Bill Text: NJ S2306 | 2024-2025 | Regular Session | Introduced
Bill Title: "New Jersey Works Act"; Permits businesses to create pre-employment training programs in partnership with nonprofit organizations or educational institutions; provides tax credit to businesses that provide financial assistance to pre-employment training programs; makes appropriation.
Spectrum: Partisan Bill (Democrat 2-0)
Status: (Introduced) 2024-03-14 - Referred to Senate Budget and Appropriations Committee [S2306 Detail]
Download: New_Jersey-2024-S2306-Introduced.html
Sponsored by:
Senator JAMES BEACH
District 6 (Burlington and Camden)
SYNOPSIS
"New Jersey Works Act"; Permits businesses to create pre-employment training programs in partnership with nonprofit organizations or educational institutions; provides tax credits to businesses that provide financial assistance to pre-employment training programs; makes appropriation.
CURRENT VERSION OF TEXT
As introduced.
An Act concerning pre-employment training programs, supplementing P.L.1992, c.43 (C.34:15D-1 et seq.), P.L.1945, c.162 (C.54:10A-1 et seq.), and Title 54A of the New Jersey Statutes, and making an appropriation.
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 "New Jersey Works Act."
2. As used in sections 1 through 4 of P.L. , c. (C. ) (pending before the Legislature as this bill):
"Agreement" means an agreement between one or more business entities and one or more institutions of higher education, comprehensive high schools, county vocational schools, or nonprofit organizations to establish a pre-employment and work readiness training program. "Assistance" means the contribution of moneys to aid in the provision of a pre-employment and work readiness training program established by a business entity in partnership with an institution of higher education or a comprehensive high school or county vocational school or nonprofit organization.
"Business entity" means any corporation, company, association, society, firm, partnership, joint stock company, sole proprietorship, limited liability entity or individual which is authorized to conduct or operate a trade or business in the State. "Business entity" shall not include any business entity engaged in a construction trade.
"Comprehensive high school" means a public or non-public high school located in the State that may grant a State-endorsed diploma to students and offers vocational education.
"Department" means the Department of Labor and Workforce Development.
"Director" means the Director of the Division of Taxation in the Department of the Treasury.
"Educational institution" means an institution of higher education, a comprehensive high school, or a county vocational school.
"Institution of higher education" means any public or independent four-year institution of higher education or a county college
"Low income household" means a household whose gross household income is less than 50 percent of the median gross household income for the region in which the business entity is located for households of similar size as determined by the department.
"Moderate income household" means a household whose gross household income is greater than or equal to 50 percent but less than 80 percent of the median gross household income of the region in which the business entity is located for households of similar size as determined by the department.
"Nonprofit organization" means a private nonprofit corporation that has been determined by the Internal Revenue Service of the United States Department of the Treasury to be exempt from income taxation pursuant to section 501(c)(3) of the federal Internal Revenue Code, 26 U.S.C. s.501(c)(3).
3. a. One or more institutions of higher education, comprehensive high schools, county vocational schools, or nonprofit organizations may enter into an agreement with a business entity to establish a pre-employment and work readiness training program. The purpose of the program shall be to recruit, prepare, and educate individuals for entry-level jobs with long-term career potential through paid training programs. The program shall target for recruitment low- and moderate-income households and current workers in need of skills development. A business entity may provide assistance for a pre-employment and work readiness training program if the program is approved by the department pursuant to section 4 of P.L. , c. (C. ) (pending before the Legislature as this bill) and may receive a credit for such assistance pursuant to section 5 or 6 of P.L. , c. (C. or C. ) (pending before the Legislature as this bill).
b. Each pre-employment and work readiness training program shall offer no less than 12 weeks of paid training for each participant, and include, but not be limited to training and instruction in the following areas: basic math and English literacy, communication skills, critical thinking, leadership, life skills and job readiness skills training such as conflict management, finance concepts, resume preparation, problem solving, self-awareness and management, and any other requirement deemed necessary by the department. Each pre-employment and work readiness training program participant shall be paid the minimum wage pursuant to section 5 of P.L.1966, c.113 (C.34:11-56a4) or any order issued by the Commissioner of Labor and Workforce Development pursuant to that act.
