Bill authorizes billions in tax incentives over seven years, requires Community Benefit Agreements, institutes Inspector-General
TRENTON – The Senate and Assembly today approved legislation sponsored by Senators M. Teresa Ruiz and Paul Sarlo that would authorize over $14 billion in tax incentives to spur economic growth, and the Governor is expected to swiftly sign the bill into law.
Senate Bill 3295, the Economic Recovery Act of 2020, would create an independent Inspector-General to monitor the grant programs, guarantee that local communities benefit from the projects, and continue the existing Economic Redevelopment and Growth (ERG) program to wrap up pending applications that have been in limbo for 18 months. The Senate vote was 38-1 and the Assembly tally was 68-11.
The legislation authorizing up to $11.5 billion in tax incentives over seven years was amended Friday to provide an additional $2.6 billion in film industry tax credits over 13 years before gaining the approval of the appropriations committees in both houses.
“This is comprehensive legislation which will grow new industries and foster innovation around the state. It will create greater investment in our communities by providing further incentives to locate in distressed municipalities, build affordable housing and redevelop brownfields,” said Senator Ruiz (D-Essex), the prime sponsor. “This legislation will help increase access to employment in high-growth industries, drive sustainable economic development and most importantly help our state to recover from the economic impact of the COVID-19 pandemic. This effort is balanced in its approach, it will ensure responsible investment, greater oversight and tangible community benefits.”
Senator Paul Sarlo (D-Bergen/Passaic), the Senate Budget and Appropriations Committee chair and co-prime sponsor of the bill, praised the incentives plan.
“New Jersey has tremendous advantages for business with our location, our skilled workforce, top-rated schools, and our extensive multi-modal transportation network, but our ability to compete has been hampered for the past 18 months by our unilateral elimination of tax incentive programs that every other state offers,” said Senator Sarlo.
“This legislation provides the tax incentives we will need to spur business and job growth as we come out of a pandemic crisis that has devastated broad sectors of our economy. Most importantly, this legislation will provide tax incentives to attract the jobs we want – jobs that pay high salaries in cutting edge industries that will transform communities, partner with our higher education sector on R&D, provide valuable job training and be good corporate citizens,” he said.
Former Senator Ray Lesniak, who served as special counsel to the Senate Majority Office in developing the new tax incentive legislation, extolled the new program.
“What you have before you is the makings of the most powerful economic development program in America,” said Lesniak, a former chair of the Senate Economic Growth Committee. “It’s not just an economic program, it is also a social justice program. It will help build affordable housing, rehabilitate historic tourism attractions in our cities, and will bring less costly and nutritious food to low-income areas, currently called food deserts.
“It will turn Brownfields into productive uses. In some cases, the state will partner with a business to help it grow and will participate in that growth. It will provide assistance to small businesses hurt by the pandemic,” he said, noting that the bill requires strict oversight by the state Economic Development Authority and independently prepared reports to the Governor and the Legislature on the net benefits of projects.