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Bill

Bill

A 2345

Establishes New Jersey Baby Bond Account Program.

2026-2027 Regular Session Introduced by Melinda Kane and 1 co-sponsor

Establishes a New Jersey Baby Bond Account Program that deposits $2,000 for each eligible child and guides long-term investment and use for education, housing, or wealth creation.

Introduced, Referred to Assembly Children, Families and Food Security Committee
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Bill Summary · A 2345

Summary of Bill A-2345 (Session 222) — New Jersey Baby Bond Account Program

Purpose and Intent

  • Establishes the New Jersey Baby Bond Account Program to promote long-term financial security for children born on or after January 1, 2021.
  • Creates a dedicated fund and a governance board to manage deposits, investments, and distributions from the program.
  • Authorizes a $70 million appropriation to implement the program for a full fiscal year.

Key Provisions

Program Purpose and Funding

  • The state will credit each eligible infant with a $2,000 deposit into an individual state account (held within the Baby Bond Account Fund).
  • Funding is provided by a $70 million General Fund appropriation, with additional money potentially appropriated in the future.

Eligible Individuals

  • Eligibility: infants born on or after January 1, 2021 to families domiciled in New Jersey (or outside the state) who establish residence within six months of birth and whose household income at birth does not exceed 200% of the federal poverty level.
  • An account is established for each eligible individual and identified to the holder by a unique personal identifier.

Account Management and Transfers

  • The State Treasurer, with the executive director, will establish and credit individual accounts.
  • Accounts can accept deposits from others and transfers between accounts may be processed by the Treasurer.
  • Amounts in the fund are not State property and are not commingled with State funds; investments earn interest that remains in the fund.

Investment and Oversight

  • An 11-member Baby Bond Account Board oversees investments, selects an executive director, and assists with administration.
    • Ex-officio members (5) include: State Treasurer (chair), State Comptroller, Director of the Office of Management and Budget,CEO of the Economic Development Authority, and Commissioner of Human Services (or designees).
    • Public members (6) are appointed by the Governor (2), the Speaker of the General Assembly (2), and the Senate President (2), all with expertise in savings plan administration or investment.
  • The Board must act prudently; returns should reflect risk, with net earnings credited pro rata to each eligible account after administrative expenses.
  • The Board may allow deposits and transfers as determined by the Treasurer.
  • The Board can designate an executive director to manage day-to-day operations, including board coordination and contract execution.
  • The executive director must provide economic literacy training to each eligible family (curriculum to include budgeting, savings, credit, using financial services, and saving toward goals).

Use of Funds and Distributions

  • Generally, distributions from an individual account are not allowed before the account holder reaches 18.
  • Exceptions allow distributions for qualified tuition and related expenses if the beneficiary is an eligible student.
  • Permissible uses (distributions) include:
    • Post-secondary educational expenses
    • Acquisition costs of a primary residence
    • Qualified business capitalization expenses
    • Other investments or assets that promote long-term wealth, as approved by the executive director and board
  • If a holder dies, the balance is transferred to a surviving spouse or estate, provided the deceased resided in New Jersey at death.
  • If a holder moves out of New Jersey and remains domiciled elsewhere for five consecutive years after age 25, the account may be considered abandoned and transferred to the Unclaimed Property Fund.

Tax and Administrative Provisions

  • Gross income for New Jersey state income tax purposes does not include: (a) any contributions credited to an individual account, or (b) any distributions (including earnings) from an account.
  • The Administrative Procedure Act governs rulemaking; the Treasurer, with the executive director and board, will promulgate regulations.

Effective Date and Timeline

  • The act takes effect immediately upon enactment.
  • Administrative and program implementation steps include establishing accounts starting January 1, 2021, with ongoing management and annual funding as authorized.

Potential Impact

  • Provides an aggregate $2,000 starter deposit per eligible child, with the potential for ongoing growth through investments.
  • Aims to reduce racial and income-based wealth gaps by enabling long-term assets for education, housing, or business ventures.
  • Establishes a framework for financial literacy, investment, and prudent stewardship of public funds dedicated to child wealth-building.

Sponsors: Co-sponsors Melinda Kane and Verlina Reynolds-Jackson. Introduced January 13, 2026; referred to Assembly Children, Families and Food Security Committee.

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

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