Tagged: Business Incentive Packages

Governor Murphy Presents FY 2020 State Budget

Governor Murphy presented his proposed Fiscal Year (FY) 2020 Budget to a joint session of the New Jersey Legislature on March 5, 2019. His spending plan for the upcoming fiscal year totals $38.6 billion, which is a $1.3 billion increase from last year’s appropriations bill. The Governor’s budget message continued his theme of a “fairer and stronger economy” to make the middle class more secure. He highlighted the recent enactment of a $15 minimum wage, expansion of paid family leave, and the implementation of the state’s paid sick leave law. The Governor also continued his call for greater K-12 education funding and making community college tuition free. The Governor’s proposal for FY 2020, which he described as a “blueprint for the middle class,” is built upon four pillars: Realizing sustainable savings; Stabilizing revenues and increasing creditworthiness; Maintaining and growing investment in education, infrastructure, and innovation; and Addressing affordability. To accomplish these goals, the Governor proposed: Achieving $1.1 billion in savings from public employee health benefit reforms and other departmental savings identified by the Treasury; Increasing the State’s surplus to $1.2 billion; Funding the State’s pension system at $3.8 billion; Reducing the diversion of funds from dedicated sources like the Affordable...

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...

Are New Jersey’s Business Loan, Incentive, and Grant Programs Right for You?

Ronald Reagan famously said that the nine most terrifying words in the English language are, “I’m from the government and I’m here to help.” But for businesses starting up, expanding, or relocating into New Jersey, state government can be helpful, if you know where to start. We regularly counsel clients on government incentives, loans, and business assistance offered through the nationally-recognized New Jersey Economic Development Authority (NJEDA) and other State agencies. The NJEDA’s programs assist businesses of all sizes access loans/loan guarantees, as well as business and tax incentives. A few of the many programs offered are listed below. Loan Programs The NJEDA offers several loan programs that support small and mid-sized companies acquiring fixed assets, obtaining working capital, and refinancing debt: The Premier Lender Program provides loan and line of credit participations/guarantees in varying amounts. The NJEDA has a group of preferred lenders, and rates are generally at or below traditional loans. In return for the NJEDA’s assistance, the business has to agree to add one new full-time employee for every $65,000 of NJEDA exposure. The Small Business Fund provides up to $500,000 for small businesses, minority or woman owned businesses, and nonprofits that have been in business for...

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...

Privately Financing the Public Good: Using Public-Private Partnerships to Inject Private Financing into Public Projects in New Jersey

New Jersey has a higher inventory of worthy infrastructure projects than it has money to fund sorely needed improvements. Although New Jersey has the seventh highest revenue of any state, the pressures of being a densely populated commuter state often impose significant liabilities on those revenues such that the State is often faced with having to choose between worthy projects because available financing is limited. One common sense solution gaining significant traction is the injection of private financing into public projects in order to relieve some of the State’s financing burdens. Often referred to as public-private partnerships or P3s, these agreements trade a limited, future revenue stream over time to a private corporation in exchange for a fiscal commitment allowing a project to put shovels in the ground. These projects can take various forms: construction of state college dormitories in exchange for rents, maintenance of highways in exchange for availability payments, or construction of a bridge in exchange for toll rights, to name a few. The State entity receives an influx of capital to address infrastructure needs and the private entity receives a long term profit from rents, tolls, availability payments, or maintenance agreements. The elegance of this type of...

Governor Christie Acts on BEIP Conversion Tax Credit Payment Changes

On June 30, 2016, Governor Christie signed to law Senate Bill 2376/Assembly Bill 4002, which modifies the tax credit payment schedule for Business Employment Incentive Program (“BEIP”) Grant recipients converting their cash grants to tax credits. The Legislature and Governor enacted a law in January allowing businesses to convert outstanding BEIP Grants into tax credits. The law provided that BEIP Grants accrued but not paid during years 2008-2013 were to be redeemable as tax credits over a five-year period starting in the 2017 tax accounting or privilege period of the business. S-2376/A-4002 revises the tax payment credit schedule so that only 5 percent of the tax credit is redeemable in 2017. Twenty percent would be redeemable in 2018, with 25 percent redeemable in years 2019, 2020, and 2021. The change was required due to the projected budgetary shortfall in Fiscal Year 2017, which the State Treasurer announced on May 18, 2016. If your business is still considering a BEIP conversion, the deadline to opt-in is the close of business on July 11, 2016. Gibbons can assist your company with the process of evaluating and implementing a conversion. Paul J. St. Onge, a Director in the Gibbons Government Affairs Department, and...

BEIP Conversion Update: State Treasurer Recommends Amending Law

With projected revenues for State Fiscal Year (“SFY”) 2017 decreasing, on May 18, 2016, the NJ State Treasurer recommended that the Legislature amend the Business Employment Incentive Program (“BEIP”) conversion law (P.L.2015, c.194) to reduce the percentage of BEIP tax credits redeemable in SFY 2017 from thirty (30) percent to five (5) percent. In testimony before the Assembly and Senate Budget Committees, the Treasurer stated that any legislation implementing his recommendation should not change (1) the conversion election deadline of July 11, 2016; (2) the total number of years for the tax credits to be issued; or (3) the overall amounts convertible to tax credits. The only change sought by the Treasurer’s Office is to shift a greater percentage of BEIP tax credit redemptions to SFY 2018 through SFY 2021. If your business is a BEIP Grant recipient and you have questions regarding the BEIP conversion process, please contact a member of the Gibbons Government Affairs Department. We will continue to monitor the BEIP conversion program and any action to amend the existing law. Paul J. St. Onge, a Director in the Gibbons Government Affairs Department, and Michael D. DeLoreto, an Associate in the Gibbons Government Affairs Department, authored this...

Clock Starts on BEIP Grant Conversion Program

Hundreds of New Jersey Business Employment Incentive Program (“BEIP”) Grant recipients may be eligible to convert their BEIP Grant to a refundable tax credit under Senate Bill 3232/Assembly Bill 4834 (S-3232/A-4834), which the State Legislature approved on December 17, 2015 and Governor Christie signed into law on January 11, 2016. If your business is a BEIP Grant recipient, Gibbons can assist you with the process of evaluating and implementing a BEIP conversion. Since the enactment of BEIP in 1996, New Jersey has entered into 499 BEIP agreements with businesses creating approximately 110,000 jobs and resulting in $12 billion in total economic activity. In 2013, the New Jersey Legislature enacted the “Economic Opportunity Act of 2013” which sunset BEIP and created the Grow New Jersey Assistance Program. The State has subsequently not fully funded BEIP Grant payments in the annual State budget. S-3232/A-4834 allows a business that is eligible to receive a BEIP Grant to direct the New Jersey Economic Development Authority (“NJEDA”) to convert its BEIP Grant to a refundable tax credit that would not be subject to the annual appropriations process. These tax credits may be applied against the business’ corporate tax liability, insurance premium tax liability, or foreign...