Establishes five-year "New Jersey Artificial Intelligence Workforce Transition Act."

S4458

SENATE, No. 4458

STATE OF NEW JERSEY

222nd LEGISLATURE

�

INTRODUCED JUNE 15, 2026

Sponsored by:

Senator� ANDREW ZWICKER

District 16 (Hunterdon, Mercer, Middlesex and Somerset)

SYNOPSIS

���� Establishes five-year �New Jersey Artificial
Intelligence Workforce Transition Act.�

CURRENT VERSION OF TEXT

���� As introduced.

��

An Act
establishing the �New Jersey Artificial Intelligence
Workforce Transition Act� and amending P.L.1992, c.43.

����
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 cited as the �New Jersey Artificial Intelligence
Workforce Transition Act.�

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

���� a.���� Artificial intelligence
(AI) technologies are rapidly transforming the labor market across all
industries, occupations, and wage levels, creating significant risk of
structural unemployment affecting millions of New Jersey workers;

���� b.��� History demonstrates
that technological disruption without adequate public-private transition
infrastructure produces lasting economic harm to workers, communities, and the
broader social fabric as evidenced by deindustrialization episodes in the
latter half of the twentieth century;

���� c.���� The appropriate
response to artificial intelligence-driven labor disruption is not to slow
innovation, which would reduce New Jersey's economic competitiveness, but to
build modern, data-driven workforce transition systems;

���� d.��� A new compact between
employers, educational institutions, and State government, in which each sector
assumes defined responsibilities, is necessary to prepare New Jersey's
workforce for an AI-integrated economy;

���� e.���� The goal of public
policy should be to incentivize augmentation of human workers by AI rather than
replacement of human workers by AI, and to ensure that the productivity gains
from AI are reinvested in the workforce;

���� f.���� Public investment in
workforce preparation must be held accountable to measurable labor market
outcomes, not merely enrollment figures;

���� g.��� AI exposure and AI
vulnerability are not the same thing:

���� (1)�� research published by
the Brookings Institution in January 2026 found that while higher-income,
white-collar workers in roles such as software development, financial
management, and law face the highest AI exposure rates, they also possess the
greatest capacity to adapt to displacement through financial savings, transferable
skills, professional networks, and access to dense labor markets;

���� (2)�� conversely, the workers
most at risk of lasting harm from AI displacement are those with both high
exposure and low adaptive capacity, approximately 6.1 million workers
nationally, concentrated in clerical and administrative roles including office
clerks, secretaries, administrative assistants, receptionists, and medical
secretaries, of whom approximately 86 percent are women; and

���� (3)�� effective public policy
must therefore target support not at exposure alone but at the intersection of
exposure and vulnerability;

���� h.��� The four factors most
predictive of a worker's capacity to adapt to job displacement are:

���� (1)�� liquid financial
savings, which determine whether a worker can weather a period of unemployment
without accepting an inferior job under duress;

���� (2)�� age, with workers aged
55 and older facing significantly lower reemployment rates and larger earnings
losses following displacement;

���� (3)�� geographic labor market
density, with workers in smaller and more rural labor markets facing fewer
alternative employment opportunities; and

���� (4)�� skill transferability,
with workers whose skills apply across many occupations experiencing smaller
earnings losses following displacement than those with highly specialized,
occupation-specific skills; and

���� i.���� It is in the public
interest of this State to act proactively and establish the institutional
frameworks, data infrastructure, funding mechanisms, and employer incentives
necessary to prevent foreseeable workforce crises, with particular attention to
workers whose combination of high AI exposure and low adaptive capacity makes
them most vulnerable to lasting economic harm.

���� 3.��� (New section)� As used
in this act:

���� "Adaptive capacity
index" means the annual index published by the commissioner pursuant to subsection
c. of section 8 of P.L.��� , c.�� (C.������� ) (pending before the Legislature
as this bill) measuring workers' estimated capacity to navigate job
displacement by occupation and zip code, based on liquid financial savings, age
distribution, geographic labor market density, and skill transferability.

���� "AI-displaced worker"
means any New Jersey resident who has experienced involuntary separation from
employment where an employer's adoption, expansion, or material modification of
an artificial intelligence system was a but-for cause or a substantial
contributing cause of the elimination, reduction, or restructuring of the
worker's position. �

���� "AI displacement
account" means the dedicated account to fund AI workforce transition
programs established within the New Jersey Workforce Development Partnership
Fund created pursuant to section 9 of P.L.1992, c.43 (C.34:15D-9).

���� "Artificial intelligence
system" or "AI system" means any machine-based system that
processes inputs using algorithms, statistical models, or neural networks to
generate outputs such as predictions, recommendations, decisions, or content
that materially influence or replace human judgment in performing a job
function.� The term includes machine learning systems, large language models,
generative AI tools, robotic process automation systems, and automated
decision-making platforms.� The term does not include general-purpose software,
standard database management systems, or basic rule-based automation that does
not incorporate learning or adaptive capabilities.

���� "Apprenticeship program"
means an earn-while-you-learn training program registered with the Department
of Labor and Workforce Development meeting standards equivalent to those
established under the National Apprenticeship Act of 1937 (29 U.S.C. s.50 et
seq.).

���� "Commissioner" means
the Commissioner of Labor and Workforce Development.

���� "Department" means
the Department of Labor and Workforce Development.

���� "Director" means the
Director of the Division of Taxation.

���� "Division" means the
Division of Wage and Hour Compliance in the Department of Labor and Workforce
Development.

���� "Employer" means any
person, firm, corporation, partnership, or other entity employing 100 or more
employees, including full-time and part-time employees, in the State,
consistent with the employee counting methodology of the �Millville Dallas
Airmotive Plant Job Loss Notification Act,� P.L.2007, c.212 (C.34:21-1 et seq.),
commonly referred to as the State �WARN Act.�

���� "Economic opportunity
zone" means a geographic designation pursuant to subsection e. of section 8
of P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
that triggers targeted economic development incentives in response to artificial
intelligence-driven displacement exceeding defined thresholds.

���� "High-automation industry"
means any industry sector designated by the commissioner pursuant to section 8 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill) as
having experienced artificial intelligence-driven workforce displacement at a
rate of five percent or greater of sector employment within any rolling
24-month period.

���� "High-demand credential"
means a certificate, license, or degree, of 18 months or less in duration, in a
field designated by the State Employment and Training Commission as
experiencing acute labor shortages.

���� "High-vulnerability
occupation" means an occupation designated by the adaptive capacity index
established pursuant to section 8 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill) as combining above-median AI exposure with
below-median adaptive capacity.

���� "Wage insurance"
means a temporary income supplement paid to a displaced worker who accepts
reemployment at a lower wage than the worker�s prior position.

���� 4.��� (New section)� a.� Any
employer that adopts, expands, or materially modifies an artificial
intelligence system that the employer reasonably anticipates will result in the
elimination, reduction, or material restructuring of 25 or more positions
within a 12-month period shall notify the Division of Wage and Hour Compliance
in the Department of Labor and Workforce Development no less than 90 days prior
to implementation.� The notice shall include:

���� (1)�� the number and job
classification of positions expected to be affected;

���� (2)�� a timeline for
implementation of the AI system;

���� (3)�� the employer's plan for
affected workers, including any retraining, redeployment, severance, or other
transition assistance the employer commits to provide; and

���� (4)�� identification of new or
evolving roles within the employer's organization for which displaced workers
may be suitable with training.

���� b.��� Failure to provide
timely notice pursuant to subsection a. of this section shall subject the
employer to a civil penalty to be collected by the commissioner, as follows:

���� (1) $500 per affected employee
for notice provided 60 to 89 days prior to implementation;

���� (2)�� $1,000 per affected
employee for notice provided 30 to 59 days prior to implementation;

���� (3)�� $2,000 per affected
employee for notice provided less than 30 days prior to implementation; and

���� (4)�� $3,000 per affected
employee for no notice provided.

