AI Tax Credits, Medical Debt, Improving Childcare Centers: New NJ Laws

NEW JERSEY — As we begin the first full week of August, some new laws are in effect in the Garden State.

Gov. Phil Murphy has signed several pieces of legislation recently, including new tax incentives to entice artificial intelligence development in the state, and new protections for New Jersey residents with medical debt.

Here is a look at the state's new laws and what they do:

Establishing the "Next New Jersey Program" for AI investments

Murphy signed this $500 million program (bill numbers S3432/A4558) into law on July 25, saying it will create new jobs and economic opportunities in the artificial intelligence sector. The measure establishes a "Next New Jersey Program," which will be administered by the New Jersey Economic Development Authority (EDA).

The program will provide up to $250 million in tax credits to businesses that have at least 50 percent of employees engaged in "AI-related activities," and those that generate at least 50 percent of their revenue from AI development. Companies must apply for an award under the program, and eligible projects must create at least 100 new jobs and include at least $100 million of capital investment.

• Who were the bill's main sponsors? Senator Raj Mukherji (D-32) and Assemblyman Chris Tully (D-38).
• When does the law officially go into effect? Immediately.

Marking money for water treatment and drinking water improvements

Murphy signed this bipartisan bill (S3384/A4426) on July 10, which appropriates funds to the New Jersey Department of Environmental Protection — who will in turn loan money to governments and privately-owned water companies for infrastructure projects that help provide residents with clean water.

This includes improvements to water discharge and treatment systems in a list of communities around the state, with over $3 billion worth of projects on the list. These project lists, and the DEP's authorization to utilize the funds appropriated by the bill, will expire on July 1, 2025.

• Who were the bill's main sponsors? Senators Holly T. Schepisi (R-39) and John J. Burzichelli (D-3), and Assemblymembers Andrea Katz (D-8), Reginald W. Atkins (D-20), and Mitchelle Drulis (D-16).
• When does the law officially go into effect? Immediately.

Child Care Facilities Improvement Program grants

In 2021, the state enacted a measure to make $54.5 million in federal dollars available as a Child Care Revitalization Act, administered through the state EDA. The program provides grants to New Jersey child care providers for facilities improvements and technical support.

This bill (S2344/A3582) removes registered family child care homes from eligibility for certain facilities improvements grants, and clarifies that the provisions of the bill only apply to child care providers that are licensed by the Department of Children and Families.

Murphy signed the measure on July 26.

"The EDA is currently developing a facilities improvement grant program, to be funded with State resources that have already been appropriated to the EDA, for family child care homes," bill sponsors said.

The initial phase provided grants ranging from $50,000 to $200,000.

• Who were the bill's main sponsors? Senators M. Teresa Ruiz (D-29) and Nisa Cruz-Perez (D-5); Assemblymembers Shama A. Haider (D-37) Shanique Speight (D-29), and Carol A. Murphy (D-7).
• When does the law officially go into effect? Immediately.

The Louisa Carman Medical Debt Relief Act

Murphy signed A3681/S2806 on July 22, which is named for a 25-year-old Governor's Office employee who died in a car crash on New Year’s Day. Louisa Carman helped craft this bill, which requires that medical debt holders offer patients a payment plan before they move to collect the debt — and also stipulates that they cannot begin the debt settlement process within 120 days of the first medical bill being sent to those patients.

The act also caps interest on medical debt at 3 percent annually, and bars medical debt collectors and creditors from reporting most of a patient’s debt to credit-rating agencies; any collectors who violate the bill may be subject to a civil penalty.

• Who were the bill's main sponsors? Primary sponsors included Senators Shirley K. Turner (D-15) and M. Teresa Ruiz (D-29), and Assemblymembers Verlina Reynolds-Jackson (D-15), Wayne P. DeAngelo (D-14), Anthony S. Verrelli (D-15), and Herb Conaway Jr. (D-7)
• When does the law officially go into effect? The portions of the act which bar reporting of medical debt (and imposing penalties on those who do) were enacted immediately. The rest of the bill won't go into effect until July 22, 2025.