Establishes the "Neighborhood Scholar Revitalization Pilot Program."

A2333

ASSEMBLY, No. 2333

STATE OF NEW JERSEY

222nd LEGISLATURE

�

PRE-FILED FOR INTRODUCTION IN THE 2026 SESSION

Sponsored by:

Assemblyman WILLIAM F. MOEN, JR.

District 5 (Camden and Gloucester)

Assemblywoman VERLINA REYNOLDS-JACKSON

District 15 (Hunterdon and Mercer)

Co-Sponsored by:

Assemblywomen Murphy, Lopez and Assemblyman Verrelli

SYNOPSIS

���� Establishes the "Neighborhood Scholar
Revitalization Pilot Program."

CURRENT VERSION OF TEXT

���� Introduced Pending Technical Review by Legislative
Counsel.

��

An Act
establishing a pilot program to provide incentives to
improve the tax base in certain municipalities and supplementing and amending
P.L.1983,
c.303.

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

���� 1.��� (New section)��� This
act shall be known and may be referred to as the "Neighborhood Scholar Revitalization
Pilot Program."

���� 2.��� (New section)��� The
Legislature finds and declares:

���� a.���� Urban blight has
substantially reduced the taxable value of property in many neighborhoods in New
Jersey's older cities, depriving these cities of the ability to raise
necessary taxes to support city services.

���� b.��� The migration of the
middle class from the cities to the suburbs during the latter half of the 20th
Century started a cycle of poverty, neglect, and blight that continues to deter
reinvestment and resettlement of a middle class in order to reestablish a middle
class.

���� c.���� A root cause of urban
blight is the loss of the municipal tax base. Attempts to revitalize urban
areas through redevelopment projects and through the urban enterprise zone
program have met moderate success in business districts, but less success
within declining residential neighborhoods.

���� d.��� A pilot program
specifically designed to attract college graduates to targeted areas in certain
cities may be a key component to the revitalization of our older cities.

���� e.���� It is therefore an
appropriate public purpose to establish a pilot program through the Urban
Enterprise Zone Authority to provide, as a financial incentive, for the
reimbursement of a certain portion of a college graduate's student loans in
return for their commitment to move into a targeted residential neighborhood
for a period of at least two years.

����� 3.�
(New section)� a.� For the purposes of P.L.��� , c.��� (C.����� ) (pending
before the Legislature as this bill):

����� "Fund"
means the "Neighborhood Scholar Revitalization Student Loan Reimbursement
Fund" established pursuant to subsection b. of this section.

����� "Pilot
municipality" means Camden City in Camden County, Trenton City in Mercer
County, Jersey City in Hudson County, and Paterson City in Passaic County.

����� "Pilot
program" means the Neighborhood Scholar Revitalization Pilot Program
established under subsection c. of this section.

����� "Qualified
participant" means an individual who has been awarded a degree upon
graduating from an accredited two- or four-year institution of higher education
and who has at least $7,000 of outstanding student loan debt at the time of
application for the pilot program.

����� "Regulated
contribution" means a contribution to the fund by a qualified business
that receives a tax credit pursuant to section 4 of P.L.��� , c.��� (C.�������
) (pending before the Legislature as this bill), subject to any limits imposed
by the authority.

����� "Targeted
residential neighborhood" means a delineated residential area within a
pilot municipality designated pursuant to subsection d. of this section.

����� b.�� There
is created a "Neighborhood Scholar Revitalization Student Loan
Reimbursement Fund" to be held by the State Treasurer, which shall be the
repository for all monies required to be deposited therein in exchange for tax
credits granted under section 4 of P.L.��� , c.���
(C. ) (pending before the
Legislature as this bill), or transferred from the enterprise zone assistance
fund pursuant to section 29 of P.L.1983, c.303 (C.52:27H-88).

����� c.�� (1)�
The Urban Enterprise Zone Authority, working in consultation with the
Commissioner of Community Affairs, shall establish the Neighborhood Scholar
Revitalization Pilot Program with the purpose of offering college graduates
with student loan debt a financial inducement, in the way of student loan
reimbursement payments, in return for their commitment to relocate into a
targeted residential neighborhood for a period of at least 24 months.

����� (2)� The
pilot program shall be limited to 200 qualified participants within each of the
four pilot municipalities.� New qualified participants may be added to replace
participants who fail to complete their 24-month commitment period.