���� Penalties shall not be
cumulative and a single penalty per affected employee shall apply based on the
notice timing tier at the time of implementation.

���� c.���� Notices filed under
this section shall be made publicly available on the department website in a
searchable, machine-readable format within 30 days of receipt.

���� d.��� No penalty shall be
imposed under subsection b. of this section where an employer demonstrates
that:

���� (1)�� the employer provided
notice in good faith based on the reasonable projection of affected positions
at the time of filing;

���� (2)�� the actual number of
affected positions or implementation timeline deviated from the notice due to
circumstances that arose after filing and were not reasonably foreseeable; and

���� (3)�� the employer filed an
amended notice within 15 days of becoming aware of the material change.

���� This subsection shall not
apply where the employer's original notice was materially inaccurate due to
reckless disregard for the accuracy of the information provided.

���� 5.��� (New section)� a.� The
commissioner shall assign staff within the Division of Wage and Hour Compliance
in the Department of Labor and Workforce Development to carry out all
enforcement functions under P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill), including notice intake, complaint processing,
investigations, penalty assessment and collection, and compliance auditing.� A
new organizational unit shall not be required to be established for this
purpose.

���� b.��� Any worker who has
reason to believe that an employer has violated the notice requirements
established pursuant to section 4 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill) may file a written complaint with the
division.� The division shall:

���� (1)�� acknowledge receipt of
the complaint within 10 business days;

���� (2)�� complete a preliminary
assessment within 45 days of receipt and notify the complainant of its
findings;

���� (3)�� initiate a formal
investigation where the preliminary assessment identifies a reasonable basis to
believe a violation occurred; and

���� (4)�� issue a final
determination within 180 days of initiating a formal investigation.

���� c.���� An employer shall not
discharge, demote, suspend, threaten, harass, or in any manner discriminate
against a worker on the basis that the worker filed a complaint, participated
in an investigation, or testified in any proceeding under P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill).� A worker subjected
to retaliation shall be entitled to reinstatement, back pay, compensatory
damages, and reasonable attorneys' fees, recoverable in a civil action in the
Superior Court of New Jersey.

���� d.��� The identity of a worker
who filed a complaint shall be kept confidential by the division to the extent
practicable and consistent with the requirements of a fair investigation.

���� e.���� (1)� The division may,
on a periodic basis, cross-reference the notice required pursuant to section 4
of P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
filed with the department against unemployment insurance claims data held by
the department.�

���� (2)�� The division may
initiate a compliance inquiry where the division identifies an employer in a
high-automation industry that has generated a pattern of unemployment insurance
claims consistent with the simultaneous separation of 25 or more employees
within a 12-month period but has not filed a notice required under section 4 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill). �The
employer shall have 20 business days to demonstrate that:

���� (a) the notice required
pursuant to section 4 of P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill) was filed;

���� (b) the separations did not
result from AI system adoption; or

���� (c)�� the separations did not
meet the threshold triggering notice requirements.

���� (3)�� Failure to respond or
demonstrate compliance shall constitute a rebuttable presumption of violation
and shall subject the employer to penalties pursuant to subsection b. of
section of 4 of P.L.��� , c.�� (C. ) (pending
before the Legislature as this bill).�

���� (4)�� An employer may rebut
this presumption by demonstrating through evidence that the separation was
caused solely by factors independent of AI adoption, including documented
performance issues, voluntary resignation, or a general economic reduction in
force unrelated to AI deployment.

���� f.���� The requirements of P.L.���
, c.�� (C.������� ) (pending before the Legislature as this bill) are in
addition to, and not in lieu of, the notice and severance obligations
established under the �Millville Dallas Airmotive Plant Job Loss Notification
Act,� P.L.2007, c.212 (C.34:21-1 et seq.). �An employer's compliance with P.L.���
, c.�� (C. ) (pending
before the Legislature as this bill) shall not be construed as satisfying its
obligations under the �Millville Dallas Airmotive Plant Job Loss Notification
Act,� P.L.2007, c.212 (C.34:21-1 et seq.), and compliance with that act shall
not be construed as satisfying the employer's obligations under P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill). �Where a layoff
triggers the �Millville Dallas Airmotive Plant Job Loss Notification Act,�
P.L.2007, c.212 (C.34:21-1 et seq.) and P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill), the employer shall comply with all
requirements under each.

���� 6.��� (New section)� a.� Any
employer that has filed one or more notices pursuant to section 4 of P.L.��� ,
c.�� (C.������� ) (pending before the Legislature as this bill) in the
preceding 24 months shall annually submit to the State Employment and Training
Commission a skills forecast report containing:

���� (1)�� an inventory of
positions the employer has already committed to creating, modifying, or
eliminating due to AI adoption, based on investment decisions already made,
contracts already signed, or systems already in implementation;

���� (2)�� the technical and
non-technical skills the employer identifies as essential to new or AI-adjacent
roles arising from AI system deployment; and

���� (3)�� the employer's
apprenticeship, internship, and on-the-job training capacity and commitments
for affected workers.

���� b.��� The forecast report required
under subsection a. of this section shall be limited to workforce changes
attributable to AI systems for which the employer has already made a commitment.
�Speculative or contingent future deployments are not required to be reported.

���� c.���� The State Employment
and Training Commission shall aggregate anonymized data from these reports and annually
publish a Statewide AI Labor Market Dashboard, accessible free of charge to
educational institutions, workforce development organizations, workers, and the
public.

���� 7.��� Section 9 of P.L.1992, c
43 (C.34:15D-9) is amended to read as follows:

���� 9. a. A restricted,
nonlapsing, revolving Workforce Development Partnership Fund, to be managed and
invested by the State Treasurer, is hereby established to: provide employment
and training services to qualified displaced, disadvantaged and employed workers
by means of training grants or customized training services; provide for the
other costs indicated in subsection a. of section 4 of P.L.1992, c.43
(C.34:15D-4); provide for the New Jersey Innovation and Research Fellowship
Program as provided for in section 3 of P.L.2015, c.235 (C.34:15D-26); provide
for the Talent Network Program as provided for in section 2 of P.L.2019, c.125
(C.34:15D-29);
provide employment transition services, extended unemployment
benefits, wage insurance, and training grants for workers displaced by
artificial intelligence systems under the �New Jersey Artificial Intelligence
Workforce Transition Act� P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill);
and facilitate the provision of education and
training to youth by means of grants provided by the Youth Transitions to Work
Partnership pursuant to the provisions of P.L.1993, c.268 (C.34:15E-1 et al.).�
All appropriations to the fund, all interest accumulated on balances in the
fund and all cash received for the fund from any other source shall be used
solely for the purposes specifically delineated by this act.

