S2298

An Act lifting the moratorium on new Business Employment Incentive Program grant awards and establishing a task force to study the effectiveness of the program on employment and capital investment, amending and supplementing P.L.1996, c.26.

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

1. Section 4 of P.L.1996, c.26 (C.34:1B-127) is amended to read as follows:

4. a. A business may apply to the authority for a grant for any project which:

(1) Will create at least 25 eligible positions in the base years; or

(2) Will create at least 10 eligible positions in the base years if the business is an advanced computing company, an advanced materials company, a biotechnology company, an electronic device technology company, an environmental technology company, or a medical device technology company.

b. In the case of a business which is a landlord, the business may apply to the authority for a grant for any project in which at least 25 eligible positions are created in the base years.

c. A project which consists solely of point-of-final-purchase retail facilities shall not be eligible for a grant under P.L.1996, c.26 (C.34:1B-124 et seq.). If a project consists of both point-of-final-purchase retail facilities and non-retail facilities, only the portion of the project consisting of non-retail facilities shall be eligible for a grant, and only the withholdings from new employees which are employed in the portion of the project which represents non-retail facilities shall be used to determine the amount of the grant. If a warehouse facility is part of a point-of-final-purchase retail facility and supplies only that facility, the warehouse facility shall not be eligible for a grant. For the purposes of P.L.1996, c.26 (C.34:1B-124 et seq.), catalog distribution centers shall not be considered point-of-final-purchase retail facilities.

[d. (1) If an application under P.L.1996, c.26 (C.34:1B-124 et seq.) has been received by the authority prior to the effective date of the "New Jersey Economic Opportunity Act of 2013," P.L.2013, c.161 (C.52:27D-489p et al.), and, to the extent that there remains sufficient appropriations for grant issuance, then the authority is authorized to consider the application and to make a grant to an eligible applicant, provided that the authority shall take final action on that grant no later than December 31, 2013.

(2) A business shall apply for a grant under the Business Employment Incentive Program prior to the effective date of the "New Jersey Economic Opportunity Act of 2013," P.L.2013, c.161 (C.52:27D-489p et al.), and shall submit its documentation for approval of a grant no later than 90 calendar days after the effective date of the "New Jersey Economic Opportunity Act of 2013," P.L.2013, c.161 (C.52:27D-489p et al.).

(3) If a business has submitted an application under P.L.1996, c.26 (C.34:1B-124 et seq.) and that application has not been approved for any reason, the lack of approval shall not serve to prejudice in any way the consideration of a new application as may be submitted by a business for the provision of incentives offered pursuant to the "New Jersey Economic Opportunity Act of 2013," P.L.2013, c.161 (C.52:27D-489p et al.).]

(cf: P.L.2013, c.161, s.3)

2. (New Section) a. There is established a task force, in but not of The Department of the Treasury, to be known as the “New Jersey Business Employment Incentive Program Task Force.” The purpose of the task force shall be to study and evaluate, and develop recommendations relating to, the effectiveness of grants awarded under the Business Employment Incentive Program in creating new employment opportunities and fostering capital investment in this State.

b. The task force shall be comprised of five members, one of whom shall be appointed by the Governor, one of whom shall be appointed by the President of the Senate, one of whom shall be appointed by the Speaker of the General Assembly, one of whom shall be appointed by the Minority Leader of the Senate and one of whom shall be appointment by the Minority Leader of the General Assembly.

c. The task force shall organize as soon as practicable, but no later than the 60th day after the appointment of a majority of its members. The task force shall elect a chairperson from among its members and appoint a secretary who need not be a member of the task force.

d. Vacancies in the membership of the task force shall be filled in the same manner provided for the original appointments.

e. The task force may meet at the call of its chair and hold hearings at the times and in the places it deems necessary and appropriate to fulfill its charge. The task force shall be entitled to call to its assistance, and avail itself of the services of, the employees of any State, county, or municipal department, board, bureau, commission, or agency as it may require and as may be available for its purposes.

f. The members of the task force shall serve without compensation, but may be reimbursed for traveling and other miscellaneous expenses necessary to perform their duties, within the limits of the funds made available to the task force for its purposes.

3. (New Section) It shall be the duty of the task force to:

a. assess the effectiveness of the Business Employment Incentive program in creating new jobs and capital investment in the State;

b. study the effectiveness of the Business Employment Incentive Program relative to other State economic development incentive programs providing grants or other tax incentives for the purposes of increasing employment and capital investment in this State;

c. evaluate the impact on business investment and the general business climate in this State due to uncertain State funding for previously awarded Business Employment Incentive Program grants; and

d. consider the needs of employers seeking to increase employment and capital investment in this State.

4. (New Section) The task force shall report its findings and recommendations to the Governor and Legislature, pursuant to section 2 of P.L.1991, c.164 (C.52:14-19.1), along with any legislative bills that it desires to recommend for adoption by the Legislature, no later than six months after the date of its initial meeting.

5. This act shall take effect immediately and sections 2 though 4 of this act shall expire upon the issuance of the task force report.

STATEMENT

This bill eliminates the current moratorium on new grant awards provided under the Business Employment Incentive Program (BEIP) and further establishes a “New Jersey Business Employment Incentive Program Task Force” to study, evaluate, and develop recommendations relating to the effectiveness of BEIP grants in creating new employment opportunities and fostering capital investment in this State.

Specifically, this bill deletes the existing statutory prohibition against the acceptance of new BEIP applications by the New Jersey Economic Development Authority (NJEDA) thereby authorizing the NJEDA to continue the implementation of the program. Under the “New Jersey Economic Opportunity Act of 2013,” P.L. 2013, c.161 (C.52:27D-489p et al.), a moratorium was imposed that prohibits the NJEDA from accepting any new applications for assistance under the program on or after the effective date of that act (September 18, 2013).

This bill further establishes a five-member task force to:

a. assess the effectiveness of BEIP in creating new jobs and capital investment in the State;

b. study the effectiveness of BEIP relative to other State economic development incentive programs providing grants or other tax incentives for the purpose of increasing employment and capital investment in this State;

c. evaluate the impact on business investment and the general business climate in this State due to uncertain State funding for previously awarded BEIP grants; and

d. consider the needs of employers seeking to increase employment and capital investment in this State.

The five member task force is to be comprised of one appointment each by: the Governor, the President of the Senate, the Speaker of the General Assembly, the Minority Leader of the Senate, and the Minority Leader of the General Assembly. The task force is required to submit a final report of findings and recommendations to the Governor and Legislature within six months after its initial meeting.

N.J.S.A.34:1B-124 et seq. provided the statutory authority for BEIP under which the NJEDA provided grants to businesses that created jobs in New Jersey. BEIP grants could be awarded for up to ten years and could equal between 10 percent and 80 percent of the total amount of State income taxes withheld by the grant receiving business from wages of new employees subject to the grant agreement. To qualify for a grant, an applicant had to certify that receipt of the grant was a “material factor” in the business' decision to invest in New Jersey.

As of December 31, 2013, the NJEDA had executed 499 BEIP grant agreements with a cumulative grant amount of $1.59 billion since the program’s inception in 1996. In all, executed BEIP grants covered 105,800 new jobs and capital investments totaling $12.6 billion.