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Bill

SB 279

Baby Bond Trust Fund.

2025-2026 Session Introduced by Jay Chaudhuri and 5 co-sponsors

SB 279 creates a Baby Bond Program that deposits $2,000 at birth into a state-managed account for eligible low- to moderate-income children, for uses like education or housing afte

Passed 1st Reading
0
WeVote Research Nonpartisan
Bill Summary · SB 279

SB 279 — Baby Bond Program Trust Fund (First Edition)

Overview / Purpose

SB 279 creates a statewide “Baby Bond” program to seed savings accounts for children born into low- and moderate‑income households. The bill establishes the Baby Bond Program Trust Fund and directs an initial, one‑time deposit of $2,000 into an individual account for each eligible infant. The stated intent is to improve long‑term financial outcomes by enabling savings for postsecondary education, homeownership, business capitalization, and other wealth‑building uses.

Key provisions

  • Establishes the Baby Bond Program Trust Fund (administered by a Board of Trustees) and creates individual accounts for eligible infants.
  • One‑time deposit: $2,000 is to be deposited into each individual account within 30 days of account establishment.
  • Eligibility: Infants born on or after January 1, 2024, who (a) are born to a parent who is a resident of the state (or who establishes residency within six months of birth), and (b) reside in a household with annual income ≤ 200% of the federal poverty level (FPL).
  • Data flow: The Office of Vital Records must transmit the name, address, and SSN of eligible births monthly to the Board so accounts can be opened.
  • Contributions: Any person (including out‑of‑state contributors) may make additional contributions to an individual account; the Board holds, invests, and disburses contributions and earnings.
  • Uses / distributions:
    • No general withdrawals before age 18, except distributions before 18 to pay “qualified tuition expenses” (as defined under federal law).
    • After age 18, permitted distributions only for specified purposes: postsecondary education, purchase of a primary residence, qualified business capitalization expenses (as approved by the Board), or long‑term financial investments/personal capital as approved by the Board.
    • The account holder must be a state resident to request a distribution.
  • Protections and limits:
    • Each eligible individual may have only one account.
    • Accounts (and interests) are not assignable or pledgable and are protected from creditor attachment, levy, or execution.
    • Accounts are to be separately tracked and annual reports made to account holders.
  • Abandonment and death:
    • If an account holder is ≥25 and has lived outside the state for ≥5 consecutive years, the account balance is presumed abandoned and handled under the state’s abandoned property law (Chapter 116B).
    • On death, balances are transferred per statutory order (surviving spouse, estate representative, or other entitled person).
  • Financial characterization: The bill specifies that contributions and earnings “shall not be considered State monies, assets of the State, or State revenue for any purpose.”
  • Administration: The Department of State Treasurer is involved in transfers; the Board holds trustee duties and must report annually. The bill authorizes the Board to accept gifts, grants, and appropriations into the Fund.

Who is affected

  • Primary beneficiaries: newborns from households at or below 200% FPL (born on/after 1/1/2024) and their families.
  • State agencies: Office of Vital Records (data reporting), Department of State Treasurer (fund transfers), and the newly created Board of Trustees (administration and investment).
  • Potential contributors: private donors, foundations, and individuals (in‑state or out‑of‑state).
  • Financial institutions, higher‑education institutions, and housing/ small‑business programs that may interact with distributions.

Fiscal and policy considerations

  • Direct fiscal cost depends on the number of eligible births and the source of the $2,000 deposit per child. The bill allows appropriations but also contemplates private gifts/grants; it expressly states contributions/earnings are not state monies.
  • Administrative costs: Board operations, account‑tracking systems, investment management, and monthly data transfers from Vital Records will require funding and staffing; the bill mandates annual reporting.
  • Long‑term impacts hinge on program funding structure (state appropriation vs. donor/grant funding), investment returns, uptake of additional contributions, and redemption patterns for education, housing, or business uses.

Procedural / timeline notes

  • Eligibility applies to infants born on or after January 1, 2024.
  • The Office of Vital Records will transmit eligible birth information monthly to the Board for account setup; the Department must deposit the $2,000 into new accounts within 30 days of notification.
  • The bill text establishes operational elements (Board, trustee authority, reporting) but does not, in the text provided, specify an explicit effective date beyond those standard to the enactment process.

Points to watch

  • Funding source and appropriation language (for the initial $2,000 deposits) will determine near‑term state budget impact.
  • Implementation details (investment policy, Board composition, administrative infrastructure, outreach) will shape program effectiveness and costs.
  • Interaction with federal student‑aid rules and tax treatment of accounts/earnings should be clarified to maximize usability for education purposes.

Compiled from official sources — confirm details with the bill’s official record.

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