S.3631. Provides tax credits for certain business headquarters located in State.

New Jersey Senate
Last action 6 months ago
Polls (open):

Summary

                     The Grow New Jersey Assistance Program (Grow Program) is the State’s premier job creation and retention business incentive program that offers eligible businesses creating or retaining jobs in New Jersey tax credits for making certain capital investments at certain locations in the State.  Although the Grow Program is achieving its intended result of having businesses locate to the commercial areas of the State’s cities and shuttered suburban office parks, thereby revitalizing these commercial areas, the State has opportunities from time to time to attract corporate headquarters that have the effect of transforming the economy of a region of the State by establishing a new business incentive program that complements the Grow Program.
                
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                         This bill establishes a “Transformative Headquarters Economic Assistance Program” (program) under the jurisdiction of the New Jersey Economic Development Authority (authority).  The purpose of this new business incentive program is to encourage economic development and new job creation in New Jersey at a corporate headquarters (headquarters) that is transformational to the regional economy, where at least 30,000 new full-time jobs are created and at least $3 billion in capital investment is made.  The program provides tax credits claimed by an eligible business for an eligibility period not to exceed 10 years for each phase of the headquarters.

     To be eligible for tax credits under the bill, an eligible business's chief executive officer or equivalent officer is to demonstrate to the authority, at the time of application, that:

     (1)   the business will make, acquire, or lease a capital investment equal to, or greater than, $3 billion at a headquarters at which it will create at least 30,000 new full-time jobs;

     (2)   the headquarters is to be constructed in accordance with the minimum environmental and sustainability standards;

     (3)   the capital investment resultant from the award of tax credits and the resultant creation of new full-time jobs will yield a net positive benefit to the State equaling at least 115 percent of the requested tax credit allocation amount where the net positive benefit determination shall be calculated for each phase of the headquarters based on the benefits generated during a period of up to 50 years following completion of the headquarters; and

     (4)   the award of tax credits will be a material factor in the business's decision to create at least 30,000 new full-time jobs for eligibility under the program.

     The bill requires a business to submit an application for tax credits to the authority prior to July 1, 2019.  If the business requests additional time to submit its application, the authority is to have the discretion to grant one six-month extension of this deadline.

     Under the bill, the authority is to require an eligible business to enter into an incentive agreement prior to the issuance of tax credits.  The incentive agreement is to include, but not be limited to:

     (1)   a detailed description of the proposed headquarters, including the phases for completion of the headquarters and the number of new full-time jobs that are approved for tax credits;

     (2)   the eligibility period of the tax credits for each phase, including the first year for which the tax credits may be claimed;

     (3)   personnel information that will enable the authority to administer the program;

     (4)   a requirement that the applicant maintain the headquarters at a location in New Jersey for the commitment period and a provision to permit the authority to recapture all or part of any tax credits awarded, at its discretion, if the business does not remain in compliance with this provision for the required term;

     (5)   a provision that up to $25,000,000 of the tax credits awarded to the business may be sold annually to a third party, provided that the maximum amount of tax credits the business may sell shall be $500,000,000 and that the proceeds are used for providing public infrastructure;

     (6)   a method for the business to certify that it has met the employment and capital investment requirements of the program pursuant to a phased-in headquarters completion and new full-time job creation employment schedule and to report annually to the authority the number of new full-time employees against which the tax credits are to be made;

     (7)   a provision permitting an audit of the payroll records of the business from time to time, as the authority deems necessary; and

     (8)   a provision which permits the authority to amend the agreement and provisions establishing the conditions under which the agreement may be terminated.

     The total amount of the tax credit for an eligible business for each new full-time job is $10,000 per year for up to 10 years.  The total tax credit amount is to be calculated and credited to the business annually for each year of the eligibility period.  There is no monetary cap on the value of credits approved by the authority attributable to the program.  If the tax credit issued to a business exceeds the amount of tax otherwise due and required to be paid, the amount of that excess may be carried over, if necessary, to the 50 tax periods following the taxable year for which the tax credit is first allowed to be applied.

     If, in any tax period, the number of new full-time employees employed by the business at its headquarters drops below 80 percent of the number of new full-time jobs specified in the incentive phase agreements for all phases completed, then the business is to forfeit its credit amount for that tax period and each subsequent tax period, until the first tax period for which documentation demonstrating the restoration of the number of full-time employees employed by the business at the headquarters to 80 percent of the number of jobs specified in the incentive phase agreements for all phases completed.
                

In an effort to be an unbiased source of information, all text in this summary comes directly from government resources.

Actions

  • Substituted by A5340

    Mon, Jan 8th 2018
  • Reported out of Senate Committee, 2nd Reading

    Fri, Jan 5th 2018
  • Introduced in the Senate, Referred to Senate Budget and Appropriations Committee

    Mon, Dec 18th 2017