S4831

An Act establishing the Youth Well-Being and Digital Accountability Act and Fund, and supplementing Title 26 of the Revised Statutes.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. This act shall be known and may be cited as the “Youth Well-Being and Digital Accountability Act.”

2. The Legislature finds and declares:

a. Addressing youth mental health is an urgent public health priority.

b. Growing evidence links certain digital technologies, including social medical platforms, online gaming platforms, and algorithmically amplified content to adverse mental health outcomes among children, youth, and young adults.

c. Over 40 states have pursued litigation against technology companies seeking compensation for harms associated with social media platforms.

d. Experience has shown that large-scale litigation settlements proceeds, absent a dedicated governance structure and binding transparency requirements, are vulnerable to being diverted from their intended purpose. Following the 1998 tobacco Master Settlement Agreement, many states directed the large majority of settlement proceeds to general government purposes rather than tobacco prevention and cessation. Likewise, opioid settlement funds have also been diverted for purposes unrelated to opioid remediation. This history underscores the need for a dedicated, independent, and transparent structure to govern the use of settlement proceeds under this act.

e. Positive youth development opportunities, including before- and after-school, summer, outdoors, sports, arts, mentoring, life skills, leadership, service, and other community-based programs are associated with improved mental health, stronger social connection, increased resilience, and other protective factors for children and youth.

f. Access to positive youth development programs that offer alternatives to digital media consumption is limited for many youth. National surveys indicate that only approximately one in four children participate in an afterschool program, while millions more would participate if a program were available and affordable, and that youth 13 to 18 years of age spend an average of more than eight hours per day engaged with screen media outside of school. Expanding access to in-person youth development opportunities, structured programming, safe third spaces, and community-based alternatives to digital media consumption is therefore a necessary component of a comprehensive response to the harms addressed by this act.

g. Any proceeds received through judgments, settlements, civil penalties, or related recoveries should be invested transparently and strategically to improve youth mental health and well-being and prevent future harms.

h. Because these resources are intended to benefit the youth of today and of the future, these resources should be administered through an independent public authority with subject matter expertise, transparency, and long-term stewardship.

3. As used in this act:

“Activation threshold” means the amount of cumulative committed settlement proceeds specified in subsection a. of section 4 of this act at which the authority and board commence full operation.

“Authority” means the entity established under section 5 of this act.

“Board” means the governing board of the Authority.

“Cumulative committed settlement proceeds” means the total amount of settlement proceeds the State has received, together with the total amount the State is contractually entitled to receive under executed settlement agreements, whether or not yet disbursed.

“Fund” means the Youth Well-Being and Digital Accountability Fund.

“Interim administrator” means the current, existing State department which administers the fund prior to the activation threshold being met as provided in subsection a. of section 5 of this act.

“Settlement agreement” means any judgement, consent decree, settlement agreement, memorandum of understanding, or other binding resolution referenced in section 4 of this act, together with any exhibits, remediation schedules, permissible-use provisions, or reporting requirements incorporated therein.

“Settlement proceeds” means all monies received by the State through judgements, settlements, consent decrees, civil penalties, or similar legal actions involving social media companies, digital technology companies, online platforms, providers of artificial intelligence products or services such as artificial intelligence chatbots and companion applications, or related entities arising from claims concerning harms to youth mental health or well-being.

“Trust” means the Youth Well-Being and Digital Accountability Trust, into which the fund converts upon certification of the activation threshold, as provided in subsection a. of section 5 of this act.

4. a. There is established an independent public body to be known as the Youth Well-Being and Digital Accountability Authority.

b. The authority is established as an independent instrumentality of the State, constituting a body corporate and politic exercising essential public and governmental functions. The authority shall not be subject to the administrative direction or control of any executive department. This subsection shall be construed and applied consistently with applicable State laws and constitutional amendments concerning separation of powers, delegation of authority between the branches of government, and appropriation of State funds.

c. There is established in, but not of, the Department of the Treasury a fund to be known as the Youth Well-Being and Digital Accountability Fund which shall be kept distinct and separate from all other funds. The State Treasurer shall serve as custodian of the fund and shall invest fund monies in accordance with applicable State laws regarding appropriation and investment of State funds. Earnings on fund monies shall be added to and become part of the fund. The authority shall direct the expenditures of the fund consistent with the provisions of this act.

