Measure Would Create Tax Credit Incentive for Retained and New Jobs
TRENTON – A bipartisan bill sponsored by Senator Raymond J. Lesniak which would create the “Grow New Jersey” program to provide tax incentives for New Jersey-based companies which maintain existing employment levels and create new jobs was approved by the Senate Budget and Appropriations Committee today by a unanimous vote of 12-0.
“Joblessness is reaching near-epidemic levels in the Garden State, and private investors are not making the capital investments which would help pull us out of economic crisis and put New Jersey residents back to work,” said Senator Lesniak, D-Union. “This bill is designed to reinvigorate our economy, creating an incentive program similar to the State’s successful BEIP (Business Employment Incentive Program) and BRRAG (Business Retention and Relocation Grant) programs focused on keeping New Jersey businesses in-State and creating new jobs for our hard-hit workforce. The ‘Grow New Jersey’ program is another tool to make New Jersey more business-friendly and encourage private investors to commit to the Garden State.”
The bill, S-3033, would establish the $200 million “Grow New Jersey” tax credit business incentive program to stimulate economic investment and private job creation. Under the bill, businesses in qualifying development zones would be eligible for the tax credits if they make or acquire a capital investment of at least $20 million, and employ at least 100 full-time employees. Beyond the employment and investment eligibility standards, the business’s CEO would be required to certify that any retained jobs are at risk of leaving the State and that at least 50 percent of the jobs at the project are New Jersey-based at the time of application. Finally, the business would have to demonstrate to the New Jersey Economic Development Authority (EDA) that the tax credit, balanced against the new or retained jobs and capital investment, will yield a net positive benefit for the State.
Qualifying businesses would be able to receive a base tax credit of $5,000 per job, per year, for 10 years on the amount of Corporate Business Taxes owed. The State EDA could increase the amount to $8,000 per job if the following conditions are met:
• the business is an in industry marked by the EDA as desirable for the State to maintain;
• the business relocates to a location adjacent to a public transit facility;
• the project creates jobs using full-time employees whose annual salaries, according to the Department of Labor and Workforce Development, are greater than the salary of the average worker employed in the State; and
• the business has been negatively impacted by the approval of a “qualified business facility,” under the Urban Transit Hub Tax Credit.
The per project tax benefit would not be permitted to exceed the capital investment at the project site, according to Senator Lesniak. He added that the EDA would have the authority to increase the amount of the program, from $200 million to up to $1.5 billion, if the agency determines that additional tax credits are reasonable, justifiable and appropriate. Finally, the EDA would be able to recapture the amount of the tax credit issued if a business does not meet an 80 percent job retention standard, stays in-State for less than 15 years, employs less than 100 people at the location, or the business is sold or subleases its tenancy in whole or in part to another corporate entity.
“The way this program is designed, businesses will receive a greater benefit for creating high-paying, highly skilled jobs, and will receive incentives for redeveloping decaying corporate properties, like the Shering-Plough Labs facilities in Union, which have stood vacant for years,” said Senator Lesniak. “The ‘Grow New Jersey’ program represents the sort of investment which will yield serious results for people struggling to find a job in the current economy.”
The bill now heads to the full Senate, where it is scheduled for a vote on Monday.