���� b.��� During any fiscal year
beginning after June 30, 2001, of the total revenues dedicated to the program
during any one fiscal year:

���� (1)
[
25%
]

12%
shall be deposited in
an account of the Workforce Development Partnership Fund reserved to provide
employment and training services for qualified displaced workers, and through
fiscal year 2023, not less than 10% of the revenues deposited in that account
shall be reserved to provide employment and training services to qualified
displaced workers in the pursuit of industry-valued credentials under the pilot
program established pursuant to P.L.2019, c.252 (C.34:15D-30 et al.); and
during any fiscal year beginning after June 30, 2019, 0.5% shall be deposited
in an account of the Workforce Development Partnership Fund reserved for an
appropriated to the Department of Labor and Workforce Development for the
Apprenticeship Start-Up Grant Program created pursuant to section 3 of
P.L.2019, c.417 (C.34:15D-6.1);

���� (2) 6% shall be deposited in
an account of the Workforce Development Partnership Fund reserved to provide
employment and training services for qualified disadvantaged workers, and
through fiscal year 2023, not less than 10% of the revenues deposited in that
account shall be reserved to provide employment and training services to
qualified disadvantaged workers in the pursuit of industry-valued credentials
under the pilot program established pursuant to P.L.2019, c.252 (C.34:15D-30 et
al.);

���� (3) 37% prior to July 1, 2022,
and 35% after June 30, 2022 shall be deposited in an account of the Workforce
Development Partnership Fund reserved for and appropriated to the Office of
Customized Training;

���� (4) 5% prior to July 1, 2022,
and 7% after June 30, 2022 shall be deposited in an account of the Workforce
Development Partnership Fund reserved for the Youth Transitions to Work
Partnership created pursuant to P.L.1993, c.268 (C.34:15E-1 et seq.);

���� (5) 3% shall be deposited in
an account of the Workforce Development Partnership Fund reserved for
occupational safety and health training;

���� (6) 5% shall be deposited in
an account of the Workforce Development Partnership Fund reserved for and
appropriated to the Talent Network Program established pursuant to section 2 of
P.L.2019, c.125 (C.34:15D-29);

���� (7) 3% shall be deposited in
an account of the Workforce Development Partnership Fund reserved for the New
Jersey Innovation and Research Fellowship Program established pursuant to
section 3 of P.L.2015, c.235 (C.34:15D-26);

���� (8) 10% shall be deposited in
an account of the Workforce Development Partnership Fund reserved for
administrative costs as defined in section 3 of P.L.1992, c.43 (C.34:15D-3);

���� (9) 0.5% shall be deposited in
an account of the Workforce Development Partnership Fund reserved for the State
Employment and Training Commission to design criteria and conduct an annual
evaluation of the program;
[
and
]

���� (10)
[
5%
]

3%

shall be deposited in an account of the Workforce Development Partnership Fund
to be used, at the discretion of the commissioner, for any of the purposes
indicated in subsection a. of section 4 of P.L.1992, c.43 (C.34:15D-4)
; and

����
(11) 15% shall be deposited
in an account of the Workforce Development Partnership Fund reserved for the AI
Displacement Account to be used for any of the purposes indicated in subsection
g. of this section
.

���� c.���� Beginning January 1,
1995, through June 30, 2002, the balance in the fund as of the previous
December 31, as determined in accordance with generally accepted accounting
principles, shall not exceed 1.5 times the amount of contributions deposited
for the calendar year then ended.� If the balance exceeds this amount, the
excess shall be deposited into the unemployment compensation fund within seven
business days of the date that the determination is made.

���� d.��� Beginning July 1, 2002,
and for any subsequent fiscal year, if the unexpended cash balance in any of
the accounts indicated in subsection b. of this section, except for the account
reserved for the Talent Network Program
and the AI Displacement Account
,
less any amount awarded in grants but not yet disbursed from the account, is
determined to exceed 20% of the amount of contributions collected for deposit
in the account pursuant to this subsection during the fiscal year then ended,
the excess shall be regarded as an unemployment compensation contribution and
deposited into the unemployment compensation fund within seven business days of
the date that the determination is made.� If the unexpended cash balance in the
account reserved for the Talent Network Program, less any amount awarded in
grants but not yet disbursed from the account, is determined to exceed 20% of
the amount of contributions collected for deposit in the account pursuant to
this subsection during the fiscal year then ended, the excess shall be
deposited into the Workforce Development Partnership Fund account reserved for
the Office of Customized Training.

���� e.���� $250,000 shall be
allocated to the Apprentice Assistance and Support Services Pilot Program
established pursuant to section 1 of P.L.2019, c.419 (C.34:15D-6.2) from the
$29,690,000 which was appropriated pursuant to the annual appropriations act
for State fiscal year 2019 from the Workforce Development Partnership Fund for
the purpose of funding Work First New Jersey Work Activities and Work First New
Jersey-Training Related Expenses, and, $1,100,000 shall be allocated to the
pilot program in each of fiscal years 2020, 2021, 2022, 2023, and 2024 from the
amounts appropriated pursuant to the annual appropriations act in those fiscal
years from the Workforce Development Partnership Fund for the purpose of
funding Work First New Jersey Work Activities and Work First New
Jersey-Training Related Expenses.� Of the funds allocated to the pilot program
pursuant to this subsection, 90% shall be dedicated to the Child Care Stipend
program and 10% to transportation reimbursement.

���� f.���� Upon the effective date
of P.L.2022, c.89 (C.34:15E-6 et al.) and notwithstanding the provisions of any
law or regulation to the contrary, in addition to the amount deposited in an
account of the Workforce Development Partnership Fund reserved for the Youth
Transitions to Work Partnership pursuant to subsection b. of this section,
$1,000,000 shall be allocated to the Youth Transitions to Work Partnership from
the $22,500,000 which was appropriated pursuant to the annual appropriations
act for State fiscal year 2022 from the Workforce Development Partnership Fund
for the purpose of funding the NJ Apprenticeship Network, the Career
Accelerator Internship Program, the Workforce Development Policy and Evaluation
Lab, the NJ Career Network, and such other priority workforce initiatives
recommended by the Commissioner of Labor and Workforce Development.

����
g.��� A restricted,
nonlapsing, revolving AI Displacement Account, to be managed by the State
Treasurer, in consultation with the Commissioner of Labor and Workforce
Development, is established within the Workforce Development Partnership Fund
to be used exclusively for the programs established under P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill).

����
(1)�� Any interest
accumulated on balances in the account shall remain in the account. �

����
(2)�� The State Treasurer
shall structure the AI Displacement Account in a manner that qualifies the
account for treatment consistent with the nonlapsing accounts designated under
subsection f. of section 9 of P.L.1992, c.43 (C.34:15D-9), such that unexpended
balances are not subject to automatic sweep into the unemployment compensation
fund under subsection d. of section 9 of P.L.1992, c.43 (C.34:15D-9). �If the
treatment requires a statutory exemption, the commissioner shall seek the
necessary legislative authorization as part of the first appropriations act
following enactment of P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill).

����
(3)�� Civil penalties
collected under subsection b. of section 4 of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill) shall be deposited into the AI
Displacement Account.

����
(4)�� If AI Displacement
Account revenue is insufficient to fully fund all programs under P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill), disbursements shall
be prioritized in the following order:

����
(a) extended unemployment
insurance benefits under section 9 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill);

����
(b) wage insurance benefits
under section 10 of P.L.��� , c.�� (C. )
(pending before the Legislature as this bill); and

����
(c) training grants under section
11 of P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).

����
(5)�� If the unexpended
cash balance in the AI Displacement Account falls below 20 percent of annual
program obligations in any fiscal year, the commissioner shall notify the
Governor and Legislature within 30 days. �Upon notification, the commissioner
shall be authorized, without further legislative action, to implement one or
more of the following emergency adjustments to restore solvency:

����
(a)�� reduce the weekly
wage insurance benefit under section 10 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill) by up to 20 percent for new awards;

����
(b)�� reduce individual
training grant awards under section 11 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill) by up to 20 percent;

����
(c)�� suspend new wage
insurance awards for a period not to exceed 90 days pending a legislative
response; or

����
(d)�� request an emergency
appropriation from the Legislature.

����
(6)�� An emergency
adjustment implemented by the commissioner under this subsection shall take
effect no sooner than 30 days after notification to the Governor and
Legislature, during which time the Legislature may, by concurrent resolution,
direct the commissioner to implement alternative measures. �Emergency
adjustments shall expire automatically at the end of the fiscal year in which
they are implemented unless the Legislature enacts permanent modifications.