c. Each trainee shall be a minimum of 16 years old. An educational institution or nonprofit organization shall not determine a trainee's eligibility for participation in a training program based on the trainee's possession of a high school diploma or any high school equivalency. Following the successful completion of a pre-employment and work readiness training program, each program shall offer trainees employment provided through a business entity which has provided funding for a qualified pre-employment and work readiness training program, or both.
d. Each educational institution or nonprofit organization shall submit to the department the following information three months, six months, and nine months following the close of a training program: the number of participants who successfully completed the training program and the number of participants currently employed by a business entity, including each participant's job title and salary.
4. a. An institution of higher education, comprehensive high school, county vocational school, or nonprofit organization which has entered into an agreement under section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill) with a business entity shall submit a proposed pre-employment and work-readiness training plan to the department for approval. Two or more institutions of higher education, comprehensive high schools, county vocational schools, or nonprofit organizations may submit a plan to the department jointly. Any plan submitted by two or more institutions of higher education, comprehensive high schools, vocational schools, or nonprofit organizations shall designate one institution of higher education, comprehensive high school, vocational school, or nonprofit organization as the lead organization with responsibility for the plan.
An institution of higher education, comprehensive high school, county vocational school, or nonprofit organization that has proposed a pre-employment and work-readiness training plan to the department may seek to amend it at any time. The department shall approve the amendments so long as the pre-employment and work readiness training plan complies with the minimum requirements set forth in subsection c. of this section.
b. The department shall review a proposed pre-employment and work-readiness training plan to make an initial determination as to whether a proposed pre-employment and work readiness training program qualifies for assistance for which a tax credit may be granted pursuant to section 5 or section 6 of P.L. , c. (C. or C. ) (pending before the Legislature as this bill). Upon the department's initial determination of qualification, the department shall refer the proposed program and application to the Director of Taxation in the Department of the Treasury for final approval, and the Treasury shall notify the department of the final approval.
c. The department shall determine that a proposed plan for a pre-employment and work readiness training program qualifies for assistance if the plan meets all of the following standards:
(1) The proposed program consists of pre-employment and work readiness training activities to benefit low- and moderate-income households and persons in need of early and mid-career skills training or vocational retraining.
(2) The proposed program is reasonably designed to accomplish its intended purpose and it would further the purposes of the pre-employment and work-readiness training plan.
(3) The educational institution or nonprofit organization demonstrates that it has the capacity to implement the proposed pre-employment and work-readiness training plan.
(4) The educational institution or nonprofit organization ensures that financial assistance is to be expended exclusively to implement the pre-employment and work-readiness training plan.
(5) The educational institution or nonprofit organization provides documentation of its completion rates.
5. a. A taxpayer, upon final approval of an application by the director, shall be allowed a credit against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) in an amount equal to 100 percent of the amount of assistance provided by the taxpayer to an institution of higher education, comprehensive high school, county vocational school, or nonprofit organization during a privilege period commencing on or after January 1 next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) for an approved pre-employment and work readiness training program established in agreement with an institution of higher education, comprehensive high school, county vocational school, or nonprofit organization pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. No tax credit shall be awarded pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of time that coincides with the privilege period for which a tax credit pursuant to this section is allowed. The order of priority of application of the tax credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) for a privilege period, shall be as prescribed by the director. The amount of the credit applied against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) shall not reduce a taxpayer's tax liability to an amount less than the statutory minimum provided in subsection (e) of section 5 of P.L.1945, c.162 (C.54:10A-5).
