York State Higher Education Services Corporation.

(4) “Degree” shall mean an undergraduate degree.

(5) “Economically disadvantaged” and “economic need” shall mean applicants who demonstrate the greatest need by dividing their household income by their outstanding student loan debt; the lowest resulting quotient evidences the greatest need.

(6) “Full time” shall mean employment devoted to the operation of a farm in New York State in accordance with the employer’s or proprietor’s policy, practice, and standard for defining full time employment.

(7) “Household income” shall mean the federal Adjusted Gross Income (AGI) for individuals or married couples filing jointly, or the aggregate AGI of married couples filing separately, reduced by a cost of living allowance, which shall be equal to the applicant’s eligible New York State standard deductions plus their eligible New York State dependent exemptions for personal income tax purposes.

(8) “Operate” and “operation” shall mean employment in a managerial position.

(9) “Outstanding student loan debt” shall mean the total cumulative student loan balance required to be paid by the applicant at the time of selection for an award under this program. Such outstanding student loan debt shall include the outstanding principal and any accrued interest covering the cost of attendance to obtain an undergraduate degree from an approved New York State college or university.

(10) “Program” shall mean the New York State Young Farmers Loan Forgiveness Incentive Program.

(b) Eligibility. An applicant must satisfy the requirements provided in section 679-f of the Education Law.

(c) Administration.

(1) An applicant for an award shall:

(i) apply for program eligibility on forms and in a manner prescribed by the corporation. The corporation may require applicants to provide additional documentation evidencing eligibility; and

(ii) postmark or electronically transmit an application for program eligibility to the corporation on or before the date prescribed by the corporation.

(2) A recipient of an award shall:

(i) execute a service contract prescribed by the corporation;

(ii) apply for payment annually on forms prescribed by the corporation;

(iii) confirm annually his or her operation of a farm in New York State on a full time basis by submitting a certification from his or her employer attesting to the recipient’s job title, job duties, full-time employment status (including a copy of the employer’s policy, practice, and standard for defining full time employment), and any other information necessary for the corporation to determine eligibility. Said submission shall be on forms and in a manner prescribed by the corporation; and

(iv) not receive more than ten thousand dollars per year for not more than five years in duration and not to exceed the total amount of such recipient’s outstanding student loan debt.

(3) The outstanding student loan debt shall:

(i) include New York State student loans, federal government student loans, and private student loans for the purpose of financing undergraduate studies made by commercial entities subject to governmental examination.

(ii) exclude federal parent PLUS loans; loans cancelled under any program; private loans given by family or personal acquaintances; student loan debt paid by credit card; loans paid in full, or in part, on or before the first successful application for program eligibility under this program; loans for which documentation is not available; loans without a promissory note; or any other loan debt that cannot be verified by the corporation.

(iii) be reduced by any reductions to student loan debt that an applicant has received or shall receive.

(d) Award selection.

(1) For the first year of this program’s operation, awards shall be granted to applicants who are economically disadvantaged with a priority given to those applicants completing the second, third, fourth or fifth year of full time farm operation.

(2) For the second year of this program’s operation and thereafter, awards shall be made in the following order of priority:

(i) applicants who received an award in a prior year and are re-applying to receive an award under this program;

(ii) applicants who are economically disadvantaged, but did not receive an award during the first year of this program’s operation, with a priority given to those applicants completing the second, third, fourth or fifth year of full time farm operation.

(3) All awards are contingent upon annual appropriations.

(e) Abandonment or revocation. Upon prior notice to a recipient, an award may be revoked by the corporation if the corporation determines that the recipient has abandoned their award. Abandonment of an award can be evidenced by:

(1) a failure to apply for payment or reimbursement;

(2) a lack of any contact or communication with the corporation;

(3) a failure to respond to a request for information; or

(4) any other information known to the corporation reasonably evidencing an indication of abandonment by a program participant.

Text of proposed rule and any required statements and analyses may be obtained from:

Cheryl B. Fisher, NYS Higher Education Services Corporation, 99 Washington Avenue, Room 1325, Albany, New York 12255, [phone], email: [e-mail]

Data, views or arguments may be submitted to:

Same as above.

Public comment will be received until:

45 days after publication of this notice.

Regulatory Impact Statement

Statutory authority:

The New York State Higher Education Services Corporation’s (“HESC”) statutory authority to promulgate regulations and administer the New York State Young Farmers Loan Forgiveness Incentive Program (“Program”) is codified within Article 14 of the Education Law. In particular, Part Y of Chapter 56 of the Laws of 2014 created the Program by adding a new section 679-f to the Education Law. Pursuant to subdivision 1 of section 679-f of the Education Law, HESC is required to promulgate rules and regulations for the administration of this Program.

Pursuant to Education Law § 652(2), HESC was established for the purpose of improving the post-secondary educational opportunities of eligible students through the centralized administration of New York State financial aid programs and coordinating the State’s administrative effort in student financial aid programs with those of other levels of government.

In addition, Education Law § 653(9) empowers HESC’s Board of Trustees to perform such other acts as may be necessary or appropriate to carry out the objects and purposes of the corporation including the promulgation of rules and regulations.

