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S 4027

Prohibits the state from entering into certain contracts with companies requiring employees to stipulate to binding arbitration for all disputes

2025 Regular Session Introduced by Liz Krueger and 2 co-sponsors

The bill requires the state to mandatorily purchase unused Aspire and Cultural Arts tax credits at 85% face value, affecting timing and ROI rules.

REFERRED TO FINANCE
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Bill Summary · S 4027

Summary — S4027 (2025)

Status: Introduced Jan. 14, 2025; reported out of Senate Budget & Appropriations with committee amendments (Mar. 17, 2025); referred to Finance. Substituted by A5170 (1R) on June 30, 2025. Effective: immediately upon enactment (per bill).

Main purpose

Require the State (through the Director of the Division of Taxation, Department of the Treasury) to purchase certain unused tax credits and tax-credit transfer certificates issued under two programs created by the New Jersey Economic Recovery Act of 2020:
- New Jersey Aspire Program (Aspire Program)
- Cultural Arts Incentives Program (recently renamed Cultural Arts Facilities Expansion Program by EDA)

Under current law the Director may (but is not required to) purchase unused tax credits; this bill makes purchases mandatory for the two programs above and specifies purchase terms.

Key provisions

  • Amend Section 89 of P.L.2020, c.156 to require the Director to purchase unused tax credits and tax credit transfer certificates issued under the Aspire Program and the Cultural Arts Incentives Program.
  • Purchase price: the Director must pay 85% of the tax credit’s face value for credits from those two programs (the statute generally caps purchases at 75% except specified programs).
  • Timing condition: the tax credit certificate or transfer certificate must have been issued at least one year prior to the applicant’s date of application to the Director.
  • Aspire-specific provision: if the application is submitted after the sixth year of the eligibility period, the developer’s payment of amounts in excess of a reasonable and appropriate return on investment increases to 50% (a statutory adjustment tied to the Aspire Program’s return-of-investment provisions).
  • The requirement applies to both original tax credit certificates and tax credit transfer certificates issued in their place.

Who is affected

  • State agencies: Division of Taxation / Department of the Treasury (required purchaser); New Jersey Economic Development Authority (EDA) administers awards.
  • Credit holders: developers, cultural institutions, and any third-party purchasers or holders of transfer certificates.
  • State budget and taxpayers: potential fiscal impacts described below.

Fiscal impact (Office of Legislative Services)

  • Net fiscal effect indeterminate: purchases increase short-term State expenditures but may reduce future revenue losses if credits otherwise would be redeemed.
  • Potential exposure (illustrative maximum): if all remaining Aspire and Cultural Arts credits were unused and purchased at 85% of face value, additional State expenditures could be up to about $6.7 billion (OLS estimate). This is based on EDA figures showing ~ $2.7 billion approved Aspire credits with roughly $4.0 billion remaining available (May 16, 2025) and program authorizations for Cultural Arts ranging $400 million to $1.2 billion (purchase cost at 85% yields ~$340M to $1.0B).
  • Example: purchasing a $1M unused credit at 85% costs the State $850,000. If that credit otherwise would have been redeemed for $1M, the State avoids the $1M revenue loss and nets $150,000 long-term benefit; if the credit would not have been redeemed by anyone, the State incurs an $850,000 net loss.
  • OLS therefore concludes the direction and magnitude of net fiscal impact depend on actual behavior (whether credits would be redeemed or unused) and other factors (awards actually made, transfers to other programs, final project outcomes, market sale prices).

Procedural / other notes

  • Committee amendments are technical updates aligning the statute with recent law.
  • The bill expands from discretionary purchase authority to a mandatory purchase requirement for the two named programs.
  • Sponsors: Kevin S. Parker (primary), with cosponsors Luis R. Sepúlveda and Liz Krueger.
  • Companion: A5170 (1R). Several prior-session related measures are listed (e.g., S2452, S1840).

This summary synthesizes the bill text and Legislative Fiscal Estimates (OLS) dated Feb. 5 and June 4, 2025.

Compiled from official sources — confirm details with the bill’s official record.

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