(cf: P.L.2022, c.89, s.2)

���� 8.��� (New section)� a.� The commissioner
shall designate staff within the Office of Research and Information in the
Department of Labor and Workforce Development to carry out the data tracking,
measurement, and publication functions established under P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill). �The commissioner
may, in the alternative or in addition, contract with an independent research
institution to develop, maintain, and annually update the adaptive capacity index
described in subsection c. of this section. �A new organizational office or
unit shall not be required to be established for this purpose.

���� b.��� The department shall, on
a quarterly basis:

���� (1)�� measure and publish artificial
intelligence-driven job displacement rates by industry sector, occupation type,
county, and ZIP code, drawing on existing unemployment insurance claims data,
mass layoff statistics, and employer notices filed under section 4 of P.L.��� ,
c.�� (C.������� ) (pending before the Legislature as this bill);

���� (2)�� update the designation
of high-automation industries as defined in section 3 of P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill); and

���� (3)�� publish the AI Labor
Market Dashboard, incorporating employer forecast data submitted under section
6 of P.L.��� , c.�� (C. )
(pending before the Legislature as this bill), accessible free of charge to
educational institutions, workforce development organizations, workers, and the
public.

���� c.���� The commissioner shall
annually publish, or cause to be published through contract with an independent
research institution, an adaptive capacity index measuring, by occupation and
ZIP code, workers' estimated capacity to navigate job displacement based on
liquid financial savings, age distribution, geographic labor market density,
and skill transferability. The adaptive capacity index shall:

���� (1) identify occupations that
combine above-median AI exposure with below-median adaptive capacity,
designating these as high-vulnerability occupations;

���� (2)�� identify ZIP codes where
high-vulnerability occupations represent a disproportionately large share of
total employment;

���� (3)�� disaggregate findings by
gender, race, and age to ensure that concentrations of vulnerable workers in
feminized or historically underrepresented occupations are visible to
policymakers and the public; and

���� (4)�� be used to inform the
prioritization of training grants under section 11 of P.L.��� , c.�� (C.�������
) (pending before the Legislature as this bill), the community college
credential program development under section 20 of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill), and the apprenticeship targeting
program under section 22 of P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill).

���� d.��� If the commissioner
determines that artificial intelligence-driven displacement in any defined
industry sector reaches or exceeds 15 percent of sector employment within any
rolling 24-month period, the following responses shall be automatically
triggered without requiring further legislative or executive action:

���� (1)�� the affected sector
shall be designated a Tier I high-automation industry;

���� (2)�� workers in the affected
sector shall become immediately eligible for extended unemployment insurance
benefits under section 9 of P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill); and

���� (3)�� the commissioner shall,
within 60 days of the threshold being reached, publish an emergency high-demand
credential list specific to the displaced sector.

���� e.���� If a geographic area
defined at the ZIP code level experiences aggregate artificial intelligence-driven
job displacement exceeding 10 percent of its employed workforce within any
rolling 24-month period, the commissioner shall recommend to the Governor and
Legislature that the area be designated an artificial intelligence economic opportunity
zone. �Upon designation of an artificial intelligence economic opportunity
zone:

���� (1)�� the area shall receive
priority consideration for State economic development incentives, including New
Jersey Economic Development Authority programs;

���� (2)�� businesses establishing
or expanding operations in an economic opportunity zone that creates net new
human employment shall receive enhanced tax credits under sections 18 or 19 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill);

���� (3)�� community colleges
serving an economic opportunity zone shall receive a 1.35 multiplier on all
performance-based supplements under section 21 of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill), applied in the Secretary of
Higher Education's annual budget recommendation.

���� f.���� The commissioner shall
submit an annual report to the Governor, the President of the Senate, and the
Speaker of the General Assembly by March 1 of each year detailing displacement
trends, adaptive capacity findings, program utilization, and recommendations for
statutory or regulatory modifications.

���� 9.��� (New section)� a.� An
AI-displaced worker who is otherwise eligible for State unemployment insurance
benefits shall receive an extended benefit period of an additional 26 weeks
beyond the standard maximum benefit duration, provided that the worker:

���� (1)�� has been certified as
AI-displaced through the process established under subsection b. of this section;
and

���� (2)�� is actively enrolled in
an approved high-demand credential program, registered apprenticeship program,
or employer-sponsored retraining program for each week of extended benefits
claimed.

���� b.��� The Division of Wage and
Hour Compliance shall establish an AI displacement certification process under
which workers may apply for AI-displaced status. �

���� (1)�� The division shall issue
a determination within 30 days of a complete application.

���� (2)�� A rebuttable presumption
of AI displacement shall arise where the employer:

���� (a)�� filed a notice under
section of 4 of P.L.��� , c.�� (C.������� ) (pending before the Legislature as
this bill) identifying the worker's job classification as affected; or

���� (b) adopted an artificial
intelligence system performing functions substantially identical to those of
the worker's position within 24 months prior to separation.

���� (3)�� Workers denied
certification may appeal to the commissioner within 30 days of denial.

���� c.���� Extended benefits under
this section shall be funded exclusively from the AI Displacement Account
established under section 9 of P.L.1992, c.43 (C.34:15D-9) and shall not affect
an employer's standard unemployment insurance experience rating.

���� d.��� A worker who voluntarily
withdraws from an approved program for reasons other than documented medical
necessity, caregiving emergency, or program closure shall forfeit extended
benefits for the weeks of non-enrollment but may re-establish eligibility upon
re-enrollment.

���� 10.� (New section)� a.� An
AI-displaced worker who obtains new employment at a wage lower than the
worker�s prior employment shall be eligible for wage insurance as follows:

���� (1)�� payments equal to 50
percent of the weekly wage differential between prior employment and new
employment;

���� (2)�� a maximum weekly benefit
of $400; and

���� (3)�� a maximum benefit
duration of 52 weeks.

���� b.��� To qualify for the wage
insurance benefits under subsection a. of this section, the AI-displaced worker
shall:

���� (1)�� have earned no more than
$250,000 in annualized wages in the prior position;

���� (2)�� have been employed in
the prior position for at least 12 consecutive months;

���� (3)�� accept new employment
within 26 weeks of separation; and

���� (4)�� file a claim with the
department within 60 days of accepting new employment.

���� c.���� Wage insurance payments
shall not be counted as income for purposes of New Jersey Earned Income Tax
Credit eligibility.

���� d.��� An AI-displaced worker
whose wage insurance claim is denied may appeal to the commissioner within 30
days of receiving written notice of denial.� The commissioner shall issue a
final determination on the appeal within 60 days of receipt.� The procedures
and standards governing appeals under this subsection shall be established by
the commissioner through interim guidance or rulemaking pursuant to section 26 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).

���� 11.� (New section)� a.� An
AI-displaced worker shall be eligible for an individual training grant of up to
$6,000 per fiscal year, for a maximum of two fiscal years, to cover the cost of
tuition, fees, and materials for:

���� (1)�� high-demand credentials
at New Jersey public or nonprofit educational institutions;

���� (2)�� registered
apprenticeship programs; or

���� (3)�� industry-recognized
certifications approved by the State Employment and Training Commission.

