Provides tax credits to companies contributing to loan and loan redemption program for residents who attend institutions of higher education in State and work at such company upon graduation.

S3727

SENATE, No. 3727

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED MARCH 5, 2026

Sponsored by:

Senator� ANTHONY M. BUCCO

District 25 (Morris and Passaic)

SYNOPSIS

���� Provides tax credits to companies contributing to
loan and loan redemption program for residents who attend institutions of
higher education in State and work at such company upon graduation.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act

establishing a student loan and loan redemption program and supplementing
P.L.1945, c.162 (C.54:10A-1 et seq.) and Title 18A of the New Jersey Statutes.

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

���� 1.��� As used in sections 3
through 12 of P.L.��� , c.���� (C.������� ) (pending before the Legislature as
this bill):

���� "Authority" means
the Higher Education Student Assistance Authority established pursuant to
N.J.S.18A:71A-3.

���� "Eligible qualifying loan
expenses" means the cumulative outstanding balance of student loans issued
under the program.

���� �Eligible State company� means
a company that operates in the State, employs State residents, and receives a
tax credit pursuant to section 2 of P.L.��� , c.���� (C.������� ) (pending
before the Legislature as this bill).

���� "Executive Director"
means the Executive Director of the Higher Education Student Assistance
Authority.

���� "Program" means the New
Jersey Talent Retention Loan and Loan Redemption Program established pursuant
to section 4 P.L.��� , c.���� (C.������� ) (pending before the Legislature as
this bill).

���� "Program
participant" means a student selected to participate in the program who
contracts with the authority to engage in employment with an eligible State
company in exchange for the redemption of eligible qualifying loan expenses.

���� 2.��� a.� A taxpayer shall be
allowed a credit against taxes imposed pursuant to section 5 of P.L.1945, c.162
(C.54:10A-5) for a contribution made during the privilege period to the New
Jersey Talent Retention Loan Fund established pursuant to section 3 of P.L.���
, c.���� (C.������� ) (pending before the Legislature as this bill), provided
that the taxpayer designates at the time the contribution is made that the
contribution is made pursuant to the New Jersey Talent Retention Loan and Loan
Redemption Program established pursuant to section 4 of P.L.��� , c.����
(C.������� ) (pending before the Legislature as this bill) and the contribution
is at least $10,000.� An amount equal to 50% of the contribution shall be
allowed as a credit against the tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) during the privilege period that the contribution is
made. An additional amount equal to up to 50% of the contribution shall be
allowed as a credit in increments of $5,000 per year, per program participant,
while the program participant is employed by the taxpayer and is engaged in
employment eligible for loan redemption pursuant to section 8 of P.L.��� ,
c.���� (C.������� ) (pending before the Legislature as this bill).

���� b.��� In order to qualify for
a tax credit pursuant to subsection a. of this section, the taxpayer shall
apply for a certification from the Executive Director of the Higher Education
Student Assistance Authority that certifies eligibility for the tax credit and
the amount of the tax credit to be granted to the taxpayer under P.L.��� ,
c.���� (C. ) (pending before the
Legislature as this bill).� Upon certification, the executive director shall
submit a copy of the certification to the taxpayer and the Director of the
Division of Taxation.� When filing a tax return that includes a claim for a
credit pursuant to this section, the taxpayer shall include a copy of the
certification.� A credit shall be valid in the tax year in which the
certification is approved and any unused portion thereof may be carried
forward, if necessary, for use in future privilege periods.

���� c.���� The order of priority
of the credit allowed under this section and any other credits allowed by law
shall be as prescribed by the Director of the Division of Taxation.� The amount
of the credit applied under this section shall not reduce the 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).

���� 3.��� a. There is created in
the Higher Education Student Assistance Authority a special nonlapsing fund to
be known as the �New Jersey Talent Retention Loan Fund.�� The fund shall be
maintained in a separate account and administered by the executive director of
the authority.� The fund shall consist of: (1) all revenues contributed by
companies pursuant to section 2 of
P.L. , c. (C. ��
) (pending before the Legislature as this bill); (2) the principal
from loan repayments made pursuant to sections 8 and 9 of P.L.���� , c.���
(C.���� ) (pending before the Legislature as this bill); and (3) all interest
and investment earnings received on monies in the fund.

