The New Jersey Economic Opportunity Bill Undergoes Radical ChangeAugust 2013 – Articles In the Zone
Since our article on A-3680 in the April 2013 edition of In The Zone , the New Jersey Economic Opportunity Act of 2013 (the Bill or Economic Opportunity Act) has received intense legislative attention. As a result, the Bill, once 47 pages in length, has grown to 82 pages. More fundamentally, there has been a dramatic shift to provide specific incentives for growth in South Jersey, in particular, the City of Camden and its neighbors.
Since April, the Bill was scrutinized by several legislative committees, which ultimately led to it being reported out of an Assembly Committee in late June. Known as A-3680, the Bill was passed at that time by the Assembly. On August 19, it passed the Senate. As of this writing, it is on the Governor’s desk awaiting his signature.
While this legislation deserves a more comprehensive analysis (which we will present at the New Jersey Corporate Counsel Association’s conference on September 20), it vastly overhauls existing taxpayer programs in New Jersey and greatly expands the geographical area in which tax credits and incentives can be deployed.
In effect, the Economic Opportunity Act makes the State of New Jersey one economic development zone. It will merge five tax incentive programs into two. The first, the Economic Redevelopment and Growth Grant Program, will focus on creating jobs. The second, the Grow New Jersey Assistance Program, will provide incentives to keep jobs in the state. Phased out will be the Business Retention and Relocation Assistance and Grant Program, the Business Employment Incentive Program and the Urban Transit Hub Tax Credit Program.
There has been much criticism levied against the existing programs, which some pundits argued benefitted the northern part of the state disproportionately. Large companies located in the northeast urbanized area of the New Jersey received multimillion-dollar incentives from the state. Last minute amendments to the Bill attempt to counter what some saw as an unfair imbalance and will funnel incentives to Camden. For example, Camden will be allotted $175 million in credits. These changes have caused some to note the shift in the balance of power in the state legislature as South Jersey legislators have pushed hard and apparently successfully for more assistance for their region, noting the intense competition from Philadelphia and Southeastern Pennsylvania.