d. The fund shall consist of:

(1) settlement proceeds;

(2) legislative appropriations;

(3) applicable taxes;

(4) gifts, grants, and donations; and

(5) interest and investment earnings.

e. The authority shall be supported by the State’s information technology and grant management infrastructure. Money in the fund shall not revert at the end of any fiscal year, shall be non-lapsing, and is continuously appropriated to the authority for the purposes of this act without need for further legislative appropriation, and shall remain available until expended.

f. Money in the fund shall not be transferred, loaned, or appropriated to the State’s General Fund or to any other fund or account unless authorized by this act. Any purported transfer in violation of this subsection is void and of no effect.

g. For administrative purposes only, including payroll, procurement, and information technology services, the authority may be supported by the Department of the Treasury. Such attachment shall not affect the authority’s independent management of fund expenditures, grantmaking, or the strategic investment plan.

h. Notwithstanding any other provision of this act, expenditures of settlement proceeds shall be consistent with the terms of the applicable settlement agreement. Where a conflict exists between this act and the terms of a settlement agreement as to the use of proceeds received under that agreement, the terms of the settlement agreement shall control. The authority shall coordinate with the Office of the Attorney General to satisfy the requirements of any applicable settlement agreement, and shall not revert to the State’s General Fund.

5. a. Prior to the activation threshold being met under subsection c. of this section, the fund shall be administered by the interim administrator, subject in full to subsections f., h., and i. of this section, and section 11 of this act.

b. The interim administrator shall establish an advisory committee of not fewer than seven members, appointed as follows: three by the Governor, two by the President of the Senate, and two by the Speaker of the House, collectively reflecting the expertise categories described in subsection b. of section 7 of this act. The advisory committee shall review the use of the fund and make recommendations to the interim administrator during the interim period.

c. The authority and board established under sections 5 through 9 of this act shall commence full operation upon written certification by the Governor that cumulative committed settlement proceeds equal or exceed $100 million.

d. Upon certification under subsection c. of this section, the interim administrator shall, within 90 days, transfer administration of the fund, all fund balances, and all records to the authority. The advisory committee established under subsection b. of this section shall dissolve upon completion of the transfer, and its members shall be eligible for appointment to the board under section 7 of this act.

e. Nothing in this section limits the applicability of subsections f., h., or i. of this section, or of section 10 of this act to the fund during the interim period described in subsection a. of this section.

f. Upon certification under subsection c. of this section, the fund shall be reconstituted as the Youth Well-Being and Digital Accountability Trust, held by the State Treasurer as trustee for the benefit of the youth of the State, and administered by the authority in accordance with the State’s “Uniform Trust Code,” P.L.2015, c.276 (C.3B:31-1 et seq.), and this act. The authority shall administer the trust with the care, skill, and diligence that a prudent fiduciary acting in a like capacity would exercise under the circumstances then prevailing. All amounts held in the fund immediately before conversion, and all amounts received thereafter, shall be subject to this subsection without distinction. From and after conversion, all references to the fund elsewhere in this act shall be construed as references to the trust.

6. a. The authority may award fund monies to entities listed in subsection c. of this section through competitive grant programs, targeted investments, cooperative agreements, contracts, or other funding mechanisms.

b. The authority may solicit applications from eligible applicants listed in subsection c. of this section or make strategic investments in eligible applicants where it determines that doing so will advance the purposes of this act.

c. Eligible applicants may include:

(1) local governments;

(2) tribal governments and organizations;

(3) nonprofit organizations;

(4) nonprofit health care providers, provided that a for-profit health care provider may be eligible where no nonprofit provider with comparable capacity is reasonably available to serve the applicable service area;

(5) schools;

(6) community-based organizations; and

(7) other public or nonprofit entities serving children, youth, young adults, and families.

d. Grant awards and other funding decisions shall be made pursuant to publicly adopted criteria in accordance with the “Administrative Procedure Act,” P.L.1968, c.410 (C.52:14B-1 et seq).

