New York Assembly Bill A01477

New York 2025-2026 Regular Session

• Introduced: 1/10/25
• Refer: 1/10/25
• Refer: 1/7/26

Caption

Allows withdrawals from family tuition accounts to pay for treatment of substance use disorder, including detoxification and rehabilitation for the designated beneficiary.

Summary

This bill amends the Education Law to expand the list of permitted “qualified withdrawals” from family tuition accounts. Under the proposal, an account owner would be allowed to withdraw all or part of an account balance to pay for treatment of substance use disorder for the designated beneficiary, including detoxification and rehabilitation. The bill specifies that the treatment must consist of at least fifteen hours and may include classroom instruction in areas approved by the commissioner. The measure is framed as an immediate change to the tuition account program, meaning it would take effect upon enactment. In practical terms, it would allow families to use education savings funds for a broader health-related purpose, rather than limiting qualified withdrawals to traditional education expenses. The bill would therefore alter the rules governing family tuition accounts by adding substance use disorder treatment as an eligible use of funds.

Impact

The bill would amend section 695-e of the Education Law, which governs family tuition accounts, by redefining a qualified withdrawal to include payments for substance use disorder treatment for the account beneficiary. This would affect account owners, beneficiaries, and program administrators by permitting tax-advantaged tuition account funds to be used for detoxification, rehabilitation, and related treatment services. It would also require program rules to recognize this new category of qualified withdrawal and to determine eligibility consistent with the statutory treatment-hour requirement.

Sentiment

Based on the bill text and the absence of recorded committee debate or votes, the overall sentiment appears supportive and policy-driven, with the bill presented as a targeted expansion of family tuition account flexibility. The sponsor’s framing suggests a public-health-oriented approach that seeks to help families finance treatment for substance use disorder using existing savings vehicles. No opposing viewpoints are documented in the provided materials.

Contention

No formal contention is reflected in the available committee transcripts or voting history, because none were provided. Potential points of debate, if raised, would likely concern whether education savings accounts should be used for non-education expenses, how the fifteen-hour treatment threshold would be administered, and whether the commissioner’s authority over acceptable instructional components could create ambiguity. Any such concerns are not documented in the supplied record.