���� b.��� Monies in the fund shall
be distributed in accordance with the provisions of section 6 of P.L.���� ,
c.���� (C.����� ) (pending before the Legislature as this bill) to provide
loans to highly qualified students in the State.

���� 4.��� There is established a New
Jersey Talent Retention Loan and Loan Redemption Program within the Higher
Education Student Assistance Authority.� The program shall provide direct loans
to finance the undergraduate study of eligible students and the redemption of a
portion of the eligible qualifying loan expenses of program participants for
each year of full-time employment at an eligible State company.

���� The purpose of the program is
to retain highly qualified students in the State by allowing business and
industry located in the State to finance the education of students at
institutions of higher education in the State through contributions made to the
New Jersey Talent Redemption Loan Fund, and then to hire these students upon
completion of their academic degree program.

���� 5.��� To be eligible to
participate in the program, an applicant shall:

���� a.���� be a resident of the
State for a period of not less than 12 months immediately prior to applying to
the program and have graduated from a high school located within the State;

���� b.��� enroll in an
undergraduate degree program at an institution of higher education located in
the State;

���� c.���� apply for all other
available forms of State and federal financial aid, exclusive of loans;

���� d.��� agree to work for up to
four years at an eligible State company;

���� e.���� apply to the program by
completing and submitting an application prescribed by the authority; and

���� f.���� agree to abide by the
terms and conditions of the program as established by the authority.

���� 6.��� a.� The authority shall
establish standards of academic merit to determine which applicants are
qualified to participate in the program.� An applicant who meets these
standards shall be placed on a qualified applicants list.

���� b.��� The selection of program
participants shall be made from the qualified applicants list as follows:� the
eligible State company that has made the largest contribution in a State fiscal
year to the New Jersey Talent Retention Loan Fund selecting the first participant,
and then proceeding in descending order of the amount of contribution until
every eligible company that has contributed $40,000 or more in the most recent
State fiscal year has made a selection.� If there are sufficient funds
remaining in the fund to select additional participants, the authority shall
then select additional qualified applicants based upon the standards, until the
available loan funds for the year have been expended.

���� c.���� No less than one
applicant for every $40,000 contribution made to the fund shall be admitted to
the program.

���� d.��� A program participant
shall be eligible for a loan of up to a maximum of $10,000 per year towards the
cost of attendance at an institution of higher education located within the
State.� The cost of attendance shall include tuition, room and board, and mandatory
fees.���������� The maximum loan amount for a program participant who is
enrolled in a baccalaureate degree program shall equal $40,000 and for a
program participant enrolled in an associate degree program, shall equal
$20,000.

���� 7.��� A program participant
shall be required to adhere to performance standards which shall include, but
need not be limited to, that the participant:

���� a.���� maintain residency in
the State;

���� b.��� maintain full-time
enrollment in an undergraduate degree program in an institution of higher
education located in the State and graduate from the institution after two
academic years in the case of a student enrolled in an associate degree program
or four academic years in the case of a student enrolled in a baccalaureate
degree program, unless enrolled in a degree program regularly requiring an
additional number of academic years for graduation;

���� c.���� maintain a cumulative
grade point average of at least 3.0 on a 4.0 scale;

���� d.��� upon completion of the
degree program, apply for employment at the eligible State company that
selected the program participant for acceptance into the program pursuant to
section 6 of P.L.����� , c.���� (C.������� ) (pending before the Legislature as
this bill), and agree to accept employment with that company before accepting
employment with any other eligible State company;

���� e.���� enter into an
employment agreement with an eligible State company; and

���� f.���� maintain satisfactory
employment performance at an eligible State company for the required period of
employment.

���� 8.��� a. Direct loans made
pursuant to section 6 of
P.L. , c. (C. ) (pending
before the Legislature as this bill) shall be redeemed by a program participant
upon execution of a contract between the program participant and the executive
director.� The maximum loan redemption shall amount to cancellation of
repayment of 20% of eligible loan indebtedness for each full year of approved
employment completed by the program participant for total cancellation of loan
indebtedness of up to $40,000 for a program participant enrolled in a
baccalaureate degree program and up to $20,000 for a program participant
enrolled in an associate degree program.

