TRENTON – Three pieces of legislation sponsored by Senator Jeff Van Drew and Senator Nilsa Cruz-Perez that would provide financial assistance to wineries and vineyards in New Jersey in order for them to expand operations and spur economic development were approved by the Senate Economic Growth Committee today.
“New Jersey wineries and vineyards are an important part of our local economies. The EDA provides assistance to small businesses that cannot receive loans from banks, and this will be a major benefit to vineyards and wineries that have a difficult time attaining those loans,” said Senator Van Drew (D-Atlantic/Cape May/Cumberland), who sponsors S-1057. “Expanding the operations of vineyards and wineries will not only be good for local economies, it will also be good for the prospects of job growth.”
“New Jersey wine is rapidly making a name for itself around the country,” said Senator Cruz-Perez (D-Camden/Gloucester), who sponsors S-1082 and S-1083. “Demand for it is increasing, so we need to assist wineries and vineyards to keep up with that high demand and help these businesses flourish.”
The first bill, S-1057, requires the EDA, in consultation with the Department of Agriculture, to establish a loan program for certain vineyard and winery capital expenses. Its purpose is to increase the size and output of both wineries and vineyards.
Under the bill, the EDA would provide loans to eligible vineyards and wineries to pay for expenditures for land acquisition or improvement, infrastructure acquisition or modernization, and the purchase or modernization of machinery and equipment. The loan amounts would be between $10,000 and $100,000, with interest rates between three and five percent, and terms up to ten years. The EDA would be authorized to conduct annual financial audits of its lenders to ensure the viability of their operations.
The second bill, S-1082, provides tax credits to vineyards and wineries for qualified capital expenses.
Each taxpayer or individual vineyard or winery paying corporation business tax would be allowed 25% of qualified expenses of tax credits up to a total of $250,000 may be used against gross income and corporation tax liability to be taken over a 10 year period.
A qualified capital expense is any expenditure made by the taxpayer for the purchase and installation of equipment or agricultural materials for use in the production of agricultural products at a vineyard or in a winery, as specified in regulations.
The third bill, S-1083, establishes a loan program and provides corporation business tax and gross income tax credits for the establishment of new vineyards and wineries. The bill acts as a form of economic development for counties affected by Hurricane Sandy. Those counties include: Monmouth, Atlantic, and Ocean. The establishment of new wineries and vineyards would be a compliment to the tourism of the New Jersey shore, allowing for the two to complement each other.
The bill would develop a 10-year pilot program to provide low interest loans to farmers for qualified costs associated with the installation of new vineyards in eligible counties. Qualified costs would include the cost of preparing land for plant installation, purchasing vines or trees, and purchasing equipment and supplies for those purposes
In addition to the pilot program, a taxpayer would be allowed a tax credit against either the corporation business tax or the gross income tax in an amount equal to 25 percent of the qualified capital expenses incurred by the taxpayer in connection with 1.) the establishment of a new vineyard or winery in an eligible county; or 2.) capital improvements made to an existing vineyard or winery in an eligible county.
“These bills will allow us to provide some economic development to areas of our state that are still looking for ways to recover from Hurricane Sandy,” said Senator Cruz-Perez. “Expanding the operations and establishing new businesses in a growing part of our economy would be a step in the right direction.”
New Jersey has been expanding its production of wine-making for the past few decades. According to the state Department of Agriculture, more than 40 varieties of grapes are grown in New Jersey. New Jersey is the seventh largest wine producing state in the country, with 1.5 million gallons of wine produced annually. There are more than 45 licensed wineries in New Jersey.
The bills were advanced through committee by a vote of 5-0 for S-1057, 5-0 for S-1082, and 5-0 for S-1083, and will next head to the Senate Budget and Appropriations Committee for further consideration.