S427

An Act concerning development subsidies and certain employment practices.

Be It Enacted by the Senate and General Assembly of the State of New Jersey:

1. For the purposes of this act:

“Commissioner” means the Commissioner of Labor and Workforce Development.

"Development subsidy" means the providing to a recipient enterprise of an amount of funds from a public body for the purpose of stimulating economic development in New Jersey, including, but not limited to, any bond, grant, loan, loan guarantee, tax increment financing, fee waiver, land price subsidy, matching fund or any tax expenditure. “Development subsidy” does not refer to any contract under which a public body purchases or otherwise procures goods, services or construction on an unsubsidized basis, including any contract solely for the construction or renovation of a facility owned by a public body.

"Granting body" means a public body that provides a development subsidy and, in the case of a tax expenditure related to any tax paid to the State, means the State Treasurer.

"Public body" means any agency, department, board or commission of this State or any political subdivision of this State.

"Recipient enterprise" means any non-governmental person, association, corporation, joint venture, partnership or other entity that receives a development subsidy.

"State" means the State of New Jersey and any agency, instrumentality or authority of the State, but not any political subdivision of the State.

“State wage, benefit and tax laws” means:

(1) P.L.1965, c.173 (C.34:11-4.1 et seq.);

(2) The "New Jersey Prevailing Wage Act," P.L.1963, c.150 (C.34:11-56.25 et seq.);

(3) The "New Jersey State Wage and Hour Law," P.L.1966, c.113 (C.34:11-56a et seq.);

(4) The workers’ compensation law, R.S.34:15-1 et seq.;

(5) The "unemployment compensation law," R.S.43:21-1 et seq.;

(6) The "Temporary Disability Benefits Law," P.L.1948, c.110 (C.43:21-25 et al.);

(7) P.L.2008, c.17 (C.43:21-39.1 et al); and

(8) The "New Jersey Gross Income Tax Act," N.J.S.54A:1-1 et seq.

"Tax expenditure" means the amount of uncollected tax revenues from any abatement, reduction, exemption or credit against any State or local tax, including, but not limited to, taxes on real property, raw materials, inventories or other assets, taxes on gross receipts, income or sales, and any use, excise or utility tax. “Tax expenditure” does not refer to any credit against any tax liability of an employee or any personal exemption, homestead rebate, credit or deduction for the expenses of a household or individual, or other reduction of the tax liability of an individual or household.

2. a. If the Commissioner of Labor and Workforce Development determines that a recipient enterprise has failed, for one or more of its employees, to maintain and report all records regarding wages, benefits and taxes which the recipient enterprise is required to maintain and report pursuant to State wage, benefit and tax laws, as defined in section 1 of this act, and has, in connection with that failure to maintain or report the records, failed to pay wages, benefits, taxes or other contributions or assessments as required by those laws, the commissioner, as an alternative to, or in addition to, any other actions taken in the enforcement of those laws, shall notify the recipient enterprise of the determination and have an audit of the recipient enterprise and any successor firm of the recipient enterprise conducted not more than 12 months after the determination.

b. If, in an audit conducted pursuant to subsection a. of this section, the commissioner determines that the recipient enterprise or any successor firm to the recipient enterprise has continued in its failure to maintain or report records as required by those State wage, benefit and tax laws and continued in its failure to pay wages, benefits, taxes or other contributions or assessments as required by those laws, the commissioner shall issue a written determination directing the State Treasurer and any other granting body which provided a development subsidy to require the recipient enterprise to repay the value of any development subsidy awarded during the five year period prior to the violation of the provisions of this section. Upon receipt of any written determination of the commissioner directing a granting body to require the recipient enterprise to repay the value of a development subsidy, the granting body shall, notwithstanding any other law, immediately provide notice to the recipient enterprise of the amount to be repaid, and the recipient enterprise shall remit to the governing body that amount not more than 60 calendar days after the date of the notice.

3. Any development subsidy which a recipient enterprise is required to repay pursuant to section 2 of this act shall be regarded as a tax liability of the recipient enterprise to the granting body. If the recipient enterprise fails to pay that tax liability when it becomes due, the recipient enterprise shall be subject to the penalties and interest provisions of the State Uniform Tax Procedure Law, R.S.54:48-1 et seq. Any recipient enterprise which considers any decision or declaration of a granting body to recapture any part of a development subsidy to be inconsistent with the provisions of this act, excessive or otherwise unjust, may appeal to the tax court in accordance with the provisions of the State Uniform Tax Procedure Law, R.S.54:48-1 et seq.

4. A recipient enterprise that knowingly makes a false material misrepresentation in any disclosure that the recipient enterprise is required to make pursuant to this act shall be deemed to have knowingly made a false material representation in connection with the negotiation, award or performance of a government contract for the purposes of subsection b. of section 97 of P.L.1999, c.440 (C.2C:21-34) and shall be guilty of a crime as specified in that section.

5. The Commissioner of Labor and Workforce Development, in consultation with the State Treasurer, shall, pursuant to the "Administrative Procedure Act," P.L.1968, c.410 (C.52:14B-1 et seq.), adopt any regulations necessary to implement the provisions of this act, which shall include regulations necessary to establish a system to identify and monitor development subsidies and recipient enterprises.

6. This act shall take effect immediately and shall only apply to subsidies received after the effective date of this act.

STATEMENT

This bill sets standards and procedures regarding repayment of State or local government development subsidies by employers who receive the subsidies, but fail to maintain and report records required by certain wage, benefit and tax laws and, in connection with that failure to maintain or report the records, fail to pay wages, benefits, taxes or other contributions or assessments required by those laws.

The bill provides that if the Commissioner of Labor and Workforce Development finds that an employer receiving a State or local government development subsidy has failed for one or more of its employees to maintain and report all records required by laws specified by the bill regarding wages, benefits and taxes and has, in connection with that failure, failed to pay wages, benefits, taxes or other contributions or assessments required by those laws, the commissioner is required to notify the employer of those failures and conduct a subsequent audit.

If the commissioner determines in that audit that the employer or any successor firm to the employer has continued in its failure to maintain or report the records and continued its failure to pay the wages, benefits, taxes or other contributions or assessments, the commissioner is required to issue a written determination directing the State Treasurer and any other granting body to require the employer to repay, within 60 days of notice by the granting body, any development subsidy awarded during the five years before the violation.

Subsidies subject to the provisions of the bill include, but are not limited to, bonds, grants, loans, loan guarantees, tax increment financing, fee waivers, land price subsidies, matching funds or tax expenditures, but not procurement or construction contracts.