HESC’s President is authorized, under Education Law § 655(4), to propose rules and regulations, subject to approval by the Board of Trustees, governing, among other things, the application for and the granting and administration of student aid and loan programs; the repayment of loans or the guarantee of loans made by HESC; and administrative functions in support of State student aid programs. Also, consistent with Education Law § 655(9), HESC’s President is authorized to receive assistance from any Division, Department or Agency of the State in order to properly carry out his or her powers, duties and functions. Finally, Education Law § 655(12) provides HESC’s President with the authority to perform such other acts as may be necessary or appropriate to carry out effectively the general objects and purposes of HESC.

Legislative objectives:

The Education Law was amended to add a new section 679-f to create the “New York State Young Farmers Loan Forgiveness Incentive Program” (Program). This Program is aimed at increasing the number of new farmers in New York State by alleviating the student loan debt burden for recent college graduates entering the agricultural profession.

Needs and benefits:

New York State law provides various loan forgiveness programs to encourage individuals to pursue careers in a needed area or profession. Taking steps to recruit college graduates to the agricultural profession serves to help address a shortage in an occupation of strategic importance to the State.

Agriculture is the leading industry in New York, yet New York’s farm community is aging. It has become increasingly difficult to attract young people to farming and to encourage younger generations to consider farming as a career. The average age of farm operators in New York is 59, and is expected to continue to increase unless steps are taken to reverse this trend. The U.S. Secretary of Agriculture has set a goal of recruiting 100,000 new farmers across the country to replace those who are retiring. By enacting a loan forgiveness program for young farmers, New York can take one small step at helping that recruitment effort.

Farming is a difficult business and there are many barriers to younger farmers who might consider entering the profession. In fact, less than 1,000 students were awarded degrees in agriculture by colleges in New York State. Yet the agricultural industry has a substantial impact on the overall economic health and wellbeing of the State. It is in the best interest of the State to ensure that enough producers are recruited and retained in the agricultural field. Additionally, the recent increase in demand for quality fresh locally grown foods and beverages highlights the importance of assisting new farmers to enter the profession.

Costs:

a. There are no application fees, processing fees, or other costs to the applicants of this Program.

b. It is anticipated that there will be no costs to the agency for the implementation of, or continuing compliance with this rule.

c. It is anticipated that there will be no costs to local governments for the implementation of, or continuing compliance with, this rule.

d. Costs to the State shall not exceed available New York State budget appropriations for the Program. The 2014-15 State Budget contained an appropriation for this Program in the sum of $100,000.

Local government mandates:

No program, service, duty or responsibility will be imposed by this rule upon any county, city, town, village, school district, fire district or other special district.

Paperwork:

This proposal will require applicants to file an electronic web supplement to determine eligibility and an electronic application for each year they wish to receive an award up to and including five years of eligibility.

Duplication:

No relevant rules or other relevant requirements duplicating, overlapping, or conflicting with this rule were identified.

Alternatives:

Given the statutory language as set forth in section 679-f(1) of the Education Law, a “no action” alternative was not an option.

Federal standards:

This proposal does not exceed any minimum standards of the Federal government.

Compliance schedule:

The agency will be able to comply with the regulation immediately upon its adoption.

Regulatory Flexibility Analysis

This statement is being submitted pursuant to subdivision (3) of section 202-b of the State Administrative Procedure Act and in support of the New York State Higher Education Services Corporation’s (“HESC”) Notice of Proposed Rule Making, seeking to add a new section 2201.14 to Title 8 of the Official Compilation of Codes, Rules and Regulations of the State of New York.

It is apparent from the nature and purpose of this rule that it will not have a negative impact on small businesses or local governments. HESC finds that this rule will not impose any compliance requirement or adverse economic impact on small businesses or local governments. Rather, it has potential positive economic impacts inasmuch as it implements a statutory student financial aid program that provides loan forgiveness benefits to individuals who operate a farm on a full time basis in New York State for five years after graduating from a New York State college or university, thereby encouraging employment in the field of agriculture within New York State.

Rural Area Flexibility Analysis

This statement is being submitted pursuant to subdivision (4) of section 202-bb of the State Administrative Procedure Act and in support of the New York State Higher Education Services Corporation’s Notice of Proposed Rule Making, seeking to add a new section 2201.14 to Title 8 of the Official Compilation of Codes, Rules and Regulations of the State of New York.

It is apparent from the nature and purpose of this rule that it will not have a negative impact on rural areas. Rather, it has potential positive economic impacts inasmuch as it implements a statutory student financial aid program that provides loan forgiveness benefits to individuals who operate a farm on a full time basis in New York State for five years after graduating from a New York State college or university, thereby encouraging employment in the field of agriculture within New York State.

This agency finds that this rule will not impose any reporting, recordkeeping or other compliance requirements on public or private entities in rural areas.

Job Impact Statement

This statement is being submitted pursuant to subdivision (2) of section 201-a of the State Administrative Procedure Act and in support of the New York State Higher Education Services Corporation’s Notice of Proposed Rule Making seeking to add a new section 2201.14 to Title 8 of the Official Compilation of Codes, Rules and Regulations of the State of New York.

It is apparent from the nature and purpose of this rule that it will not have a negative impact on jobs or employment opportunities. Rather, it has potential positive economic impacts inasmuch as it implements a statutory student financial aid program that provides loan forgiveness benefits to individuals who operate a farm on a full time basis in New York State for five years after graduating from a New York State college or university, thereby encouraging employment in the field of agriculture within New York State.