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Budget Matters, Incentives, and Cannabis Will Be This Summer’s Hot Topics in Trenton

The Summer is here and the halls of the Legislature are quiet, but three topics that controlled much of the debate in Trenton this year are expected to drag into the Fall: the state budget, economic incentives, and cannabis. Fiscal Year 2020 Governor Murphy signed the Fiscal Year 2020 budget on June 30, avoiding a government shutdown, but not ending the debate on taxes and spending. After the Legislature sent the Governor a budget that did not include a millionaire’s tax, corporate responsibility fee, and tax on opioid manufacturers, the Governor line-item vetoed several appropriations and signed an Executive Order authorizing the State Treasury to place in reserve approximately $235 million in state appropriations. In 2016,Governor Christie took similar action when his Administration froze approximately $100 million in spending as the state health benefit plan design committees considered cost reductions. Prior to the July 4th holiday, the Murphy Administration announced the full list of spending items placed in reserve. The funds will only be released after the Treasurer certifies that certain revenue objectives are met, meaning this issue will linger for several months. Economic Incentives Also on June 30, the State’s two main economic incentive programs, the Grow NJ Assistance...

Recap: IRS Convenes Public Hearing on Proposed Regulations for Opportunity Zones

Jason J. Redd, a Director in the Gibbons Government & Regulatory Affairs Department attended an overflowing public hearing on February 14 convened by the Internal Revenue Service for the purpose of obtaining input from stakeholders concerning the initial proposed regulations for Opportunity Zones (OZ) issued in October. The IRS is reviewing comments on the first round of proposed rules and is expected to issue the next round of proposed regulations in March, with the potential for final regulations to be issued in late spring. Witnesses at the packed hearing included state cabinet officials, as well as representatives from state economic development groups, small businesses, community reinvestment coalitions, investment funds, and technology and planning organizations, among others. Testimony focused on ensuring that program regulations maximize investment and economic growth by generating new development, capital, and jobs in the distressed communities where OZs are located. There was also a clear call, by all in attendance, for clarity and flexibility in the next round of rules. Suggestions included: (i) modifying the rules to provide more flexibility to investors when exiting Qualified Opportunity Fund (QOF) investments, which is currently limited to a sale of the QOF investment itself; (ii) minimizing sourcing and location rules...

Governor Christie Presents the FY 2018 Budget

Earlier this week, Governor Christie announced his final State Budget to a joint session of the Legislature. The Governor’s Fiscal Year 2018 budget of $35.5 billion represents a 2.6 percent increase from the prior year. It assumes annual growth in the State’s major tax revenues (gross income tax, sales tax, and corporate business tax) and also reallocates funding between programs. The highlights of the FY 2018 Budget include: $17.4 billion in school and local aid, representing almost half of all State spending; A $2.5 billion contribution to the State pension system, with payments occurring quarterly; Cuts to most Executive Departments including Agriculture, Community Affairs, Corrections, Environmental Protection, Labor, Law and Public Safety, Military and Veterans Affairs, Transportation, and Treasury; Funding increases to the Departments of Health and Human Services for the expansion of FamilyCare, opioid addiction treatment, and graduate medical education; $20 million appropriation for lead remediation assistance for low and moderate income households; Additional State health benefit reforms, saving the State $125 million in FY 2018; and A lump-sum contribution from the State Lottery system to the State’s pension system to reduce the existing unfunded liability. Governor Christie also proposed a supplemental appropriation in the current fiscal year of...

New Jersey Legislature Focuses on Drone Technology

The First Legislative District Economic Development Task Force (“Task Force”) will meet on February 23, 2017, to discuss unmanned aviation technology and the potential impact it could have on the Southern New Jersey region. The Task Force, established by the New Jersey Senate in 2014 and reauthorized in 2016, was charged with “identifying methods, policies, regulations, incentives, and tools to foster economic activity and create jobs in Atlantic, Cape May, and Cumberland counties.” To accomplish its work, the 11-member Task Force is composed of a broad cross-section of thought leaders from the political, educational, and economic spheres. Over the last three years, the Task Force has met multiple times and has studied several issues of importance to the region. It has also studied aquaculture development and educational initiatives to develop a more skillful workforce. Throughout their deliberations, the members of the Task Force have identified actions that will grow the workforce and position the region to attract and support innovation. As the home of the William J. Hughes Technical Center and Stockton University, Southern New Jersey is known for aviation innovation. The testimony received by the Task Force on February 23rd will highlight the potential assets of the region. This...

New Jersey’s Legislature Attempts to Override Governor’s Objections to “Equal Pay” Bill

The sponsors of pay equity legislation passed by the New Jersey Senate and Assembly earlier this year have announced that the State Senate will attempt to override Governor Christie’s veto of the bill on December 19, 2016. Senate Bill 992/Assembly Bill 2750 would amend the Law Against Discrimination (“LAD”) to promote gender pay equality. The New Jersey bill follows a trend of recently enacted state laws, in California, New York, Maryland, and Massachusetts, that aim to make it easier for plaintiffs to bring pay equity claims and subject employers to potentially greater damages. The bill would make it an unlawful employment practice, under the LAD, to discriminate against employees on the basis of sex by compensating an employee of one sex at a lesser rate than an employee of the other sex for “substantially similar work.” The “substantially similar” standard, which diverges from the “equal work” standard of the federal Equal Pay Act, mirrors the California Fair Pay Act, which became effective in January 2016. Under the proposed legislation, an employer would be permitted to pay a different rate to an employee if it can show that the positions are not “substantially similar” and the difference in compensation is based on...