���� b.��� Direct loans shall not
bear interest or finance charges during the time a program participant is
enrolled in the program or is engaged in approved employment pursuant to this
act.� Direct loans shall become due and payable 18 months after graduation if the
program participant has not begun approved employment with an eligible State
company and no redemption contract is in effect, or six months after change to
part-time student status, withdrawal from the program, or termination from
approved employment.� The principal collected from loan repayments shall be
credited to the loan fund for the purposes of funding additional participants.

���� c.���� Prior to the annual
redemption of loan indebtedness, a program participant shall submit proof of
required employment to the authority.� In no event shall employment for less
than a full year entitle the program participant to any benefits under the loan
redemption conditions of the program.� The authority shall enforce repayment of
all loans for a program participant who does not comply with the provisions of
P.L.������ , c.���� (C.����� ) (pending before the Legislature as this bill),
including the use of all lawful collection procedures.

���� 9.��� A program participant
who has entered into a redemption contract with the authority may nullify the
contract by submitting written notification and assuming full responsibility
for repayment of the full amount of the loan or that portion of the loan which
has not been redeemed by the State in return for partial fulfillment of the
contract.� The interest on the loan shall be equal to the prevailing market
rate at the time the loan was made.� The participant seeking to nullify the
contract shall be required to repay the loan or the unredeemed portion thereof
in accordance with a schedule determined by the authority.

���� 10.� In case of a program
participant�s death or total or permanent disability, the executive director
shall nullify the employment obligation, thereby terminating the program
participant�s obligation to repay the unpaid balance of the loan; or where
continued enforcement of the contract may result in extreme hardship, the
executive director may nullify or suspend the program participant�s employment
obligation.

���� 11.� The Executive Director of
the authority shall adopt in accordance with the �Administrative Procedure
Act,� P.L.1968, c.410 (C.52:14B-1 et seq.), rules and regulations as may be
necessary to implement the provisions of this act.

���� 12.� This act shall take
effect for the 2012-2013 academic year; however, the authority may immediately
take such administrative action as may be necessary to implement the provisions
of this act.

STATEMENT

���� This bill establishes the New
Jersey Talent Retention Loan and Loan Redemption Program within the Higher
Education Student Assistance Authority (HESAA).� The goal of the program is to
keep the most talented students in New Jersey from leaving the State during
college or at the beginning of their working career.� The program is a
financial aid program that offers certain New Jersey high school students who
attend college in New Jersey, loans of up to $10,000 per year and up to a
$40,000 maximum, and then forgiveness of those loans in exchange for employment
with certain New Jersey companies.� The companies that are eligible under this
program to employ students are the companies that provide the funding for the
loan program through donations to the New Jersey Talent Retention Loan Fund
which is also established in HESAA.�

���� Employers that contribute to
the loan fund are eligible to take a tax credit equal to 50% of the amount
contributed in the taxable year of the contribution.� Contributions to the loan
fund will be used to fund loans for eligible students.� The employer is
eligible to take an additional tax credit equal to 50% of the contribution by
employing students who have received loans under the program upon their
graduation.� For every $40,000 contributed to the loan fund, an employer may
select a student who receives a loan under the program and that student is then
contractually obligated to apply to and accept an offer of employment with that
company before he is eligible to accept employment with any other company that
has made a contribution.

���� A student who wants to
participate in the program must submit an application to HESAA.� HESAA will
accept students in accordance with standards of academic merit that it is
directed to establish under the bill.� The accepted students will be placed on
a qualified applicants list.� Employers and HESAA will then select from among
the qualified applicants list to decide which students will be admitted into
the program.� Companies that contribute the greatest amount to the loan fund
will select first and then other companies will make selections in descending
order of contribution amount until all monies in the loan fund for that year
have been disbursed.�

���� A student admitted to the
program will then be eligible for a loan from HESAA of up to $10,000 per year
with a maximum amount of $40,000 for a baccalaureate degree program and $20,000
for an associate degree program.� After graduation, the student must obtain
employment with one of the employers that contributed to the loan fund.� If the
participant does not obtain employment with a qualified employer within 18
months of graduation, the participant will have to begin paying back the
loans.� If the participant does find employment with a qualified employer, the
student will have 25% of the loan amount redeemed for every 12 months of full
time employment, until the loan is completely forgiven.