����� (3)� Each
qualified participant shall enter into a written contract to maintain their
principal residence within a dwelling located within a targeted residential
neighborhood for a period of at least 24 months.� A qualified participant may
change residences during the 24-month commitment period, so long as they remain
within a targeted residential neighborhood.

����� (4)� At
the completion of the 24-month commitment period, each qualified participant
shall be entitled to receive from the fund a student loan reimbursement payment
of $7,000, representing $3,500 for each 12-month period within the 24-month
commitment period. A reimbursement payment received pursuant to this section
shall not be included as income for the purpose of taxation under the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., or for any income
limit required for participation in any State program.

����� d.�� (1)
Each pilot municipality shall designate targeted residential neighborhoods for
approval by the Commissioner of Community Affairs.� The commissioner shall
approve the designation of a targeted residential neighborhood that is
primarily residential in character and located in a census tract in which the
median household income is 60 percent or less of the median income for the
housing region in which the census tract is located, as determined for a
three-person household by the Department of Community Affairs in accordance
with the latest federal decennial census. A list of eligible census tracts
within the pilot municipalities shall be maintained by the Department of
Community Affairs and shall be adjusted upon publication of median income
figures by census tract after each federal decennial census.

����� (2)� The
Department of Community Affairs shall maintain a list of targeted residential
neighborhoods on its Internet website and each pilot municipality shall
maintain a list of targeted residential neighborhoods within that municipality
on its Internet website.

����� e.�� The
authority shall work with the New Jersey Housing and Mortgage Finance Authority
to develop and offer favorable loan programs to qualified participants seeking
to purchase homes within a targeted residential neighborhood.

����� f.��� No
later than three years after the effective date of P.L.��� , c.��� (C.����� )
(pending before the Legislature as this bill), the authority, in consultation
with the Commissioner of Community Affairs, shall prepare and submit a report
to the Governor and Legislature, pursuant to section 2 of P.L.1991, c.164
(C.52:14-19.1), evaluating the efficacy of the pilot program and making
recommendations for its expansion or termination.

���� g.��� The
authority, in consultation with the Commissioner of Community Affairs, shall
promulgate rules and regulations to effectuate the purposes of P.L.��� , c.���
(C.���� ) (pending before the Legislature as this bill).

���� 4.� (New section)� a.� Any
business that is located in a pilot municipality that is subject to the
provisions of the "Corporation Business Tax Act (1945)," P.L.1945,
c.162 (C.54:10A-1 et seq.), and is actively engaged in the conduct of business from
a location within an enterprise zone designated pursuant to P.L.1983, c.303,
(C.52:27H-60 et seq.), shall be allowed a neighborhood scholar revitalization
tax credit against the amount of tax imposed under the "Corporation
Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et seq.) equal to
the amount of each annual regulated contribution by the business to the
"Neighborhood Scholar Revitalization Student Loan Reimbursement Fund"
established pursuant to section 3 of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill).

���� b.� The tax credit allowed
pursuant to this section shall be applied against the taxpayer's corporation
business tax liability, but shall not reduce a taxpayer's tax liability under
the "Corporation Business Tax Act (1945)," P.L. 1945, c. 162 (C.
54:10A-1 et seq.) in any tax year by more than 50 percent of the amount
otherwise due.� Any neighborhood scholar revitalization tax credit remaining
and unused in a tax year may be carried forward by the taxpayer to the next
succeeding tax year and applied against 50 percent of the amount of tax
otherwise due in that succeeding tax year.

���� c.� The neighborhood scholar
revitalization tax credit shall be allowed in the tax year immediately
following the tax year in which the business made an annual regulated
contribution to the "Neighborhood Scholar Revitalization Student Loan
Reimbursement Fund" established pursuant to section 3 of P.L.��� , c.���
(C.������� ) (pending before the Legislature as this bill), and shall be
permitted in any tax year of a 20 year period from the date of the
contribution.

