Would Create Innovation Zones Around Research Institutions
TRENTON – A bill sponsored by Senator Shirley K. Turner that would establish an innovation zone program to stimulate technology industry clusters around New Jersey’s research institutions was approved by the Senate Economic Growth Committee today. It would allow certain technology businesses located in three innovation zones to receive tax credits under the Grow New Jersey assistance program.
Eligible industries would include advanced computing, advanced materials, biotechnology, electronic device technology, information technology, life sciences, medical device technology, mobile communications technology and renewable energy technology.
“New Jersey has all the ingredients for an explosive burst of high-tech economic growth and now is the time to solidify the synergy needed to reap the benefits for decades to come,” said Senator Turner (D-Hunterdon/Mercer.” “We have a highly educated population, an economy reliant on biopharmaceutical and technological industries and world-renowned research institutions. This bill supports all those resources in a way that will lead every resident of this state and all our businesses to a more secure and prosperous future.”
The bill, S-848, would require the New Jersey Economic Development Authority to establish an “innovation zone” program with each of three zones surrounding a research university, college or research hospital, or any combination thereof, and located in Greater Camden, Greater New Brunswick, and Greater Newark. The authority would also be allowed to create subzones centered on a specific research institution within each of the three zones.
The three zones would cover the following municipalities:
- Greater Camden: Camden City, Egg Harbor Township, Galloway Township, Glassboro Borough, Harrison Township in Gloucester County, Mantua Township, and Stratford Borough;
- Greater New Brunswick: East Windsor Township, Ewing Township, Franklin Township in Somerset County, Hopewell Township and Lawrence Township in Mercer County, New Brunswick City, North Brunswick Township, Piscataway Township, Plainsboro Township, Princeton Borough, South Brunswick Township, Trenton City, and West Windsor Township; and
- Greater Newark: Belleville Township, Clifton City, East Orange City, Little Falls Township, Livingston Township, Montclair Township, Newark City, Nutley Township, and Orange City.
The bill would require the Authority, with the approval of the State Treasurer, to modify its existing business assistance programs, if permissible by law, to give bonuses or other enhanced incentives to high-technology businesses located in an innovation zone.
The bill would also create a tax credit program for high-technology businesses located in the Innovation Zones. In order to qualify, these businesses would need to create at least ten high-tech jobs, for which they would receive a credit of $4,000 a year for ten years. If the businesses hire young graduates, they would receive an additional $1,000 for five years. The annual credits would be capped at $100,000 per business, and $1 million per zone. After seven years, the tax credit program would expire and the EDA would send a report to the Governor and Legislature on the effectiveness of the program at developing high-technology industry clusters and increasing graduates’ employment rate.
The bill would also require the Authority and the Secretary of Higher Education to modify their programs, if permissible by law, to promote and support networks and collaboration between high-technology businesses and research institutions in the innovation zones, to increase federal funding to research institutions in areas of strategic importance to New Jersey’s high-technology industry, to promote the transfer of technology and commercialization of new ideas in the innovation zones and to further develop support for high-technology companies in the innovation zones including, but not limited to, business incubation and grant writing assistance services.
“Innovation zones are a dynamic way for our state to propel itself into a robust economic future,” said Senator Turner. “This legislation enables the proper placement and support of people, places and things necessary to create and sustain cutting-edge research and development centers that will serve as models the world over.”
The bill would further require the authority to work cooperatively with other State departments, agencies, boards, commissions, and authorities to explore and implement opportunities to direct resources to those zones, and may provide technology, financial, and workforce development opportunities, infrastructure, and housing within innovation zones. With the assistance of these State entities, the executive director of the authority and the secretary would be allowed to recommend potential future innovation zones and subzones surrounding other research institutions to the authority’s board members to enhance cluster-based economic development strategies anchored by research institutions.
Under the bill, the authority would be required to establish an advisory committee for each innovation zone whose membership is to consist of local high-technology business leaders and representatives from the research community. Each advisory committee is to meet quarterly to advise the authority and the secretary with respect to the functioning of the innovation zones and the needs of the local high-technology industry.
With today’s vote of 5-0, the bill advances to the Budget and Appropriations Committee for further consideration.