���� b.��� Priority in grant awards
shall be determined by reference to the adaptive capacity index published
pursuant to subsection c. of section 8 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill).� Workers in occupations designated as
high-vulnerability occupations shall receive first priority, and within that
category, priority shall be further determined by the following adaptive
capacity factors, weighted in the order listed:

���� (1)�� workers aged 55 and
older shall receive highest priority, reflecting research showing that older
workers face significantly lower reemployment rates and larger earnings losses
following displacement;

���� (2)�� workers with limited
liquid savings as evidenced by eligibility for means-tested public benefits
programs shall receive elevated priority, reflecting that financial insecurity
forces workers into inferior jobs under duress;

���� (3)�� workers in counties or
ZIP codes designated as low-density labor markets by the department shall
receive elevated priority, reflecting that workers in smaller markets face
fewer alternative employment opportunities;

���� (4)�� workers in occupations
with low skill transferability scores on the adaptive capacity index shall
receive elevated priority, reflecting that narrowly specialized workers face
greater difficulty moving across occupations.

���� c.���� Nothing in this section
shall preclude an AI-displaced worker who does not meet priority criteria from
receiving a training grant if funds remain available after priority applicants
are served.

���� 12.� (New section)� a.� A
taxpayer that employs and maintains a full-time equivalent employee headcount
at or above a baseline headcount while implementing an artificial intelligence system
shall be allowed a credit against the corporation business tax imposed pursuant
to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to $3,000 per
full-time equivalent employee retained above the baseline headcount, up to a
maximum of $750,000 per taxable year. �

���� b.��� To claim the credit
established pursuant to subsection a. of this section, a taxpayer shall apply
and submit certified payroll records and an attestation that the taxpayer has
deployed an artificial intelligence system during the applicable taxable year in
a form and manner determined by the director. �

���� c.���� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the corporation business tax for a privilege
period shall be as prescribed by the director.

���� (2)�� The amount of the credit
applied pursuant to this section 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).

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).

���� (4)�� The director shall
promulgate rules within 18 months of the effective date of P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill) establishing
certification procedures, and the Commissioner of Labor and Workforce
Development may issue interim guidance pursuant to section 26 to enable
employers to claim the credit before final rules are in place.

���� d.��� A tax credit allowed
pursuant to this section shall be the amount provided in sections 12 and 13 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill) against
the corporation business tax imposed pursuant to section 5 of P.L.1945, c.162
(C.54:10A-5) or the gross income tax imposed pursuant to the "New Jersey
Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� e.���� As used in this
section:

���� "Artificial intelligence
system" or "AI system" means any machine-based system that
processes inputs using algorithms, statistical models, or neural networks to
generate outputs such as predictions, recommendations, decisions, or content
that materially influence or replace human judgment in performing a job
function.� The term includes machine learning systems, large language models,
generative AI tools, robotic process automation systems, and automated
decision-making platforms.� The term does not include general-purpose software,
standard database management systems, or basic rule-based automation that does
not incorporate learning or adaptive capabilities.

���� "Baseline headcount"
means an employer's employee count, including both full-time and part-time
employees, as of the effective date of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill) or, for employers not in operation on that
date, the employee count as of the date of the employer's first AI system
deployment after the effective date of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill).

���� 13.� (New section)� a.� A
taxpayer that employs and maintains a full-time equivalent employee headcount
at or above a baseline headcount while implementing an artificial intelligence
system shall be allowed a credit against the �New Jersey Gross Income Tax Act,�
N.J.S.54A:1-1 et seq., in an amount equal to $3,000 per full-time equivalent
employee retained above the baseline headcount, up to a maximum of $750,000 per
taxable year.�

���� b.��� To claim the credit
established pursuant to subsection a. of this section, a taxpayer shall apply
and submit certified payroll records and an attestation that the taxpayer has
deployed an artificial intelligence system during the applicable taxable year in
a form and manner determined by the director.�

���� c.���� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the New Jersey gross income tax due pursuant
to N.J.S.54A:1-1 et seq. for a privilege period shall be as prescribed by the
director.

���� (2)�� The amount of the credit
applied pursuant to this section against the New Jersey gross income tax due
pursuant to N.J.S.54A:1-1 et seq., shall not reduce a taxpayer�s tax liability
to an amount less than zero.

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill). �

���� (4)�� The director shall
promulgate rules within 18 months of the effective date of P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill) establishing
certification procedures, and the Commissioner of Labor and Workforce
Development may issue interim guidance pursuant to section 26 to enable
employers to claim the credit before final rules are in place.

���� d.��� A tax credit allowed
pursuant to this section shall be the amount provided in sections 12 and 13 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� e.���� As used in this section:

���� "Artificial intelligence
system" or "AI system" means any machine-based system that
processes inputs using algorithms, statistical models, or neural networks to
generate outputs such as predictions, recommendations, decisions, or content
that materially influence or replace human judgment in performing a job
function.� The term includes machine learning systems, large language models,
generative AI tools, robotic process automation systems, and automated
decision-making platforms.� The term does not include general-purpose software,
standard database management systems, or basic rule-based automation that does
not incorporate learning or adaptive capabilities.

���� "Baseline headcount"
means an employer's employee count, including both full-time and part-time
employees, as of the effective date of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill) or, for employers not in operation on that
date, the employee count as of the date of the employer's first AI system
deployment after the effective date of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill).

���� 14.� (New section)� a.� A
taxpayer that retrains an existing employee for a new role within the same firm,
including roles created by or adjacent to an artificial intelligence system deployment,
shall be allowed a credit against the corporation business 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 direct costs of employee retraining, including tuition, fees, instructor
costs, and the cost of approved training materials, up to a maximum of $1,000,000
per taxable year.� The purpose of the tax credit is to encourage employers to
invest in their existing workforce rather than displacing employees through AI
systems.

���� b.��� To claim the credit
established pursuant to subsection a. of this section, a taxpayer shall apply
and submit, in a form and manner determined by the director, information
demonstrating that:

���� (1)�� the employee undergoing
retraining has held a position with the taxpayer for at least 12 consecutive
months prior to the start of retraining;

���� (2)�� the retraining will
result in the employee assuming a materially different role with the taxpayer
within 18 months of the start of retraining; and

���� (3)�� the retraining program
is approved by the State Employment and Training Commission or will result in
an industry-recognized credential.

���� c.���� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the corporation business tax for a privilege
period shall be as prescribed by the director.

���� (2)�� The amount of the credit
applied pursuant to this section 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).

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).

���� d.��� A tax credit allowed
pursuant to this section shall be the amount provided in sections 14 and 15 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� e.���� As used in this section,
"artificial intelligence system" or "AI system" means any
machine-based system that processes inputs using algorithms, statistical
models, or neural networks to generate outputs such as predictions,
recommendations, decisions, or content that materially influence or replace
human judgment in performing a job function.� The term includes machine
learning systems, large language models, generative AI tools, robotic process
automation systems, and automated decision-making platforms.� The term does not
include general-purpose software, standard database management systems, or
basic rule-based automation that does not incorporate learning or adaptive
capabilities.

���� 15.� (New section)� a.� A
taxpayer that retrains an existing employee for a new role within the same
firm, including roles created by or adjacent to an artificial intelligence
system deployment, shall be allowed a credit against the �New Jersey Gross
Income Tax Act,� N.J.S.54A:1-1 et seq., in an amount equal to 100 percent of
the direct costs of employee retraining, including tuition, fees, instructor
costs, and the cost of approved training materials, up to a maximum of
$1,000,000 per taxable year.� The purpose of the tax credit is to encourage
employers to invest in their existing workforce rather than displacing
employees through AI systems.

���� b.��� To claim the credit
established pursuant to subsection a. of this section, a taxpayer shall apply
and submit, in a form and manner determined by the director, information
demonstrating that:

���� (1)�� the employee undergoing
retraining has held a position with the taxpayer for at least 12 consecutive
months prior to the start of retraining;

���� (2)�� the retraining will
result in the employee assuming a materially different role with the taxpayer
within 18 months of the start of retraining; and

���� (3)�� the retraining program
is approved by the State Employment and Training Commission or will result in
an industry-recognized credential.

