SENATE HIGHER EDUCATION COMMITTEE

STATEMENT TO

SENATE, No. 3730

STATE OF NEW JERSEY

DATED:  OCTOBER 10, 2024

      The Senate Higher Education Committee reports favorably Senate Bill No. 3730.

This bill establishes a process to monitor a proprietary institution that converts to a nonprofit corporation for transactions that constitute private inurement.

     The bill provides that, if a proprietary institution converts to a nonprofit corporation, the institution is to annually submit its Internal Revenue Service Form 990 to the Secretary of Higher Education for a period of five years following its incorporation as a nonprofit.  The bill requires the secretary to annually review the Form 990 to ensure that there exist no reportable incidents that constitute private inurement.   The secretary may, upon a finding of a reportable incident, recommend to the Secretary of State that the institution’s certificate of incorporation be revoked.