7. a. The authority shall be governed by a board consisting of 15 voting members and one ex officio, nonvoting member as provided in subsection b. of this section.

b. Members shall be appointed as follows:

(1) four appointed by the Governor consisting of one member with expertise in behavioral health; one member with expertise in public health; one member with expertise in pediatric medicine; and one member with expertise in behavioral health financing or research and evaluation;

(2) three appointed by the President of the Senate consisting of one member with expertise in schools; one member with expertise in community-based organizations serving youth; and one youth or young adult with lived experience of behavioral health conditions or receiving services therefrom;

(3) three appointed by the Speaker of the House consisting of one member with expertise in youth development; one member who is a parent or caregiver of a youth or young adult; and one youth or young adult with lived experience of behavioral health conditions or receiving services therefrom, who shall be under the age of 25 years at the time of appointment;

(4) five ex officio members appointed by the secretary or commissioner representing the Departments of Health; Human Services; Education; Children and Families; and Labor and Workforce Development; and

(5) one ex officio, nonvoting member appointed by the Attorney General.

c. (1) At the time of appointment, each appointing official under subsection b. of this section shall provide the board a brief written statement identifying the qualifying expertise or lived experience supporting each appointment.

(2) If a category of expertise or lived experience required under subsection b. of this section is or becomes unfilled, the board shall notify the relevant appointing official in writing, and that appointing official shall address the vacancy at its next opportunity to fill a seat under this section.

d. The Governor shall designate the chair of the board.

e. Members shall serve staggered three-year terms and may be reappointed once.

f. Members shall comply with applicable State ethics and conflict of interest laws.

g. Ex officio members under subsection b. of this section shall be the head of the respective department, or a designee holding senior decision-making authority equivalent to a deputy secretary, deputy commissioner, or division director. No ex officio member may delegate participation in board business to staff who lack such authority.

h. A member who has, or whose immediate family member, as defined by the State, has a financial or governance interest in an entity applying for or receiving funds from this act shall disclose the interest to the board and recuse from any discussion, deliberation, or vote relating to that entity’s application or award.

8. a. The authority shall have all powers necessary to carry out the purposes of this act, including the power to:

(1) administer and manage the Youth Well-Being and Digital Accountability Fund established pursuant to this act;

(2) conduct or commission Statewide needs assessments, fiscal mapping, environmental scans, and other analyses necessary to identify gaps in programs and services that reduce the harms of social media, including (a) positive youth development programs that foster social connection, build trusted adult and peer relationships, reduce screen time, and promote mental health; (b) safe digital engagement tools and programs that prepare youth and adult caregivers to navigate online experiences safely; and (c) mental health screenings to assess needs for early intervention, targeted interventions to strengthen mental health and social connection, and crisis response to address acute needs;

(3) develop, adopt, and periodically update the strategic investment plan required pursuant to section 9 of this act, using the plan as the primary framework to guide all expenditures from the fund;

(4) establish Statewide funding priorities and investment strategies that are evidence-informed, data-driven, and responsive to changing Statewide needs;

(5) establish grantmaking policies, application procedures, funding criteria, and award processes consistent with the strategic investment plan pursuant to section 9 of this act;

(6) solicit, review, approve, and monitor grants and contracts funded pursuant to this act;

(7) establish priorities that promote a balanced continuum of investments delivered in community and clinical settings across the behavioral health continuum including universal access to youth program and third spaces, targeted mental health interventions, and support for children with intensive behavioral health needs along with investments in reasonable intermediary, operational, workforce, training, evaluation, cross-system coordination, data sharing, and related costs that are necessary for effective, equitable, and sustainable service delivery;

(8) coordinate funding strategies with State agencies, local governments, tribal governments where applicable, schools, health systems, community organizations, and other youth-serving entities to maximize impact and avoid duplication of effort;

(9) enter into contracts, memoranda of understanding, cooperative agreements, and other agreements necessary to carry out the purposes of this act;

(10) through the board, hire, evaluate, set the compensation of, and remove an Executive Director, who shall serve at the pleasure of the board and may be removed by a vote of the majority of the board’s voting members; and employ such additional staff as necessary;

(11) establish advisory committees or technical advisory groups to provide subject matter expertise on positive youth development, youth mental health, digital well-being, finance, evaluation, or other matters relevant to the authority’s work;

(12) develop performance measures and outcome indicators to evaluate the effectiveness of investments made from the fund;

(13) collect, analyze, and publish data regarding fund expenditures, program performance, and Statewide outcomes;

(14) prepare and publish the annual report required pursuant to this act;

(15) adopt bylaws, policies, and procedures governing the operations of the authority, including conflict of interest policies, procurement standards, grant administration procedures, and financial controls; and

(16) exercise any other powers necessary to fulfill the purposes of this act consistent with applicable State and federal law.

b. In carrying out its duties under this section, the authority shall assign qualified allocation targets, expressed as dollar amounts or percentage of projected available funds, to each category identified in subsection c. of section 9 of this act. The targets shall be informed by the needs assessment and gap analysis required pursuant to subsection c. of section 9 of this act.