���� c.���� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the New Jersey gross income tax due pursuant
to N.J.S.54A:1-1 et seq. for a privilege period shall be as prescribed by the director.

���� (2)�� The amount of the credit
applied pursuant to this section against the New Jersey gross income tax due
pursuant to N.J.S.54A:1-1 et seq., shall not reduce a taxpayer�s tax liability
to an amount less than zero.

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).�

���� d.��� A tax credit allowed
pursuant to this section shall be the amount provided in sections 14 and 15 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� e.���� As used in this
section, "artificial intelligence system" or "AI system"
means any machine-based system that processes inputs using algorithms,
statistical models, or neural networks to generate outputs such as predictions,
recommendations, decisions, or content that materially influence or replace
human judgment in performing a job function.� The term includes machine
learning systems, large language models, generative AI tools, robotic process
automation systems, and automated decision-making platforms. �The term does not
include general-purpose software, standard database management systems, or
basic rule-based automation that does not incorporate learning or adaptive
capabilities.

���� 16.� (New section)� a.� A
taxpayer that provides qualifying on-the-job training to a State resident who
is an AI-displaced worker or a participant in a registered apprenticeship
program shall be allowed a credit against the corporation business tax imposed
pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in an amount equal to:

���� (1)�� 30 percent of wages paid
to the qualifying trainee during the first 12 months of training; and

���� (2) an additional 10 percent
credit if the trainee was unemployed for more than six months prior to hiring.

���� b.��� The total value of the
tax credit claimed by a taxpayer under this section shall not exceed $500,000
in a taxable year.

���� c.���� A taxpayer shall apply
in a form and manner to be determined by the director for the tax credit
provided pursuant to this section.

���� d.��� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the corporation business tax for a privilege
period shall be as prescribed by the director.

���� (2)�� The amount of the credit
applied pursuant to this section 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).

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).

���� e.���� A tax credit allowed
pursuant to this section shall be the amount provided in sections 16 and 17 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� f.���� As used in this
section:

���� "AI-displaced
worker" means any New Jersey resident who has experienced involuntary
separation from employment where an employer's adoption, expansion, or material
modification of an artificial intelligence system was a but-for cause or a
substantial contributing cause of the elimination, reduction, or restructuring
of the worker's position.�

���� "Apprenticeship
program" means an earn-while-you-learn training program registered with
the Department of Labor and Workforce Development meeting standards equivalent
to those established under the National Apprenticeship Act of 1937 (29 U.S.C.
s.50 et seq.).

���� 17.� (New section)� a.� A
taxpayer that provides qualifying on-the-job training to a State resident who
is an AI-displaced worker or a participant in a registered apprenticeship
program shall be allowed a credit against the corporation business tax imposed
pursuant to �New Jersey Gross Income Tax Act,� N.J.S.54A:1-1 et seq., in an
amount equal to:

���� (1)�� 30 percent of wages paid
to the qualifying trainee during the first 12 months of training; and

���� (2) an additional 10 percent
credit if the trainee was unemployed for more than six months prior to hiring.

���� b.��� The total value of the
tax credit claimed by a taxpayer under this section shall not exceed $500,000
in a taxable year.

���� c.���� A taxpayer shall apply
in a form and manner to be determined by the director for the tax credit
provided pursuant to this section.

���� d.��� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the New Jersey gross income tax due pursuant
to N.J.S.54A:1-1 et seq. for a privilege period shall be as prescribed by the director.

���� (2)�� The amount of the credit
applied pursuant to this section against the New Jersey gross income tax due
pursuant to N.J.S.54A:1-1 et seq., shall not reduce a taxpayer�s tax liability
to an amount less than zero.

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).�

���� e.���� A tax credit allowed
pursuant to this section shall be the amount provided in sections 16 and 17 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� f.���� As used in this
section:

���� "AI-displaced
worker" means any New Jersey resident who has experienced involuntary
separation from employment where an employer's adoption, expansion, or material
modification of an artificial intelligence system was a but-for cause or a
substantial contributing cause of the elimination, reduction, or restructuring
of the worker's position.�

���� "Apprenticeship
program" means an earn-while-you-learn training program registered with
the Department of Labor and Workforce Development meeting standards equivalent
to those established under the National Apprenticeship Act of 1937 (29 U.S.C.
s.50 et seq.).

���� 18.� (New section)� a.� A
taxpayer that establishes or expands business operations within a designated artificial
intelligence economic opportunity zone and creates net new full-time human
employment in that zone shall be allowed a credit against the corporation
business tax imposed pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), in
an amount equal to $5,000 per net new full-time position created and maintained
for at least 12 consecutive months, up to a maximum of $2,000,000 per business
per taxable year.

���� b.��� A taxpayer shall apply
in a form and manner to be determined by the director for the tax credit
provided pursuant to this section.

���� c.���� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the New Jersey gross income tax due pursuant
to N.J.S.54A:1-1 et seq. for a privilege period shall be shall be given to businesses
in fields designated as high-growth and human-centric by the Commissioner of
Labor and Workforce Development, including, but not limited to biotechnology,
green energy, healthcare services, and advanced manufacturing.

���� (2)�� The amount of the credit
applied pursuant to this section 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).

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).

���� d.��� A tax credit allowed
pursuant to this section shall be the amount provided in sections 18 and 19 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� e.���� As used in this
section, "economic opportunity zone" means a geographic designation
pursuant to subsection e. of section 8 of P.L. , c.��
(C.������� ) (pending before the Legislature as this bill) that triggers
targeted economic development incentives in response to artificial
intelligence-driven displacement exceeding defined thresholds.

���� 19.� (New section)� a.� A
taxpayer that establishes or expands business operations within a designated
artificial intelligence economic opportunity zone and creates net new full-time
human employment in that zone shall be allowed a credit against the corporation
business tax imposed pursuant to �New Jersey Gross Income Tax Act,�
N.J.S.54A:1-1 et seq., in an amount equal to $5,000 per net new full-time
position created and maintained for at least 12 consecutive months, up to a
maximum of $2,000,000 per business per taxable year.

���� b.��� A taxpayer shall apply
in a form and manner to be determined by the director for the tax credit
provided pursuant to this section.

���� c.���� (1)� The order of
priority of the application of the credit allowed pursuant to this section and
any other credits allowed against the New Jersey gross income tax due pursuant
to N.J.S.54A:1-1 et seq. for a privilege period shall be shall be given to
businesses in fields designated as high-growth and human-centric by the
Commissioner of Labor and Workforce Development, including, but not limited to
biotechnology, green energy, healthcare services, and advanced manufacturing.

���� (2)�� The amount of the credit
applied pursuant to this section against the New Jersey gross income tax due
pursuant to N.J.S.54A:1-1 et seq., shall not reduce a taxpayer�s tax liability
to an amount less than zero.

���� (3)�� Credit allowed pursuant
to this section shall be available for the five consecutive taxable years
beginning with the first full taxable year following the effective date of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill).�

���� d.��� A tax credit allowed
pursuant to this section shall be the amount provided in sections 15 and 16 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)
against the corporation business tax imposed pursuant to section 5 of P.L.1945,
c.162 (C.54:10A-5) or the gross income tax imposed pursuant to the "New
Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

���� e.���� As used in this
section, "economic opportunity zone" means a geographic designation
pursuant to subsection e. of section 8 of P.L. , c.��
(C.������� ) (pending before the Legislature as this bill) that triggers
targeted economic development incentives in response to artificial
intelligence-driven displacement exceeding defined thresholds.

