NJSB02032
Reconciles simultaneous legislative enactments to clarify law that limits tax credits under the Economic Redevelopment and Growth Grant Program. No companion bill. Status: 3/14/2016 : Introduced, 1st Reading without Reference, 2nd Reading
All Versions: Introduced    Status and Related Information: History
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S2032

SENATE, No. 2032

STATE OF NEW JERSEY

217th LEGISLATURE

 

INTRODUCED MARCH 14, 2016

 


 

Sponsored by:

Senator  PAUL A. SARLO

District 36 (Bergen and Passaic)

 

 

 

 

SYNOPSIS

     Reconciles simultaneous legislative enactments to clarify law that limits tax credits under the Economic Redevelopment and Growth Grant Program.

 

CURRENT VERSION OF TEXT

     As introduced.

  


An Act clarifying limits on tax credits under the Economic Redevelopment and Growth Grant Program, and reconciling provisions of P.L.2015, c.217, P.L.2015, c.242, and P.L.2015, c.252.

 

     Be It Enacted by the Senate and General Assembly of the State of New Jersey:

 

     1. Section 6 of P.L.2009, c.90 (C.52:27D-489f) is amended to read as follows:

     6.    a.  Up to the limits established in subsection b. of this section and in accordance with a redevelopment incentive grant agreement, beginning upon the receipt of occupancy permits for any portion of the redevelopment project, or upon [such] any other event evidencing project completion as set forth in the incentive grant agreement, the State Treasurer shall pay to the developer incremental State revenues directly realized from businesses operating [on or] at the site of the redevelopment project from the following taxes: the Corporation Business Tax Act (1945), P.L.1945, c.162 (C.54:10A-1 et seq.), the tax imposed on marine insurance companies pursuant to R.S.54:16-1 et seq., the tax imposed on insurers generally, pursuant to P.L.1945, c.132 (C.54:18A-1 et seq.), the public utility franchise tax, public utilities gross receipts tax and public utility excise tax imposed on sewerage and water corporations pursuant to P.L.1940, c.5 (C.54:30A-49 et seq.), those tariffs and charges imposed by electric, natural gas, telecommunications, water and sewage utilities, and cable television companies under the jurisdiction of the New Jersey Board of Utilities, or comparable entity, except for those tariffs, fees, or taxes related to societal benefits charges assessed pursuant to section 12 of P.L.1999, c.23 (C.48:3-60), any charges paid for compliance with the "Global Warming Response Act," P.L.2007, c.112 (C.26:2C-37 et seq.), transitional energy facility assessment unit taxes paid pursuant to section 67 of P.L.1997, c.162 (C.48:2-21.34), and the sales and use taxes on public utility and cable television services and commodities, the tax derived from net profits from business, a distributive share of partnership income, or a pro rata share of S corporation income under the "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq., the tax derived from a business at the site of a redevelopment project that is required to collect the tax pursuant to the "Sales and Use Tax Act," P.L.1966, c.30 (C.54:32B-1 et seq.), the tax imposed pursuant to P.L.1966, c.30 (C.54:32B-1 et seq.) from the purchase of furniture, fixtures and equipment, or materials for the remediation, the construction of new structures at the site of a redevelopment project, the hotel and motel occupancy fee imposed pursuant to section 1 of P.L.2003, c.114 (C.54:32D-1), or the portion of the fee imposed pursuant to section 3 of P.L.1968, c.49 (C.46:15-7) derived from the sale of real property at the site of the redevelopment project and paid to the State Treasurer for use by the State, that is not credited to the "Shore Protection Fund" or the "Neighborhood Preservation Nonlapsing Revolving Fund" ("New Jersey Affordable Housing Trust Fund") pursuant to section 4 of P.L.1968, c.49 (C.46:15-8).  Any developer shall be allowed to assign their ability to apply for the tax credit under this subsection to a non-profit organization with a mission dedicated to attracting investment and completing development and redevelopment projects in a Garden State Growth Zone. The non-profit organization may make an application on behalf of a developer which meets the requirements for the tax credit, or a group of non-qualifying developers, such that these will be considered a unified project for the purposes of the incentives provided under this section.

     b.    (1)  Up to an average of 75 percent of the projected annual incremental revenues or 85 percent of the projected annual incremental revenues in a Garden State Growth Zone may be pledged towards the State portion of an incentive grant.

     (2)  In the case of a qualified residential project or a project involving university infrastructure, if the authority determines that the estimated amount of incremental revenues pledged towards the State portion of an incentive grant is inadequate to fully fund the amount of the State portion of the incentive grant, then in lieu of an incentive grant based on [such] incremental [revenue] revenues, the developer shall be awarded tax credits equal to the full amount of the incentive grant.

