Does the New Jersey Economic Opportunity Act Legislation Have Legs?April 2013 – Articles In the Zone
Introduced earlier this year, the New Jersey Economic Opportunity Act of 2013, A3680, seemed destined for quick passage. Touted to spur growth within the state, it quickly passed through the Assembly Commerce and Economic Development Committee (Committee), which proposed amendments but reported on the legislation favorably. Since this report in March 2013, the legislation was transferred to the Assembly Budget Committee where it seems to have stalled.
The bill, 47 pages in length, seeks to expand two economic development incentive programs and phase out three incentive programs administered by the New Jersey Economic Development Authority (EDA). Those being phased out include the very popular Business Employment Incentive and the Urban Transit Hub Tax Credit programs. However, with job creation and retention the paramount goal, the legislation plans to merge five incentive programs into two programs. The Committee believes this streamlining will enhance the state’s ability to attract and retain businesses.
Two major changes are packaged in the proposed legislation as a result of the Committee’s work. First, the eligibility for the economic development incentives will be geographically expanded. This expansion will be coupled with lower eligibility thresholds for businesses seeking to take advantage of the programs. It is anticipated that more businesses will, as a result, become eligible. Second, the bill modifies GROW NJ to allow New Jersey to better match or exceed competing states’ financial incentive packages. This is achieved in part by reducing the capital investment and employment eligibility standards for applicants. While eligibility is expanded geographically, smart growth areas are given priority in the form of bonuses. Finally, the Economic Redevelopment and Growth Grant (ERG) program would be the sole program offering redevelopment incentives. In this case, the objective is to help close project financing gaps and build public infrastructure that would complement redevelopment projects.
The Committee’s amendments specifically propose to: (1) delete Section 13 to allow municipalities to determine the percentage of low and moderate income housing includable in a project; (2) set a maximum value of tax credits that the EDA can approve for an ERG redevelopment incentive grant; (3) enhance the structure of the ERG program in order to encourage new applications; (4) adjust ERG project caps and give a bonus award for certain project financing gaps; and (5) change the term workforce housing to moderate income housing as defined by the Fair Housing Act.
Assemblywoman Bonnie Watson-Coleman, one of the primary sponsors of A3680, is the Mercer Employer Legislative Committee’s featured speaker at its monthly luncheon on May 3. It is anticipated she will discuss this legislation along with other issues of interest to the business community. For information about the luncheon, contact Liz Tindall at [email protected].