Bill > A324

Introduced Session

This bill makes improvements to the New Jersey Better Education and Savings Trust (NJBEST) program to assist accountholders in saving for a college education. The Higher Education Student Assistance Authority, in selecting an investment manager for NJBEST accounts, would be required to select the investment manager that charges the lowest possible fees and costs imposed by the manager or managers on yield to contributors. State law currently requires the authority to, among other criteria, consider the impact of fees and costs imposed by the manager on yield to contributors. The minimum dollar amount held in an NJBEST account that is required to be excluded when evaluating the financial needs of a student would also be raised from $25,000 to $50,000. Under current law, the Higher Education Student Assistance Authority determines a dollar amount of an NJBEST account that: (1) is not permitted to be considered in evaluating the financial need of a student beneficiary enrolled in an institution of higher education located in the State or be deemed a financial resource or form of financial aid for purposes of determining the student beneficiary's eligibility for any State scholarship or grant; and (2) may not be used to reduce the amount of any scholarship, grant, or monetary assistance awarded by the State to which the student beneficiary is entitled. The authority may not set this dollar amount at less than $25,000. This bill would increase the amount to $50,000, thereby authorizing the exclusion of a greater amount of a NJBEST account from consideration in evaluating the student beneficiary's financial need for purposes of determining eligibility for any scholarship, grant or monetary assistance awarded by the State. The current income limitation for taxpayers who wish to deduct contributions made to an NJBEST account would be raised to $300,000 and permit a deduction of up to $15,000 in contributions from the taxpayer's gross income for the taxable year. Under current law, taxpayers with incomes of $200,000 or less may only deduct up to $10,000 in contributions made during the taxable year. Taxpayers with an annual gross income of $150,000 or less who frequently deposit into their NJBEST accounts would be eligible for grants of at least 10 percent of the initial deposit into the account up to $1,000 and for an additional grant of at least $100 for each year the taxpayer is enrolled in an automated investment plan except for the year in which the initial deposit is made. Currently, NJBEST accounts opened by taxpayers with gross incomes of $75,000 or less is only eligible for a one-time grant of up to $750 in a dollar-for-dollar match of the initial deposit into the account. In addition, taxpayers with a gross income of $150,000 or less would be eligible for a one-time grant of up to $500 in a dollar-for-dollar match of the initial deposit into an NJBEST account provided that the funds used for the initial deposit originate from an out-of-state account established pursuant to section 529 of the federal Internal Revenue Code. Grant funds received by the taxpayer would not be subject to State income taxes. This bill also creates the New Jersey Better Education Savings and Trust (NJBEST) Advisory Council within the Higher Education Student Assistance Authority (HESAA). The advisory council would advise the Governor and the Legislature on ways to improve the operation, management, and administration of the NJBEST program, reviewing, monitoring, and reporting the extent to which the NJBEST program has made a college education accessible and affordable to families across the State; and support existing, and recommending new, Statewide initiatives encouraging families to save for a college education by opening an NJBEST account. The advisory council would be composed of the following members: · the Secretary of Higher Education, or a designee;· the Executive Director of the Higher Education Student Assistance Authority, or a designee;· the Commissioner of the Division of Banking and Insurance, or a designee;· a representative from an institution of higher education appointed by the Governor;· four members of the Legislature appointed by the President of the Senate, Minority Leader of the Senate, Speaker of the General Assembly, and the Minority Leader of the General Assembly; and· five public members appointed by the Governor, the President of the Senate, the Minority Leader of the Senate, the Speaker of the General Assembly, and the Minority Leader of the General Assembly. Finally, the bill provides tax credits against taxes otherwise due under the State corporate business tax and the New Jersey Gross Income Tax Act for employers that make matching contributions to the NJBEST accounts of employees. Employers would be allowed a tax credit for the total amount of matching contributions made by the taxpayer to the NJBEST accounts of employees during the taxable year. To qualify for the tax credit, the taxpayer would report the names, addresses, and account numbers of the NJBEST accountholders employed by the taxpayer who received matching contributions during the taxable year and the amount of the contributions made to employee accounts.

AI Summary

Committee Categories

Michele Matsikoudis (R)*, 

Introduced, Referred to Assembly Higher Education Committee (on 01/09/2024)

Official Document