     (3)  In the case of a mixed use parking project, if the authority determines that the estimated amount of [the] incremental revenues pledged towards the State portion of an incentive grant is inadequate to fully fund the amount of the State portion of the incentive grant, then, in lieu of an incentive grant based on [such] incremental [revenue] revenues, [a municipal redeveloper] the developer shall be awarded tax credits equal to the full amount of the incentive grant.

     The value of all credits approved by the authority pursuant to [paragraph] paragraphs (2) [or] and (3) of this [paragraph] subsection shall not exceed [$600,000,000] $628,000,000, of which:

     (a)   $250,000,000 shall be restricted to qualified residential projects within Atlantic, Burlington, Camden, Cape May, Cumberland, Gloucester, Ocean, and Salem counties, of which $175,000,000 of credits shall be restricted to the following categories of projects: (i) qualified residential projects located in a Garden State Growth Zone located within the aforementioned counties [,]; and (ii) mixed use parking projects located in a Garden State Growth Zone or urban transit hub located within the aforementioned counties [,]; and $75,000,000 of credits shall be restricted to qualified residential projects in municipalities with a 2007 Municipal Revitalization Index of 400 or higher as of the date of enactment of the "New Jersey Economic Opportunity Act of 2013," P.L.2013, c.161 (C.52:27D-489p et al.) and located within the aforementioned counties;

     (b)  $250,000,000 shall be restricted to the following categories of projects: (i) qualified residential projects located in urban transit hubs that are commuter rail in nature that otherwise do not qualify under subparagraph (a) of this paragraph [,]; (ii) qualified residential projects located in Garden State Growth Zones that do not qualify under subparagraph (a) of this paragraph [,]; (iii) mixed use parking projects located in urban transit hubs or Garden State Growth Zones that do not qualify under subparagraph (a) of this paragraph, provided however, an urban transit hub shall be allocated no more than $25,000,000 for mixed use parking projects [,]; (iv) qualified residential projects which are disaster recovery projects that otherwise do not qualify under subparagraph (a) of this paragraph [, and];  (v) qualified residential projects in SDA municipalities located in Hudson County that were awarded State Aid in State Fiscal Year 2013 through the Transitional Aid to Localities program and otherwise do not qualify under subparagraph (a) of this paragraph [,]; and (vi) $25,000,000 of credits shall be restricted to mixed use parking projects in Garden State Growth Zones which have a population in excess of 125,000 and do not qualify under subparagraph (a) of this paragraph;

     (c)   [$75,000,000] $87,000,000 shall be restricted to the following categories of projects: (i) qualified residential projects located in distressed municipalities, deep poverty pockets, highlands development credit receiving areas or redevelopment areas, otherwise not qualifying pursuant to subparagraph (a) or (b) of this paragraph[,]; and (ii) mixed use parking projects that do not qualify under subparagraph (a) or (b) of this paragraph, [which include a vacant commercial building located wholly or partially within a distressed municipality,] and which are used by an independent institution of higher education, a school of medicine, a nonprofit hospital system, or any combination thereof; provided, however, that $20,000,000 of the $87,000,000 shall be allocated to mixed used parking projects that do not qualify under subparagraph (a) or (b) of this paragraph; [and]

     (d)  [$25,000,000] $16,000,000 shall be restricted to qualified residential projects that are located within a qualifying economic redevelopment and growth grant incentive area otherwise not qualifying under subparagraph (a), (b), or (c) of this paragraph; and

     (e)   $25,000,000 shall be restricted to projects involving university infrastructure.

