STATE OF NEW JERSEY
PRE-FILED FOR INTRODUCTION IN THE 2020 SESSION
Assemblyman CHRISTOPHER P. DEPHILLIPS
District 40 (Bergen, Essex, Morris and Passaic)
Assemblywoman AURA K. DUNN
District 25 (Morris and Somerset)
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
Introduced Pending Technical Review by Legislative Counsel.
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.
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.