Assembly Commerce and Economic Development Committee Statement to Assembly, No. 583 (December 5, 2022)

Summary

Assembly Commerce and Economic Development Committee Statement to First Reprint Assembly, No. 583, State of New Jersey, dated December 5, 2022, reporting Assembly Bill No. 583 (1R) favorably with committee amendments. As amended, the bill, titled the "New Jersey Works Act," would give a business a credit against the corporation business tax or gross income tax for 100 percent of the financial assistance for an approved pre-employment and work readiness training program. It would authorize $12 million in tax credits per State fiscal year and require at a minimum 12 weeks of paid training, with participants at least 16 years old. The committee proposes amendments including an effective date 180 days following enactment.

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ASSEMBLY COMMERCE AND ECONOMIC DEVELOPMENT
                COMMITTEE

                           STATEMENT TO

                              [First Reprint]
                       ASSEMBLY, No. 583
                          with committee amendments



       STATE OF NEW JERSEY
                          DATED: DECEMBER 5, 2022

           The Assembly Commerce and Economic Development Committee
      reports favorably Assembly Bill No. 583 (1R), with committee
      amendments.
           As amended, this bill, titled the “New Jersey Works Act,” would
      incentivize businesses to establish pre-employment and work readiness
      training programs together with certain types of educational
      institutions or with nonprofit organizations. Under the bill, a business
      may receive a credit against the corporation business tax (CBT) or
      gross income tax (GIT) for 100 percent of the financial assistance
      provided to support a qualified pre-employment and work readiness
      training program approved by the Department of Labor and Workforce
      Development (department). Business engaged in a construction trade
      are excluded from participating in the bill’s training programs.
           The bill would authorize the award of $12 million in tax credits per
      State fiscal year to taxpayers that have established an approved pre-
      employment and work readiness training program with an institution
      of higher education, a comprehensive high school, a vocational school,
      or a nonprofit organization.
           The bill would require an educational institution or nonprofit
      organization, which has entered into an agreement with a business
      entity to establish a training program, to submit a proposed pre-
      employment and work readiness training plan to the department for
      approval. At a minimum, each pre-employment and work readiness
      training program must offer 12 weeks of paid training, at the
      minimum wage for each participant, and include, but not be limited to
      instruction and training in the following areas: basic math and English
      literacy, communication skills, critical thinking, leaderships, life skills
      and job readiness skills training, such as conflict management, finance
      concepts, resume preparation, problem solving, self-awareness and
      management, and any other training deemed necessary by the
      department. A single pre-employment training plan may be submitted
      by multiple educational institutions or nonprofit organizations, but the
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plan must designate one entity as the lead organization with
responsibility for the plan.
    Program participants must be a minimum of 16 years old. An
educational institution or nonprofit organization may not determine a
trainee’s eligibility for participation in the training program based on
the trainee’s possession of either a high school diploma or a high
school equivalency. Each program would offer trainees employment
with a business entity which has provided funding for a qualified pre-
employment and work readiness training program.
    The bill would require the department to review each proposed
pre-employment and work-readiness training plan to make an initial
determination of whether the proposed training program qualifies for
financial assistance based on whether the program:
    consists of pre-employment and work readiness training activities
to benefit low- and moderate-income households and persons in need
of mid-career skills training or vocational retraining;
    is reasonably designed to accomplish its intended purpose and
further the purposes of the proposed training plan.
    Additionally, the educational institution or nonprofit organization
must: demonstrate that it has the capacity to implement the plan;
ensure that financial assistance will be expended exclusively to
implement the plan, and provide documentation of its completion
rates.
    If the department makes an initial determination that a proposed
plan qualifies under the program guidelines, the department would
refer the proposal to the Director of the Division of Taxation for final
approval, and the director would notify the department of a final
approval
    The bill would require the Department of State to conduct a study
of the efficacy of the training programs and tax credits following two
years from the date of enactment of the bill and report the findings to
the Governor and the Legislature.

PROPOSED COMMITTEE AMENDMENTS:
     The committee proposes to amend the bill to:
     (1) remove a provision that would have required a training
program to offer trainees college credits for all applicable course work
of the program provided through an educational institution;
     (2) change the State agency tasked with overseeing the pre-
employment and work readiness training program from the State
Employment and Training Commission to the Department of Labor
and Workforce Development (department or DOLWD) throughout the
bill;
     (3) change the effective date to 180 days following the date of
enactment;
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    (4) change the agency tasked with producing an analysis of the
efficacy of the training programs and tax credits from the State
Treasurer to the Department of State;
    (5) remove the bill’s expiration date;
    (6) limit definitions in section 2 to sections 1 through 4 of the bill,
and revise and supplement the definitions in the bill;
    (7) make an appropriation from the general fund to the DOLWD
and Division of Taxation for the cost of administrating the program;
    (8) update language referring to fiscal year 2020 to fiscal year
2023;
    (9) change language from graduation rates to completion rates and
delete language relating to the percentage of students placed in
employment relevant to their training and coursework; and
    (10) clarify that after the Director of the Division of Taxation in
the Department of Treasury approves the tax credit, the director is
required to notify the DOLWD of the approval, since the DOLWD
required to manage success rates.


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