c. The value of tax credits approved by the director pursuant to subsection a. of this section and pursuant to subsection a. of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed a cumulative total of $12,000,000 in State fiscal year 2023, and in each State fiscal year thereafter, to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the cumulative total amount of tax credits allowed to taxpayers for privilege periods or taxable years commencing during a single fiscal year under subsection a. of this section and subsection a. of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) exceeds the amount of tax credits available in that fiscal year, then taxpayers who have first applied for and have not been allowed a tax credit for that reason shall be allowed, in the order in which they have submitted an application, the amount of the tax credit on the first day of the next succeeding fiscal year in which tax credits under subsection a. of this section and subsection a. of section 6 of P.L. , c. (C. ) (pending before the Legislature as this bill) are not in excess of the amount of credits available.
d. A taxpayer shall submit to the director a report to verify the taxpayer's tax credit claim. The report shall include a certification from an institution of higher education, a comprehensive high school, a county vocational school, or a nonprofit organization that the assistance was used for an approved pre-employment and work readiness training program, and shall include such other information as the director may require. The certification shall be provided to the taxpayer and a copy of the certification shall be included in the filing of a return that includes a claim for a tax credit allowed pursuant to this section.
6. a. A taxpayer, upon approval of an application to the director, shall be allowed a credit against the tax otherwise due for the taxable year under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., in an amount equal to 100 percent of the amount of assistance provided by the taxpayer to an institution of higher education, comprehensive high school, county vocational school, or nonprofit organization during a taxable year commencing on or after January 1 next following the enactment of P.L. , c. (C. ) (pending before the Legislature as this bill) for an approved pre-employment and work readiness training program established in agreement with an educational institution or a nonprofit organization pursuant to section 3 of P.L. , c. (C. ) (pending before the Legislature as this bill).
b. No tax credit shall be allowed pursuant to this section for any costs or expenses included in the calculation of any other tax credit or exemption granted pursuant to a claim made on a tax return filed with the director, or included in the calculation of an award of business assistance or incentive, for a period of the time that coincides with the taxable year, for which a tax credit authorized pursuant to this section is allowed. The order of priority of the application of the credit allowed pursuant to this section, and any other credits allowed against the tax imposed pursuant to N.J.S.54A:1-1 et seq. for a taxable year, shall be as prescribed by the director. The amount of the credit applied against the New Jersey gross income tax imposed pursuant to N.J.S.54A:1-1 shall not reduce a taxpayer's tax liability to an amount less than zero.
c. (1) A business entity that is classified as a partnership for federal income tax purposes shall not be allowed a tax credit pursuant to this section directly, but the amount of tax credit of a taxpayer in respect to a distributive share of entity income shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the entity that is equal to the taxpayer's share, whether or not distributed, of the total distributive income or gain of the entity for its taxable year ending within or with the taxpayer's taxable year.
(2) A New Jersey S Corporation shall not be allowed a tax credit pursuant to this section directly, but the amount of the tax credit of a taxpayer in respect of a pro rata share of S Corporation income shall be determined by allocating to the taxpayer that proportion of the tax credit acquired by the New Jersey S Corporation that is equal to the taxpayer's share, whether or not distributed, of the total pro rata share of S Corporation income of the New Jersey S Corporation for its privilege period ending within or with the taxpayer's taxable year.
d. The value of tax credits approved by the director pursuant to subsection a. of this section and pursuant to subsection a. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill) shall not exceed a cumulative total of $12,000,000 in State fiscal year 2023 and in State each fiscal year thereafter to apply against the tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5) and the tax imposed pursuant to the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq. If the cumulative total amount of tax credits allowed to taxpayers for taxable years or privilege period commencing during a single fiscal year under subsection a. of this section and subsection a. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill) exceeds the amount of tax credits available in that fiscal year, then taxpayers who have first applied for and have not been allowed a tax credit for that reason shall be allowed, in the order in which they have submitted an application, the amount of tax credit on the first day of the next succeeding fiscal year in which tax credits under subsection a. of this section and subsection a. of section 5 of P.L. , c. (C. ) (pending before the Legislature as this bill) are not in excess of the amount of credits available.
e. A taxpayer shall submit to the director a report to verify the taxpayer's tax credit claim. The report shall include a certification from an institution of higher education, a comprehensive high school, a county vocational school, or a nonprofit organization that the assistance was used for an approved pre-employment and work readiness training program, and shall include such other the director may require. The certification shall be provided to the taxpayer and a copy of the certification shall be included in the filing of a return that includes a claim for a tax credit allowed pursuant to this section.
