Bill Text: NJ S1034 | 2014-2015 | Regular Session | Introduced
Bill Title: Provides for distribution of gross income tax refunds via prepaid debit cards.
Spectrum: Partisan Bill (Democrat 1-0)
Status: (Introduced - Dead) 2014-01-30 - Introduced in the Senate, Referred to Senate Budget and Appropriations Committee [S1034 Detail]
Download: New_Jersey-2014-S1034-Introduced.html
Sponsored by:
Senator LORETTA WEINBERG
District 37 (Bergen)
SYNOPSIS
Provides for distribution of gross income tax refunds via prepaid debit cards.
CURRENT VERSION OF TEXT
As introduced.
An Act providing for the distribution of gross income tax refunds via prepaid debit cards, supplementing Title 54A of the New Jersey Statutes.
Be It Enacted by the Senate and General Assembly of the State of New Jersey:
1. a. For gross income tax refunds due for taxable years beginning on or after January 1, 2014, the Director of the Division of Taxation shall establish a system for distributing gross income tax refunds in the form of prepaid debit cards.
b. The distribution of a gross income tax refund in the form of a prepaid debit card shall be the default gross income tax refund receipt option, subject to the following schedule:
(1) For taxable years beginning on or after January 1, 2014, but before January 1, 2016, the director shall allow a gross income tax refund recipient the opportunity to elect for alternative gross income tax refund receipt methods, which methods shall include, but not be limited to, a conventional check or electronic fund transfer for direct deposit into the recipient's account held by a financial institution to the extent those options were available for taxable years beginning on or after January 1, 2013, but before January 1, 2014; and
(2) For taxable years beginning on or after January 1, 2016, the director shall allow a gross income tax refund recipient the opportunity to elect to receive a refund in the form of a prepaid debit card or electronic fund transfer for direct deposit into the recipient's account held by a financial institution.
c. As used in this section:
"Automated teller machine" means an electronic information processing device that is operated by a financial institution which accepts or dispenses cash in connection with credit or deposit accounts.
"Prepaid debit card" means an open loop card, which may be reloadable or nonreloadable, that enables the cardholder to: (i) transfer funds assigned to the card to a merchant through a point-of-sale terminal in exchange for products, services or a combination thereof; and (ii) withdraw cash against the balance assigned to the card via a qualified financial institution's automated teller machine or a qualified financial institution's manual teller terminal.
"Qualified financial institution" means a State or federally chartered bank, savings bank, savings and loan association, credit union, or other entity approved by the director, which owns or operates automated teller machines or manual teller terminals in the State.
2. This act shall take effect immediately.
STATEMENT
This bill provides for the distribution of gross income tax refunds via prepaid debit cards. The purpose of this bill is to provide taxpayers with a more versatile and potentially efficient monetary delivery device in which to receive gross income tax refunds. In particular, this bill is aimed at providing gross income tax refund recipients who lack readily available access to banking institutions a less cumbersome method of refund receipt.
The bill requires the Director of the Division of Taxation to establish a system of providing gross income tax refunds in the form of prepaid debit cards in time for taxable years beginning on or after January 1, 2014.
The bill's requirements are scheduled to be implemented in two stages. The first stage covers taxable years beginning in 2014 and 2015. During the first stage of implementation the bill makes prepaid debit cards the default mechanism for gross income tax refunds, but allows taxpayers to opt out of the prepaid debit card refund format in favor of conventional checks or direct deposit, to the extent available for taxable years beginning in 2013. During the second stage of implementation the bill maintains prepaid debit cards as the default form for gross income tax refunds, but allows taxpayers to opt out of the prepaid debit card format in favor of direct deposit.
The bill limits the types of prepaid debit cards that may be used for gross income tax refunds to those having the following characteristics:
· Open Loop: The prepaid debit card must be redeemable at a variety of merchants and financial institutions as opposed to a closed loop of related merchants.
· Redeemable for Products, Services or Cash:
The prepaid debit card must be redeemable:
(i) for products or services with merchants; and
(ii) for cash at automated and manual teller terminals of director approved financial institutions.
· Reloadable or Nonreloadable: The prepaid debit card may be reloadable or nonreloadable.
