There's a couple things you might run into problems with, depending on your flow rate and pressures. The first is the depth of the water - assuming the water stays cold, that 3' should be enough suction head to meet the pump's NPSHR, so I wouldn't expect a problem there at your power range. There is a chance you could form a vortex from the surface, however. I'm not sure how to calculate depth for vortex formation though, but it might be worth a putting a vortex breaker (basically just a steel "X" across the inside of the tank outlet) on the outlet to cut the chances. As far as the return being directed upwards at another point, the only thing I'd be worried about here is the jet being enough to extend above the surface in the tank (sort of like a little fountain). This could cause aeration of the water, which can result in a loss of performance in the pump, and flawed test results. If the tank is big enough, I'd return horizontally below the water level, or through some sort of diffuser to break the velocity. I can't say for sure, not knowing the tank geometry, if you'd have these problems, but I am sure the breaker and horizontal return would minimize the chance of problems.