Sufferers of PTSD Gain Access to Medicinal Marijuana

On September 14, 2016, New Jersey amended its medicinal marijuana law to add post-traumatic stress disorder (‘PTSD’) as a qualifying condition, permitting PTSD sufferers to gain access to this unconventional therapy for the first time. Some background — In 2009, New Jersey became the 14th state to allow access to medicinal marijuana. Over the past seven years, 11 additional states have expanded their laws to allow access to medical marijuana. In New Jersey, the original law provided access to medical marijuana for the following conditions: Amyotrophic lateral sclerosis; Multiple sclerosis; Terminal cancer; Muscular dystrophy; Inflammatory bowel disease, including Crohn’s disease; Terminal illness, if the physician has determined a prognosis of less than 12 months of life; Seizure disorder, including epilepsy; Intractable skeletal muscular spasticity; Glaucoma; Positive status for human immunodeficiency virus; Acquired immune deficiency syndrome; and Cancer. Under the amended law signed by Governor Christie, a patient with PTSD would be eligible for medicinal marijuana if she has been unsuccessful alleviating her symptoms with conventional medical therapy. Additionally, the patient would have to obtain certification of her condition from a physician with whom she has a “bona fide physician-patient relationship.” Several other recent developments on this issue merit a brief...

Why and How – Basics of Government Affairs (Part 1 of 2)

“Don’t you know someone in the Governor’s Office?” “You know the Senate President, right?” “That woman we met at that Chamber of Commerce event last month, she is the Chief of Staff to the Assembly Speaker, right?” After a lobbyist hears these words, most times the next sentence goes something like this: “We are having a problem with … and our CEO asked me to see what we can do in order to …” Then the client relates to us the sad tale of a difficult piece of legislation, or regulation, or land use development that will negatively impact the client’s core business. The CEO then asks you to fix the problem and save the day. And more times than not, the final nail in the coffin necessary to sink the client’s business interest in this bill, regulation, or development is being acted upon by the government … in a matter of days. In these types of cases, it is simply too late. Too late to begin to think about a government affairs strategy. The cake has already been baked. These scenarios happen, unfortunately, more frequently than one would think, even among sophisticated businessmen and-women across a myriad of industries....

Innovation Brewing in the New Jersey Legislature

Every summer, New Jersey legislators travel to the annual conferences of the National Conference of State Legislators (“NCSL”), the Council of State Governments (“CSG”), and the American Legislative Exchange Council (“ALEC”) to educate themselves about policy innovations occurring throughout the United States. While we wait to learn about their experiences, right now is a good opportunity to focus on innovative legislation currently before the New Jersey Legislature. As of August 15, 2016, 7,068 bills have been introduced in the New Jersey Legislature, 4,379 in the Assembly and 2,689 in the Senate, and only 87 have been signed into law. The following list of bills currently in committee represent examples by legislators looking to encourage innovation in New Jersey: S158 (Madden)/A3631 (Quijano) would promote investment in New Jersey by broadening the types of New Jersey emerging technology businesses that are eligible to receive investments under the New Jersey Angel Investor Tax Credit Act; A3187 (Munoz)/ S948 (Singer) would create a program within the New Jersey Economic Development Authority that would create a pathway to the commercial market for technology developed at a New Jersey college or university. Under this legislation, New Jersey would stimulate the economy while recapturing the state’s investment...

With the Budget Done, Line Item Veto Shapes the FY17 Budget

On June 27, 2016, the New Jersey Legislature sent S17, the FY 2017 budget bill, to Governor Christie. S17 makes various language changes and adds $275 million to the Governor’s proposed budget. Usually, the Governor is limited to three options when reviewing passed legislation. He can accept the bill as it is written, veto the bill in its entirety or suggest changes, or send it back to the Legislature. The budget bill is different. The New Jersey Constitution gives the Governor the ability to enact laws, that appropriate money, while reducing or removing specific line items. Article V, Section I, paragraph 15 provides that “If any bill presented to the Governor shall contain one or more items of appropriation of money, he may object in whole or in part to any such item or items while approving the other portions of the bill. In such case he shall append to the bill, at the time of signing it, a statement of each item or part thereof to which he objects, and each item or part so objected to shall not take effect.” That same section also grants the Legislature the ability to override the Governor’s line item veto by a...

Legislative Fixes to Keep Pharmaceutical Companies in NJ

In recent years, New Jersey has — at times — been deemed a “Judicial Hell Hole” by the American Tort Reform Association. The expense of defending thousands of mass tort products liability cases in New Jersey, as well as other costs of doing business in New Jersey, have resulted in some pharmaceutical companies relocating out of state. To halt the trend of businesses leaving New Jersey, the legislature could consider the following three actions to incentivize New Jersey companies to remain in-state. Provide an absolute defense to pharmaceutical companies sued for a failure to warn claim if the warning was approved by the Food and Drug Administration (“FDA”). Michigan has adopted, MCL 600.2946(5), which, subject to two exceptions, establishes an absolute defense for drug manufacturers and sellers in a products liability action, where the drugs complied with FDA standards and labeling. In New Jersey, a bill similar to MCL has been introduced. While N.J.S. 2A:58C-4 of the New Jersey Products Liability Act (“NJPLA”) provides for a rebuttable presumption of adequacy with respect to a drug label where the drug is approved by the FDA, an absolute defense in these circumstances would be more appropriate. The pharmaceutical industry is among the most...