Gibbons Law Alert

Gibbons Law Alert

Tagged: New Jersey Economic Development Authority (NJEDA)

Governor Murphy Signs New Economic Incentive Legislation

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Posted in Economic Development

On January 7, 2021

Governor Murphy signed into law the New Jersey Economic Recovery Act of 2020 (NJERA), opening a new chapter in the Murphy Administration’s efforts to incentivize businesses to invest in New Jersey and to assist the State in recovering from the economic downturn caused by COVID-19. NJERA’s enabling legislation, almost 250 pages long, creates new economic development programs, amends existing programs, and makes operational changes to the New Jersey Economic Development Authority (EDA). New Incentive Programs NJERA 2020 creates nine new incentive programs: The Historic Property Reinvestment Program provides tax credits for part of the cost of rehabilitating historic properties in this State. Tax credits under this program are capped at $50 million annually for six years. Qualified historic properties potentially eligible for tax credits include those designated on the National Register of Historic Places or the New Jersey Register of Historic Places, by the Pinelands Commission, or by municipalities under certain criteria approved by the State Historic Preservation Officer. The Brownfields Redevelopment Incentive Program provides tax credits to compensate developers for remediation costs of redevelopment projects located on brownfield sites. Tax credits under this program are capped at $50 million annually for six years. Brownfield sites include any former or current commercial or industrial site that is currently vacant or underutilized and on which there...

What’s a “Pocket Veto” Anyway? – A Guide to the End of New Jersey’s 217th Legislative Session

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Posted in Regulatory Counseling and Departmental Action

On December 22, 2017

At noon on January 9, 2017, the New Jersey Legislature’s 217th session comes to a close. That means any bill not presented to the Governor for his consideration before then will become moot and must be reintroduced in the 218th session. But certain constitutional rules also apply to bills passed by the Legislature and presented to the Governor in the last days of the session. During the two year legislative cycle, the New Jersey Constitution (Art. V, §1, ¶14(b) and (c)) allows the Governor 45 days to either sign the bill or veto it, with the veto being either absolute or conditional. This time frame can be extended if the house of origin (the Senate or General Assembly) is not in session on the 45th day. If the Governor takes no action within the allotted time, the bill becomes law. Any bill presented to the Governor on or after November 25, 2017, cannot receive 45 days of consideration before the end of the session on January 9, 2018. The New Jersey Constitution (Art. V, §1, ¶¶14 (c) and (d)) provides special procedures for this situation: Any bills presented on November 25, 2017, must be signed by noon on January 9, 2018, or vetoed and returned to the Legislature by noon on January 8, 2018, or else the...

NJEDA Proposes Readoption and Changes to Administrative Rules

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Posted in Regulatory Counseling and Departmental Action

On December 5, 2017

Notwithstanding recent headlines about attempts to “kill” off the New Jersey Economic Development Authority (NJEDA), reports of the NJEDA’s death are greatly exaggerated. On November 20, 2017, the NJEDA proposed for readoption with amendments the administrative rules for its assistance programs. This includes changes to the Grow NJ Assistance Program (the “Grow NJ Program”) that implement the recently enacted law creating incentive areas around colleges and universities; modifications to the submission dates for the Economic Redevelopment and Growth Program (the “ERG Program”); and revisions to the Angel Investor Tax Credit Program (the “Angel Investor Program”). Interested parties may submit written comments by January 19, 2018. The NJEDA is an independent State agency that finances small and mid-sized businesses, administers tax incentives to retain and grow jobs, revitalizes communities through redevelopment initiatives and supports entrepreneurial development by providing access to training and mentoring programs. We have previously written about some of the NJEDA’s programs, and the most important proposed changes to the NJEDA’s program rules are listed below. Grow NJ Grow NJ encourages economic development and job creation by offering tax credits to businesses looking to relocate to the State, or that are currently located in New Jersey but are in danger of leaving. The NJEDA’s proposed changes to the Grow NJ program rules would: Implement new incentive...

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

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Posted in Business Incentives / Economic Development

On October 26, 2016

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 at least one to three years. The Direct Loan Program provides up to $2 million...

Innovation Brewing in the New Jersey Legislature

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Posted in Economic Development

On August 18, 2016

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 in higher education; and S348 (Kean) would utilize funds from the Workforce Development Partnership Fund,...

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

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Posted in Economic Development

On July 26, 2016

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 solution is that design, procurement, and initial construction can all overlap because they are being...

Governor Christie Acts on BEIP Conversion Tax Credit Payment Changes

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Posted in Business Incentives

On July 1, 2016

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.

BEIP Conversion Update: State Treasurer Recommends Amending Law

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Posted in Business Incentives

On May 23, 2016

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 & Regulatory Affairs Department. We will continue to monitor the BEIP conversion program and any action to amend the existing law.

Clock Starts on BEIP Grant Conversion Program

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Posted in Business Incentives

On May 18, 2016

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 insurance tax liability. A business without these tax liabilities can apply for a tax credit...

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