���� 20.� (New section)� a.� The
New Jersey Council of County Colleges, in consultation with the Secretary of
Higher Education, shall, within 18 months of the effective date of P.L.��� ,
c.�� (C.������� ) (pending before the Legislature as this bill), work with
member institutions to develop and implement a modular credential framework
under which:

���� (1)�� county community
colleges are encouraged to offer stackable, stand-alone credentials of four to
18 months in high-demand fields identified by the State Employment and Training
Commission;

���� (2)�� credits earned in any
stackable credential program may be counted toward an associate or bachelor's
degree at any State public institution of higher education; and

���� (3)�� programs are designed to
accommodate working adults, including hybrid and evening scheduling.

���� b.��� The modular credential framework
shall prioritize fields where the AI Labor Market Dashboard, published pursuant
to section 6 of P.L.��� , c.�� (C.������� ) (pending before the Legislature as
this bill), identifies acute current or projected labor shortages, including,
but not limited to advanced manufacturing, healthcare technology,
cybersecurity, data analysis, AI systems oversight, and green infrastructure.

���� c.���� The New Jersey Council
of County Colleges shall report to the Governor, the Secretary of Higher
Education, and the Legislature within 24 months of the effective date of P.L.���
, c.�� (C.������� ) (pending before the Legislature as this bill) on the status
of modular credential framework implementation, including which institutions
have adopted new credential programs, which fields are being prioritized, and
any barriers to implementation that require legislative or regulatory action.

���� 21.� (New section)� a.� The
Secretary of Higher Education shall, beginning with the State budget request
for fiscal year 2028, recommend to the Governor and Legislature an annual
performance-based supplement to existing State aid for county community
colleges, to be funded through the regular higher education appropriations
process.� The supplement shall be calculated as follows:

���� (1)�� a base performance
supplement of $3,000 per graduate who completes a high-demand credential and
obtains employment in the credentialed field within 12 months of completion;
and

���� (2)�� an additional supplement
of $1,500 per graduate who was an AI-displaced worker prior to enrollment.

���� b.��� A county community
college serving economically disadvantaged populations shall adjust the
performance-based supplement as follows:

���� (1) an institution whose
enrolled students in a given program have a median household income below 200%
of the federal poverty level shall receive a multiplier of 1.25 applied to all
base performance supplements for that program;

���� (2) an institution located in
a county with an unemployment rate exceeding the statewide average by more than
two percentage points, or in a designated artificial intelligence economic opportunity
zone, shall receive a multiplier of 1.15 applied to all base performance
supplements; and

���� (3)�� where the conditions of
paragraphs (1) and (2) of this subsection are met, the higher multiplier shall
apply.

���� c.���� The Secretary of Higher
Education and the Commissioner of Labor and Workforce Development shall jointly
develop outcome measurement standards and data-sharing agreements necessary to
calculate the performance-based supplement and verify employment outcomes. �The
Secretary of Higher Education shall publish annual data on supplement awards by
institution, credential field, and student demographic.

���� d.��� Nothing in this section
shall be construed to reduce base operating appropriations to any community
college below the fiscal year 2027 appropriation level.

���� e.���� The performance-based
supplement established under this section shall not be funded through the AI
Displacement Account established under section 9 of P.L.1992, c.43 (C.34:15D-9).
�The performance-based supplement shall be subject to the annual appropriations
process and shall be presented as a distinct line item in the Secretary of
Higher Education's annual budget submission.

���� 22.� (New section)� a.� The
Commissioner of Labor and Workforce Development shall, within 12 months of the
effective date of P.L.��� , c.�� (C.������� ) (pending before the Legislature
as this bill), designate artificial intelligence-adjacent occupations as
priority sectors under the existing Growing Apprenticeship in Nontraditional
Sectors (GAINS) grant program.�

���� b.��� Priority artificial
intelligence-adjacent occupations shall include, but not be limited to, AI
systems oversight, data quality assurance, human-artificial intelligence workflow
coordination, cybersecurity, and advanced manufacturing roles incorporating artificial
intelligence-driven equipment.

���� c.���� The commissioner shall
direct the Office of Apprenticeship in the department to develop, within 18
months of the effective date of P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill), model registered apprenticeship program templates
for designated AI-adjacent occupations. �The templates shall be made available
to employers, labor organizations, and community colleges at no cost and shall
meet U.S. Department of Labor standards for registration as registered
apprenticeship programs.

���� d.��� The commissioner shall
ensure that existing Growing Apprenticeship in Nontraditional Sectors (GAINS) program
reporting is enhanced to disaggregate apprenticeship capacity, participation,
and completion data by whether programs serve workers in high-vulnerability occupations
as designated under subsection c. of section 7 of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill). �The enhanced disaggregation
shall be incorporated into the department�s existing annual apprenticeship
reporting and shall not constitute a separate reporting obligation.

���� e.���� A startup grant awarded
under the GAINS program to employers establishing apprenticeship programs in
designated AI-adjacent occupations shall be eligible for a funding priority and
shall not be subject to a per-employer cap lower than $100,000.

���� 23.� a.� The State Employment
and Training Commission shall designate and annually update the list of
high-demand credential fields for the purposes of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill), consistent with the existing
mandate to identify in-demand occupations and high-growth industries in the
State.�

���� b.��� In making designations,
the State Employment and Training Commission shall give priority to fields
identified in the AI Labor Market Dashboard, published pursuant to section 8 of
P.L.��� , c.�� (C. ) (pending
before the Legislature as this bill), as experiencing acute current or
projected labor shortages attributable to artificial intelligence-driven
workforce transformation.

���� c.���� The State Employment
and Training Commission shall, consistent with its existing evaluation function
under section 9 of P.L.1992, c.43 (C.34:15D-9), review and approve the
methodology used by the commissioner to produce the adaptive capacity index established
pursuant to subsection c. of section 8 of P.L.��� , c.�� (C. ) (pending
before the Legislature as this bill) and the AI Labor Market Dashboard
established pursuant to section 8 of P.L.��� , c.�� (C.������� ) (pending
before the Legislature as this bill). �The State Employment and Training
Commission shall conduct the review established under this subsection not less
than once every two years and publish the findings on the commission�s Internet
website.

���� 24.� a.� No later than March 1
of each year, the commissioner shall annually submit to the President of the
Senate, the Speaker of the General Assembly, and the Governor a comprehensive
report on the implementation of P.L.��� , c.�� (C.������� ) (pending before the
Legislature as this bill) containing:

���� (1)�� artificial
intelligence-driven displacement rates by sector, occupation, county, and ZIP
code, and the current list of designated high-automation industries;

���� (2)�� the current adaptive
capacity index findings, including the list of high-vulnerability occupations
and high-concentration ZIP codes;

���� (3)�� the number of
AI-displaced workers certified, and the number served under each program
established by P.L.��� , c.�� (C.������� ) (pending before the Legislature as
this bill);

���� (4)�� training completion and
employment outcome data, disaggregated by age, gender, race, county, and prior
industry;

���� (5)�� tax credit utilization
and estimated fiscal impact, compiled in coordination with the Director of the
Division of Taxation;

���� (6)�� AI Displacement Account
revenues, expenditures, and solvency projections for the next three fiscal
years;

���� (7)�� the status of the community
college credential program development established under section 20 of P.L.���
, c.�� (C.������� ) (pending before the Legislature as this bill), based on the
Council of County Colleges implementation report;

���� (8)�� apprenticeship program
expansion data established under section 22 of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill), based on existing GAINS program
reporting; and

���� (9)�� recommendations for
statutory or regulatory modifications.

���� The annual report under this
subsection shall be made publicly available on the department's website within
30 days of submission.