���� 5.�
Section 29 of P.L.1983, c.303, s.29 (C.52:27H-88) is
amended to read as follows:

���� 29.� a.� (1) There is created
an enterprise zone assistance fund to be held by the State Treasurer, which
shall be the repository for all moneys required to be deposited therein under
section 11 of P.L.2021, c.197 (C.52:27H-98).� All moneys deposited in the fund
shall be held and disbursed in the amounts necessary to fulfill the purposes of
this section and subject to the requirements hereinafter prescribed. The State
Treasurer may invest and reinvest any moneys in the fund, or any portion
thereof, to strengthen capital structures, leverage additional debt capital,
and increase lending and investing in economically disadvantaged communities,
and in any other manner that advances the goals of the Urban Enterprise Zone
program, including, but not limited to legal obligations of the United States
or of the State or of any political subdivision thereof or government-sponsored
enterprises. Any income from, interest on, or increment to moneys so invested
or reinvested shall be included in the fund.�

���� Notwithstanding the provisions
of section 11 of P.L.2021, c.197 (C.52:27H-98) or any other provision of law to
the contrary, the amount to be deposited in the enterprise zone assistance fund
shall be as follows:

���� (a)�� In the first five State
fiscal years next following the effective date of P.L.2021, c.197, 100 percent
of the amount determined pursuant to section 11 of P.L.2021, c.197
(C.52:27H-98) shall be deposited in the enterprise zone assistance fund;

���� (b)�� In the sixth State
fiscal year next following the effective date of P.L.2021, c.197, 95 percent of
the amount determined pursuant to section 11 of P.L.2021, c.197 (C.52:27H-98)
shall be deposited in the enterprise zone assistance fund and five percent of
such amount shall be deposited in the General Fund;

���� (c)�� In the seventh State
fiscal year next following the effective date of P.L.2021, c.197, 90 percent of
the amount determined pursuant to section 11 of P.L.2021, c.197 (C.52:27H-98)
shall be deposited in the enterprise zone assistance fund and 10 percent of
such amount shall be deposited in the General Fund;

���� (d)�� In the eighth State
fiscal year next following the effective date of P.L.2021, c.197, 85 percent of
the amount determined pursuant to section 11 of P.L.2021, c.197 (C.52:27H-98)
shall be deposited in the enterprise zone assistance fund and 15 percent of such
amount shall be deposited in the General Fund;

���� (e)�� In the ninth State
fiscal year next following the effective date of P.L.2021, c.197, 80 percent of
the amount determined pursuant to section 11 of P P.L.2021, c.197 (C.52:27H-98)
shall be deposited in the enterprise zone assistance fund and 20 percent of
such amount shall be deposited in the General Fund; and

���� (f)�� In the 10th State fiscal
year next following the effective date of P.L.2021, c.197, 75 percent of the
amount determined pursuant to section 11 of P.L.2021, c.197 (C.52:27H-98) shall
be deposited in the enterprise zone assistance fund and 25 percent of such
amount shall be deposited in the General Fund.

���� (2)� The State Treasurer shall
maintain separate accounts for each enterprise zone designated under P.L.1983,
c.303 (C.52:27H-60 et seq.) that is in good standing with the UEZ Authority in
accordance with rules adopted by the UEZ Authority, and one in the authority's
name for the administration of the Urban Enterprise Zone program, and for
providing grants, including planning grants, investments, loans or other
guaranties related to qualified assistance fund expenses.� The State Treasurer
shall credit to each account an amount of the moneys deposited in the fund
determined by a weighted formula that applies 50 percent weight to a zone
municipality's number of commercial and industrial parcels as recorded by the
municipal tax assessor, its Municipal Revitalization Index Distress Score, as
determined by the Department of Community Affairs, and the average number of
unemployed persons in the municipality according to data provided by the New
Jersey Department of Labor and Workforce Development, and 50 percent weight to
the gross taxable sales in the municipality subject to reduced sales tax
pursuant to section 21 of P.L.1983, c.303 (C.52:27H-80), as determined by the
State Treasurer.� The data used in the formula, developed under this section,
shall be the most recent data that has been made available by the Department of
Community Affairs, the Department of Labor and Workforce Development, and the
State Treasurer.� When funds are received by a qualifying municipality pursuant
to this subsection, the funds shall be placed in a new trust or, for a
qualifying municipality that has a trust for an enterprise zone on the
effective date of P.L.2021, c.197, in the existing trust.� The Division of
Local Government Services in the Department of Community Affairs shall promulgate
regulations, policies, or procedures as necessary to implement the provisions
of this section.