     (f)   For subparagraphs (a) through (d) of this paragraph, not more than $40,000,000 of credits shall be awarded to any qualified residential project in a deep poverty pocket or distressed municipality and not more than $20,000,000 of credits shall be awarded to any other qualified residential project.  The developer of a qualified residential project seeking an award of credits towards the funding of its incentive grant shall submit an incentive grant application prior to July 1, 2016 and if approved after September 18, 2013, the effective date of P.L.2013, c.161 (C.52:27D-489p et al.) shall submit a temporary certificate of occupancy for [such] the project no later than July 28, [2018] 2019.  The developer of a mixed use parking project seeking an award of credits towards the funding of its incentive grant pursuant to subparagraph (c) of this paragraph and if approved after the effective date of P.L.     , c.      (pending before the Legislature as this bill), shall submit a temporary certificate of occupancy for the project no later than July 28, 2021.  Applications for tax credits pursuant to this subsection relating to an ancillary infrastructure project or infrastructure improvement in the public [right of way] right-of-way, or both, shall be accompanied with a letter of support relating to the project or improvement by the governing body or agency in which the project is located.  Credits awarded to a developer pursuant to this subsection shall be subject to the same financial and related analysis by the authority, the same term of the grant, and the same mechanism for administering the credits, and shall be utilized or transferred by the developer as if [such] the credits had been awarded to the developer pursuant to section 35 of P.L.2009, c.90 (C.34:1B-209.3) for qualified residential projects thereunder.  No portion of the revenues pledged pursuant to the "New Jersey Economic Opportunity Act of 2013," P.L.2013, c.161 (C.52:27D-489p et al.) shall be subject to withholding or retainage for adjustment, in the event the developer or taxpayer waives its rights to claim a refund thereof.

     (4)  A developer may apply to the Director of the Division of Taxation in the Department of the Treasury and the chief executive officer of the authority for a tax credit transfer certificate, if the developer is awarded a tax credit pursuant to paragraph (2) or paragraph (3) of this subsection, covering one or more years, in lieu of the developer being allowed any amount of the credit against the tax liability of the developer.  The tax credit transfer certificate, upon receipt thereof by the developer from the director and the chief executive officer of the authority, may be sold or assigned, in full or in part, to any other person [that] who may have a tax liability pursuant to section 5 of P.L.1945, c.162 (C.54:10A-5), sections 2 and 3 of P.L.1945, c.132 (C.54:18A-2 and C.54:18A-3), section 1 of P.L.1950, c.231 (C.17:32-15), or N.J.S.17B:23-5.  The certificate provided to the developer shall include a statement waiving the developer's right to claim that amount of the credit against the taxes that the developer has elected to sell or assign.  The sale or assignment of any amount of a tax credit transfer certificate allowed under this paragraph shall not be exchanged for consideration received by the developer of less than 75 percent of the transferred credit amount before considering any further discounting to present value that may be permitted.  Any amount of a tax credit transfer certificate used by a purchaser or assignee against a tax liability shall be subject to the same limitations and conditions that apply to the use of the credit by the developer who originally applied for and was allowed the credit.

     c.    All administrative costs associated with the incentive grant shall be assessed to the applicant and be retained by the State Treasurer from the annual incentive grant payments.

     d.    The incremental revenue for the revenues listed in subsection a. of this section shall be calculated as the difference between the amount collected in any fiscal year from any eligible revenue source included in the State redevelopment incentive grant agreement, less the revenue increment base for that eligible revenue.

     e.    The municipality is authorized to collect any [and all] information necessary to facilitate grants under this program and remit that information [, as may be required from time to time,] in order to assist in the calculation of incremental revenue.

(cf:  P.L.2015, c.69, s.2)

 

     2.    This act shall take effect immediately.

 

 

STATEMENT

 

     This bill clarifies section 6 of P.L.2009, c.90 (C.52:27D-489f) by reconciling three near simultaneous enactments of the 216th Legislature, each of which amended that section of law.  Section 6 of P.L.2009, c.90 (C.52:27D-489f) imposes limits on the overall amount of tax credits the Economic Development Authority (EDA) may approve under the Economic Redevelopment and Growth Grant (ERGG) Program, and allocates funding to specific geographic regions and categories of projects.  Prior to the recent amendments to this statute, this provision of law limited the overall amount of tax credits that EDA may approve under the ERGG program to $600 million.

     P.L.2015, c.217, approved on January 11, 2016, increased the overall limit on the amount of tax credits that EDA may approve under the ERGG program from $600 million to $603 million, reallocated funding between two categories of projects, and increased the amount allocated to a specific category of projects.  P.L.2015, c.242, approved on January 19, 2016, established a new project category (university infrastructure projects), allocated $25 million worth of tax credits to that project category, and increased the overall “cap” on ERGG tax credits from $600 million to $625 million.  P.L.2015, c.252 was also approved on January 19, 2016, however, it did not alter the funding allocations or overall program limit, leaving in place the $600 million overall limitation.

     This bill reconciles P.L.2015, c.217, P.L.2015, c.242, and P.L.2015, c.252 by increasing the overall limit on the amount of tax credits that EDA may approve under the ERGG program to $628 million.  The bill incorporates changes contained in each of the three recent enactments, and makes a few technical changes necessary to facilitate the Legislature’s intention to allow for the EDA to implement P.L.2015, c.217, P.L.2015, c.242, and P.L.2015, c.252.