���� b.��� No later than three
years after the effective date of P.L.��� , c.�� (C.������� ) (pending before
the Legislature as this bill), the commissioner shall conduct a comprehensive
interim review of all programs established under P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill) and submit a report to the
Governor, the President of the Senate, and the Speaker of the General Assembly
containing:

���� (1)�� an assessment of whether
the AI Displacement Account revenues are sufficient, excessive, or require
adjustment based on actual displacement rates and program utilization,
including whether a supplemental appropriation or additional revenue source is
warranted;

���� (2)�� an assessment of whether
the wage insurance benefit levels, weekly cap, and duration under section 10 of
P.L.��� , c.�� (C.������� ) (pending before the Legislature as this bill)�
remain appropriate given actual wage gap data for AI-displaced workers;

���� (3)�� an assessment of whether
the training grant amounts under section 11 of P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill) are adequate to cover the actual
cost of high-demand credentials and registered apprenticeships, and whether the
performance-based supplement under section 21 of P.L.��� , c.�� (C. ) (pending
before the Legislature as this bill) is being funded at levels sufficient to
incentivize credential program development;

���� (4)�� an assessment of whether
the 15 percent Workforce Development Partnership Fund reallocation has produced
unintended adverse effects on existing programs previously funded through the
displaced worker or discretionary accounts;

���� (5)�� an assessment of whether
the definition of artificial intelligence system, the employer threshold, and
the 25-position trigger remain appropriately calibrated to actual artificial
intelligence deployment patterns in the State; and

���� (6)�� specific recommended
statutory amendments, if any, necessary to improve program effectiveness,
equity, or fiscal sustainability.

���� The interim review under this
subsection shall be made publicly available on the department's website within
30 days of submission.

���� 25.� a.� The Legislature shall
consider the annual report and interim review submitted pursuant to section 24 of
P.L.��� , c.�� (C. ) (pending
before the Legislature as this bill) and any additional testimony or evidence
the Legislature deems relevant to the reauthorization of P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill).

���� b.��� The Legislature may
modify any provision of P.L.��� , c.�� (C. )
(pending before the Legislature as this bill) as part of reauthorization,
including adjustment of benefit levels, employer thresholds, and program
eligibility criteria.

���� c.���� If P.L.��� , c.��
(C.������� ) (pending before the Legislature as this bill) expires:

���� (1)�� new applications for
benefits, training grants, or wage insurance shall not be accepted after the
expiration date;

���� (2)�� benefits, wage insurance
payments, and training grants awarded prior to expiration shall continue to be
paid until the authorized duration expires;

���� (3)�� the AI Displacement
Account within the Workforce Development Partnership Fund shall revert to the
general displaced worker account allocation under section 9 of P.L.1992, c.43
(C.34:15D-9) as it existed prior to amendment by P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill), effective on the expiration
date.

���� d.��� The Legislature acknowledges
that the pace of AI development and its labor market effects are sufficiently
uncertain and that a mandatory reauthorization process serves the public
interest by ensuring that the programs under P.L.��� , c.�� (C.������� )
(pending before the Legislature as this bill) remain calibrated to actual
conditions rather than projections made at the time of initial enactment.

���� 26.� The Commissioner of Labor
and Workforce Development, the Secretary of Higher Education, the State
Treasurer, and the Director of the Division of Taxation shall each promulgate
rules and regulations, pursuant to the "Administrative Procedure
Act," P.L.1968, c.410 (C.52:14B-1 et seq.), necessary to effectuate the
provisions of this act within 18 months of the effective date. �Notwithstanding
the foregoing, the commissioner may issue interim guidance, directives, and
administrative procedures prior to the completion of formal rulemaking to the
extent necessary to implement the programs established under this act without
undue delay. �The interim guidance shall be clearly identified as interim, made
publicly available on the department's Internet website, and remain in effect
only until superseded by final rules promulgated pursuant to the "Administrative
Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.).

���� 27.� This act shall take
effect immediately except that:

���� (1)�� section 4 shall take
effect 180 days after enactment;

���� (2)�� section 7 shall take
effect on the first day of the State fiscal year beginning after enactment; and

���� (3)�� shall expire on the
fifth year after the effective date unless reauthorized by the Legislature
prior to that date.

STATEMENT

���� This bill establishes a five-year
�New Jersey Artificial Intelligence Workforce Transition Act.�

���� The bill establishes a
comprehensive framework to prepare New Jersey workers for artificial
intelligence driven labor disruption built upon cooperation between the public
sector, employers, and educational institutions.�

���� Under the bill, companies with
100 or more employees are required to give 90 days' advance notice before artificial
intelligence (AI) driven layoffs that would affect 25 or more workers, with
tiered penalties ranging from $500 to $3,000 per affected employee. �A good
faith safe harbor protects compliant employers. �The Division of Wage and Hour
Compliance is to carry out enforcement functions under the bill.� The division
may cross-reference notices against unemployment insurance claims data to
identify non-filers. Requirements under the bill are cumulative with and do not
displace existing notice and severance obligations under the �Millville Dallas
Airmotive Plant Job Loss Notification Act.�

���� The bill amends the Workforce
Development Partnership Fund to establish a dedicated 15 percent AI
Displacement Account.� The fund is a constitutionally protected, nonlapsing
revolving fund carrying approximately $188 million. �The 15 percent is sourced
by reducing the general displaced worker account from 25 percent to 12 percent
and the commissioner discretionary account from five percent to three percent. �Civil
penalties under the bill are to be deposited into the account. �The bill
establishes disbursement and emergency adjustment provisions in the event that AI
Displacement Account funds are constrained.

���� Drawing on Brookings
Institution research published in January 2026, the bill distinguishes between
AI exposure and AI vulnerability. The most vulnerable workers are the 6.1
million nationally, concentrated in clerical and administrative roles, of whom
approximately 86 percent are women, who combine high exposure with low adaptive
capacity. �The bill operationalizes this distinction through the adaptive capacity
index, published annually by the Commissioner of Labor and Workforce
Development using existing Department of Labor and Workforce Development
research infrastructure or a contracted research partner, which directly drives
training grant prioritization, credential program targeting, and apprenticeship
focus.

���� The bill establishes numerous
tax credits that prioritize keeping workers employed rather than replacing
them. �A human retention tax credit rewards employers who maintain worker
headcount while deploying AI. A same-firm retraining tax credit provides 100
percent of retraining costs to reward companies that retrain an existing
employee into a new internal role rather than displacing them. �An on-the-job training
tax credit supports hiring displaced workers from outside the firm.� An AI
economic opportunity zone investment tax credit incentivizes business operation
and expansion in designated AI economic opportunity zones

���� The bill provides several
worker safety nets for certified AI-displaced workers:

���� (1) extended unemployment
insurance benefits for an additional 26 weeks for certified AI-displaced
workers enrolled in an approved training program;

���� (2)�� wage insurance covering
50 percent of the weekly wage differential between prior employment and new
employment, up to $400 a week for 52 weeks with no income floor and a $250,000
ceiling; and

���� (3)�� training grants of up to
$6,000 per year for two years.

���� Under the bill, the New Jersey
Council of County Colleges is to work with member institutions to develop
short, stackable credentials tied to real labor demand. �The Secretary of
Higher Education is to recommend outcome-based performance supplements through
the normal appropriations process with equity multipliers protecting
institutions serving lower-income students. �The bill also expands existing
Growing Apprenticeship in Nontraditional Sectors (GAINS) program infrastructure
into AI-adjacent occupations with model program templates developed by Office
of Apprenticeship in the Department of Labor and Workforce Development.

���� The bill is designed to be
self-correcting with the Workforce Development Partnership Fund reallocation
providing a constitutionally protected funding base. �The commissioner has
emergency adjustment authority if the account becomes constrained. �Further, an
annual report, three-year interim review, and five-year sunset provision ensures
that the Legislature retains active oversight and that programs remain
calibrated to actual AI displacement conditions.