9. a. Within one year of the effective date of this act, and at least once every five years thereafter, the authority shall adopt a Statewide multi-year strategic investment plan to guide the expenditure of monies from the fund.

b. The strategic investment plan shall establish a long-term framework for investing settlement proceeds to support the mental health, safety, well-being, and positive development of school-age children, youth, and young adults.

c. The strategic investment plan shall be informed by Statewide data and stakeholder engagement and shall include, at a minimum:

(1) a Statewide needs assessment identifying unmet behavioral health and development needs of children, youth, and young adults;

(2) a fiscal mapping analysis identifying existing federal and State funding streams supporting youth mental health and well-being;

(3) an assessment of geographic, demographic, and population-specific data on access to prevention, early intervention, treatment, recovery supports, and other services;

(4) measurable Statewide goals and priorities for investment over the planning period;

(5) funding strategies that balance investments across the following areas:

(a) In Real Life Alternatives

(i) positive youth development programs such as before- and after-school, and summer learning and enrichment programs; outdoor learning, environmental education, and nature-based programs; youth sports and recreation; play-based programs; arts, music, and creative expression programs; culturally specific programs; faith-based programs; community schools and clubs; libraries; museum-based programs; and safe third spaces designed for young people;

(ii) career, workforce, post-secondary readiness, life skills, youth employment, and mentoring programs;

(iii) youth service, youth leadership, youth organizing, civic engagement, and other youth-led initiatives; and

(iv) caregiver and family programs to support health and trusting family adult-child relationships;

(b) Safe Digital Engagement

(i) digital citizenship education delivered in-person and digitally for youth, caregivers, and youth-serving staff including youth-guided curricula, programs, tools, and peer-to-peer supports; and

(ii) youth-led and youth-serving initiatives that advocate for safe platform design and policies and elevate youth voices through listening tours, youth town halls, community conversations, and public awareness campaigns;

(i) youth-serving professionals and educators trained on early detection, screening, and referrals to care for emerging mental health needs;

(ii) peer and near-peer delivery models to expand clinical and nonclinical mental health workforce capacity;

(iii) community, school, and pediatric clinical and nonclinical supports, including pediatric collaborative care, dyadic care, and other evidence-based interventions; and

(iv) crisis response and community-based treatment models for youth with acute needs, such as investments into the local 988 Suicide and Crisis Lifeline, Mobile Response and Stabilization Supports, and pediatric behavioral health urgent care infrastructure; and

(d) System-level Investments in Harm Reduction and Abatement

(i) investment and evaluation of intermediary, operational, and workforce training systems to ensure effective equitable and effective service delivery; and

(ii) establishment and evaluation of cross-system coordination and data sharing across systems;

(6) strategies to ensure that fund expenditures supplement rather than supplant existing public investments;

(7) performance measures and outcomes indicators to evaluate the effectiveness of funded initiatives;

(8) recommendations for improving coordination among State agencies, schools, health care providers, community organizations, families, and other youth-serving systems; and

(9) any additional priorities the authority determines are necessary to fulfill the purposes of this act.

d. In developing or updating the strategic investment plan, the authority shall consult with youth, parents and caregivers, educators, behavioral health providers, researchers, tribal governments where applicable, community-based organizations, and other stakeholders with expertise in positive youth development, youth mental health, prevention, and digital well-being.

e. Prior to adopting the strategic plan, the authority shall publish a draft strategic investment plan for public comment and conduct at least one public meeting to receive input.

f. The authority shall annually review progress toward implementation of the strategic investment plan and may adopt amendments as necessary to respond to emerging evidence, changing Statewide needs, or new settlement revenues.

g. Grant awards and other expenditures from the fund shall, to the maximum extent practicable, be consistent with the priorities and objectives established in the strategic investment plan.

