TRENTON – A bill sponsored by Senators Sandra Bolden Cunningham (D-Hudson) and Teresa Ruiz (D-Essex) that would expand eligibility for the Urban Transit Hub Tax Credit and make other changes to the program was approved 37-0 today by the Senate.
By expanding eligibility requirements, the bill would make Secaucus eligible for the credit. The program was created to attract investment in areas surrounding transit hubs, leading to more jobs and encouraging the use of mass transit.
“By providing economic incentives, the Urban Transit Hub Tax Credit program is designed to encourage smart growth principles,” Senator Cunningham said. “It encourages development that focuses on rail and pedestrian transportation rather than automobile travel. The program will also serve to create jobs and develop the state’s infrastructure.”
Other changes would expand the definition of urban transit hub to include freight rail lines, provided the business that applies for the credit uses that freight line for loading and unloading freight cars.
The bill also expands the definition of a transit hub zone to include business headquarters property within a one-mile-wide zone in a qualified municipality under the “Municipal Rehabilitation and Economic Recovery Act.”
“This provision would allow the Campbell’s Soup headquarters in Camden City to be eligible,” Sen. Ruiz said. “Under current law, the transit hub is defined as the ½-mile radius surrounding the center of the rail platform area.”
Under current law, a business that makes $75,000,000 of capital investment in a qualified business facility within an urban transit hub and employs at least 250 people at the facility may qualify for a tax credit equal to the qualified capital investment. The credit may be applied against corporate business tax or insurance premiums tax. The act requires the credit to be taken over a 10 year period, at a rate of 10 percent per year. It also enables tenants located in a qualified business facility to take advantage of a similar credit, under certain circumstances and limitations.
“Our bill would lower the capital investment threshold from $75 million to $50 million for both tenant and non-tenant businesses,” Senator Cunningham said. “It would also permit businesses to count workers employed by a Professional Employment Organization (PEO) as employees for the purposes of meeting the program’s employment threshold requirement.”
The bill would require a tenant’s leased area to represent $17.5 million of the total capital investment for the tenant to be eligible for the credit. Under current law, the leased area must represent at least $25 million. It would also permit an owner to count a tenant’s investment as its own, but only to the extent necessary to meet the owner’s minimum capital investment of $50,000,000.
“Since the inception of program in 2007 only one Urban Transit Hub Tax Credit has been granted,” Senator Ruiz said. “The credit was granted to the Verizon Corporation in the Newark transit hub.”