���� (3)�� From the amounts
allocated to the zone assistance fund in each State fiscal year pursuant to
section 11 of P.L.2021, c.197 (C.52:27H-98), there shall be deposited annually
to the account in the authority's name, $2,500,000 beginning in State Fiscal
Year 2022, for the administration of the Urban Enterprise Zone program, and for
providing grants, investments, loans, or other guaranties related to qualified
assistance fund expenses.� This amount shall be adjusted annually by the
percentage change in the 12-month Consumer Price Index from June 30 to July 1.

���� (4)�� The State Treasurer
shall promulgate the rules and regulations necessary to govern the
administration of the fund for the purposes of this section, which shall
include, but not be limited to, regulations requiring the establishment of
separate bank accounts for funds credited to the enterprise zone account of
each municipality from the enterprise zone assistance fund, commonly known as
"first generation funds," and funds generated from the repayments of
loans to individuals and businesses from the enterprise zone account of each
municipality and the proceeds from the sale of properties and equipment
acquired through the enterprise zone program, commonly known as "second
generation funds," and the review, compilation, and monitoring of second
generation fund quarterly reports submitted by each enterprise zone.

���� Any individual, including an
individual who is not directly employed by a municipality, with the authority
to administer, allocate or approve the use of zone assistance funds is subject
to the "Local Government Ethics Law," P.L.1991, c.29 (C.40A:9-22.1 et
seq.), unless the individual is a State employee or a special State officer.

���� b.���
(1)
� The
enterprise zone assistance fund shall be used for the purpose of assisting
qualifying municipalities in which enterprise zones are designated in
undertaking economic development projects in designated enterprise zones by
funding qualified assistance fund expenses.� However, a municipality shall not
appropriate or expend more than 25 percent of the amount annually credited to
its enterprise zone assistance fund for public safety purposes, as described
pursuant to paragraph (4) of subsection m. of section 3 of P.L.1983, c.303
(C.52:27H-62) or more than 10 percent of the amount annually credited to its
enterprise zone assistance fund for administrative expenses.

����
(2)� Amounts from the
enterprise zone assistance fund for qualifying municipalities that are
qualifying municipalities for the purposes of P.L.��� , c.��� (C.������� )
(pending before the Legislature as this bill) may be transferred to the
�Neighborhood Scholar Revitalization Student Loan Reimbursement Fund�
established pursuant to section 3 of P.L.��� , c.��� (C.������� ) (pending
before the Legislature as this bill) to accomplish the purposes of that law.�

���� c.���� The governing body of a
qualifying municipality in which an enterprise zone is designated and the zone
development corporation created or designated by the municipality for that
enterprise zone may, by resolution jointly adopted after public hearing, propose
to undertake an economic development project in the enterprise zone, and to
fund that project from moneys deposited in the enterprise zone assistance fund
and credited to the account maintained by the State Treasurer for the
enterprise zone.

���� The proposal so adopted shall
set forth a plan for the project and shall include:

���� (1)�� A description of the
proposed project;

���� (2)�� An estimate of the total
project costs, and an estimate of the amounts of funding necessary annually
from the enterprise zone account;

���� (3)�� A statement of any other
revenue sources to be used to finance the project;

���� (4)�� A statement of the time
necessary to complete the project;

���� (5)�� A statement of the
manner in which the proposed project furthers the municipality's policy and
intentions for addressing economic development in the enterprise zone as set
forth in the zone development plan approved by the authority; and

���� (6)�� A description of the
financial and programmatic controls and reporting mechanisms to be used to
guarantee that the funds will be spent in accordance with the plan and that the
project will accomplish its purpose.

���� As used in this section,
"project" means an activity that satisfies the requirements of a
qualified assistance fund expense, as that term is defined in subsection m. of
section 3 of P.L.1983, c.303 (C.52:27H-62), and which will lead to the creation
of new jobs and increased economic activity within the zone.

���� d.��� (Deleted by amendment,
P.L.2021, c.197)

���� e.���� (Deleted by amendment,
P.L.2021, c.197)

���� f.���� (Deleted by amendment,
P.L.2021, c.197)

���� g.��� (Deleted by amendment,
P.L.2021, c.197)

���� h.��� At the end of a State
fiscal year, if a municipality has not encumbered a portion of its allocation,
such amount may be carried forward to the next State fiscal year and the State
fiscal year thereafter.� If at the end of the third State fiscal year any of
those unencumbered funds remain, then the funds shall be transferred to the UEZ
Authority's account in the enterprise zone assistance fund.

