Section 171-E. Certain overpayments credited against national defense/national direct, health professions or nursing student loans

(1)  As  used  in this section only, the term "state university loan" or
  "city  university  loan"  refers  to  loans  provided  to  students   at
  state-operated  units  of  the  state university of New York or the city
  university of New York respectively under the national  defense/national
  direct, health professions or nursing student loan programs.
    (2)  The  commissioner  of  taxation and finance, on behalf of the tax
  commission,  shall  enter  into  a  written  agreement  with  the  state
  university  of  New York or the city university of New York respectively
  which shall set forth the procedures for crediting any overpayment by an
  individual, estate or trust of income tax imposed by article  twenty-two
  of  this chapter, city personal income tax on residents imposed pursuant
  to the authority of article thirty of  this  chapter,  city  income  tax
  surcharge  on  residents  imposed  pursuant  to the authority of article
  thirty-A of this chapter, city  earnings  tax  on  nonresidents  imposed
  pursuant  to  the authority of article two-E of the general city law and
  city earnings tax on nonresidents imposed pursuant to the  authority  of
  article  thirty-B  of this chapter and the interest on such overpayments
  against the amount of any default in repayment  of  a  state  university
  loan or city university loan owed by such individual, estate or trust of
  which  the commissioner of taxation and finance has been notified by the
  state university of  New  York  or  the  city  university  of  New  York
  respectively pursuant to the provisions of such agreement.
    (3)  Such  agreement  shall  apply  only to the amount of a default in
  repayment of a state university loan or city university loan as to which
  the state and/or state university of New York or the city university  of
  New   York   respectively   has  obtained  a  judgment  or  has  made  a
  determination that satisfies the requirements of  subdivision  three  of
  section one hundred seventy-one-f of this article.
    (4) Such agreement shall include:
    (a)  the procedure under which the state university of New York or the
  city university of New York respectively shall notify  the  commissioner
  of  taxation  and  finance  of  a  default  in  a  repayment  of a state
  university loan or city university loan, such procedure to specify  when
  the  commissioner  of  taxation  and  finance  shall be notified and the
  content of such notification;
    (b) the minimum amount outstanding on a  default  in  repayment  of  a
  state  university  loan  or  city  university  loan  against  which  the
  commissioner of taxation and finance shall, pursuant  to  this  section,
  credit an overpayment;
    (c)  the  procedure  for reimbursement of the commissioner of taxation
  and finance by the state university of New York or the  city  university
  of  New  York  respectively  for  the  full  cost  of  carrying  out the
  procedures authorized by this section;
    (d) a provision providing that  information  furnished  to  the  state
  university  of  New York or the city university of New York respectively
  by the commissioner of taxation and finance and the comptroller pursuant
  to said agreement shall be considered  confidential  and  shall  not  be
  disclosed  except to such federal or state department or agency entitled
  to such information;
    (e) such other matters as the parties to  such  agreement  shall  deem
  necessary to carry out the provisions of this section; and
    (f)  the  procedure  for reimbursement of the comptroller by the state
  university  of  New  York  or  city  university  of  New  York  for  any
  overpayment  and  interest  thereon  which has been credited against the
  amount of default on repayment of a state  university  loan  or  a  city
  university  loan owed by a taxpayer filing a joint return, but which has

  been  refunded  by  the  comptroller,  pursuant  to  paragraph  six   of
  subsection  (b)  of  section six hundred fifty-one of this chapter, to a
  spouse not liable for the amount of default  in  repayment  of  a  state
  university loan or city university loan owed by such taxpayer.
    (5)  (a)  In  calculating  the  amount  of an overpayment and interest
  thereon which shall be credited against  the  amount  of  a  default  in
  repayment  of  a state university loan or city university loan owed by a
  taxpayer, the tax commission shall  first  credit  the  overpayment  and
  interest thereon against any:
    (A)  liability  of such taxpayer in respect of any tax imposed by this
  chapter;
    (B) liability of such taxpayer for any tax  imposed  pursuant  to  the
  authority  of  this chapter or any other law if such tax is administered
  by the tax commission;
    (C) estimated tax for the succeeding taxable  year  if  such  taxpayer
  claims  such  overpayment  or  a  portion  thereof  as  a credit against
  estimated tax for such succeeding taxable year  pursuant  to  subsection
  (e) of section six hundred eighty-six of this chapter or subdivision (e)
  of  section  11-1786  of the administrative code of the city of New York
  for any tax imposed pursuant to the authority of  this  chapter  or  any
  other law if such tax is administered by the tax commission; and
    (D)  past-due  support  owed  by  the taxpayer pursuant to section one
  hundred seventy-one-c of this chapter;
    (b) Only  the  balance  remaining,  after  such  overpayment  and  the
  interest thereon has been credited as described in paragraph (a) of this
  subdivision,  shall  be certified as an overpayment plus any interest to
  be credited against the amount of a default  in  repayment  of  a  state
  university  loan  or  city  university  loan,  with  the remainder to be
  refunded to the taxpayer if such remainder is not  required  to  satisfy
  the  amount  of  a past-due legally enforceable debt pursuant to section
  one hundred seventy-one-f of this article, and/or a city of New York tax
  warrant judgment debt pursuant to section one hundred  seventy-one-l  of
  this article and/or the amount of a default in repayment of a guaranteed
  student  loan  pursuant  to  section  one  hundred seventy-one-d of this
  article.
    (6) The tax commission shall certify  to  the  comptroller  the  total
  amount  of  the  overpayment  and  the interest on such overpayment, the
  amount of such overpayment  and  the  interest  on  such  amount  to  be
  credited  against  the  amount  of  the  default in repayment of a state
  university loan  or  city  university  loan  and  the  balance  of  such
  overpayment and interest to be refunded to the taxpayer.
    (7) The commissioner of taxation and finance shall notify the taxpayer
  making  the  overpayment,  in writing, of the amount of such overpayment
  and the interest thereon certified to the comptroller as the  amount  to
  be  credited  against  the  amount  of a default in repayment of a state
  university loan or city  university  loan.  Such  notice  shall  include
  notification  to any other person who may have filed a joint return with
  the taxpayer of the steps such other person may take in order to  secure
  his or her proper share of the refund.
    (8)  From  the  time the state tax commission is notified by the state
  university of New York or the city university of New  York  respectively
  of  an individual's, estate's or trust's default in repayment of a state
  university loan or city university loan under the agreement provided for
  in this section, the state tax commission and the department of taxation
  and finance shall be relieved from all  liability  to  such  individual,
  estate or trust, their assigns, successors, heirs or representatives for
  the  amount  of  an overpayment and interest on such amount certified to
  the comptroller to be credited  against  the  amount  of  a  default  in

  repayment of such state university loan or city university loan and such
  individual,  estate  or  trust  shall  have no right to commence a court
  action or proceeding or to any other legal recourse  against  the  state
  tax commission or the department of taxation and finance to recover such
  overpayment or such interest certified to the comptroller to be credited
  against the amount of default in repayment of a state university loan or
  city  university  loan.  Provided,  however,  nothing  herein  shall  be
  construed to prohibit such individual, estate or trust  from  proceeding
  against  the  state university of New York or the city university of New
  York respectively to recover that part of such overpayment  or  interest
  thereon  so  certified  to  the  comptroller  to be credited against the
  amount of a default in repayment of a  state  university  loan  or  city
  university loan which is greater than the amount of such default owed by
  such individual, estate or trust on the date of such certification.
    (9)  The tax commission shall promulgate such rules and regulations as
  it deems necessary to carry out the provisions of this section.