7. Following two years from the effective date of this act, the Department of State shall prepare, or cause to be prepared, an appropriate study and analysis of the efficacy of the training programs and tax credits, including but not limited to, employment and education outcomes of participants and the costs and benefits of the programs and tax credits to the State. Upon its completion, copies of the report shall be transmitted to the Governor and the Legislature pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1).
8. There is appropriated from the General Fund to the Department of Labor and Workforce Development and the Division of Taxation such funds as are necessary to implement the provisions and to effectuate the purposes of this act.
9. The Commissioner of
Labor and Workforce Development shall adopt rules and regulations pursuant to
the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to
effectuate sections 3 and 4 of this act.
10. The Director of the Division of Taxation in the Department of the Treasury shall adopt rules and regulations pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), to effectuate sections 5 and 6 of this act.
11. This act shall take effect 180 days following the date of enactment, and sections 5 and 6 shall apply to privilege periods and taxable years beginning on or after the January 1 next following the date of enactment.
STATEMENT
This bill, titled the "New Jersey Works Act," provides a financial incentive for businesses to establish pre-employment and work readiness training programs in partnership with institutions of higher education, comprehensive high schools, county vocational schools, and nonprofit organizations. Under the bill, a business entity may receive a credit against the corporation business tax or gross income tax for 100 percent of any financial assistance provided to support a qualified pre-employment and work readiness training program approved by the Department of Labor and Workforce Development (DOLWD). A maximum of $12 million in tax credits per State fiscal year is allowed to be granted to taxpayers for assistance provided to an institution of higher education, a secondary comprehensive school, a vocational school, or a nonprofit organization for an approved pre-employment and work readiness training program.
The bill requires an institution of higher education, comprehensive high school, county vocational school, or nonprofit organization that has entered into a partnership with a business entity to submit a pre-employment training plan for approval by the DOLWD. Each pre-employment and work readiness training program is required to offer at least 12 weeks of paid training at the minimum wage for each participant, and include, but not be limited to, instruction and training in the following areas: basic math and English literacy, communication skills, critical thinking, leadership, life skills and job readiness skills training, such as conflict management, finance concepts, resume preparation, problem solving, self-awareness and management, and any other training deemed necessary by the DOLWD. A single pre-employment and training plan may submitted by multiple institutions of higher education, comprehensive high schools, county vocational schools, or nonprofit organizations, but the plan must designate one entity as the lead organization with responsibility for the plan.
Program participants must be at least 16 years old. An institution of higher education or nonprofit organization may not determine a trainee's eligibility for participation in the training program on the trainee's possession of either a high school diploma or any high school equivalency diploma. Each program is required to offer trainees employment with a business entity which has provided funding for a qualified pre-employment and work readiness training program.
The bill requires the DOLWD to review each pre-employment training and work readiness plan to determine if it qualifies for financial assistance for which a tax credit may be granted. Each program must consist of pre-employment and work readiness training activities that will low- and moderate-income trainees and persons in needs of mid-career training skills training or vocational retraining and be reasonably designed to accomplish its intended purpose and further the purposes of the pre-employment training plan. The institution of higher education, comprehensive high school, county vocational school, or nonprofit organization must demonstrate that it has the capacity to implement that pre-employment training plan and provide adequate assurances that the assistance provided by a business entity will be expended exclusively to implement the pre-employment training plan. The bill requires the institution of higher education, comprehensive high school, county vocational school, or nonprofit organization to provide documentation of its completion rates.
The bill appropriates from the General Fund to the DOLWD and the Division of Taxation in the Department of the Treasury such funds as are necessary to administer the program.