���� i.���� At the end of a State
fiscal year, if a municipality has not expended or otherwise committed a
portion of its encumbered funds, then such amount may be carried forward to the
next three succeeding State fiscal years.� If at the end of the third State fiscal
year any unexpended funds remain, then the funds shall be transferred to the
UEZ Authority's account in the enterprise zone assistance fund.

���� j.���� At the end of a State
fiscal year, the Department of Community Affairs shall review an enterprise
zone's expenditures of funds received from the zone assistance fund.� If the
department finds that an enterprise zone expended such funds in a manner inconsistent
with the provisions of P.L.1983, c.303 (C.52:27H-60 et seq.) and P.L.2021,
c.197, then the enterprise zone shall repay such funds to the department
through the forfeiture of future zone assistance fund disbursements.� The
department shall withhold future funding from the enterprise zone until the
enterprise zone enters into and complies with a corrective action plan
developed by the department.

���� k.��� If in a State fiscal
year the amount allocated to the enterprise zone assistance fund is less than
the amount required to be allocated pursuant to section 11 of P.L.2021, c.197
(C.52:27H-98) and paragraph (1) of subsection a. of this section, the Legislature
shall appropriate to the enterprise zone assistance fund the amount that was
not allocated in such State fiscal year in a succeeding State fiscal year along
with the funds required to be allocated in that State fiscal year.

(cf: P.L.2021, c.197, s.10)

���� 6.��� This act shall take
effect immediately.

STATEMENT

����� This bill entitled the "Neighborhood Scholar
Revitalization Pilot Program," is intended to aid in the revitalization of
declining neighborhoods in the older cities by "seeding" them with a
new middle class.� The bill establishes a pilot program in four older cities,
one in each region of the State, to try to attract recent college graduates to
enter into a two-year commitment to settle within certain targeted residential
neighborhoods.� The four initial cities that will participate in the pilot
program are Camden, Trenton, Jersey City, and Paterson.� The cities would be
responsible for identifying the targeted residential neighborhoods, although
those neighborhoods would have to be primarily residential in character and
located in a census tract in which the median household income is 60 percent or
less of the median income for the housing region in which the census tract is
located, as determined for a three-person household by the Department of
Community Affairs in accordance with the latest federal decennial census.

����� Each of the four cities participating in the pilot
program would be eligible to offer up to 200 qualified graduates a financial
incentive to agree to maintain their primary residence within a targeted
residential neighborhood for a period of at least 24 months.� To qualify for
participation in the program, a graduate would need a degree from a two- or
four-year accredited institution of higher education, and proof of outstanding
student loan indebtedness of at least $7,000.� At the end of the required residency
period, the program participant would be reimbursed a total $7,000 towards
their student loan obligations.

����� This pilot program would be administered by the Urban
Enterprise Zone Authority because businesses located
within pilot municipalities and an
enterprise zone designated pursuant to P.L.1983, c.303, (C.52:27H-60 et seq.)
and
subject to the
"Corporation Business Tax Act (1945)," P.L.1945, c.162 (C.54:10A-1 et
seq.) would be entitled to receive neighborhood scholar revitalization tax
credits for contributions made to the "Neighborhood Scholar Revitalization
Student Loan Reimbursement Fund" established by the bill.� This would
assist UEZ businesses in recruiting highly educated workers by offering the
student loan reimbursement program as an additional benefit.� Monies from each
pilot municipality's urban enterprise zone assistance fund account could be
transferred into the "Neighborhood Scholar Revitalization Student Loan
Reimbursement Fund" for the purpose of funding student loan
reimbursements.

����� The bill specifies that the amount of the Corporation
Business Tax (CBT) tax credit allowed to a business would be equal to the
amount of each annual regulated contribution by the business to the
"Neighborhood Scholar Revitalization Student Loan Reimbursement Fund"
established pursuant to section 3 of the bill, but limited to 50 percent of the
amount of tax otherwise due by the business in a given tax year.� The bill
provides for the carry-forward of unused tax credits.�

����� At the end of three years, the Urban Enterprise Zone
Authority, in consultation with the Commissioner of Community Affairs, would be
required to report to the Governor and Legislature on the success of the pilot
program, and make recommendations regarding either the expansion or termination
of the pilot program.