Bill
A 5170
NJ requires the Tax Division to buy unused Aspire and Cultural Arts credits at 85% of face value, creating a mandatory state purchase of credits issued at least 1 year earlier.
Status / Timeline
- Introduced: December 19, 2024 (Assembly).
- Committee action: Reported with amendments by Assembly Appropriations (May 15, 2025).
- Passed Assembly: May 22, 2025 (60-16-2). Passed Senate: June 30, 2025.
- Approved / Enacted: July 22, 2025 (P.L.2025, c.113).
- Primary sponsor: Asm. Michaelle C. Solages. Companion: S4027.
Purpose
- To require the State (through the Director of the Division of Taxation, NJ Department of the Treasury) to purchase certain unused tax credits issued under the New Jersey Economic Recovery Act of 2020 — specifically credits awarded under the New Jersey Aspire Program and the Cultural Arts Incentives Program — at set discount levels, thereby creating a mandatory State purchase option where previously purchase was discretionary.
Key provisions
- Amends section 89 of P.L.2020, c.156 (C.52:18A-263).
- Requires (shall purchase) the Division of Taxation to buy unused tax credits and tax-credit transfer certificates issued under:
- The New Jersey Aspire Program (paragraph (6)); and
- The Cultural Arts Incentives Program (paragraph (13)).
- Purchase price: the director shall pay 85% of the credit’s face value, subject to conditions:
- The tax credit certificate or transfer certificate must have been issued at least one year before the date of application to the director.
- (For Aspire Program credits, additional statutory provisions related to the developer’s required return/repayment after year six remain applicable.)
- Leaves intact the general rule that the director shall not pay more than 75% for other listed program credits (and retains existing exceptions for other named programs).
Who is affected
- State government: Division of Taxation / Department of the Treasury (administration and payments); impact on State budget and revenues.
- New Jersey Economic Development Authority (EDA): awards and administration of Aspire and Cultural Arts credits.
- Holders of tax credits: developers, cultural institutions, and secondary purchasers who may sell unused credits to the State.
- Taxpayers / General Fund: potential net budgetary effects depending on whether purchased credits would otherwise have been redeemed.
Fiscal impact (Office of Legislative Services)
- Multi-year, indeterminate net effect (both increased expenditures from purchases and potentially increased revenues from avoided future redemptions).
- Illustrative estimates:
- If all remaining Aspire and Cultural Arts credits were purchased at 85%: up to ~$6.7 billion in State expenditures over several years (OLS maximum scenario).
- Aspire-only exposure estimated up to ~$5.7 billion; Cultural Arts program exposure ~$340 million–$1.0 billion depending on allocations.
- Net result per credit depends on whether the credit would otherwise have been redeemed: buying a credit that would have been redeemed can produce a net long‑term gain (~15% of face value); buying a credit that would not otherwise have been used produces a net loss equal to the purchase amount (85% of face value).
Other notes
- Committee amendments were technical to align cross‑references with recent law.
- Effective date: immediate upon enactment.
Compiled from official sources — confirm details with the bill’s official record.
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