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Van Drew/Turner Bill to Extend UEZ Designations Approved

State Seal

TRENTON – A bill sponsored by Senators Jeff Van Drew and Shirley K. Turner to extend the urban enterprise zone (UEZ) designation for an additional two years for Bridgeton, Camden, Newark, Plainfield, and Trenton, which are scheduled to expire at the end of 2016, was approved today by the Senate Economic Growth Committee.

“Urban enterprise zones have been extremely beneficial in helping to reinvigorate downtowns in municipalities across New Jersey. Allowing these designations to expire would have a severe economic impact in some of our most challenged areas. It is a priority to keep them operating and we believe this narrowly tailored legislation is the best way to ensure that happens in these five municipalities that are due to expire at the end of the year,” said Senator Van Drew (D-Cape May/Cumberland/Atlantic).

The bill (S-2670) would authorize qualifying retail businesses in the UEZs to continue to charge and collect the State’s sales and use tax (SUT) at one-half of the normal rate. It would dedicate 10 percent of the reduced-rate SUT revenues to the New Jersey Urban Enterprise Zone Authority and all remaining revenues would be appropriated to the UEZs for economic development and job creation activities. The bill would amend current law to restrict the fund to only those purposes.

“The UEZ program is an important program for disadvantaged communities to be able to attract new companies that bring jobs for local residents,” said Senator Turner (D-Mercer/Hunterdon).  “However, it is also helping to keep existing businesses that already have local residents on their payrolls.  Cities with UEZ designation and the businesses and residents that benefit from it cannot afford to lose it.  Extending the UEZ designation is paramount.”

The first five UEZs were authorized in 1986 and there are currently 32 designated zones across the state. Businesses in the UEZ benefit from reduced sales tax; tax free purchase on certain items such as capital equipment, facility expansions, and upgrades, and other benefits. Approximately 6,800 businesses across the state participate in the program.

The UEZ designation for Bridgeton, Camden, Trenton, Newark, and Plainfield would be extended until the end of 2018, under the bill. The legislation would also require the Commissioner of Community Affairs to review the Urban Enterprise Zone Program and issue a report examining and making recommendations on the feasibility of an alternative, location-based program to assist fiscally distressed municipalities as the UEZs expire.

The committee approved the bill by a vote of 3-2. It next heads to the Senate Budget and Appropriations Committee for consideration.