10. a. Money distributed under this act shall supplement and not supplant existing federal, State, local, or private funding, and shall not be used for litigation, lobbying, or to fund the general administrative operations of any State agency other than the authority.

b. The authority shall not expend fund monies to pay for, or reimburse the cost of, any behavioral health service that is required to be covered and reimbursed by any medical assistance program or a commercial health benefit plan under applicable federal or State law, including mental health parity requirements. Nothing in this act shall be construed to limit, diminish, or substitute for any obligation of a health benefit plan to provide coverage or reimbursement for behavioral health services under applicable law.

c. The Department of Insurance and Banking shall coordinate with the authority to ensure appropriate coverage and reimbursement of behavioral health services by any health benefits plans operating in the State, including by:

(1) identifying services funded or proposed for funding under this act that are subject to a coverage or reimbursement obligation under applicable law;

(2) referring instances of noncompliant claims denial, delay, or reduction to the appropriate enforcement process; and

(3) advising the authority on the design of grant criteria and funding priorities to avoid displacement of commercial coverage obligations.

d. The authority shall not expend fund monies to replace, reduce, or supplant federal, State, or local funding otherwise available to, or required to be provided by, a local education agency, public school, public charter school, or other educational entity.

e. Nothing in this section shall be construed to limit the authority’s ability to fund evidence-informed positive youth development, family support, or other youth-serving community-based services that promote mental health and well-being but are not reimbursable behavioral health services.

11. a. The authority shall submit an annual report to the Governor and the Legislature by July 1 of each year, which report must include:

(1) revenues received;

(2) expenditures;

(3) grant awards;

(4) geographic distribution of funding;

(5) funded outcomes and performance measures;

(6) evaluation findings;

(7) administrative expenditures; and

(8) recommendations for future investments.

b. The authority shall publish the report, with the underlying expenditure and grant award data in a searchable and downloadable format, on a publicly accessible page of the authority’s website no later than July 1 of each year, and shall retain each year’s report and data on that page for at least 10 years.

12. a. The authority may expend not more than 10 percent of annual expenditures for administration, staffing, evaluation, technical assistance, and operational support.

b. The accounts of the authority shall be independently audited annually by the State Department of the Treasury.

c. The authority shall adopt bylaws and policies governing meetings, procurement, grantmaking, conflicts of interest, and financial management.

13. Meetings of the board shall be subject to applicable open meetings and public records laws.

14. a. The Legislature shall conduct a comprehensive review of the authority’s structure, governance, and performance not later than one year, or earlier as required by the applicable settlement agreement, after the effective date of this act, and at least once every three years thereafter, or earlier as required by the applicable settlement agreement.

b. This section does not terminate the authority, the fund, or any obligation arising under a settlement agreement absent affirmative legislative action.

15. If any provision of this act, or the application of any person or circumstance, is held invalid, the invalidity does not affect other provisions or applications of this act that can be given effect without the invalid provision or application, and to this end and the provisions of this act are severable.

16. This act shall take effect immediately.

STATEMENT

This bill establishes an independent Youth Well-Being and Digital Accountability Fund to hold settlement proceeds and invest the proceeds in evidence-informed programs that measurably prevent, mitigate, and remediate harms associated with digital technologies; support the mental health, safety, well-being, and positive development of school-age children, youth, and young adults; promote off-screen connection, resilience, trusted adult and peer relationships, and other protective factors; and provide treatment, early intervention, and recovery supports for children, youth, and young adults with diagnosed or emergency mental health conditions.

The bill also establishes an authority governed by an independent board, which would be responsible for the administration of the monies in the fund. The members of the board would be appointed variously by the Governor, President of the Senate, Speaker of the House, the Attorney General, and by the commissioners or heads of various executive agencies.

The authority would have the power to administer and manage the monies in the fund, conduct Statewide needs assessments, establish funding priorities, grantmaking policies, investment strategies, coordinate funding strategies across executive agencies, and establish advisory committees. The authority would also be required to release an annual report to the Legislature and the Governor regarding the revenues received, expenditures, grant awards, geographic distribution of funding, funded outcomes and performance measures, evaluation findings, administrative expenses, and recommendation for future investments. The report would be required to be publicly published on the authority’s Internet webpage and must remain published and public for at least 10 years.